1) Market risk is also called

a) Non diversifiable risk and systematic risk

b) diversifiable risk and systematic risk
c) systematic risk and unique risk
d) Non diversifiable and Unique
2)Risk that arise due to possibility of host government harmful actions is called
a) Market Risk
b) Product risk
c) Business Risk
d) Political Risk

3)Which of the following risk is associated in international investment?

a) Market Risk
b) Product risk
c) Business Risk
d) Political Risk

4)As per CAPM model total risk of the security is equal to

a) Diversifiable risk
b) Non Diversifiable risk
c) Both
d) Non of above

5)BETA of market portfolio is

a) 0.5
b) -1
c) 0
d) 1

6)The market risk premium slop

a) Security market line

b) Opportunity line
c) Capital market line
d) Non of these

7)According to CAPM over Priced Securities have

a) Negative Alphas
b) Positive Alphas
c) Zero Alphas
 d) Negative Betas

8)Beta coefficient is used to measure market risk which is an index of

a) coefficient risk volatility
b) market risk volatility
c) stock market volatility
d) portfolio market portfolio
9)Beta of risk free asset is
a) 2
b) 1
c) 0
d) -1
10)CAPM asserts that Portfolio returns are
a) Diversifications
b) Economic Factors
c) Systematic Risk
d) Specific Risk
11)The market Premium is 15% and risk free rate is 5% , beta is 0.2. What is return of asset under
CAPM?
a) 3%
b) 20%
c) 7%
d) 8%

12)If an asset’s expected return plots above security line, the asset is:

a) Under Priced
b) Over Priced
c) Both
d) Fairly priced
13) Risk free return is the return of

a) Fixed return of bonds/ debentures

b) Return of equity instruments
c) Return of any security
d) None of above

14) Risk free return denotes in formula with

a) Rf

b) Rt

c) Fr

D) Tf

15) Which of the following is not the assumption of CAPM

a) All investors are averse to risk.
b) Markets are highly efficient. All investors have equal access to all available information.
c) All investors can borrow and lend unlimited amounts under a risk-free rate.
d) Alpha coefficient is the only measure of risk
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