Corporate Finance :Annualized standard deviation

發布時間：2020-12-17 11:07編輯：融躍教育CFA

  Questions 1:

  Which of the following is least likely to be a component of a developing country’s equity premium?

  A、 Annualized standard deviation of the developing country’s equity index

  B、 Sovereign yield spread

  C、 Annualized standard deviation of the sovereign bond market in terms of the developing country’s currency

  Questions 2:

  Financial risk is least likely affected by:

  A 、debentures.

  B 、dividends.

  C、 long-term leases.

  View answer resolution

  【Answer to question 1】C

  【analysis】

  C is correct. The annualized standard deviation of the sovereign bond market in terms

  of the developing country’s currency is not part of the equity premium calculation.

  A is incorrect because the annualized standard deviation on a developing country’s

  index is part of the country’s equity premium.

  B is incorrect because the sovereign yield spread is part of the country equity premium.

  【Answer to question 2】B

  【analysis】

  B is correct. By taking on fixed obligations, such as debt (including debentures) and longterm leases, a company increases its financial risk. Dividends will not increase financial risk.

  A is incorrect because the use of debentures (one type of bond) is directly associated

  with financial risk.

  C is incorrect because the use of long-term leases is directly related to financial risk.