security analysis portfolio management 10
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LIST OF ATTEMPTED QUESTIONS AND ANSWERSMultiple Choice Multiple Answer
Question Active investment managers :-
Correct Answer Do not believe that markets are efficient , Puts efforts to searchmispriced securities in the market , Are relatively active tradersin securities to acquire abnormal returns
Multiple Choice Multiple AnswerQuestion Equity analysts provides estimates of earnings and earnings
growth for future, using historical data and :-Correct Answer Macro economic information that may impact future growth ,
Private information about the firm , Firm's specific informationand public information
Multiple Choice Multiple Answer
Question What are the features of short-term trends?Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course of
the intermediate cycle , They are usually influenced by randomnews events
Multiple Choice Multiple AnswerQuestion What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move intrends , The trend lines represent points of support andresistance
Multiple Choice Multiple AnswerQuestion What are the features of candle stick charts?
Correct Answer Indicates in black if the closing price is lower than the opening price , Indicates in white if the closing price is higher than theopening price
Your Answer , Displays the correlation between the high and low prices
Multiple Choice Multiple AnswerQuestion The growth rate in the initial phase is not constant but declines
linearly over time to reach the stable growth rate in steady stateis a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth ,H-Model unlike the classic two stage model
Multiple Choice Multiple AnswerQuestion What are the features of line charts?
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Correct Answer It connects closing prices from one period to the next , It isideal for securities with no high or low price data
Multiple Choice Multiple AnswerQuestion What are the ways of measuring relative strength?
Correct Answer Calculate the rates of return and classify securities that haveearned superior historical returns , Calculating certain ratioswill help in analyzing whether a security has relative strength
Your Answer Calculating the Return on investment
Multiple Choice Multiple AnswerQuestion The Peer group of Bharat Forge consists of which all
companies?Correct Answer Am forge industries , Kalyani Forge , EL Forge
Multiple Choice Multiple AnswerQuestion Which were the initiatives which the chairman said would
focus on in 2003-04 in the speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on balance sheet , Overseas acquisitions
Multiple Choice Multiple AnswerQuestion The Two-Stage dividend discount model is best suited for the
firms that are :-
Correct Answer In high growth rate phase , Expecting to maintain the growthrate phase steadily for a specific time period , Sources of highgrowth are expected to disappear after specific period of time
Multiple Choice Multiple AnswerQuestion The features of bond are :-
Correct Answer Collateral , Call provision , Sinking fund and protectivecovenants
Multiple Choice Multiple Answer Question What are the features of
company fixed deposits?Correct Answer Interest rate offered is
higher than banks , Nobenefits under 80 L , NoTDS for interest incomeupto Rs. 5000
Your Answer Interest rate offered ishigher than banks , No
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benefits under 80 L , NoTDS for interest incomeupto Rs. 5000
Multiple Choice Multiple Answer Question What are the features of point
and figure charts?Correct Answer Charts are constructed using a
combination of X's and O'sknown as boxes. , X's show thatthe prices are moving up , O'sshow that the prices are movingdown
Your Answer Charts are constructed using acombination of X's and O'sknown as boxes. , X's show thatthe prices are moving up , O'sshow that the prices are movingdown
Multiple Choice Multiple Answer Question What are the features of post
office monthly income scheme?Correct Answer Investor earns bonus of 10% on
completion of term , Rate of return is 8 % , Interest payablemonthly
Your Answer Rate of return is 8 % , Interestpayable monthly , Investor earnsbonus of 10% on completion of term
Multiple Choice Multiple Answer Question The firm issuing bonds
operating sinking fund andrepurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buyingbonds in the open market ,Buying bonds issued tobanks and financialinstitutions
Your Answer Calling in a certain number
of bonds by lot , Buyingbonds in the open market ,Buying bonds issued tobanks and financialinstitutions
Multiple Choice Multiple Answer Question If option is given to you to
receive Rs.1,000/- today or after
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entails fixed outgo of periodicpayments , Help in assessing therisk arising using the debt capital
Your Answer Help in assessing the risk arisingusing the debt capital , Debt equityratio and interest coverage ratio
and DSCR are important leverageratios , Debt is riskier source of finance as it entails fixed outgo of periodic payments
Multiple Choice Multiple Answer Question What developments had taken
place during the year 2000 in caseof Bharat Forge Ltd.?
Correct Answer Demerger of investment divisionand windmills , Nominee director of UTI resigned and ceased to be the
director - nomination withdrawn byUTIYour Answer Demerger of investment division
and windmills , Nominee director of UTI resigned and ceased to be thedirector - nomination withdrawn byUTI
Multiple Choice Multiple Answer Question The investor in bonds receives income
from :-Correct Answer Interest payments at coupon rates ,
Capital gain/loss arising out of the sale of the bond , Redemption of the bond of theissuer at a contracted value
Your Answer Interest payments at coupon rates ,Capital gain/loss arising out of the sale of the bond , Redemption of the bond of theissuer at a contracted value
Multiple Choice Multiple Answer Question 1 Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation
Your Answer Dividends , Interests , Capital appreciation
Multiple Choice Multiple Answer Question 5 What were the achievements of Bharat Forge
during the year 2003?Correct Answer Secured second largest customer in China ,
Appointed a Company Secretary to act ascompliance officer , New contracts won in
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passenger car components
Your Answer Secured second largest customer in China ,Appointed a Company Secretary to act ascompliance officer , New contracts won inpassenger car components
Multiple Choice Multiple Answer Question 35 An option is :-
Correct Answer A contract between two parties , Where buyer receives a privilege for which he pays apremium , Where the seller accepts an obligationfor which he receives a fee
Your Answer A contract between two parties , Where buyer receives a privilege for which he pays apremium , Where the seller accepts an obligation
for which he receives a fee
Multiple Choice Multiple Answer Question 41 Formula for calculation of portfolio variance
requires :-Correct Answer Expected return on portfolio , Expected return on
assets , Weight of asset in the portfolioYour Answer Expected return on portfolio , Expected return on
assets , Weight of asset in the portfolio
Multiple Choice Multiple Answer Question 46 What were the objectives for 2002-03 the
chairman of Bharat forge had emphasised on inthe annual report for 2001 - 02Correct Answer Maintain aggressive exports thrust , Increase
shares of value added products , Continuereducing costs
Your Answer Maintain aggressive exports thrust , Increaseshares of value added products , Continuereducing costs
Multiple Choice Multiple Answer Question 47 Which are the most popular types of orders
placed through an online trading account?Correct Answer Limit orders , Market orders
Your Answer Market orders , Hedging orders , Arbitrage orders
Multiple Choice Multiple Answer Question 4 A firm's growth is determined by how
much is re-invested into new assets andthe quality of these investments, andthese includes :-
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Correct Answer Acquisitions , Building distributionchannels , Expanding marketingcapabilities and investing in new facilities
Your Answer Acquisitions , Expanding marketingcapabilities and investing in new facilities ,Mergers
Multiple Choice Multiple Answer Question 5 Which of the following are important
momentum indicators used widely?Correct Answer Rate of change (ROC) , Relative strength
indicator (RSI) , Moving averageconvergence divergence(MACD)
Your Answer Rate of change (ROC) , Relative strengthindicator (RSI) , Moving averageconvergence divergence(MACD)
Multiple Choice Multiple Answer
Question 14 Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios ,Debt service coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios ,Debt service coverage ratios
Multiple Choice Multiple Answer Question 15 What were the Chairman's comments during
the speech in the Annual report of the FY2002-03?
