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All changes saved 1. The amount of gain in reducing idiosyncratic risk by adding additional stocks to a portfolio is sharply reduced after reaching which of the following numbers of stock in a portfolio? 8 500 20 1,000 2. An individual purchases a corporate bond that is currently returning 12%. If the expected inflation rate is 5%, and the individual's tax rate is 30%, the real rate of return (after taxes and inflation are accounted for) is 8.4% 7% 3.4% -18% 5. If the wealth elasticity of demand for financial assets is less than 1.0, a 1% increase in wealth would lead to a more than proportionate increase in demand for financial assets an equal percentage change in the demand for investment assets no change in the percentage of a given asset in an investment portfolio a reduction in the percentage of a given asset in an investment portfolio 10. According to the Capital Asset Pricing Model (CAPM), what would be the value of beta if the risk-free rate is 2%, the risk premium on the market portfolio is 8%, and the expected return on the asset is 12%? 1.25 0 2 1 .5 All changes saved 1. The amount of gain in reducing idiosyncratic risk by adding additional stocks to a portfolio is sharply reduced after reaching which of the following numbers of stock in a portfolio? 8 500 20 1,000 2. An individual purchases a corporate bond that is currently returning 12%. If the expected inflation rate is 5%, and the individual's tax rate is 30%, the real rate of return (after taxes and inflation are accounted for) is 8.4% 7% 3.4% -18% 5. If the wealth elasticity of demand for financial assets is less than 1.0, a 1% increase in wealth would lead to a more than proportionate increase in demand for financial assets an equal percentage change in the demand for investment assets no change in the percentage of a given asset in an investment portfolio a reduction in the percentage of a given asset in an investment portfolio 10. According to the Capital Asset Pricing Model (CAPM), what would be the value of beta if the risk-free rate is 2%, the risk premium on the market portfolio is 8%, and the expected return on the asset is 12%? 1.25 0 2 1 .5
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Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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