Need to answer some question and some of them need to calculate for CFA

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Nynfxn

Business Finance

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Those are multi-questions, some of them need to caculate, please make sure your answers are all correct and highlight your answers.

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1. Which of the following is not an assumption of the Capital Market Theory? All investors are Markowitz efficient investors. All investors have homogeneous expectations. There are no taxes or transaction costs in buying or selling assets. All investments are indivisible so it is impossible to buy or sell fractional shares. All investors have the same one period time horizon. 2. When identifying undervalued and overvalued assets, which of the following statements is false? An assets is properly valued if its estimated rate of return is equal to is required rate of return. An asset is considered overvalued if its estimated rate of return is below its required rate of return. An asset is considered undervalued if its estimated rate of return is above its required rate of return. An asset is considered overvalued if its required rate of return is below its estimated rate of return. None of the above (that is, all are true statements) 3. The separation theorem divides decisions on _____ from decisions on _____. Lending, borrrowing Risk, return Investing, financing Risky assets, risk free assets Buying stocks, buying bonds 4. Utilizing the security market line an investor owning a stock with a beta of -2 would expect the stock's return to _____ in a market that was expected to decline 15 percent. Rise of fall an indeterminate amount Fall by 3% Fall by 30% Rise by 13% Rise by 30% 5. As the number of securities in a portfolio increases, the amount of systematic risk Remains constant. Decreases. Increases. Changes. None of the above. 6. The correlation coefficient between the market return and a risk-free asset would be +∞. be -∞. be +1. be -1. be Zero. 7. Which of the following statements about the risk-free asset is correct? The risk-free asset is defined as an asset for which there is uncertainty regarding the expected rate of return. The standard deviation of return for the risk-free asset is equal to zero. The standard deviation of return for the risk-free asset cannot be zero, since division by zero is undefined. Choices a and b. Choices a and c. 8. The market portfolio consists of all New York Stock Exchange stocks. High grade stocks and bonds. Stocks and bonds. U.S. and non-U.S. stocks and bonds. Risky assets. 9. Calculate the expected return for A Industries which has a beta of 1.75 when the risk free rate is 0.03 and you expect the market return to be 0.11. 11.13 % 14.97 % 16.25 % 22.25 % 17.0% 10. The capital market line (CML) uses _____ as a risk measurement, wheres the capital asset pricing model (CAPM) uses _____. Beta; total risk Standard deviation; total risk Standard deviation; systematic risk Unsystematic risk; total risk Systematic risk; beta
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