Risk That Can Be Eliminated Through Diversification Is Called ______ Risk.

Risk that can be eliminated through diversification is called ______ risk.

Asset A has an expected return of 15% and a reward-to-variability ratio of .4. Asset B has an expected return of 20% and a reward-to-variability ratio of .3. A risk-averse investor would prefer a portfolio using the risk-free asset and

Diversification is most effective when security returns are

x

Consider an investment opportunity set formed with two securities that are perfectly negatively correlated. The global minimum variance portfolio has a standard deviation that is always

Harry Markowitz is best known for his Nobel prize winning work on

On a standard expected return vs. standard deviation graph investors will prefer portfolios that lie to the _____________ of the current investment opportunity set.

According to Tobin's separation property, portfolio choice can be separated into two independent tasks consisting of __________ and __________.

Rational risk-averse investors will always prefer portfolios _____

The optimal risky portfolio can be identified by finding _____

The values of beta coefficients of securities are ___

Investing in two assets with a correlation coefficient of 1.0 will reduce which kind of risk? ____

Which of the following are assumptions of the simple CAPM model? ___

According to the capital asset pricing model, a security with a ____

In a world where the CAPM holds which one of the following is not a true statement regarding the capital market line?

The SML is valid for _______________ and the CML is valid for _______

Assume there are 4 risky assets traded in the market. In order to generate the minimum variance frontier, how many inputs (in terms of expected return, variance, and covariance) do you need? _

Investors require a risk premium as compensation for bearing __

According to the capital asset pricing model, a fairly priced security will plot ____

Evidence suggests that there may be ______ momentum and ________ reversal patterns in stock price behavior.

Proponents of the EMH typically advocate ____

If you believe in the ________ form of the EMH, you believe that stock prices reflect all publicly available information but not information that is available only to insiders.

Choosing stocks by searching for predictable patterns in stock prices is called __

When stock returns exhibit positive serial correlation, this means that ________ returns tend to follow ___________ returns.

Even if the markets are efficient, professional portfolio management is still important because it provides investors with ___

A firm cuts its dividend payout ratio. As a result you know that the firm's _____

The constant growth dividend discount model (DDM) can be used only when the __________

Generally speaking, as the firm progresses through the industry life cycle you would expect the PVGO to ________ as a percent of share price.