All questions are in multiple-choice format The test is timed tor a MAXIMUM of 2

Question

All questions are in multiple-choice format The test is timed tor a MAXIMUM of 2.5 hours (i e. 150 nwxites maximum). You must try to complete test in one-siting (i.®.. within a 150 minute hmit--as the timer keeps running) Exam taking window is between 7:00 pm. Fn April 8 through Mon. Apnl 11 11:59 pm (end-of-day) This test has a time limit of 2 hours and 30 mmutes.This test will save and submit automatically when the time expres Warnings appear when half the time 5 minutes 1 minute and 30 seconds remain. Not allowed This test can only be taken once This test can be saved and resigned at any point unbl time has expired. The timer will continue to run if you leave the test Which of the following statements concerning financial risk is fais. Generically. financial risk is related to the probability of a return less than expected. If the returns on two investments move in urns on (are perfectly positively correlated), combining the two into a portfolio will lower risk. If the returns on two investments move in untson (are perfectly positively correlated). combining the two into a portfolio will not impact nsk. In the real world, it is not possible to create a riskless portfofoo because all investment returns, to a greater or lesser extent, move with the overal economy. Assume you know for certain that an nvestment will return negative 10 percent- (In other words, the probability of a -10 percent return is 100 percent.) Altheugh the expected return is negative, the investment is riskless

Explanation / Answer

Which of these are false

Answer: Option B: If the returns on the two investments move in unison (are perfectly positively correlated), combining the two into a portfolio will lower risk

Explanation: When two investments move in unison, they will have no impact on risk as both of them belong to the same risk class.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---