Financial Management - Study Mode

[#616] An amount invested is Rs 2500 and an amount received is Rs 1500 then return will be
Correct Answer

(C) -Rs 1,000.00

Explanation

Solution: Return on investment = Amount recieved - Amount invested = Rs. 1500 - Rs. 2500 = - Rs. 1000.

[#617] Method and model used to analyze relationship between rates of return and risk is classified as
Correct Answer

(A) capital asset pricing model

Explanation

Solution: Method and model used to analyze relationship between rates of return and risk is classified as capital asset pricing model. The Capital Asset Pricing Model (CAPM) is a model that describes the relationship between the expected return. The return on the investment is an unknown variable that has different values associated with different probabilities. and risk of investing in a security.

[#618] Stocks in market portfolio are graphically represented with
Correct Answer

(A) dashed line

Explanation

Solution: Stocks in market portfolio are graphically represented with dashed line.

[#619] Stock with large amount of contribution of risk in a diversified portfolio is represented by
Correct Answer

(A) high beta and standard deviation

Explanation

Solution: Stock with large amount of contribution of risk in a diversified portfolio is represented by high beta and standard deviation. Beta and standard deviation are measures by which a portfolio or fund's level of risk is calculated. Beta compares the volatility of an investment to a relevant benchmark while standard deviation compares an investment's volatility to the average return over a period of time.

[#620] Shares or stocks which are protected against withdrawals of funds by an original stock owners are classified as
Correct Answer

(B) founders shares

Explanation

Solution: Shares or stocks which are protected against withdrawals of funds by an original stock owners are classified as founders shares. Founders stock refers to the shares issued to the originators of a company. Often, the stock does not receive any returns up to the point that a dividend is payable to the common stockholders. Founders stock comes with a vesting schedule, which determines when the shares are exercisable.