Capm
問題一覧
1
model based on the proposition that any stocks required rate of return is equal to the risk free rate of return plus a risk premium that reflects only the risk remaining after diversification
CAPM
2
also called unsystematic or company risk
Diversifiable Risk
3
a type of risk that can be diversified away
Diversifiable Risk
4
also called systematic or market risk
Undiversifiable Risk
5
Type of risk that cannot be eliminated by diversification
Undiversifiable Risk
6
measure of risk when assets are held in portfolio
Beta coefficient
7
rate of return that an investor would require in a riskless investment. This is composed of the real rate and inflation premium.
Risk-free rate
8
expected rate of return of the market as a whole
Market rate of return
9
difference between market rate of return and the risk free rate
Market risk premium ( price per unit of risk)
10
is the return required as compensation to investors for taking risk
Risk premium
11
a graphical representation of CAPM
SML
12
Capm uses _______ as a measure of risk
Beta
13
Risk free rate is composed of
real rate and inflation premium
14
provides a general framework for analyzing risk return relationship for all types of assets
CAPM
15
CAPM uses only one part of the total risk called
Systematic Risk
16
represents essentially random events like;
lawsuits, strikes, company management, marketing strategies etc.
Diversifiable risk
17
affecting market as a whole, it affects all firms simultaneously like;
wars, inflation, interest rates, etc.
undiversifiable
18
measure of sensitivity of a security's return relative to the returns of a broad based market portfolio securities
Beta
19
measures co-movement between a stock and the market portfolio
Beta
20
as the one tends to move up and down in step with the general market as measured by some index
Average-risk stock
21
represents the linear relationship between a security's required rate of return and its risk as measured by beta.
SML
22
minimum rate of return required for a project to be accepted
Hurdle Rate
23
Assumptions about investor behavior include:
- Investor are risk averse and expected to be rewarded
- Investors act rational
- Investors made decision on a single time horizon
- Investors same the share expectations
TRUE
24
Assumptions about the securities market include:
- All investors can borrow or lend unlimited amount
- Financial markets are frictionless ( no taxes/transaction costs)
- All assets are perfectly divisible and perfect liquid
- Information is freely available to all investors
TRUE
25
Is it advisable for an investor to just hold a portfolio consisting all stocks? Probably not, because of the following reasons:
- entails high administrative costs
-Index fund can be used for diversification
- Some people they can "beat the market"
- Some people believe they can find and buy undervalued stocks and sell overvalued ones.
TRUE
26
Systematic risk can be measured by a stock's beta coefficient
TRUE
27
yvc
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2nd exam
2nd exam
Alpha Ton · 24問 · 1年前2nd exam
2nd exam
24問 • 1年前1STEXAM-VALUATION
1STEXAM-VALUATION
Alpha Ton · 49問 · 1年前1STEXAM-VALUATION
1STEXAM-VALUATION
49問 • 1年前3RDEXAM-VALUATION
3RDEXAM-VALUATION
Alpha Ton · 19問 · 1年前3RDEXAM-VALUATION
3RDEXAM-VALUATION
19問 • 1年前4THEXAM-VALUATION
4THEXAM-VALUATION
Alpha Ton · 9問 · 1年前4THEXAM-VALUATION
4THEXAM-VALUATION
9問 • 1年前問題一覧
1
model based on the proposition that any stocks required rate of return is equal to the risk free rate of return plus a risk premium that reflects only the risk remaining after diversification
CAPM
2
also called unsystematic or company risk
Diversifiable Risk
3
a type of risk that can be diversified away
Diversifiable Risk
4
also called systematic or market risk
Undiversifiable Risk
5
Type of risk that cannot be eliminated by diversification
Undiversifiable Risk
6
measure of risk when assets are held in portfolio
Beta coefficient
7
rate of return that an investor would require in a riskless investment. This is composed of the real rate and inflation premium.
Risk-free rate
8
expected rate of return of the market as a whole
Market rate of return
9
difference between market rate of return and the risk free rate
Market risk premium ( price per unit of risk)
10
is the return required as compensation to investors for taking risk
Risk premium
11
a graphical representation of CAPM
SML
12
Capm uses _______ as a measure of risk
Beta
13
Risk free rate is composed of
real rate and inflation premium
14
provides a general framework for analyzing risk return relationship for all types of assets
CAPM
15
CAPM uses only one part of the total risk called
Systematic Risk
16
represents essentially random events like;
lawsuits, strikes, company management, marketing strategies etc.
Diversifiable risk
17
affecting market as a whole, it affects all firms simultaneously like;
wars, inflation, interest rates, etc.
undiversifiable
18
measure of sensitivity of a security's return relative to the returns of a broad based market portfolio securities
Beta
19
measures co-movement between a stock and the market portfolio
Beta
20
as the one tends to move up and down in step with the general market as measured by some index
Average-risk stock
21
represents the linear relationship between a security's required rate of return and its risk as measured by beta.
SML
22
minimum rate of return required for a project to be accepted
Hurdle Rate
23
Assumptions about investor behavior include:
- Investor are risk averse and expected to be rewarded
- Investors act rational
- Investors made decision on a single time horizon
- Investors same the share expectations
TRUE
24
Assumptions about the securities market include:
- All investors can borrow or lend unlimited amount
- Financial markets are frictionless ( no taxes/transaction costs)
- All assets are perfectly divisible and perfect liquid
- Information is freely available to all investors
TRUE
25
Is it advisable for an investor to just hold a portfolio consisting all stocks? Probably not, because of the following reasons:
- entails high administrative costs
-Index fund can be used for diversification
- Some people they can "beat the market"
- Some people believe they can find and buy undervalued stocks and sell overvalued ones.
TRUE
26
Systematic risk can be measured by a stock's beta coefficient
TRUE
27
yvc
ffd