Documente Academic
Documente Profesional
Documente Cultură
I DE NTIAL
CONF
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
True/False
Question Bond ratings by credit rating agencies provide superior and low
cost information to the investor serving as a basis for a proper
risk-return trade off by investors.
Correct Answer True
Confidential
Your Answer True
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
Your 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
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Bar and line charts , Candle stick charts , Point and figure charts
True/False
Question A higher value of current ratio indicates a better short term
solvency of the firm.
Correct Answer True
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
Your Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
Confidential
Your Answer 4% and 5%
True/False
Question A rally that develops on contracting volumes is suspect and
warns of a potential trend reversal in price
Correct Answer True
Confidential
Question What is the objective of Portfolio management?
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
Your Answer 6
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
Your 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
Confidential
Question Current liabilities include all liabilities due in the next ________
and provisions.
Correct Answer 12 months
True/False
Question Balance of payments surplus augments foreign reserves of the
country and have a favourable impact on he exchange rate.
Correct Answer True
True/False
Question The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Correct Answer False
Confidential
Your Answer Market value to replacement cost ratio
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Confidential
Your Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
True/False
Confidential
Question Equity shares is a high return high risk instrument.
True/False
Question The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.
Correct Answer True
True/False
Question Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
Confidential
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
Total Sets 11
SET 1
Under options contract When you expect When you expect prises to rise, then you take
prices to fall, then, you take a long position a short position by selling puts.
by buying puts.
A contract where both the parties are equally Futures contract
responsible
The amount which the buyer of the option Option price
has to pay to the option writer to induce him
to accept the risk associated with the
contract.
NSE&BSE are regulated by Securities Exchange Board of India
H-Model For Valuing Growth Initial growth rate is not constant but linearly
falls over time to reach the stable growth rate
Confidential
The general model Expected dividends and required rate of
return
The Gordons Growth model Expected dividends in the next period, cost
of equity and expected growth rate in
dividends
The Two-Stage Dividend Discount Model Based on two extraordinary growth phase
lasting n years and stable growth phase that
lasts forever
Confidential
Stability of principal Fixed - income portfolio
appreciation 75-100 % in equities
The yield to maturity is same as the Geometric mean return or the internal rate of
return
Periodic interest payments and principal Debt instrument/Bonds
repayment at the time of maturity
The actual yield earned by an investor on a Realised yield
bond
Present value interest factor of annuities and Yield to maturity
present value interest factor
Confidential
SET 1
Question Measures of ________ tells us what we can expect a typical or middle data point of a
distribution to be.
Correct Answer Central tendency
Question Capital expenditure -depreciation +change in working capital -(new debt issued - debt
repaid) =
Correct Answer Equity reinvested in business
Question What were the objectives for 2002-03 the chairman of Bharat forge had emphasised on
in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value added products ,
Continue reducing costs
Question What do you understand by term pioneering stage in the industry life cycle analysis?
Correct Answer Slow sales growth product recently introduced
Question ________ measures the profitability of operations without considering the influence of
financial structure and tax rate.
Correct Answer Earnings power
Question The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer 5
Question The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer Early 90's
Question 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/-
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Question ________ is due to the fact that a borrower may not pay interest and/or principal on
time.
Correct Answer Default risk
Confidential
Question What do you understand by the term redemption price?
Correct Answer Price or NAV at which a scheme purchases its units
Question Investment decisions can be viewed as an integrated process to which security analysis
makes its unique contribution.
Correct Answer True
Question Secondary reactions occurs because of ________ which arise in the market as a result of
over optimism and over pessimism.
Correct Answer Technical distortions
Question What is the percentage of variation the market and industry influence account for?
Correct Answer 2/3rd
Question With the use of diversification you can reduce the risk.
Correct Answer True
Question Till 1990's secular Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
Question 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/-
Question The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,
Buying bonds issued to banks and financial institutions
Question A mutual fund is required to dispatch the dividend warrants to the unit holders within
thirty days of the declaration of dividend.
Correct Answer True
Question Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as
well as current.
Correct Answer True
Question A pattern which does not result in reversal of a trend but reaffirmation of the underlying
trend is called ________.
Correct Answer Consolidation pattern
Confidential
Question The risk associated to get the required rate of return on the stock is measure by market
beta.
Correct Answer True
Question Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer Current ratio
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
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Question In case of fixed income securities like debentures, you get the return in the form of
dividend.
Correct Answer False
Question The Peer group of Bharat Forge consists of which all companies?
Correct Answer Am forge industries , Kalyani Forge , EL Forge
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
Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%
Question What were the Chairman's comments during the speech in the Annual report of the FY
2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Confidential
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
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/-
Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary to
act as compliance officer , New contracts won in passenger car components
SET 2
Question 1 :-
Correct Answer Dividends , Interests , Capital appreciation
Question 2 Currently in India index options are both European and American in nature.
Correct Answer False
Question 3 The cost structure remaining the same, better price realisation results in lower gross
profit ratio.
Correct Answer False
Question 5 What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary to
act as compliance officer , New contracts won in passenger car components
Question 6 A segment is more attractive when there are actual or potential substitutes for the
product.
Correct Answer False
Question 7 The regulations of SEBI with respect to mutual funds were fully revised in the year
________.
Correct Answer 1996
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
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
Question 10 Efficient market hypothesis is based on the assumption that market comprises
of :-
Confidential
Correct Answer Rational Investors
Question 11 Co variance of asset with market portfolio 85 and variance of market portfolio
is 100 then beta is :-
Correct Answer 0.0085
Question 12 The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Question 15 Bond ratings by credit rating agencies provide superior and low cost
information to the investor serving as a basis for a proper risk-return trade off by investors.
Correct Answer True
Question 20 ________ refers to the possibility that there may not be a readily available
market for the particular bond.
Correct Answer Liquidity risk
Question 21 The govt allowed public sector banks and institutions in mutual funds in
________.
Correct Answer Early 90's
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/-
Confidential
Question 25 The value of the stock in the ________ model is sensitive to the estimates of
the growth rate.
Correct Answer The Gordons dividend growth
Question 28 During the 1980's rate of savings in India has hovered around what percentage?
Correct Answer 0.21
Question 29 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
Question 35 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
Question 36 The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Question 37 Following a decline, heavy volume with little price change is indicative of
accumulation and is normally a bearish factor.
Correct Answer False
Question 38 In case of assured returns, A scheme cannot promise returns unless such returns
are fully guaranteed by sponsor or AMC.
Correct Answer True
Confidential
Question 40 The computation of return on a bond involves considering :-
Correct Answer The entire sequence of cash flows , The timing of cash flows , Calculating the
internal rate of return
Question 42 ________ absorbs the excess demand or supply generated by hedgers and
assume the risk of price fluctuations.
Correct Answer Speculators
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
Question 44 A ________ rally for stocks generally takes place because of an improved
outlook for business conditions over what was anticipated.
Correct Answer Bear market
Question 46 What were the objectives for 2002-03 the chairman of Bharat forge had
emphasised on in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value added products ,
Continue reducing costs
Question 47 Which are the most popular types of orders placed through an online trading
account?
Correct Answer Limit orders , Market orders
SET 3
Question 3 A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer True
Question 4 A firm's growth is determined by how much is re-invested into new assets and the
quality of these investments, and these includes :-
Correct Answer Acquisitions , Building distribution channels , Expanding marketing
capabilities and investing in new facilities
Question 5 Which of the following are important momentum indicators used widely?
Confidential
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving average
convergence divergence(MACD)
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
Question 9 If option is given to you to receive Rs.1,000/- today or after one year, you will choose
to receive it today because :-
Correct Answer You can use the amount to generate returns over the next one year , The
purchasing power of Rs.1,000/- today is more than what it will be one year from now , There is an
element of uncertainty associated with the future receipt
Question 10 As per the exhibit 18-1 for individual stock futures on NSE, the price steps in
respect of all futures contract admitted to the dealings of the exchange shall be :-
Correct Answer 0.05
Question 12 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
Question 13 Measures of ________ tells us what we can expect a typical or middle data
point of a distribution to be.
Correct Answer Central tendency
Question 15 What were the Chairman's comments during the speech in the Annual report of
the FY 2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Question 16 Debentures rated ________ are judged to offer sufficient safety of timely
payment of interest and repayment of principal.
Correct Answer "BBB"
Question 17 Given the accounting standards across firm, price to book value ratios can be
compared across similar firms for signs of under valuation.
Correct Answer True
Confidential
Question 18 Quick assets consist of current assets less inventories.
Correct Answer True
Question 22 If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Question 27 Investing in this avenue enable you participate in the equity market indirectly :-
Correct Answer Mutual Funds
Question 28 ________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.
Correct Answer Michael Porter
Question 29 In any Economy, bridge is created between savers and who need the funds by
this system :-
Correct Answer Financial
Question 32 ________ ratio indicates the margin available after meeting the manufacturing
expenses.
Correct Answer Gross Profit margin
Confidential
Question 34 Which were the initiatives which the chairman said would focus on in 2003-04
in the speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on balance sheet ,
Overseas acquisitions
Question 35 There may be convertible clause which gives the debenture holder the option to
convert the debentures into equity shares.
Correct Answer True
Question 36 ________is a hybrid form of security which has characteristics of both equity
and debentures
Correct Answer Preference shares
Question 37 Who operates the sinking fund under the sinking fund provision of a firm?
Correct Answer The bond trustee or the issuer
Question 39 Debentures rated "BB" refers ________ of timely payment of interest and
principal.
Correct Answer Inadequate safety
Question 43 The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Question 45 Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Question 46 The Dow theory was published in a series of editorials in the ________.
Correct Answer Wall street journal
Confidential
SET 4
Question 1 ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Question 4 The growth rate in the initial phase is not constant but declines linearly over time to
reach the stable growth rate in steady state is a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model
unlike the classic two stage model
Question 5 Which are the different types of accounts offered to investors by the stock brokers?
Correct Answer Cash trading , Margin trading
Question 8 Under ________ EMH investors cannot earn abnormal/superior profits on securities
on a consistent basis.
Correct Answer Semi-strong form
Question 10 To measure the movement of stocks in the market which indices were
constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones Transportation Average
Question 11 ________ take long or short positions only with the intention of making profits
by getting out of the market when conditions favor them.
Correct Answer Speculators
Question 13 Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True
Question 14 ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remains for the long-term.
Confidential
Correct Answer The Two-Stage dividend discount
Question 15 Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Question 17 ________ ratio is estimated by dividing the market value of a firm's assets by
the replacement cost of these assets.
