Standard deviation of portfolio returns is a measure of ___________.   Group of answer choices   total risk systematic risk market risk firm-specific risk unsystematic risk

Q: Which of the following is a false statement of the market price of risk found in the Capital Market…

A: Portfolios that blend risk and return optimally are represented by the capital market line (CML).…

Q: standard deviation of historical returns Market beta Tracking error risk Discuss in what scenario…

A: In financial terms, risk can be defined as the possibility that the real profits from an outcome or…

Q: Indicate why you agree with justifications to the following statements:  “As a percentage of the…

A: Unsystamatic risk is related particular company or sectors specific So unsystamatic risk is related…

Q: Which of the following statements regarding non-systematic risk, systematic risk and total risk…

A: Systematic risk is the risk derived from the market and which is measured by the beta of the stock…

Q: Portfolio standard deviation is negatively associated with the covariance among the assets in the…

A: The portfolio standard deviation is the financial measure which computes the investment risk and…

Q: xplain the difference between (a) stand-alone risk and (b) risk in a portfolio context. How are they…

A: Stand-alone In terms of how they are calculated and analyzed, risk and portfolio risk are not the…

Q: Describe the goal of a portfolio owner in terms of risk and return. How does he or she evaluate the…

A: The question is based on the concept of portfolio management and objective of portfolio. Portfolio…

Q: A manager who evaluates portfolios' investment performance adjusted for market risk is most likely…

A: Portfolio Performance metrics: There are several portfolio performance metrics that can be used to…

Q: What is the standard deviation of the portfolio in part (a) if the citation nescient?

A: Diversified portfolio- It refers to a portfolio of investments in which unsystematic risk or firm…

Q: explain the assertion that the relationship between the standard deviation on a portfolio an the…

A: Answer: The relationship between the standard portfolio deviation and the standard portfolio…

Q: It is a risk adjusted performance measure that represents the average return on a portfolio. a.…

A: Correct answer is (a) sharp ratio

Q: Explain how the following parameters are used for analyzing a stock (or portfolio). Include in your…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: The standard deviation of a portfolio   Group of answer choices   -is not a weighted average of the…

A: The standard deviation of a portfolio is not a weighted average of the standard deviations of the…

Q: Value-at-risk (VaR) can be defined as: Group of answer choices A. The highest value of a portfolio…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: Describe how Investment Managers measure the non-systematic risk of their portfolio

A: Non-systematic risk refers to firm specific risk factors. This type of risk is usually eliminated or…

Q: Portfolio managers pick stocks for their clients’ portfolios based on the investment objective of…

A: Portfolio risk : There are various types of risks, such as -  market risk;  sovereign risk,…

Q: If a portfolio has a positive investment in every asset, can the standard deviation of the portfolio…

A: A portfolio is a group of different assets. The returns and risks of the portfolio depend on the…

Q: . The difference between the expected (c equired) return for the market portfolio ar he risk-free…

A: This pertains to the CAPM (capital asset pricing model). The difference between expected return on a…

Q: Which of the following statements is true regarding the optimal risky portfolio: It is designated…

A: A group of financial assets such as stocks, bonds, commodities, cash, and cash equivalents, as well…

Q: Portfolio theory tends to define risky investments in terms of just two factors: expected returns…

A: Since, you asked multiple questions, we will answer first question for you as per guidelines. Kindly…

Q: A stock's risk has a component called _____________________, which can be minimized as we add more…

A: Systematic risk is the risk that refers to entire market and it is not avoidable. this risk arises…

Q: For a market timer, the ________ will be higher when the market risk premium is higher Select one:…

A: The portfolio beta will be reflective of the systematic risk associated with a particular asset and…

Q: The security market line depicts:   a. Expected return as a function of systematic risk (indicated…

A: The security market line (SML) is a graphical representation of the capital asset pricing model…

Q: Portfolio manager wants to optimize the riskiness of the two assets portfolio with the given…

A: Portfolio standard deviation  =SQRT((WA*SDA)^2+(WB*SDB)^2+(2*WA*SDA*WB*SDB*Corr(a,b) WA Weight of…

Q: Arrange the following portfolios according to the efficient frontier and identify the portfolio that…

A: The efficient frontier: In the Markowitz portfolio theory, the efficient forntier comprises of all…

Q: In evaluating portfolio return we use the market values at the beginning of the period to compute…

A: A pool of different type of investments is called as portfolio. Return from this total pool of…

Q: It measures the sensitivity of the return of a security to changes in the return of a common index…

A: Concept- Sensitivity of the return of a security to changes in the return of a common index means…

Q: When a portfolio consists of only a risky asset and a risk-free asset, increasing the fraction of…

A: Principally, it is an established rule that higher the risk, higher the return.

Q: According to modern portfolio theory, pair-wise covariance is more important to total portfolio risk…

A: According to modern portfolio theory, every investment's risk and return characteristics should not…

Q: The measure of risk for a security held in a diversified portfolio is:a. Specific risk.b. Standard…

A: the standard deviation of returns is the measure of risk which measures the dispersion of variables.…

Q: Explain, with the aid of an equation, the conditions under which variances of stock returns are…

A: As an investor, Construction of an optimal portfolio of investment is  important. When constructing…

Q: Investors can use certain metrics to assess a stock or stock portfolio's risk.  One of them is the…

A: Sortino ratio: Sortino ratio is a measure of return of an investment that is adjusted for risk.…

Q: Is there a relationship between risk and return in building an effective portfolio?(explain

A: Portfolio management involves prioritization, selection and control of projects and programs of an…

Q: Fundamental analysis is a method of______________________________to determine intrinsic value of the…

A: Fundamental analysis measures a stock's or security's intrinsic value by using various economic or…

Q: In the context of the capital asset pricing model, the systematic measure of risk is captured by…

A: Risk can be both systematic and unsystematic

Q: The concept of Portfolio Effect indicates that the more assets added to the portfolio, the less risk…

A: Portfolio means collection of various financial investments. Such investments can be in mutual…

Q: True or false: The standard deviation of the portfolio is always equal to the weighted average of…

A: The standard deviation measures volatility of an investment or the risk of an investment. The…

Q: What statistical concept do many portfolio managers use to represent a risk when considering…

A: The return an individual or organisation gets from any investment portfolio is termed as investment…

Q: Which statement is true? Multiple Choice ___ The larger the standard deviation, the lower the…

A: Standard deviation :— Standard Deviations is a basic mathematical concepts that measures volatility…

Q: Portfolio risk is comprised of risk risk. Select one: O a. firm-specific; plus diversifiable b.…

A: Portfolio are created to diversify firm specific or unsystematic risk. Risk which cannot be…

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.