Ch. 11 Risk and Return
Terms in this set (8)
Under what conditions will a company's announcement have no effect on common stock prices?
When the information in the announcement was fully expected (there was no surprise; all of the information had already been discounted)
What are the 2 basic types of returns?
What are the 2 basic types of risks?
What is the distinction between the 2 types of risks?
Systematic risk factors affect ALL stocks to some degree.
Unsystematic risk factors affect only one or a small group assets.
What happens to the standard deviation of return for a portfolio if we increase the number of securities in the portfolio?
Principle of Diversification
Why is some risk diversifiable?
Why can't systematic risk be diversified away?