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risk/return performance of a stock

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Question

If the risk/return performance of a stock lies above the Security Market Line, the stock is said to have

a:

a. Positive correlation coefficient b. Positive alpha c. Positive expected return d. Positive covarience

 
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A bond fund

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Question

A bond fund had the following yearly returns: year 1. 14%, year 2. 7% year 3. -3% 4. 18%  5. 9%What is the

standard deviation of the returns?

 
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financial planner

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Question

Tom wants to accumulate wealth, but he has told his financial planner that he is risk-averse.  What should the

planner advise Tom to do regarding his current asset investment choices, considering his risk tolerance and his goal of accumulating wealth?

a. Invest in products which bring the highest return regardless of risk b. Invest in products producing high income because fixed income products are generally safe c. Put his assets in 100% cash equivalents d. Determine his risk tolerance

 
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return

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Question

Using the CPAM formula, what return should a client expect from a security that returned 10% with a standard

deviation of 6%, a beta of 1.5, when the overall market return has been 8% and the risk free rate is around 2%?

 
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