Reference no: EM131825993

1. The utility score an investor assigns to a particular portfolio, other things equal, A) will decrease as the rate of return increases. B) will decrease as the standard deviation decreases. C) will decrease as the variance decreases. D) will increase as the variance increases. E) will increase as the rate of return increases.

2. Systematic risk is also referred to as A) market risk, nondiversifiable risk. B) market risk, diversifiable risk. C) unique risk, nondiversifiable risk. D) unique risk, diversifiable risk. E) None of the options

3. The risk that can be diversified away is A) firm specific risk. B) beta. C) systematic risk. D) market risk.

4. Consider the following probability distribution for stocks A and B: The expected rates of return of stocks A and B are ________ and ________, respectively. A) 13.2%; 9% B) 14%; 10% C) 13.2%; 7.7% D) 7.7%; 13.2%

5. Which one of the following portfolios cannot lie on the efficient frontier as described by Markowitz? A) Only portfolio A cannot lie on the efficient frontier. B) Only portfolio B cannot lie on the efficient frontier. C) Only portfolio C cannot lie on the efficient frontier. D) Only portfolio D cannot lie on the efficient frontier. E) Cannot tell from the information given.