A. reduce aggregate risk
B. eliminate all risk
C. increase the standard deviation of the portfolio’s return
D. reduce idiosyncratic risk
Related Mcqs:
- Compared to a portfolio composed entirely of shares a portfolio that is 50 percent government bonds and 50 percent shares will have a ?
A. lower return and a lower level or risk
B. lower return and a higher level of risk
C. higher return and a lower level or risk
D. higher return and a higher level of risk - Which of the following reduces risk in a portfolio the greatest ?
A. Increasing the number of shares from 10 to 20
B. All of these answers provide the same amount of risk reduction
C. Increasing the number of shares in the portfolio from 1 to 10
D. Increasing the number of shares from 20 to 30 - What is referred by the term ‘Portfolio ?
A. A collection of investments, real or financial
B. Net assets of a company
C. Total profit of company in a year
D. Total unmovable assets of a company - Which of the following is a form of international reserve assets, created by IMF in 1967 whose value is based on a portfolio of widely used currencies ?
A. Special Drawing Right (SDR)
B. IMF Drawing Rights (SDR)
C. International Drawing Right (IDR)
D. Sure, Drawing Rights (SDR) - Which of the following is an example of foreign portfolio investment ?
A. Toyota builds a new plant in the north of England
B. EDF of France buys shares in Scottish & Southern Energy of the UK, and Scottish & Southern Energy uses the Proceeds to build a new hydro-electric power station in Scotland
C. Deutsche Bank of Germany buys some new software from UK Supplier
D. JCB builds a new plant near Manchester - In a portfolio investment ?
A. investors are directly involved in managing the operations
B. as in direct investment investors export goods and services abroad
C. investors transfer the technology to local investors
D. investors have no control over operations - Idiosyncratic risk is the ?
A. uncertainty associated with the entire economy
B. uncertainty associated with specific companies
C. risk associated with adverse selection
D. risk associated with moral hazard - If a depositor puts Rs100 in a bank amount that earns 4 percent interest compounded annually, how much will be in the account after five years ?
A. Rs400.00
B. Rs 104.00
C. Rs 121.67
D. Rs 123.98 - An increase in the prevailing interest rate ?
A. increases the present value of future returns from investment and increases investment
B. decreases the present value of future return from investment and decreases investment
C. decreases the present value of future returns from investment and increase investment
D. increases the present value of future returns from investment and decreases investment - If people are risk averse, then ?
A. None of these answers are true
B. All of these answers are true
C. They dislike bad things more than the like comparable good things
D. The utility they would lose from losing a Rs50 bet would exceed the utility they would gain from winning a Rs 50 bet
Their utility function exhibit the property of diminishing marginal utility of wealth
