Question 1
In the Capital Asset Pricing Model (CAPM), the expected return on a security is best described as:
Correct Answer:
The risk-free rate plus the security's beta times the market risk premium
Question 2
A stock has a covariance with the market of 0.024 and the market variance is 0.016. What is the stock's beta?
Correct Answer:
1.50
Question 3
The risk-free rate is 3%, the expected market return is 9%, and a stock's beta is 1.2. What is the CAPM-implied expected return?
Correct Answer:
10.2%
Question 4
On a security market line (SML) plot, a stock with positive Jensen's alpha lies:
Correct Answer:
Above the SML
Question 5
The Fama-French three-factor model adds which two factors to the CAPM market factor?
Correct Answer:
Size (SMB) and value (HML)
Question 1
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Prepare with the CAS Exam 9 Practice Questions - CAS Exam 9 Financial Risk and Rate of Return Exam practice quiz. This question bank includes 100 questions covering insurer, model, beta, return, and market. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CAS Exam 9 Practice Questions - CAS Exam 9 Financial Risk and Rate of Return Exam

This practice set contains 100 questions from the matching question bank and focuses on insurer, model, beta, return, and market. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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