Quiz Ch 08 – Parameters Defining Normal and Lognormal Distributions
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What characteristics define normal and lognormal distributions?
What characteristics define normal and lognormal distributions?
Where would an overpriced stock likely plot on a graph?
On a graph, where would an underpriced stock typically be positioned?
What is a fundamental principle of the Capital Asset Pricing Model (CAPM)?
What is the role of a stock return’s beta?
What does the correlation coefficient assess?
True or false: According to the Arbitrage Pricing Theory (APT), the market portfolio is considered efficient.
True or false: The beta for risk-free U.S. Treasury bills is higher than zero.
True or false: U.S. Treasury bills, being risk-free, have a beta of zero.
True or false: Beta measures how much a stock adds to the risk of a well-diversified portfolio.