Exam 8: Risk, Return, and Portfolio Theory

Suppose you own 100 shares of CyberChase Ltd.and 200 shares of NetSurfer Ltd.At the time of purchase, the stocks of CyberChase and NetSurfer were trading at $25 and $15 per share, respectively.What is the expected value of the portfolio if CyberChase has an expected return of 8.0% and NetSurfer has an expected return of 13.0%?

Given the following forecasts, what is the expected return for a portfolio that has $2,200 invested in Stock X, $3,600 in Stock Y, and $4,200 invested in Stock Z?

The expected return on Alpha Inc.is 8.0% and the expected return on Beta Inc.is 24.0%.What is the trade-off between investing in Alpha and Beta if the portfolio weight in Alpha is increased by 1%?

The standard deviation and expected returns for 4 portfolios (A, B, C, and D)are graphed on the following efficient frontier: Which of the following portfolios are attainable?

Which of the following is NOT a disadvantage of Value at Risk (VaR)?

Stocks A and B have a correlation coefficient of +1.If stock A went from $10 to $12 over the past month, what is the price of stock B, if its price one month ago was $5?

If the closing price of Stock Y was $38.63 on Friday, which was after it had earned daily returns of 8.0%, 23.0%, -30.0%, 20.0%, and -5.0% during the week (Monday to Friday), what was the opening price of Stock Y on Monday?

Use the following three statements to answer this question: I.There will be benefits from diversification as long as . II.As long as , an equally weighted portfolio would be risk-free. III.Diversification can never eliminate the total risk of the portfolio.

Define and discuss expected return with regard to individual securities and a portfolio as a whole.

The standard deviation and expected returns for 4 portfolios (A, B, C, and D)are graphed on the following efficient frontier: Which of the following portfolios are efficient?

Which portfolio represents the minimum variance portfolio?