CAPM model

what is the full form of CAPM?

• Current Assets pricing Model

• Capital Assets Pricing model

• Current Average Pricing Model

• Capital Average Pricing Model

what is the full form of SML?

• Stock Market Line

• Share market Line

• Security Market line

• Simple market Line

Beta represents ............. Risk.

• Systematic Risk

• Unsystematic Risk

• Total Risk

• Default Risk

From the following information calculate expected return from XYZ Ltd.- Risk free rate is 5 % , Market return is 10% and Beta value is 0.5 of XYZ Ltd.

• 5%

• 7.5%

• 10%

• 15%

From the following information you have to calculate Risk Premium.

Risk free rate is 10%, market return is 15% and beta is 1.5.

• 5%

• 17.5%

• 15%

• 10%

From the following information find out that stock is over performer or under performer .

Rf is 5%, market Return is 10% , beta is 0.5 and actual return is 10%.

• Over performer

• Under performer

SML is based on which formula?

• Rm+ (RM-RF)

• Rm + Beta (Rm-RF)

• Rm + beta

• Beta (Rm-Rf)

which one is helpful in expecting return from individual security?

• Capital Market Line

• Security market Line

• Capital Allocation Line

• Securities Characteristic Line

A "More risky " common stock would have a "beta"

• Equal to Zero

• More then one

• Less then One

• Equal to One

According to the capital-asset pricing model (CAPM), a security's expected return is equal to the risk-free rate plus a premium

• equal to the security's beta.

• based on the unsystematic risk of the security.

• based on the total risk of the security.

• based on the systematic risk of the security.