SCDL Papers: Security Analysis & Portfolio Management SCDL Exam - 30

Multiple Choice Single Answer
Question	What do you understand by money supply?
Correct Answer	Total money in existence at any given time
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
Multiple Choice Single Answer
Question	What is net national product also known as?
Correct Answer	National income
Select The Blank
Question	Risk can be referred as the ________ in the return with respect to the expected return.
Correct Answer	Volatility
Multiple Choice Single Answer
Question	What is balance of payments?
Correct Answer	Credit and debit transactions of a country
True/False
Question	The returns of sector specific funds are solely dependant on the performance of the respective sectors / industries.
Correct Answer	TRUE
Multiple Choice Multiple Answer
Question	The security market is the market for :-
Correct Answer	Equity , Debt , Derivatives
Select The Blank
Question	Under the options contract ________ gives the holder the right, but not the obligation to buy or sell the underlying instrument only on the expiry date.
Correct Answer	European option
Select The Blank
Question	________ measures the efficiency of credit management.
Correct Answer	Average collection period
Multiple Choice Multiple Answer
Question	Which are the different styles of displaying charts?
Correct Answer	Bar and line charts , Candle stick charts , Point and figure charts
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
Multiple Choice Single Answer
Question	A security represent evidence of :-
Correct Answer	A property right
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
True/False
Question	With the use of diversification you can reduce the risk.
Correct Answer	TRUE
Multiple Choice Multiple Answer
Question	Explain what are leverage ratios ?
Correct Answer	Help in assessing the risk arising using the debt capital , Debt equity ratio and interest coverage ratio and DSCR are important leverage ratios , Debt is riskier source of finance as it entails fixed outgo of periodic payments
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
Select The Blank
Question	UTI was set up in the year ________.
Correct Answer	1963
Select The Blank
Question	Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer	Current ratio
True/False
Question	While calculating geometric mean calculation of root is not important.
Correct Answer	FALSE
Select The Blank
Question	________ measures the profitability of operations without considering the influence of financial structure and tax rate.
Correct Answer	Earnings power
True/False
Question	A price rise accompanied by expanding volume denotes a potential trend reversal.
Correct Answer	FALSE
Multiple Choice Multiple Answer
Question	Features of PSU Bonds are :-
Correct Answer	No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Single Answer
Question	The greater the deviation of the actual returns from the actual return :-
Correct Answer	Greater the variance
True/False
Question	The price earning ratio is an increasing function of the payout ratio and the growth rate and a decreasing function of the riskiness of the firm.
Correct Answer	TRUE
Select The Blank
Question	Security analysis serves the investment decision maker by identifying ________securities.
Correct Answer	Under priced
Multiple Choice Single Answer
Question	What are intermediate trends?
Correct Answer	They are counter-cyclical trends within the confines of a primary trend
Select The Blank
Question	________involves a simultaneous sale and repurchase agreement.
Correct Answer	Repos
Multiple Choice Single Answer
Question	In any Economy, bridge is created between savers and who need the funds by this system :-
Correct Answer	Financial
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
Multiple Choice Multiple Answer
Question	What are the important macro economic indicators?
Correct Answer	GNP growth rate , Price Conditions , Monsoons
Multiple Choice Single Answer
Question	If index future is taken under futures contract, the underlying asset would be :-
Correct Answer	Stock index
Multiple Choice Single Answer
Question	What could be a better approach to flow-of -funds analysis?
Correct Answer	An examination of liquidity trends in the banking system
True/False
Question	The Asset management company of the mutual fund must have 50% independent directors.
Correct Answer	TRUE
True/False
Question	A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer	TRUE
Multiple Choice Single Answer
Question	Investment is a risk free investment when :-
Correct Answer	Actual return is = expected return
Multiple Choice Single Answer
Question	The price of the index futures contract is defined as :-
Correct Answer	Future price = Spot price + Carry cost
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	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
Multiple Choice Single Answer
Question	What does flow-of fund analysis help in understanding?
Correct Answer	Availability of money for the stock market
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 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)
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	Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer	Inadequate safety
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
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 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
True/False
Question	Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer	FALSE

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