Quiz Ch 11 – Measurement of Risk: Standard Deviation and Beta
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition
What types of risks do standard deviation and beta measure?
What types of risks do standard deviation and beta measure?
Which measure is used to quantify the amount of systematic risk in a specific risky asset relative to an average risky asset?
What is the minimum rate of return needed for an investment to be deemed attractive?
Which portfolio is expected to have a beta of zero?
Which term denotes the strategy of investing in diverse assets to mitigate risk?
In relation to the security market line, what does it indicate when a security plots to the right and below the line, and what is the pricing implication?
Which type of risk is the basis for the risk premium of an individual security?
Which formula calculates the risk premium for individual security based on the expected return, risk-free rate, beta, and expected market return?
What does the security market line illustrate in terms of its relationship between two variables?
What does the slope of the security market line represent?