Correct Answer Market value to replacement cost ratio
Question 18 In a typical stock market cycle which are the types of trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Question 23 Under futures market ________ process provides for collection of losses that
have already occurred.
Correct Answer The daily settlement
Question 24 What was the final analysis on the performance of Bharat forge for the year FY
02?
Correct Answer Aim to become US$1 billion Company by Fy 08 from US$100 million , Stock
currently trades at 15 times its FY 05 consensus EPS forecasts , Stock will trade at an inexpensive
PEG of 0.6x.
Question 27 Fundamental analysis focuses on predicting the future price of a security and
Technical analysis on estimating the intrinsic value of a security.
Correct Answer False
Question 28 Current liabilities include all liabilities due in the next ________ and
provisions.
Correct Answer 12 months
Confidential
Question 30 S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Question 32 If rupee weakens against the dollar, it has favourable impact for the importers.
Correct Answer False
Question 36 The risk associated to get the required rate of return on the stock is measure by
market beta.
Correct Answer True
Question 37 The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Correct Answer Interest rates are falling
Question 40 The basic inputs of the general model are expected dividends and required rate
of return on stock.
Correct Answer True
Question 42 European style options are more expensive than American style because they
offer greater flexibility to the buyer.
Correct Answer False
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
Confidential
Question 45 The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,
Buying bonds issued to banks and financial institutions
Question 46 Avenues can be broadly classified into the which type of assets?
Correct Answer Financial and Real
SET 5
Question The value of the stock in the ________ model is sensitive to the estimates of the
growth rate.
Correct Answer The Gordons dividend growth
Question The possibility of reduction of risk through the construction of a portfolio depends on
the value of ________ between the two assets.
Correct Answer Correlation coefficient
Question When an investor invests in stock, expects to get the dividends and an expected price
for the period the stock is held is the rule of :-
Correct Answer The General model
Question Debentures rated ________ are judged to offer sufficient safety of timely payment of
interest and repayment of principal.
Correct Answer "BBB"
Question Equity analysts provides estimates of earnings and earnings growth for future, using
historical data and :-
Correct Answer Macro economic information that may impact future growth , Private
information about the firm , Firm's specific information and public information
Question The normal relationship is for the volume to expand on rallies and contract on
declines.
Correct Answer True
Confidential
Question In case of assured returns, A scheme cannot promise returns unless such returns are
fully guaranteed by sponsor or AMC.
Correct Answer True
Question ________ is due to the fact that a borrower may not pay interest and/or principal on
time.
Correct Answer Default risk
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
Question A pattern which does not result in reversal of a trend but reaffirmation of the
underlying trend is called ________.
Correct Answer Consolidation pattern
Question Policies of the government and the attitude of the government towards the industry
have a considerable influence on the industry.
Correct Answer True
Question The growth rate in the initial phase is not constant but declines linearly over time to
reach the stable growth rate in steady state is a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model
unlike the classic two stage model
Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Question ________ bonds are generally called for prepayment after interest rates have fallen,
investors will not be able to find comparable investment avenues.
Correct Answer Call risk
Question More than half the variation in stock price could be attributed to which factor?
Correct Answer Market influence
Confidential
Price pattern Resistance level Head and shoulders formation
Primary trendLast between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to as long as 6 months Last between 3 weeks to as
long as 6 months
Short term trend Last 1 to 3-4 weeks Last 1 to 3-4 weeks
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
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
Question When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer False
Question In India, the futures on individual securities have been introduced from :-
Correct Answer 2001
Question The Peer group of Bharat Forge consists of which all companies?
Correct Answer Am forge industries , Kalyani Forge , EL Forge
Question Which were the initiatives which the chairman said would focus on in 2003-04 in the
speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on balance sheet ,
Overseas acquisitions
Confidential
Question Dow Jones transportation average was previously known as ________.
Correct Answer Rail average
Question The Two-Stage dividend discount model is best suited for the firms that are :-
Correct Answer In high growth rate phase , Expecting to maintain the growth rate phase
steadily for a specific time period , Sources of high growth are expected to disappear after specific
period of time
Question A mutual fund is required to dispatch the dividend warrants to the unit holders within
thirty days of the declaration of dividend.
Correct Answer True
Question As per the exhibit 18-1 for individual stock futures on NSE, the price steps in respect
of all futures contract admitted to the dealings of the exchange shall be :-
Correct Answer 0.05
Question A pledge of real assets as insurance against the non-payment of default by the buyer
represents
Correct Answer Collateral
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
Question Who developed Dow's Principles and organised them into a theory as it is known
today?
Correct Answer William Peter Hamilton Your Answer Charles.H.Dow
SET6
Question Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer Inadequate safety
Confidential
Question The risk associated to get the required rate of return on the stock is measure by market
beta.
Correct Answer True
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
Question A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer True
Question Debt instruments that have a maturity period of more than one year are called as :-
Correct Answer Bonds
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
Question A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer True
Question Risk can be referred as the ________ in the return with respect to the expected return.
Correct Answer Volatility
Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True
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
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)
Confidential
Question What is Gross National Product ?
Correct Answer Gross income generated from within the country
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
Question Which market is affected with the improving and higher growth rate in economy?
Correct Answer Stock market
Question If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer True
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits
Question If rupee weakens against the dollar, it has favourable impact for the importers.
Correct Answer False
Question Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer Current ratio
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
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
Question The basic assumption of Technical analysis is that, price discounts everything and it is
the outcome of all forces affecting a stock.
Confidential
Correct Answer True
Dow Jones transportation average was previously known as Rail average Logistics average Road
average Freight average.
SET 7
Question ________ measures the profitability of operations without considering the influence of
financial structure and tax rate.
Correct Answer Earnings power
Question The Asset management company of the mutual fund must have 50% independent
directors.
Correct Answer True
Question A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer True
Question The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer Early 90's
Question The returns of sector specific funds are solely dependant on the performance of the
respective sectors / industries.
Correct Answer True
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
Question Secondary reactions occurs because of ________ which arise in the market as a result
of over optimism and over pessimism.
Correct Answer Technical distortions
Confidential
Question In a heads and shoulders formation the deeper the pattern, the greater is the ________
significance once it is completed
Correct Answer Bearish
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
Question The normal relationship is for the volume to expand on rallies and contract on
declines. Correct Answer True
Question Risk on a portfolio of assets is always same as the risk on individual asset.
Correct Answer False
Question A line is defined as a price movement two or three weeks or longer, during which
period the price variation
Confidential
Question The return to the bond investor can be measured in terms of :-
Correct Answer Realised yield , Current yield , Yield to maturity
Question Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer Inadequate safety
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
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
Question A ________ rally for stocks generally takes place because of an improved outlook for
business conditions over that was anticipated.
Correct Answer Bear market
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
Question The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Correct Answer Interest rates are falling
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
Question The growth rate is used to forecast future revenues and earnings and are inputs in
valuing :- Correct Answer Stable firms
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
Confidential
Growth of income 40-60 % debt, 40-60 % equities 40-60 % debt, 40-60 % equities
Current income Short term debt portfolio Fixed - income portfolio
Stability of principalFixed - income portfolio Short term debt portfolio
appreciation 75-100 % in equities75-100 % in equities
Question An investor with a higher tolerance of risk should tilt his portfolio in favour of
________.
Correct Answer Stocks
Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Ratio used as a measure of relative value PEG ratio Price to book value 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
SET 8
Question The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Confidential
Correct Answer An initial phase where the growth is not a stable growth rate , A subsequent
steady state of growth rate being stable and lasts n years , A stable growth phase lasts forever
Question Risk can be referred as the ________ in the return with respect to the expected return.
Correct Answer Volatility
Question With the introduction of on-line trading by NSE and BSE, the role of regional stock
exchanges have diminished.
Correct Answer True
Question The price earning ratio can be estimated for the firms with negative earnings per
share. Correct Answer False
Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary to
act as compliance officer , New contracts won in passenger car components
Question ________ absorbs the excess demand or supply generated by hedgers and assume the
risk of price fluctuations. Correct Answer Speculators
Question A share certificate indicates that the investor owns a certain number of shares.
Correct Answer True
Question What is the percentage of variation the market and industry influence account for?
Correct Answer 2/3rd
Question Balance of payments surplus augments foreign reserves of the country and have a
favourable impact on he exchange rate.
Correct Answer True
Question What are the features of post office monthly income scheme?
Correct Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10%
on completion of term
Question What were the Chairman's comments during the speech in the Annual report of the FY
2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Confidential
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
Question The ________ phase carries a lot of significance because it marks the turning point
between a rising and a falling market.
Correct Answer Transitional
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits
Question A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer Over priced
Question 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
Question Which market is affected with the improving and higher growth rate in economy?
Correct Answer Stock market
Question In any Economy, bridge is created between savers and who need the funds by this
system :- Correct Answer Financial
Question The basic inputs of the general model are expected dividends and required rate of
return on stock. Correct Answer True
Confidential
Correct Answer True
Question The expected price of the stock at the end of the holding period is determined by
future dividends and the value of the stock is the present value of dividends through infinity are the
underlying assumptions of :-
Correct Answer The General model
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
Question If rupee weakens against the dollar, it has favourable impact for the importers.
Correct Answer False
Question ________ is the ratio of the market price per share to the earnings per share.
Correct Answer Price earning ratio
Question What are the warning indicators to be considered before analysing the financial
statements of a firm ?
Correct Answer Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting rules changed frequently
Question ________ is the value today of a stream of cash flows that occurs in future.
Correct Answer Present value
Question Under futures market ________ process provides for collection of losses that have
already occurred. Correct Answer The daily settlement
The yield to maturity is same as the Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest payments and principal repayment at the time of maturity Debt instrument/Bonds
Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Yield to maturity
Present value interest factor of annuities and present value interest factor Yield to maturity
Interest rate risk
Question A price rise accompanied by expanding volume denotes a potential trend reversal.
Correct Answer False
SET 9
Confidential
Question Measures of ________ tells us what we can expect a typical or middle data point of a
distribution to be.
Correct Answer Central tendency
Question ________ ratio indicates the margin available after meeting the manufacturing
expenses.
Correct Answer Gross Profit margin
Question Which were the initiatives which the chairman said would focus on in 2003-04 in the
speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on balance sheet ,
Overseas acquisitions
Question What developments had taken place during the year 2000 in case of Bharat Forge
Ltd.?
Correct Answer Demerger of investment division and windmills , Nominee director of UTI
resigned and ceased to be the director - nomination withdrawn by UTI
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Question The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer 5
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
Question Currently in India index options are both European and American in nature.
Correct Answer False
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)
Question The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Confidential
Question European style options are more expensive than American style because they offer
greater flexibility to the buyer.
