With a positive amount invested in each stock

Assignment Help Financial Management
Reference no: EM13729724

Which of the following statements is FALSE?

A. With a positive amount invested in each stock, the more the stocks move together and the higher their covariance or correlation, the more volatile the portfolio will be.

B. Stocks in the same industry tend to have more highly correlated returns than stocks in different industries.

C. Stock returns will tend to move together if they are affected similarly by economic events.

D. Almost all of the correlations between stocks are negative, illustrating the general tendency of stocks to move together.

Reference no: EM13729724

Questions Cloud

Read about healthcare safety training : Craig has read about healthcare safety training and mechanical lifting devices but is unsure what would be the best advice to improve safety and decrease injuries.
Compose an essay explaining termination through starvation : Compose an essay explaining "termination through starvation." Discuss the role that ego, power, and politics play in this form of termination.
Expected to pay their first annual dividend : A company is expected to pay their first annual dividend three years from now. That payment will be $0.50 a share. Starting in year four, the company will increase the dividend by 4% per year. The required return is 12%. What is the estimated value o..
Why should marketers analyze the costs and benefits : Why should marketers analyze the costs and benefits of whether to implement a segmentation approach or not
With a positive amount invested in each stock : With a positive amount invested in each stock, the more the stocks move together and the higher their covariance or correlation, the more volatile the portfolio will be. Stocks in the same industry tend to have more highly correlated returns than sto..
Explain the firm''s ability to make money : According to the theory of constraints, which of the following financial measurements can be used to measure the firm's ability to make money
Describe how the sages created the li : Describe how the sages created the li (rites). In either case, they are describing someone who lives in the world of distinctions but yet still follows the natural patterns of the cosmos.
Compare and contrast outsourcing and offshoring : Many companies have conducted a cost benefit analysis and have found that it is more efficient to outsource certain tasks. Compare and contrast outsourcing and offshoring
Find market and future competition for selection usinng swot : Using the SWOT analysis, evaluate your market and future competition for your selection

Reviews

Write a Review

Financial Management Questions & Answers

  What is the markets expectation today of the average level

A 5-year corporate bond has an 8 percent yield. A 10-year corporate bond has a 9 percent yield. The two bonds have the same default risk premium and liquidity premium. The real risk-free rate, r*, is expected to remain constant at 3 percent.

  What is the firms degree of financial leverage

Irresistible Chips is reviewing its financial condition. Sales are $15,667,426 from which the firm generated an operating profit of $2,445,157 and a net profit after tax of $943,674. The firm’s interest expense was $1,192,195.

  What is the present value of the payment stream

What is the present value of the following payment stream, discounted at 8% annually: $1,000 at the end of year 1, $2,000 at the end of year 2, and $3,000 at the end of year 3?

  Cost-reduction and profit-sharing program

Discuss the major differences between cost-reduction and profit-sharing program, including the philosophic issues underlying each type of program.

  Define environment and general good of society

In particular do you think subjects like customer and employee safety, environment and general good of society fits in this framework or they essentially ignored?

  Interim assessment of international financial management

Assessment for the Interim Assessment of International Financial Management - the value to QN of taking out short term derivatives and a comparison between futures and a forward rate

  Significant abnormal negative returns

Some firms had significant abnormal negative returns, but most didn't. Abnormal negative returns were short lived, meaning their stock prices returned to normal after a short period of time.

  Shares of common stock outstanding

At December 31, 2014, Sager Co. had 1,200,000 shares of common stock outstanding. In addition, Sager had 450,000 shares of preferred stock which were convertible into 750,000 shares of common stock. During 2015, Sager paid $900,000 cash dividends on ..

  Operating costs other than depreciation

Wells Water Systems recently reported $12,550 of sales, $4,250 of operating costs other than depreciation, and $1,700 of depreciation. The company had no amortization charges, it had $3,250 of outstanding bonds that carry a 6.75% interest rate, and i..

  Prepare a wac io and po tranche

Prepare a WAC IO and PO tranche to give a 5.75% deal coupon. Create a PAC class (A-1) with an initial collar of 50%-200% PPC, assuming base case defaults.

  What is the future value-compounded quarterly

What is the future value of $1,400, placed in a saving account for four years if the account pays 0.10, compounded quarterly?

  How do they earn their return on equity

Different companies have different financial ratios. So Return on Equity for any one company is the product of three ratios which may be quite different in value than the same three ratios for a different company.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd