Finance MCQs

Page No. 14

A theory which states that assets are traded at price equal to its intrinsic value is classified as___________________?


aEfficient money hypothesis

✖


bEfficient market hypothesis

✓


cInefficient market hypothesis

✖


dInefficient money hypothesis

✖



In capital asset pricing model, characteristic line is classified as____________?


aRegression line

✓


bProbability line

✖


cScattered points

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dWeighted line

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View Answer Regression line

Betas tend to move towards 1.0 with passage of time are classified as__________?


aStandard betas

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bVaried betas

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cHistorical betas

✖


dAdjusted betas

✓


View Answer Adjusted betas

All assets are perfectly divisible and liquid in___________?


aTax free pricing model

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bCost free pricing model

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cCapital asset pricing model

✓


dStock pricing model

✖



Stock issued by company have higher rate of return because of______________?


aLow market to book ratio

✖


bHigh book to market ratio

✓


cHigh market to book ratio

✖


dLow book to market ratio

✖



According to capital asset pricing model assumptions, variances, expected returns and co-variance of all assets are__________?


aIdentical

✓


bNot identical

✖


cFixed

✖


dVariable

✖


View Answer Identical

According to capital asset pricing model assumptions, quantities of all assets are______________?


aGiven and fixed

✓


bNot given and fixed

✖


cNot given and variable

✖


dGiven and variable

✖


View Answer Given and fixed

According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given___________?


aIdentical and fixed returns

✖


bRisk free rate of interest

✓


cFixed rate of interest

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dRisk free expected return

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A high portfolio return is subtracted from low portfolio return to calculate_________?


aHML portfolio

✓


bR portfolio

✖


cSubtracted portfolio

✖


d

✖


View Answer HML portfolio

In capital market line, risk of efficient portfolio is measured by its____________?


aStandard deviation

✓


bVariance

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cAggregate risk

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dIneffective risk

✖


View Answer Standard deviation

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