Correct Answer Best year in the history of the company ,
146% growth in exports , Highest pre andpost tax profitsYour Answer Best year in the history of the company ,
146% growth in exports , Highest pre andpost tax profits
Multiple Choice Multiple Answer Question 20 Who are the constituents of a
mutual fund?Correct Answer Sponsor & trustees , Asset
management company ,Custodian
Your Answer Sponsor & trustees , Assetmanagement company ,Custodian
Multiple Choice Multiple Answer Question 26 What are the features of Kisan Vikas Patra?
Correct Answer Term is for 8 years seven months , Provisionof premature withdrawal , Interest rate is 8.4%
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compounded annually
Your Answer Term is for 8 years seven months , Provisionof premature withdrawal , Interest rate is 8.4%compounded annually
Multiple Choice Multiple Answer Question 38 The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earningpower , Projection of future profitability
Your Answer True picture of a company , Normal earningpower , Projection of future profitability
Multiple Choice Multiple Answer Question 41 The return to the bond investor can be
measured in terms of :-Correct Answer Current yield , Yield to maturity , Realised
yieldYour Answer Yield to maturity , Realised yield
Multiple Choice Multiple Answer Question 5 Which are the different types of accounts offered to
investors by the stock brokers?Correct Answer Cash trading , Margin trading
Your Answer General trading , Cash trading , Margin trading
Multiple Choice Multiple Answer Question 7 What are the features of Retail government securities
(G-secs) ?Correct Answer Safest investment option available , Demat account is
required for investment , Choice of tenure varies fromless than 1 year to 30 years
Your Answer Securities can be bought from the RBI , Safestinvestment option available , Demat account is requiredfor investment
Multiple Choice Multiple Answer Question 10 To measure the movement of stocks in the market
which indices were constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow JonesTransportation AverageYour Answer Dow Jones Transportation Average
Multiple Choice Multiple Answer Question 16 The security market is the market for :-
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Correct Answer Equity , Debt , Derivatives
Your Answer Equity , Debt , Bank deposits
Multiple Choice Multiple Answer
Question 18 In a typical stock market cycle which are the types of trends?Correct Answer Trends upward , Trend downward , Sideway trend
Your Answer Trends upward , Trend downward , Flat trend
Multiple Choice Multiple Answer Question 22 Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme
Your Answer Open ended scheme , Close ended scheme , Growthschemes
Multiple Choice Multiple Answer Question 24 What was the final analysis on the performance of
Bharat forge for the year FY 02?Correct Answer Aim to become US$1 billion Company by Fy 08 from
US$100 million , Stock currently trades at 15 times itsFY 05 consensus EPS forecasts , Stock will trade at aninexpensive PEG of 0.6x.
Your Answer Aim to become US$1 billion Company by Fy 08 fromUS$100 million , Stock currently trades at 15 times itsFY 05 consensus EPS forecasts , Stock will trade at aninexpensive PEG of 0.6x.
Multiple Choice Multiple Answer Question 26 Gilt Edged Securities are :-
Correct Answer State Govt. , Quasi-Govt , Central Govt
Your Answer Central Govt , State Govt. , Quasi-Govt
Multiple Choice Multiple Answer Question 33 What are the ways of measuring relative strength?
Correct Answer Calculate the rates of return and classify securities that
have earned superior historical returns , Calculatingcertain ratios will help in analyzing whether a securityhas relative strength
Your Answer Calculate the rates of return and classify securities thathave earned superior historical returns , Calculatingcertain ratios will help in analyzing whether a securityhas relative strength , Calculating the Return oninvestment
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Multiple Choice Multiple Answer Question 44 What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return onequity
Your Answer Gross profit margin ratio , Earnings power , Return on
equity
Multiple Choice Multiple Answer Question The Gordon growth model is best suited for firms :-
Correct Answer Growing at a rate equal to or lower that the growth in the economy ,Which have well established dividend payout ratio policy , Whoseearnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the economy ,Which have well established dividend payout ratio policy
Multiple Choice Multiple Answer
Question The Two-Stage dividend discount model is based on the assumptionof :-Correct Answer An initial phase where the growth is not a stable growth rate , A
subsequent steady state of growth rate being stable and lasts nyears , A stable growth phase lasts forever
Your Answer An initial phase where the growth is not a stable growth rate , Asubsequent steady state of growth rate being stable and lasts nyears , A stable growth phase lasts forever
Multiple Choice Multiple Answer Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer
Your Answer No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Multiple Answer Question An options contract allows the investor :-
Correct Answer To earn a profit while restricting the downside risk , To use theoptions for speculation , Either to honour or walk away from thecontract
Your Answer Either to honour or walk away from the contract , To earn a profitwhile restricting the downside risk , To use the options for
speculation
Multiple Choice Multiple Answer Question Major steps involved in construction of a index are :-
Correct Answer Selecting a set of scrips to be used , Fixing starting date ,Calculating market capitalisation
Your Answer Selecting a set of scrips to be used , Fixing starting date , Fixingending date
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Multiple Choice Multiple Answer Question How can the financial statements can be manipulated while
giving the estimates for growth?Correct Answer Change method of rate of depreciation , Change method of stock
valuation , Inflating sales for current year by advancing sales for the following year
Your Answer Change method of rate of depreciation , Change method of stockvaluation , Inflating sales for current year by advancing sales for the following year
Multiple Choice Multiple Answer Question The underlying assumptions of Technical analysis are that :-
Correct Answer Prices move in predictable patterns , Market value is determinedby supply & demand , Investors are emotional than being rational
Your Answer Prices move in predictable patterns , Investors are emotionalthan being rational
Multiple Choice Multiple Answer Question Which are the different styles of displaying charts?
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Candle stick charts , Point and figure charts , Bar and line charts
Multiple Choice Multiple Answer Question What are the features of public provident scheme?
Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal isavailable from 7th year
Your Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal isavailable from 7th year
Multiple Choice Multiple Answer Question Growth of the firm can be estimated through :-
Correct Answer Firm's past earnings/historical growth rate , Estimates made byequity research analyst who follow the firm , Estimates from afirm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates made byequity research analyst who follow the firm , Estimates from a
firm's fundamentals
Multiple Choice Multiple Answer Question Characteristics of Preference shares are :-
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,Redemption in 7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit ,Redemption in 7 to 12 years
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Multiple Choice Multiple Answer Question What are the SEBI regulations with respect to mutual funds?
Correct Answer Mutual funds to be registered with SEBI before the launching anyscheme , 2/3rds of the directors of the trustee company must beindependent , An AMC approved by SEBI manages the fund
Your Answer Mutual funds to be registered with SEBI before the launching anyscheme , 2/3rds of the directors of the trustee company must beindependent , An AMC approved by SEBI manages the fund
Multiple Choice Multiple Answer Question The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning power , Projection of future profitability
Your Answer True picture of a company , Normal earning power , Projection of future profitability
Multiple Choice Multiple Answer Question The return to the bond investor can be measured in terms of :-
Correct Answer Current yield , Yield to maturity , Realised yield
Your Answer Realised yield
Multiple Choice Multiple Answer Question What are the features of bank deposits?
Correct Answer Interest is presently around 6% , Benefits under section 80 L ,Banks offer cheque facility for investors making it convenient towithdraw
Your Answer Interest is presently around 6% , Banks offer cheque facility for investors making it convenient to withdraw
Multiple Choice Multiple Answer Question What are the important macro economic indicators?
Correct Answer GNP growth rate , Price Conditions , Monsoons
Your Answer GNP growth rate , Price Conditions , Monsoons
Multiple Choice Single AnswerQuestion When an investor invests in stock, expects to get the dividends and
an expected price for the period the stock is held is the rule of :-Correct Answer The General model
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Multiple Choice Single AnswerQuestion Stock Exchanges are the part of :-
Correct Answer Secondary market
Your Answer Money Market
Multiple Choice Single AnswerQuestion The index futures symbols of BSE are represented as :-
Correct Answer BSX JAN 2005 (January contract)
Multiple Choice Single AnswerQuestion More than half the variation in stock price could be attributed
to which factor?Correct Answer Market influence
Multiple Choice Single AnswerQuestion In India we have index futures contracts based on :-
Correct Answer S&P CNX Nifty and the BSE sensex
Multiple Choice Single AnswerQuestion In India, the futures on individual securities have been
introduced from :-Correct Answer 2001
Multiple Choice Single AnswerQuestion What do you understand by the term redemption price?
Correct Answer Price or NAV at which a scheme purchases its units
Multiple Choice Single AnswerQuestion A security analysis is done :-
Correct Answer For decision making for investments
Multiple Choice Single AnswerQuestion As per the exhibit 18-1 for individual stock futures on NSE,
the price steps in respect of all futures contract admitted tothe dealings of the exchange shall be :-
Correct Answer 0.05
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Multiple Choice Single AnswerQuestion What is a technical approach to investment?
Correct Answer A reflection of the idea that prices move in trends which aredetermined by various factors
Multiple Choice Single AnswerQuestion A pledge of real assets as insurance against the non-payment
of default by the buyer representsCorrect Answer Collateral
Multiple Choice Single AnswerQuestion Who developed Dow's Principles and organised them into a
theory as it is known today?Correct Answer William Peter Hamilton
Your Answer Charles.H.DowMultiple Choice Single Answer Question We can compare the price earning ratio of a market to its
historical average to make judgements about, whether marketis :-
Correct Answer Under valued or over valued
Your Answer Under valued or over valued
Multiple Choice Single Answer Question When a firm can grow net profits by issuing equity, the expected
growth rate in net profits is determined by :-Correct Answer Equity reinvestment rate X return on equity
Your Answer Price earning ratio X return on equity
Multiple Choice Single Answer Question What is a load fund?
Correct Answer Fund charging a fee for entry and exit
Your Answer Fund charging a fee for entry and exit
Multiple Choice Single Answer Question Investment is a risk free investment when :-
Correct Answer Actual return is = expected return
Your Answer Actual return is = expected return
Multiple Choice Single Answer
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Question Debt instruments that have a maturity period of more than oneyear are called as :-
Correct Answer Bonds
Your Answer Bonds
Multiple Choice Single Answer Question Mr. Sharma is expecting to receive Rs. 50,000/- at the end of 5
years. He wanted to know what is the present value of thisamount, if the rate of interest is 6% p.a?
Correct Answer Rs. 37363/-
Your Answer Rs. 37363/-
Multiple Choice Single Answer Question Which of these is a short-maturity debt issue?
Correct Answer Money market funds and gilts
Your Answer Money market funds and gilts
Multiple Choice Single Answer Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Your Answer Market resistance to a price fall
Multiple Choice Single Answer Question During the 1980's rate of savings in India has hovered around
what percentage?Correct Answer 0.21
Your Answer 0.22
Multiple Choice Single Answer Question A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :-Correct Answer Over valued
Your Answer Over valued
Multiple Choice Single Answer Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average
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Your Answer Geometric average
Multiple Choice Single Answer Question 4 What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycleYour Answer They are counter-cyclical trends within the confines of a primary
trendMultiple Choice Single Answer Question 8 When the firm is not raising equity by issuing new shares, the
growth rate in net profits is given by :-Correct Answer Retention ratio X return on equity
Your Answer Price earning ratio X return on equity
Multiple Choice Single Answer
Question 9 The historical growth rate and the past earnings of a firm areused in valuing :-
Correct Answer Stable firms, but not appropriate for high growth firms
Your Answer Consistent stable firms, but not appropriate for high growth firms
Multiple Choice Single Answer Question 10 Efficient market hypothesis is based on the assumption that
market comprises of :-Correct Answer Rational Investors
Your Answer Heterogeneous investors
Multiple Choice Single Answer Question 11 Co variance of asset with market portfolio 85 and variance of
market portfolio is 100 then beta is :-Correct Answer 0.0085
Your Answer 0.0085
Multiple Choice Single Answer
Question 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10years. He wanted to know what is the present value of thisamount, if the rate of interest is 10% p.a:-
Correct Answer Rs. 9639/-
Your Answer Rs. 9639/-
Multiple Choice Single Answer
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Question 18 What does flow-of fund analysis help in understanding?
Correct Answer Availability of money for the stock market
Your Answer Financial strength of various companies
Multiple Choice Single Answer Question 23 A security represent evidence of :-
Correct Answer A property right
Your Answer Safety
Multiple Choice Single Answer Question 24 Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4%
compounded annually. What will be the value of his investmentafter 5 years?
Correct Answer Rs. 6083/-Your Answer Rs. 6083/-
Multiple Choice Single Answer Question 27 In India futures on individual securities have been introduced
by :-Correct Answer BSE & NSE
Your Answer BSE & NSE
Multiple Choice Single Answer Question 43 The issuing firm enjoys the flexibility to call the bonds if the
interest rates fall significantly and it can issue :-Correct Answer New bonds at a lower rates
Your Answer New bonds at a lower rates
Multiple Choice Single Answer Question 2 When was the first mutual fund set up?
Correct Answer 1963
Your Answer 1963
Multiple Choice Single Answer Question 7 How can transition phases be projected?
Correct Answer Transition phases are signalled by clearly definable pricepatterns
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Your Answer By working out the resistance and support levels
Multiple Choice Single Answer Question 8 If the price of a share at the beginning of the year was Rs.50/-,
dividend received during the year was Rs.10/-per share and the
price at the end is Rs.60/-. What is the rate of return?Correct Answer 0.4
Your Answer 0.2
Multiple Choice Single Answer Question 27 Investing in this avenue enable you participate in the equity
market indirectly :-Correct Answer Mutual Funds
Your Answer Mutual Funds
Multiple Choice Single Answer Question 29 In any Economy, bridge is created between savers and who
need the funds by this system :-Correct Answer Financial
Your Answer Economic
Multiple Choice Single Answer Question 30 Agriculture account for how much portion of the economy?
