Risk Return Analysis  Assessment
Assess your learning on Risk Return Analysis topic. Below quiz is compiled with open source MCQs available as student resources and questions framed by us. The idea is to make online learning interesting and productive.
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A statistical measure of the variability of a distribution around its mean is referred to as __________.
1 point
a probability distribution
the expected return
the standard deviation
coefficient of variation
Clear selection
Which form of market efficiency states that current prices fully reflect all publicly available information?
1 point
Weak.
Semistrong.
Strong.
Clear selection
Which of the following items is a model that describes the relationship between risk and expected return (in this model the expected return is equal to the riskfree return plus a premium based on the systematic risk of the security)?
2 points
Beta.
Characteristic line.
Capital asset pricing model.
Efficient markets model.
Clear selection
Which of the following statements regarding covariance is correct?
1 point
Covariance always lies in the range 1 to +1.
Covariance, because it involves a squared value, must always be a positive number (or zero).
Low covariances among returns for different securities leads to high portfolio risk.
Covariances can take on positive, negative, or zero values.
Clear selection
Which form of market efficiency states that current prices fully reflect the historical sequence of prices?
1 point
Weak.
Semistrong.
Strong.
Clear selection
The __________ describes the linear relationship between expected rates of return for individual securities (or portfolios) and __________.
1 point
characteristic line; standard deviation
characteristic line; beta
security market line; standard deviation
security market line; beta
Clear selection
__________ is the variability of return on stocks or portfolios associated with changes in return on the market as a whole.
1 point
Systematic risk
Standard deviation.
Unsystematic risk
Coefficient of variation.
Clear selection
What is the beta for an average risk security? What is the beta for a Treasury bill?
1 point
1; 0.
0; 1.
Greater than 1; 1.
1; Greater than 1.
Clear selection
The __________ describes the relationship between an individual security's returns and returns on the market portfolio. The slope of this line is __________.
1 point
security market line; beta
characteristic line; beta
security market line; equal to +1.
characteristic line; equal to +1
Clear selection
Which form of market efficiency states that current security prices fully reflect all information, both public and private?
1 point
Weak.
Semistrong.
Strong.
Clear selection
Which of the following items describes an index measure of systematic risk?
1 point
Beta.
Standard deviation.
Coefficient of variation.
Variance.
Clear selection
The weighted average of possible returns, with the weights being the probabilities of occurrence is referred to as __________.
1 point
a probability distribution
the expected return
the standard deviation
coefficient of variation
Clear selection
The firm of Sun and Moon purchased a share of Acme.com common stock exactly one year ago for $45. During the past year the common stock paid an annual dividend of $2.40. The firm sold the security today for $85. What is the rate of return the firm has earned?
2 points
88.9%
194.2%
94.2%
5.3%
Clear selection
__________ is the variability of return on stocks or portfolios not explained by general market movements. It is avoidable through diversification.
1 point
Systematic risk
Standard deviation.
Unsystematic risk
Coefficient of variation.
Clear selection
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