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How is total risk measured-what is a portfolio

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Reference no: EM13696700

Answer all of the questions

1. How is total risk measured?

2. What is a portfolio?

3. Why is the standard deviation of a portfolio less than the average standard deviation of the assets in the portfolio?

4. What is systematic risk? What are the other names for it?

5. What is unsystematic risk? What are the other names for it?

6. Why does diversification reduce unsystematic risk but not systematic risk?

7. Why does only systematic risk matter?

8. How is systematic risk measured?

9. What is the beta for a t-bill? What is the beta for the market?

10. What does a beta of more than 1 mean, what does a beta of less than 1 mean?

11. What do the costs of equity, debt and preferred stocks mean?

12. What does the weighted average cost of capital represent to the firm?

13. What do the following measure: gross profit margin, net profit margin, the difference between net and gross, asset turnover and debt ratio.

14. What are the advantages and disadvantages of debt?

Reference no: EM13696700

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