Exam 9: Characterizing Risk and Return

The standard deviation of the past five monthly returns for K and Company are 4.25 percent, 4.13 percent, −2.05 percent, 3.25 percent, and 7.25 percent. What is the standard deviation?

The optimal portfolio for you will be

If you own 100 shares of Air Line Inc. at $42.50, 250 shares of BuyRite at $53.25, and 350 shares of MotorCity at $7.75, what are the portfolio weights of each stock?

If you invested $30,000 in Disney and $10,000 in Oracle and the two companies returned 6 percent and 12 percent respectively, what was your portfolio's return?

An investor owns $2,000 of Adobe Systems stock, $4,000 of Dow Chemical, and $6,000 of Office Depot. What are the portfolio weights of each stock?

Which of the following describes what will occur as you randomly add stocks to your portfolio?

Modern portfolio theory is

Which of these statements is true?

Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 10 percent and standard deviation of 15 percent. The average return and standard deviation of Idol Staff are 15 percent and 25 percent; and of Poker-R-Us are 12 percent and 35 percent.

Consider the characteristics of the following three stocks: Expected Stardard Returl Devation Thumb Devices 13\% 23\% Air Corrfort 10 19 Sport Garb 10 17 The correlation between Thumb Devices and Air Comfort is ?0.12. The correlation between Thumb Devices and Sport Garb is 0.89. The correlation between Air Comfort and Sport Garb is ?0.85. If you can pick only two stocks for your portfolio, which two stocks should be included in your portfolio to eliminate the most risk? Why?

The past five monthly returns for K and Company are 4.25 percent, 4.13 percent, −2.05 percent, 3.25 percent, and 7.25 percent. What is the average monthly return?

Year-to-date, Company Y had earned a 7 percent return. During the same time period, Company R earned 9.25 percent and Company C earned −2.25 percent. If you have a portfolio made up of 35 percent Y, 40 percent R, and 25 percent C, what is your portfolio return?

Which of the following is another term for market risk?

Which of the following is correct regarding the total risk of a company?

The process of putting money in different types of investments for the purpose of reducing the overall risk of the portfolio is ________.

Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio that dominates it. Portfolio Blue has an expected return of 14 percent and risk of 19 percent. The expected return and risk of portfolio Yellow are 15 percent and 18 percent; and for the Purple portfolio are 16 percent and 21 percent.

At the beginning of the month, you owned $6,000 of Company G, $8,000 of Company S, and $1,000 of Company N. The monthly returns for Company G, Company S, and Company N were 7.25 percent, −1.50 percent, and −0.23 percent. What is your portfolio return?

Which statement regarding coefficient of variation is NOT true?

If you invested $1,000 in Disney and $5,000 in Oracle and the two companies returned 15 percent and 18 percent respectively, what was your portfolio's return?

Sharif's portfolio generated returns of 10 percent, 9 percent, −2 percent, and 6 percent over four years. What was his average return over this period?