Correct Answer False
Question A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer True
Average collection period Similar to debtors turnover How fast the inventory is being converted
Turnover ratios Help measure the efficiency of utilisation of assets Help measure the
efficiency of utilisation of assets
Debt Equity ratio Debt / Equity Debt / Equity
quick assets Highly liquid assets Highly liquid assets
Question In a typical stock market cycle which are the types of trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Question Debentures rated as "A" are judged to offer ________ of timely payment of interest
and principal. Correct Answer Adequate safety
Question A mutual fund is required to dispatch the dividend warrants to the unit holders within
thirty days of the declaration of dividend.
Correct Answer True
Question How would you rate a portfolio with 90% investment in stocks?
Correct Answer Highly aggressive
Question ________ is due to the fact that a borrower may not pay interest and/or principal on
time. Correct Answer Default risk
Question ________ take long or short positions only with the intention of making profits by
getting out of the market when conditions favor them.
Correct Answer Speculators
Confidential
Question In case of fixed income securities like debentures, you get the return in the form of
dividend. Correct Answer False
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/-
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
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/-
Question The Dow theory was published in a series of editorials in the ________.
Correct Answer Wall street journal
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
Question The greater the deviation of the actual returns from the actual return :-
Correct Answer Greater the variance
Question Which are the different types of accounts offered to investors by the stock brokers?
Correct Answer Cash trading , Margin trading
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
Question If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer True
Question If option is given to you to receive Rs.1,000/- today or after one year, you will choose
to receive it today because :-
Confidential
Correct Answer You can use the amount to generate returns over the next one year , The
purchasing power of Rs.1,000/- today is more than what it will be one year from now , There is an
element of uncertainty associated with the future receipt
Question A rally that develops on contracting volumes is suspect and warns of a potential trend
reversal in price Correct Answer True
Question The approach followed to assess the growth rate by looking at how much a firm
reinvests for future growth and the quality of its re-investments is :-
Correct Answer Estimating growth from a firm's fundamentals
Question 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/-
SET 10
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
Question 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
Question The sideways trend is essentially a transitional one which separates the two major
market movements.
Correct Answer True
Question More than half the variation in stock price could be attributed to which factor?
Correct Answer Market influence
Confidential
Question Security analysis serves the investment decision maker by identifying
________securities.
Correct Answer Under priced
Question 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/-
Question Under ________ EMH investors cannot earn abnormal/superior profits on securities
on a consistent basis.
Correct Answer Semi-strong form
Question A mutual fund is required to dispatch the dividend warrants to the unit holders within
thirty days of the declaration of dividend.
Correct Answer True
Question Risk can be referred as the ________ in the return with respect to the expected return.
Correct Answer Volatility
Question 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/-
Question ________ measures the profitability of operations without considering the influence of
financial structure and tax rate.
Correct Answer Earnings power
The yield to maturity is same as the Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest payments and principal repayment at the time of maturity Debt instrument/Bonds
Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Realised yield
Present value interest factor of annuities and present value interest factor Yield to maturity
Yield to maturity
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/-
Confidential
Question Dividend discount model is considered as the simplest model for :-
Correct Answer Valuing Equity
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/-
Question ________ refers to the possibility that there may not be a readily available market for
the particular bond.
Correct Answer Liquidity risk
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/-
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
Question With the use of diversification you can reduce the risk.
Correct Answer True
Weak form model is also termed as Random walk model Weak form EMH
Investors are rational Efficient market hypothesisPassive managers
Securities current prices fully reflect all historical information Weak form EMH Strong form
Framework on efficient capital markets, a review of theory and empirical work Fama Fama
Confidential
Question In any Economy, bridge is created between savers and who need the funds by this
system :- Correct Answer Financial
Question If index future is taken under futures contract, the underlying asset would be :-
Correct Answer Stock index
Question European style options are more expensive than American style because they offer
greater flexibility to the buyer.
Correct Answer False
Question ________ model is based on the principle that an initial phase where the growth rate is
not stable and subsequent steady growth rate and remains for the long-term.
Correct Answer The Two-Stage dividend discount
Question ________ absorbs the excess demand or supply generated by hedgers and assume the
risk of price fluctuations.
Question When a firm can grow net profits by issuing equity, the expected growth rate in net
profits is determined by
Correct Answer Equity reinvestment rate X return on equity
Question If rupee weakens against the dollar, it has favourable impact for the importers.
Correct Answer False
SET 11
Question With the introduction of on-line trading by NSE and BSE, the role of regional stock
exchanges have diminished.
Correct Answer True
Confidential
Question The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Question All trades in the futures market are cash settled on a ________ basis.
Correct Answer T+1
Question 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
Question Under futures market ________ process provides for collection of losses that have
already occurred.
Correct Answer The daily settlement
Question Fundamental analysis focuses on predicting the future price of a security and Technical
analysis on estimating the intrinsic value of a security.
Correct Answer False
Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary to
act as compliance officer , New contracts won in passenger car components
Question The growth rate in the initial phase is not constant but declines linearly over time to
reach the stable growth rate in steady state is a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model unlike
the classic two stage model
Question There may be convertible clause which gives! the deb enture holder the option to convert
the debentures into equity shares.
Confidential
Correct Answer True
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
Question 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
Question Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer Inadequate safety
Question When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer False
Question A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer True
Question What are the warning indicators to be considered before analysing the financial
statements of a firm ?
Correct Answer Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting rules changed frequently
Question ________ identified five forces that determine the intrinsic long run profit attractiveness
of a market or market segment.
Correct Answer Michael Porter
Question What were the Chairman's comments during the speech in the Annual report of the FY
2002-03?
Correct Answer 146% growth in exports , Highest pre and post tax profits , Best year in the history
of the company
Question The regulations of SEBI with respect to mutual funds were fully revised in the year
________.
Correct Answer 1996
Question Measures of ________ tells us what we can expect a typical or middle data point of a
distribution to be.
Correct Answer Central tendency
Confidential
Correct Answer True
Question The ratios between profits and investments are called rate of return measures.
Correct Answer True
Question What levels if increased will have unfavourable impact on the stock market?
Correct Answer Higher levels of taxation
Question Till 1990's secular Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
Question Capital expenditure -depreciation +change in working capital -(new debt issued - debt
repaid) =
Correct Answer Equity reinvested in business
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
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Question If the price of a share at the beginning of the year was Rs.70/-, dividend received during
the year was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer 0.2
Question A segment is more attractive when there are actual or potential substitutes for the
product.
Correct Answer True
Confidential
Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicates a particular index
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Confidential
Correct Answer Macro economic information that may impact future growth ,
Private information about the firm , Firm's specific
information and public information
True/False
Question The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC.
Correct Answer True
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Confidential
Correct Answer True
True/False
Question Policies of the government and the attitude of the government
towards the industry have a considerable influence on the
industry.
Correct Answer True
True/False
Question Investors in high tax bracket would benefit by investing in
equity schemes.
Correct Answer False
Confidential
Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
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
Confidential
True/False
Question When we invest in only one asset we are not exposed to any
specific or market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Confidential
Multiple Choice Multiple Answer
Question Which were the initiatives which the chairman said would
focus on in 2003-04 in the speech in annual report for the
year 2003-03?
Correct Answer Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions
True/False
Question A mutual fund is required to dispatch the dividend warrants
to the unit holders within thirty days of the declaration of
dividend.
Correct Answer True
Confidential
Match The Following
Question Correct Answer Your Answer
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True
Confidential
6. A segment is more attractive when there are actual or potential substitutes for the
product.
True
False
12. The GDP growth rate in the economy in real terms has fluctuated between :-
a)
4% and 5%
b)
3% and 4%
c)
6% and 7%
d) 5% and 6%
The sideways trend is essentially a transitional one which separates the two major
14.
market movements.
True
False
17. What is the minimum investment amount in G-secs?
a)
1000
b)
10000
c)
50000
d) 100000
30. The Two-Stage dividend discount model is best suited for the firms that are :-
a)
In high growth rate phase
b)
Expecting to maintain the growth rate phase steadily for a specific time period
c)
Expecting a established dividend payout ratio
d) Sources of high growth are expected to disappear after specific period of time
How can the financial statements can be manipulated while giving the
estimates for growth?
Confidential
a)
Change
method of
b) rate of
depreciation
c)
Change
d) method of
stock
valuation
Inflating
sales for
current year
by advancing
sales for the
following year
Changing
the
management
of the
company
frequently
Marks : 2
a)
Calculate the rates of return and classify securities that have earned superior
historical returns
b)
Calculating certain ratios will help in analyzing whether a security has relative
c) strength
46. The average investor in the market is driven more by emotions than by rational
analysis is a rule of :-
a)
Fundamental Analysis
b) Intrinsic value analysis
c) Economic Analysis
Confidential
d)
Technical analysis
49. What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment
b) Unstable economy
a)
Since every investor has a different set of circumstances, needs and
opportunities
b)
Since it depends on their investment strategies
c)
Every investor has different risk bearing capacities
d)
Every investor has different perception of the markets
True/False
Question In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC.
Correct Answer True
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
Your 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
Confidential
Correct Answer The bond trustee or the issuer
True/False
Question Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
True/False
Question A higher value of current ratio indicates a better short term
solvency of the firm.
Correct 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.
Correct Answer False
Confidential
Your Answer False
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True
Confidential
efficiency of utilisation of being converted
assets
Debt Equity ratio Debt / Equity Debt / Equity
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 Line Charts , Bar Charts , Point and Figure Charts
Confidential
Question A security is said to be ________ if its current market price is
over its intrinsic value.
Correct Answer Over priced
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.
Correct Answer False
Correct Answer A reflection of the idea that prices move in trends which are
determined by various factors
Confidential
Your Answer A reflection of the idea that prices move in trends which are
determined by various factors
Your Answer 6
True/False
Question The basic inputs of the general model are expected dividends
and required rate of return on stock.
Correct Answer True
Confidential
Question Dividend discount model is considered as the simplest model for
:-
Correct 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.
Correct Answer True
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Bar and line charts , Candle stick charts , Point and figure charts
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
Confidential
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
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
Your 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.
Correct Answer False
Confidential
Your Answer Commercial paper
Confidential
Marks : 2
44. To measure the current yield on the bond, it's coupon rate is compared with :-
a)
Future estimated price
b) Prevailing market price
True/False
Question Investment in gilt edged securities carry a higher element of risk.
True/False
Question Equity shares is a high return high risk instrument.
