Financial Markets - Coursera All Quiz & Assignments Answer with Rationale
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Finance
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Hult International Business School
Financial Markets - Coursera All Quiz & Assignments Answer with Which of the following professions has the highest projected employment for 2024? 1 / 1 point Economist Teacher Financial Advisor Truck driver Correct • Which of the following is NOT a learning objective in this course? 1 / 1 point H...
which of the following professions has the highest projected employment for 2024 1 1 point economist teacher financial advisor truck driver correct • which of the following is not a learning object
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Financial Markets - Coursera All Quiz & Assignments
Answer with Rationale
MODULE 1 (Due on September 3)
Lesson 1
1. Which of the following professions has the highest projected employment for
2024?
�
�Financial
Advisor Truck
driver Teacher
Economist
2. Which of the following is NOT a learning objective in this course?
🗌How to make money
How we incentivize people to get things
done Regulating financial markets
Applying psychology and sociology to finance
3. According to Andrew Carnegie, what should somebody do once she is wealthy?
🗌Retire early and commit to philanthropy while young
Pass it on to her children
Retire late to accumulate as much wealth as possible, and then give the wealth away
Throw extravagant parties to help her wealth trickle down
4. Why is it relevant that finance tends to attract large amounts of money?
Finance attracts people from around the globe
,Financial Markets - Coursera All Quiz & Assignments
Answer with Rationale
🗌All of the above
Money can be used for good or evil
Financial markets are a critical components of economic success
Lesson 2
1. A stress test: (check all that apply)
🗌Tries to incorporate all potential economic and financial crises, such as recessions,
appreciation and depreciation of currency, liquidity crisis, etc.
🗌Tries to incorporate all the interconnections between financial institutions.
🗌Does not look at historical returns, and looks at all the details of the portfolios and their
vulnerabilities during all sorts of potential financial crises.
Aims to test the behavior of historical returns and their fluctuations during all sorts of
potential financial crises.
2. A 5% 3-month Value At Risk (VaR) of $1 million represents:
A 5% decline in the value of the asset after 3 month, per each $1 million of notional
A 5% chance of the asset increasing in value by $1 million during the 3-month time
frame.
The likelihood of a 5% of $1 million decline in the asset over the next 3-month.
🗌A 5% chance of the asset declining in value by $1 million during the 3-month time
frame.
3. In the Capital Asset Pricing Model (CAPM), a measure of systematic risk is
captured by:
The standard deviation of returns.
,Financial Markets - Coursera All Quiz & Assignments
Answer with Rationale
The variance of returns.
🗌Is the risk for an asset to experience losses due to factors that affect the entire stock
market; Is the risk which is endemic to a specific asset and therefore not the market as a
whole
Is the risk for an asset to experience losses due to factors that affect the entire stock
market; Is the risk which is endemic to the industry of the asset and therefore not the
market as a whole
Is the risk for an asset to experience losses due factors that solely affect the industry
associated with the asset; Is the risk which is endemic to a specific asset and therefore not
the market as a whole
Is the risk for an asset to not be able to be traded in the market at a later time; Is the risk
for an asset to experience losses due to factors that affect the entire stock market
5. Why might an investor not normally invest large sums of money into Walmart
or Apple stock?
🗌Their stock prices are highly volatile, and thus carry a lot of risk
The stock prices are very stable, making it difficult to gain large sums of money
Both companies have received extensive media coverage
Their stock prices closely track the S&P500
6. Why is the normal distribution not a good model of some financial data?
🗌It does not have many outliers (Most values drawn from a normal distribution are
within a few standard deviations of the mean. This is not the case in the S&P500
data, for example.) The standard deviation is too low
, Financial Markets - Coursera All Quiz & Assignments
Answer with Rationale
Extreme events occur too often
The standard deviation is too high
Lesson 3
1. Which of these best describes risk pooling?
Insurance companies must avoid situations whereby customers are incentivized to
intentionally cause an incident (e.g. burning their house down)
If individual events are not independent, risk can be decreased by averaging across all
of the events
Sick people are more likely to sign up for health insurance, and healthy people will
not purchase the policy because this will make the premium more expensive
I🗌 f individual events are independent, risk can be decreased by averaging across all of
the events
2. Which of the following was NOT a factor which led to the proliferation of
life insurance?
Insurance salespeople
🗌Increased life expectancy
Statistical data on life expectancy
New sales pitches
3. What happens in the United States if your insurance company goes bankrupt?
There is no protection from the government against insurance company failure
🗌Consumers are insured from insurance company failure at the state level
Insurance companies are partially owned by the government, and thus are not allowed to
fail.
Just like the FDIC protects consumers from bank failures, the federal government insures
against insurance company failures
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