Question
Q10: Which is not a measure to help evaluate and select among projects? PI YTM PBP IRR Q11: Let cells A1 to A3 contain:Risk-Free Rate
Q10: Which is not a measure to help evaluate and select among projects?
- PI
- YTM
- PBP
- IRR
Q11: Let cells A1 to A3 contain:Risk-Free Rate (A1), beta of the investment (A2), Market Risk Premium (A3).
The Capital Asset Pricing Model (CAPM) can be calculated as:
- =A1+A3
- =A1-A3
- =A1+A2*A3
- =A1-A2*A3
Q12: Which is not a procedure of constructing a frequency distribution?
- Assign observations to the appropriate interval
- Calculate the absolute frequency
- Define the intervals
- Count the observations
Q13: You have a loan principal of $100,000. The annual interest rate is 3% and the loan term is 30 years. Using the PMT() formula, calculate the amount of each annual payment.
- $30,005.21
- $5,036.20
- $30,011.45
- $5,101.93
Q14: Which of the statements about normal distribution is incorrect?
- The skewness must be 0 and kurtosis must be 3 for a normal distribution
- The mean, median, and mode are all the same in a normal distribution
- We can simply use mean and variance to identify different normal distributions
- The tails of a normal distribution will get smaller and smaller and reaches zero eventually
Q15: An asset's contribution to a portfolio's return is determined by its:
- Weight
- Weight and return
- None of the listed choices
- Return
Q16: Which is not included in the CAPM?
- Standardised covariance term
- Unsystematic risk
- Market risk premium
- Risk-free rate
Q17: Which statement about portfolio management is correct:?
- Given the same level of risk, portfolio with higher Sharpe Ratio generates higher return
- Once constructed, there is no need to rebalance the portfolio
- We should always invest in the asset with highest return
- It is a good practice to invest all our money into one type of assets
Q18: You decide to make 8 annual investments of $2,500 each starting a year from now. Your aim is to accumulate $15,000 by the end of 6 years. To achieve this, you will need a rate of return of 20%. Which of the following Excel formula is applicable for this calculation?
- FV() formula
- PV() formula
- NPV() formula
- RATE() formula
Q19: Which statement is incorrect?
- The efficient frontier coincides with the top portion of the minimum-variance frontier
- An investor can expect to get one unit of market risk premium in additional return for every unit of market risk that the investor is willing to accept.
- Capital allocation line is a function of risk and return of a portfolio given the risk-free rate
- The global minimum-variance portfolio is the portfolio that has the lowest standard deviation of all portfolios with a given expected return
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