Capital Asset Pricing Model MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Capital Asset Pricing Model, a fundamental topic in the field of Financial Management and Financial Markets. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Capital Asset Pricing Model MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Capital Asset Pricing Model mcq questions that explore various aspects of Capital Asset Pricing Model problems. Each MCQ is crafted to challenge your understanding of Capital Asset Pricing Model principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace Financial Management and Financial Markets tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Capital Asset Pricing Model MCQs are your pathway to success in mastering this essential Financial Management and Financial Markets topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Capital Asset Pricing Model. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Capital Asset Pricing Model knowledge to the test? Let's get started with our carefully curated MCQs!

Capital Asset Pricing Model MCQs | Page 12 of 15

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Q111.
The relationship between risk and required return is classified as
Discuss
Answer: (a).security market line
Q112.
The tendency of moving together of two variables is classified as
Discuss
Answer: (a).correlation
Q113.
Of all the stocks in a portfolio, the required rate of return is classified as
Discuss
Answer: (d).market portfolio
Q114.
The risk in average individual stock can be reduced by placing an individual stock in
Discuss
Answer: (b).diversified portfolio
Q115.
The required return is 15% and the premium for risk is 11% then the risk free return would be
Discuss
Answer: (b).0.04
Q116.
The market required return is subtracted from the risk free rate which is used to calculate
Discuss
Answer: (b).market risk premium
Q117.
An estimation by marginal investor, a higher expected return is earned on
Discuss
Answer: (a).more riskier securities
Q118.
The term structure premium, an inflation of bond and bond default premium are included in
Discuss
Answer: (a).risk factors
Q119.
Mostly in financials, the risk of portfolio is smaller than that of asset's
Discuss
Answer: (b).weighted average
Q120.
If the risk can be eliminated with the help of diversification, then the relevant risk is
Discuss
Answer: (a).smaller than stand-alone risk