True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
Confidential
Correct Answer True
Weak form model is also Random walk model Random walk model
termed as
Investors are rational Efficient market Efficient market hypothesis
hypothesis
Securities current prices Weak form EMH Weak form EMH
fully reflect all historical
information
Framework on efficient Fama Fama
Confidential
capital markets, a review
of theory and empirical
work
Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt
equity ratio
Your Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
Confidential
Question Correct Answer Your Answer
Confidential
Your Answer 6.5%
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Your Answer Gross profit margin ratio , Return on equity , Debt service
coverage ratio
True/False
Confidential
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
True/False
Question If rupee weakens against the dollar, it has favourable impact for
the importers.
Correct Answer False
True/False
Question A mutual fund is required to dispatch the dividend warrants to
the unit holders within thirty days of the declaration of dividend.
Correct Answer True
Correct Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders
in securities to acquire abnormal returns
Your Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders
in securities to acquire abnormal returns
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
Your 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
True/False
Question Bonds and Debentures represent long term debt instruments.
Confidential
Question The possibility of reduction of risk through the construction of a
portfolio depends on the value of ________ between the two
assets.
Correct Answer Correlation coefficient
Your Answer 5
True/False
Question The performance of a scheme is reflected in its NAV which is
disclosed on a daily basis in case of open ended schemes.
Correct Answer True
True/False
Question Currently in India index options are both European and American
in nature.
Correct Answer False
Confidential
after 5 years?
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation
of total assets, fixed as well as current.
Correct Answer True
Confidential
Your Answer Total money in existence at any given time
Confidential
What is the objective of
fundamental analysis?
a)
To establish relationship between economic, industrial and
company indicators with a view to forecast the earnings and
b) dividends of the company
Correct Answer Interest payments at coupon rates , Capital gain/loss arising out
of the sale of the bond , Redemption of the bond of the issuer at
a contracted value
Your Answer Capital gain/loss arising out of the sale of the bond , Redemption
of the bond of the issuer at a contracted value , Interest
payments at coupon rates
Confidential
Your Answer Rs.1,15,827/-
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Your Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Correct Answer True
Confidential
Your Answer Rs. 62,275/-
True/False
Question A rally that develops on contracting volumes is suspect and
warns of a potential trend reversal in price
Correct Answer True
Correct Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Your 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 The risk associated to get the required rate of return on the stock
is measure by market beta.
Correct Answer True
Confidential
Your Answer True
True/False
Question The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Confidential
Your Answer Speculators
Correct Answer 2
Your Answer 2
True/False
Question PPF is a good retirement planning and tax saving vehicle.
Confidential
Question ________ bonds are generally called for prepayment after
interest rates have fallen, investors will not be able to find
comparable investment avenues.
Correct Answer Call risk
Confidential
Correct Answer 5
Your Answer 5
True/False
Question The labour conditions do not play an important role in the
industry analysis.
Correct Answer False
Confidential
Select The Blank
Question ________ ratio is estimated by dividing the market value of a
firm's assets by the replacement cost of these assets.
Correct Answer Market value to replacement cost ratio
Confidential
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
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Confidential
Correct Answer Macro economic information that may impact future growth ,
Private information about the firm , Firm's specific
information and public information
True/False
Question The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC.
Correct Answer True
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Confidential
Correct Answer True
True/False
Question Policies of the government and the attitude of the government
towards the industry have a considerable influence on the
industry.
Correct Answer True
True/False
Question Investors in high tax bracket would benefit by investing in
equity schemes.
Correct Answer False
Confidential
Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
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
Confidential
True/False
Question When we invest in only one asset we are not exposed to any
specific or market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Confidential
Multiple Choice Multiple Answer
Question Which were the initiatives which the chairman said would
focus on in 2003-04 in the speech in annual report for the
year 2003-03?
Correct Answer Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions
True/False
Question A mutual fund is required to dispatch the dividend warrants
to the unit holders within thirty days of the declaration of
dividend.
Correct Answer True
Confidential
Match The Following
Question Correct Answer Your Answer
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True
Confidential
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
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
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
True/False
Question A higher value of current ratio indicates a better short
term solvency of the firm.
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Correct Answer True
Your Answer True
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
Confidential
Correct Answer 0.15
Your Answer 0.15
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
True/False
Question If a rupee weakens against the dollars it has favourable
impact for the exporters.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable
impact for the importers.
Correct Answer False
Your Answer False
Confidential
Question Acid test ratio is more stringent measure of liquidity
compared to the ________.
Correct Answer Current ratio
Your Answer Current ratio
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
********************************
Dow Jones transportation average was previously known as Rail average
Logistics average Road average Freight average.
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Page 1 of 8
True/False
Question 2 Currently in India index options are both European and American
in nature.
Correct Answer False
True/False
Question 3 The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Correct Answer False
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
True/False
Question 6 A segment is more attractive when there are actual or potential
substitutes for the product.
Correct Answer False
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Select The Blank
Question 7 The regulations of SEBI with respect to mutual funds were fully
revised in the year ________.
Correct Answer 1996
Your Answer Consistent stable firms, but not appropriate for high growth firms
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Correct Answer Rs. 9639/-
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
Your Answer Indicates in black if the closing price is lower than the opening
price , Displays the correlation between the high and low prices ,
Displays a trend over the period of an year
True/False
Question 15 Bond ratings by credit rating agencies provide superior and low
cost information to the investor serving as a basis for a proper
risk-return trade off by investors.
Correct Answer True
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Multiple Choice Multiple Answer
Question 19 What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
Your Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
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Select The Blank
Question 25 The value of the stock in the ________ model is sensitive to the
estimates of the growth rate.
Correct Answer The Gordons dividend growth
True/False
Question 29 The arithmetic mean is a set of observations is calculated by
finding the sum values and dividing by the number of
observations.
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Correct Answer True
True/False
Question 30 Investment in gilt edged securities carry a higher element of risk.
True/False
Question 31 Investment in gilt edged securities carry a higher element of risk.
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
Your Answer 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 , Help in assessing the
risk arising using the equity
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Your Answer Interest rate offered is higher than banks , No TDS for interest
income upto Rs. 5000 , Considered to be a safe investment
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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
Your Answer 5
True/False
Question 37 Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Correct Answer False
True/False
Question 38 In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC.
Correct Answer True
Correct Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the net present value of cash flows
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Your Answer Expected return on portfolio , Expected return on assets , Weight
of asset in the portfolio
True/False
Question 45 Speculators buy or sell futures contract in an attempt to earn a
profit.
Correct Answer True
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question 3 A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
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Multiple Choice Single Answer
Question 7 How can transition phases be projected?
True/False
Question 11 Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.
Correct Answer True
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Your Answer Right but not obligation
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
True/False
Question 17 Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under
valuation.
Correct Answer True
True/False
Question 18 Quick assets consist of current assets less inventories.
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Question 19 In India we have index futures contracts based on :-
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
True/False
Question 23 A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
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Question 25 Active investment managers :-
Correct Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders
in securities to acquire abnormal returns
Your Answer Believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders
in securities to acquire abnormal returns
True/False
Question 31 Post office monthly schemes have a 10 year tenor.
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Correct Answer False
True/False
Question 35 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct Answer True
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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
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Your Answer Options
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
Your 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
True/False
Question 45 Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.
Correct Answer True
True/False
Question 47 PPF is a good retirement planning and tax saving vehicle.
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question 2 Bonds and Debentures represent long term debt instruments.
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Multiple Choice Multiple Answer
Question 7 What are the features of Retail government securities (G-secs) ?
True/False
Question 9 While calculating geometric mean calculation of root is not
important.
Correct Answer False
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.
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Correct Answer True
True/False
Question 15 Investors in high tax bracket would benefit by investing in equity
schemes.
Correct Answer False
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Match The Following
Question 20 Correct Answer Your Answer
H-Model For Valuing Initial growth rate is not Initial growth rate is not
Growth constant but linearly falls constant but linearly falls
over time to reach the over time to reach the
stable growth rate stable growth rate
The general model Expected dividends and Expected dividends in the
required rate of return next period, cost of equity
and expected growth rate
in dividends
The Gordons Growth Expected dividends in the Assessment of the growth
model next period, cost of equity rate by looking at how
and expected growth rate much a firm reinvests for
in dividends future growth and the
quality of its reinvestment
The Two-Stage Dividend Based on two Based on two
Discount Model extraordinary growth extraordinary growth phase
phase lasting n years and lasting n years and stable
stable growth phase that growth phase that lasts
lasts forever forever
True/False
Question 21 Sensex is the index of Calcutta Stock Exchange.
Your Answer Open ended scheme , Close ended scheme , Growth schemes
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Correct Answer Aim to become US$1 billion Company by Fy 08 from US$100
million , Stock currently trades at 15 times its FY 05 consensus
EPS forecasts , Stock will trade at an inexpensive PEG of 0.6x.
Your Answer Aim to become US$1 billion Company by Fy 08 from US$100
million , Stock currently trades at 15 times its FY 05 consensus
EPS forecasts , Stock will trade at an inexpensive PEG of 0.6x.
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
True/False
Question 27 Fundamental analysis focuses on predicting the future price of a
security and Technical analysis on estimating the intrinsic value
of a security.
Correct Answer False
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Your Answer NIFTY
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact for
the importers.
Correct Answer False
Correct Answer Calculate the rates of return and classify securities that have
earned superior historical returns , Calculating certain ratios will
help in analyzing whether a security has relative strength
Your Answer Calculate the rates of return and classify securities that have
earned superior historical returns , Calculating certain ratios will
help in analyzing whether a security has relative strength ,
Calculating the Return on investment
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Correct Answer Net Profit Margin
True/False
Question 36 The risk associated to get the required rate of return on the stock
is measure by market beta.
Correct Answer True
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
True/False
Question 40 The basic inputs of the general model are expected dividends
and required rate of return on stock.
Correct Answer True
Correct Answer 2
Your Answer 2
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True/False
Question 42 European style options are more expensive than American style
because they offer greater flexibility to the buyer.
Correct Answer False
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Your Answer Gross profit margin ratio , Earnings power , Return on equity
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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Correct Answer Earnings power
Your Answer Net profit margin
True/False
Question Investment decisions can be viewed as an integrated process to which
security analysis makes its unique contribution.
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Correct Answer True
Your Answer True
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Your Answer True
Primary trend Last between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to as long as 6 months Last between 3 weeks to
as long as 6 months
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
True/False
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Question Post office monthly schemes have a 10 year tenor.
