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LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question The value of t

he stock in the ________ model is sensitive to the estimates of the growth rate.
Correct The Gordons dividend growth Answer Select The Blank Question The possib
ility of reduction of risk through the construction of a portfolio depends on th
e value of ________ between the two assets. Correct Correlation coefficient Answ
er Multiple Choice Single Answer Question When an investor invests in stock, exp
ects to get the dividends and an expected price for the period the stock is held
is the rule of :Correct The General model Answer Select The Blank Question Debe
ntures rated ________ are judged to offer sufficient safety of timely payment of
interest and repayment of principal. Correct "BBB" Answer Multiple Choice Singl
e Answer Question Stock Exchanges are the part of :Correct Answer Your Answer Se
condary market Money Market
Multiple Choice Multiple Answer Question Active investment managers :Correct Ans
wer Do not believe that markets are efficient , Puts efforts to search mispriced
securities in the market , Are relatively active traders in securities to acqui
re abnormal returns
Multiple Choice Multiple Answer
Question Correct Answer
Equity analysts provides estimates of earnings and earnings growth for future, u
sing historical data and :Macro economic information that may impact future grow
th , Private information about the firm , Firm's specific information and public
information
Multiple Choice Multiple Answer Question What are the features of short-term tre
nds? 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
True/False Question Correct Answer True/False Question Correct Answer
The normal relationship is for the volume to expand on rallies and contract on d
eclines. True
In case of assured returns, A scheme cannot promise returns unless such returns
are fully guaranteed by sponsor or AMC. True
Multiple Choice Multiple Answer Question What are the features of trend lines Co
rrect Answer A simple and useful tool in technical analysis , Prices move in tre
nds , The trend lines represent points of support and resistance
Select The Blank Question ________ is due to the fact that a borrower may not pa
y interest and/or principal on time. Correct Default risk Answer Multiple Choice
Multiple Answer Question What are the features of candle stick charts? Correct
Answer Your Answer Indicates in black if the closing price is lower than the ope
ning price , Indicates in white if the closing price is higher than the opening
price , Displays the correlation between the high and low prices
True/False Question Correct Answer
A firm uses a combination of equity and debt for financing its assets. True
Select The Blank Question A pattern which does not result in reversal of a trend
but reaffirmation of the underlying trend is called ________. Correct Consolida
tion pattern Answer True/False Question Correct Answer
Policies of the government and the attitude of the government towards the indust
ry have a considerable influence on the industry. True
Multiple Choice Single Answer Question The index futures symbols of BSE are repr
esented as :Correct Answer BSX JAN 2005 (January contract)
Multiple Choice Multiple Answer 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 H- Model for valuing growth , H-Two sta
ge model for Answer growth , H-Model unlike the classic two stage model Multiple
Choice Multiple Answer Question What are the features of line charts? Correct A
nswer True/False Question Correct Answer It connects closing prices from one per
iod to the next , It is ideal for securities with no high or low price data
Investors in high tax bracket would benefit by investing in equity schemes. Fals
e
Select The Blank Question ________ bonds are generally called for prepayment aft
er interest rates have fallen, investors will not be able to find comparable inv
estment avenues. Correct Call risk Answer Select The Blank Question ________ dea
l in futures to offset a pre-existing risk. Correct Answer Hedger
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Market influence Answer Match Th
e Following Question Price pattern Primary trend Intermediate trend Short term t
rend
Correct Answer Resistance level Last between 1-2 years
Your Answer Head and shoulders formation Last between 1-2 years
Last between 3 weeks to Last between 3 weeks to as long as 6 months as long as 6
months Last 1 to 3-4 weeks Last 1 to 3-4 weeks
Select The Blank Question ________are good benchmark to compare the ratios for a
firm. Correct Industry averages Answer Select The Blank Question The ________ p
hase is characterized by resistance area and support level. Correct Transition A
nswer True/False Question
The price earning ratio is an increasing function of the payout ratio and the gr
owth rate and a decreasing function of the riskiness of the firm.
