Which of the following factors is most likely to affect the level of systematic risk in a portfolio? The type of industries represented in the portfolio The number of securities in the portfolio Macroeconomic conditions The geographic location of the securities in the portfolio

Which of the following factors is most likely to affect the level of systematic risk in a portfolio? The type of industries represented in the portfolio The number of securities in the portfolio Macroeconomic conditions The geographic location of the securities in the portfolio

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter13: Investment Fundamentals

Section13.3: Risks And Other Factors Affect

Problem 2CC

See similar textbooks

Related questions

Q: Your boss asked you to evaluate a project with an infinite life. Sales and costs project to $1,000…

A: Net present value is defined as the sum of the present values of all future cash inflows less the…

Q: Under your advice, A has decided to enter the market as a digital two-sided platform. You and your…

A: An auction is a public or private event in which goods, services, or assets are offered for sale to…

Q: The Benefit of a Higher APY Isabel Lopez from Lewiston, Idaho, who is 19 years old, recently…

A: The Certificate of Deposit is a savings instrument that provides a fixed rate of return to the…

Q: (Capital Asset Pricing Model) The expected return for the general market is 13.0 percent, and the…

A: CAPM refers to the model that puts forth the assumption that the systematic risk faced by the stock…

Q: ave a convertible bond with a par value of 100,000 with a 10% coupon. It can be converted into…

A: Some bonds have conversion features and can be converted into stocks on the expiration of the bond…

Q: Assume that the following two assets are priced according to the zero-beta security market line:…

A: To exploit an arbitrage opportunity, one can create a portfolio that is risk-free and has a positive…

Q: Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard…

A: Risky portfolio rate of return (Re) = 17%Risky portfolio standard deviation (Se) = 27%T bill rate…

Q: 2. Consider a $1,000 par, 9% annual coupon bond with exactly three years until maturity and no…

A: The value of a bond using an interest rate tree is calculated using the process of backward…

Q: Chrome's Jeans manufacturers blue jeans. They process the jeans in 40-jean batch sizes. The cutting…

A: Batch size = 40 jeansCutting time = 5 min Sewing time = 20 min Move time = 2 min Value added time is…

Q: You are the CFO of a manufacturing company that is considering an investment in new production…

A: Capital budgeting is a method of determining the profitability and feasibility of projects. This…

Q: explain the application of annuities with discount rates (usinf formulas)

A: Annuities are a series of equal payments made at regular intervals. The concept of discounting…

Q: How can the prices of crude oil derivatives be used to obtain market expectations about the…

A: Prices of crude oil derivatives, such as futures and options contracts, can provide information on…

Q: Company TechGear Ltd. is a technology company that manufactures and sells smartphones. They are…

A: Financial structure refers to the combination of debt, equity, and other financial instruments used…

Q: On February 2, 2016, an investor held some Province of Ontario stripped coupons in a…

A: The yield to maturity of a zero coupon bond is the discount rate that makes the present value of the…

Q: Effective date of a decreasing annuity: 1/1/01. Date of first payment: 4/1/01. Frequency of…

A: An annuity refers to a series of periodic payments made in exchange for a lump sum payment. It is…

Q: The Webex Corporation is trying to choose between the following two mutually exclusive design…

A: Profitability Index or PI is the ratio of present value of operating cash inflows to the present…

Q: Given the three-period binomial model where ,S0=30, sd=40%,r=0.05% , T= 12 months, and K = 35…

A: A put option refers to a derivative instrument that provides its holder the choice to sell the…

Q: Compare the binomial and Black-Scholes option pricing models. What are their differences and…

A: The Binomial and Black-Scholes option pricing models are two widely used methods for valuing…

Q: 1) The geologists have suggested that company acquire 640 acres in Scurry County. They believe that…

A: A capital budgeting measure that is used to assess a project's or investment's profitability is net…

Q: You are to invest $1000 now, $2000 in one year, $3000 in two years and $4000 in three years in an…

A: The concept of time value of money states that worth of money changes with passage of time as money…

Q: Investor B sold a put option and bought a call option when the stock price is $30. The strike price…

A: A call option refers to a derivative instrument that provides the choice of purchasing the…

Q: Purchase price: $320,000 LTV: 97% Term & Am: 25 years Interest Rate: 4.0% Holding period: 5 years.…

A: A mortgage is a loan used to finance the purchase of real estate, where a lender provides funds to a…

Q: please solve step by step if using BA caluculater please explain what values use for what. if using…

A: An investor issues a bond to a borrower, such as a business or the government. The investor earns…

Q: eBook Problem Walk-Through Baker Industries' net income is $21,000, its interest expense is $5,000,…

A: ROE refers to the return on equity that is earned particularly related to the equity holdersROE =…

Q: healthcare organization is planning to invest in new technology to improve patient care and…

A: Company need money for growth that may be raised through debt and may be raised through equity that…

