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Financial Management Entrance Tests: Practice Test 10 (Chapter 9)

Risk, Return, and Capital Asset Pricing Model Multiple Choice Questions (MCQ) PDF Download - 10

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Risk, Return, & Capital Asset Pricing Model MCQs with Answers PDF Download: Quiz 10

MCQ: 46

The relationship between risk and required return is classified as

  1. security market line
  2. required return line
  3. market risk line
  4. riskier return line
MCQ: 47

The tendency of moving together of two variables is classified as

  1. correlation
  2. move tendency
  3. variables tendency
  4. double tendency
MCQ: 48

Of all the stocks in a portfolio, the required rate of return is classified as

  1. return portfolio
  2. in volatile portfolio
  3. volatile portfolio
  4. market portfolio
MCQ: 49

The risk in average individual stock can be reduced by placing an individual stock in

  1. low risk portfolio
  2. diversified portfolio
  3. undiversified portfolio
  4. high risk portfolio
MCQ: 50

The required return is 15% and the premium for risk is 11% then the risk free return would be

  1. 0.26
  2. 0.04
  3. 165
  4. 0.0136

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