1. The first portfolio task faced by any individual is to set up an overall framework for the investment of their portfolio. This framework is built around their own personal investment profile, taking into consideration their return needs and their tolerance for risk. Another term for this is _____.
a. screening
b. stock selection
c. value investing
d. asset allocation
2. Unsystematic risk is the amount of return volatility that is specific to __________.
a. Beta
b. the individual firm
c. inflation
d. the market
3. The __________ return is upward biased and should not be used to estimate expected accumulated wealth over time.
a. lowest quartile
b. risk-free
c. arithmetic average
d. geometric average