Correct Answer
True
Multiple Choice Single Answer Question In India we have index futures contracts
based on :Correct Answer True/False Question Correct Answer S&P CNX Nifty and th
e BSE sensex
When we invest in only one asset we are not exposed to any specific or market ri
sk. False
Multiple Choice Single Answer Question In India, the futures on individual secur
ities have been introduced from :Correct 2001 Answer Select The Blank Question _
_______ measures the efficiency of credit management. Correct Answer Average col
lection period
Multiple Choice Single Answer Question What do you understand by the term redemp
tion price? Correct Answer Price or NAV at which a scheme purchases its units
Multiple Choice Multiple Answer Question What are the ways of measuring relative
strength? Correct Answer Your Answer Calculate the rates of return and classify
securities that have earned superior historical returns , Calculating certain r
atios will help in analyzing whether a security has relative strength Calculatin
g the Return on investment
Multiple Choice Multiple Answer Question The Peer group of Bharat Forge consists
of which all companies?
Correct Answer True/False Question Correct Answer
Am forge industries , Kalyani Forge , EL Forge
Five paisa.com is an example of on line trading portal. True
Multiple Choice Single Answer Question A security analysis is done :Correct Answ
er For decision making for investments
Multiple Choice Multiple Answer Question Which were the initiatives which the ch
airman said would focus on in 2003-04 in the speech in annual report for the yea
r 2003-03? Correct Research and development , Capital investment and focus on An
swer balance sheet , Overseas acquisitions Select The Blank Question Dow Jones t
ransportation average was previously known as ________. Correct Rail average Ans
wer Your Answer Freight average Multiple Choice Multiple Answer Question The Two
-Stage dividend discount model is best suited for the firms that are :Correct In
high growth rate phase , Expecting to maintain the growth Answer rate phase ste
adily for a specific time period , Sources of high growth are expected to disapp
ear after specific period of time True/False Question Correct Answer
A mutual fund is required to dispatch the dividend warrants to the unit holders
within thirty days of the declaration of dividend. True
Multiple Choice Single Answer
Question Correct Answer
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 b
e :0.05
Multiple Choice Multiple Answer Question The features of bond are :Correct Answe
r Collateral , Call provision , Sinking fund and protective covenants
Multiple Choice Single Answer Question What is a technical approach to investmen
t? Correct Answer A reflection of the idea that prices move in trends which are
determined by various factors
Match The Following Question MCX Sensex Nifty Lifex
Correct Answer Commodity Exchange BSE Index NSE Index ET Index
Your Answer Commodity Exchange BSE Index NSE Index Gold Index
Multiple Choice Single Answer Question A pledge of real assets as insurance agai
nst the non-payment of default by the buyer represents Correct Collateral Answer
True/False Question Correct Answer
Bearish actions come from a series of declining peaks and troughs. True
Multiple Choice Single Answer Question Who developed Dow's Principles and organi
sed them into a theory as it is known today? Correct William Peter Hamilton Answ
er
Your Answer
kk
Charles.H.Dow
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 Bl
ank Question Debentures rated "BB" refers ________ of timely payment of interest
and principal. Correct Answer Inadequate safety Your Answer Inadequate safety S
elect The Blank Question S&P NSE 50 index is known as ________. Correct Answer N
IFTY Your Answer NIFTY True/False Question The risk associated to get the requir
ed rate of return on the stock is measure by market beta. Correct Answer True Yo
ur Answer True Match The Following Question Correct Answer Your Answer
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 ta
ke a short position by selling puts. Cost of Carry model Options contract A cont
ract where both the parties are equally responsible Futures contract Futures con
tract The amount which the buyer of the option has to pay to the option writer t
o induce him to accept the risk associated with the contract. Option price Optio
n price
True/False Question A segment is unattractive if the buyers possess strong or gr
owing bargaining powers. Correct Answer True Your Answer True Multiple Choice Si
ngle Answer Question Debt instruments that have a maturity period of more than o
ne year are called as :Correct Answer Bonds Your Answer Bonds Multiple Choice Si
ngle Answer
Question The present value of all the future cash payments to be paid on the sec
urity to the investor is termed as :Correct Answer Intrinsic value of a security
Your Answer Intrinsic value of a security Multiple Choice Multiple Answer Quest
ion What are the features of Retail government securities (G-secs) ? Correct Ans
wer Safest investment option available , Demat account is required for investmen
t , 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. Corr
ect Answer True Your Answer True Select The Blank Question ________seeks to safe
guard against potential losses on the outstanding position in futures market. Co
