Risk-Return Relationship and the Capital Asset Pricing Model (CAPM)
The risk affects any firm with the factors such as war, recessions, inflation and high interest rates is classified as
diversifiable risk
market risk
stock risk
portfolio risk
market risk
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The standard deviation is 18% and the expected return is 15.5% then the coefficient of variation would beA. 0.00861
B. 0.01161
C. 0.025
D. โ2.5%
The risk per unit of return or the stand alone risk is represented by
A. coefficient of standard
B. coefficient of return
C. coefficient of variation
D. coefficient of deviation
The relationship between risk and required return is classified as
A. security market line
B. required return line
C. market risk line
D. riskier return line
The correct measure of risk of stock is called
A. alpha
B. beta
C. variance
D. market relevance
A technique of lowering the risk for multinational companies and globally designed portfolios is classified as
A. national diversification
B. behavioral diversification
C. global diversification
D. behavioral finance
The stock which has higher correlation with market tend to have
A. high beta, less risky
B. low beta, more risky
C. high beta, more risky
D. low beta, less risky
An amount invested is $1500 and an amount received is $2000 then the dollar return would be
A. 500
B. โ$500
C. 3500
D. โ$3500
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