Security Analysis & Portfolio Management SCDL Solved Exam Paper 42

This solved paper of SCDL Security Analysis & Portfolio Management of SCDL Pune has been contributed by Deepak Goyal

 Thanks To: Deepak Goal

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
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
Select The Blank
Question	Secondary reactions occurs because of ________ which arise in the market as a result of over optimism and over pessimism.
Correct Answer	Technical distortions
Select The Blank
Question	In a heads and shoulders formation the deeper the pattern, the greater is the ________ significance once it is completed
Correct Answer	Bearish
True/False
Question	Debt is less riskier source of finance than equity.
Correct Answer	FALSE
True/False
Question	The arithmetic mean is a set of observations is calculated by finding the sum values and dividing by the number of observations.
Correct Answer	TRUE
Multiple Choice Single Answer
Question	What does flow-of fund analysis help in understanding?
Correct Answer	Availability of money for the stock market
True/False
Question	The normal relationship is for the volume to expand on rallies and contract on declines.
Correct Answer	TRUE
Multiple Choice Multiple Answer
Question	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 fundamentals
Multiple Choice Multiple Answer
Question	The security analysis process will achieve :-
Correct Answer	True picture of a company , Normal earning power , Projection of future profitability
Multiple Choice Single Answer
Question	The general dividend model is based on the principle of :-
Correct Answer	Present value of the expected future cash flow
Multiple Choice Single Answer
Question	The index futures symbols of BSE are represented as :-
Correct Answer	BSX JAN 2005 (January contract)
Multiple Choice Multiple Answer
Question	What are the features of bank deposits?
Correct Answer	Interest is presently around 6% , Benefits under section 80 L , Banks offer cheque facility for investors making it convenient to withdraw
True/False
Question	Risk on a portfolio of assets is always same as the risk on individual asset.
Correct Answer	FALSE
Select The Blank
Question	UTI was set up in the year ________.
Correct Answer	1963
Multiple Choice Multiple Answer
Question	Major steps involved in construction of a index are :-
Correct Answer	Selecting a set of scrips to be used , Fixing starting date , Calculating market capitalisation
Select The Blank
Question	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
Multiple Choice Multiple Answer
Question	The return to the bond investor can be measured in terms of :-
Correct Answer	Realised yield , Current yield , Yield to maturity
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
Select The Blank
Question	Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer	Inadequate safety
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
Multiple Choice Single Answer
Question	When the firm is not raising equity by issuing new shares, the growth rate in net profits is given by :-
Correct Answer	Retention ratio X return on equity
Select The Blank
Question	A ________ rally for stocks generally takes place because of an improved outlook for business conditions over what was anticipated.
Correct Answer	Bear market
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
Multiple Choice Multiple Answer
Question	What are the SEBI regulations with respect to mutual funds?
Correct Answer	Mutual funds to be registered with SEBI before the launching any scheme , 2/3rds of the directors of the trustee company must be independent , An AMC approved by SEBI manages the fund
Multiple Choice Single Answer
Question	The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Correct Answer	Interest rates are falling
Multiple Choice Single Answer
Question	We can compare the price earning ratio of a market to its historical average to make judgements about, whether market is :-
Correct Answer	Under valued or over valued
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
Multiple Choice Single Answer
Question	A security analysis is done :-
Correct Answer	For decision making for investments
Multiple Choice Multiple Answer
Question	Which ratios are commonly used?
Correct Answer	Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
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
Match The Following
Question	Correct Answer
Growth of income	40-60 % debt, 40-60 % equities
Current income	Short term debt portfolio
Stability of principal	Fixed - income portfolio
Appreciation	75-100 % in equities

Note: Please tally the answers and verify them from SCDL textbooks as all answers might not be correct.