Seprate Sapmgt

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Multiple Choice Multiple Answer

Question What are the features of company fixed deposits?
Correct Answer Interest rate offered is higher than banks , No benefits under 80 L , No TDS for interest income
upto Rs. 5000

Question What are the features of point and figure charts?
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

Question What are the features of post office monthly income scheme?
Correct Answer Investor earns bonus of 10% on completion of term , Rate of return is 8 % , Interest payable
monthly

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 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 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 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

Question Explain what are leverage ratios ?
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

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resigned and ceased to be the director - nomination withdrawn by UTI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 investor in bonds receives income from :-
2
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
(single answer)
Multiple Choice Single Answer
3
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 Stock Exchanges are the part of :-
Correct Answer Secondary market
Your Answer Money Market

Question The index futures symbols of BSE are represented as :-
Correct Answer BSX JAN 2005 (January contract)

Question More than half the variation in stock price could be attributed to which factor?
Correct Answer Market influence

Question In India we have index futures contracts based on :-
Correct Answer S&P CNX Nifty and the BSE sensex

Question In India, the futures on individual securities have been introduced from :-
Correct Answer 2001

Question What do you understand by the term redemption price?
Correct Answer Price or NAV at which a scheme purchases its units

Question A security analysis is done :-
Correct Answer For decision making for investments

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 What is a technical approach to investment?
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Correct Answer A reflection of the idea that prices move in trends which are determined by various factors

Question A pledge of real assets as insurance against the non-payment of default by the buyer
represents
Correct Answer Collateral

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
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 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
Your Answer Price earning ratio X return on equity

Question What is a load fund?
Correct Answer Fund charging a fee for entry and exit

Question Investment is a risk free investment when :-
Correct Answer Actual return is = expected return

Question Debt instruments that have a maturity period of more than one year are called as :-
Correct Answer Bonds

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/-
Your Answer Rs. 37363/-

Question Which of these is a short-maturity debt issue?
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Correct Answer Money market funds and gilts

Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Your Answer Market resistance to a price fall

Question During the 1980's rate of savings in India has hovered around what percentage?
Correct Answer 0.21
Your Answer 0.22

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

Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average
Your Answer Geometric average

Question 4 What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycle
Your Answer They are counter-cyclical trends within the confines of a primary trend

Question 8 When the firm is not raising equity by issuing new shares, the growth rate in net profits is given by
:-
Correct Answer Retention ratio X return on equity
Your Answer Price earning ratio X return on equity

Question 9 The historical growth rate and the past earnings of a firm are used in valuing :-
Correct Answer Stable firms, but not appropriate for high growth firms
Your Answer Consistent stable firms, but not appropriate for high growth firms

Question 10 Efficient market hypothesis is based on the assumption that market comprises of :-
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Correct Answer Rational Investors
Your Answer Heterogeneous 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 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10 years. He wanted to know what is
the present value of this amount, if the rate of interest is 10% p.a:-

Question 18 What does flow-of fund analysis help in understanding?
Correct Answer Availability of money for the stock market
Your Answer Financial strength of various companies

Question 23 A security represent evidence of :-
Correct Answer A property right
Your Answer Safety

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?

Question 27 In India futures on individual securities have been introduced by :-
Correct Answer BSE & NSE

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 2 When was the first mutual fund set up?
Correct Answer 1963

Question 7 How can transition phases be projected?
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Correct Answer Transition phases are signalled by clearly definable price patterns
Your Answer By working out the resistance and support levels

Question 8 If the price of a share at the beginning of the year was Rs.50/-, dividend received during the year
was Rs.10/-per share and the price at the end is Rs.60/-. What is the rate of return?
Correct Answer 0.4
Your Answer 0.2

Question 27 Investing in this avenue enable you participate in the equity market indirectly :-
Correct Answer Mutual Funds

Question 29 In any Economy, bridge is created between savers and who need the funds by this system :-
Correct Answer Financial
Your Answer Economic

Question 30 Agriculture account for how much portion of the economy?
Correct Answer Quarter
Your Answer Three fourths

