Risk and return scenario 70: currency depreciation on imported inputs primarily increases

economic exposure for import-dependent firms

Islamic Finance Pakistan MCQs 2026

48 questions with detailed answers · 17 from past papers · 5 quiz batches available

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Page 1 of 1 Questions 1–10 of 48

Q1 Past Paper · PPSC/FPSC/NTS medium

Risk and return scenario 70: currency depreciation on imported inputs primarily increases
1. A systematic risk to zero for all firms
2. B economic exposure for import-dependent firms
3. C guaranteed positive alpha for all stocks
4. D complete elimination of unsystematic risk
💡 Explanation:
Scenario 70: currency depreciation on imported inputs.
Q2 hard

CAPM calculation 69: Rf 16%, Rm 20%, beta 1.80. Required return is approximately
1. A 16%
2. B 23.2%
3. C 20%
4. D 30.2%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q3 hard

CAPM calculation 67: Rf 14%, Rm 18%, beta 1.50. Required return is approximately
1. A 14%
2. B 18%
3. C 20%
4. D 27.0%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q4 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 65: Rf 17%, Rm 16%, beta 1.20. Required return is approximately
1. A 15.8%
2. B 17%
3. C 16%
4. D 22.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q5 hard

CAPM calculation 63: Rf 15%, Rm 21%, beta 0.90. Required return is approximately
1. A 15%
2. B 21%
3. C 20.4%
4. D 27.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q6 hard

CAPM calculation 61: Rf 13%, Rm 19%, beta 0.60. Required return is approximately
1. A 13%
2. B 16.6%
3. C 19%
4. D 23.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q7 hard

CAPM calculation 9: Rf 12%, Rm 16%, beta 1.80. Required return is approximately
1. A 19.2%
2. B 12%
3. C 16%
4. D 26.2%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q8 hard

CAPM calculation 7: Rf 10%, Rm 21%, beta 1.50. Required return is approximately
1. A 26.5%
2. B 10%
3. C 21%
4. D 33.5%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q9 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 5: Rf 13%, Rm 19%, beta 1.20. Required return is approximately
1. A 13%
2. B 19%
3. C 20.2%
4. D 27.2%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q10 hard

CAPM calculation 3: Rf 11%, Rm 17%, beta 0.90. Required return is approximately
1. A 11%
2. B 17%
3. C 23.4%
4. D 16.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q11 hard

CAPM calculation 1: Rf 9%, Rm 15%, beta 0.60. Required return is approximately
1. A 9%
2. B 15%
3. C 19.6%
4. D 12.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q12 hard

Treynor ratio uses
1. A inventory turnover
2. B beta as risk measure instead of standard deviation
3. C current ratio
4. D payables period
💡 Explanation:
Treynor = (Rp - Rf) / βp.
Q13 Past Paper · PPSC/FPSC/NTS hard

Sharpe ratio equals
1. A beta divided by alpha
2. B portfolio excess return divided by standard deviation
3. C return divided by face value
4. D coupon divided by price
💡 Explanation:
Sharpe measures risk-adjusted performance.
Q14 hard

Jensen alpha measures
1. A excess return over CAPM expected return
2. B only dividend growth rate
3. C only bond coupon
4. D only inventory days
💡 Explanation:
Positive alpha suggests outperformance.
Q15 Past Paper · PPSC/FPSC/NTS medium

Total risk equals
1. A only beta
2. B only alpha
3. C only liquidity premium
4. D systematic risk plus unsystematic risk
💡 Explanation:
Variance decomposes into components.
Q16 hard

Security with negative beta would theoretically
1. A move identically with market
2. B have infinite return
3. C be risk-free always
4. D move opposite to market on average
💡 Explanation:
Rare; hedging instruments may show low/negative beta.
Q17 Past Paper · PPSC/FPSC/NTS medium

Capital Asset Pricing Model (CAPM) formula is
1. A E(Ri) = Rf only
2. B E(Ri) = Rf + βi[E(Rm) - Rf]
3. C E(Ri) = βi / Rf
4. D E(Ri) = σi × Rf
💡 Explanation:
CAPM links expected return to beta.
Q18 Past Paper · PPSC/FPSC/NTS easy

Risk-averse investor prefers
1. A maximum risk always
2. B zero return always
3. C random speculation
4. D certain outcome over risky gamble with same expected value
💡 Explanation:
Risk aversion implies diminishing marginal utility of wealth.
Q19 medium

Coefficient of variation equals
1. A expected return divided by beta
2. B beta times correlation
3. C variance plus mean
4. D standard deviation divided by expected return
💡 Explanation:
CV measures risk per unit of return.
Q20 Past Paper · PPSC/FPSC/NTS medium

Standard deviation of returns measures
1. A only systematic risk
2. B only tax rate
3. C total volatility of an investment
4. D only dividend growth
💡 Explanation:
σ is dispersion of returns.
Q21 Past Paper · PPSC/FPSC/NTS easy

Required rate of return compensates investors for
1. A only brokerage commission
2. B only stamp duty
3. C only accounting profit
4. D time value of money and risk undertaken
💡 Explanation:
Risk premium added to risk-free rate.
Q22 hard

CAPM calculation 37: Rf 12%, Rm 16%, beta 0.60. Required return is approximately
1. A 12%
2. B 16%
3. C 21.4%
4. D 14.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q23 hard

