The document contains 15 multiple choice questions testing risk and return concepts in finance. Question topics include: 1) measures used to compare risk of securities, 2) conditions to create a riskless portfolio, 3) calculating expected portfolio return, 4) ranking investments by riskiness, 5) definition of standard deviation, 6) risk premium, 7) calculation of total risk, 8) criteria for accepting investment proposals, 9) definition of standard deviation, 10) what CAPM accounts for, 11) definition of efficient portfolios, 12) defining expected rate of return, 13) definition of diversification, 14) defining systematic risk, 15) defining risk aversion.
The document contains 15 multiple choice questions testing risk and return concepts in finance. Question topics include: 1) measures used to compare risk of securities, 2) conditions to create a riskless portfolio, 3) calculating expected portfolio return, 4) ranking investments by riskiness, 5) definition of standard deviation, 6) risk premium, 7) calculation of total risk, 8) criteria for accepting investment proposals, 9) definition of standard deviation, 10) what CAPM accounts for, 11) definition of efficient portfolios, 12) defining expected rate of return, 13) definition of diversification, 14) defining systematic risk, 15) defining risk aversion.
The document contains 15 multiple choice questions testing risk and return concepts in finance. Question topics include: 1) measures used to compare risk of securities, 2) conditions to create a riskless portfolio, 3) calculating expected portfolio return, 4) ranking investments by riskiness, 5) definition of standard deviation, 6) risk premium, 7) calculation of total risk, 8) criteria for accepting investment proposals, 9) definition of standard deviation, 10) what CAPM accounts for, 11) definition of efficient portfolios, 12) defining expected rate of return, 13) definition of diversification, 14) defining systematic risk, 15) defining risk aversion.
The document contains 15 multiple choice questions testing risk and return concepts in finance. Question topics include: 1) measures used to compare risk of securities, 2) conditions to create a riskless portfolio, 3) calculating expected portfolio return, 4) ranking investments by riskiness, 5) definition of standard deviation, 6) risk premium, 7) calculation of total risk, 8) criteria for accepting investment proposals, 9) definition of standard deviation, 10) what CAPM accounts for, 11) definition of efficient portfolios, 12) defining expected rate of return, 13) definition of diversification, 14) defining systematic risk, 15) defining risk aversion.
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1.
Risk of two securities with different expected return can be
compared with a) Coefficient of variation b) Standard deviation c) Variance of securities d) None of the above 2.A portfolio having two risky securities can be turned risk less if a)if securities are completely positively correlated b)if correlation ranges between zero and one c)the securities are negatively correlated d)none of the above 3. A portfolio comprises two securities and the expected return on them is 12⁒ and 16⁒ respectively. Determine return of portfolio if first security constitutes 40⁒ of total
a)12.4⁒
b)13.3⁒
c)14.4⁒
4.of the following four investments ……..is considered the safest?
a)commercial paper
b)corporate bonds
c)treasury bonds
d)treasury bills
5……… is a statistical measure of the variability of a distribution
around mean ?
a)variance b)expected rate of return
c)standard deviation
d)co-efficient of variation
6.The additional return we must expect to receive for assuming risk?
A)risk discount
b)par risk
c) risk premium
d)risk free rate
7.the total risk is calculated by adding unsystematic risk with
a)systematic risk
b)market risk
c)country specific risk
d)all of the above
8.an investment proposal should be judge and accepted?
a)a return more than required by investor
b)a return equal to the return by the investor
c)a return less than required by investor
d)none of the above
9.the conventional measure of dispersion is-----------?
a)a probability distribution
b)the expected return
c)the standard deviation
d)coefficient of variation
10.CAPM accounts for;
a)unsystematic risk
b)systematic risk
c)both a and b
d)none of the above
11.efficient portfolios can be defined as those portfolios which for a
given level of risk provides
a)maximum return
b)average return
c)minimum return
d)none of the above
12.marry owns a risky stock and anticipates earning 16.7 percent on
her investment in that stock. The best description of it?
a)real return
b)market rate
c)expected rate
d)risk premium
13.which term best refers to the practice of investing in a variety of
diverse assets as a means of risk?
a)systematic b)unsystematic
c)diversification
d)CAPM
14.which one describe systematic risk?
a)diversifiable risk
b)asset specific risk
c)an individual security risk
d)risk that affects a large number of assets
15the attitude towards risk in which an increased return is required