Correct Answer False
Your Answer False
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True
Your Answer True
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
Correct Answer True
Your Answer True
True/False
Question The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True
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Your Answer False
True/False
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Your Answer True
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
Correct Answer False
Your Answer False
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Multiple Choice Single Answer
Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%
Your Answer 6.5%
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Multiple Choice Multiple Answer
Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company
Secretary to act as compliance officer , New contracts won in passenger car components
Your Answer Secured second largest customer in China , Appointed a Company
Secretary to act as compliance officer , New contracts won in passenger car components
Weak form model is also termed as Random walk model Efficient market hypothesis
Securities current prices fully reflect all historical information Weak form EMH Weak
form EMH
Framework on efficient capital markets, a review of theory and empirical work Fama
Strong form
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
Your Answer True
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
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Question What could be a better approach to flow-of -funds analysis?
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
True/False
Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries.
Correct Answer True
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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
Your 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
True/False
Question Debt is less riskier source of finance than 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.
Correct Answer True
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Multiple Choice Single Answer
Question What does flow-of fund analysis help in understanding?
True/False
Question The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer True
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Multiple Choice Multiple Answer
Question What are the features of bank deposits?
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
Your Answer 5
Confidential
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
Your 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
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit
, Redemption in 7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit
, Redemption in 7 to 12 years
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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
Your 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
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
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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
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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
Your 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
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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
Your 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
Your Answer 6
True/False
Question With the introduction of on-line trading by NSE and BSE, the
role of regional stock exchanges have diminished.
Correct Answer True
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True/False
Question The price earning ratio can be estimated for the firms with
negative earnings per share.
Correct Answer False
True/False
Question A share certificate indicates that the investor owns a certain
number of shares.
Correct Answer True
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Correct Answer Transition phases are signalled by clearly definable price
patterns
Your Answer Transition phases are signalled by clearly definable price
patterns
True/False
Question Balance of payments surplus augments foreign reserves of
the country and have a favourable impact on he exchange
rate.
Correct Answer True
Confidential
Multiple Choice Single Answer
Question When was the Dow theory first published?
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up ,
O's show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up ,
O's show that the prices are moving down
Confidential
Question What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Your Answer Gross profit margin ratio , Earnings power , Return on equity
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True/False
Question The basic inputs of the general model are expected
dividends and required rate of return on stock.
Correct Answer True
True/False
Question Quick assets consist of current assets less inventories.
True/False
Question Bonds and Debentures represent long term debt
instruments.
Correct Answer False
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
True/False
Question If rupee weakens against the dollar, it has favourable impact
for the importers.
Correct Answer False
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Question What are the features of Kisan Vikas Patra?
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The yield to maturity is Geometric mean return Geometric mean return or
same as the or the internal rate of the internal rate of return
return
Periodic interest Debt instrument/Bonds Debt instrument/Bonds
payments and principal
repayment at the time of
maturity
The actual yield earned Realised yield Yield to maturity
by an investor on a bond
Present value interest Yield to maturity Interest rate risk
factor of annuities and
present value interest
factor
True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
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Your Answer Research and development , Capital investment and focus
on balance sheet , Overseas acquisitions
Your Answer 5
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accepts an obligation for which he receives a fee
True/False
Question Currently in India index options are both European and
American in nature.
Correct Answer False
True/False
Question European style options are more expensive than American
style because they offer greater flexibility to the buyer.
Correct Answer False
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
Confidential
Match The Following
Question Correct Answer Your Answer
True/False
Question A mutual fund is required to dispatch the dividend warrants
to the unit holders within thirty days of the declaration of
dividend.
Correct Answer True
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Your Answer Interest coverage ratio
Correct Answer Growing at a rate equal to or lower that the growth in the
economy , Which have well established dividend payout ratio
policy , Whose earnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the
economy , Which have well established dividend payout ratio
policy
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True/False
Question In case of fixed income securities like debentures, you get
the return in the form of dividend.
Correct Answer False
True/False
Question Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit
ratings agencies.
Correct Answer True
True/False
Confidential
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
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Your Answer Equal returns for their given level of risk
True/False
Question If a rupee weakens against the dollars it has favourable
impact for the exporters.
Correct Answer True
True/False
Question A rally that develops on contracting volumes is suspect and
warns of a potential trend reversal in price
Correct Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
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Your Answer False
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question Active investment managers :-
Correct Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders
in securities to acquire abnormal returns
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Correct Answer It connects closing prices from one period to the next , It is
ideal for securities with no high or low price data
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benefits under 80 L , No
TDS for interest income
upto Rs. 5000
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one year, you will choose to
receive it today because :-
Correct Answer You can use the amount to
generate returns over the next
one year , The purchasing
power of Rs.1,000/- today is
more than what it will be one
year from now , There is an
element of uncertainty
associated with the future
receipt
Your Answer You can use the amount to
generate returns over the next
one year , The purchasing
power of Rs.1,000/- today is
more than what it will be one
year from now , There is an
element of uncertainty
associated with the future
receipt
Confidential
payments , Help in assessing the
risk arising using the debt capital
Your 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
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Your Answer Secured second largest customer in China ,
Appointed a Company Secretary to act as
compliance officer , New contracts won in
passenger car components
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Your Answer Acquisitions , Expanding marketing
capabilities and investing in new facilities ,
Mergers
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Multiple Choice Multiple Answer
Question 38 The security analysis process will achieve :-
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Question 18 In a typical stock market cycle which are the types of
trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Correct Answer Calculate the rates of return and classify securities that
have earned superior historical returns , Calculating
certain ratios will help in analyzing whether a security
has relative strength
Your Answer Calculate the rates of return and classify securities that
have earned superior historical returns , Calculating
certain ratios will help in analyzing whether a security
has relative strength , Calculating the Return on
investment
Confidential
equity
Correct Answer Growing at a rate equal to or lower that the growth in the economy ,
Which have well established dividend payout ratio policy , Whose
earnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the economy ,
Which have well established dividend payout ratio policy
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
Your Answer Either to honour or walk away from the contract , To earn a profit
while restricting the downside risk , To use the options for
speculation
Confidential
the following year
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Candle stick charts , Point and figure charts , Bar and line charts
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
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
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independent , An AMC approved by SEBI manages the fund
Your 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
Confidential
Multiple Choice Single Answer
Question The index futures symbols of BSE are represented as :-
Correct Answer BSX JAN 2005 (January contract)
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Multiple Choice Single Answer
Question A pledge of real assets as insurance against the non-payment
of default by the buyer represents
Correct Answer Collateral
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Multiple Choice Single Answer
Question Mr. Sharma is expecting to receive Rs. 50,000/- at the end of 5
years. He wanted to know what is the present value of this
amount, if the rate of interest is 6% p.a?
Correct Answer Rs. 37363/-
Correct Answer A point where the prices become relatively attractive for buyers
Correct Answer Trends which interrupt the course of the intermediate cycle
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Your Answer They are counter-cyclical trends within the confines of a primary
trend
Multiple Choice Single Answer
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 Consistent stable firms, but not appropriate for high growth firms
Confidential
Question 23 A security represent evidence of :-
Confidential
Your Answer 0.2
Confidential
Your Answer Cannot give indication of the inclination of market participants to
purchase stock
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
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
Confidential
Question 41 How many measures of money supply are used commonly?
Correct Answer 2
Your Answer 2
Confidential
Multiple Choice Single Answer
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/-
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Correct Answer Market influence
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
Confidential
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
Confidential
Multiple Choice Single Answer
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/-
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Question If index future is taken under futures contract, the underlying
asset would be :-
Correct Answer Stock index
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 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
Question The growth rate is used to forecast future revenues and earnings and
are inputs in valuing :-
Correct Answer Stable firms
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Your Answer Under priced and over priced
Correct Answer Transition phases are signalled by clearly definable price patterns
Your Answer Transition phases are signalled by clearly definable price patterns
Correct Answer To identify trend changes at an early stage and maintain investment
posture till the trend has reversed
Your Answer To identify trend changes at an early stage and maintain investment
posture till the trend has reversed
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present value of dividends through infinity are the underlying
assumptions of :-
Correct Answer The General model
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Select The Blank
Question Dow Jones transportation average was previously known as ________.
Your Answer 3
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Your Answer Gross Profit margin
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comparable investment avenues.
Correct Call risk
Answer
Confidential
Question 21 The govt allowed public sector banks and institutions in mutual funds in
________.
Correct Answer Early 90's
Correct Answer 6
Your Answer 5
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Select The Blank
Question 12 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
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Correct Answer Wall street journal
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Select The Blank
Question 28 Current liabilities include all liabilities due in the next ________ and
provisions.
Correct Answer 12 months
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Your Answer Sideways
Your Answer 5
Confidential
Question All trades in the futures market are cash settled on a ________ basis.
Confidential
Select The Blank
Question The govt allowed public sector banks and institutions in mutual funds in
________.
Correct Answer Early 90's
Your Answer 5
True/False
Question The normal relationship is for the volume to expand on rallies and
contract on declines.
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Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns unless
such returns are fully guaranteed by sponsor or AMC.
Correct Answer True
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Correct Answer True
True/False
Question Policies of the government and the attitude of the government
towards the industry have a considerable influence on the
industry.
Correct Answer True
True/False
Question Investors in high tax bracket would benefit by investing in
equity schemes.
Correct Answer False
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
True/False
Question When we invest in only one asset we are not exposed to any
specific or market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
True/False
Question A mutual fund is required to dispatch the dividend warrants
to the unit holders within thirty days of the declaration of
dividend.
Correct Answer True
True/False
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Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True
True/False
Question Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.
Correct Answer True
True/False
Question With the use of diversification you can reduce the risk.
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
True/False
Question Debt is less riskier source of finance than equity.
True/False
Question Post office monthly schemes have a 10 year tenor.
True/False
Confidential
Question With the introduction of on-line trading by NSE and BSE, the role
of regional stock exchanges have diminished.
Correct Answer True
True/False
Question Penetration of a trend line denotes a bearish phase.
True/False
Question Passive investment managers believe that markets are
inefficient and Active managers believe that markets are
efficient.
Correct Answer False
True/False
Question 2 Currently in India index options are both European and American
in nature.
Correct Answer False
True/False
Question 3 The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Correct Answer False
True/False
Question 6 A segment is more attractive when there are actual or potential
substitutes for the product.
Correct Answer False
True/False
Question 15 Bond ratings by credit rating agencies provide superior and low
cost information to the investor serving as a basis for a proper
risk-return trade off by investors.
Correct Answer True
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True/False
Question 29 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 30 Investment in gilt edged securities carry a higher element of risk.
True/False
Question 37 Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Correct Answer False
True/False
Question 45 Speculators buy or sell futures contract in an attempt to earn a
profit.
Correct Answer True
True/False
Question 11 Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.