rrect Answer Initial margin Your Answer Initial margin Select The Blank
Question Risk can be referred as the ________ in the return with respect to the
expected return. Correct Answer Volatility Your Answer Volatility Multiple Choic
e Multiple Answer Question The return to the bond investor can be measured in te
rms of :Correct Answer Current yield , Yield to maturity , Realised yield Your A
nswer Current yield , Yield to maturity , Realised yield True/False Question Cer
tificate of Deposits offers high rate of interest than Treasury Bills. Correct A
nswer 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 o
r before the expiry date and the option can be exercised early. Correct Answer T
rue Your Answer True Multiple Choice Multiple Answer Question Which of the follo
wing 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) , Relativ
e strength indicator (RSI) , Moving average convergence divergence(MACD) Multipl
e Choice Single Answer Question What is Gross National Product ? Correct Answer
Gross income generated from within the country Your Answer Gross income generate
d from within the country Select The Blank Question An ________ is a series of e
qual 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 duri
ng the year and the price at the end is Rs.115/-. What is the rate of return? Co
rrect Answer 0.15 Your Answer 0.15 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 Match The Following Questio
n Correct Answer Your Answer Ratio used as a measure of relative value PEG ratio
PEG 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 replaceme
nt cost ratio Key determiner of revenue multiples Profit margin Profit margin Th
e 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 rat
io
Multiple Choice Multiple Answer Question Features of PSU Bonds are :Correct Answ
er 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 Q
uestion Credit rating companies assign ratings for which of these investments? C
orrect 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 Multiple Choice Single Answer Question W
hat is the objective of Portfolio management? Correct Answer To Minimize risk an
d maximize return Your Answer To Minimize risk and maximize return
Select The Blank Question Acid test ratio is more stringent measure of liquidity
compared to the ________. Correct Answer Current ratio Your Answer Current rati
o
Multiple Choice Multiple Answer Question An option is :Correct Answer A contract
between two parties , Where buyer receives a privilege for which he pays a prem
ium , Where the seller accepts an obligation for which he receives a fee Your An
swer 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 receive
s a fee 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 Answ
er Future value Your Answer Future value True/False Question The basic assumptio
n of Technical analysis is that, price discounts everything and it is the outcom
e of all forces affecting a stock. Correct Answer True Your Answer True
********************************
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank Question ________ take long or short positions only with the in
tention of making profits by getting out of the market when conditions favor the
m. Correct Answer Speculators Your Answer Speculators
Select The Blank Question ________ deal in futures to offset a pre-existing risk
. Correct Answer Hedger Your Answer Hedger
Multiple Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The
rate of interest is 4% compounded annually. What will be the value of his inves
tment after 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/-
Multiple Choice Single Answer Question In estimating the growth of a firm, analy
st's forecasts have an advantage over historical data-based models because :Corr
ect Answer They incorporate more recent information about the firm and inputs fu
ture prospects Your Answer They use the firm's growth rate based on the arithmet
ic average and the geometric average
Multiple Choice Single Answer Question In a forward contract there is :Correct A
nswer No Exchange of cash Your Answer No Exchange of cash
Multiple Choice Multiple Answer Question What are the features of trend lines Co
rrect Answer A simple and useful tool in technical analysis , Prices move in tre
nds , The trend lines represent points of support and resistance Your Answer A s
imple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and resistance
Select The Blank Question ________ is the value at a certain future date today o
f a stream of cash flows that occurs over a period of time. Correct Answer Futur
e value Your Answer Future value
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 befo
re a specific date. Correct Answer Right but not obligation Your Answer Right bu
t not obligation
Multiple Choice Multiple Answer Question What are the features of point and figu
re 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 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
Multiple Choice Single Answer Question Which of these is a short-maturity debt i
ssue? Correct Answer Money market funds and gilts Your Answer Money market funds
and gilts
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 invest
ment after 5 years? Correct Answer Rs.14.693/Your Answer Rs.14.693/-
True/False Question When we invest in only one asset we are not exposed to any s
pecific or market risk.
