please answer all MC

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1.Which one of the following indicates a portfolio is being effectively diversified?

Select one:

a. a decrease in the portfolio standard deviation

b. an increase in the portfolio rate of return

c. an increase in the portfolio beta

d. an increase in the portfolio standard deviation

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2.The primary purpose of portfolio diversication is to:

Select one:

a. eliminate asset-specic risk.

b. eliminate systematic risk.

c. eliminate all risks.

d. increase returns and risks.

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3.The principle of diversication tells us that:

Select one:

a. Concentrating an investment in three companies all within the same in- dustry will greatly reduce the systematic risk.

b. Concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk.

c. Spreading an investment across many diverse assets will eliminate some of the total risk.

d. Spreading an investment across many diverse assets will eliminate all of the systematic risk.

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4.Which one of the following is the formula that explains the relationship between the expected return on a security and the level of that security's systematic risk?

Select one:

a. capital asset pricing model

b. market performance model

c. expected risk formula

d. unsystematic risk equation

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5.The expected risk premium on a stock is equal to the expected return on the stock minus the:

Select one:

a. risk-free rate

b. variance

c. expected market rate of return

d. standard deviation

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6.You recently purchased a stock that is expected to earn 22 percent in a booming economy, 9 percent in a normal economy, and lose 33 percent in a recessionary economy. There is a 5 percent probability of a boom and a 75 percent chance of a normal economy. What is your expected rate of return on this stock?

Select one:

a. 0.45%

b. 1.25%

c. 0.25%

d. 1.45%

Question 28

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7.You would like to combine a risky stock with a beta of 2.3 with U.S. Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in the risky stock?

Select one:

a. 60.2%

b. 40.4%

c. 43.5%

d. 53.2%

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8.The expected return on stock A is 15.78 percent while the expected return on the market is 11.34 percent. The stock's beta is 1.62. What is the right equation to calculate the risk premium?

Select one:

a.

b.

c.

d.

please answer all MC

please answer all MC

please answer all MC