Question 37 Who operates the sinking fund under the sinking fund provision of a firm?
Correct Answer The bond trustee or the issuer

Question 40 How did Dow use the behaviour of stock markets?
Correct Answer As a barometer of business conditions rather than a basis for forecasting stock prices

Question 42 The growth period in the industry life cycle is defined as :-
Correct Answer Period of rapid market acceptance and substantial profit improvement
Your Answer Period of rapid market acceptance and substantial profit improvement

Question 3 What is the limitation of Flow-of funds analysis method?
Your Answer Cannot give indication of the inclination of market participants to purchase stock
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Question 6 Sentiment indicators are based on what assumption
Your Answer Different groups of investors are consistent in their actions at major market turning points

Question 12 An agreement to buy or sell a specified quantity of an asset at a certain future date or a certain
price is know as :-
Your Answer Futures contract

Question 25 What are intermediate trends?
Correct Answer They are counter-cyclical trends within the confines of a primary trend

Question 29 What are index funds?
Correct Answer Investment in securities in the same weightage which replicates a particular index

Question 38 What are the assumptions of the Dow theory?
Correct Answer Majority of stocks follow the underlying trend of the market most of the time

Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually. What will be
the value of his investment after 3 years?

Question 41 How many measures of money supply are used commonly?
Correct Answer 2

Question 43 Under which simple model the value of the stock is the present value of expected dividends on it
:-
Correct Answer The Dividend discount model
Your Answer The Dividend growth model

Question 46 Avenues can be broadly classified into the which type of assets?
Correct Answer Financial and Real
Your Answer Tangible and Intangible
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Question The average investor in the market is driven more by emotions than by rational analysis is a rule
of :-
Correct Answer Technical analysis
Your Answer Fundamental Analysis

Question What is the objective of an income fund?
Correct Answer To provide regular and steady income
Your Answer To provide guaranteed returns to investors

Question What does lower level of unemployment indicates?
Correct Answer Positive economic conditions
Your Answer Economic slowdown

Question The GDP growth rate in the economy in real terms has fluctuated between :-
Correct Answer 4% and 5%

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 Which market is affected with the improving and higher growth rate in economy?
Correct Answer Stock market

Question What do you understand by money supply?
Correct Answer Total money in existence at any given time

Question What is Gross National Product ?
Correct Answer Gross income generated from within the country

Question The greater the deviation of the actual returns from the actual return :-
Correct Answer Greater the variance
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Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
Your Answer Includes indirect taxes

Question More than half the variation in stock price could be attributed to which factor?
Correct Answer Market influence

Question Free Float index considers this to calculate market capitalisation :-
Your Answer Actual no. of shares available

Question The Top-down approach is also known as :-
Correct Answer Economy-industry-company approach

Question What is a technical approach to investment?
Correct Answer A reflection of the idea that prices move in trends which are determined by various factors

Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicates a particular index

Question What could be a better approach to flow-of -funds analysis?
Correct Answer An examination of liquidity trends in the banking system
Your Answer A study of macro economical changes

Question The general dividend model is based on the principle of :-
Your Answer Present value of the expected future cash flow

Question What are short term trends?
Correct Answer Trends which interrupt the course of the intermediate cycle

Question What is the aim of growth funds?
Correct Answer To provide capital appreciation over medium to long term
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Question This is not a stock exchange :-
Correct Answer MCX

Question Under EMH it is assumed that if markets are efficient, securities are priced to provide a :-
Your Answer Normal returns for their given level of risk

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?

Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost

Question Financial assets can be classified as :-
Correct Answer Marketable and non-marketable

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 What is Flow-of-funds analysis?
Your Answer Consists of an analysis of the financial positions of various investor groups

Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7 years. He wanted
to know what is the present value of this amount, if the rate of interest is 7%
p.a ?
Correct Answer Rs. 62,275/-

Question What do you understand by term pioneering stage in the industry life cycle
analysis?
Correct Answer Slow sales growth product recently introduced

Question Till 1990's secular Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
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Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits

Question If index future is taken under futures contract, the underlying asset would be :-
Correct Answer Stock index

Question What is balance of payments?
Correct Answer Credit and debit transactions of a country

Question Profits are non existent in pioneering stage because of :-
Correct Answer Heavy expenses on product introduction

Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity

Question What does a transitional phase indicate?
Correct Answer It marks the turning point between a rising and falling market

Question Dividend discount model is considered as the simplest model for :-
Your Answer Valuing Equity

Question The present value of all the future cash payments to be paid on the security to the investor is
termed as :-
Your Answer Intrinsic value of a security

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 What is the objective of Portfolio management?
Correct Answer To Minimize risk and maximize return

Question Capital expenditure -depreciation +change in working capital -(new debt issued - debt repaid) =
Correct Answer Equity reinvested in business
Your Answer Equity reinvested in business
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Question What is the percentage of variation the market and industry influence account for?
Correct Answer 2/3rd
Your Answer 75%

Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%

Question Investments could be made in retail government securities through :-
Your Answer Primary dealers
Question The growth rate is used to forecast future revenues and earnings and are inputs in valuing :-
Correct Answer Stable firms
Your Answer High growth firms

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 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
Your Answer High growth firms

Question How can transition phases be projected?
Correct Answer Transition phases are signalled by clearly definable price patterns

Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902

Question When was the first mutual fund set up?
Correct Answer 1963

Question What is the art of technical analysis?
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Correct Answer To identify trend changes at an early stage and maintain investment posture till the trend has
reversed
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
Your Answer The Dividend discount model

Question How would you rate a portfolio with 90% investment in stocks?
Correct Answer Highly aggressive

Question What are primary trends?
Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the business cycle
Your Answer Long term trends

Question In a forward contract there is :-
Correct Answer No Exchange of cash

Question Under EMH it is assumed that if markets are efficient, securities are priced to provide a :-
Correct Answer Normal returns for their given level of risk
Your Answer Equal returns for their given level of risk

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
Your Answer Earnings multiplier approach
Select The Blank

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 Time
Select The Blank

Question Dow Jones transportation average was previously known as ________.
Correct Answer Rail average
Select The Blank

Question The compounded annual return of Kisan Vikas patra is ________.
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Correct Answer 0.084
Select The Blank

Question Under futures market ________ process provides for collection of losses that have already
occurred.
Correct Answer The daily settlement
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully revised in the year ________.
Correct Answer 1996
Select The Blank

Question The Dow theory states that there are simultaneously ________ movements in the stock market.
Correct Answer 3
Select The Blank

Question Under the options contract ________ gives the holder the right, but not the obligation to buy or
sell the underlying instrument only on the expiry date.
Correct Answer European option
Select The Blank

Question ________ ratio indicates the margin available after meeting the manufacturing expenses.
Correct Answer Gross Profit margin
Select The Blank

Question Secondary reactions occurs because of ________ which arise in the market as a result of over
optimism and over pessimism.
Correct Answer Technical distortions
Your Answer Bearish trends
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of timely payment of interest and principal.
Correct Answer Adequate safety
Select The Blank

Question Debentures rated ________ are judged to offer sufficient safety of timely payment of interest and
repayment of principal.
Correct Answer "BBB"
Select The Blank

Question The value of the stock in the ________ model is sensitive to the estimates of the growth
rate.
Correct Answer The Gordons dividend growth
Select The Blank
Question ________ is due to the fact that a borrower may not pay interest and/or principal on time.
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Correct Answer Default risk
Select The Blank

Question A pattern which does not result in reversal of a trend but reaffirmation of the underlying
trend is called ________.
Correct Answer Consolidation pattern
Select The Blank

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
Select The Blank

Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Select The Blank

Question ________are good benchmark to compare the ratios for a firm.
Correct Answer Industry averages
Select The Blank

Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Select The Blank

Question ________ measures the efficiency of credit management.
Correct Answer Average collection period
Select The Blank

