If a person?s required return does not change when risk increases, that person is said to be a. risk-indifferent. b

Question

1) If a person’s required return does not change when risk increases, that person is said to be

a. risk-indifferent.

b. risk-aware.

c. risk-averse.

d. risk-seeking.

2) The ________ of an asset is the change in value plus any cash distributions expressed

as a percentage of the initial price or amount invested.

a. return

b. risk

c. probability

d. value

3) Prime-grade commercial paper will most likely have a higher annual return than

a. a common stock.

b. a Treasury bill.

c. a preferred stock.

d. an investment-grade bond.

4) The ________ of an event occurring is the percentage chance of a given outcome.

a. reliability

b. standard deviation