Correct Answer False Your Answer False
Match The Following Question Correct Answer Your Answer
Expiration period for options Nine months Nine months
The world's first largest options exchange Chicago Board of options exchange Chi
cago Board of options exchange
The most popular pricing options model published in the year 1973 Black Scholes
Black Scholes
When the writer gives the buyer of the option the right to sell the underlying a
sset on or before the expiry date Put option Put option
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 thi
s amount, if the rate of interest is 6% p.a? Correct Answer Rs. 37363/Your Answe
r Rs. 37363/-
True/False Question When you are making an investment you are expecting certain
future benefits from your investment. Correct Answer True Your Answer True
Match The Following Question Correct Answer Your Answer
Technical collaboration of Bharat Forge with SIFCO industries USA 1981 1981
Bharat Forge was incorporated at Mumbai 1961 1961
Shares of 100 each subdivided of Bharat forge 1971 1971
930000 bonus shares issued by Bharat Forge 1976 1976
Select The Blank Question ________ ratio indicates the margin available after me
eting the manufacturing expenses. Correct Answer Gross Profit margin Your Answer
Gross Profit margin
Multiple Choice Multiple Answer Question Gilt Edged Securities are :Correct Answ
er
Central Govt , State Govt. , Quasi-Govt Your Answer Central Govt , State Govt. ,
Quasi-Govt
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,5
0,000/- at the end of 3 years. He wanted to know what is the present value of th
is amount, if the rate of interest is 9% p.a ? Correct Answer Rs.1,15,827/Your A
nswer Rs.1,15,827/-
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 :C
orrect 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 receip
t 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 receip
t
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 A
nswer True Your Answer True
Multiple Choice Single Answer Question Which market is affected with the improvi
ng and higher growth rate in economy? Correct Answer Stock market Your Answer St
ock market
True/False Question The price earning ratio can be estimated for the firms with
negative earnings per share. Correct Answer False Your Answer False
Multiple Choice Multiple Answer 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 Your Ans
wer H- Model for valuing growth , H-Two stage model for growth , H-Model unlike
the classic two stage model
Multiple Choice Single Answer Question How did Dow use the behaviour of stock ma
rkets? Correct Answer As a barometer of business conditions rather than a basis
for forecasting stock prices Your Answer As a barometer of business conditions r
ather than a basis for forecasting stock prices
True/False Question The normal relationship is for the volume to expand on ralli
es and contract on declines. Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question What were the objectives for 2002-03 th
e chairman of Bharat forge had emphasised on in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value add
ed products , Continue reducing costs Your Answer Maintain aggressive exports th
rust , Increase shares of value added products , Continue reducing costs
Multiple Choice Multiple Answer Question Which are the different types of accoun
ts offered to investors by the stock brokers? Correct Answer Cash trading , Marg
in trading Your Answer Cash trading , Margin trading
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Current yield , Yield to maturity , Realise
d yield
Your Answer Current yield , Yield to maturity , Realised yield
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 Y
our Answer True
Multiple Choice Multiple Answer Question What was the final analysis on the perf
ormance of Bharat forge for the year FY 02? Correct Answer Aim to become US$1 bi
llion 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 w
ill trade at an inexpensive PEG of 0.6x.
Multiple Choice Single Answer
Question Agriculture account for how much portion of the economy? Correct Answer
Quarter Your Answer Quarter
True/False Question If rupee weakens against the dollar, it has favourable impac
t for the importers. Correct Answer False Your Answer False
True/False Question The labour conditions do not play an important role in the i
ndustry analysis. Correct Answer False Your Answer False
Multiple Choice Multiple Answer Question
Major steps involved in construction of a index are :Correct Answer Selecting a
set of scrips to be used , Fixing starting date , Calculating market capitalisat
ion Your Answer Selecting a set of scrips to be used , Fixing starting date , Ca
lculating market capitalisation
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Answer Speculator
s Your Answer Speculators
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market. Correct Ans
wer Transitional Your Answer Transitional
Multiple Choice Single Answer
Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compound
ed annually. What will be the value of his investment after 3 years? Correct Ans
wer Rs. 29775/Your Answer Rs. 29775/-
Multiple Choice Single Answer 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 thi
s amount, if the rate of interest is 7% p.a ? Correct Answer Rs. 62,275/Your Ans
wer Rs. 62,275/-
Select The Blank Question A line is defined as a price movement two or three wee
ks or longer, during which period the price variation of both averages moves wit
hin a price range of approximately________%. Correct Answer 5 Your Answer 5
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years? Correct Answer Rs. 73466/Your Answer Rs. 7346
6/-
Multiple Choice Multiple Answer Question Equity analysts provides estimates of e
arnings and earnings growth for future, using historical data and :Correct Answe
r Macro economic information that may impact future growth , Private information
about the firm , Firm's specific information and public information Your 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 risk associated to get the required rate of return on th
e stock is measure by market beta.
Correct Answer True Your Answer True
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 thi
s amount, if the rate of interest is 10% p.a:Correct Answer Rs. 9639/Your Answer
Rs. 9639/-
Multiple Choice Single Answer Question What is a technical approach to investmen
t? 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 m
ove in trends which are determined by various factors
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 de
velopment , Capital investment and focus on balance sheet , Overseas acquisition
s Your Answer Research and development , Capital investment and focus on balance
sheet , Overseas acquisitions
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False Question Following a decline, heavy volume with little price change i
s indicative of accumulation and is normally a bearish factor. Correct Answer Fa
lse Your Answer False
Select The Blank Question ________are good benchmark to compare the ratios for a
firm. Correct Answer Industry averages
Your Answer Industry averages
Multiple Choice Single Answer Question A market that is trading at a Price earni
ng ratio that is much higher than its historical norms is considered to be :Corr
ect Answer Over valued Your Answer Over valued
Multiple Choice Single Answer Question What are short term trends? Correct Answe
r Trends which interrupt the course of the intermediate cycle Your Answer Trends
which interrupt the course of the intermediate cycle
Select The Blank Question UTI was set up in the year ________. Correct Answer 19
63 Your Answer 1963
True/False Question European style options are more expensive than American styl
e because they offer greater flexibility to the buyer. Correct Answer False Your
Answer False
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Answer Market influence Your Ans
wer Market influence
Select The Blank Question A ________ rally for stocks generally takes place beca
use of an improved outlook for business conditions over what was anticipated. Co
rrect Answer Bear market Your Answer Bear market
Multiple Choice Multiple Answer Question What are the features of Kisan Vikas Pa
tra? Correct Answer Term is for 8 years seven months , Provision of premature wi
thdrawal , Interest rate is 8.4% compounded annually Your Answer Term is for 8 y
ears seven months , Provision of premature withdrawal , Interest rate is 8.4% co
mpounded annually
Multiple Choice Single Answer Question What is Gross National Product ? Correct
Answer Gross income generated from within the country Your Answer Gross income g
enerated from within the country
Multiple Choice Single Answer Question Capital expenditure -depreciation +change
in working capital -(new debt issued - debt repaid) = Correct Answer Equity rei
nvested in business Your Answer Equity reinvested in business
Multiple Choice Single Answer Question What levels if increased will have unfavo
urable impact on the stock market? Correct Answer Higher levels of taxation Your
Answer Low levels of interest rates
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s based on the assumption of :Correct Answer An initial phase where the growth i
s not a stable growth rate , A subsequent steady state of growth rate being stab
le and lasts n years , A stable growth phase lasts forever Your Answer An initia
l 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 for
ever
Select The Blank Question ________ refers to the possibility that there may not
be a readily available market for the particular bond. Correct Answer Liquidity
risk
Your Answer Liquidity risk
Select The Blank Question The Derivative market is divided into Future market an
d ________ market. Correct Answer Options Your Answer Present
Multiple Choice Multiple Answer Question The features of bond are :Correct Answe
r Collateral , Call provision , Sinking fund and protective covenants Your Answe
r Collateral , Call provision , Sinking fund and protective covenants
Multiple Choice Single Answer Question In India futures on individual securities
have been introduced by :Correct Answer
BSE & NSE Your Answer BSE & NSE
Multiple Choice Single Answer Question The expected price of the stock at the en
d of the holding period is determined by future dividends and the value of the s
tock is the present value of dividends through infinity are the underlying assum
ptions of :Correct Answer The General model Your Answer The Dividend Capitalisat
ion model
True/False Question Sensex is the index of Calcutta Stock Exchange. Correct Answ
er False Your Answer False
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 Your Answer True
Multiple Choice Single Answer Question What is GDP at factor cost ? Correct Answ
er Excludes net income received from abroad Your Answer Excludes net income rece
ived from abroad
True/False Question Quick assets consist of current assets less inventories. Cor
rect Answer True Your Answer True
Multiple Choice Multiple Answer Question The Gordon growth model is best suited
for firms :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 e
qual to or lower that the growth in the economy , Which have well established di
vidend payout ratio policy , Whose earnings are steady and perpetual
Select The Blank Question Mutual fund is to be registered with ________ before r
aising funds from public. Correct Answer SEBI Your Answer SEBI
Multiple Choice Single Answer Question What does lower level of unemployment ind
icates? Correct Answer Positive economic conditions Your Answer Positive economi
c conditions
Multiple Choice Single Answer Question The GDP growth rate in the economy in rea
l terms has fluctuated between :-
Correct Answer 4% and 5% Your Answer 4% and 5%
Select The Blank Question An investor with a higher tolerance of risk should til
t his portfolio in favour of ________. Correct Answer Stocks Your Answer Stocks
Multiple Choice Single Answer Question Avenues can be broadly classified into th
e which type of assets? Correct Answer Financial and Real Your Answer Financial
and Real
Multiple Choice Multiple Answer Question Mutual fund schemes could be broadly cl
assified as :Correct Answer
Open ended scheme , Close ended scheme Your Answer Open ended scheme , Close end
ed scheme
Match The Following Question Correct Answer Your Answer
Development of Dow's principles William Peter Hamilton William Peter Hamilton
Breadth Indicator Advance/decline line Advance/decline line
Momentum indicator MACD MACD
Trend lines Useful tool in technical analysis Useful tool in technical analysis
Multiple Choice Single Answer
Question The bond issuing firm enjoys the flexibility of being able to call the
bonds if :Correct Answer Interest rates are falling Your Answer Interest rates a
re falling
Multiple Choice Single Answer Question The issuing firm enjoys the flexibility t
o call the bonds if the interest rates fall significantly and it can issue :Corr
ect Answer New bonds at a lower rates Your Answer New bonds at a lower rates
True/False Question If a rupee weakens against the dollars it has favourable imp
act for the exporters. Correct Answer True Your Answer True
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry influence a
ccount for? Correct Answer 2/3rd Your Answer 2/3rd
Multiple Choice Multiple Answer Question Which of the following are important mo
mentum indicators used widely? Correct Answer Rate of change (ROC) , Relative st
rength indicator (RSI) , Moving average convergence divergence(MACD) Your Answer
Rate of change (ROC) , Relative strength indicator (RSI) , Moving average conve
rgence divergence(MACD)
Match The Following Question Correct Answer Your Answer
Turnover ratios Help measure the efficiency of utilisation of assets Help measur
