Return, Risk, & the Security Market Line Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. A(n) _____ is a collection of financial assets or investments such as stocks, bonds, and cash.

Question 2 2. Which of the following statements accurately describes the principle of systematic risk?

Question 3 3.

You own the following portfolio investments:

-$4,000 of Stock A

-$6,000 of Stock B

-$3,000 of Stock C

What is the value weight of Stock B?

Question 4 4. What is the term for risk associated with a single stock?

Question 5 5. Bernie is considering investing $1,000 in a stock with a beta of 1.5. If the value of the broader market increases by 4% this year, how much should Bernie anticipate his investment to be worth at the end of the year?

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Question 6 6. Stock D has a 40% chance of producing a 30% profit and a 60% chance of producing a 15% loss. What is the expected return for this stock?

Question 7 7. If the benchmark rose 10% last year, and a comparison investment also rose 10%, what is the beta?

Question 8 8. Which of the following is true if a particular investment has a beta of 2?

Question 9 9. Which of the following strategies can be used to manage systemic risk?

Question 10 10. What is the term for risk associated with the entire stock market?

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Question 11 11. The weight of an investment portfolio refers to:

Question 12 12. When investing in the stock market, which of these is one way that investors can protect themselves against systematic risk?

Question 13 13. Which of the following statements about beta and diversification is TRUE?

Question 14 14. The amount an investor anticipates he or she will receive on an investment is called the:

Question 15 15. How is portfolio beta calculated?

Return, Risk, & the Security Market Line Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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