Question: kindly ans these question for me. 1. Diversification works because I. Company specific risk exists; II. Forming stocks into a portfolio reduces the standard deviation

kindly ans these question for me.

1. Diversification works because I. Company specific risk exists; II. Forming stocks into a portfolio reduces the standard deviation of each stock in the portfolio III. Firm-specific risk can be dramatically reduced and virtually eliminated A. I only D. I and Ill only B. III only E. I, II and III C. I and II only PARTB (Short conceptual Question) 1. If the Market interest rate goes down for bonds, which type of risk the bondholders are expected to face? Briefly explain your understanding in this regard. (1 mark]

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The 0.5-kg cylinder A is released from rest from the position shown and drops the distance h 1 = 0.6 m. It then collides with the 0.4-kg block B; the coefficient of restitution is e = 0.8. Determine...

1) If the Market interest rate goes down for bonds, which type of risk the bondholders are expected to face? Briefly explain your understanding in this regard. 2) Diversification works because I....

QUESTION 18 Diversification works because: Not yet answered Marked out of 1.00 Select one: Flag question O a. Firm-specific risk can be never be reduced. b. Stocks earn higher returns than bonds. O...

Question 3 6.25 pts Diversification works because: I. unsystematic risk exists. II. combining stocks into a portfolio reduces the standard deviation of each stock in the portfolio. III. firm-specific...

please just answer the quantitave problem Risk and Returni Risk in Portfolio Context The capital asset pricing model (CAPM) explains how risk should be considered when stocks and other assets are...

I need your help with this: Can you please quote from the attached chapters / resource if possible? Corporations often use different costs of capital for different operating divisions. Using an...

You helped me a couple of weeks ago. I was wondering if i could setup a time for tomorrow that you could be available to help me with some questions. I will pay $20 per question. They are short and I...

14. Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15%, betas of 2.0, and standard deviations of 30%. The returns of...

help mi with my questions 21. There are three assets, A, B and C, where A is the market portfolio and C is the risk-free asset. The return on the market has a mean of 12% and a standard deviation of...

Its about swaps show calculations 20. In August 1993 the Bank of Thailand was reported as offering to foreign investors in troubled banks the opportunity to resell their share; back to the central...

Question 1. 1. Which of the following statements is CORRECT? (Points : 0.1) A. The beta of a portfolio of stocks is always smaller than the betas of any of the individual stocks. B. If you found a...

Find the point-slope equation for the line that passes through the points (-3, 2) and (2, 12). Use the first point in your equation. y - [?] = [ ](x - [ ])

Does current political stability in India will be able to transform India into a world Manufacturing Hub and 2nd largest economy in the world?

The SML helps determine the risk of version level among investors, the steep of the slope of SML , the blank level of risk version

transforms transactional data like sales into useful information that supports business decisions in other parts of the company, such as manufacturing, inventory, procurement, invoicing,...

What do the CIPP and Brinkerhoff models of evaluation add to what is missing from Kirkpatricks model? What benefit, if any, is there to viewing evaluation in this way?

According to the text, what is blended learning? What do you think of this as an approach to training new professional employees?

According to Nickols, what is a training stakeholder? What are some important categories of training stakeholders? Why is the notion of multiple stakeholders (or constituencies) important to training...