Quiz Ch 13 – Irrelevance in a Well-Diversified Portfolio
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Which of the following would be considered irrelevant to an investor who owns a well-diversified portfolio?
Which of the following would be considered irrelevant to an investor who owns a well-diversified portfolio?
What is the market’s measure of systematic risk?
What changes can be expected in a portfolio’s characteristics when it transitions from poor diversification to proper diversification?
What is the primary motivation for portfolio diversification?
When calculating the present value of a business, at what rate should the firm’s free cash flows be discounted?
If a project can be partially financed with debt and the firm is subject to taxes, what will happen to the project’s acceptability if it initially had a positive NPV when financed entirely by equity?
How many stocks, on average, are needed to effectively mitigate diversifiable risk in a portfolio?
Which of the following actions is unlikely to be effective in mitigating unsystematic risk in an investment portfolio?
What concept or model is used to explain the connection between the expected return of a security and its systematic risk?
What measures total risk and systematic risk respectively?