#1
Which of the following measures indicates the variability of returns from an investment?
Standard deviation
Mean return
Median return
Mode
#2
Which of the following types of risk is unique to an individual investment?
Systematic risk
Unsystematic risk
Market risk
Interest rate risk
#3
Which of the following is NOT a type of risk associated with investments?
Inflation risk
Credit risk
Liquidity risk
Stability risk
#4
Which statistical measure is used to represent the average of a set of investment returns?
Standard deviation
Mean return
Variance
Skewness
#5
Which of the following is NOT considered a primary asset class for investment?
Equities
Bonds
Real estate
Commodities
#6
What does the Capital Asset Pricing Model (CAPM) help investors to determine?
Expected return of an investment
Historical return of an investment
Risk-free rate of return
All of the above
#7
Which of the following statements about diversification is true?
Diversification increases unsystematic risk.
Diversification reduces unsystematic risk.
Diversification increases systematic risk.
Diversification reduces systematic risk.
#8
Beta measures the sensitivity of an investment's returns to which of the following?
Market risk
Interest rate risk
Credit risk
Liquidity risk
#9
What is the Sharpe ratio used to evaluate?
Liquidity risk
Market risk
Return per unit of risk
Credit risk
#10
Which of the following is a measure of downside risk?
Beta
Sortino ratio
Sharpe ratio
Alpha
#11
Which of the following factors has the most significant impact on the risk and return of an investment portfolio?
Diversification
Historical performance
Market trends
Asset allocation
#12
What does the coefficient of variation (CV) measure?
Total risk
Systematic risk
Unsystematic risk
Risk per unit of return
#13
What does the concept of 'efficient frontier' represent in portfolio theory?
The set of optimal portfolios that offer the highest expected return for a given level of risk.
The set of portfolios that offer the highest return regardless of risk.
The set of portfolios that offer the lowest return for a given level of risk.
The set of portfolios that offer the lowest risk regardless of return.
#14
What does the Fama-French three-factor model help to explain?
Market risk
Credit risk
Systematic risk
Asset pricing anomalies
#15
What is the purpose of Monte Carlo simulation in investment analysis?
To estimate the expected return of an investment
To simulate potential future outcomes and assess risk
To determine the correlation between different assets
To calculate the Sharpe ratio