Practice Test: Covariance Workbook Fundamentals
A practice test on workbook scenarios, individual stock measures, and recognition of reported values.
9 questions · pass mark 50% · try 5 free
1 How many states of the economy are listed in the covariance workbook?
- 2
- 3
- 4
- 6
The workbook lists three states: Growth, Status Quo, and Recession.
2 What probability is assigned to Status Quo?
- 0.25
- 0.50
- 0.75
- 1.00
The workbook assigns a probability of 0.50 to Status Quo.
3 Stock C has a return of -5% in Recession.
- True
- False
The workbook shows Stock C's Recession return as -5%.
4 Which stock has the highest expected return in the workbook?
- A
- C
- D
- F
The listed expected returns show A at 23.25%, which is the highest among the six stocks.
5 What is the expected return of Stock E?
- 2.25%
- 3.50%
- 4.00%
- 5.00%
The workbook reports E[RE] = 3.50%.
4 more questions in this test
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