Topic 6: Risk and Return Flashcards
1
Q
CV =
A
Standard deviation / Expected return
2
Q
In the two-asset case, the expected return on our portfolio depends on two things:
A
(1) the portfolio weights
(2) the individual asset returns.
3
Q
The risk of a portfolio is measured by its ______________
A
standard deviation or variance
4
Q
portfolios whose return is maximized for a given level
of risk or, equivalently, portfolios whose risk is minimized for a given
level of return
A
efficient
portfolios
5
Q
According to the ________________________, the expected return for all assets is determined
by the asset’s correlation to the “market portfolio” and the risk-free
return
A
CAPM
6
Q
CV measures __________________.
A
risk/reward ratio.