Question

In: Finance

a. Which of the following is NOT a fundamental feature of Bitcoin system?


a. Which of the following is NOT a fundamental feature of Bitcoin system?
A. Decentralized
B. Counterfeit
C. Easy to decrypt
D. Anonymous
 
b. In the context of investments in securities (stocks and bonds), portfolio risk diversification refers to   
A. the time-honored adage "Don't put all your eggs in one basket".
B. investors' ability to reduce portfolio risk by holding securities that are less than perfectly positively correlated.
C. the fact that the less correlated the securities in a portfolio, the lower the portfolio risk.
D. all of the above
 
c. With regard to the OIP
A. the composition of the optimal international portfolio is identical for all investors, regardless of home country.
B. the OIP has more return and less risk for all investors, regardless of home country.
C. the composition of the optimal international portfolio is identical for all investors of a particular country, whether or not they hedge their risk with currency futures contracts.
D. none of the above

Solutions

Expert Solution

Answer:- Option B: Counterfeit

Explanation:- When bitcoins are transferred to someone, it is not actually handed over. So the transaction is submitted to the network which makes sure that the address is valid and has the proper value. So there is no risk of counterfeiting because there is nothing to counterfeit.

Answer:- Option D: all of the above

Explanation:- Portfolio risk diversification refers to the following:-

  • the time-honored adage "Don't put all your eggs in one basket".

  • investors' ability to reduce portfolio risk by holding securities that are less than perfectly positively correlated

  • the fact that the less correlated the securities in a portfolio, the lower the portfolio risk.

Answer:- Option C: the composition of the optimal international portfolio is identical for all investors of a particular country, whether or not they hedge their risk with currency futures contracts.

Explanation:- The composition of the optimal international portfolio varies depending upon the numeraire currency used to measure returns. So, the composition of the optimal international portfolio is identical for all investors of a particular country, whether or not they hedge their risk with currency futures contracts.


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