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Risk and Return (simplified version)

Authored by Kanis Saengchote

Business

University

Used 1+ times

Risk and Return (simplified version)
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12 questions

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1.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

What are the two components of financial returns?

Price depreciation and diversification

Cash yield and price appreciation

Risk premium and systematic risk

Beta and risk-free rate

2.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

A stock’s price increased from $50 to $55, and it paid a dividend of $2 during the year. What is the total return for the stock?

10%

12%

14%

16%

3.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

What is the primary goal of diversification in portfolio management?

Maximizing return with high risk

Reducing risk without lowering the average return

Eliminating all risk from investments

Maximizing beta coefficient

4.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

What does the efficient frontier represent in portfolio theory?

The riskiest investment options available

The optimal combinations of risk and return for assets

The highest beta values for individual assets

The risk-free rate of return for a market portfolio

5.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

What is the risk premium in the CAPM equation?

The additional return expected for taking systematic risk

The market index return

The cash yield from a risk-free investment

The difference between beta and market return

6.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

What does the Sharpe ratio measure in finance?

The relative return of a portfolio

The risk-adjusted return of an investment

The relationship between beta and alpha

The volatility of a portfolio’s returns

7.

MULTIPLE CHOICE QUESTION

15 mins • 1 pt

The market portfolio has a return of 10%, a risk-free rate of 3%, and a standard deviation of 15%. What is its Sharpe ratio?

0.47

0.50

0.67

0.80

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