#1
Which of the following is a measure of investment risk?
Standard deviation
Expected return
Capital gain
Interest rate
#2
What does the term 'diversification' refer to in investment?
Concentrating investments in a single asset
Spreading investments across various assets
Investing only in high-risk assets
Avoiding all types of investments
#3
What is 'standard deviation' in the context of investment?
Average return of an investment
Measure of dispersion of investment returns
Probability of loss in an investment
Difference between actual return and expected return
#4
Which of the following is a characteristic of a 'bull market'?
Pessimism and declining stock prices
Positive investor sentiment and rising stock prices
Low trading volume
Economic downturn and recession
#5
What is the primary goal of portfolio diversification?
Maximize returns
Minimize risk
Increase volatility
Focus on short-term gains
#6
Which of the following is NOT a type of investment risk?
Market risk
Credit risk
Inflation risk
Economic risk
#7
Which of the following is NOT typically considered a measure of investment return?
Coupon payments
Dividend yield
Price-to-earnings ratio
Capital gains
#8
Beta coefficient is a measure of:
Total return on investment
Market risk
Liquidity risk
Credit risk
#9
What does the 'efficient market hypothesis' suggest?
Markets always overreact to new information
Stock prices reflect all available information
Investors should always buy low and sell high
Market prices are influenced only by government policies
#10
What does 'alpha' represent in investment analysis?
Measure of total portfolio risk
Excess return compared to the market
Probability of loss in an investment
Average return of similar assets
#11
Which of the following is NOT a type of systematic risk?
Interest rate risk
Market risk
Company-specific risk
Inflation risk
#12
What is the relationship between risk and return in investments?
There is no relationship between risk and return
Higher risk always leads to higher returns
Higher risk may lead to higher returns, but it also increases the chance of losses
Lower risk always leads to higher returns
#13
What is the formula for calculating the Sharpe ratio?
Risk-free rate / Standard deviation of returns
(Expected return - Risk-free rate) / Standard deviation of returns
Standard deviation of returns / Expected return
(Expected return - Risk-free rate) * Standard deviation of returns
#14
Which of the following is a measure of downside risk?
Sharpe ratio
Treynor ratio
Sortino ratio
Jensen's alpha
#15
What is the formula to calculate compound annual growth rate (CAGR)?
(Ending Value - Beginning Value) / Beginning Value
(Ending Value / Beginning Value) ^ (1 / Number of years) - 1
(Ending Value - Beginning Value) * Number of years
(Ending Value / Beginning Value) * Number of years
#16
What is the formula for calculating the geometric mean return of an investment?
Sum of returns / Number of observations
Product of (1 + each return)^(1 / Number of observations) - 1
Average of returns
Sum of (each return - average return)^2 / Number of observations
#17
Which of the following is NOT a measure of investment performance?
Tracking error
Information ratio
Alpha
Economic growth rate