RETURN QUESTIONS WITH CORRECT
ANSWERS 2026
The chance that some unfavorable event will occur. - correct answer-Risk
What are 2 investor attitudes towards risk? - correct answer-1. riskKaversion
2. Risk Premium
assumes investor dislike risk and require higher rates of return to encourage them to hold riskier securiti
es. - correct answer-Risk Aversion
the difference between the return on a risky asset and a risk-
less asset, which serves as compensation for investors to hold riskier securities. - correct answer-
Risk Premium
How do you calculate return? - correct answer-ending value-cost/cost
The riskiness of an asset is based on what? - correct answer-The riskiness of the cash flows
What are the 2 ways an assets risk can be analyzed? - correct answer-1. Stand Alone
2. AKPortfolio Context
analyzing an asset's cash flows by themselves. - correct answer-Stand Alone
combining the cash flows from differentKassets. - correct answer-Portfolio
What are the ways you can quantify the stand alone risk? - correct answer-
Standard deviation and coefficient of variation