Risk and Return MCQs (1-10)

1. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?

(a) Systematic risk

(b) Standard deviation

(c) Unsystematic risk

(d) Coefficient of variation

Correct! Wrong!

2. An investment proposal should be judged and accepted?

(a) A return equal to the return require by the investor

(b) A return more than required by investor

(c) A return less than required by investor

(d) None of Above

Correct! Wrong!

3. The conventional measure of dispersion is ________________________?

(a) A probability distribution

(b) The expected return

(c) The standard deviation

(d) Coefficient of variation

Correct! Wrong!

4. The rate of return you earn on an investment before adjusting for inflation is called the ____________ rate?

(a) Nominal

(b) Real

(c) Premium

(d) Coupon

Correct! Wrong!

5. The additional return we must expect to receive for assuming risk?

(a) Risk discount

(b) Risk premium

(c) Par risk

(d) Risk free rate of return

Correct! Wrong!

6. The total risk is calculated by adding Unsystematic risk with ____________________?

(a) Systematic risk

(b) Market risk

(c) Country specific risk

(d) All of the above

Correct! Wrong!

7. The single investment risk that investor would face if he or she held only one financial asset is called ________?

(a) Stand alone risk

(b) Portfolio risk

(c) Diversifiable risk

(d) Systematic risk

Correct! Wrong!

8. If we multiply each possible outcome by its probability of occurrence and then sum these products than we get?

(a) Variance

(b) Expected Rate of Return

(c) Standard Deviation

(d) Co-efficient of Variation

Correct! Wrong!

9. _______________ is a statistical measure of the variability of a distribution around its mean?

(a) Variance

(b) Expected rate of return

(c) Standard deviation

(d) Co-efficient of variation

Correct! Wrong!

10. Of the following four investments, _____________________ is considered the safest?

(a) Commercial paper

(b) Corporate bonds

(c) Treasury bonds

(d) Treasury bills

Correct! Wrong!

1. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?

2. An investment proposal should be judged and accepted?

3. The conventional measure of dispersion is ________________________?

4. The rate of return you earn on an investment before adjusting for inflation is called the ____________ rate?

5. The additional return we must expect to receive for assuming risk?

6. The total risk is calculated by adding Unsystematic risk with ____________________?

7. The single investment risk that investor would face if he or she held only one financial asset is called ________?

8. If we multiply each possible outcome by its probability of occurrence and then sum these products than we get?

9. _______________ is a statistical measure of the variability of a distribution around its mean?

10. Of the following four investments, _____________________ is considered the safest?

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