an efficient portolio ...... 1) minimise return for a given level of risk 2) minimise risk for a given level of return 3) minimize both risk and return 4) all the options choose the correct statement

Q: What must be true about the sign of the risk aversion coefficient, A, for a risk lover? Draw the…

A: The question is based on the concept risk attitude of investors in financial economics, there are…

Q: Explain how knowing the standard deviation of a security’s historical returns increases an…

A: The question is based on the concept, which establish relation between return and risk for…

Q: Clearly explain the difference between systematic risk and non-systematic risk and  discuss the…

A: Risk is the possibility of loss to a company due to unforeseen circumstances. Beta is the measure of…

Q: An analyst wanting to assess the downside risk of an alternative investment and is considering the…

A: Downside risk is a statistical measure that defines the probability of potential loss from a fall in…

Q: A security with only diversifiable risk has an expected return that exceeds the riskfree rate of…

A: Unsystematic risk is another term for diversifiable risk. The risk that may be quantified and…

Q: define risk in terms of variance or standard deviation of actual returns around an expected return.…

A: The right answer is d. Investment D: Expected  Return =10% , Standard deviation=15%

Q: What happens to the SML graph when risk aversion increasesor decreases?

A: Risk Aversion: The ability of a human being to avoid the risk and eventually reducing losses that…

Q: there is uncertainty about monetary outcome and you are concerned about return and risk, then all…

A: Yes agreed to that above statement that there is no need of entire data distribution but standard…

Q: What is efficient set? Explain why rational investors will never chose a portfolio below the minimum…

A: What is efficient set?  Various configurations of securities yield various degrees of returns. The…

Q: When can investors treat beta as a relevant risk measure and when can they treat beta as only a…

A: Beta or risk in the security and portfolio analysis is a statistical measure that is the variability…

Q: The desired rate of return on an investment should reflect the degree of risk involved. A.   True…

A: Riskier investments may give higher returns to the investors as they provide favorable ratio of risk…

Q: According to the information in the table given below, fill in the blanks with correct option:…

A: Financing maturity is a particular time at which asset gets mature and payments of all the due…

Q: (Net income ∕ Total assets)

A: Operating Profit Margin: It shows the performance of the firm in generating operating profit from…

Q: Risk-Return Tradeoff state that the more risk is willing to accept, the less return that should be…

A: Risk return trade-off represents a direct relationship between the two variables, which means when…

Q: The higher a security's risk, the higher the return investors demand, and thus the less they are…

A: Risk on security is defined as the risk of not getting actual return as per the expectations of the…

Q: q2- Which of the following statements is correct? Select one: a. Only risk averse investors would…

A: The Modern Portfolio Theory: The Modern Portfolio Theory propounded by Harry Markowitz is one of…

Q: Discuss the difference between Systematic Risk and Unsystematic Risk. What kind of strategies we can…

A: Risk in finance is the situation that may or may not arise in the future and has an impact on the…

Q: 2. Explain the weighted average cost of capital (WACC) and its significance and include hypothetical…

A: Honor code: Since you have asked multiple questions, we will solve the first question for you. If…

Q: omparing Value at Risk (VAR) and Expected Shortfall (ES), which is preferred by regulators for…

A: VAR that is value at risk and another is ES expected shortfall these are two methods to measure the…

Q: Explain the difference between a linear risk and a nonlinear risk.

A: Linear risk is an enterprise's risk, based on the traditional economic system of "take-up-dispose."…

Q: With respect to an investor's utility function expressed as: U = E(r) –Ao², which of the following…

A: Utility Function = Er-12Aσ2 where A is -4, 0 and 4

Q: (3) What are the basic steps in risk manaqement? Briefly describe each.

A: In finance we make investments and manage our money with the objective of generating a return.…

Q: The the expected return, the the risk. O a. lower; higher O b. higher,lower O c. higher; higher more…

A: Expected return and risk are correlated

Q: iation of a security’s historical returns increases an investor’s underst

A: A standard deviation is a tool used in finance to measure the volatility and risk associated with a…

Q: what is the key deference between Value - at - Risk ( VaR ) and volatility ? More specifically, what…

A: Volatility is a traditional measure of risk. Because of certain disadvantages in using volatility as…

Q: Markowitz theory indicates to create and construct a portfolio of assets to maximize returns within…

A: Efficient frontier curve tells the set of portfolios which offer the highest rate of return with the…

Q: Are you agree with the - return curve slop of a risky has a negative slop."? explain why?**…

A: The exchange rate indifference curve is the curve between the exchange rate and demand for given…

Q: George wants to calculate risk using risk assessment matrix ,should he assess for the worst credible…

A: Risk assessment matrix is a method used for finding the risk. This method prioritizes the risk by…

Q: Explain if the operational risk is considered a risk or uncertainty? Why? If it is a risk, how can…

A: Operational Loss:   The risk involved in failures of Man, Machine, Material, and Methods during…

Q: Please explain the risk vs. expected rate of return tradeoff, the security market line, and…

A: The risk-free rate refers to the rate that is assumed to be holding no risk. Government-issued…

Q: Risks that are insurable because their probabilities can be calculated precisely enough for the risk…

A: An insurable risk, that might comprise possibility of loss that is unexpected and outside the…

Q: Draw an indifference curve for a risk-neutral investor providing utility level .05.

A: The indifference curve of a risk-neutral investor at the utility level of 0.05 is as follows:

Q: Standard deviation measures which type of risk? Select one: a. Total b. Non diversifiable c.…

A: STANDARD DEVIATION IS USED AS AN INDIACATOR OF MARKET VOLATILITY AND THUS OF RISK .

Q: Another name for the expected value of an investment would be: Answer a. The mean value b. The…

A: An Expected Value is an anticipated value for an investment at some point in future.

Q: Beta is useful in practice because it assists in: Select one: a.   designing portfolios suited to…

A: A stock's volatility can be compared to the systematic risk of the entire market using a beta…

Q: How important is risk to returns?

A: “Since you have asked multiple questions, we will solve the first question for you. If youwant any…

Q: Markowitz theory indicates to create and construct a portfolio of assets to maximize returns within…

A: Security market lineIt is the line drawn on the chart that serves as the CAPM graphical…

Q: Calculated risks mean ________________ A. Knowing what is the limit of every decision B. Studying…

A: Every opportunity has risk and reward profile associated with it. Some opportunities give higher…

Q: Pls Briefly explain these four.  1. The process of assessing overall risks can be difficult and…

A: The process of identifying, analyzing, and accepting or mitigating uncertainty in investment…

Q: Which one of the following statements is correct? Group of answer choices   The lower the average…

A: Risk premium: It is the difference between the expected returns and risk-free market rates. Correct…

Q: Which of the following Incoterms (EXW, FCA, DPU, DAP) are in favor of the buyer in terms of risk?…

A: FOLLOWING INCOTERMS- EXW -EX WORKS FCA-FREE CARRIER DPU-DELIVERED AT PLACE UNLOADED DAP-DELIVERED AT…

Q: Consider the following four statements about value at risk (VaR): The choice of VaR confidence…

A: It leads to the problem with the usage of VaR in the practice. The uniformity of practice is not…