Here is Coursera course Corporate Finance Essentials quiz 2 solution. It
is online course which is offered by the Coursera.
Correlation and Diversification
Quiz 2
1.
Consider the returns of the MSCI indexes of
developed and emerging markets equity in columns C and D of the Excel file that
goes with this quiz. Given the returns over the 1988-2013 period, what has been
the correlation between these markets?
0.67
2.
Consider the returns of the MSCI index of
developed markets equity in column C of the Excel file that goes with this
quiz. Given the returns over the 1988-2013 period, and the arithmetic mean
return and volatility you calculated in the first quiz (which you could also
recalculate now if necessary), what has been the ‘quick-and-dirty’
risk-adjusted return of these markets?
0.54
3.
Consider the returns of the MSCI index of
emerging markets equity in column D of the Excel file that goes with this quiz.
Given the returns over the 1988-2013 period, and the arithmetic mean return and
volatility you calculated in the first quiz (which you could also recalculate
now if necessary), what has been the ‘quick-and-dirty’ risk-adjusted return of
these markets?
0.51
4.
Which one of the statements below is false?
The correlation between two assets can
only be a positive number.
5.
Which one of the statements below is true?
When two assets with
a correlation lower than 1 are combined into a portfolio, the volatility of the
portfolio is lower than the weighted-average volatility of the two assets.
6.
Of the five options below, select the one that
incorrectly completes the following sentence: “Diversification can help
investors …
to always be fully exposed to the best
performing asset.”
7.
Which one of the statements below is false?
Spanish investors
have nothing to gain from diversifying into a risky market like China.
8.
Which one of the statements below is true?
In the long term, the
correlations across global equity markets tend to be positive.
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