Why is some risk diversifiable

Assignment Help Financial Accounting
Reference no: EM133306757

Questions

1. In broad terms, why is some risk diversifiable? Why are some risks nondiversifiable? Does it follow that an investor can control the level of unsystematic risk in a portfolio, but not the level of systematic risk?

2. Suppose the government announces that, based on a just-completed survey, the growth rate in the economy is likely to be 2 percent in the coming year, as compared to 5 percent for the past year. Will security
prices increase, decrease, or stay the same following this announcement? Does it make any difference whether the 2 percent figure was anticipated by the market? Explain.

3. If a portfolio has a positive investment in every asset, can the expected return on the portfolio be greater than that on every asset in the portfolio? Can it be less than that on every asset in the portfolio? If you answer yes to one or both of these questions, give an example to support your answer.

4. True or false: The most important characteristic in determining the expected return of a well-diversified portfolio is the variance of the individual assets in the portfolio. Explain.

5. If a portfolio has a positive investment in every asset, can the standard deviation on the portfolio be less than that on every asset in the portfolio? What about the portfolio beta?

Reference no: EM133306757

Questions Cloud

How was impacted by the first great migration : Discuss how it was impacted by the first great migration {1916-1930}: New York, Philadelphia, Pittsburgh, Chicago, Detroit, and Cleveland.
Central banks manage monetary stability of country : How central banks manage the monetary stability of a country? how might a central banks achieve the full employment as a result of monetary stability?
What are the most important things to do before : what would you tell them (please use information from chapter 13 dying, death and bereavement to answer this)? In what order would you put them? Why would you
Summarize the article and outline the main facts : Since human rights in the workplace is the source of the employee's complaint, indicate which prohibited ground the individual is challenging
Why is some risk diversifiable : Why is some risk diversifiable? Why are some risks nondiversifiable? Does it follow that an investor can control the level of unsystematic risk in a portfolio,
Discuss womens suffrage and anti suffrage movements : Discuss women's suffrage and Anti suffrage movements. Think about Republican Motherhood, coverture, the Women's Christian Temperance Union.
Describe the stages of the general adaptation syndrome : PY 101 Mohawk Valley Community College Identify three types of external events that can cause stress and Describe the stages of the general adaptation syndrome
What could be done to empower individuals to resist : Discuss social impact theory and how it can explain the effects of the various manipulations used. Discuss if the obedience observed in Milgram's research
Describe the flapper lifestyle : Do their opinions represent that they advocate for progressive change or the preservation of traditional American values?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd