CAT Quant Practice Problems

Question: Shabnam is considering three alternatives to invest her surplus cash for a week. She wishes to guarantee maximum returns on her investment. She has three options, each of which can be utilized fully or partially in conjunction with others.

Option A : Invest in a public sector bank. It promises a return of +0.10%.

Option B : Invest in mutual funds of ABC Ltd. A rise in the stock market will result in a return of + 5% while a fall will entail a return of –3%.

Option C: Invest in mutual funds of CBA Ltd. A rise in the stock market will result in a return of –2.5%, while a fall will entail a return of +2%.

The maximum guaranteed return to Shabnam is


  1. 0.25
  2. 0.1
  3. 0.2
  4. 0.15
  5. 0.3

Correct Option:3

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