Finance MCQs

Page No. 11

Correct measure of risk of stock is called_____________?


aAlpha

✓


bBeta

✓


cVariance

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dMarket relevance

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View Answer Beta

Portfolio which consists of perfectly positive correlated assets having no effect of___________?


aNegativity

✖


bPositivity

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cCorrelation

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dDiversification

✓


View Answer Diversification

Mostly in financials, risk of portfolio is smaller than that of asset’s________?


aMean

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bWeighted average

✓


cMean correlation

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d Negative correlation

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View Answer Weighted average

Coefficient of beta is used to measure stock volatility_____________?


aCoefficient of market

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bRelative to market

✓


cIr-relative to market

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dSame with market

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View Answer Relative to market

Relationship between risk and required return is classified as___________?


aSecurity market line

✓


bRequired return line

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cMarket risk line

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dRiskier return line

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View Answer Security market line

Tendency of moving together of two variables is classified as_____________?


aCorrelation

✓


bMove tendency

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cVariables tendency

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dDouble tendency

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View Answer Correlation

Chance of occurrence of any event is classified as_____________?


aProbability

✓


bRisk

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cChance

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dEvent happening

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View Answer Probability

Term structure premium, an inflation of bond and bond default premium are included in_________________?


aRisk factors

✓


bPremium factors

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cBond buying factors

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dMulti model

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View Answer Risk factors

Tendency of measuring correlation of two variables is classified as_________?


aTendency coefficient

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bVariable coefficient

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cCorrelation coefficient

✓


dDouble coefficient

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Stock which has higher correlation with market tend to have__________?


aHigh beta, less risky

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bLow beta, more risky

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cHigh beta, more risky

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dLow beta, less risky

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View Answer High beta, more risky

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