1.

Risk of two securities with different expected return can be

compared with
a) Coefficient of variation
b) Standard deviation
c) Variance of securities
d) None of the above
2.A portfolio having two risky securities can be turned risk less if
a)if securities are completely positively correlated
b)if correlation ranges between zero and one
c)the securities are negatively correlated
d)none of the above
3. A portfolio comprises two securities and the expected return on
them is 12⁒ and 16⁒ respectively. Determine return of portfolio if
first security constitutes 40⁒ of total

a)12.4⁒

b)13.3⁒

c)14.4⁒

4.of the following four investments ……..is considered the safest?

a)commercial paper

b)corporate bonds

c)treasury bonds

d)treasury bills

5……… is a statistical measure of the variability of a distribution

around mean ?

a)variance
b)expected rate of return

c)standard deviation

d)co-efficient of variation

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

A)risk discount

b)par risk

c) risk premium

d)risk free rate

7.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

8.an investment proposal should be judge and accepted?

a)a return more than required by investor

b)a return equal to the return by the investor

c)a return less than required by investor

d)none of the above

9.the conventional measure of dispersion is-----------?

a)a probability distribution

b)the expected return

c)the standard deviation

d)coefficient of variation

10.CAPM accounts for;

a)unsystematic risk

b)systematic risk

c)both a and b

d)none of the above

11.efficient portfolios can be defined as those portfolios which for a

given level of risk provides

a)maximum return

b)average return

c)minimum return

d)none of the above

12.marry owns a risky stock and anticipates earning 16.7 percent on

her investment in that stock. The best description of it?

a)real return

b)market rate

c)expected rate

d)risk premium

13.which term best refers to the practice of investing in a variety of

diverse assets as a means of risk?

a)systematic
b)unsystematic

c)diversification

d)CAPM

14.which one describe systematic risk?

a)diversifiable risk

b)asset specific risk

c)an individual security risk

d)risk that affects a large number of assets

15the attitude towards risk in which an increased return is required

for an increase risk

a)risk taker

b)risk aversion

c) a ,b

d)none of the above