854. In regression of capital asset pricing model, an intercept of excess returns is classified as

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Sharpe’s reward to variability ratio
tenor’s reward to volatility ratio
Jensen’s alpha
tenor’s variance to volatility ratio
✅ The correct answer is C.
In regression of capital asset pricing model, an intercept of excess returns is classified as Jensen’s alpha. Jensen’s Alpha, also known as the Jensen’s Performance Index, is a measure of the excess returns earned by the portfolio compared to returns suggested by the CAPM model. It represents by the symbol α. The value of the excess return may be positive, negative, or zero.

835. Type of financial security in which loans are secured by borrower’s property is classified as

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municipal bonds
corporate bonds
U.S treasury bonds
mortgages
✅ The correct answer is D.
Type of financial security in which loans are secured by borrower’s property is classified as mortgages. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.

833. Risk free rate is subtracted from expected market return is considered as

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country risk
diversifiable risk
equity risk premium
market risk premium
✅ The correct answer is C.
Risk free rate is subtracted from expected market return is considered as equity risk premium. Equity risk premium refers to the excess return that investing in the stock market provides over a risk-free rate.

831. Ratios which relate firm’s stock to its book value per share, cash flow and earnings are classified as

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return ratios
market value ratios
marginal ratios
equity ratios
✅ The correct answer is B.
Ratios which relate firm’s stock to its book value per share, cash flow and earnings are classified as market value ratios. Market value ratios are used to evaluate the current share price of a publicly-held company’s stock.

829. Pricing model approach in which it is assumed that stock price can have one of two values of stock is classified as

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valued approach
marketability approach
stock approach
binomial approach
✅ The correct answer is D.
Pricing model approach in which it is assumed that stock price can have one of two values of stock is classified as binomial approach. The binomial option pricing model is an options valuation method developed in 1979. The binomial option pricing model uses an iterative procedure, allowing for the specification of nodes, or points in time, during the time span between the valuation date and the option’s expiration date.

828. Which statement relates to macroeconomics?

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Oil prices are rising in Pakistan
Profit rate is high on textile industry
The firms try to make huge profits
The government has failed to control inflation
✅ The correct answer is D.
The government has failed to control inflation relates to macroeconomics. Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contradictory monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.

825. Under law of demand

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Price of commodity is an independent variable
Quantity demanded is a dependent variable
Reciprocal relationship is found between price and quantity demanded
All of the above
✅ The correct answer is D.
Under law of demand Price of commodity is an independent variable, Quantity demanded is a dependent variable and Reciprocal relationship is found between price and quantity demanded.