All Questions PGDBA - Sec Analysis & Portfolio Managementa Pm

7/30/2019 All Questions PGDBA - Sec Analysis & Portfolio Managementa Pm

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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 search mispriced

securities in the market , Are relatively active traders in 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 , Privateinformation about the firm , Firm's specific information and public information

Multiple Choice Multiple AnswerQuestion 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 random news events

Multiple Choice Multiple AnswerQuestion What are the features of trend linesCorrect Answer A simple and useful tool in technical analysis , Prices move in trends , The

trend lines represent points of support and resistance

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 the opening priceYour 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 state is 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?Correct Answer It connects closing prices from one period to the next , It is ideal 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 have earned superior

historical returns , Calculating certain ratios will help in analyzing whether a security has relative

strengthYour 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 :-


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Correct Answer In high growth rate phase , Expecting to maintain the growth rate phasesteadily for a specific time period , Sources of high growth are expected to disappear after specificperiod of time

Multiple Choice Multiple AnswerQuestion The features of bond are :-Correct Answer Collateral , Call provision , Sinking fund and protective covenants

Multiple Choice Multiple AnswerQuestion What are the features of company fixed deposits?Correct Answer Interest rate offered is higher than banks , No benefits under 80 L , No TDS for

interest income upto Rs. 5000Your Answer Interest rate offered is higher than banks , No benefits under 80 L , No TDS forinterest income upto 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's known as boxes. ,

X's show that the prices are moving up , O's show that the prices are moving downYour Answer Charts are constructed using a combination of X's and O's known as boxes. ,X's show that the prices are moving up , O's show that the prices are moving down

Multiple Choice Multiple AnswerQuestion 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 payable monthlyYour Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10%on completion of term

Multiple Choice Multiple AnswerQuestion The firm issuing bonds operating sinking fund and repurchases bonds either :-Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,

Buying bonds issued to banks and financial institutionsYour Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,Buying bonds issued to banks and financial institutions

Multiple Choice Multiple AnswerQuestion If option is given to you to receive Rs.1,000/- today or after one year, you will choose

to receive it today because :-Correct Answer You can use the amount to generate returns over the next one year , The

purchasing power of Rs.1,000/- today is more than what it will be one year from now , There is anelement of uncertainty associated with the future receiptYour Answer You can use the amount to generate returns over the next one year , Thepurchasing power of Rs.1,000/- today is more than what it will be one year from now , There is anelement of uncertainty associated with the future receipt

Multiple Choice Multiple AnswerQuestion The computation of return on a bond involves considering :-Correct Answer The entire sequence of cash flows , The timing of cash flows , Calculating the

internal rate of return

Your Answer The entire sequence of cash flows , The timing of cash flows , Calculating theinternal rate of return

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 is ideal for securitieswith no high or low price dataYour Answer It connects closing prices from one period to the next , It is ideal for securitieswith no high or low price data

Multiple Choice Multiple AnswerQuestion Explain what are leverage ratios ?Correct Answer Debt equity ratio and interest coverage ratio and DSCR are important leverage

ratios , Debt is riskier source of finance as it entails fixed outgo of periodic payments , Help inassessing the risk arising using the debt capitalYour Answer Help in assessing the risk arising using the debt capital , Debt equity ratio andinterest coverage ratio and DSCR are important leverage ratios , Debt is riskier source of financeas it entails fixed outgo of periodic payments

Multiple Choice Multiple AnswerQuestion What developments had taken place during the year 2000 in case of Bharat Forge

Ltd.?Correct Answer Demerger of investment division and windmills , Nominee director of UTI

resigned and ceased to be the director - nomination withdrawn by UTI

Your Answer Demerger of investment division and windmills , Nominee director of UTIresigned and ceased to be the director - nomination withdrawn by UTI

Multiple Choice Multiple AnswerQuestion 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 the issuer at a contracted valueYour Answer Interest payments at coupon rates , Capital gain/loss arising out of the sale ofthe bond , Redemption of the bond of the issuer at a contracted value

Multiple Choice Multiple AnswerQuestion 1 Return can be in the form of :-Correct Answer Dividends , Interests , Capital appreciation

Your Answer Dividends , Interests , Capital appreciation

Multiple Choice Multiple AnswerQuestion 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 as compliance officer , New contracts won in passenger car componentsYour Answer Secured second largest customer in China , Appointed a Company Secretary to

act as compliance officer , New contracts won in passenger car components

Multiple Choice Multiple AnswerQuestion 35 An option is :-Correct Answer A contract between two parties , Where buyer receives a privilege for which he

pays a premium , Where the seller accepts an obligation for which he receives a feeYour Answer A contract between two parties , Where buyer receives a privilege for which hepays a premium , Where the seller accepts an obligation for which he receives a fee

Multiple Choice Multiple AnswerQuestion 41 Formula for calculation of portfolio variance requires :-Correct Answer Expected return on portfolio , Expected return on assets , Weight of asset in

the portfolio


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Your Answer Expected return on portfolio , Expected return on assets , Weight of asset inthe portfolio

Multiple Choice Multiple AnswerQuestion 46 What were the objectives for 2002-03 the chairman of Bharat forge had

emphasised on in the annual report for 2001 - 02Correct Answer Maintain aggressive exports thrust , Increase shares of value added products ,

Continue reducing costs

Your Answer Maintain aggressive exports thrust , Increase shares of value added products ,Continue reducing costs

Multiple Choice Multiple AnswerQuestion 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 ordersMultiple Choice Multiple AnswerQuestion 4 A firm's growth is determined by how much is re-invested into new assets and the

quality of these investments, and these includes :-

Correct Answer Acquisitions , Building distribution channels , Expanding marketing capabilitiesand investing in new facilitiesYour Answer Acquisitions , Expanding marketing capabilities and investing in new facilities ,Mergers

Multiple Choice Multiple AnswerQuestion 5 Which of the following are important momentum indicators used widely?Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving average

convergence divergence(MACD)Your Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving averageconvergence divergence(MACD)

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion 15 What were the Chairman's comments during the speech in the Annual report of

the FY 2002-03?

Correct Answer Best year in the history of the company , 146% growth in exports , Highest preand post tax profitsYour Answer Best year in the history of the company , 146% growth in exports , Highest preand post tax profits

Multiple Choice Multiple AnswerQuestion 20 Who are the constituents of a mutual fund?Correct Answer Sponsor & trustees , Asset management company , Custodian

Your Answer Sponsor & trustees , Asset management company , Custodian

Multiple Choice Multiple AnswerQuestion 26 What are the features of Kisan Vikas Patra?Correct Answer Term is for 8 years seven months , Provision of premature withdrawal , Interest

rate is 8.4% compounded annuallyYour Answer Term is for 8 years seven months , Provision of premature withdrawal , Interestrate is 8.4% compounded annually


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Multiple Choice Multiple AnswerQuestion 38 The security analysis process will achieve :-Correct Answer True picture of a company , Normal earning power , Projection of future

profitabilityYour Answer True picture of a company , Normal earning power , Projection of futureprofitability

Multiple Choice Multiple AnswerQuestion 41 The return to the bond investor can be measured in terms of :-Correct Answer Current yield , Yield to maturity , Realised yield

Your Answer Yield to maturity , Realised yield

Multiple Choice Multiple AnswerQuestion 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 tradingMultiple 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 from less than 1 year to 30 yearsYour Answer Securities can be bought from the RBI , Safest investment option available ,Demat account is required for investment

Multiple Choice Multiple AnswerQuestion 10 To measure the movement of stocks in the market which indices were

constructed by Dow?Correct Answer Dow Jones industrial Average , Dow Jones Transportation Average

Your Answer Dow Jones Transportation Average

Multiple Choice Multiple AnswerQuestion 16 The security market is the market for :-Correct Answer Equity , Debt , Derivatives

Your Answer Equity , Debt , Bank deposits

Multiple Choice Multiple AnswerQuestion 18 In a typical stock market cycle which are the types of trends?

Correct Answer Trends upward , Trend downward , Sideway trendYour Answer Trends upward , Trend downward , Flat trendMultiple Choice Multiple AnswerQuestion 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 , Growth schemes

Multiple Choice Multiple AnswerQuestion 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 its FY 05 consensus EPS forecasts , Stock will trade at an inexpensivePEG of 0.6x.Your Answer Aim to become US$1 billion Company by Fy 08 from US$100 million , Stockcurrently trades at 15 times its FY 05 consensus EPS forecasts , Stock will trade at an inexpensivePEG of 0.6x.


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Multiple Choice Multiple AnswerQuestion 26 Gilt Edged Securities are :-Correct Answer State Govt. , Quasi-Govt , Central Govt

Your Answer Central Govt , State Govt. , Quasi-Govt

Multiple Choice Multiple AnswerQuestion 33 What are the ways of measuring relative strength?

Correct Answer Calculate the rates of return and classify securities that have earned superiorhistorical returns , Calculating certain ratios will help in analyzing whether a security has relativestrengthYour Answer Calculate the rates of return and classify securities that have earned superiorhistorical returns , Calculating certain ratios will help in analyzing whether a security has relativestrength , Calculating the Return on investment

Multiple Choice Multiple AnswerQuestion 44 What are the different types of profitability ratios?Correct Answer Gross profit margin ratio , Earnings power , Return on equity

Your Answer Gross profit margin ratio , Earnings power , Return on equity

Multiple Choice Multiple AnswerQuestion 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 , Whose earnings are steady and perpetualYour Answer Growing at a rate equal to or lower that the growth in the economy , Whichhave well established dividend payout ratio policy

Multiple Choice Multiple AnswerQuestion The Two-Stage dividend discount model is based on the assumption of :-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 n years , A stable growth phase lasts foreverYour Answer An initial phase where the growth is not a stable growth rate , A subsequentsteady state of growth rate being stable and lasts n years , A stable growth phase lasts forever

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion An options contract allows the investor :-Correct Answer To earn a profit while restricting the downside risk , To use the options for

speculation , Either to honour or walk away from the contractYour Answer Either to honour or walk away from the contract , To earn a profit whilerestricting the downside risk , To use the options for speculation

Multiple Choice Multiple AnswerQuestion Major steps involved in construction of a index are :-Correct Answer Selecting a set of scrips to be used , Fixing starting date , Calculating market

capitalisationYour Answer Selecting a set of scrips to be used , Fixing starting date , Fixing ending date



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Question How can the financial statements can be manipulated while giving the estimates forgrowth?Correct Answer Change method of rate of depreciation , Change method of stock valuation ,

Inflating sales for current year by advancing sales for the following yearYour Answer Change method of rate of depreciation , Change method of stock valuation ,Inflating sales for current year by advancing sales for the following year


Question The underlying assumptions of Technical analysis are that :-Correct Answer Prices move in predictable patterns , Market value is determined by supply &demand , Investors are emotional than being rationalYour Answer Prices move in predictable patterns , Investors are emotional than beingrational

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion What are the features of public provident scheme?Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from

7th yearYour Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from7th year

Multiple Choice Multiple AnswerQuestion Growth of the firm can be estimated through :-Correct Answer Firm's past earnings/historical growth rate , Estimates made by equity research

analyst who follow the firm , Estimates from a firm's fundamentalsYour Answer Firm's past earnings/historical growth rate , Estimates made by equity researchanalyst who follow the firm , Estimates from a firm's fundamentals

Multiple Choice Multiple AnswerQuestion Characteristics of Preference shares are :-Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in 7

to 12 yearsYour Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in 7to 12 years

Multiple Choice Multiple AnswerQuestion What are the SEBI regulations with respect to mutual funds?Correct Answer Mutual funds to be registered with SEBI before the launching any scheme ,

2/3rds of the directors of the trustee company must be independent , An AMC approved by SEBImanages the fundYour Answer Mutual funds to be registered with SEBI before the launching any scheme ,2/3rds of the directors of the trustee company must be independent , An AMC approved by SEBImanages the fund

Multiple Choice Multiple AnswerQuestion The security analysis process will achieve :-Correct Answer True picture of a company , Normal earning power , Projection of future

profitabilityYour Answer True picture of a company , Normal earning power , Projection of futureprofitability


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Multiple Choice Multiple AnswerQuestion 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


Question What are the features of bank deposits?Correct Answer Interest is presently around 6% , Benefits under section 80 L , Banks offercheque facility for investors making it convenient to withdrawYour Answer Interest is presently around 6% , Banks offer cheque facility for investorsmaking it convenient to withdraw

Multiple Choice Multiple AnswerQuestion 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

Multiple Choice Single AnswerQuestion Stock Exchanges are the part of :-Correct Answer Secondary marketYour 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 Answer

Question 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 :-


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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 to the dealings of the exchange shall be :-Correct Answer 0.05

Multiple Choice Single AnswerQuestion What is a technical approach to investment?Correct Answer A reflection of the idea that prices move in trends which are determined 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 HamiltonYour Answer Charles.H.Dow

Multiple Choice Single AnswerQuestion 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 valuedYour Answer Under valued or over valued

Multiple Choice Single AnswerQuestion 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 equityYour Answer Price earning ratio X return on equity

Multiple Choice Single AnswerQuestion What is a load fund?Correct Answer Fund charging a fee for entry and exitYour Answer Fund charging a fee for entry and exit

Multiple Choice Single AnswerQuestion Investment is a risk free investment when :-Correct Answer Actual return is = expected returnYour Answer Actual return is = expected return

Multiple Choice Single AnswerQuestion Debt instruments that have a maturity period of more than one year are called as :-Correct Answer BondsYour Answer Bonds

Multiple Choice Single AnswerQuestion 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 this amount, if the rate of interest is 6% p.a?Correct Answer Rs. 37363/-


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Your Answer Rs. 37363/-

Multiple Choice Single AnswerQuestion Which of these is a short-maturity debt issue?Correct Answer Money market funds and giltsYour Answer Money market funds and gilts

Multiple Choice Single AnswerQuestion What is Support level?Correct Answer A point where the prices become relatively attractive for buyersYour Answer Market resistance to a price fall

Multiple Choice Single AnswerQuestion During the 1980's rate of savings in India has hovered around what percentage?Correct Answer 0.21Your Answer 0.22

Multiple Choice Single AnswerQuestion 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 valuedYour Answer Over valued

Multiple Choice Single AnswerQuestion The average historical growth rate can be calculated as :-Correct Answer Arithmetic average or a geometric averageYour Answer Geometric average

Multiple Choice Single AnswerQuestion 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 trend

Multiple Choice Single AnswerQuestion 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 equityYour Answer Price earning ratio X return on equity

Multiple Choice Single AnswerQuestion 9 The historical growth rate and the past earnings of a firm are used in valuing :-Correct Answer Stable firms, but not appropriate for high growth firmsYour Answer Consistent stable firms, but not appropriate for high growth firms

Multiple Choice Single AnswerQuestion 10 Efficient market hypothesis is based on the assumption that market comprises

of :-Correct Answer Rational InvestorsYour Answer Heterogeneous investors

Multiple Choice Single AnswerQuestion 11 Co variance of asset with market portfolio 85 and variance of market portfolio

is 100 then beta is :-Correct Answer 0.0085


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Your Answer 0.0085

Multiple Choice Single AnswerQuestion 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10 years. He

wanted to know what is the present value of this amount, if the rate of interest is 10% p.a:-Correct Answer Rs. 9639/-Your Answer Rs. 9639/-

Multiple Choice Single AnswerQuestion 18 What does flow-of fund analysis help in understanding?Correct Answer Availability of money for the stock marketYour Answer Financial strength of various companies

Multiple Choice Single AnswerQuestion 23 A security represent evidence of :-Correct Answer A property rightYour Answer Safety

Multiple Choice Single AnswerQuestion 24 Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4% compounded

annually. What will be the value of his investment after 5 years?Correct Answer Rs. 6083/-Your Answer Rs. 6083/-

Multiple Choice Single AnswerQuestion 27 In India futures on individual securities have been introduced by :-Correct Answer BSE & NSEYour Answer BSE & NSE

Multiple Choice Single AnswerQuestion 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 ratesYour Answer New bonds at a lower rates


Question 2 When was the first mutual fund set up?Correct Answer 1963Your Answer 1963

Multiple Choice Single AnswerQuestion 7 How can transition phases be projected?Correct Answer Transition phases are signalled by clearly definable price patternsYour Answer By working out the resistance and support levels


Question 8 If the price of a share at the beginning of the year was Rs.50/-, dividend receivedduring the year was Rs.10/-per share and the price at the end is Rs.60/-. What is the rate ofreturn?Correct Answer 0.4Your Answer 0.2



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Question 27 Investing in this avenue enable you participate in the equity marketindirectly :-Correct Answer Mutual FundsYour Answer Mutual Funds

Multiple Choice Single AnswerQuestion 29 In any Economy, bridge is created between savers and who need the funds by

this system :-

Correct Answer FinancialYour Answer Economic

Multiple Choice Single AnswerQuestion 30 Agriculture account for how much portion of the economy?Correct Answer QuarterYour Answer Three fourths

Multiple Choice Single AnswerQuestion 37 Who operates the sinking fund under the sinking fund provision of a firm?

Correct Answer The bond trustee or the issuerYour Answer The bond trustee or the issuer

Multiple Choice Single AnswerQuestion 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

pricesYour Answer As a barometer of business conditions rather than a basis for forecasting stock

prices

Multiple Choice Single AnswerQuestion 42 The growth period in the industry life cycle is defined as :-Correct Answer Period of rapid market acceptance and substantial profit improvementYour Answer Period of rapid market acceptance and substantial profit improvement

Multiple Choice Single AnswerQuestion 3 What is the limitation of Flow-of funds analysis method?Correct Answer Cannot give indication of the inclination of market participants to purchase

stockYour Answer Cannot give indication of the inclination of market participants to purchase

stock


Question 6 Sentiment indicators are based on what assumptionCorrect Answer Different groups of investors are consistent in their actions at major market

turning pointsYour Answer Different groups of investors are consistent in their actions at major market

turning points

Multiple Choice Single AnswerQuestion 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 contractYour Answer Futures contract

Multiple Choice Single AnswerQuestion 25 What are intermediate trends?Correct Answer They are counter-cyclical trends within the confines of a primary trendYour Answer They are counter-cyclical trends within the confines of a primary trend


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Multiple Choice Single AnswerQuestion 29 What are index funds?Correct Answer Investment in securities in the same weightage which replicates a particular

indexYour Answer Investment in securities in the same weightage which replicates a particular

index

Multiple Choice Single AnswerQuestion 38 What are the assumptions of the Dow theory?Correct Answer Majority of stocks follow the underlying trend of the market most of the timeYour Answer Majority of stocks follow the underlying trend of the market most of the time

Multiple Choice Single AnswerQuestion 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded

annually. What will be the value of his investment after 3 years?Correct Answer Rs. 29775/-Your Answer Rs. 29775/-

