1) What is return? a) profit or loss b) received by investor c) from investment activities d) can be in terms of income or money e) something that is certain f) in the form of assets only 2) Return can be divided into 2, which are ______________________. a) Required rate of return b) Exchanged rate of return c) Expected rate of return d) Reimbursement rate of return e) Future rate of return 3) What are the elements to calculate Standard Deviation? a) Expected rate of return b) Required rate of return c) Probability d) Square root e) Interest f) Cost of capital 4) What are the elements needed to calculate Coefficient of Variation? a) Expected rate of return b) Required rate of return c) Standard deviation d) Probability e) Square root f) Cost of capital 5) ________________________ is used to determine which investment will give a higher return to the company. a) Coefficient of variation b) Expected rate of return c) Standard Deviation d) Required rate of return 6) In terms of risk, ___________________ standard deviation means that the investment will expose us to a higher risk. a) Higher b) Lower c) Undetermined d) Large e) Small 7) "Higher risk, _____________________ return" a) Higher b) Lower c) Unstable d) Large e) Small 8) Risk-taker investors usually will choose ________________ Coefficient of Variation. a) Lowest b) Smallest c) Largest d) Highest e) Undetermined 9) Risk-averse is someone willing to take the risk as long as the return is high. a) True b) Flase 10) What is the method used to calculate risk only? a) Standard deviation b) Expected rate of return c) Required rate of return d) Coefficient of variation

Chapter 2 : Risk & Return

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