Economics - Risk and Return MCQ Test 4

1. What is the primary purpose of diversification in an investment portfolio?

2. Define 'Fiscal Policy' as an economic tool.

3. What is the significance of the 'Dividend Yield' in stock investing?

4. What is the 'Tobin Tax' designed to address?

5. What is the primary function of 'Options' in financial markets?

6. What is 'Market Capitalization' in the context of stocks?

7. What is the primary focus of 'Game Theory' in economics?

8. How does 'Standard Deviation' function as a measure of risk in financial analysis?

9. In international trade, what does 'Comparative Advantage' refer to?

10. In finance, what is the primary purpose of the 'VIX' (Volatility Index)?

11. What is the 'Capital Asset Pricing Model (CAPM)' used for in finance?

12. Define 'Sharpe Ratio' and its role in evaluating investment performance.

13. What does the 'Risk-Return Tradeoff' suggest in finance?

14. In finance, what does 'Diversifiable Risk' refer to?

15. What is the 'Time Value of Money' principle in finance?

16. What is the primary goal of 'Monetary Policy'?

17. How is 'Risk' typically defined in the context of financial investments?

18. What is the significance of 'VaR' (Value at Risk) in risk management?

19. How does 'Beta' measure risk in the context of investment portfolios?

20. Define 'Systematic Risk' in the context of investments.