Multiple Choice Single AnswerQuestion 41 How many measures of money supply are used commonly?Correct Answer 2Your Answer 2

Multiple Choice Single AnswerQuestion 43 Under which simple model the value of the stock is the present value of

expected dividends on it :-Correct Answer The Dividend discount modelYour Answer The Dividend growth model

Multiple Choice Single AnswerQuestion 46 Avenues can be broadly classified into the which type of assets?Correct Answer Financial and RealYour Answer Tangible and Intangible

Multiple Choice Single AnswerQuestion The average investor in the market is driven more by emotions than by rational

analysis is a rule of :-Correct Answer Technical analysisYour Answer Fundamental Analysis

Multiple Choice Single AnswerQuestion What is the objective of an income fund?Correct Answer To provide regular and steady incomeYour Answer To provide guaranteed returns to investors


Question What does lower level of unemployment indicates?Correct Answer Positive economic conditionsYour Answer Economic slowdown



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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 AnswerQuestion Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded annually.

What will be the value of his investment after 5 years?Correct Answer Rs.14.693/-

Your Answer Rs.14.693/-

Multiple Choice Single AnswerQuestion Which market is affected with the improving and higher growth rate in economy?Correct Answer Stock marketYour Answer Stock market

Multiple Choice Single AnswerQuestion 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 AnswerQuestion What is Gross National Product ?Correct Answer Gross income generated from within the countryYour Answer Gross income generated from within the country

Multiple Choice Single AnswerQuestion The greater the deviation of the actual returns from the actual return :-Correct Answer Greater the varianceYour Answer Greater the variance

Multiple Choice Single AnswerQuestion What is GDP at factor cost ?Correct Answer Excludes net income received from abroadYour Answer Includes indirect taxes

Multiple Choice Single AnswerQuestion More than half the variation in stock price could be attributed to which factor?

Correct Answer Market influenceYour Answer Market influence

Multiple Choice Single AnswerQuestion Free Float index considers this to calculate market capitalisation :-Correct Answer Actual no. of shares availableYour Answer Actual no. of shares available

Multiple Choice Single AnswerQuestion The Top-down approach is also known as :-Correct Answer Economy-industry-company approachYour Answer Economy-industry-company approach


various factors


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Your Answer A reflection of the idea that prices move in trends which are determined byvarious factors

Multiple Choice Single AnswerQuestion What are index funds?Correct Answer Investment in securities in the same weightage which replicates a particular


index

Multiple Choice Single AnswerQuestion What could be a better approach to flow-of -funds analysis?Correct Answer An examination of liquidity trends in the banking systemYour Answer A study of macro economical changes

Multiple Choice Single AnswerQuestion 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 AnswerQuestion What are short term trends?Correct Answer Trends which interrupt the course of the intermediate cycleYour Answer Trends which interrupt the course of the intermediate cycle

Multiple Choice Single AnswerQuestion What is the aim of growth funds?Correct Answer To provide capital appreciation over medium to long termYour Answer To provide capital appreciation over medium to long term

Multiple Choice Single AnswerQuestion This is not a stock exchange :-Correct Answer MCXYour Answer MCX

Multiple Choice Single AnswerQuestion 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 riskYour Answer Normal returns for their given level of risk

Multiple Choice Single AnswerQuestion 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 investment after 5 years?Correct Answer Rs. 73466/-Your Answer Rs. 73466/-

Multiple Choice Single AnswerQuestion The price of the index futures contract is defined as :-Correct Answer Future price = Spot price + Carry cost

Your Answer Future price = Spot price + Carry cost

Multiple Choice Single AnswerQuestion Financial assets can be classified as :-Correct Answer Marketable and non-marketable


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Your Answer Marketable and non-marketable

Multiple Choice Single AnswerQuestion 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 this amount, if the rate of interest is 9% p.a ?Correct Answer Rs.1,15,827/-Your Answer Rs.1,15,827/-

Multiple Choice Single AnswerQuestion What is Flow-of-funds analysis?Correct Answer Consists of an analysis of the financial positions of various investor groupsYour Answer Consists of an analysis of the financial positions of various investor groups


Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7 years. He wanted toknow what is the present value of this amount, if the rate of interest is 7% p.a ?Correct Answer Rs. 62,275/-Your Answer Rs. 62,275/-

Multiple Choice Single AnswerQuestion What do you understand by term pioneering stage in the industry life cycle analysis?Correct Answer Slow sales growth product recently introducedYour Answer Slow sales growth product recently introduced

Multiple Choice Single AnswerQuestion Till 1990's secular Indian economy's inflation rate has been of what percentage?Correct Answer 0.07Your Answer 0.07

Multiple Choice Single AnswerQuestion Credit rating companies assign ratings for which of these investments?Correct Answer Company depositsYour Answer Company deposits

Multiple Choice Single AnswerQuestion If index future is taken under futures contract, the underlying asset would be :-Correct Answer Stock indexYour Answer Stock index

Multiple Choice Single AnswerQuestion What is balance of payments?Correct Answer Credit and debit transactions of a countryYour Answer Credit and debit transactions of a company

Multiple Choice Single AnswerQuestion Profits are non existent in pioneering stage because of :-

Correct Answer Heavy expenses on product introductionYour Answer Heavy expenses on product introduction

Multiple Choice Single AnswerQuestion What is the indicator of buoyant economy?


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Correct Answer Increased level of housing construction activityYour Answer Increased level of housing construction activity

Multiple Choice Single AnswerQuestion What does a transitional phase indicate?Correct Answer It marks the turning point between a rising and falling marketYour Answer It marks the turning point between a rising and falling market


Question Dividend discount model is considered as the simplest model for :-Correct Answer Valuing EquityYour 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 security

Your 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 end is Rs.115/-. What is the rate of return?Correct Answer 0.15

Your Answer 0.15

Multiple Choice Single AnswerQuestion What is the objective of Portfolio management?Correct Answer To Minimize risk and maximize return

Your Answer To Minimize risk and maximize return

Multiple Choice Single AnswerQuestion Capital expenditure -depreciation +change in working capital -(new debt issued - debt

repaid) =Correct Answer Equity reinvested in business

Your Answer Equity reinvested in business


Question What is the percentage of variation the market and industry influence account for?Correct Answer 2/3rd

Your Answer 75%

Multiple Choice Single AnswerQuestion What is the rate of interest on the tax free bonds issue by the government?Correct Answer 6.5%

