Financial Management MCQs: Multiple Choice Questions and Answers (Quiz & Tests with Answer Keys) by Arshad Iqbal

Author:Arshad Iqbal [Iqbal, Arshad]
Language: eng
Format: azw3
Publisher: Bushra Arshad
Published: 2016-05-23T04:00:00+00:00

Chapter 8

Portfolio Theory and Asset Pricing Models

MCQ 1: The beta reflects the stock risk for investors which is usually

A. individual

B. collective

C. weighted

D. linear

MCQ 2: For any or lower degree of risk, the highest or any expected return are the concepts use in

A. risky portfolios

B. behavior portfolios

C. inefficient portfolios

D. efficient portfolios

MCQ 3: An unsystematic risk which can be eliminated but the market risk is the

A. aggregate risk

B. remaining risk

C. effective risk

D. ineffective risk

MCQ 4: An indication in a way that variance of y-variable is explained by x-variable which is shown as

A. degree of dispersion is one

B. degree of dispersion is two

C. degree of dispersion is three

D. degree of dispersion is four

MCQ 5: In regression of capital asset pricing model, an intercept of excess returns is classified as

A. Sharpe's reward to variability ratio

B. tenor's reward to volatility ratio

C. Jensen's alpha

D. tenor's variance to volatility ratio

MCQ 6: In arbitrage pricing theory, the required returns are functioned of two factors which have

A. dividend policy

B. market risk

C. historical policy

D. Both A and B

MCQ 7: If the book value is greater than market value comparison with the investors for future stock are considered as

A. pessimistic

B. optimistic

C. experienced

D. inexperienced

MCQ 8: An average return of portfolio divided by its coefficient of beta is classified as

A. Sharpe's reward to variability ratio

B. treynor's reward to volatility ratio

C. Jensen's alpha

D. treynor's variance to volatility ratio

MCQ 9: The slope coefficient of beta is classified statistically significant if its probability is

A. greater than 5%

B. equal to 5%

C. less than 5%

D. less than 2%

MCQ 10: The second factor in the Fama French three factor model is the

A. size of industry

B. size of market

C. size of company

D. size of portfolio

MCQ 11: The difference between actual return on stock and the predicted return is considered as

A. probability error

B. actual error

C. prediction error

D. random error

MCQ 12: The complex statistical and mathematical theory is an approach, which is classified as

A. arbitrage pricing theory

B. arbitrage risk theory

C. arbitrage dividend theory

D. arbitrage market theory

MCQ 13: The first step in determining an efficient portfolio is to consider

A. set of attainable portfolios

B. set of unattainable portfolios

C. set of attributable portfolios

D. set of attributable portfolios

MCQ 14: The tendency of people to blame failure on bad luck but given tribute of success to themselves is classified as

A. self-attribution bias

B. self-success bias

C. self-failure bias

D. self-condition bias

MCQ 15: The stock portfolio with the highest book to market ratios is considered as

A. H portfolio

B. L portfolio

C. S portfolio

D. B to M portfolio

MCQ 16: The high portfolio return is 6.5% and the low portfolio return is 3.0% then the HML portfolio will be

A. 2.16%

B. 9.50%

C. 3.50%

D. 0.4615 times

MCQ 17: The stocks which has lower book for market ratio are considered as

A. optimistic

B. more risky

C. less risky

D. pessimistic

MCQ 18: An individual stock required return is equal to risk free rate plus bearing risk premium is an explanation of

A. security market line

B. capital market line

C. aggregate market line

D. beta market line

MCQ 19: The future beta is needed to calculate in most situations is classified as

A. historical betas

B. adjusted betas

C. standard betas

D.

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