Sample MCQ

Sample Multiple Choice Questions Topic 1


Question 1: An `efficient' portfolio is one that:

A: combines assets whose returns are not perfectly correlated.
B: offers the highest expected return for a given level of risk.
C: holds a proportion of all possible assets.
D: combines many diverse assets.
E: offers the lowest possible risk.


Question 2: The efficient frontier:

A: includes those portfolios that offer the maximum expected return for a given level of risk.
B: combines those assets in a portfolio that offer the highest expected return for a given level of risk.
C: includes the portfolio of all possible assets.
D: combines portfolios that offer the ...

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asset first and then purchase later).
E: Investors are rational and risk averse.

Question 4: Systematic risk represents:

A: diversifiable risk.
B: risk that is unavoidable.
C: risk that is unique.
D: Both A and C.
E: Both A and B.


Question 5: Which of the following is not an example of unsystematic risk?

A: Changes in the level of interest rates.
B: The chief executive officer resigns.
C: A legal suit against a company for environmental pollution.
D: The development of a new product line.
E: The abandonment of a project.








Question 6: What is the expected return on an asset with a beta of 2.0, if the risk-free rate of interest is 5% and the expected return on the market portfolio is 10%?

A: 12.5%
B: 20%
C: 10%
D: 15%
E: 35%



Question 7: Beta is a measure of:

A: the extent to which the returns on the stock market as a whole change over time.
B: the extent to which a security's risk can be eliminated by proper ...

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PAPER DETAILS
Added: 5/11/2017 04:43:06 AM
Submitted By: caoxinmei
Category: Business
Words: 1226
Pages: 5

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