BUS 329 Quiz 6 | Questions and Answers Latest Updated 2026 (Graded A+) - Murdoch University
Question 1
Correct
11. Consider a portfolio formed with debt security and equity security. Which of the following portfolio strategies
Mark 1.00 out
would you follow when weight of debt security is greater than one and weight of equity security less than zero?
of 1.00
Select one:
a. Short sell equity and invest the proceed in debt
b. Borrow more money and invest in equity
c. Borrow at risk-free rate and invest in stock portfolio
d. Short sell debt security and invest the proceed in equity security
Question 2
Correct
8. Portfolio theory as described by Markowitz is most concerned with
Mark 1.00 out
of 1.00
Select one:
a. Diversifying systematic risk
b. Identifying unsystematic risk
c. Effect of diversification on portfolio risk
d. Active portfolio management
Question 3
Correct
9. The standard deviation of a portfolio of risky securities is
Mark 1.00 out
of 1.00
Select one:
a. The square root of the weighted sum of the securities' variances
b. The square root of the sum of the securities' variances
c. square root of the sum of the securities' co-variances
d. the square root of the weighted sum of the securities' variances and co-variances.
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, Question 4
Correct
22. Expected return and standard deviation of portfolio B are 8.45% and 10.50% respectively and the T-bill rate is
Mark 1.00 out
4%. The Sharpe ratio of portfolio B is
of 1.00
Select one:
a. 0.42
b. 0.06
c. 0.32
d. 0.57
Question 5
Correct
29. When borrowing and lending at a risk-free rate are allowed, the capital allocation line (CAL) should the investor
Mark 1.00 out
choose to combine with the efficient frontier: (I) The one with the highest reward-to-volatility ratio, (II) The one that
of 1.00
will maximize his utility, (III) The one with the steepest slope, (IV) The one with the lowest slope.
Select one:
a. (I), (III) and (IV)
b. (II), (III) and (IV)
c. (I), (II) and (III)
d. (I), (II), (III) and (IV)
Question 6
Correct
28. The standard deviation of a two-asset portfolio is a linear function of the assets' weights when the assets have a
Mark 1.00 out
correlation coefficient
of 1.00
Select one:
a. Less than zero
b. Equal to zero
c. Less than one
d. Equal to one
Question 7
Correct
1. Extensive diversification cannot eliminate risk, when affect all firms
Mark 1.00 out
of 1.00
Select one:
a. Non-diversifiable risk
b. Market risk
c. Common source of risk
d. All of the above
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Question 1
Correct
11. Consider a portfolio formed with debt security and equity security. Which of the following portfolio strategies
Mark 1.00 out
would you follow when weight of debt security is greater than one and weight of equity security less than zero?
of 1.00
Select one:
a. Short sell equity and invest the proceed in debt
b. Borrow more money and invest in equity
c. Borrow at risk-free rate and invest in stock portfolio
d. Short sell debt security and invest the proceed in equity security
Question 2
Correct
8. Portfolio theory as described by Markowitz is most concerned with
Mark 1.00 out
of 1.00
Select one:
a. Diversifying systematic risk
b. Identifying unsystematic risk
c. Effect of diversification on portfolio risk
d. Active portfolio management
Question 3
Correct
9. The standard deviation of a portfolio of risky securities is
Mark 1.00 out
of 1.00
Select one:
a. The square root of the weighted sum of the securities' variances
b. The square root of the sum of the securities' variances
c. square root of the sum of the securities' co-variances
d. the square root of the weighted sum of the securities' variances and co-variances.
Dashboard | myMurdoch Advice
/
, Question 4
Correct
22. Expected return and standard deviation of portfolio B are 8.45% and 10.50% respectively and the T-bill rate is
Mark 1.00 out
4%. The Sharpe ratio of portfolio B is
of 1.00
Select one:
a. 0.42
b. 0.06
c. 0.32
d. 0.57
Question 5
Correct
29. When borrowing and lending at a risk-free rate are allowed, the capital allocation line (CAL) should the investor
Mark 1.00 out
choose to combine with the efficient frontier: (I) The one with the highest reward-to-volatility ratio, (II) The one that
of 1.00
will maximize his utility, (III) The one with the steepest slope, (IV) The one with the lowest slope.
Select one:
a. (I), (III) and (IV)
b. (II), (III) and (IV)
c. (I), (II) and (III)
d. (I), (II), (III) and (IV)
Question 6
Correct
28. The standard deviation of a two-asset portfolio is a linear function of the assets' weights when the assets have a
Mark 1.00 out
correlation coefficient
of 1.00
Select one:
a. Less than zero
b. Equal to zero
c. Less than one
d. Equal to one
Question 7
Correct
1. Extensive diversification cannot eliminate risk, when affect all firms
Mark 1.00 out
of 1.00
Select one:
a. Non-diversifiable risk
b. Market risk
c. Common source of risk
d. All of the above
Dashboard | myMurdoch Advice
/