Correct Answer True
True/False
Question 17 Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under
valuation.
Correct Answer True
True/False
Question 18 Quick assets consist of current assets less inventories.
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Your Answer True
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
True/False
Question 23 A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
True/False
Question 35 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct Answer True
True/False
Question 47 PPF is a good retirement planning and tax saving vehicle.
True/False
Question 2 Bonds and Debentures represent long term debt instruments.
True/False
Question 9 While calculating geometric mean calculation of root is not
important.
Correct Answer False
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
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Your Answer True
True/False
Question 21 Sensex is the index of Calcutta Stock Exchange.
True/False
Question 27 Fundamental analysis focuses on predicting the future price of a
security and Technical analysis on estimating the intrinsic value
of a security.
Correct Answer False
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact for
the importers.
Correct Answer False
True/False
Question 36 The risk associated to get the required rate of return on the stock
is measure by market beta.
Correct Answer True
True/False
Question 40 The basic inputs of the general model are expected dividends
and required rate of return on stock.
Correct Answer True
True/False
Question 42 European style options are more expensive than American style
because they offer greater flexibility to the buyer.
Correct Answer False
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True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
Correct Answer True
True/False
Question The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.
Correct Answer True
True/False
Question The labour conditions do not play an important role in the
industry analysis.
Correct Answer False
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.
Correct Answer False
True/False
Question Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.
Correct Answer True
True/False
Question The Asset management company of the mutual fund must have 50%
independent directors.
Correct Answer True
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
Correct Answer False
Confidential
Your Answer False
True/False
Question Investment in gilt edged securities carry a higher element of risk.
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
True/False
Question Prices of stocks usually move in trends.
True/False
Question The sideways trend is essentially a transitional one which separates the
two major market movements.
Correct Answer True
True/False
Question With the use of diversification you can reduce the risk.
True/False
Question A higher value of current ratio indicates a better short
term solvency of the firm.
Correct Answer True
Your Answer True
True/False
Confidential
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
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
Correct Answer True
Your Answer True
True/False
Question The price earning ratio can be estimated for the firms with negative
earnings per share.
Correct Answer False
True/False
Question A share certificate indicates that the investor owns a certain number of
shares.
Correct Answer True
True/False
Question Balance of payments surplus augments foreign reserves of the
country and have a favourable impact on he exchange rate.
Correct Answer True
True/False
Question Bonds and Debentures represent long term debt instruments.
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True/False
Question A price rise accompanied by expanding volume denotes a potential
trend reversal.
Correct Answer False
True/False
Question Currently in India index options are both European and American in
nature.
Correct Answer False
True/False
Question A rally that develops on contracting volumes is suspect and warns of a
potential trend reversal in price
Correct Answer True
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Match The Following
Question Correct Answer Your Answer
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A contract where both the Futures contract Options contract
parties are equally
responsible
The amount which the Option price Transaction cost model
buyer of the option has to
pay to the option writer to
induce him to accept the
risk associated with the
contract.
NSE&BSE are regulated Securities Exchange Securities Exchange Board
by Board of India of India
H-Model For Valuing Initial growth rate is not Initial growth rate is not
Growth constant but linearly falls constant but linearly falls
over time to reach the over time to reach the
stable growth rate stable growth rate
The general model Expected dividends and Expected dividends in the
required rate of return next period, cost of equity
and expected growth rate
in dividends
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The Gordons Growth Expected dividends in the Assessment of the growth
model next period, cost of equity rate by looking at how
and expected growth rate much a firm reinvests for
in dividends future growth and the
quality of its reinvestment
The Two-Stage Dividend Based on two Based on two
Discount Model extraordinary growth extraordinary growth phase
phase lasting n years and lasting n years and stable
stable growth phase that growth phase that lasts
lasts forever forever
Weak form model is also Random walk model Random walk model
termed as
Investors are rational Efficient market Efficient market hypothesis
hypothesis
Securities current prices Weak form EMH Fama
fully reflect all historical
information
Framework on efficient Fama Strong form
capital markets, a review
of theory and empirical
work
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industries USA
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5. Measures the profitability of debt funds
6. Indicates the margin available after meeting the
manufacturing expenses
1. SEBI 5 1. Nifty
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Expiration period for options Nine months Nine months
The world's first largest Chicago Board of options New York board of Options
options exchange exchange exchange
The most popular pricing Black Scholes Black Scholes
options model published in
the year 1973
When the writer gives the Put option Put option
buyer of the option the right
to sell the underlying asset
on or before the expiry date
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question With the introduction of on-line trading by NSE and BSE, the role of regional
stock exchanges have diminished.
Correct Answer True
Correct Answer Calculate the rates of return and classify securities that have earned superior
historical returns , Calculating certain ratios will help in analyzing whether a
security has relative strength
Your Answer Calculate the rates of return and classify securities that have earned superior
historical returns , Calculating certain ratios will help in analyzing whether a
security has relative strength
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Your Answer Next day settlement
Correct Answer Stable firms, but not appropriate for high growth firms
Your Answer Stable firms, but not appropriate for high growth firms
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in
7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in
7 to 12 years
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.
Correct Answer False
Confidential
Multiple Choice Multiple Answer
Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary
to act as compliance officer , New contracts won in passenger car
components
Your Answer Secured second largest customer in China , Appointed a Company Secretary
to act as compliance officer , New contracts won in passenger car
components
True/False
Question There may be convertible clause which gives the debenture holder the option
to convert the debentures into equity shares.
Correct Answer True
True/False
Question Bearish actions come from a series of declining peaks and troughs.
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Your Answer Inadequate safety
True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Correct Answer False
Weak form model is also Random walk model Efficient market hypothesis
termed as
Investors are rational Efficient market hypothesis Passive managers
Securities current prices fully Weak form EMH Random walk model
reflect all historical information
Framework on efficient capital Fama Fama
markets, a review of theory
and empirical work
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
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Your Answer Philip Kotler
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
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
Your Answer Indicates in black if the closing price is lower than the opening price , Displays
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the correlation between the high and low prices
True/False
Question Five paisa.com is an example of on line trading portal.
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
Your 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
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
True/False
Question The ratios between profits and investments are called rate of return
measures.
Correct Answer True
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Question Where are gilt funds invested?
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Correct Answer Under priced and over priced
True/False
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Correct Answer Term is for 8 years seven months , Provision of premature withdrawal ,
Interest rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Provision of premature withdrawal ,
Interest rate is 8.4% compounded annually
True/False
Question A segment is more attractive when there are actual or potential substitutes for
the product.
Correct Answer True
Correct Answer Investment in securities in the same weightage which replicates a particular
index
Your Answer Investment in gilt edged securities which is similar to a particular index
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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
Your Answer Interest is taxable under 80 L , They last from 1 to 3 or 4 weeks , They
interrupt the course of the intermediate cycle
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Your Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
True/False
Question Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.
Correct Answer True
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Multiple Choice Single Answer
Question Investment is a risk free investment when :-
True/False
Question With the use of diversification you can reduce the risk.
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
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Correct Answer Investor earns bonus of 10% on completion of term , Rate of
return is 8 % , Interest payable monthly
Your Answer Rate of return is 8 % , Interest payable monthly , Investor earns
bonus of 10% on completion of term
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
True/False
Question Debt is less riskier source of finance than equity.
True/False
Question Post office monthly schemes have a 10 year tenor.
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Your Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
True/False
Question With the introduction of on-line trading by NSE and BSE, the role
of regional stock exchanges have diminished.
Correct Answer True
Confidential
Your Answer The daily settlement
Correct Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Correct Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Your Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Correct Answer 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 , Help in assessing the
risk arising using the debt capital
Your 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 Penetration of a trend line denotes a bearish phase.
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Correct Answer False
Correct Answer A point where the prices become relatively attractive for buyers
Correct Answer Interest payments at coupon rates , Capital gain/loss arising out
of the sale of the bond , Redemption of the bond of the issuer at
a contracted value
Your Answer Interest payments at coupon rates , Capital gain/loss arising out
of the sale of the bond , Redemption of the bond of the issuer at
a contracted value
True/False
Question Passive investment managers believe that markets are
inefficient and Active managers believe that markets are
efficient.
Correct Answer False
Your Answer 3
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efficiency of utilisation of efficiency of utilisation of
assets assets
Debt Equity ratio Debt / Equity Debt / Equity
Confidential
Question A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :-
Correct Answer Over valued
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sapm.txt
kk 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
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
Page 1
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sapm.txt
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
Confidential
sapm.txt
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
Page 3
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sapm.txt
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
Confidential
sapm.txt
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
********************************
Dow Jones transportation average was previously known as Rail average Logistics average Road average Freight
average.
Page 5
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Multiple Choice Single Answer
Question What are primary trends?
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service coverage
ratios
Your Answer Debt equity ratio , Interest coverage ratios , Acid test ratio
True/False
Question The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.
Correct Answer True
Correct Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer Dow Jones industrial Average , Dow Jones Transportation Average
Confidential
Your Answer Forward contract
True/False
Question Quick assets consist of current assets less inventories.
True/False
Question In case of fixed income securities like debentures, you get the return
in the form of dividend.
Correct Answer False
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
True/False
Confidential
Question Sensex is the index of Calcutta Stock Exchange.
Correct Answer Term is for 8 years seven months , Provision of premature withdrawal
, Interest rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Provision of premature withdrawal
, Interest rate is 8.4% compounded annually
Confidential
Your Answer Calling in a certain number of bonds by lot , Buying bonds in the open
market , Buying bonds issued to banks and financial institutions
True/False
Question Default is normally evaluated and indicated by the rating assigned to
the debt instruments by independent credit ratings agencies.
Correct Answer True
True/False
Confidential
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.
Correct Answer False
True/False
Question Because of statutory compulsion, generally Govt. securities are held
by banks, financial institutions, insurance companies etc.
Correct Answer True
True/False
Question With the use of diversification you can reduce the risk.
Confidential
Multiple Choice Single Answer
Question In India futures on individual securities have been introduced by :-
True/False
Question Passive investment managers believe that markets are inefficient and
Active managers believe that markets are efficient.
Correct Answer False
Confidential
Your Answer True
Correct Answer Growing at a rate equal to or lower that the growth in the economy ,
Which have well established dividend payout ratio policy , Whose
earnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the economy ,
Whose earnings are steady and perpetual , Value of stock is risky
Confidential
Multiple Choice Single Answer
Question What does lower level of unemployment indicates?
Confidential
Select The Blank
Question ________is a hybrid form of security which has characteristics of
both equity and debentures
Correct Answer Preference shares
True/False
Question There may be convertible clause which gives the debenture holder
the option to convert the debentures into equity shares.
