A Bernoulli Process Consists of a Series of N Independent

question 88

True/False

A Bernoulli process consists of a series of n independent and identical trials of an experiment such that in each trial there are three possible outcomes and the probabilities of each outcome remain the same.

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Definitions:

Betas

Measures the volatility of a stock or portfolio in relation to the overall market, indicating the level of risk associated with the investment.

Diversifiable Risk

A type of investment risk that can be reduced or eliminated in a portfolio through diversification, unlike systemic risk.

Market Risk

The risk of losses in financial markets due to factors such as market volatility, interest rate changes, and economic downturns that affect the entire market.

Required Return

The minimum return that investors expect or demand for an investment to be worth it, considering its risk level.