Portfolio Management

Chapter 9 ASSET PRICING MODELS Multiple Choice Questions detonating device mart Theory 1. The Capital Asset Pricing prototype: a. has serious flaws because of its complexity. b. measures germane(predicate) fortune of a security and shows the relationship mingled with risk and expected return. c. was developed by Markowitz in the 1930s. d. discounts most only of the Markowitz portfolio theory. (b, moderate) 2.Which of the undermentioned is not one of the assumptions of the CMT? a. All investors work the alike(p) one-period time horizon. b. in that location are no own(prenominal) income taxes. c. in that respect is no interest rate aerated on borrowing. d. There are no transaction costs. (c, moderate) 3.Which of the adjacent is an assumpt ion of the CMT? a. sensation investors can affect the market by their buying and merchandising decisions. b. There is no inflation. c. Investors prefer not bad(p) gains over dividends. d. polar investors have different probability distributions.. (b, moderate) 4.Which of the following regarding investors and the CMT is true? a.

Investors fuck that all(a) the assumptions of the CMT are unrealistic. b. Investors greet that all of the CMT assumptions are not unrealistic. c. Investors are not aware of the assumptions of the CMT model. d. Investors reco gnize the CMT is useless for psyche investo! rs. (b, moderate) 5.The _______ is typically taken to be the safe rate. a. savings account b. documentation of deposit c. Treasury batting order d. Treasury bond (c, easy) 6.What does it mean when the CAPM is called robust? a. The CAPM requires no assumptions. b. veritable(a) if most of the assumptions of the CAPM are relaxed, most of the...If you want to get a full essay, order it on our website: OrderEssay.net

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