Monday, February 4, 2008

Security Analysis & Portfolio Management - 1

LIST OF ATTEMPTED QUESTIONS AND ANSWERS



Select The Blank
Question
________involves a simultaneous sale and repurchase agreement.
Correct Answer
Repos
Your Answer
Repos

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 the issuer at a contracted value
Your Answer
Capital gain/loss arising out of the sale of the bond , Redemption of the bond of the issuer at a contracted value , Interest payments at coupon rates

Select The Blank
Question
________ 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
Market value to replacement cost ratio

True/False
Question
Bearish actions come from a series of declining peaks and troughs.
Correct Answer
True
Your Answer
True

Select The Blank
Question
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 obligation
Your Answer
Right but not obligation

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

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

True/False
Question
When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer
Question
In estimating the growth of a firm, analyst's forecasts have an advantage over historical data-based models because :-
Correct Answer
They incorporate more recent information about the firm and inputs future prospects
Your Answer
They incorporate more recent information about the firm and inputs future prospects

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

True/False
Question
A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ take long or short positions only with the intention of making profits by getting out of the market when conditions favor them.
Correct Answer
Speculators
Your Answer
Speculators

Multiple Choice Multiple Answer
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 rational
Your Answer
Prices move in predictable patterns , Market value is determined by supply & demand , Investors are emotional than being rational

Multiple Choice Multiple Answer
Question
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 industrial Average , Dow Jones Transportation Average

Multiple Choice Multiple Answer
Question
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 annually
Your Answer
Term is for 8 years seven months , Provision of premature withdrawal , Interest rate is 8.4% compounded annually

Select The Blank
Question
________ absorbs the excess demand or supply generated by hedgers and assume the risk of price fluctuations.
Correct Answer
Speculators
Your Answer
Speculators

Multiple Choice Multiple Answer
Question
What were the objectives for 2002-03 the chairman of Bharat forge had emphasised on in the annual report for 2001 - 02
Correct 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

True/False
Question
The price earning ratio can be estimated for the firms with negative earnings per share.
Correct Answer
False
Your Answer
False

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 Multiple Answer
Question
Formula for calculation of portfolio variance requires :-
Correct Answer
Expected return on portfolio , Expected return on assets , Weight of asset in the portfolio
Your Answer
Expected return on portfolio , Expected return on assets , Weight of asset in the portfolio

Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer
Over priced
Your Answer
Over priced

Multiple Choice Single Answer
Question
What are sector specific funds?
Correct Answer
Scheme which invest in certain sectors
Your Answer
Scheme which invest in certain sectors

Multiple Choice Single Answer
Question
In India we have index futures contracts based on :-
Correct Answer
S&P CNX Nifty and the BSE sensex
Your Answer
S&P CNX Nifty and the BSE sensex

Multiple Choice Multiple Answer
Question
The Peer group of Bharat Forge consists of which all companies?
Correct Answer
Am forge industries , Kalyani Forge , EL Forge
Your Answer
Am forge industries , Kalyani Forge , EL Forge

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

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

Multiple Choice Single Answer
Question
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

Select The Blank
Question
When a debenture is sold to the general public a ________ is appointed.
Correct Answer
Trustee
Your Answer
Trustee

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
0.21

True/False
Question
PPF is a good retirement planning and tax saving vehicle.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer
5
Your Answer
5

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

True/False
Question
In case of fixed income securities like debentures, you get the return in the form of dividend.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer
Question
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 strength
Your 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 strength

True/False
Question
Policies of the government and the attitude of the government towards the industry have a considerable influence on the industry.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
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 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

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

True/False
Question
Sensex is the index of Calcutta Stock Exchange.
Correct Answer
False
Your Answer
False

Select The Blank
Question
Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer
Current ratio
Your Answer
Current ratio

Multiple Choice Multiple Answer
Question
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
Your Answer
It connects closing prices from one period to the next , It is ideal for securities with no high or low price data

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

Select The Blank
Question
________ of companies may open at higher or lower price than the issue price.
Correct Answer
IPO's
Your Answer
IPO's

Match The Following
Question
Correct Answer
Your Answer
Future value of a series of cash flows occurring at the end of each period.
Future value of annuity
Future value of annuity
Value today of a stream of cash flows that occurs in future.
Present Value
Present Value
Value at a certain future date today of a stream of cash flows that occurs over a period of time.
Future Value
Future Value
Series of equal payments or receipts occurring at regular intervals of time.
Present value of annuity
Present value of annuity

Match The Following
Question
Correct Answer
Your Answer
Development of Dow's principles
William Peter Hamilton
William Peter Hamilton
Breadth Indicator
Advance/decline line
Advance/decline line
Momentum indicator
MACD
MACD
Trend lines
Useful tool in technical analysis
Useful tool in technical analysis

True/False
Question
Post office monthly schemes have a 10 year tenor.
Correct Answer
False
Your Answer
False

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
Stable firms

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