Author name: Administrator

1201. A measure which is not included in Fama French Three-Factor model is

realized risk free rate
rate of return on market
random error
risk premium
✅ The correct answer is D.
A measure which is not included in Fama French Three-Factor model is risk premium. The Fama-French three-factor model is an expansion of the capital asset pricing model (CAPM) CAPM formula shows the return of a security is equal to the risk-free return plus a risk premium, based on the beta of that security. The model is adjusted for outperformance tendencies.

1205. The value of a derivative security _______.

depends on the value of the related primitive security
can only cause increased risk
is unrelated to the value of the related primitive security
is worthless today
✅ The correct answer is A.
The value of a derivative security depends on the value of the related primitive security. A derivative security is a financial instrument whose value depends upon the value of another asset. The main types of derivatives are futures, forwards, options, and swaps.

1208. He described economics as a science of material welfare

Robbins
Marshall
Ricardo
Keynes
✅ The correct answer is B.
Marshall described economics as a science of material welfare. Marshall’s view is that economics studies all the actions that people take in order to achieve economic welfare. In the words of Marshall, “man earns money to get material welfare.”

1209. An excess of actual price of option over an exercise value of option is classified as

time value options
actual options
estimated options
optional pricing
✅ The correct answer is A.
An excess of actual price of option over an exercise value of option is classified as time value options. In options trading, time value refers to the portion of an option’s premium that is attributable to the amount of time remaining until the expiration of the option contract.

1211. An outstanding bonds are also classified as

standing bonds
outdated bonds
dated bonds
seasoned bonds
✅ The correct answer is D.
An outstanding bonds are also classified as seasoned bonds. A seasoned issue is an issue of additional securities from an established company whose securities already trade in the secondary market. A seasoned issue is also known as a “seasoned equity offering” or “follow-on offering.”
Scroll to Top