Systematic risk present in an average risky asset

Assignment Help Financial Management

Reference no: EM131354305

1. Which one of the following measures the amount of systematic risk present in a particular risky asset relative to the systematic risk present in an average risky asset?

A. beta

B. standard deviation

C. reward-to-risk ratio

D. variance

2. The expected risk premium on a stock is equal to the expected return on the stock minus the:

risk-free rate

inflation rate

standard deviation

expected market rate of return

Reference no: EM131354305

Questions Cloud

No change in net operating working capital : Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. No change in net..

What is fair value for this stock today : A compay is expected to have earnings of $1.54 per share in one year, $1.88 per share in two years, and $2.22 per share in three years. The dividend payout ratio is also expected to remain at 30% over the next three years. The leading P/E ratio is ex..

What is expected return on the portfolio : The common stock of Jensen Shipping has an expected return of 14.7 percent. The return on the market is 10.8 percent and the risk-free rate of return is 3.8 percent. What is the beta of this stock? You own a portfolio that has $2,000 invested in Stoc..

Risks is irrelevant to well-diversified investor : Which one of the following risks is irrelevant to a well-diversified investor? The risk-free rate of return is 3.9 percent and the market risk premium is 6.2 percent. What is the expected rate of return on a stock with a beta of 1.21?

Systematic risk present in an average risky asset : Which one of the following measures the amount of systematic risk present in a particular risky asset relative to the systematic risk present in an average risky asset? The expected risk premium on a stock is equal to the expected return on the stock..

Risk that applies to most securities : Jessica is examining data for Gamma, Inc. She sees that Gamma has EBIT (operating profit) of $2,000,000. She knows that Gamma paid $400,000 in interest. Which one of the following is a risk that applies to most securities?

What are the benefits and costs of debt issuance : What are the benefits and costs of equity issuance? How do you actively manage country risk? What are the benefits and costs of debt issuance?

What is the current price of the common stock : Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the g..

The present value relationship to interest is best described : For a firm paying 10 percent for new debt, the higher the firm's tax rate: With respect to the time value of money, the present value relationship to interest is best described as:

User Account

All Pages