2010 QUIZ 3 ANSWER KEY

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Department
Commerce
Course
COMM 367
Professor
Abdullah Mamun
Semester
Winter

Description
Quiz2 Comm 367 T2 2010 2011 Time 30 minutesNOTE 1 Mark your answers on the Scranton sheet If the answer is not properly marked on the Scranton sheet it will not be marked 2 Write your name and id on the exam 3 Submit your formula sheet with your examNameIDPart A a When wealth is shifted from the risky portfolio to the riskfree asset what happens to the relative proportions of the various risky assets within the risky portfolioA They all decrease B Some increase and some decrease C They all increase D They are not changed E The answer depends on the specific circumstances 2 The variance of a portfolio of risky securitiesA is a weighted sum of the securities variances B is the sum of the securities variances C is the weighted sum of the securities variances and covariances D is the sum of the securities covariances E none of these 3 Other things equal diversification is most effective whenA securities returns are uncorrelated B securities returns are positively correlated C securities returns are high D securities returns are negatively correlated E b and c
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