CAPM calculation 11: Rf 9%, Rm 18%, beta 2.10. Required return is approximately
1. A 27.9%
2. B 9%
3. C 18%
4. D 34.9%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q24 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 39: Rf 14%, Rm 18%, beta 0.90. Required return is approximately
1. A 14%
2. B 18%
3. C 17.6%
4. D 24.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q25 hard

CAPM calculation 41: Rf 11%, Rm 20%, beta 1.20. Required return is approximately
1. A 11%
2. B 20%
3. C 28.8%
4. D 21.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q26 hard

CAPM calculation 43: Rf 13%, Rm 15%, beta 1.50. Required return is approximately
1. A 13%
2. B 15%
3. C 16%
4. D 23.0%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q27 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 45: Rf 15%, Rm 17%, beta 1.80. Required return is approximately
1. A 18.6%
2. B 15%
3. C 17%
4. D 25.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q28 hard

CAPM calculation 47: Rf 13%, Rm 19%, beta 2.10. Required return is approximately
1. A 13%
2. B 25.6%
3. C 19%
4. D 32.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q29 hard

CAPM calculation 49: Rf 15%, Rm 21%, beta 0.60. Required return is approximately
1. A 15%
2. B 18.6%
3. C 21%
4. D 25.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q30 hard

CAPM calculation 51: Rf 12%, Rm 16%, beta 0.90. Required return is approximately
1. A 12%
2. B 16%
3. C 22.6%
4. D 15.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q31 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 53: Rf 14%, Rm 18%, beta 1.20. Required return is approximately
1. A 18.8%
2. B 14%
3. C 18%
4. D 25.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q32 hard

CAPM calculation 55: Rf 16%, Rm 20%, beta 1.50. Required return is approximately
1. A 16%
2. B 20%
3. C 22%
4. D 29.0%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q33 hard

CAPM calculation 57: Rf 13%, Rm 15%, beta 1.80. Required return is approximately
1. A 13%
2. B 15%
3. C 23.6%
4. D 16.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q34 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 59: Rf 15%, Rm 17%, beta 2.10. Required return is approximately
1. A 15%
2. B 19.2%
3. C 17%
4. D 26.2%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q35 medium

Risk and return scenario 12: regulatory fine on operations primarily increases
1. A systematic risk to zero for all firms
2. B guaranteed positive alpha for all stocks
3. C complete elimination of unsystematic risk
4. D legal and reputational risk affecting cash flows
💡 Explanation:
Scenario 12: regulatory fine on operations.
Q36 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 13: Rf 11%, Rm 20%, beta 0.60. Required return is approximately
1. A 11%
2. B 20%
3. C 23.4%
4. D 16.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q37 hard

CAPM calculation 15: Rf 13%, Rm 15%, beta 0.90. Required return is approximately
1. A 13%
2. B 15%
3. C 14.8%
4. D 21.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q38 hard

CAPM calculation 17: Rf 11%, Rm 17%, beta 1.20. Required return is approximately
1. A 11%
2. B 17%
3. C 25.2%
4. D 18.2%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q39 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 19: Rf 13%, Rm 19%, beta 1.50. Required return is approximately
1. A 13%
2. B 19%
3. C 29.0%
4. D 22%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q40 hard

CAPM calculation 21: Rf 10%, Rm 21%, beta 1.80. Required return is approximately
1. A 10%
2. B 21%
3. C 36.8%
4. D 29.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q41 hard

CAPM calculation 23: Rf 12%, Rm 16%, beta 2.10. Required return is approximately
1. A 12%
2. B 16%
3. C 20.4%
4. D 27.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q42 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 25: Rf 14%, Rm 18%, beta 0.60. Required return is approximately
1. A 14%
2. B 16.4%
3. C 18%
4. D 23.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q43 medium

Risk and return scenario 26: inflation spike raising input costs primarily increases
1. A systematic risk to zero for all firms
2. B guaranteed positive alpha for all stocks
3. C complete elimination of unsystematic risk
4. D cost uncertainty and potentially required returns
💡 Explanation:
Scenario 26: inflation spike raising input costs.
Q44 hard

CAPM calculation 27: Rf 11%, Rm 20%, beta 0.90. Required return is approximately
1. A 19.1%
2. B 11%
3. C 20%
4. D 26.1%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q45 hard

CAPM calculation 29: Rf 13%, Rm 15%, beta 1.20. Required return is approximately
1. A 13%
2. B 15%
3. C 15.4%
4. D 22.4%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q46 hard

CAPM calculation 31: Rf 11%, Rm 17%, beta 1.50. Required return is approximately
1. A 20%
2. B 11%
3. C 17%
4. D 27.0%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q47 Past Paper · PPSC/FPSC/NTS hard

CAPM calculation 33: Rf 13%, Rm 19%, beta 1.80. Required return is approximately
1. A 13%
2. B 19%
3. C 30.8%
4. D 23.8%
💡 Explanation:
Ke = Rf + β(Rm - Rf).
Q48 hard

CAPM calculation 35: Rf 15%, Rm 21%, beta 2.10. Required return is approximately
1. A 27.6%
2. B 15%
3. C 21%
4. D 34.6%
💡 Explanation:
Ke = Rf + β(Rm - Rf).

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Islamic Finance Pakistan MCQs 2026

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