Security Analysis and Portfolio Management -25

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank

Question ________ is affected by the leverage decisions of the firm.

Correct Answer Return on equity

Your Answer Return on equity

Select The Blank

Question Debentures rated "BB" refers ________ of timely payment of interest and

principal.

Correct Answer Inadequate safety

Your Answer Inadequate safety

Select The Blank

Question S&P NSE 50 index is known as ________.

Correct Answer NIFTY

Your Answer NIFTY

True/False

Question The risk associated to get the required rate of return on the stock is measure

by market beta.

Correct Answer True

Your Answer True

Match The Following

Question Correct Answer Your Answer

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

Board of India

Under options contract When you expect prices to fall, then, you take a long position by

buying puts. When you expect prises to rise, then you take a short position by selling

puts. Cost of Carry model Options contract

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

contract

The amount which the buyer of the option has to pay to the option writer to induce him to

accept the risk associated with the contract. Option price Option price

True/False

Question A segment is unattractive if the buyers possess strong or growing bargaining

powers.

Correct Answer True

Your Answer True

Multiple Choice Single Answer

Question Debt instruments that have a maturity period of more than one year are called

as :-

Correct Answer Bonds

Your Answer Bonds

Multiple Choice Single Answer

Question 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 Multiple Answer

Question 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 years

Your Answer Safest investment option available , Demat account is required for

investment , Choice of tenure varies from less than 1 year to 30 years

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 ________seeks to safeguard against potential losses on the outstanding

position in futures market.

Correct Answer Initial margin

Your Answer Initial margin

Select The Blank

Question Risk can be referred as the ________ in the return with respect to the

expected return.

Correct Answer Volatility

Your Answer Volatility

Multiple Choice Multiple Answer

Question The return to the bond investor can be measured in terms of :-

Correct Answer Current yield , Yield to maturity , Realised yield

Your Answer Current yield , Yield to maturity , Realised yield

True/False

Question Certificate of Deposits offers high rate of interest than Treasury Bills.

Correct Answer True

Your Answer True

True/False

Question 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 True

Your Answer True

Multiple Choice Multiple Answer

Question 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

average convergence divergence(MACD)

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

Select The Blank

Question An ________ is a series of equal payments or receipts occurring at regular

intervals of time.

Correct Answer Annuity

Your Answer Annuity

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 Single Answer

Question Which market is affected with the improving and higher growth rate in

economy?

Correct Answer Stock market

Your Answer Stock market

Match The Following

Question Correct Answer Your Answer

Ratio used as a measure of relative value PEG ratio PEG ratio

The market value of the firms assets divided by the replacement cost of these assets

Market value to replacement cost ratio Market value to replacement cost ratio

Key determiner of revenue multiples Profit margin Profit margin

The market value of the equity in a firm reflects the markets expectations of the firms

earnings power and cash flows. Price to book value ratio Price earning ratio

Multiple Choice Multiple Answer

Question Features of PSU Bonds are :-

Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer

Your Answer No TDS , Transferable by endorsement , No stamp duty on transfer

True/False

Question If a rupee weakens against the dollars it has favourable impact for the

exporters.

Correct Answer True

Your Answer True

Multiple Choice Single Answer

Question Credit rating companies assign ratings for which of these investments?

Correct Answer Company deposits

Your Answer Company deposits

True/False

Question If rupee weakens against the dollar, it has favourable impact for the

importers.

Correct Answer False

Your Answer False

Multiple Choice Single Answer

Question What is the objective of Portfolio management?

Correct Answer To Minimize risk and maximize return

Your Answer To Minimize risk and maximize return

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 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

fee Your 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

fee

Select The Blank

Question ________ is the value at a certain future date today of a stream of cash flows

that occurs over a period of time.

Correct Answer Future value

Your Answer Future value

True/False

Question The basic assumption of Technical analysis is that, price discounts everything

and it is the outcome of all forces affecting a stock.

Correct Answer True

Your Answer True