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  3. given the following: market retuen = 10% beta of a

Given the following: market retuen = 10% beta of a stock = 1.2 Risk free...

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Finance

Given the following:

market retuen = 10%

beta of a stock = 1.2

Risk free rate = 4%

Calculate the required return of the stock

1.

6%
2.

11.2%
3.

7.2%
4.

none of the answers are correct.

In ____________________ all income statements are divided by total sales, and all balance sheet items are divided by total assets.

1.

fundamental analysis
2.

common size analysis

3.

Intrinsic analysis
4.

none of the ansers are correct

The risk associated with an individual, stand alone stock is:

1.

Its Beta
2.

Its correlation
3.

its intrinsic value
4.

none of the above

  1. An investor can eliminate the majority of market risk by diversifying with ownership of 30 to 40 stocks in various sectors of the economy.

    True

    False

  2. Diversification offers the ability to lower the overall risk of a portfolio, including establishng a portfolio risk that is even lower that the risk of any individual stock in the portfolio.

    True

    False

Answer & Explanation Solved by verified expert
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