Security Analysis & Portfolio Management SCDL Solved Exam Paper 59

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

 

Thanks To: Deepak Goyal

 

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question	In case of assured returns, A scheme cannot promise returns unless such returns are fully guaranteed by sponsor or AMC.
Answer	TRUE
Multiple Choice Multiple Answer
Question	What are the features of short-term trends?
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	Who operates the sinking fund under the sinking fund provision of a firm?
Answer	The bond trustee or the issuer
True/False
Question	Certificate of Deposits offers high rate of interest than Treasury Bills.
Answer	TRUE
Multiple Choice Multiple Answer
Question	What developments had taken place during the year 2000 in case of Bharat Forge Ltd.?
Answer	Demerger of investment division and windmills , Nominee director of UTI resigned and ceased to be the director - nomination withdrawn by UTI
True/False
Question	While calculating geometric mean calculation of root is not important.
Answer	FALSE
Multiple Choice Single Answer
Question	The objective of fundamental analysis for a security in a market is to identify either it is :-
Answer	Under priced and over priced
True/False
Question	A higher value of current ratio indicates a better short term solvency of the firm.
Answer	TRUE
True/False
Question	A rise in interest rates will push the market prises of outstanding bonds where as a fall in interest rates will depress the market prices down.
Answer	FALSE
Select The Blank
Question	The ________ phase carries a lot of significance because it marks the turning point between a rising and a falling market.
Answer	Transitional
Match The Following
Question	Answer
Equity shares	High risk
Government Securities	No risk
Bank Deposits	Low risk
Mutual Funds	Average risk
Select The Blank
Question	Secondary reactions occurs because of ________ which arise in the market as a result of over optimism and over pessimism.
Answer	Technical distortions
True/False
Question	Bearish actions come from a series of declining peaks and troughs.
Answer	TRUE
Multiple Choice Single Answer
Question	What is an open ended fund or scheme?
Answer	Which is available for subscription and repurchase on a continuous basis
Match The Following
Question	Answer
Turnover ratios	Help measure the efficiency of utilisation of assets
Debt Equity ratio	Debt / Equity
Quick assets	Highly liquid assets
Average collection period	Similar to debtors turnover
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 :-
Answer	Intrinsic value of a security
Select The Blank
Question	Dow Jones transportation average was previously known as ________.
Answer	Rail average
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.
Answer	TRUE
Multiple Choice Multiple Answer
Question	The commonly used charts to measure the movements in price under the technical analysis are :-
Answer	Line Charts , Bar Charts , Point and Figure Charts
Multiple Choice Multiple Answer
Question	What are the important macro economic indicators?
Answer	GNP growth rate , Price Conditions , Monsoons
Select The Blank
Question	A security is said to be ________ if its current market price is over its intrinsic value.
Answer	Over priced
Multiple Choice Single Answer
Question	What do you understand by the term redemption price?
Answer	Price or NAV at which a scheme purchases its units
Select The Blank
Question	________ is due to the fact that a borrower may not pay interest and/or principal on time.
Answer	Default risk
Multiple Choice Multiple Answer
Question	What are the features of Kisan Vikas Patra?
Answer	Term is for 8 years seven months , Provision of premature withdrawal , Interest rate is 8.4% compounded annually
Multiple Choice Single Answer
Question	What could be a better approach to flow-of -funds analysis?
Answer	An examination of liquidity trends in the banking system
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.
Answer	FALSE
Multiple Choice Single Answer
Question	What is a technical approach to investment?
Answer	A reflection of the idea that prices move in trends which are determined by various factors
Select The Blank
Question	The 8% taxable savings bonds are repayable after ________ years.
Answer	6
Select The Blank
Question	Acid test ratio is more stringent measure of liquidity compared to the ________.
Answer	Current ratio
Select The Blank
Question	An ________ is a series of equal payments or receipts occurring at regular intervals of time.
Answer	Annuity
Select The Blank
Question	When a debenture is sold to the general public a ________ is appointed.
Answer	Trustee
True/False
Question	The basic inputs of the general model are expected dividends and required rate of return on stock.
Answer	TRUE
Multiple Choice Multiple Answer
Question	Gilt Edged Securities are :-
Answer	Central Govt , State Govt. , Quasi-Govt
Multiple Choice Single Answer
Question	Dividend discount model is considered as the simplest model for :-
Answer	Valuing Equity
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.
Answer	TRUE
Select The Blank
Question	Mutual fund is to be registered with ________ before raising funds from public.
Answer	SEBI
Multiple Choice Multiple Answer
Question	Formula for calculation of portfolio variance requires :-
Answer	Expected return on portfolio , Expected return on assets , Weight of asset in the portfolio
Multiple Choice Single Answer
Question	What is the minimum investment amount in G-secs?
Answer	1000
Multiple Choice Multiple Answer
Question	Which are the different styles of displaying charts?
Answer	Bar and line charts , Candle stick charts , Point and figure charts
Multiple Choice Multiple Answer
Question	Characteristics of Preference shares are :-
Answer	Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in 7 to 12 years
Select The Blank
Question	The ________ phase is characterized by resistance area and support level.
Answer	Transition
Select The Blank
Question	In a heads and shoulders formation the deeper the pattern, the greater is the ________ significance once it is completed
Answer	Bearish
Multiple Choice Multiple Answer
Question	Explain what are leverage ratios ?
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
True/False
Question	Passive investment managers believe that markets are inefficient and Active managers believe that markets are efficient.
Answer	FALSE
Select The Blank
Question	S&P NSE 50 index is known as ________.
Answer	NIFTY
Multiple Choice Single Answer
Question	Which of the following is a money market fund?
Answer	Commercial paper
Multiple Choice Single Answer
Question	Capital expenditure -depreciation +change in working capital -(new debt issued - debt repaid) =
Answer	Equity reinvested in business

 

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