Download PASSEMALL Prep app now
Scan QR code or get instant email to install app
Question:
Property and casualty insurers typically have a short-term rime horizon, since claims are expected in the near term, and low risk tolerance
Comments
Your email address will not be published. Required fields are marked *
Comment *
Name*
Email*
URL
Save my name, email, and website in this browser for the next time I comment.
Consider the following statements:Statement 1: A risk‐averse investor can attain a better risk-return tradeoff by investing a portion of his portfolio in Asset A, which is more risky than his current portfolio, only if the correlation between his current portfolio and Asset A is negative.Statement 2: A more risk‐averse investor will have a steeper indifference curve than a less risk‐averse investor.Which of the following is most likely?
Only Statement 2 is correct.
In which step of the portfolio management process does an investment manager rebalance the portfolio to its target asset allocation percentages?
Feedback step.
A primary reason for developing a strategic asset allocation is to:
determine asset classes offering unique risk and return profiles with low correlations to one another.
Which of the following most likely have the shortest time horizon for their investment portfolios?
Banks
Which of the following pairs refer to the same type of risk?
Total risk and the variance of returns.
This stock is most likely:
Undervalued.
A stock has a beta of 0.9 and an estimated return of 10%. The risk- free rate is 7%, and the expected return on the market is 11%. According to the CAPM, this stock:
is overvalued.
Comments