Question 16 ________ is affected by the leverage decisions of the firm.
Correct Answer Return on equity
Your Answer Return on equity
Select The Blank

Question 20 ________ refers to the possibility that there may not be a readily available market for the
particular bond.
Correct Answer Liquidity risk
Your Answer Interest rate risk
Select The Blank
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Question 21 The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer Early 90's
Select The Blank

Question 36 The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Your Answer 5
Select The Blank

Question 39 Security analysis serves the investment decision maker by identifying ________securities.
Correct Answer Under priced
Your Answer Blue chip
Select The Blank

Question 42 ________ absorbs the excess demand or supply generated by hedgers and assume the risk of
price fluctuations.
Correct Answer Speculators
Your Answer Brokers
Select The Blank

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
Your Answer Bullish market
Select The Blank

Question 1 UTI was set up in the year ________.
Correct Answer 1963
Select The Blank

Question 6 An ________ is a series of equal payments or receipts occurring at regular intervals of time.
Correct Answer Annuity
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
Your Answer Right but not obligation
Select The Blank
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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
Select The Blank

Question 28 ________ identified five forces that determine the intrinsic long run profit attractiveness of a
market or market segment.
Correct Answer Michael Porter
Select The Blank

Question 36 ________is a hybrid form of security which has characteristics of both equity and debentures
Correct Answer Preference shares
Select The Blank

Question 39 Debentures rated "BB" refers ________ of timely payment of interest and principal.
Correct Answer Inadequate safety
Select The Blank

Question 43 The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Select The Blank

Question 46 The Dow theory was published in a series of editorials in the ________.
Correct Answer Wall street journal
Select The Blank

Question 1 ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Your Answer Speculator
Select The Blank

Question 8 Under ________ EMH investors cannot earn abnormal/superior profits on securities on a
consistent basis.
Correct Answer Semi-strong form
Your Answer Semi-strong form
Select The Blank

Question 11 ________ take long or short positions only with the intention of making profits by getting out of the
market when conditions favor them.
Your Answer Hedgers
20
Select The Blank
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.
Correct Answer The Two-Stage dividend discount
Your Answer The Gordons dividend growth
Select The Blank

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
Your Answer PEG ratio
Select The Blank

Question 19 ________involves a simultaneous sale and repurchase agreement.
Correct Answer Repos
Select The Blank

Question 28 Current liabilities include all liabilities due in the next ________ and provisions.
Correct Answer 12 months
Select The Blank

Question 30 S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Select The Blank

Question 31 ________seeks to safeguard against potential losses on the outstanding position in futures
market.
Correct Answer Initial margin
Your Answer Daily settlement
Select The Blank

Question 35 ________ ratio is the ratio of net profit to the sales.
Correct Answer Net Profit Margin
Select The Blank

Question Mutual fund is to be registered with ________ before raising funds from public.
Correct Answer SEBI
Select The Blank

Question An investor with a higher tolerance of risk should tilt his portfolio in favour of ________.
Correct Answer Stocks
Your Answer Bank deposits
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Select The Blank
Question The ________ phase carries a lot of significance because it marks the turning point between a
rising and a falling market.
Correct Answer Transitional
Your Answer Sideways
Select The Blank

Question Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer Current ratio
Select The Blank

Question ________ measures the efficiency of credit management.
Correct Answer Average collection period
Select The Blank

Question ________ measures the profitability of operations without considering the influence of financial
structure and tax rate.
Your Answer Earnings power
Select The Blank

Question A line is defined as a price movement two or three weeks or longer, during which period the price
variation of both averages moves within a price range of approximately________%.
Correct Answer 5
Select The Blank

Question ________ measures the profitability of equity funds invested in the firms.
Correct Answer Return on equity
Select The Blank

Question Risk can be referred as the ________ in the return with respect to the expected return.
Correct Answer Volatility
Your Answer Difference
Select The Blank

Question All trades in the futures market are cash settled on a ________ basis.
Correct Answer T+1
Your Answer T+1
Select The Blank

