61. A collection of assets held by an investor is called
(A) corporate bond
(B) random returns
(C) risk premium
(D) portfolio

62. The risk of a well-diversified portfolio depends on the __________ of the securities included in the portfolio.

(A) specific risk
(B) market risk
(C) both A and B
(D) none of these

63. The contribution of an individual security to the risk of a well-diversified portfolio is measured by?
(A) beta
(B) variance
(C) standard deviation
(D) CAPM

64. The sensitivity of an asset to the market movements is called
(A) beta
(B) variance
(C) standard deviation
(D) CAPM

65. The average beta of all stocks in a market is
(A) –1
(B) 0
(C) 1
(D) 1.5

66. If the daily prices of a stock on 20 and 21 January are 90 and 100 respectively, then what is the daily rate of return?
(A) 9.9%
(B) 10.10%
(C) 11.11%
(D) 12.12%

67. According to the MM proposition, dividend policy is
(A) correlated
(B) under-performed
(C) relevant
(D) irrelevant

68. In portfolio analysis __________ curves play an important role.
(A) circle
(B) ellipse
(C) parabola
(D) hyperbola

69. If stock prices increases, dividend yield
(A) also increases
(B) decreases
(C) remains same
(D) increases to one and a half

70. According to residual dividend policy, a firm should pay a dividend of all left over when
(A) zero NPV projects have been funded
(B) positive NPV projects have been funded
(C) projects with IRR equal to risk-free interest rate have been funded
(D) projects with IRR greater than risk-free interest rate have been funded

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