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# Capital Asset Pricing Model Online Exam Quiz

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

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