Security Analysis And Portfolio Management - 10

Multiple Choice Single Answer
Question 4 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
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Question 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 equity
Your Answer Price earning ratio X return on equity
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Question 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 firms
Your Answer Consistent stable firms, but not appropriate for high growth firms
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Question 10 Efficient market hypothesis is based on the assumption that
market comprises of :-
Correct Answer Rational Investors
Your Answer Heterogeneous investors
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Question 11 Co variance of asset with market portfolio 85 and variance of
market portfolio is 100 then beta is :-
Correct Answer 0.0085
Your Answer 0.0085
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Question 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/-
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Question 18 What does flow-of fund analysis help in understanding?
Correct Answer Availability of money for the stock market
Your Answer Financial strength of various companies
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Question 23 A security represent evidence of :-
Correct Answer A property right
Your Answer Safety
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Question 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/-
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Question 27 In India futures on individual securities have been introduced by
:-
Correct Answer BSE & NSE
Your Answer BSE & NSE
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Question 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 rates
Your Answer New bonds at a lower rates
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Question 2 When was the first mutual fund set up?
Correct Answer 1963
Your Answer 1963
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Question 7 How can transition phases be projected?
Correct Answer Transition phases are signalled by clearly definable price
patterns
Your Answer By working out the resistance and support levels
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Question 8 If the price of a share at the beginning of the year was Rs.50/-,
dividend received during the year was Rs.10/-per share and the
price at the end is Rs.60/-.What is the rate of return?
Correct Answer 0.4
Your Answer 0.2
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Question 27 Investing in this avenue enable you participate in the equity
market indirectly :-
Correct Answer Mutual Funds
Your Answer Mutual Funds
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Question 29 In any Economy, bridge is created between savers and who
need the funds by this system :-
Correct Answer Financial
Your Answer Economic
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Question 30 Agriculture account for how much portion of the economy?
Correct Answer Quarter
Your Answer Three fourths
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Question 37 Who operates the sinking fund under the sinking fund provision
of a firm?
Correct Answer The bond trustee or the issuer
Your Answer The bond trustee or the issuer
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Question 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 prices
Your Answer As a barometer of business conditions rather than a basis for
forecasting stock prices
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Question 42 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
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Question 3 What is the limitation of Flow-of funds analysis method?
Correct Answer Cannot give indication of the inclination of market participants to
purchase stock
Your Answer Cannot give indication of the inclination of market participants to
purchase stock
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Question 6 Sentiment indicators are based on what assumption
Correct Answer Different groups of investors are consistent in their actions at
major market turning points
Your Answer Different groups of investors are consistent in their actions at
major market turning points
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Question 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 contract
Your Answer Futures contract
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Question 25 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
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Question 29 What are index funds?
Correct Answer Investment in securities in the same weightage which replicates
a particular index
Your Answer Investment in securities in the same weightage which replicates
a particular index
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Question 38 What are the assumptions of the Dow theory?
Correct Answer Majority of stocks follow the underlying trend of the market most
of the time
Your Answer Majority of stocks follow the underlying trend of the market most
of the time
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Question 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/-
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Question 41 How many measures of money supply are used commonly?
Correct Answer 2
Your Answer 2
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Question 43 Under which simple model the value of the stock is the present
value of expected dividends on it :-
Correct Answer The Dividend discount model
Your Answer The Dividend growth model
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Question 46 Avenues can be broadly classified into the which type of assets?
Correct Answer Financial and Real
Your Answer Tangible and Intangible
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Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-
Correct Answer Technical analysis
Your Answer Fundamental Analysis
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Question What is the objective of an income fund?
Correct Answer To provide regular and steady income
Your Answer To provide guaranteed returns to investors
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Question What does lower level of unemployment indicates?
Correct Answer Positive economic conditions
Your 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%
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Question 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/-
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Question Which market is affected with the improving and higher growth
rate in economy?
Correct Answer Stock market
Your Answer Stock market
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Question 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
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Question What is Gross National Product ?
Correct Answer Gross income generated from within the country
Your Answer Gross income generated from within the country
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Question The greater the deviation of the actual returns from the actual
return :-
Correct Answer Greater the variance
Your Answer Greater the variance
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Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
Your Answer Includes indirect taxes
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Question More than half the variation in stock price could be attributed to
which factor?
Correct Answer Market influence
Your Answer Market influence
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Question Free Float index considers this to calculate market capitalisation
:-
Correct Answer Actual no. of shares available
Your Answer Actual no. of shares available
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Question The Top-down approach is also known as :-
Correct Answer Economy-industry-company approach
Your Answer Economy-industry-company approach
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Question 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
Your Answer A reflection of the idea that prices move in trends which are
determined by various factors
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Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicates
a particular index
Your Answer Investment in securities in the same weightage which replicates
a particular index
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Question What could be a better approach to flow-of -funds analysis?
Correct Answer An examination of liquidity trends in the banking system
Your Answer A study of macro economical changes
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Question 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
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Question What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycle
Your Answer Trends which interrupt the course of the intermediate cycle
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Question What is the aim of growth funds?
Correct Answer To provide capital appreciation over medium to long term
Your Answer To provide capital appreciation over medium to long term
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Question This is not a stock exchange :-
Correct Answer MCX
Your Answer MCX
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Question 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 risk
Your Answer Normal returns for their given level of risk
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Question 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/-
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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
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Question Financial assets can be classified as :-
Correct Answer Marketable and non-marketable
Your Answer Marketable and non-marketable
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Question 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/-
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Question What is Flow-of-funds analysis?
Correct Answer Consists of an analysis of the financial positions of various
investor groups
Your Answer Consists of an analysis of the financial positions of various
investor groups
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Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7
years. He wanted to know 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/-
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Question What do you understand by term pioneering stage in the industry
life cycle analysis?
Correct Answer Slow sales growth product recently introduced
Your Answer Slow sales growth product recently introduced
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Question Till 1990's secular Indian economy's inflation rate has been of
what percentage?
Correct Answer 0.07
Your Answer 0.07
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Question Credit rating companies assign ratings for which of these
investments?
Correct Answer Company deposits
Your Answer Company deposits
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Question If index future is taken under futures contract, the underlying
asset would be :-
Correct Answer Stock index
Your Answer Stock index
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Question What is balance of payments?
Correct Answer Credit and debit transactions of a country
Your Answer Credit and debit transactions of a company
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Question Profits are non existent in pioneering stage because of :-
Correct Answer Heavy expenses on product introduction
Your Answer Heavy expenses on product introduction
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Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity
Your Answer Increased level of housing construction activity
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Question What does a transitional phase indicate?
Correct Answer It marks the turning point between a rising and falling market
Your Answer It marks the turning point between a rising and falling market
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Question Dividend discount model is considered as the simplest model for
:-
Correct Answer Valuing Equity
Your Answer Valuing Equity