Basic risk types,measurement and management tools
Portfolio 1 is not efficient because it has a lower expected return and higher risk than both Portfolios 2 and 3.
Since both portfolios are undervalued,the investor should sell the portfolio that offers less excess return.Sell Portfolio Y because its excess return is less than that of Portfolio X.
Securities that fall on the SML are properly priced. They have value to an investor in that they still earn a return.
All investors will combine the market portfolio with the risk-free asset.Asset-specific risk is not important and is actually eliminated with the choice of the market portfolio.
The slope of the CML indicates the excess return(expected return less the risk-free rate)per unit of risk.
Financial risk management:
The role of risk management in corporate governance题库原题
The role of risk management in corporate governance
Which of the following statements regarding risk management tools is CORRECT?