Q: A company puts together a set of cash flow projections and calculates an IRR of 25% for the project.…

A: IRR refers to the internal rate of return, it is the percentage of gain or profits generated by the…

Q: its 150,000 in a bank, with the bank agreeing to pay 6% annual effective for three years. The client…

A: In this question, a client deposits 150,000 in a bank, with the bank agreeing to pay 6% annual…

Q: Franklin says we can lend and borrow at interest. He even goes so far as to say that we should lend…

A: Lending and borrowing money at interest is how banks survive. This is a legitimate way to make…

Q: You buy an 8 percent, 25 year, 1000 par value floating rate bond in 1999. By the year 2004, rates on…

A: The value of the bond is the present value of all the coupon payments and the present value of the…

Q: Compare the binomial and Black-Scholes option pricing models. What are their differences and…

A: The Binomial and Black-Scholes option pricing models are two prominent methods used to estimate the…

Q: Net income in 2016 = $3,000 Annual depreciation in 2016 = $1,000 Interests in 2016= $500 Working…

A: Cash Flow from Assets is a measure that indicates the cash generated by a company's core operating…

Q: You opened a margin account with borrowing $50,000 from your broker a year ago. Your account started…

A: Borrowings = $50,000Initial Margin = 50%ABC Stock price = $50Maintenance margin = 35%Interest rate =…

Q: XVW Ltd. currently holds a portfolio containing two assets; Asset 1 and Asset 2. If Er1 = 0.25, Er2…

A: A Minimum Variance Portfolio (MVP) is a concept in finance and investment that refers to a portfolio…

Q: Consider a convertible bond as follows: par value = $1,000, coupon rate = 8.00%, market price of…

A: the convertible bond is a type of corporate bond that allows the bondholder to convert it into a…

Q: You sold short 300 shares of common stock at $55 per share. The initial margin is 60%. At what stock…

A: You are taking the short position, that means you are selling the shares. You will get a margin call…

Q: A 25-year coupon bond pays an annual coupon of 5 and has a face value of 100. If the current price…

A: YTM stands for "Yield to Maturity." It represents the total return anticipated on a bond if it is…

Q: A project requires an initial outlay of $9200 and produces a return of $30000 at the end of year 1,…

A: The internal rate of return (IRR) of an investment is the amount that the investor will receive in…

Q: A manufacturer of packaging for companies that produce breakfast cereals is considering alternatives…

A: The return an organization anticipates on a particular investment to justify the use of resources is…

Q: Which of the following is correct with regards to Theories of Term Structure? When the shape of…

A: Term structure refers to the relationship between the yields or interest rates of financial…

Q: The NPV for Dust Devils is The NPV for Ospry is The NPV for Voyagers is How many projects should be…

A: The capital budgeting decision play an important role understanding the decisions to be…

Q: Use linear interpolation to determine the interest rate j4 at which deposits of $275 at the end of…

A: Compound = Quarterly = 4Payment = pmt= $275Future Value = fv = $4780Time = nper = 4 * 4 = 16Present…

Q: L Consider an individual facing the prospect of having high income, yí > 0, with probability π and…

A: In the given scenario, we have an individual who faces the possibility of receiving either high…

Q: what annual rate of return is needed to receive $930 in one year on an investment of $ 18,600?

A: Simple interest refers to the method of interest calculation where the principal amount remains…

Q: Mr. Bean wants to borrow $8,600 for three years. The interest rate is 5.2% compounded monthly. a.…

A: The effective rate is the rate at which compounding affects the principal amount of the loan. This…

Q: June 2019 Mexican peso futures contract has a price of $0.05197 per MXN. You believe the spot price…

A: Futures contracts are a type of financial derivative that obligates either the buyer or the seller…

Q: Consider an American Put option with time to expiry of 5 months and a strike price of 88. The…

A: The binomial model is a mathematical model used in finance to value options. It assumes that the…

Q: A student purchases a computer by obtaining a simple interest loan. The computer costs $1500, and…

A: Simple interest is a straightforward method of calculating interest on a principal amount over a…

Q: Stacey and her husband David have a joint savings account that earns 3.47% interest payable…

A: Present value refers to the discounted value of all future cash flows discounted at a specific rate…

Q: Twenty-five years ago, Jamie Lannister invested $10,000. Today that investment is worth $211,836.…

A: The time period is 25 yearsAmount invested is $10,000Value of the investment is $211,836To…

Q: ya has 400 Euros (the European Union currency) and desires Indian Rupees. Using the foreign exchange…

A: Currencies are converted into other currencies based on exchange rate but some of these are…

Question

Which of the following factors is most likely to affect the level of systematic risk in a portfolio?

The type of industries represented in the portfolio

The number of securities in the portfolio

Macroeconomic conditions

The geographic location of the securities in the portfolio

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of systematic risk-

VIEW

Step 2: Analysis of the given options:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.