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LOS a: Explain the importance of the portfolio perspective.
Q1. Which one of the following alternatives correctly outlines the importance of the portfolio perspective?
A) Market participants should attempt to eliminate the unsystematic risk associated with each security by forming portfolios that will diversify away this risk.
B) Market participants should analyze the risk-return trade-off of a portfolio as a whole, not the risk-return trade-off of the individual investments in a portfolio.
C) Market participants should focus on the systematic risk of the components of a portfolio not the unsystematic risk of the components of a portfolio.
Q2. Equity pricing models assume which risk is priced?
A) Unsystematic.
B) Both systematic and unsystematic.
C) Systematic.
Q3. Diversification can reduce:
A) systematic risk.
B) macroeconomic risks.
C) unsystematic risk. | 
发表于 2009-4-2 14:44
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