Your Answer 6.5%


Question Investments could be made in retail government securities through :-Correct Answer Primary dealers

Your Answer Primary dealers

Question The growth rate is used to forecast future revenues and earnings and are inputs invaluing :-


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Correct Answer Stable firmsYour Answer High growth firms

Multiple Choice Single AnswerQuestion The objective of fundamental analysis for a security in a market is to identify either it

is :-Correct Answer Under priced and over pricedYour Answer Under priced and over priced

Multiple Choice Single AnswerQuestion 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 valuedYour Answer Under valued or over valued

Multiple Choice Single AnswerQuestion The growth rate is used to forecast future revenues and earnings and are inputs in

valuing :-

Correct Answer Stable firmsYour Answer High growth firms

Multiple Choice Single AnswerQuestion How can transition phases be projected?Correct Answer Transition phases are signalled by clearly definable price patternsYour Answer Transition phases are signalled by clearly definable price patterns

Multiple Choice Single AnswerQuestion When was the Dow theory first published?Correct Answer Between 1900 and 1902Your Answer Between 1900 and 1902

Multiple Choice Single AnswerQuestion When was the first mutual fund set up?Correct Answer 1963Your Answer 1963


Question What is the art of technical analysis?Correct Answer To identify trend changes at an early stage and maintain investment posture

till the trend has reversedYour Answer To identify trend changes at an early stage and maintain investment posture

till the trend has reversed

Multiple Choice Single AnswerQuestion 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 the present value of dividends through infinity arethe underlying assumptions of :-Correct Answer The General model

Your Answer The Dividend discount model

Multiple Choice Single AnswerQuestion How would you rate a portfolio with 90% investment in stocks?Correct Answer Highly aggressive


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Your Answer Highly aggressiveMultiple Choice Single AnswerQuestion What are primary trends?Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the

business cycleYour Answer Long term trends


Question In a forward contract there is :-Correct Answer No Exchange of cashYour Answer No Exchange of cash

Multiple Choice Single AnswerQuestion 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 riskYour Answer Equal returns for their given level of risk

Multiple Choice Single AnswerQuestion 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

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 coefficientYour Answer Time

Select The BlankQuestion Dow Jones transportation average was previously known as ________.Correct Answer Rail averageYour Answer Rail average

Select The BlankQuestion The compounded annual return of Kisan Vikas patra is ________.Correct Answer 0.084Your Answer 0.084

Select The BlankQuestion Under futures market ________ process provides for collection of losses that have

already occurred.Correct Answer The daily settlementYour Answer The daily settlement

Select The BlankQuestion The regulations of SEBI with respect to mutual funds were fully revised in the year

________.Correct Answer 1996Your Answer 1996

Select The BlankQuestion The Dow theory states that there are simultaneously ________ movements in the stock

market.Correct Answer 3


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Your Answer 3

Select The BlankQuestion Under the options contract ________ gives the holder the right, but not the obligation

to buy or sell the underlying instrument only on the expiry date.Correct Answer European optionYour Answer European option

Select The BlankQuestion ________ ratio indicates the margin available after meeting the manufacturing

expenses.Correct Answer Gross Profit marginYour 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 safetyYour 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 BlankQuestion 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 BlankQuestion ________ is due to the fact that a borrower may not pay interest and/or principal on

time.Correct Answer Default risk

Select The BlankQuestion 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 BlankQuestion ________ bonds are generally called for prepayment after interest rates have fallen,

investors will not be able to find comparable investment avenues.


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Correct Answer Call risk

Select The BlankQuestion ________ 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 BlankQuestion The ________ phase is characterized by resistance area and support level.Correct Answer Transition

Select The BlankQuestion ________ 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 equityYour Answer Return on equity

Select The BlankQuestion 20 ________ refers to the possibility that there may not be a readily available

market for the particular bond.Correct Answer Liquidity riskYour Answer Interest rate risk

Select The BlankQuestion 21 The govt allowed public sector banks and institutions in mutual funds in

________.

Correct Answer Early 90'sYour Answer Early 90's

Select The BlankQuestion 36 The 8% taxable savings bonds are repayable after ________ years.Correct Answer 6Your Answer 5

Select The BlankQuestion 39 Security analysis serves the investment decision maker by identifying

________securities.Correct Answer Under pricedYour Answer Blue chip

Select The Blank


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Question 42 ________ absorbs the excess demand or supply generated by hedgers andassume the risk of price fluctuations.Correct Answer SpeculatorsYour 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 marketYour Answer Bullish market

Select The BlankQuestion 1 UTI was set up in the year ________.Correct Answer 1963Your Answer 1963

Select The BlankQuestion 6 An ________ is a series of equal payments or receipts occurring at regular intervals of

time.Correct Answer AnnuityYour 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 specific date.Correct Answer Right but not obligationYour 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 tendencyYour 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 sharesYour Answer Preference shares

Select The BlankQuestion 39 Debentures rated "BB" refers ________ of timely payment of interest and

principal.Correct Answer Inadequate safetyYour Answer Inadequate safety

Select The Blank


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Question 43 The Derivative market is divided into Future market and ________ market.Correct Answer OptionsYour Answer Options

Select The BlankQuestion 46 The Dow theory was published in a series of editorials in the ________.Correct Answer Wall street journalYour Answer Wall street journal

Select The BlankQuestion 1 ________ deal in futures to offset a pre-existing risk.Correct Answer HedgerYour 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 remains for the long-term.Correct Answer The Two-Stage dividend discountYour 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 ratioYour Answer PEG ratio

Select The BlankQuestion 19 ________involves a simultaneous sale and repurchase agreement.Correct Answer ReposYour Answer Repos

Select The BlankQuestion 28 Current liabilities include all liabilities due in the next ________ and provisions.Correct Answer 12 monthsYour Answer 12 months

Select The BlankQuestion 30 S&P NSE 50 index is known as ________.Correct Answer NIFTYYour Answer NIFTY


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Select The BlankQuestion 31 ________seeks to safeguard against potential losses on the outstanding position

in futures market.Correct Answer Initial marginYour Answer Daily settlement

Select The Blank

Question 35 ________ ratio is the ratio of net profit to the sales.Correct Answer Net Profit MarginYour Answer Net Profit Margin

Select The BlankQuestion Mutual fund is to be registered with ________ before raising funds from public.Correct Answer SEBIYour Answer SEBI

