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1 Finance MCQs

A tighter or more concentrated probability distribution of possible outcomes indicates:

  • Higher risk
  • Lower risk
  • Expected risk
  • Peaked risk
0 Comments
Correct Answer: B. Lower risk

Explanation:

The correct option is this Lower risk.


In Finance MCQs, understanding probability distributions is ... Read More Details

2 Finance MCQs

The coefficient of variation is used to measure the relative effect of which factors on an investment?

  • Risk
  • Return
  • Deviation
  • Both A and B
0 Comments
Correct Answer: D. Both A and B

Explanation:

The correct option is this Both A and B.


In Finance MCQs, the Read More Details

3 Finance MCQs

The likelihood of an unfavorable event occurring in the near future is called:

  • Chance
  • Event happening
  • Probability
  • Risk
0 Comments
Correct Answer: D. Risk

Explanation:

The correct option is this Risk.


In Finance MCQs, risk is one of the ... Read More Details

4 Finance MCQs

Term structure premium, inflation premium, and bond default premium are collectively included in:

  • Risk factors
  • Premium factors
  • Bond buying factors
  • Multi-model
0 Comments
Correct Answer: B. Premium factors

Explanation:

The correct option is this Premium factors.


In Finance MCQs, understanding how bond yields ... Read More Details

5 Finance MCQs

The likelihood or chance of any event occurring is called:

  • Probability
  • Risk
  • Chance
  • Event happening
0 Comments
Correct Answer: A. Probability

Explanation:

The correct option is this Probability.


In Finance MCQs, probability is a foundational concept ... Read More Details

6 Finance MCQs

The relationship between risk and the required return on an investment is represented by:

  • Security Market Line
  • Required return line
  • Market risk line
  • Riskier return line
0 Comments
Correct Answer: A. Security Market Line

Explanation:

The correct option is this Security Market Line (SML).


In Finance MCQs, the Security ... Read More Details

7 Finance MCQs

In finance, the risk of a portfolio is usually smaller than the __________ of its individual assets:

  • Mean
  • Weighted average
  • Mean correlation
  • Negative correlation
0 Comments
Correct Answer: B. Weighted average

Explanation:

The correct option is this Weighted average.


In Finance MCQs, understanding portfolio risk is ... Read More Details

8 Finance MCQs

A portfolio composed of perfectly positively correlated assets has no effect on:

  • Negativity
  • Positivity
  • Correlation
  • Diversification
0 Comments
Correct Answer: D. Diversification

Explanation:

The correct option is this Diversification.


In Finance MCQs, diversification is one of the ... Read More Details

9 Finance MCQs

The standard measure used to assess a stock’s risk relative to the market is called:

  • Alpha
  • Beta
  • Variance
  • Market relevance
0 Comments
Correct Answer: B. Beta

Explanation:

The correct option is this Beta.


In Finance MCQs, beta is one of the ... Read More Details

10 Finance MCQs

According to the market risk premium concept, the amount of risk premium depends on an investor's:

  • Risk-taking
  • Risk aversion
  • Market aversion
  • Portfolio aversion
0 Comments
Correct Answer: B. Risk aversion

Explanation:

The correct option is this Risk aversion


In Finance MCQs, understanding the concept of ... Read More Details