CHAPTER 22
ESTIMATING RISK AND
RETURN ON ASSETS
Review Questions
Questions:
1. What is the meaning of risk?
2. Explain the difference between objective and subjective probabilities
3. What is the difference between a discrete and a continuous probability distribution?
4. Why does riskiness increase with time?
5. What is the meaning of the expected value of returns?
6. What is the difference between an absolute and a relative risk measure?
7. What is the characteristic of a normal curve?
8. What are the three risk preference categories of decision makers?