Select The Blank

Question An investor with a higher tolerance of risk should tilt his portfolio in favour of ________.Correct Answer StocksYour 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 TransitionalYour Answer Sideways

Select The BlankQuestion Acid test ratio is more stringent measure of liquidity compared to the ________.Correct Answer Current ratioYour Answer Current ratio

Select The BlankQuestion ________ measures the efficiency of credit management.Correct Answer Average collection periodYour 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 powerYour 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 price range 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


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Your Answer Return on equity

Select The BlankQuestion Risk can be referred as the ________ in the return with respect to the expected return.Correct Answer VolatilityYour Answer Difference

Select The BlankQuestion All trades in the futures market are cash settled on a ________ basis.Correct Answer T+1Your Answer T+1

Select The BlankQuestion ________ ratio is the ratio of net profit to the sales.Correct Answer Net Profit MarginYour Answer Net Profit Margin

Select The BlankQuestion When a debenture is sold to the general public a ________ is appointed.Correct Answer TrusteeYour Answer Brokers

Select The BlankQuestion A security is said to be ________ if its current market price is over its intrinsic value.Correct Answer Over pricedYour 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 valueYour Answer Future value

Select The BlankQuestion Mutual fund is to be registered with ________ before raising funds from public.

Correct Answer SEBIYour Answer SEBI

Select The BlankQuestion In a heads and shoulders formation the deeper the pattern, the greater is the ________

significance once it is completedCorrect Answer BearishYour Answer Bearish

Select The Blank

Question The govt allowed public sector banks and institutions in mutual funds in ________.Correct Answer Early 90'sYour Answer Early 90's

Select The Blank


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Question Under ________ EMH investors cannot earn abnormal/superior profits on securities ona consistent basis.Correct Answer Semi-strong formYour 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 ratioYour 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 SpeculatorsYour Answer Speculators

Select The BlankQuestion UTI was set up in the year ________.Correct Answer 1963Your 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/False

Question 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 the industry.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 the riskiness of the firm.Correct Answer True

True/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 debtinstruments by independent credit ratings agencies.Correct Answer TrueYour Answer True

True/FalseQuestion With the use of diversification you can reduce the risk.Correct Answer TrueYour Answer True

True/FalseQuestion A segment is unattractive if the buyers possess strong or growing bargaining powers.Correct Answer TrueYour Answer True

True/FalseQuestion Risk on a portfolio of assets is always same as the risk on individual asset.Correct Answer FalseYour Answer False

True/FalseQuestion Debt is less riskier source of finance than equity.Correct Answer FalseYour 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 TrueYour Answer True

True/FalseQuestion Penetration of a trend line denotes a bearish phase.Correct Answer FalseYour Answer True

True/FalseQuestion Passive investment managers believe that markets are inefficient and Active

managers believe that markets are efficient.Correct Answer False


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Your Answer False

True/FalseQuestion 2 Currently in India index options are both European and American in nature.Correct Answer FalseYour Answer False

True/FalseQuestion 3 The cost structure remaining the same, better price realisation results in lower grossprofit ratio.Correct Answer FalseYour Answer True

True/FalseQuestion 6 A segment is more attractive when there are actual or potential substitutes for the

product.Correct Answer FalseYour Answer True

True/FalseQuestion 15 Bond ratings by credit rating agencies provide superior and low cost

information to the investor serving as a basis for a proper risk-return trade off by investors.Correct Answer TrueYour 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 FalseYour 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 FalseYour Answer True

True/FalseQuestion 45 Speculators buy or sell futures contract in an attempt to earn a profit.Correct Answer TrueYour 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 TrueTrue/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 TrueYour Answer True


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True/FalseQuestion 18 Quick assets consist of current assets less inventories.Correct Answer TrueYour Answer True

True/False

Question 22 If a rupee weakens against the dollars it has favourable impact for theexporters.Correct Answer TrueYour Answer True

True/FalseQuestion 23 A price rise accompanied by expanding volume denotes a potential trend

reversal.Correct Answer FalseYour 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 TrueYour Answer True

True/FalseQuestion 47 PPF is a good retirement planning and tax saving vehicle.Correct Answer TrueYour Answer True

True/FalseQuestion 2 Bonds and Debentures represent long term debt instruments.Correct Answer FalseYour Answer True

True/FalseQuestion 9 While calculating geometric mean calculation of root is not important.Correct Answer FalseYour Answer False

True/False

Question 13 Certificate of Deposits offers high rate of interest than Treasury Bills.Correct Answer TrueYour Answer True

True/FalseQuestion 21 Sensex is the index of Calcutta Stock Exchange.Correct Answer FalseYour Answer False

True/False

Question 27 Fundamental analysis focuses on predicting the future price of a security andTechnical analysis on estimating the intrinsic value of a security.



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True/FalseQuestion 32 If rupee weakens against the dollar, it has favourable impact for the importers.Correct Answer FalseYour 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 TrueYour Answer True

True/False

Question 42 European style options are more expensive than American style because theyoffer greater flexibility to the buyer.Correct Answer FalseYour Answer True

True/FalseQuestion When you are making an investment you are expecting certain future benefits from

your investment.Correct Answer TrueYour Answer True

True/FalseQuestion The returns of sector specific funds are solely dependant on the performance of the

respective sectors / industries.Correct Answer TrueYour Answer True

True/False

Question The labour conditions do not play an important role in the industry analysis.Correct Answer FalseYour 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 FalseYour Answer True

True/False

Question Because of statutory compulsion, generally Govt. securities are held by banks,financial institutions, insurance companies etc.Correct Answer TrueYour Answer True


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True/FalseQuestion The Asset management company of the mutual fund must have 50% independent

directors.Correct Answer TrueYour Answer True

True/False

Question In case of fixed income securities like debentures, you get the return in the form ofdividend.Correct Answer FalseYour Answer False

True/FalseQuestion Investment in gilt edged securities carry a higher element of risk.Correct Answer FalseYour 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 option can be exercised early.Correct Answer TrueYour Answer True

True/FalseQuestion Prices of stocks usually move in trends.Correct Answer TrueYour Answer True

True/FalseQuestion The sideways trend is essentially a transitional one which separates the two major

market movements.Correct Answer TrueYour Answer False

True/FalseQuestion With the use of diversification you can reduce the risk.Correct Answer TrueYour Answer True

True/FalseQuestion A higher value of current ratio indicates a better short term solvency of the firm.Correct Answer True

Your Answer True

True/FalseQuestion The basic assumption of Technical analysis is that, price discounts everything and it is

the outcome of all forces affecting a stock.


