6-1Copyright©2017McGraw-HillEducation.Allrightsreserved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducationChapter06TestBank-StaticStudent:___________________________________________________________________________MultipleChoiceQuestions1.Whichofthefollowingstatementsregardingrisk-averseinvestorsistrue?A.Theyonlycareabouttherateofreturn.B.Theyacceptinvestmentsthatarefairgames.C.Theyonlyacceptriskyinvestmentsthatofferriskpremiumsovertherisk-freerate.D.Theyarewillingtoacceptlowerreturnsandhighrisk.E.Theyonlycareabouttherateofreturn,andtheyacceptinvestmentsthatarefairgames.2.Whichofthefollowingstatementsis(are)true?I)Risk-averseinvestorsrejectinvestmentsthatarefairgames.II)Risk-neutralinvestorsjudgeriskyinvestmentsonlybytheexpectedreturns.III)Risk-averseinvestorsjudgeinvestmentsonlybytheirriskiness.IV)Risk-lovinginvestorswillnotengageinfairgames.A.IonlyB.IIonlyC.IandIIonlyD.IIandIIIonlyE.II,III,andIVonly3.Whichofthefollowingstatementsis(are)false?I)Risk-averseinvestorsrejectinvestmentsthatarefairgames.II)Risk-neutralinvestorsjudgeriskyinvestmentsonlybytheexpectedreturns.III)Risk-averseinvestorsjudgeinvestmentsonlybytheirriskiness.IV)Risk-lovinginvestorswillnotengageinfairgames.A.IonlyB.IIonlyC.IandIIonlyD.IIandIIIonlyE.IIIandIVonly4.Inthemean-standarddeviationgraph,anindifferencecurvehasa________slope.A.negativeB.zeroC.positiveD.verticalE.Cannotbedetermined.5.Inthemean-standarddeviationgraph,whichoneofthefollowingstatementsistrueregardingtheindifferencecurveofarisk-averseinvestor?A.Itisthelocusofportfoliosthathavethesameexpectedratesofreturnanddifferentstandarddeviations.B.Itisthelocusofportfoliosthathavethesamestandarddeviationsanddifferentratesofreturn.C.Itisthelocusofportfoliosthatofferthesameutilityaccordingtoreturnsandstandarddeviations.D.Itconnectsportfoliosthatofferincreasingutilitiesaccordingtoreturnsandstandarddeviations.E.Noneoftheoptionsarecorrect.6-2Copyright©2017McGraw-HillEducation.Allrightsreserved.Noreproductionordistrib...