Correct Answer Quarter
Your Answer Three fourths
Multiple Choice Single Answer Question 37 Who operates the sinking fund under the sinking fund provision
of a firm?Correct Answer The bond trustee or the issuer
Your Answer The bond trustee or the issuer
Multiple Choice Single Answer Question 40 How did Dow use the behaviour of stock markets?
Correct Answer As a barometer of business conditions rather than a basis for forecasting stock prices
Your Answer As a barometer of business conditions rather than a basis for forecasting stock prices
Multiple Choice Single Answer Question 42 The growth period in the industry life cycle is defined as :-
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Correct Answer Period of rapid market acceptance and substantial profitimprovement
Your Answer Period of rapid market acceptance and substantial profitimprovement
Multiple Choice Single Answer Question 3 What is the limitation of Flow-of funds analysis method?
Correct Answer Cannot give indication of the inclination of market participants topurchase stock
Your Answer Cannot give indication of the inclination of market participants topurchase stock
Multiple Choice Single Answer Question 6 Sentiment indicators are based on what assumption
Correct Answer Different groups of investors are consistent in their actions atmajor market turning points
Your Answer Different groups of investors are consistent in their actions atmajor market turning points
Multiple Choice Single Answer Question 12 An agreement to buy or sell a specified quantity of an asset at a
certain future date or a certain price is know as :-Correct Answer Forward contract
Your Answer Futures contract
Multiple Choice Single Answer Question 25 What are intermediate trends?
Correct Answer They are counter-cyclical trends within the confines of a primarytrendYour Answer They are counter-cyclical trends within the confines of a primary
trend
Multiple Choice Single Answer Question 29 What are index funds?
Correct Answer Investment in securities in the same weightage which replicatesa particular index
Your Answer Investment in securities in the same weightage which replicatesa particular index
Multiple Choice Single Answer Question 38 What are the assumptions of the Dow theory?
Correct Answer Majority of stocks follow the underlying trend of the market mostof the time
Your Answer Majority of stocks follow the underlying trend of the market mostof the time
Multiple Choice Single Answer
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Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%compounded annually. What will be the value of his investmentafter 3 years?
Correct Answer Rs. 29775/-
Your Answer Rs. 29775/-
Multiple Choice Single Answer Question 41 How many measures of money supply are used commonly?
Correct Answer 2
Your Answer 2
Multiple Choice Single Answer Question 43 Under which simple model the value of the stock is the present
value of expected dividends on it :-
Correct Answer The Dividend discount model
Your Answer The Dividend growth model
Multiple Choice Single Answer Question 46 Avenues can be broadly classified into the which type of assets?
Correct Answer Financial and Real
Your Answer Tangible and Intangible
Multiple Choice Single Answer Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-Correct Answer Technical analysis
Your Answer Fundamental Analysis
Multiple Choice Single Answer Question What is the objective of an income fund?
Correct Answer To provide regular and steady income
Your Answer To provide guaranteed returns to investors
Multiple Choice Single Answer Question What does lower level of unemployment indicates?
Correct Answer Positive economic conditions
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Your Answer Economic slowdown
Multiple Choice Single Answer Question The GDP growth rate in the economy in real terms has
fluctuated between :-
Correct Answer 4% and 5%
Your Answer 4% and 5%
Multiple Choice Single Answer Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8%
compounded annually. What will be the value of his investmentafter 5 years?
Correct Answer Rs.14.693/-
Your Answer Rs.14.693/-
Multiple Choice Single Answer Question Which market is affected with the improving and higher growth
rate in economy?Correct Answer Stock market
Your Answer Stock market
Multiple Choice Single Answer Question What do you understand by money supply?
Correct Answer Total money in existence at any given time
Your Answer Total money in existence at any given time
Multiple Choice Single Answer Question What is Gross National Product ?
Correct Answer Gross income generated from within the country
Your Answer Gross income generated from within the country
Multiple Choice Single Answer Question The greater the deviation of the actual returns from the actual
return :-Correct Answer Greater the variance
Your Answer Greater the variance
Multiple Choice Single Answer
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Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
Your Answer Includes indirect taxes
Multiple Choice Single Answer Question More than half the variation in stock price could be attributed to
which factor?Correct Answer Market influence
Your Answer Market influence
Multiple Choice Single Answer Question Free Float index considers this to calculate market
capitalisation :-Correct Answer Actual no. of shares available
Your Answer Actual no. of shares available
Multiple Choice Single Answer Question The Top-down approach is also known as :-
Correct Answer Economy-industry-company approach
Your Answer Economy-industry-company approach
Multiple Choice Single Answer Question What is a technical approach to investment?
Correct Answer A reflection of the idea that prices move in trends which aredetermined by various factors
Your Answer A reflection of the idea that prices move in trends which aredetermined by various factors
Multiple Choice Single Answer Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicatesa particular index
Your Answer Investment in securities in the same weightage which replicatesa particular index
Multiple Choice Single Answer Question What could be a better approach to flow-of -funds analysis?
Correct Answer An examination of liquidity trends in the banking system
Your Answer A study of macro economical changes
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Multiple Choice Single Answer Question The general dividend model is based on the principle of :-
Correct Answer Present value of the expected future cash flow
Your Answer Present value of the expected future cash flow
Multiple Choice Single Answer Question What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycle
Your Answer Trends which interrupt the course of the intermediate cycle
Multiple Choice Single Answer Question What is the aim of growth funds?
Correct Answer To provide capital appreciation over medium to long term
Your Answer To provide capital appreciation over medium to long term
Multiple Choice Single Answer Question This is not a stock exchange :-
Correct Answer MCX
Your Answer MCX
Multiple Choice Single Answer Question Under EMH it is assumed that if markets are efficient, securities are
priced to provide a :-Correct Answer Normal returns for their given level of risk
Your Answer Normal returns for their given level of risk
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a scheme of LIC, the rate of interest
is 8% compounded annually. What will be the value of his investmentafter 5 years?
Correct Answer Rs. 73466/-
Your Answer Rs. 73466/-
Multiple Choice Single Answer Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost
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Your Answer Future price = Spot price + Carry cost
Multiple Choice Single Answer Question Financial assets can be classified as :-
Correct Answer Marketable and non-marketableYour Answer Marketable and non-marketable
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3
years. He wanted to know what is the present value of thisamount, if the rate of interest is 9% p.a ?
Correct Answer Rs.1,15,827/-
Your Answer Rs.1,15,827/-
Multiple Choice Single Answer Question What is Flow-of-funds analysis?
Correct Answer Consists of an analysis of the financial positions of variousinvestor groups
Your Answer Consists of an analysis of the financial positions of variousinvestor groups
Multiple Choice Single Answer
Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7years. He wanted to know what is the present value of thisamount, if the rate of interest is 7% p.a ?
Correct Answer Rs. 62,275/-
Your Answer Rs. 62,275/-
Multiple Choice Single Answer Question What do you understand by term pioneering stage in the industry
life cycle analysis?Correct Answer Slow sales growth product recently introduced
Your Answer Slow sales growth product recently introduced
Multiple Choice Single Answer Question Till 1990's secular Indian economy's inflation rate has been of
what percentage?Correct Answer 0.07
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Your Answer 0.07
Multiple Choice Single Answer Question Credit rating companies assign ratings for which of these
investments?
