Important questions about Capital Asset Pricing Model. Capital Asset Pricing Model MCQ questions with answers. Capital Asset Pricing Model exam questions and answers for students and interviews.

The beta reflects the stock risk for investors which is usually

Options

A : a. individual

B : b. collective

C : c. weighted

D : d. linear

For any or lower degree of risk, the highest or any expected return are the concepts use in

Options

A : a. riskier portfolios

B : b. behavior portfolios

C : c. inefficient portfolios

D : d. efficient portfolios

An unsystematic risk which can be eliminated but the market risk is the

Options

A : a. aggregate risk

B : b. remaining risk

C : c. effective risk

D : d. ineffective risk

An indication in a way that variance of y-variable is explained by x-variable which is shown as

Options

A : a. degree of dispersion is one

B : b. degree of dispersion is two

C : c. degree of dispersion is three

D : d. degree of dispersion is four

In regression of capital asset pricing model, an intercept of excess returns is classified as

Options

A : a. Sharpe's reward to variability ratio

B : b. tenor's reward to volatility ratio

C : c. Jensen's alpha

D : d. tenor's variance to volatility ratio

In arbitrage pricing theory, the required returns are functioned of two factors which have

Options

A : a. dividend policy

B : b. market risk

C : c. historical policy

D : d. both a and b

If the book value is greater than market value comparison with the investors for future stock are considered as

Options

A : a. pessimistic

B : b. optimistic

C : c. experienced

D : d. inexperienced

An average return of portfolio divided by its coefficient of beta is classified as

Options

A : a. Sharpe's reward to variability ratio

B : b. treynor's reward to volatility ratio

C : c. Jensen's alpha

D : d. treynor's variance to volatility ratio

The slope coefficient of beta is classified statistically significant if its probability is

Options

A : a. greater than 5%

B : b. equal to 5%

C : c. less than 5%

D : d. less than 2%

The second factor in the Fama French three factor model is the

Options

A : a. size of industry

B : b. size of market

C : c. size of company

D : d. size of portfolio

The difference between actual return on stock and the predicted return is considered as

Options

A : a. probability error

B : b. actual error

C : c. prediction error

D : d. random error

The complex statistical and mathematical theory is an approach, which is classified as

Options

A : a. arbitrage pricing theory

B : b. arbitrage risk theory

C : c. arbitrage dividend theory

D : d. arbitrage market theory

The first step in determining an efficient portfolio is to consider

Options

A : a. set of attainable portfolios

B : b. set of unattainable portfolios

C : c. set of attributable portfolios

D : d. set of attributable portfolios

The tendency of people to blame failure on bad luck but given tribute of success to themselves is classified as

Options

A : a. self attribution bias

B : b. self success bias

C : c. self failure bias

D : d. self condition bias

The stock portfolio with the highest book to market ratios is considered as

Options

A : a. H portfolio

B : b. L portfolio

C : c. S portfolio

D : d. B to M portfolio

The high portfolio return is 6.5% and the low portfolio return is 3.0% then the HML portfolio will be

Options

A : a. 0.0216

B : b. 0.095

C : c. 0.035

D : d. 0.4615 times

The stocks which has lower book for market ratio are considered as

Options

A : a. optimistic

B : b. more risky

C : c. less risky

D : d. pessimistic

An individual stock required return is equal to risk free rate plus bearing risk premium is an explanation of

Options

A : a. security market line

B : b. capital market line

C : c. aggregate market line

D : d. beta market line

The future beta is needed to calculate in most situations is classified as

Options

A : a. historical betas

B : b. adjusted betas

C : c. standard betas

D : d. varied betas

The rational traders immediately buy the stock when the price is

Options

A : a. too low

B : b. too high

C : c. conditional

D : d. inefficient portfolio

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