MCQOPTIONS
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MCQOPTIONS
This section includes 3 Mcqs, each offering curated multiple-choice questions to sharpen your Business Finance knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
If the risk - free return (Rf) is 6%, Beta value (β) is 1.5 and market rate of return (Km) is 10%, the expected rate of return would be1. 15%2. 12%3. 17.5%4. 16% |
| A. | 1 |
| B. | 2 |
| C. | 3 |
| D. | 4 |
| Answer» C. 3 | |
| 2. |
Political risk management comes in the ambit of which of the following financial decisions? |
| A. | Non - conventional capital budgeting |
| B. | International currency arbitrage |
| C. | Foreign exchange market |
| D. | Multinational capital budgeting |
| Answer» E. | |
| 3. |
Choose the correct code for the following statements being correct or incorrect.Statement I : When the two securities returns are perfectly positively correlated, the risk of their portfolio is just a weighted average of the individual risks of the securities. In such case, diversification does not provide risk reduction but only risk averaging.Statement II : Total risk of a portfolio of two risk securities can be completely eliminated when their returns are perfectly negatively correlated and their proportionate holdings in the portfolio are inversely related to the relative individual risks of the securities. |
| A. | Both the statement I and II are correct. |
| B. | Both the statement I and II are incorrect. |
| C. | Statement I is correct, but II is incorrect. |
| D. | Statement II is correct, but I is incorrect. |
| Answer» B. Both the statement I and II are incorrect. | |