What are two key financial considerations in most business decisions
Risk and Return
100
The chance that a given outcome will occur is
Probability
100
What is a portfolio
A collection or group of assets
100
What does the Capital Pricing Model measure?
How much additional return an investor should expect from taking a little extra risk.
100
What is security market line a depiction of?
The Capital asset pricing model as a graph
200
True or false? Single assets and Portfolios are measured and assessed the same.
False. Single assets and Portfolios are measured and assessed differently.
200
What model shows the relationship of probabilities to the associated outcomes
Probability Distribution Model
200
What is correlation?
Statistical measure of the relationship between any two series of numbers.
200
What are two types of risks that equal the total risk of an asset?
Diversifiable risk and Non-diversifiable risk
200
What symbol is used to measure risk on the SML?
Beta
300
The measure of uncertainty surrounding the return that an estimate will earn is called?
Risk
300
What type of chart shows a limited number of outcomes and associated probabilities for a given event?
Bar chart
300
The measure of the degree of correlation between two series defines what term?
Correlation coefficient
300
What do you call the return on the market portfolio of all traded securities?
Market return
300
What axis do required returns fall on?
y axis
400
The total gain or loss experience on an investment over a given period of time is referred to as?
Return
400
What formula measures the dispersion around the expected value?
Standard Deviation
400
Name a positive outcome of Diversification of Portfolios?
reducing overall risk of total assets
400
True of False? Beta coefficient is used to measure both risk of assets and risk of portfolios.
True
400
Non-diversifiable risk is characterized by what symbol?
Beta
500
What are three different attitudes or preferences toward risk?
adverse, seeking, and neutral
500
A measure of relative dispersion that is useful in comparing the risks of assets with differing expected returns refers to what?
Coefficient of Variation
500
What two risks are unique to international diversification
Currency risk and political risk
500
What two parts can CAPM be divided into?
risk free rate of return and risk premium
500
You automatically get an A! Just joking! DAILY DOUBLE
Name two professional aspects discussed in the presentation where risk applies to the decisions that are made ?