. Referring to the same information as in question 4:Which of the following statements is not true?The total risk of the stock is reflected in its standard deviationThe systematic or non-diversifiable risk is reflected in betaThe market risk premium is 8%The firm’s risk premium is 12%The market has a beta of 1.5

stock's total risk depends on the stock's ________ and ________.Question 5Select one:a.beta; specific riskb.beta; market riskc.specific risk; firm-specific riskd.aggressive risk; defensive risk

Which statement is correct regarding the following information? - Shares in company A have an expected return of 8%, standard deviation of 15%  and beta coefficient of 1.3- Shares in company B have an expected return of 12%, standard deviation of 25% and beta coefficient of -0.75.Group of answer choicesIn a single asset portfolio, security A would be riskier because its coefficient of variation is higher than security B.In a single asset portfolio, security B would be riskier because its coefficient of variation is higher than security ASecurity A is less risky if held in a diversified portfolio because of its positive correlation with market portfolioSecurity B is riskier if held in a diversified portfolio because of its beta coefficient of –0.75None of the options is correct.

Which of the following statements is FALSE? It is common practice to estimate beta based on the historical correlation and volatilities. Beta is the expected percent change in the excess return of the security for a 1% change in the excess return of the market portfolio. Beta represents the amount by which risks that affect the overall market are amplified for a given stock or investment. Beta measures the diversifiable risk of a security, as opposed to its market risk, and is the appropriate measure of the risk of a security for an investor holding the market portfolio.

Which of the following statements is true?Group of answer choicesA stock having a covariance with the market that is higher than the variance of the market will always have a beta above 1.0.Stocks with high standard deviations will necessarily also have high betas.The standard deviation of a two-stock portfolio generally equals the value-weighted average of the standard deviations of the two stocks.A portfolio with a beta of one offers an expected return equal to the market risk premium.

Which of the statement is WRONG?A.The market portfolio contains all shares of all stocks and securities in the market.B.There is no clear relationship between the volatility and return of individual stocks.C.Diversification eliminates both idiosyncratic risk and systematic risk.D.The total risk of a security contains risk which is not rewarded.