Correct Answer Company depositsYour Answer Company deposits
Multiple Choice Single Answer Question If index future is taken under futures contract, the underlying
asset would be :-Correct Answer Stock index
Your Answer Stock index
Multiple Choice Single Answer
Question What is balance of payments?Correct Answer Credit and debit transactions of a country
Your Answer Credit and debit transactions of a company
Multiple Choice Single Answer Question Profits are non existent in pioneering stage because of :-
Correct Answer Heavy expenses on product introduction
Your Answer Heavy expenses on product introduction
Multiple Choice Single Answer Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity
Your Answer Increased level of housing construction activity
Multiple Choice Single Answer Question What does a transitional phase indicate?
Correct Answer It marks the turning point between a rising and falling market
Your Answer It marks the turning point between a rising and falling market
Multiple Choice Single Answer Question Dividend discount model is considered as the simplest model
for :-Correct Answer Valuing Equity
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Your Answer Valuing Equity
Multiple Choice Single AnswerQuestion The present value of all the future cash payments to be
paid on the security to the investor is termed as :-Correct Answer Intrinsic value of a securityYour Answer Intrinsic value of a security
Multiple Choice Single AnswerQuestion If the price of a share at the beginning of the year was
Rs.100/-, no dividend received during the year and the price at the endis Rs.115/-. What is the rate of return?
Correct Answer 0.15Your Answer 0.15
Multiple Choice Single AnswerQuestion What is the objective of Portfolio management?Correct Answer To Minimize risk and maximize returnYour Answer To Minimize risk and maximize return
Multiple Choice Single Answer Question Capital expenditure -depreciation +change in working capital -(new debt
issued - debt repaid) =Correct Answer Equity reinvested in businessYour Answer Equity reinvested in business
Multiple Choice Single Answer Question What is the percentage of variation the market and industry influence account
for?Correct Answer 2/3rdYour Answer 75%
Multiple Choice Single Answer Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%Your Answer 6.5%
Multiple Choice Single Answer Question Investments could be made in retail government securities through :-Correct Answer Primary dealersYour Answer Primary dealers
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Question The growth rate is used to forecast future revenues and earnings andare inputs in valuing :-
Correct Answer Stable firms
Your Answer High growth firms
Multiple Choice Single Answer Question The objective of fundamental analysis for a security in a market is to
identify either it is :-Correct Answer Under priced and over priced
Your Answer Under priced and over priced
Multiple Choice Single Answer Question We can compare the price earning ratio of a market to its historical
average to make judgements about, whether market is :-Correct Answer Under valued or over valued
Your Answer Under valued or over valued
Multiple Choice Single Answer Question The growth rate is used to forecast future revenues and earnings and
are inputs in valuing :-Correct Answer Stable firms
Your Answer High growth firms
Multiple Choice Single Answer Question How can transition phases be projected?
Correct Answer Transition phases are signalled by clearly definable price patterns
Your Answer Transition phases are signalled by clearly definable price patterns
Multiple Choice Single Answer Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902
Your Answer Between 1900 and 1902
Multiple Choice Single Answer Question When was the first mutual fund set up?
Correct Answer 1963
Your Answer 1963
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Multiple Choice Single Answer Question What is the art of technical analysis?
Correct Answer To identify trend changes at an early stage and maintain investmentposture till the trend has reversed
Your Answer To identify trend changes at an early stage and maintain investmentposture till the trend has reversed
Multiple Choice Single Answer Question The expected price of the stock at the end of the holding period is
determined by future dividends and the value of the stock is thepresent value of dividends through infinity are the underlyingassumptions of :-
Correct Answer The General model
Your Answer The Dividend discount model
Multiple Choice Single Answer Question How would you rate a portfolio with 90% investment in stocks?
Correct Answer Highly aggressive
Your Answer Highly aggressive
Multiple Choice Single Answer Question What are primary trends?
Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in thebusiness cycle
Your Answer Long term trends
Multiple Choice Single Answer Question In a forward contract there is :-
Correct Answer No Exchange of cash
Your Answer No Exchange of cash
Multiple Choice Single Answer Question Under EMH it is assumed that if markets are efficient, securities are
priced to provide a :-Correct Answer Normal returns for their given level of risk
Your Answer Equal returns for their given level of risk
Multiple Choice Single Answer Question The approach followed to assess the growth rate by looking at how
much a firm reinvests for future growth and the quality of its re-investments is :-
Correct Answer Estimating growth from a firm's fundamentals
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Your Answer Earnings multiplier approach
Select The BlankQuestion The possibility of reduction of risk through the construction of a portfolio
depends on the value of ________ between the two assets.Correct Answer Correlation coefficient
Your Answer Time
Select The BlankQuestion Dow Jones transportation average was previously known as ________.
Correct Answer Rail average
Your Answer Rail average
Select The BlankQuestion The compounded annual return of Kisan Vikas patra is ________.
Correct Answer 0.084
Your Answer 0.084
Select The BlankQuestion Under futures market ________ process provides for collection of losses
that have already occurred.Correct Answer The daily settlement
Your Answer The daily settlement
Select The BlankQuestion The regulations of SEBI with respect to mutual funds were fully revised in
the year ________.Correct Answer 1996
Your Answer 1996
Select The BlankQuestion The Dow theory states that there are simultaneously ________
movements in the stock market.Correct Answer 3
Your Answer 3
Select The Blank
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Question Under the options contract ________ gives the holder the right, but not theobligation to buy or sell the underlying instrument only on the expiry date.
Correct Answer European option
Your Answer European option
Select The BlankQuestion ________ ratio indicates the margin available after meeting the
manufacturing expenses.Correct Answer Gross Profit margin
Your Answer Gross Profit margin
Select The BlankQuestion Secondary reactions occurs because of ________ which arise in the
market as a result of over optimism and over pessimism.Correct Answer Technical distortions
Your Answer Bearish trends
Select The BlankQuestion Debentures rated as "A" are judged to offer ________ of timely payment of
interest and principal.Correct Answer Adequate safety
Your Answer Adequate safety
Select The BlankQuestion Debentures rated ________ are judged to offer sufficient safety of timely
payment of interest and repayment of principal.Correct Answer "BBB"
Your Answer "BBB"
Select The Blank Question The value of the stock in the ________ model is sensitive to the estimates of the growth
rate.Correct Answer The Gordons dividend growth
Select The Blank Question ________ is due to the fact that a borrower may not pay interest and/or
principal on time.Correct Answer Default risk
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Select The Blank Question A pattern which does not result in reversal of a trend but reaffirmation of
the underlying trend is called ________.Correct Answer Consolidation pattern
Select The Blank Question ________ bonds are generally called for prepayment after interest rates
have fallen, investors will not be able to find comparable investmentavenues.
Correct Answer Call risk
Select The Blank Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Select The Blank Question ________are good benchmark to compare the ratios for a firm.
Correct Answer Industry averages
Select The Blank Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Select The Blank Question ________ measures the efficiency of credit management.
Correct Answer Average collection period
Select The BlankQuestion 16 ________ is affected by the leverage decisions of the firm.