Question ________ ratio is the ratio of net profit to the sales.
Correct Answer Net Profit Margin
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Select The Blank
Question When a debenture is sold to the general public a ________ is appointed.
Correct Answer Trustee
Your Answer Brokers
Select The Blank

Question A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer Over priced
Select The Blank

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
Select The Blank

Question Mutual fund is to be registered with ________ before raising funds from public.
Correct Answer SEBI
Select The Blank

Question In a heads and shoulders formation the deeper the pattern, the greater is the ________
significance once it is completed
Correct Answer Bearish
Select The Blank

Question The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer Early 90's
Select The Blank

Question Under ________ EMH investors cannot earn abnormal/superior profits on securities on a
consistent basis.
Correct Answer Semi-strong form
Select The Blank

Question The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer 5
Select The Blank

Question ________ is the ratio of the market price per share to the earnings per share.
Correct Answer Price earning ratio
Select The Blank

Question ________ absorbs the excess demand or supply generated by hedgers and assume the risk of
price fluctuations.
Select The Blank

Question UTI was set up in the year ________.
Correct Answer 1963
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TRUE/FALSE
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.
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.
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
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
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True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
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.
True/False
Question Debt is less riskier source of finance than equity.
Your Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
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
True/False
Question Penetration of a trend line denotes a bearish phase.
Your Answer True
True/False
Question Passive investment managers believe that markets are inefficient and Active managers
believe that markets are efficient.
True/False
Question 2 Currently in India index options are both European and American in nature.
True/False
Question 3 The cost structure remaining the same, better price realisation results in lower gross
profit ratio.
25
True/False
Question 6 A segment is more attractive when there are actual or potential substitutes for the
product.
Your Answer True
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
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.
Your Answer True
True/False
Question 37 Following a decline, heavy volume with little price change is indicative of accumulation
and is normally a bearish factor.
Your Answer True
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.
Correct Answer True
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer True
26
True/False
Question 23 A price rise accompanied by expanding volume denotes a potential trend reversal.
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.
Correct Answer True
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.
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct 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.
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact for the importers.
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
27
True/False
Question 42 European style options are more expensive than American style because they offer
greater flexibility to the buyer.
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.
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.
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.
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
Your Answer True
28
True/False
Question Prices of stocks usually move in trends.
Correct Answer True
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 With the use of diversification you can reduce the risk.
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 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 Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as well as
current.
Your Answer True
True/False
Question The price earning ratio can be estimated for the firms with negative earnings per share.
Your Answer True
True/False
Question A share certificate indicates that the investor owns a certain number of shares.
Correct Answer True
Your 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
Your Answer True
29
Select The Blank
Question The ________ phase carries a lot of significance because it marks the turning point between
a rising and a falling market.
Correct Answer Transitional
Your Answer Transitional
True/False
Question Bonds and Debentures represent long term debt instruments.
Your Answer True
True/False
Question A price rise accompanied by expanding volume denotes a potential trend reversal.
Your Answer False
Select The Blank

Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Your Answer Transition
True/False
Question Currently in India index options are both European and American in nature.
Your Answer False
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of timely payment of interest and
principal.
Correct Answer Adequate safety
Your Answer High safety
True/False
Question A rally that develops on contracting volumes is suspect and warns of a potential trend
reversal in price
Correct Answer True
Your Answer True
30
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Your Answer Price earning ratio X return on equity

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Correct Answer Fund charging a fee for entry and exit

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Correct Answer Actual return is = expected return

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Correct Answer Bonds

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Your Answer Rs. 37363/-

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Your Answer Market resistance to a price fall

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Correct Answer 0.21

Your Answer 0.22

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Multiple Choice Single Answer

Correct Answer Arithmetic average or a geometric average

Your Answer Geometric average

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Your Answer Price earning ratio X return on equity

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Your Answer Heterogeneous investors

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Correct Answer 0.0085

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Correct Answer Availability of money for the stock market

Your Answer Financial strength of various companies

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Correct Answer A property right

Your Answer Safety

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Correct Answer BSE & NSE

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Multiple Choice Single Answer

Correct Answer 1963