80.2K

Verified Solution

Link Copied!

Disney vs Ford Use this info for the next five questions: Standard Deviation Beta Disney 25.0% 1.25 Ford 32.0% 0.98 Question 16 (1 point) Which of the above stock would you recommend for a well-diversified investor and why? Disney because it has lowest total risk Disney because it has lowest systematic risk Ford because it has lowest firm specific risk Ford because it has lowest market risk. Question 17 (1 point) Which of the above stock would you recommend for an undiversified investor and why? Disney because it has lowest market risk Disney because it has lowest standard deviation. Ford because it has lowest systematic risk. Ford because it has lowest unique risk. Question 18 (1 point) Which of the above stock would you expect to provide the least return? Ford because it has the highest total deviation. Ford because it has the lowest amount of market risk Disney because it has the highest amount of total risk Disney because it has the highest amount of systematic risk. Question 19 (1 point) In a boom economy, which stock would you include in your portfolio and why? Disney because it is a defensive stock Disney because it is an aggressive stock Ford because it is an aggressive stock Ford because it is a defensive stock Question 20 (1 point) According to CAPM, what is the true return on Ford stock if the risk-rate is 0.25% and the market risk premium is 5%? 4.55% O 6.50% 5.15% O 5.75% Question 21 (1 point) What is the decision rule in the case of projects with significant difference in initial costs of investment? Select the highest IRR to be conservative. Select the project based on IIRR. Select the project based on MIRR Evaluate the project according to NPV

Answer & Explanation Solved by verified expert

See Answer