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NEW QUESTION: 1
Which of the following statements about portfolio management is TRUE?
A. As an investor diversifies away the unsystematic portion of risk, the correlation between his portfolio return and that of the market approaches negative one.
B. The security market line (SML) measures systematic and unsystematic risk versus expected return; the CML measures total risk.
C. Combining the capital market line (CML) (risk-free rate and efficient frontier) with an investor's indifference curve map separates out the decision to invest from the decision of what to invest in.
D. The expected return on a 0 beta security is the expected market return.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Combining the CML (risk-free rate and efficient frontier) with an investor's indifference curve map separates out the decision to invest from what to invest in and is called the separation theorem. The investment selection process is thus simplified from stock picking to efficient portfolio construction through diversification.
The other statements are false. As an investor diversifies away the unsystematic portion of risk, the correlation between his portfolio return and that of the market approaches positive one. (Remember that the market portfolio has no unsystematic risk). The SML measures systematic risk, or beta risk. The expected return on a 0 beta security is the risk free rate (the market premium term has a value of 0).

NEW QUESTION: 2
The owner of a convertible bond:
A. Has the right to convert his bond
B. Must wait for the decision of the issuer if he wants to convert his bond
C. Has the obligation to convert his bond
D. Has the obligation to convert the coupon into a variable or a fixed rate
Answer: A

NEW QUESTION: 3
組織ごとの最大同時API Analytics呼び出し
A. 0
B. 1
C. 2
D. 3
Answer: B

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