True/FalseQuestion Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed

as well as current.


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True/FalseQuestion The price earning ratio can be estimated for the firms with negative earnings per

share.Correct Answer FalseYour Answer True

True/FalseQuestion A share certificate indicates that the investor owns a certain number of shares.Correct Answer TrueYour 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 TrueYour 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 TransitionalYour 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 FalseYour 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 FalseYour Answer False

Select The BlankQuestion Debentures rated as "A" are judged to offer ________ of timely payment of interest

and principal.

Correct Answer Adequate safetyYour Answer High safety

True/False


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Question A rally that develops on contracting volumes is suspect and warns of a potential trendreversal in priceCorrect Answer TrueYour Answer True

Match The FollowingQuestion Correct Answer Your Answer

Price patternResistance level Head and shoulders formation

Primary trend Last between 1-2 years Last between 1-2 years

Intermediate trend Last between 3 weeks to as long as 6 monthsLast between 3 weeks to as longas 6 months

Short term trend Last 1 to 3-4 weeksLast 1 to 3-4 weeks


MCX Commodity Exchange Commodity Exchange

Sensex BSE Index BSE Index

Nifty NSE Index NSE Index

Lifex ET Index Gold Index


Turnover ratios Help measure the efficiency of utilisation of assets Help measure theefficiency of utilisation of assets

Debt Equity ratio Debt / Equity Debt / Equity

Quick assets Highly liquid assetsHighly liquid assets

Average collection period Similar to debtors turnover Similar to debtors turnover


Development of Dow's principles William Peter Hamilton Charles H.dow

Breadth Indicator Advance/decline line Moving average

Momentum indicator MACD MACD

Trend lines Useful tool in technical analysis Useful tool in technical analysis

Match The FollowingQuestion 26 Correct Answer Your Answer


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Under options contract When you expect prices to fall, then, you take a long position by buyingputs. When you expect prises to rise, then you take a short position by selling puts. Cost of CarrymodelFutures contract

A contract where both the parties are equally responsible Futures contract Options contract

The amount which the buyer of the option has to pay to the option writer to induce him to acceptthe risk associated with the contract. Option price Transaction cost model

NSE&BSE are regulated by Securities Exchange Board of India Securities Exchange Boardof India


Equity shares High risk High risk

Government Securities No risk Low risk

Bank Deposits Low risk No risk

Mutual Funds Average risk Average risk


Risk free investment Actual returns = expected returns Actual returns = expected returns

Risk Volatility in the return Volatility in the return

Variance Measure of dispersion Measure of dispersion

Returns Future benefits from investments Future benefits from investments


H-Model For Valuing Growth Initial growth rate is not constant but linearly falls over time to

reach the stable growth rate Initial growth rate is not constant but linearly falls over time toreach the stable growth rate

The general model Expected dividends and required rate of return Expected dividends in thenext period, cost of equity and expected growth rate in dividends

The Gordons Growth model Expected dividends in the next period, cost of equity andexpected growth rate in dividends Assessment of the growth rate by looking at how much afirm reinvests for future growth and the quality of its reinvestment

The Two-Stage Dividend Discount Model Based on two extraordinary growth phase lasting nyears and stable growth phase that lasts forever Based on two extraordinary growth phase

lasting n years and stable growth phase that lasts forever



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Future value of a series of cash flows occurring at the end of each period. Future value ofannuity Future value of annuity

Value today of a stream of cash flows that occurs in future. Present Value Future Value

Value at a certain future date today of a stream of cash flows that occurs over a period of time.Future ValuePresent Value

Series of equal payments or receipts occurring at regular intervals of time. Present value ofannuity Present value of annuity


Weak form model is also termed as Random walk model Random walk model

Investors are rational Efficient market hypothesis Efficient market hypothesis

Securities current prices fully reflect all historical information Weak form EMH Fama

Framework on efficient capital markets, a review of theory and empirical work Fama Strongform


Technical collaboration of Bharat Forge with SIFCO industries USA 1981 1981

Bharat Forge was incorporated at Mumbai 1961 1961

Shares of 100 each subdivided of Bharat forge 1971 1971

930000 bonus shares issued by Bharat Forge 1976 1976


The yield to maturity is same as the Geometric mean return or the internal rate of returnGeometric mean return or the internal rate of return

Periodic interest payments and principal repayment at the time of maturity Debtinstrument/Bonds Debt instrument/Bonds

The actual yield earned by an investor on a bond Realised yield Realised yield

Present value interest factor of annuities and present value interest factor Yield to maturityYield to maturity

1. Treasury Bills


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1. Foreign Institutional Investors

2. Commercial Papers 32. Government of India

3. Certificate of Deposits3. 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 considering the influence offinancial structure and tax rate

2. Earnings power 1 2. Ratio if net profit to sales

3. Net profit margin 2 3. Measure the profitability of equity funds

4. Gross profit margin 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

3. AMFI 6 3. Net average value

4. NSE4. Association of merchant financers of India

5. Redressal of investor complaints

6. Association of mutual funds of India

Match The Following

Question 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 Following


Ratio used as a measure of relative value PEG ratio Price to book value ratio

The market value of the firms assets divided by the replacement cost of these assets Marketvalue to replacement cost ratio Market value to replacement cost ratio


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Key determiner of revenue multiples Profit marginProfit margin

The market value of the equity in a firm reflects the markets expectations of the firms earningspower and cash flows. Price to book value ratio Price earning ratio


Expiration period for options Nine monthsNine months

The world's first largest options exchange Chicago Board of options exchange New Yorkboard of Options exchange

The most popular pricing options model published in the year 1973 Black Scholes BlackScholes

When the writer gives the buyer of the option the right to sell the underlying asset on or beforethe expiry date Put option Put option

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple AnswerQuestion An options contract allows the investor :-Correct Answer To earn a profit while restricting the downside risk , To use the options for

speculation , Either to honour or walk away from the contractYour Answer Either to honour or walk away from the contract , To earn a profit whilerestricting the downside risk , To use the options for speculation

Multiple Choice Single AnswerQuestion Free Float index considers this to calculate market capitalisation :-Correct Answer Actual no. of shares availableYour Answer Actual no. of shares available

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.


