Financial Management - Study Mode
[#496] Conglomerates that combine many financial institutions within a single corporation are classified as
Correct Answer
(C) financial services corporations
Explanation
Solution: Conglomerates that combine many financial institutions within a single corporation are classified as financial services corporations. Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.
[#497] A risk which is classified as its contribution to risk of portfolio is classified as
Correct Answer
(D) relevant risk
Explanation
Solution: A risk which is classified as its contribution to risk of portfolio is classified as relevant risk. Relevant risk is the fluctuation of returns caused by the macroeconomic factors that affect all risky assets.
[#498] Chance of happening any unfavourable event in near future is classified as
Correct Answer
(D) risk
Explanation
Solution: Chance of happening any unfavourable event in near future is classified as risk. In broad terms, risk involves exposure to some type of danger and the possibility of loss or injury. In general, risks can apply to your physical health or job security. In finance and investing, risk often refers to the chance an outcome or investment's actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment.
[#499] A tighter probability distribution shows the
Correct Answer
(B) lower risk
Explanation
Solution: A tighter probability distribution shows the lower risk.
[#500] Stock which has higher correlation with market tend to have
Correct Answer
(C) high beta, more risky
Explanation
Solution: Stock which has higher correlation with market tend to have high beta, more risky. High-beta stocks tend to be riskier but provide the potential for higher returns.