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BNKF5001 Risk & Return 3

Authored by Nick Nick

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University

Used 2+ times

BNKF5001 Risk & Return 3
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10 questions

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1.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

A financial portfolio is a collection of:

Art works

Assets (usually financial)

Assets (usually real)

Bonds

2.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

Diversification is the process of:

spreading your funds over a range of investments in order to reduce risk.

reducing the variability of investments so that all investments will perform well at the same time.

finding assets that are not perfectly correlated with each other.

A and C only.

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The risk-return line:

always has a positive slope and commences above the origin.

always has a positive slope and commences at the risk-free rate.

shows the risk associated with an investment and the returns it should provide.

All of the above.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The annual returns for Genray Ltd are reproduced below:

Year Genray Ltd (%)

20X2 -4

20X3 8

20X4 11

20X5 3

20X6 -8

6.8%

2.0%

8.5%

2.5%

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The _____________ the standard deviation, the ____________ the investment.

smaller, larger the expected return on

larger, riskier

smaller, riskier

larger, smaller the expected return on

6.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

In a portfolio with $5,000 invested in Genray Ltd and $15,000 invested in Terrafirma Inc, the portfolio weightings respectively are:

75% and 25%

5% and 15%

50% and 50%

25% and 75%

7.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The average annual returns for Genray Ltd and Terrafirma Inc are 10%p.a. and 15%p.a. respectively. Assuming a portfolio with 50% in Genray and 50% in Terrafirma, the overall expected portfolio return should be:

10%

12.5%

13.5%

15%

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