Question 1: How would you evaluate the return of the financial assets? Describe with examples.
Question 2: Which average-Arithmetic mean or Geometric mean must be employed for computing average return on securities?
Question 3: Define the term risk and differentiate between the systematic and unsystematic risk.
Question 4: Of those risks generally related with the holding of securities:
a) What three risks are usually categorized as systematic in nature?
b) What risks are most common in holding common stocks?
Question 5: What are the statistical tools employed to measure the risk of the securities return? Illustrate.
Question 6: Describe the principal sources of the systematic and unsystematic risk.
Question 7: Give an illustration by using probabilities where two securities have equivalent expected returns however unequal variances or risk in returns.