Correct Answer Return on equity
Your Answer Return on equity
Select The Blank
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Question 20 ________ refers to the possibility that there may not be a readily availablemarket for the particular bond.
Correct Answer Liquidity risk
Your Answer Interest rate risk
Select The BlankQuestion 21 The govt allowed public sector banks and institutions in mutual funds in
________.Correct Answer Early 90's
Your Answer Early 90's
Select The BlankQuestion 36 The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Your Answer 5
Select The BlankQuestion 39 Security analysis serves the investment decision maker by identifying
________securities.Correct Answer Under priced
Your Answer Blue chip
Select The BlankQuestion 42 ________ absorbs the excess demand or supply generated by hedgers
and assume the risk of price fluctuations.Correct Answer Speculators
Your Answer Brokers
Select The BlankQuestion 44 A ________ rally for stocks generally takes place because of an improved
outlook for business conditions over what was anticipated.Correct Answer Bear market
Your Answer Bullish market
Select The BlankQuestion 1 UTI was set up in the year ________.
Correct Answer 1963
Your Answer 1963
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Select The BlankQuestion 6 An ________ is a series of equal payments or receipts occurring at regular
intervals of time.Correct Answer Annuity
Your Answer Annuity
Select The BlankQuestion 12 An option is a contract which gives the buyer ________ to buy or sell
shares of the underlying security at a specific price on or before a specificdate.
Correct Answer Right but not obligation
Your Answer Right but not obligation
Select The BlankQuestion 13 Measures of ________ tells us what we can expect a typical or middle
data point of a distribution to be.Correct Answer Central tendency
Your Answer Central tendency
Select The BlankQuestion 28 ________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.Correct Answer Michael Porter
Your Answer Michael Porter
Select The BlankQuestion 36 ________is a hybrid form of security which has characteristics of both
equity and debenturesCorrect Answer Preference shares
Your Answer Preference shares
Select The BlankQuestion 39 Debentures rated "BB" refers ________ of timely payment of interest and
principal.Correct Answer Inadequate safety
Your Answer Inadequate safety
Select The BlankQuestion 43 The Derivative market is divided into Future market and ________ market.
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Correct Answer Options
Your Answer Options
Select The Blank
Question 46 The Dow theory was published in a series of editorials in the ________.Correct Answer Wall street journal
Your Answer Wall street journal
Select The BlankQuestion 1 ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Your Answer Speculator
Select The BlankQuestion 8 Under ________ EMH investors cannot earn abnormal/superior profits on
securities on a consistent basis.Correct Answer Semi-strong form
Your Answer Semi-strong form
Select The BlankQuestion 11 ________ take long or short positions only with the intention of making
profits by getting out of the market when conditions favor them.
Correct Answer SpeculatorsYour Answer Hedgers
Select The BlankQuestion 14 ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remainsfor the long-term.
Correct Answer The Two-Stage dividend discount
Your Answer The Gordons dividend growth
Select The BlankQuestion 17 ________ ratio is estimated by dividing the market value of a firm's assets
by the replacement cost of these assets.Correct Answer Market value to replacement cost ratio
Your Answer PEG ratio
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Select The BlankQuestion 19 ________involves a simultaneous sale and repurchase agreement.
Correct Answer Repos
Your Answer Repos
Select The BlankQuestion 28 Current liabilities include all liabilities due in the next ________ and
provisions.Correct Answer 12 months
Your Answer 12 months
Select The BlankQuestion 30 S&P NSE 50 index is known as ________.
Correct Answer NIFTYYour Answer NIFTY
Select The BlankQuestion 31 ________seeks to safeguard against potential losses on the outstanding
position in futures market.Correct Answer Initial margin
Your Answer Daily settlement
Select The BlankQuestion 35 ________ ratio is the ratio of net profit to the sales.
Correct Answer Net Profit Margin
Your Answer Net Profit Margin
Select The BlankQuestion Mutual fund is to be registered with ________ before raising funds from
public.Correct Answer SEBI
Your Answer SEBI
Select The BlankQuestion An investor with a higher tolerance of risk should tilt his portfolio in favour
of ________.Correct Answer Stocks
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Your Answer Bank deposits
Select The BlankQuestion The ________ phase carries a lot of significance because it marks the
turning point between a rising and a falling market.
Correct Answer Transitional
Your Answer Sideways
Select The BlankQuestion Acid test ratio is more stringent measure of liquidity compared to the
________.Correct Answer Current ratio
Your Answer Current ratio
Select The BlankQuestion ________ measures the efficiency of credit management.
Correct Answer Average collection period
Your Answer Average collection period
Select The BlankQuestion ________ measures the profitability of operations without considering the
influence of financial structure and tax rate.Correct Answer Earnings power
Your Answer Earnings power
Select The BlankQuestion A line is defined as a price movement two or three weeks or longer, during
which period the price variation of both averages moves within a pricerange of approximately________%.
Correct Answer 5
Your Answer 5
Select The BlankQuestion ________ measures the profitability of equity funds invested in the firms.
Correct Answer Return on equity
Your Answer Return on equity
Select The Blank
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Question Risk can be referred as the ________ in the return with respect to theexpected return.
Correct Answer Volatility
Your Answer Difference
Select The BlankQuestion All trades in the futures market are cash settled on a ________ basis.
Correct Answer T+1
Your Answer T+1
Select The BlankQuestion ________ ratio is the ratio of net profit to the sales.
Correct Answer Net Profit Margin
Your Answer Net Profit Margin
Select The BlankQuestion When a debenture is sold to the general public a ________ is appointed.
Correct Answer Trustee
Your Answer Brokers
Select The Blank
Question A security is said to be ________ if its current market price is over itsintrinsic value.
Correct Answer Over priced
Your Answer Over priced
Select The BlankQuestion ________ is the value at a certain future date today of a stream of cash
flows that occurs over a period of time.Correct Answer Future value
Your Answer Future value
Select The BlankQuestion Mutual fund is to be registered with ________ before raising funds from
public.Correct Answer SEBI
Your Answer SEBI
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Select The BlankQuestion In a heads and shoulders formation the deeper the pattern, the greater is
the ________ significance once it is completedCorrect Answer Bearish
Your Answer Bearish
Select The BlankQuestion The govt allowed public sector banks and institutions in mutual funds in
________.Correct Answer Early 90's
Your Answer Early 90's
Select The BlankQuestion Under ________ EMH investors cannot earn abnormal/superior profits on
securities on a consistent basis.Correct Answer Semi-strong form
Your Answer Semi-strong form
Select The BlankQuestion The 6.________% tax saving bonds of government of India have a tenure
of 5 years.Correct Answer 5
Your Answer 5
Select The BlankQuestion ________ is the ratio of the market price per share to the earnings per
share.Correct Answer Price earning ratio
Your Answer Price earning ratio
Select The BlankQuestion ________ absorbs the excess demand or supply generated by hedgers
and assume the risk of price fluctuations.
Correct Answer Speculators
Your Answer Speculators
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Select The BlankQuestion UTI was set up in the year ________.
