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True False O 0 0 0 C O O 0 O O O 0 O 0 4. Large company stocks tend to have larger standard deviations than small company stocks. 5. In a normal distribution, about 95% of all observations fall within two standard deviations of the average. 0 6. It is not possible to earn more than 100% in a single year. O 0 0 O 1. RETURN-LOSS/ORIGINAL COST 2. If Stock X has a higher profit than Stock Y. it is not fair to assume that Stock X has a higher HPR. 3. A quarterly return of 3% equates to an EAR of 12%. O 7. In the CAPM equation, stocks with larger betas will have lower expected returns. 8. The SML intersects the risk axis when graphed. 9. The market risk premium would be the same for stocks with different betas. 10. It is fair to say that systematic risk can be diversified away. True False O 0 0 0 C O O 0 O O O 0 O 0 4. Large company stocks tend to have larger standard deviations than small company stocks. 5. In a normal distribution, about 95% of all observations fall within two standard deviations of the average. 0 6. It is not possible to earn more than 100% in a single year. O 0 0 O 1. RETURN-LOSS/ORIGINAL COST 2. If Stock X has a higher profit than Stock Y. it is not fair to assume that Stock X has a higher HPR. 3. A quarterly return of 3% equates to an EAR of 12%. O 7. In the CAPM equation, stocks with larger betas will have lower expected returns. 8. The SML intersects the risk axis when graphed. 9. The market risk premium would be the same for stocks with different betas. 10. It is fair to say that systematic risk can be diversified away.
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Related Book For
Statistics The Art And Science Of Learning From Data
ISBN: 9780321755940
3rd Edition
Authors: Alan Agresti, Christine A. Franklin
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