MT 5 - Risk, Return and Cost of Capital

Question 1

Define risk

Answer 1

Question 2

Variance definition and formula

Answer 2

Question 3

Sample variance definition

Answer 3

Question 4

Define:

1) Portfolio weights
2) Expected returns
3) Variances
4) Correlations

Answer 4

Question 5

Formula:

1) Expected portfolio return
2) Portfolio return variance

Answer 5

Question 6

Define Beta as a contribution of a stock to portfolio risk

Answer 6