Essentials of Corporate Finance (10th Edition)

Chapter 11

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The expected return can be calculated by adding ... more

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The variance can be estimated by firstly taking ... more

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Portfolio weight is the percentage that shows the ... more

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The portfolio expected return can be calculated by... more

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No, the portfolio standard deviation and the ... more

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Two components of total return are expected return... more

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In a situation, when information regarding the ... more

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Two components of total risk are systematic risk ... more

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Systematic risk is the risk that impacts almost ... more

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The portfolio standard deviation reduces as the ... more

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The diversification principle states that some of ... more

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Some risks are diversifiable because they are ... more

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Systematic risk cannot be eliminated or ... more

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The return on equity of Company S did not improve ... more

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The company has accumulated losses over the period... more

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The systematic risk principle states that the ... more

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The beta coefficient is used to measure the amount... more

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The portfolio beta is calculated by multiplying ... more

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False, as the expected return depends upon the ... more

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The elementary relation between risk and return is... more

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The straight line showing the positive ... more

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The capital asset pricing model shows the ... more

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A positive net present value of an investment is ... more

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The minimum required return that an investor ... more

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Variance measures the variation or dispersion of ... more

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The total return is:  ; Return can be defined as ... more

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Unsystematic risk influences single security or ... more

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Systematic risk cannot be mitigated through ... more

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The beta of the market is always 1. ; The beta ... more

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Security market line (SML) explains the ... more

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Expected return of Stock A1 = 25%Expected return ... more

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Portfolio expected return: 28.50%Portfolio ... more

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The reward-to-risk ratio of Stock M is less than ... more

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Expected Return of Stock: 11.60%Beta of another ... more

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Some risks are controllable by investing in ... more

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The price does not change by the announcement made... more

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The uncontrollable risk is systematic. The company... more

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The expected return of the portfolio will not be ... more

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The variance helps to determine the risk inherent ... more

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It is possible to have the standard deviation of ... more

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If the return on a risky asset is similar to the ... more

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The layoff of employees saves the employment cost... more

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The estimation of future cash flows of a company ... more

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Weight of stock A1 = 67.75%Weight of stock B1 = 32... more

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11.89% ; Calculate the total investment amount by ... more

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13.05% ; An expected return on security is a ... more

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Investment amount in stock X1 = $5,667Investment ... more

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10.80% ; An expected return on security is the ... more

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10.95% ; An expected return on security is a ... more

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Expected return of Stock A1 = 11.20%Expected ... more

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The portfolio expected return is 12.17% and it is ... more

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1.08 ; Beta refers to the movement of the security... more

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1.71 ; Beta refers to the movement of security ... more

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11.92% ; Capital asset pricing model (CAPM) helps ... more

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1.13 ; Capital asset pricing model (CAPM) helps an... more

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11.80% ; Capital asset pricing model (CAPM) helps ... more

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4.13% ; Capital asset pricing model (CAPM) helps ... more

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The expected return and beta of the portfolio is ... more

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Stock Y1 is underpriced. The price should increase... more

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1.20% ; Calculate the reward-to-risk ratio of ... more

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Expected return of the portfolio invested in:L ... more

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; Prove that the ratio of the risk premium on two... more

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Weight of Stock J1: 0.4103 or 41.03%Weight of ... more

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12.42% ; Calculate the value of Stock W1 by ... more

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The reward-to-risk ratio of the stocks are equal, ... more

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Investment in Stock C1 is $173,050. Investment in ... more

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$45,760 ; Calculate the weight of Stock D1 by ... more

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Systematic risk is measured by the beta of a stock... more

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Expected Return: 14.3648% The assumptions used in ... more

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5 stocks have a beta less than (5,000)[1] Company ... more

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1965 stocks have a beta less than 0.[1] Company M ... more

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The monthly return, average monthly return, and ... more

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The motivation of the linear regression is to ... more

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The beta calculated using the regression analysis ... more

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The beta of the stock found on the mentioned site ... more

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