Intermediate Financial Management 11th Edition Brigham Test Bank
Intermediate Financial Management 11th Edition Brigham Test Bank
Intermediate Financial Management 11th Edition Brigham Test Bank
CHAPTER 2
RISK AND RETURN: Part I
Please see the preface for information on the AACSB letter indicators (F, M, etc.) on the subject
lines.
Multiple Choice: True/False
(2.2) Standard deviation F N Answer: b EASY
1. The tighter the probability distribution of its expected future returns,
the greater the risk of a given investment as measured by its standard
deviation.
a. True
b. False
a. True
b. False
a. True
b. False
a. True
b. False
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted
to a publicly accessible website, in whole or in part.
a. True
b. False
a. True
b. False
a. True
b. False
a. True
b. False
a. True
b. False
a. True
b. False
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted
to a publicly accessible website, in whole or in part.
a. True
b. False
a. True
b. False
(2.3) CAPM and risk F N Answer: a EASY
13. According to the Capital Asset Pricing Model, investors are primarily
concerned with portfolio risk, not the risks of individual stocks held
in isolation. Thus, the relevant risk of a stock is the stock's
contribution to the riskiness of a well-diversified portfolio.
a. True
b. False
a. True
b. False
a. True
b. False
a. True
b. False
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted
to a publicly accessible website, in whole or in part.