Correct Answer True
Correct Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders in
securities to acquire abnormal returns
Your Answer Do not believe that markets are efficient , Puts efforts to search
mispriced securities in the market , Are relatively active traders in
securities to acquire abnormal returns
True/False
Confidential
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
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
Your 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
Correct Answer Interest payments at coupon rates , Capital gain/loss arising out of
the sale of the bond , Redemption of the bond of the issuer at a
contracted value
Your Answer Interest payments at coupon rates , Capital gain/loss arising out of
the sale of the bond , Redemption of the bond of the issuer at a
contracted value
Confidential
Question Mutual fund schemes could be broadly classified as :-
Correct Answer Transition phases are signalled by clearly definable price patterns
Your Answer Transition phases are signalled by clearly definable price patterns
True/False
Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Confidential
Your Answer Semi-strong form
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
Your 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
Correct Answer The weak form, semi-strong form & strong form
Confidential
Correct Answer Economy-industry-company approach
True/False
Question The Asset management company of the mutual fund must have 50%
independent directors.
Correct Answer True
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
H-Model For Valuing Initial growth rate is not Expected dividends and
Growth constant but linearly falls required rate of returns as
over time to reach the per the market price per
stable growth rate share to the earningsper
share
The general model Expected dividends and Initial growth rate is not
required rate of return constant but linearly falls
over time to reach the stable
growth rate
The Gordons Growth model Expected dividends in the Based on two extraordinary
next period, cost of equity growth phase lasting n years
and expected growth rate in and stable growth phase that
dividends lasts forever
The Two-Stage Dividend Based on two extraordinary Expected dividends in the
Discount Model growth phase lasting n next period, cost of equity
years and stable growth and expected growth rate in
phase that lasts forever dividends
Confidential
Question A pledge of real assets as insurance against the non-payment of
default by the buyer represents
Correct Answer Collateral
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
True/False
Question A higher value of current ratio indicates a better short term solvency
of the firm.
Correct Answer True
True/False
Question Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under
valuation.
Correct Answer True
Confidential
Your Answer Bonds
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
Your Answer Firm's past earnings/historical growth rate , Estimates made by equity
research analyst who follow the firm , Estimates from a firm's
fundamentals
Your Answer 5
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
Your 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 Balance of payments surplus augments foreign reserves of the
country and have a favourable impact on he exchange rate.
Confidential
Correct Answer True
Correct Answer Trends which interrupt the course of the intermediate cycle
Your Answer Trends which interrupt the course of the intermediate cycle
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
True/False
Question Post office monthly schemes have a 10 year tenor.
True/False
Question A segment is more attractive when there are actual or potential
substitutes for the product.
Correct Answer True
Confidential
sapm-Akshat1.txt
sapm - Akshat1
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer
Question 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 Stable firms, but not appropriate for high growth firms
Select The Blank
Question The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Your Answer 6
Multiple Choice Single Answer
Question 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/-
Confidential
sapm-Akshat1.txt
Match The Following
Question Correct Answer Your Answer
Equity shares High risk High risk
Government Securities No risk No risk
Bank Deposits Low risk Low risk
Mutual Funds Average risk Average risk
Confidential
sapm-Akshat1.txt
Multiple Choice Multiple Answer
Question The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market , Buying bonds
issued to banks and financial institutions
Your Answer Buying bonds issued to banks and financial institutions , Calling in a certain number of bonds by
lot , Buying bonds in the open market
True/False
Question The Asset management company of the mutual fund must have 50% independent directors.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is an open ended fund or scheme?
Correct Answer Which is available for subscription and repurchase on a continuous basis
Your Answer Which is available for subscription and repurchase on a continuous basis
True/False
Question A price rise accompanied by expanding volume denotes a potential trend reversal.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question The Two-Stage dividend discount model is best suited for the firms that are :-
Correct Answer In high growth rate phase , Expecting to maintain the growth rate phase steadily for a specific
time period , Sources of high growth are expected to disappear after specific period of time
Your Answer In high growth rate phase , Expecting to maintain the growth rate phase steadily for a specific
time period , Sources of high growth are expected to disappear after specific period of time
Multiple Choice Single Answer
Question If the price of a share at the beginning of the year was Rs.70/-, dividend received during the year
was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer 0.2
Your Answer 0.2
Multiple Choice Multiple Answer
Question If option is given to you to receive Rs.1,000/- today or after one year, you will choose to receive
it today because :-
Correct Answer You can use the amount to generate returns over the next one year , The purchasing power of
Rs.1,000/- today is more than what it will be one year from now , There is an element of uncertainty associated
with the future receipt
Your Answer You can use the amount to generate returns over the next one year , The purchasing power of
Rs.1,000/- today is more than what it will be one year from now , There is an element of uncertainty associated
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sapm-Akshat1.txt
with the future receipt
True/False
Question Investment in gilt edged securities carry a higher element of risk.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry influence account for?
Correct Answer 2/3rd
Your Answer 2/3rd
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Select The Blank
Question ________ take long or short positions only with the intention of making profits by getting out of the
market when conditions favor them.
Correct Answer Speculators
Your Answer Speculators
Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
Select The Blank
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Your Answer Transition
True/False
Question Sensex is the index of Calcutta Stock Exchange.
Correct Answer False
Your Answer False
Select The Blank
Question When a debenture is sold to the general public a ________ is appointed.
Correct Answer Trustee
Your Answer Trustee
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
Multiple Choice Multiple Answer
Question To measure the movement of stocks in the market which indices were constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones Transportation Average
Your Answer Dow Jones industrial Average , Dow Jones Transportation Average
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
Your Answer It connects closing prices from one period to the next , It is ideal for securities with no high
or low price data
Multiple Choice Multiple Answer
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Question What are the features of post office monthly income scheme?
Correct Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on completion of
term
Your Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on completion of
term
Multiple Choice Single Answer
Question In India we have index futures contracts based on :-
Correct Answer S&P CNX Nifty and the BSE sensex
Your Answer S&P CNX Nifty and the BSE sensex
Select The Blank
Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Your Answer Hedger
Multiple Choice Multiple Answer
Question What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Your Answer Gross profit margin ratio , Earnings power , Return on equity
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.
Correct Answer False
Your Answer False
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
Your Answer Bear market
True/False
Question Following a decline, heavy volume with little price change is indicative of accumulation and is
normally a bearish factor.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Gross profit margin Indicates the margin available after meeting the manufacturing expenses Valuation ratio
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ROE Measure the profitability of equity funds Measures the profitability of debt funds
Earnings power Measure the profitability of operations without considering the influence of financial structure
and tax rate Indicates the margin available after meeting the manufacturing expenses
Net profit margin Ratio if net profit to sales Measure the profitability of operations without considering the
influence of financial structure and tax rate
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Penetration of a trend line denotes a bearish phase.
Correct Answer False
Your Answer False
True/False
Question The performance of a scheme is reflected in its NAV
which is disclosed on a daily basis in case of open
ended schemes.
Correct Answer True
Your Answer True
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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.
A contract where both Futures contract Futures contract
the parties are equally
responsible
The amount which the Option price Transaction cost model
buyer of the option has
to pay to the option
writer to induce him to
accept the risk
associated with the
contract.
NSE&BSE are Securities Exchange Securities Exchange
regulated by Board of India Board of India
True/False
Question Balance of payments surplus augments foreign
reserves of the country and have a favourable impact
on he exchange rate.
Correct Answer True
Your Answer True
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maintain investment posture till the trend has reversed
True/False
Question Investment in gilt edged securities carry a higher
element of risk.
Correct Answer False
Your Answer False
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
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
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Correct Answer Reflection of investor's attitudes towards unfolding
fundamentals in the business cycle
Your Answer Reflection of investor's attitudes towards unfolding
fundamentals in the business cycle
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Your Answer Which is available for subscription and repurchase on
a continuous basis
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True/False
Question If rupee weakens against the dollar, it has favourable
impact for the importers.
Correct Answer False
Your Answer False
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Your Answer True picture of a company , Normal earning power ,
Projection of future profitability
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Your Answer Line Charts , Bar Charts
True/False
Question The normal relationship is for the volume to expand on
rallies and contract on declines.
Correct Answer True
Your Answer True
True/False
Question Because of statutory compulsion, generally Govt.
securities are held by banks, financial institutions,
insurance companies etc.
Correct Answer True
Your Answer True
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Question The ________ phase is characterized by resistance
area and support level.
Correct Answer Transition
Your Answer Horizontal
True/False
Question Sensex is the index of Calcutta Stock Exchange.
Correct Answer False
Your Answer False
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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Correct Answer Rs. 62,275/-
True/False
Question Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.
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Correct Answer True
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Correct Answer Which is available for subscription and repurchase on a
continuous basis
Your Answer Which is available for subscription and repurchase on a
continuous basis
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Multiple Choice Multiple Answer
Question Which are the most popular types of orders placed through an
online trading account?
Correct Answer Limit orders , Market orders
True/False
Question A mutual fund is required to dispatch the dividend warrants to
the unit holders within thirty days of the declaration of dividend.
Correct Answer True
True/False
Question The sideways trend is essentially a transitional one which
separates the two major market movements.
Correct Answer True
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Question A firm's growth is determined by how much is re-invested into
new assets and the quality of these investments, and these
includes :-
Correct Answer Acquisitions , Building distribution channels , Expanding
marketing capabilities and investing in new facilities
Your Answer Acquisitions , Building distribution channels , Expanding
marketing capabilities and investing in new facilities
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Correct Answer True
True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
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Correct Answer False
Your Answer Stable firms, but not appropriate for high growth firms
True/False
Question With the introduction of on-line trading by NSE and BSE, the role
of regional stock exchanges have diminished.
Correct Answer True
Your Answer 3
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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
Your Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
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38. In a perfectly efficient market all securities are correctly priced means there are no :-
a)
High priced and low priced securities
d)
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Marks : 2
42. What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment
b) Unstable economy
d)
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Correct Answer Return on equity , Gross profit margin ratio , Earnings power
Your Answer Return on equity , Gross profit margin ratio , Earnings power
Correct Answer Growing at a rate equal to or lower that the growth in the
economy , Which have well established dividend payout ratio
policy , Whose earnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the
economy , Which have well established dividend payout ratio
policy
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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
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
Your 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
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True/False
Question A mutual fund is required to dispatch the dividend warrants to
the unit holders within thirty days of the declaration of dividend.
Correct Answer True
True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
Correct Answer True
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Correct Answer Cannot give indication of the inclination of market participants to
purchase stock
Your Answer Does not give specific information
True/False
Question The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.
