Quiz Ch 07 – T/F Relationship Between Standard Deviations and Betas
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: High standard deviation in stocks implies high betas.
True or false: High standard deviation in stocks implies high betas.
True or false: When comparing stocks to 10-year U.S. Treasury bonds, the resulting risk premium is anticipated to be smaller than the risk premium obtained from comparing stocks to U.S. Treasury bills.
True or false: Within the United States, the authors suggest a plausible risk premium range of 5 percent to 8 percent.
True or false: Beta and covariance are the standard statistical measures of stock return variability.
True or false: Generally, stock returns tend to move together, resulting in pairs of stocks showing positive covariances and correlations.
True or false: Treasury bills generally yield higher average returns, both nominally and in real terms, compared to long-term government bonds.
True or false: Unique risk, the portion of portfolio risk that persists even with diversification, is an inherent component.
What does a standard error measure?
What does Beta assess?
How many variance terms are included in the formula for portfolio variance in a portfolio of N-stocks?