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Choose the correct answer _____________________________________________________________________ Q1

Ahmad invests $5000 in the stock market, $15000 in the bank. The risk of the market is 20%. If Ahmad overall risk is 0.05, then the bank risk is

A 0 b 0,25 c 0.5 d 0.2 ___________________________________________________________________________ An investor notice that every time the stock touch the $35, then drop to $30. An investor is not willing to lose more than $100

a.

The investor needs to buy 15 stock

b.

The investor needs to buy 25 stock

c.

He should invest $700

d.

He should invest $7000

______________________________________________________________________________

Sharp use Beta instead of because

a.

Specific risk is more important

b.

Investor use B only with a diversified portfolio

c.

Systematic risk of the stock is more important

d.

Non- Systematic Risk is more important

_________________________________________________________________________________

If Rf=4%;R(M)=12%,B=0.5.Then the required return on the stock is

a.

12%

b.

8%

c.

16%

d.

4%

_____________________________________________________________________________

A portfolio on the efficient frontier is

a.

The highest risk for any given return

b.

A mix of risky and non-risky

c.

A mix of risky and Risk-free

d.

A mix of risky asset

______________________________________________________________________________

An investor invested $100 in stock A and $100 in stock B. The price of stock A change from $30 to $50 Stock B changes from $85 to $100. At the end of the year his wealth

a.

Increase by $42

b.

Increase by 124

c.

Increase by $142

d.

Increase by $24

_________________________________________________________________________

If the Rm (return on the market)=12%, Rf=3%. The standard deviation of the min risk portfolio is the market portfolio is 9%. The standard deviation of the optimal portfolio is 18%. Then the sharp ratio ( the slope)

a.

1

b.

2

c.

0.5

d.

9

The price of Alitisalat had been going up for the last few days for no specific reason, however, the Arab Bank announced a takeover of Alitisilat the price didn't move after the announcement. The conclusion is that

a.

The market is a weak but not semi-strong

b.

The market is not a semi-strong and not a strong form

c.

The market is a semi-strong but not a strong

d.

A market is a weak form and semi-strong

If the return on a stock is 6%, the ret on the market is 10%, Rf=4, then B=

a.

6

b.

0.5

c.

4

d.

0.33

All the following is a systematic risk except

a.

Corona

b.

Inflation

c.

Recession

d.

Death of the manager

Stock A: return 6%; =12%;StockB: return8%; =5%;StockC: return 11%;=6%;StockD: return 7%; =3%;StockE:return 5%; =5%;StockF:return 10%;=11%.The following stocks on the effecient frontier

a.

Stock B,C only

b.

Stock B,C,D only

c.

Stock A,B,F only

d.

Stock D,F, E only

The CAL line is a mix of

a.

Risky and non-risky asset

b.

Market Portfolio and Optimal Portfolio

c.

Min risk and Optimal Portfolio

d.

Risk-free and Min risk portfolio

__________________________________________________________________________________-- An investor invests 10000 in stock A, $5000 in stock B. Stock A' price change from $30 to $50; stock B changes from $85 to $100.Which is the right sentence

a.

2134 available in his account

b.

3124 available in his account

c.

The total return is 0.5

d.

2134 available in her account

Ahmad has $20000. The market risk is 40%. Ahmad is not willing to take more than 10%. How much should Ahmad deposit in the bank

a.

15000

b.

10000

c.

2000

d.

5000

_________________________________________________________________________________ If the Rm (return on the market)=15%, Rf=3%. The standard deviation of the optimal portfolio is 24%. If the investor is willing to take risk 10%, then the Ret will be

a.

5%

b.

15%

c.

13%

d.

8%

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