Which of the following measures reflects the excess return earned on a portfolio per unit of its systematic risk a. Treynor’s measure b. Sharpe’s measure c. Jensen’s measure d. Total measure

Q: Clearly explain the difference between systematic risk and non-systematic risk and  discuss the…

A: Risk is the possibility of loss to a company due to unforeseen circumstances. Beta is the measure of…

Q: assets that you add it to ii. The amount of a portfolio's risk that is diversified away depends on…

A: Step 1 Unsystematic risk refers to a general risk to the company or industry. Informal risk is also…

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: Two important assumptions of portfolio theory are: a) returns from investments are normally…

A: The portfolio theory seems to be an investment framework that enables investors to select from a…

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: Morningstar's Risk-Adjusted Rating most closely resembles which measure? The Treynor Index Jensen's…

A: Financial statements are statements which states the business activities performed by the company .…

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: Which of the following statements about expected rate of return is most correct? The weighted…

A: EXPECTED RETURN = RISK FREE RATE + BETA X MARKET RISK PREMIUM.

Q: The desired rate of return on an investment should reflect the degree of risk involved. A.   True…

A: Riskier investments may give higher returns to the investors as they provide favorable ratio of risk…

Q: In the context of the Capital Asset Pricing Model (CAPM), the relevant measure of risk is A.…

A: As per CAPM, Expected Return = Risk free Rate + Beta * Market Risk Premium

Q: f cor

A: Introduction : In statistics, correlation or dependency refers to any statistically link among two…

Q: (Net income ∕ Total assets)

A: Operating Profit Margin: It shows the performance of the firm in generating operating profit from…

Q: Critically evaluate the importance of the standard deviation factor in comparing investments.

A: Standard deviation helps the investor to measure the volatility of the market. It helps an investor…

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: Which is the best measure of risk for a single asset held in isolation, and which is the best…

A: Answer -    Coefficient of variation shall be regarded as the best measure of risk for a single…

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: What are the quantitative characteristics of the asset and how to measure.

A: Hello, since your question has multiple parts we will solve the first question for you. If you want…

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: Capital asset pricing theory asserts that portfolio returns are best explained by:a. Economic…

A: Capital Asset Pricing Theory is used to determine the relationship between the systematic risk of an…

Q: When adding real estate to an asset allocation program that currently includes only stocks, bonds,…

A: The question is based on the concept of risk of portfolio, which different asset class. The…

Q: Consider the following performance data for two portfolio managers (A and B) and a common benchmark…

A: Given:

Q: Standard deviation of portfolio returns is a measure of ___________.   Group of answer choices…

A: Standard deviations of portfolio give the standard deviations of return of portfolio.

Q: arket's Risk premium measures Select one: a. The market return plus the risk free rate. b. The…

A: The market risk premium represents the market participants demand extra return by increasing the…

Q: What is risk and how is it measured? How is risk measured in a portfolio compared to risk in a…

A: Risk is measured by the amount of volatility, that is, the difference between actual returns and…

Q: Refined measures of performance are commonly used to evaluate portfolio performance. a. Define and…

A: The portfolio refers to the combination of different types of securities for investment. The…

Q: Portfolio theory as described by Markowitz is most concerned with:a. The elimination of systematic…

A: The theory of Harry Markowitz is based on how risk-averse investors can create the portfolio in…

Q: The standard deviation of any portfolio of risky assets is equal to the weighted average of the…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

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: Explain the following Financial Terminology and then determined the relationship between its.…

A: Efficient Portfolio – It is the Portfolio that lines on the CML (capital market line) and maximizes…

Q: Beta is defined as the:    a. Amount of systematic risk in a risky asset relative to that in an…

A: Beta is an important concept in finance and important models such as capital asset pricing model…

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: Assess how the Modern Portfolio Theory (MPT) may be used by investors to classify, estimate, and…

A: Modern portfolio theory is the investment related theory that allows investors to manage their risk…

Q: Return on a portfolio of two risky assets which are perfectly negatively correlated is equivalent to…

A: Two assets which are having negatively correlated which means risk can be can be reduced to zero.…

Q: When assessing investment performance, what statistical notion do many portfolio managers employ to…

A: Portfolio managers are those who make investing decisions. They create and implement investment…

Q: The security market line depicts:a. A security’s expected return as a function of its systematic…

A: The relationship between assets expected return of individual security with that of risk involved in…

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: 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: why can  variance/volatility of returns be a misleading measure of risk for an individual asset held…

A: The portfolio reflects a combination of assets which will provide with the benefit of elimination of…

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.