Analysis Intermediate: Evaluating Risk

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1.
When choosing your investments, look for those that will give you the highest returns for your acceptable level of risk.
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True. This is one of the cornerstones of successful investing.
2.
If a security is more volatile than the market, it has a beta _______.
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Greater than 1. A beta greater than 1 indicates that a stock is more volatile than the overall market.
3.
In the CAPM formula, Rf stands for _______.
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Risk-free return. In the CAPM formula, Rf stands for risk-free return.
4.
A steep standard deviation curve means that _______.
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A securitys deviation is low. When the curve is steep, the deviation is small compared to the height of the curve.
5.
The coefficient of variation divides a securitys price mean by its standard deviation.
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False. The coefficient of variation divides a securitys standard deviation by its price mean.