Question: Finance Sorry for posting more than one question. But these all relate to each other. Pls help. Thank you in advance. Diversification can reduce or

Finance Sorry for posting more than one question. But these all relate to each other. Pls help. Thank you in advance.

Diversification can reduce or eliminate __________ risk.

A. all

B. firm-specific

C. systematic

D. market

The risk premium is the _________.

A. realized rate of return in excess of the risk-free rate

B. rate of return that can be earned with certainty

C. required rate of return minus rate of riskless asset

D. index return

A portfolio with a 5% beta and 10% standard deviation expects a return of 10% when T-bills is paying 4%. This portfolio had a Sharpe ratio of ____.

A. 0.4

B. 0.6

C. 0.8

D. I do not know

Bonds rated _____ or better by Standard & Poor's are considered investment grade.

A. AAA

B. AA

C. BBB

D. CCC

Consider an investment opportunity set formed with two securities that are not perfectly negatively correlated. The global minimum-variance portfolio has a standard deviation that is always _________.

A. equal to the sum of the securities' standard deviations

B. equal to 0

C. greater than the standard deviation of risk-free asset

D. less than the standard deviation of risk-free asset

The term complete portfolio refers to a portfolio consisting of _________________.

A. the market portfolio combined with the minimum-variance portfolio

B. securities from domestic markets combined with securities from foreign markets

C. the risk-free asset combined with at least one risky asset

D. common stocks combined with bonds

A measure of the total riskiness of an asset is ____________.

A. beta

B. covariance

C. standard deviation

D. alpha

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