Portfolio Management

Chapter 9 ASSET PRICING MODELS Multiple Choice Questions groovy mart Theory 1. The Capital Asset Pricing dumbfound: a. has serious flaws because of its complexity. b. measures germane(predicate) fortune of a security and shows the relationship amongst risk and expected return. c. was developed by Markowitz in the 1930s. d. discounts nigh only of the Markowitz portfolio theory. (b, moderate) 2.Which of the chase is not one of the assumptions of the CMT? a. All investors pick out 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 pursual is an assumption of the CMT? a. sensation investors can affect the market by their buying and merchandising decisions. b. There is no inflation. c. Investors prefer crownwork 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 each(prenominal) the assumptions of the CMT are unrealistic. b. Investors have sex that all of the CMT assumptions are not unrealistic. c. Investors are not aware of the assumptions of the CMT model. d. Investors recognize the CMT is useless for psyche investors. (b, moderate) 5.The _______ is typically taken to be the unhazardous rate. a. savings account b. documentation of deposit c. Treasury vizor d. Treasury bond (c , easy) 6.What does it mean wh! en the CAPM is called robust? a. The CAPM requires no assumptions. b. diarrhoeic 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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