Multiple Choice Single AnswerQuestion Who operates the sinking fund under the sinking fund provision of a firm?Correct Answer The bond trustee or the issuerYour Answer The bond trustee or the issuer

Multiple Choice Single AnswerQuestion In India, the futures on individual securities have been introduced from :-

Correct Answer 2001Your Answer 2001

Select The BlankQuestion ________ measures the profitability of equity funds invested in the firms.


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Correct Answer Return on equityYour Answer Return on equity

True/FalseQuestion Given the accounting standards across firm, price to book value ratios can be

compared across similar firms for signs of under valuation.Correct Answer TrueYour Answer True

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 price range of approximately________%.Correct Answer 5Your Answer 10

Select The BlankQuestion ________ measures the efficiency of credit management.Correct Answer Average collection period

Your Answer Interest coverage ratio

Multiple Choice Multiple AnswerQuestion Major steps involved in construction of a index are :-Correct Answer Selecting a set of scrips to be used , Fixing starting date , Calculating market

capitalisationYour Answer Selecting a set of scrips to be used , Fixing starting date , Fixing ending date

Select The BlankQuestion Risk can be referred as the ________ in the return with respect to the expected return.Correct Answer VolatilityYour Answer Difference

True/FalseQuestion Bearish actions come from a series of declining peaks and troughs.Correct Answer TrueYour Answer True


Question 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 as compliance officer , New contracts won in passenger car componentsYour Answer Secured second largest customer in China , Appointed a Company Secretary toact as compliance officer , New contracts won in passenger car components

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 to the dealings of the exchange shall be :-Correct Answer 0.05Your Answer 0.05

Multiple Choice Single AnswerQuestion The Top-down approach is also known as :-Correct Answer Economy-industry-company approachYour Answer Economy-industry-company approach


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various factorsYour Answer A reflection of the idea that prices move in trends which are determined by

various factors

Multiple Choice Single AnswerQuestion More than half the variation in stock price could be attributed to which factor?Correct Answer Market influenceYour Answer Market influence

Multiple Choice Multiple AnswerQuestion 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 , Standard deviation

Multiple Choice Multiple AnswerQuestion 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 yearYour Answer Change method of rate of depreciation , Change method of stock valuation ,Inflating sales for current year by advancing sales for the following year

Multiple Choice Single AnswerQuestion What are index funds?Correct Answer Investment in securities in the same weightage which replicates a particular


index

Select The BlankQuestion All trades in the futures market are cash settled on a ________ basis.Correct Answer T+1Your Answer T+1

Select The BlankQuestion ________ measures the profitability of operations without considering the influence of

financial structure and tax rate.Correct Answer Earnings powerYour Answer ROE

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Mutual fund schemes could be broadly classified as :-Correct Answer Open ended scheme , Close ended scheme


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Your Answer Open ended scheme , Close ended scheme , Growth schemes

True/FalseQuestion If a rupee weakens against the dollars it has favourable impact for the exporters.Correct Answer TrueYour Answer True

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 the opening priceYour Answer Indicates in black if the closing price is lower than the opening price , Indicatesin white if the closing price is higher than the opening price , Displays the correlation between thehigh and low prices

Select The BlankQuestion ________ identified five forces that determine the intrinsic long run profit

attractiveness of a market or market segment.

Correct Answer Michael PorterYour Answer Harold Koontz


H-Model For Valuing Growth Initial growth rate is not constant but linearly falls over time toreach the stable growth rate Initial growth rate is not constant but linearly falls over time toreach the stable growth rate

The general model Expected dividends and required rate of return Expected dividends andrequired rate of return

The Gordons Growth model Expected dividends in the next period, cost of equity andexpected growth rate in dividends Expected dividends in the next period, cost of equity andexpected growth rate in dividends

The Two-Stage Dividend Discount Model Based on two extraordinary growth phase lasting nyears and stable growth phase that lasts forever Based on two extraordinary growth phaselasting n years and stable growth phase that lasts forever

True/FalseQuestion Because of statutory compulsion, generally Govt. securities are held by banks,

financial institutions, insurance companies etc.Correct Answer TrueYour Answer True

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 growth rate phase

steadily for a specific time period , Sources of high growth are expected to disappear after specific

period of timeYour Answer In high growth rate phase , Expecting to maintain the growth rate phasesteadily for a specific time period , Expecting a established dividend payout ratio

Match The Following


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Weak form model is also termed as Random walk model Random walk model

Investors are rational Efficient market hypothesis Efficient market hypothesis

Securities current prices fully reflect all historical information Weak form EMH Fama

Framework on efficient capital markets, a review of theory and empirical work Fama Strong

form

Multiple Choice Multiple AnswerQuestion What are the features of Kisan Vikas Patra?Correct Answer Term is for 8 years seven months , Provision of premature withdrawal , Interest

rate is 8.4% compounded annuallyYour Answer Term is for 8 years seven months , Provision of premature withdrawal , Taxbenefits under 80 L available

Multiple Choice Multiple AnswerQuestion The underlying assumptions of Technical analysis are that :-Correct Answer Prices move in predictable patterns , Market value is determined by supply &

demand , Investors are emotional than being rationalYour Answer Prices move in predictable patterns , Investors are emotional than beingrational

True/FalseQuestion Sensex is the index of Calcutta Stock Exchange.Correct Answer FalseYour Answer False

Select The BlankQuestion ________ refers to the possibility that there may not be a readily available market for

the particular bond.Correct Answer Liquidity riskYour Answer Liquidity risk

Multiple Choice Single AnswerQuestion What could be a better approach to flow-of -funds analysis?

Correct Answer An examination of liquidity trends in the banking systemYour Answer A study of macro economical changes

True/FalseQuestion There may be convertible clause which gives the debenture holder the option to

convert the debentures into equity shares.Correct Answer TrueYour Answer True

Select The Blank

Question ________are good benchmark to compare the ratios for a firm.Correct Answer Industry averagesYour Answer Trend analysis



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Question An agreement to buy or sell a specified quantity of an asset at a certain future dateor a certain price is know as :-Correct Answer Forward contractYour Answer Futures contract

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 TrusteeYour Answer Brokers

Multiple Choice Single AnswerQuestion The general dividend model is based on the principle of :-Correct Answer Present value of the expected future cash flow

Your Answer Pre

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All Questions PGDBA - Sec Analysis & Portfolio Managementa Pm