Investment Management - Investment Management Questions
- Option : A
- Explanation : The most risk-averse investor has the indifference curve with the greatest slope.
- Option : C
- Explanation : Risk-averse investors are generally willing to invest in risky investments, if the return on the investment is sufficient to reward the investor for taking on this risk. Participants in securities markets are generally assumed to be risk-averse investors.
3. Selected information about shares of two companies is provided below:
| ABC Corporation | XYZ Corporation | |
| Standard deviation | 25% | 30% |
| Correlation of returns | 0.24 | |
| Portfolio weights | 40% | 60% |
The standard deviation of returns of the portfolio formed with these two stocks is closest to:
- Option : B
- Explanation : Portfolio standard deviation = √ (0.25)² (0.4)² + (0.3)² (0.6)² + 2 (0.24) (0.4) (0.6) (0.25) (0.3) = 0.2259.
| Stock | Standard Deviation | Portfolio Weights |
| ABC | 36% | 40% |
| JKL | 27% | 60% |
The standard deviation of the returns for the portfolio is 30%. Thecorrelation coefficient for the returns is closest to:<
5. The following data is available:
| Expected Return | Standard Deviation | Risk aversion coefficient |
| 15% | 27% | 4 |
The utility of this investment is closest to:
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Portfolio Management MCQ Questions for UGC NET Management
Portfolio Management MCQ
Portfolio Management MCQ Multiple choice questions
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