Correct Answer 1963
Your Answer 1963
True/FalseQuestion The normal relationship is for the volume to expand on rallies and
contract on declines.Correct Answer True
True/FalseQuestion In case of assured returns, A scheme cannot promise returns unless
such returns are fully guaranteed by sponsor or AMC.Correct Answer True
True/FalseQuestion A firm uses a combination of equity and debt for financing its
assets.Correct Answer True
True/FalseQuestion Policies of the government and the attitude of the government
towards the industry have a considerable influence on theindustry.
Correct Answer True
True/FalseQuestion Investors in high tax bracket would benefit by investing in
equity schemes.Correct Answer False
True/FalseQuestion The price earning ratio is an increasing function of the payout
ratio and the growth rate and a decreasing function of theriskiness of the firm.
Correct Answer TrueTrue/FalseQuestion When we invest in only one asset we are not exposed to any
specific or market risk.Correct Answer False
True/False
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Question Five paisa.com is an example of on line trading portal.
Correct Answer True
True/FalseQuestion A mutual fund is required to dispatch the dividend warrants
to the unit holders within thirty days of the declaration of dividend.
Correct Answer True
True/FalseQuestion Bearish actions come from a series of declining peaks and
troughs.Correct Answer True
True/FalseQuestion Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.Correct Answer True
Your Answer True
True/FalseQuestion With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
True/FalseQuestion A segment is unattractive if the buyers possess strong or
growing bargaining powers.Correct Answer True
Your Answer True
True/FalseQuestion Risk on a portfolio of assets is always same as the risk on
individual asset.Correct Answer False
Your Answer False
True/FalseQuestion Debt is less riskier source of finance than equity.
Correct Answer False
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Your Answer True
True/FalseQuestion Post office monthly schemes have a 10 year tenor.
Correct Answer FalseYour Answer False
True/FalseQuestion With the introduction of on-line trading by NSE and BSE, the role
of regional stock exchanges have diminished.Correct Answer True
Your Answer True
True/FalseQuestion Penetration of a trend line denotes a bearish phase.
Correct Answer False
Your Answer True
True/FalseQuestion Passive investment managers believe that markets are
inefficient and Active managers believe that markets areefficient.
Correct Answer False
Your Answer False
True/FalseQuestion 2 Currently in India index options are both European and American
in nature.Correct Answer False
Your Answer False
True/FalseQuestion 3 The cost structure remaining the same, better price realisation
results in lower gross profit ratio.Correct Answer False
Your Answer True
True/False
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Question 6 A segment is more attractive when there are actual or potentialsubstitutes for the product.
Correct Answer False
Your Answer True
True/FalseQuestion 15 Bond ratings by credit rating agencies provide superior and lowcost information to the investor serving as a basis for a proper risk-return trade off by investors.
Correct Answer True
Your Answer True
True/FalseQuestion 29 The arithmetic mean is a set of observations is calculated by
finding the sum values and dividing by the number of observations.
Correct Answer TrueYour Answer True
True/FalseQuestion 30 Investment in gilt edged securities carry a higher element of risk.
Correct Answer False
Your Answer True
True/FalseQuestion 37 Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.Correct Answer False
Your Answer True
True/FalseQuestion 45 Speculators buy or sell futures contract in an attempt to earn a
profit.Correct Answer True
Your Answer True
True/FalseQuestion 11 Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.Correct Answer True
Your Answer True
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True/FalseQuestion 17 Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under valuation.
Correct Answer True
Your Answer True
True/FalseQuestion 18 Quick assets consist of current assets less inventories.
Correct Answer True
Your Answer True
True/FalseQuestion 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.Correct Answer True
Your Answer True
True/FalseQuestion 23 A price rise accompanied by expanding volume denotes a
potential trend reversal.Correct Answer False
Your Answer True
True/FalseQuestion 35 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.Correct Answer True
Your Answer True
True/FalseQuestion 47 PPF is a good retirement planning and tax saving vehicle.
Correct Answer True
Your Answer True
True/FalseQuestion 2 Bonds and Debentures represent long term debt instruments.
Correct Answer False
Your Answer True
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True/FalseQuestion 9 While calculating geometric mean calculation of root is not
important.Correct Answer False
Your Answer False
True/FalseQuestion 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.Correct Answer True
Your Answer True
True/FalseQuestion 21 Sensex is the index of Calcutta Stock Exchange.
Correct Answer False
Your Answer False
True/FalseQuestion 27 Fundamental analysis focuses on predicting the future price of a
security and Technical analysis on estimating the intrinsic valueof a security.
Correct Answer False
Your Answer True
True/FalseQuestion 32 If rupee weakens against the dollar, it has favourable impact for
the importers.Correct Answer False
Your Answer False
True/FalseQuestion 36 The risk associated to get the required rate of return on the stock
is measure by market beta.
Correct Answer TrueYour Answer True
True/FalseQuestion 40 The basic inputs of the general model are expected dividends
and required rate of return on stock.Correct Answer True
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Your Answer True
True/FalseQuestion 42 European style options are more expensive than American style
because they offer greater flexibility to the buyer.
Correct Answer False
Your Answer True
True/FalseQuestion When you are making an investment you are expecting certain
future benefits from your investment.Correct Answer True
Your Answer True
True/FalseQuestion The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.Correct Answer True
Your Answer True
True/FalseQuestion The labour conditions do not play an important role in the
industry analysis.Correct Answer False
Your Answer False
True/FalseQuestion A rise in interest rates will push the market prises of outstanding bonds
where as a fall in interest rates will depress the market prices down.Correct Answer False
Your Answer True
True/FalseQuestion Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.Correct Answer True
Your Answer True
True/False
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Question The Asset management company of the mutual fund must have 50%independent directors.
Correct Answer True
Your Answer True
True/FalseQuestion In case of fixed income securities like debentures, you get the return in the
form of dividend.Correct Answer False
Your Answer False
True/FalseQuestion Investment in gilt edged securities carry a higher element of risk.
Correct Answer False
Your Answer False
True/FalseQuestion American option gives the holder the right, but not the obligation to buy or
sell the underlying instrument on or before the expiry date and the optioncan be exercised early.
Correct Answer True
Your Answer True
True/False
Question Prices of stocks usually move in trends.
Correct Answer True
Your Answer True
True/FalseQuestion The sideways trend is essentially a transitional one which separates the
two major market movements.Correct Answer True
Your Answer False
True/FalseQuestion With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
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True/FalseQuestion A higher value of current ratio indicates a better short
term solvency of the firm.
Correct Answer TrueYour Answer True
True/FalseQuestion The basic assumption of Technical analysis is that, price
discounts everything and it is the outcome of all forces affecting astock.
Correct Answer True
Your Answer True
True/FalseQuestion Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.Correct Answer TrueYour Answer True
True/FalseQuestion The price earning ratio can be estimated for the firms with negative
earnings per share.Correct Answer False
Your Answer True
True/FalseQuestion A share certificate indicates that the investor owns a certain number of shares.
Correct Answer True
Your Answer True
True/FalseQuestion Balance of payments surplus augments foreign reserves of the
country and have a favourable impact on he exchange rate.Correct Answer True
Your Answer True
Select The BlankQuestion The ________ phase carries a lot of significance because it marks the
turning point between a rising and a falling market.Correct Answer Transitional
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Your Answer Transitional
True/FalseQuestion Bonds and Debentures represent long term debt instruments.
