Final PN-14 SFM Quiz 4

1. The feature of the general version of the arbitrage pricing theory (APT) that offers the greatest potential advantage over the simple CAPM is the:

2. In contrast to the CAPM, arbitrage pricing theory:

3. Arbitrage portfolio  

4. The security market line’s first point is riskless asset with a beta of zero and the second point on the line is beta of            

5. Consider the information given below:

Rate of inflation = 5.1%                                          Beta = 0.85 Real rate of return = 4.2% and               Market return = 12.6%

The risk premium for the above security will be-

6. Covariance between a stock and a market index and the variance of the market index were found to be 33.56 and 19.15 respectively. The beta of the stock is:

7. Mr. X invested Rs.10,000 in shares of XYZ Company 20 years ago, and that his shares (including reinvested dividends) are currently worth Rs.18,800. Using this information, calculate total investment return of Mr. A.

8. What is the annualized return of Mr. A based on the data of the above question?

9. Mr. A invested Rs.10,000 in a shares of XYZ Company 10 years ago, and that is shares (including reinvested dividends) are currently worth Rs.23,8000. Using this information, calculate total investment return of Mr. A

10. A portfolio comprises two securities and the expected return on them is 12% and 16% respectively. Determine return of portfolio if first security constitutes 40% of total portfolio.

11. Risk of two securities with different expected return can be compared with              

12. Total risk includes

13. A portfolio having two risky securities can be turned risk less if

14. For a scheme to be defined as an equal fund, it must have a minimum       

15. If opening units 1,25,000 Units subscribe 2,00,000, Units redeem 50,000 then Closing units?

16. For a scheme to be defined as an equal fund, it must have a minimum       

17. If opening units 10,000 Units subscribe 3000, Units redeem 1000 then Closing units?

18. A mutual fund had average daily assets of Rs.500 million in the past year. During the year, the fund sold Rs.60 million of stock X and purchased Rs.90 million of stock Y. What was the fund’s turnover ratio?

19. How much money would you need to purchase 400 shares of a mutual fund with a NAV of Rs. 55 per share and a 3% load?

20. Identify the statement that applies to open-end mutual funds

21. The mutual funds are likely to perform better in the market than a small investor because they

22. Which of the following benefits is not usually conferred by mutual funds?

23. Which among the following increases the NAV of a mutual fund scheme?

24. Balanced funds have the following characteristics

25. Settlement are done at the instance of the