Finance MCQs

Page No. 12

Chance of happening any unfavorable event in near future is classified as___________?


aChance

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bEvent happening

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cProbability

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dRisk

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View Answer Risk

Coefficient of variation is used to identify an effect of__________?


aRisk

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bReturn

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cDeviation

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dBoth A and B

✓


View Answer Both A and B

A tighter probability distribution shows the___________?


aHigher risk

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bLower risk

✓


cExpected risk

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dPeaked risk

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View Answer Lower risk

Standard deviation is divided by expected rate of return is used to calculate_________?


aCoefficient of variation

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bCoefficient of deviation

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cCoefficient of standard

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dCoefficient of return

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In capital asset pricing model, stock with high standard deviation tend to have________?


aLow variation

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bLow beta

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cHigh beta

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dHigh variation

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View Answer Low beta

Risk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as____________?


aStock risk

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bPortfolio risk

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cDiversifiable risk

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dMarket risk

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View Answer Diversifiable risk

A portfolio consists of all stocks in a market is classified as____________?


aMarket portfolio

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bReturn portfolio

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cCorrelated portfolio

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dDiversified portfolio

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View Answer Market portfolio

Beta coefficient is used to measure market risk which is an index of__________?


aCoefficient risk volatility

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bMarket risk volatility

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cStock market volatility

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dPortfolio market portfolio

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External factors such as expiration of basic patents and industry competition effect____________?


aPatents premium

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bCompetition premium

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cCompany’s beta

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dExpiry premium

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View Answer Company’s beta

Type of risk in which beta is equal to one is classified as____________?


aMultiple risk stock

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bVaried risk stock

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cTotal risk stock

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dAverage risk stock

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View Answer Average risk stock

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