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ad-work [718]
3 years ago
12

Which of the following statements is FALSE?A. Asset-specific risks can be easily diversified with highly correlated assets in a

portfolioB. Asset-specific risks can be easily diversified with numerous assets in a portfolioC. Bearing risk is rewarded with higher expected returnsD. Only market-wide risks, not asset-specific risks, should earn rewards
Business
2 answers:
Gekata [30.6K]3 years ago
7 0

Answer:

The false statement is letter "D": Only market-wide risks, not asset-specific risks, should earn rewards.

Explanation:

The difference between choosing market-wide risks and asset-specific risks lays in the number of securities the investor decides to trade with. The latter reduces the risk by selecting a reduced number of assets. This is also called <em>unsystematic risk</em>. However, in both cases, the investors may profit from their trades according to their strategy.

Over [174]3 years ago
7 0

Answer:

D. Only market-wide risks, not asset-specific risks, should earn rewards

Explanation:

Assets are investments that people do in order to see their money grow, there are high risks and low risk investments, for example you can invest in government bonds, and they will pay a low fee but you will never loose your money, while you could have portfolios of money invested in companies and you could loose money there, from the options the one that is incorrect is the last one D. Only market-wide risks, not asset-specific risks, should earn rewards, because all investments should earn rewards.

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2 years ago
what is the present value of $500 recieved at the end of each year for 15 years? ( assume thatt the first patyment is recieved a
Eva8 [605]

Answer:

$3800

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow fromyear 1 to 15 = 500

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To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

4 0
2 years ago
Wilson’s is reviewing a project with an internal rate of return of 13.09 percent and a beta of 1.42. The market risk premium is
maria [59]

Answer:

Accepted and rejected

Explanation:

Since the internal rate of return is 13.09% and the WACC is 12.68%

As we can see that the internal rate of return is higher than the WACC as WACC is considered as the discount rate

So the project should be accepted

And, if CAPM is used

So, the expected rate of return is

If CAPM is used

Risk-free rate of return + Beta × market risk premium

= 2.9% + 1.42 × 8.1%

= 2.9% + 11.502%

= 14.40%

And, The Internal rate of return  = 13.09%

Since the internal rate of return is less than the expected rate of return therefore the project should be rejected

5 0
2 years ago
Which of the following is NOT true of confidence interval estimates of the difference between two population proportions?
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Answer: D. A confidence interval is used to test a claim about two population proportions.

Explanation: Confident interval estimate is a type of estimate computed from statistics of observed data.

The confident interval estimate of the difference between two population proportions will use a standard deviation based on estimated values of the population proportion. The confident interval will be used to estimate the difference in the two population proportions, but it will not be used to test claim about two population proportions because it can not.

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2 years ago
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