Correct Answer FalseYour Answer True
True/FalseQuestion A price rise accompanied by expanding volume denotes a potential
trend reversal.Correct Answer False
Your Answer False
Select The BlankQuestion The ________ phase is characterized by resistance area and support
level.Correct Answer Transition
Your Answer Transition
True/FalseQuestion Currently in India index options are both European and American in
nature.Correct Answer False
Your Answer False
Select The BlankQuestion Debentures rated as "A" are judged to offer ________ of timely
payment of interest and principal.Correct Answer Adequate safety
Your Answer High safety
True/False
Question A rally that develops on contracting volumes is suspect and warns of apotential trend reversal in price
Correct Answer True
Your Answer True
Match The Following
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Question Correct Answer Your Answer
Price pattern Resistance level Head and shoulders formation
Primary trend Last between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to aslong as 6 months Last between 3 weeks to aslong as 6 monthsShort term trend Last 1 to 3-4 weeks Last 1 to 3-4 weeks
Match The FollowingQuestion Correct Answer Your Answer
MCX Commodity Exchange Commodity Exchange
Sensex BSE Index BSE Index
Nifty NSE Index NSE Index
Lifex ET Index Gold Index
Match The FollowingQuestion Correct Answer Your Answer
Turnover ratios Help measure theefficiency of utilisation of assets
Help measure the efficiencyof utilisation of assets
Debt Equity ratio Debt / Equity Debt / Equity
Quick assets Highly liquid assets Highly liquid assets
Average collection period Similar to debtors turnover Similar to debtors turnover
Match The FollowingQuestion Correct Answer Your Answer
Development of Dow'sprinciples
William Peter Hamilton Charles H.dow
Breadth Indicator Advance/decline line Moving average
Momentum indicator MACD MACD
Trend lines Useful tool in technicalanalysis
Useful tool in technicalanalysis
Match The FollowingQuestion 26 Correct Answer Your Answer
Under options contractWhen you expect prices tofall, then, you take a longposition by buying puts.
Cost of Carry model Futures contract
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When you expect prises torise, then you take a shortposition by selling puts.A contract where both theparties are equallyresponsible
Futures contract Options contract
The amount which thebuyer of the option has topay to the option writer toinduce him to accept therisk associated with thecontract.
Option price Transaction cost model
NSE&BSE are regulatedby
Securities ExchangeBoard of India
Securities Exchange Boardof India
Match The FollowingQuestion 24 Correct Answer Your Answer
Equity shares High risk High riskGovernment Securities No risk Low risk
Bank Deposits Low risk No risk
Mutual Funds Average risk Average risk
Match The FollowingQuestion 33 Correct Answer Your Answer
Risk free investment Actual returns = expected
returns
Actual returns = expected
returnsRisk Volatility in the return Volatility in the return
Variance Measure of dispersion Measure of dispersion
Returns Future benefits frominvestments
Future benefits frominvestments
Match The FollowingQuestion 20 Correct Answer Your Answer
H-Model For ValuingGrowth
Initial growth rate is notconstant but linearly fallsover time to reach thestable growth rate
Initial growth rate is notconstant but linearly fallsover time to reach thestable growth rate
The general model Expected dividends andrequired rate of return
Expected dividends in thenext period, cost of equityand expected growth rate individends
The Gordons Growthmodel
Expected dividends in thenext period, cost of equityand expected growth rate
Assessment of the growthrate by looking at howmuch a firm reinvests for
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in dividends future growth and thequality of its reinvestment
The Two-Stage DividendDiscount Model
Based on twoextraordinary growthphase lasting n years andstable growth phase thatlasts forever
Based on two extraordinarygrowth phase lasting nyears and stable growthphase that lasts forever
Match The FollowingQuestion 34 Correct Answer Your Answer
Future value of a series of cash flows occurring at theend of each period.
Future value of annuity Future value of annuity
Value today of a stream of cash flows that occurs infuture.
Present Value Future Value
Value at a certain future
date today of a stream of cash flows that occursover a period of time.
Future Value Present Value
Series of equal paymentsor receipts occurring atregular intervals of time.
Present value of annuity Present value of annuity
Match The FollowingQuestion Correct Answer Your Answer
Weak form model is alsotermed as
Random walk model Random walk model
Investors are rational Efficient markethypothesis Efficient market hypothesis
Securities current pricesfully reflect all historicalinformation
Weak form EMH Fama
Framework on efficientcapital markets, a reviewof theory and empiricalwork
Fama Strong form
Match The FollowingQuestion Correct Answer Your Answer
Technical collaboration of Bharat Forge with SIFCOindustries USA
1981 1981
Bharat Forge wasincorporated at Mumbai
1961 1961
Shares of 100 eachsubdivided of Bharat forge
1971 1971
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930000 bonus sharesissued by Bharat Forge
1976 1976
Match The FollowingQuestion Correct Answer Your Answer
The yield to maturity issame as the
Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest paymentsand principal repayment atthe time of maturity
Debt instrument/Bonds Debt instrument/Bonds
The actual yield earned byan investor on a bond
Realised yield Realised yield
Present value interestfactor of annuities andpresent value interestfactor
Yield to maturity Yield to maturity
1. Treasury Bills 1. Foreign Institutional Investors
2. Commercial Papers 3
2. Government of India
3. Certificate of Deposits 3. Corporates
4. Bonds 5 4. Banks and Financial Institutions 5. Central/State Govts/PSU's 6. Post Office
1. ROE 3 1. Measure the profitability of operations without consideringthe influence of financial structure and tax rate
2. Earningspower
1 2. Ratio if net profit to sales
3. Net profitmargin
2 3. Measure the profitability of equity funds
4. Gross profitmargin
6 4. Valuation ratio
5. Measures the profitability of debt funds 6. Indicates the margin available after meeting the
manufacturing expenses
1. SEBI 5 1. Nifty
2. NAV 2 2. Net asset value
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3. AMFI 6 3. Net average value 4. NSE 4. Association of merchant financers of India
5. Redressal of investor complaints 6. Association of mutual funds of India
Match The FollowingQuestion Correct Answer Your Answer
Growth of income 40-60 % debt, 40-60 %equities
40-60 % debt, 40-60 %equities
Current income Short term debt portfolio Fixed - income portfolio
Stability of principal Fixed - income portfolio Short term debt portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Match The FollowingQuestion Correct Answer Your Answer
Ratio used as a measure of relative value
PEG ratio Price to book value ratio
The market value of thefirms assets divided by thereplacement cost of theseassets
Market value to replacementcost ratio
Market value to replacementcost ratio
Key determiner of revenuemultiples
Profit margin Profit margin
The market value of theequity in a firm reflects themarkets expectations of thefirms earnings power andcash flows.
Price to book value ratio Price earning ratio
Match The FollowingQuestion Correct Answer Your Answer
Expiration period for options Nine months Nine months
The world's first largestoptions exchange
Chicago Board of optionsexchange
New York board of Optionsexchange
The most popular pricingoptions model published inthe year 1973
Black Scholes Black Scholes
When the writer gives thebuyer of the option the rightto sell the underlying asseton or before the expiry date
Put option Put option
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