Question

17. Which of the following are true? I. Expected return on a risky asset is made up of risk-free return and that asset's risk premium II. The return on market portfolio is a common factor for all the risky assets III. Even though the market is in equilibrium, the reward-to-risk ratio of an individual asset could be different from the reward-to-risk ratio of the market portfolio IV. When the market is in equilibrium, all the risky assets will have the same risk premiums V. Reward-to-risk ratio and risk premium are the same for the market portfolio 1. I and II 2. I and III 3. I, II and IV 4. I, II and V 5. I, III, IV and V

          17. Which of the following are true?
I. Expected return on a risky asset is made up of risk-free return and that asset's risk premium
II. The return on market portfolio is a common factor for all the risky assets
III. Even though the market is in equilibrium, the reward-to-risk ratio of an individual asset could be different from the reward-to-risk ratio of the market portfolio
IV. When the market is in equilibrium, all the risky assets will have the same risk premiums
V. Reward-to-risk ratio and risk premium are the same for the market portfolio
1. I and II
2. I and III
3. I, II and IV
4. I, II and V
5. I, III, IV and V

17. Which of the following are true?
I. Expected return on a risky asset is made up of risk-free return and that asset's risk premium
II. The return on market portfolio is a common factor for all the risky assets
III. Even though the market is in equilibrium, the reward-to-risk ratio of an individual asset could be different from the reward-to-risk ratio of the market portfolio
IV. When the market is in equilibrium, all the risky assets will have the same risk premiums
V. Reward-to-risk ratio and risk premium are the same for the market portfolio
1. I and II
2. I and III
3. I, II and IV
4. I, II and V
5. I, III, IV and V

Added by Isabel E.

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