Correct Answer True
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Model unlike the classic two stage model
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
True/False
Question The labour conditions do not play an important role in the
industry analysis.
Correct Answer False
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Question Which market is affected with the improving and higher growth
rate in economy?
Correct Answer Stock market
True/False
Question Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
Your Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance
True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
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Correct Answer Open ended scheme , Close ended scheme
Your Answer Open ended scheme , Close ended scheme , Balance fund
Your Answer 5
True/False
Question Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Correct Answer False
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Correct Answer Greater the variance
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
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Score Card
Registration
200404214
Number:
Name: Manpreet Malhotra
Subject: Security Analysis & Portfolio Mgt.
Assignment Status
16/03/2006
As On:
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Number of Wrong Questions 17
Result Pass
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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
Your Answer Either to honour or walk away from the contract , To earn a profit
while restricting the downside risk , To use the options for
speculation
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.
Correct Answer False
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True/False
Question Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under
valuation.
Correct Answer True
Your Answer 10
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True
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Correct Answer Secured second largest customer in China , Appointed a
Company Secretary to act as compliance officer , New contracts
won in passenger car components
Your Answer Secured second largest customer in China , Appointed a
Company Secretary to act as compliance officer , New contracts
won in passenger car components
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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the following year
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
Your Answer Open ended scheme , Close ended scheme , Growth schemes
True/False
Question If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
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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
Your 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 , Displays the correlation between the high and
low prices
H-Model For Valuing Initial growth rate is not Initial growth rate is not
Growth constant but linearly falls constant but linearly falls
over time to reach the over time to reach the
stable growth rate stable growth rate
The general model Expected dividends and Expected dividends and
required rate of return required rate of return
The Gordons Growth Expected dividends in the Expected dividends in the
model next period, cost of equity next period, cost of equity
and expected growth rate and expected growth rate
in dividends in dividends
The Two-Stage Dividend Based on two Based on two
Discount Model extraordinary growth extraordinary growth phase
phase lasting n years and lasting n years and stable
stable growth phase that growth phase that lasts
lasts forever forever
True/False
Question Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.
Correct Answer True
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Correct Answer In high growth rate phase , Expecting to maintain the growth rate
phase steadily for a specific time period , Sources of high growth
are expected to disappear after specific period of time
Your Answer In high growth rate phase , Expecting to maintain the growth rate
phase steadily for a specific time period , Expecting a
established dividend payout ratio
Weak form model is also Random walk model Random walk model
termed as
Investors are rational Efficient market Efficient market hypothesis
hypothesis
Securities current prices Weak form EMH Fama
fully reflect all historical
information
Framework on efficient Fama Strong form
capital markets, a review
of theory and empirical
work
True/False
Question Sensex is the index of Calcutta Stock Exchange.
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Correct Answer Liquidity risk
True/False
Question There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct Answer True
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Question The general dividend model is based on the principle of :-
True/False
Question PPF is a good retirement planning and tax saving vehicle.
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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LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Confidential
Question The normal relationship is for the volume to expand on rallies and contract
on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns unless such
returns are fully guaranteed by sponsor or AMC.
Correct Answer True
True/False
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
True/False
Question Policies of the government and the attitude of the government towards the
industry have a considerable influence on the industry.
Correct Answer True
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Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-
Model unlike the classic two stage model
True/False
Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Primary trend Last between 1-2 years Last between 1-2 years
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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
True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
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Multiple Choice Multiple Answer
Question Which were the initiatives which the chairman said would focus on in
2003-04 in the speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True
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Lifex ET Index Gold Index
True/False
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
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
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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
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True
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Question ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Answer Initial margin
Your Answer Initial margin
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
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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
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
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
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
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Your Answer False
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
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Question The possibility of reduction of risk through the construction of a portfolio
depends on the value of ________ between the two assets.
Correct Answer Correlation coefficient
True/False
Question The normal relationship is for the volume to expand on rallies and contract
on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns unless such
returns are fully guaranteed by sponsor or AMC.
Correct Answer True
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Multiple Choice Multiple Answer
Question What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and resistance
True/False
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
True/False
Question Policies of the government and the attitude of the government towards the
industry have a considerable influence on the industry.
Correct Answer True
True/False
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Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Primary trend Last between 1-2 years Last between 1-2 years
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
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True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
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Your Answer Freight average
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True
True/False
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Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
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
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
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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
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True
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Your Answer Volatility
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
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Correct Answer Stock market
Your Answer Stock market
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
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
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
Your Answer False
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Question Acid test ratio is more stringent measure of liquidity compared to the
________.
Correct Answer Current ratio
Your Answer Current ratio
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
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
Your Answer True
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Correct Answer New bonds at a lower rates
Your Answer New bonds at a lower rates
True/False
Question The sideways trend is essentially a transitional one which separates the
two major market movements.
Correct Answer True
Your Answer False
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
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Correct Answer True
Your Answer True
True/False
Question While calculating geometric mean calculation of root is not important.
Correct Answer False
Your Answer False
The yield to maturity is same as the Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest payments and principal repayment at the time of maturity Debt
instrument/Bonds Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Realised yield
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Present value interest factor of annuities and present value interest factor Yield to
maturity Yield to maturity
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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
Your 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
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
Your Answer True
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
Weak form model is also termed as Random walk model Weak form EMH
Securities current prices fully reflect all historical information Weak form EMH
Strong form
Framework on efficient capital markets, a review of theory and empirical work Fama
Fama
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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
True/False
Question European style options are more expensive than American style because
they offer greater flexibility to the buyer.
Correct Answer False
Your Answer False
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Select The Blank
Question ________ absorbs the excess demand or supply generated by hedgers and
assume the risk of price fluctuations.
Correct Answer Speculators
Your Answer Speculators
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
Your Answer False
Confidential
Question UTI was set up in the year ________.
Correct Answer 1963
Your Answer 1963
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Confidential
Question The normal relationship is for the volume to expand on rallies and contract
on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns unless such
returns are fully guaranteed by sponsor or AMC.
Correct Answer True
True/False
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
True/False
Question Policies of the government and the attitude of the government towards the
industry have a considerable influence on the industry.
Correct Answer True
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Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-
Model unlike the classic two stage model
True/False
Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Primary trend Last between 1-2 years Last between 1-2 years
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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
True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
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Multiple Choice Multiple Answer
Question Which were the initiatives which the chairman said would focus on in
2003-04 in the speech in annual report for the year 2003-03?
Correct Answer Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True
Confidential
Lifex ET Index Gold Index
True/False
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
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
Confidential
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
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True
Confidential
Question ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Answer Initial margin
Your Answer Initial margin
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
Confidential
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
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
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
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
Confidential
Your Answer False
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
Confidential
Question The possibility of reduction of risk through the construction of a portfolio
depends on the value of ________ between the two assets.
Correct Answer Correlation coefficient
True/False
Question The normal relationship is for the volume to expand on rallies and contract
on declines.
Correct Answer True
True/False
Question In case of assured returns, A scheme cannot promise returns unless such
returns are fully guaranteed by sponsor or AMC.
Correct Answer True
Confidential
Multiple Choice Multiple Answer
Question What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and resistance
True/False
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
True/False
Question Policies of the government and the attitude of the government towards the
industry have a considerable influence on the industry.
Correct Answer True
True/False
Confidential
Question Investors in high tax bracket would benefit by investing in equity schemes.
Correct Answer False
Primary trend Last between 1-2 years Last between 1-2 years
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
Confidential
True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Confidential
Your Answer Freight average
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True
True/False
Confidential
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
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
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
Confidential
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
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True
Confidential
Your Answer Volatility
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
Confidential
Correct Answer Stock market
Your Answer Stock market
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
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
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
Your Answer False
Confidential
Question Acid test ratio is more stringent measure of liquidity compared to the
________.
Correct Answer Current ratio
Your Answer Current ratio
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
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
Your Answer True
Confidential
Correct Answer New bonds at a lower rates
Your Answer New bonds at a lower rates
True/False
Question The sideways trend is essentially a transitional one which separates the
two major market movements.
Correct Answer True
Your Answer False
True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Confidential
Correct Answer True
Your Answer True
True/False
Question While calculating geometric mean calculation of root is not important.
Correct Answer False
Your Answer False
The yield to maturity is same as the Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest payments and principal repayment at the time of maturity Debt
instrument/Bonds Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Realised yield
Confidential
Present value interest factor of annuities and present value interest factor Yield to
maturity Yield to maturity
Confidential
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
Your 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
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
Your Answer True
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True
Weak form model is also termed as Random walk model Weak form EMH
Securities current prices fully reflect all historical information Weak form EMH
Strong form
Framework on efficient capital markets, a review of theory and empirical work Fama
Fama
Confidential
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
True/False
Question European style options are more expensive than American style because
they offer greater flexibility to the buyer.
Correct Answer False
Your Answer False
Confidential
Select The Blank
Question ________ absorbs the excess demand or supply generated by hedgers and
assume the risk of price fluctuations.
Correct Answer Speculators
Your Answer Speculators
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False
Your Answer False
Confidential
Question UTI was set up in the year ________.
Correct Answer 1963
Your Answer 1963
Confidential
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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
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
True/False
Question The sideways trend is essentially a transitional one which
separates the two major market movements.
Correct Answer True
Confidential
Multiple Choice Single Answer
Question What do you understand by money supply?
True/False
Question A mutual fund is required to dispatch the dividend warrants to
the unit holders within thirty days of the declaration of dividend.
Correct Answer True
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
Confidential
Correct Answer Volatility
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Bar and line charts , Candle stick charts , Point and figure charts
Confidential
Multiple Choice Single Answer
Question A security analysis is done :-
Confidential
Question What are the features of public provident scheme?
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
Your 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
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.
Confidential
Weak form model is also Random walk model Weak form EMH
termed as
Investors are rational Efficient market Passive managers
hypothesis
Securities current prices Weak form EMH Strong form
fully reflect all historical
information
Framework on efficient Fama Fama
capital markets, a review
of theory and empirical
work
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
Confidential
Your Answer GNP growth rate , Price Conditions , Monsoons
True/False
Question European style options are more expensive than American style
because they offer greater flexibility to the buyer.
Correct Answer False
True/False
Question Five paisa.com is an example of on line trading portal.
Confidential
Question When a firm can grow net profits by issuing equity, the expected
growth rate in net profits is determined by :-
Correct Answer Equity reinvestment rate X return on equity
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
Your 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
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
Your 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 If rupee weakens against the dollar, it has favourable impact for
the importers.
Correct Answer False
Confidential