2181 - Chapter 6 - Key terms

2181 - Chapter 6 - Key terms

Assessment

Flashcard

Social Studies

University

Hard

Created by

Phuong Vu

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11 questions

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1.

FLASHCARD QUESTION

Front

risk premium

Back

An expected return in excess of that on risk-free securities; provides compensation for the risk of an investment.

2.

FLASHCARD QUESTION

Front

fair game

Back

An investment prospect that has a zero-risk premium.

3.

FLASHCARD QUESTION

Front

risk averse

Back

An investor who will consider risky portfolios only if they provide compensation for risk via a risk premium.

4.

FLASHCARD QUESTION

Front

risk lover

Back

An investor who is willing to accept lower expected returns on prospects with higher amounts of risk.

5.

FLASHCARD QUESTION

Front

mean–variance (M–V) criterion

Back

The selection of portfolios based on the means and variances of their returns.

6.

FLASHCARD QUESTION

Front

indifference curve

Back

Connects all portfolios with the same utility according to their means and standard deviations.

7.

FLASHCARD QUESTION

Front

complete portfolio

Back

The entire portfolio, including risky and risk-free assets.

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