Security Analysis And Portfolio Management - 13

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question With the introduction of on-line trading by NSE and BSE, the role of regional
stock exchanges have diminished.
Correct Answer True
Your Answer True
Select The Blank
Question The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Your Answer Past and present
Select The Blank
Question All trades in the futures market are cash settled on a ________ basis.
Correct Answer T+1
Your Answer T+1
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
Multiple Choice Single Answer
Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
Your Answer GDP at market cost
Select The Blank
Question ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Answer Initial margin
Your Answer Next day settlement
Multiple Choice Single Answer
Question 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 firms
Your Answer Stable firms, but not appropriate for high growth firms
Select The Blank
Question Under futures market ________ process provides for collection of losses that
have already occurred.
Correct Answer The daily settlement
Your Answer The next day settlement
Select The Blank
Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Your Answer NIFTY
Multiple Choice Single Answer
Question What does a Balanced fund seek to achieve?
Correct Answer Growth and regular income
Your Answer Growth and regular income
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
True/False
Question Fundamental analysis focuses on predicting the future price of a security and
Technical analysis on estimating the intrinsic value of a security.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
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
components
Your 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 Answer
Question 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
Your Answer H- Model for valuing growth , H-Two stage model for growth , H-Model unlike
the classic two stage model
True/False
Question There may be convertible clause which gives the debenture holder the option
to convert the debentures into equity shares.
Correct Answer True
Your Answer True
True/False
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The issuing firm enjoys the flexibility to call the bonds if the interest rates fall
significantly and it can issue :-
Correct Answer New bonds at a lower rates
Your Answer New bonds at par
Select The Blank
Question Debentures rated "BB" refers ________ of timely payment of interest and
principal.
Correct Answer Inadequate safety
Your Answer Inadequate safety
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 True
Match The Following
Question Correct Answer Your Answer
Weak form model is also
termed as
Random walk model Efficient market hypothesis
Investors are rational Efficient market hypothesis Passive managers
Securities current prices fully
reflect all historical information
Weak form EMH Random walk model
Framework on efficient capital
markets, a review of theory
and empirical work
Fama Fama
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question What are the warning indicators to be considered before analysing the
financial statements of a firm ?
Correct Answer Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting rules changed frequently
Your Answer Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting rules changed frequently
Select The Blank
Question ________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.
Correct Answer Michael Porter
Your Answer Philip Kotler
Multiple Choice Multiple Answer
Question What were the Chairman's comments during the speech in the Annual report
of the FY 2002-03?
Correct Answer 146% growth in exports , Highest pre and post tax profits , Best year in the
history of the company
Your Answer Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Select The Blank
Question The regulations of SEBI with respect to mutual funds were fully revised in the
year ________.
Correct Answer 1996
Your Answer 1990
Multiple Choice Single Answer
Question What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycle
Your Answer They are counter-cyclical trends within the confines of a primary trend
Select The Blank
Question Dow Jones transportation average was previously known as ________.
Correct Answer Rail average
Your Answer Freight average
Select The Blank
Question Measures of ________ tells us what we can expect a typical or middle data
point of a distribution to be.
Correct Answer Central tendency
Your Answer Central tendency
Multiple Choice Multiple Answer
Question 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 price
Your Answer Indicates in black if the closing price is lower than the opening price , Displays
the correlation between the high and low prices
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Growth of income 40-60 % debt, 40-60 %
equities
100 % in mutual funds
Current income Short term debt portfolio Fixed - income portfolio
Stability of principal Fixed - income portfolio 100% debt
Appreciation 75-100 % in equities 75-100 % in equities
Multiple Choice Multiple Answer
Question 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 contract
Your Answer To earn a profit while restricting the downside risk , To use the options for
speculation , Either to honour or walk away from the contract
Multiple Choice Multiple Answer
Question 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 , Return on equity
True/False
Question The ratios between profits and investments are called rate of return
measures.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question Where are gilt funds invested?
Correct Answer Government securities
Your Answer Government securities
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 Interest is taxable under 80 L , Rate of interest is 8% , Partial withdrawal is
available from 7th year
Multiple Choice Single Answer
Question What levels if increased will have unfavourable impact on the stock market?
Correct Answer Higher levels of taxation
Your Answer Higher levels of unemployment
Select The Blank
Question The margining system is future contract is based on ________
recommendations.
Correct Answer J R verma committee
Your Answer Fama committee
Multiple Choice Single Answer
Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Your Answer 0.05
Multiple Choice Single Answer
Question Capital expenditure -depreciation +change in working capital -(new debt
issued - debt repaid) =
Correct Answer Equity reinvested in business
Your Answer Price earning ratio
Multiple Choice Single Answer
Question The objective of fundamental analysis for a security in a market is to identify
either it is :-
Correct Answer Under priced and over priced
Your Answer Increased price and decreased price
True/False
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Your Answer True
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
Multiple Choice Single Answer
Question If the price of a share at the beginning of the year was Rs.70/-, dividend
received during the year was Rs.5/-per share and the price at the end is
Rs.79/-. What is the rate of return?
Correct Answer 0.2
Your Answer 0.25
True/False
Question A segment is more attractive when there are actual or potential substitutes for
the product.
Correct Answer True
Your Answer False
Multiple Choice Single Answer
Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicates a particular
index
Your Answer Investment in gilt edged securities which is similar to a particular index
Multiple Choice Multiple Answer
Question What are the features of short-term trends?
Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the
intermediate cycle , They are usually influenced by random news events
Your Answer Interest is taxable under 80 L , They last from 1 to 3 or 4 weeks , They
interrupt the course of the intermediate cycle