e the efficiency of utilisation of assets
Debt Equity ratio Debt / Equity Debt / Equity
Quick assets Highly liquid assets Highly liquid assets
Average collection period Similar to debtors turnover Similar to debtors turnove
r
Multiple Choice Multiple Answer Question What are the features of candle stick c
harts? 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 openi
ng price Your Answer Indicates in black if the closing price is lower than the o
pening price , Indicates in white if the closing price is higher than the openin
g price
True/False Question Policies of the government and the attitude of the governmen
t towards the industry have a considerable influence on the
industry. Correct Answer True Your Answer True
Multiple Choice Single Answer Question What do you understand by money supply? C
orrect Answer Total money in existence at any given time Your Answer Total money
in existence at any given time
Multiple Choice Multiple Answer Question What are the features of short-term tre
nds? 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 Y
our Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the i
ntermediate cycle , They are usually influenced by random news events
Multiple Choice Single Answer
Question What is net national product also known as? Correct Answer National inc
ome Your Answer National income
Select The Blank Question Risk can be referred as the ________ in the return wit
h respect to the expected return. Correct Answer Volatility Your Answer Volatili
ty
True/False Question Currently in India index options are both European and Ameri
can in nature. Correct Answer False Your Answer False
Multiple Choice Single Answer Question
What is balance of payments? Correct Answer Credit and debit transactions of a c
ountry Your Answer Credit and debit transactions of a country
Select The Blank Question Under ________ EMH investors cannot earn abnormal/supe
rior profits on securities on a consistent basis. Correct Answer Semi-strong for
m Your Answer Semi-strong form
True/False Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries. Correct Answer True You
r Answer True
Multiple Choice Multiple Answer Question The security market is the market for :
-
Correct Answer Equity , Debt , Derivatives Your Answer Equity , Debt , Derivativ
es
s
38. In a perfectly efficient market all securities are correctly priced means th
ere are no :-
a)
High priced and low priced securities Increase priced and decrease priced securi
ties Under priced and over priced securities
b)
c)
Book priced and market priced securities
d)
Marks : 2
42.
What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment Unstable economy Higher levels of taxation
b)
c)
Low levels of interest rates
d)
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer Question What are the different types of profita
bility ratios? Correct Answer Return on equity , Gross profit margin ratio , Ear
nings power Your Answer Return on equity , Gross profit margin ratio , Earnings
power
Select The Blank Question
Mutual fund is to be registered with ________ before raising funds from public.
Correct Answer SEBI Your Answer SEBI
Multiple Choice Multiple Answer Question The security market is the market for :
Correct Answer Equity , Debt , Derivatives Your Answer Equity , Debt , Bank depo
sits
Multiple Choice Multiple Answer Question The Gordon growth model is best suited
for firms :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 lowe
r that the growth in the economy , Which have well established dividend payout r
atio policy
Multiple Choice Single Answer Question A security analysis is done :Correct Answ
er For decision making for investments Your Answer As per instruction of the com
pany
Multiple Choice Single Answer Question The average investor in the market is dri
ven more by emotions than by rational analysis is a rule of :Correct Answer Tech
nical analysis Your Answer Fundamental Analysis
Multiple Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The
rate of interest is 4% compounded annually. What will be the value of his inves
tment after 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/-
Multiple Choice Single Answer Question What is the objective of an income fund?
Correct Answer To provide regular and steady income Your Answer To provide guara
nteed returns to investors
Multiple Choice Multiple Answer Question Explain what are leverage ratios ? Corr
ect Answer Help in assessing the risk arising using the debt capital , Debt equi
ty 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 He
lp in assessing the risk arising using the debt capital , Debt equity ratio and
interest coverage ratio and DSCR are important leverage ratios , Debt is riskier
source of finance as it entails fixed outgo of periodic payments
Multiple Choice Multiple Answer Question Which were the initiatives which the ch
airman said would focus on in 2003-04 in the speech in annual report for the yea
r 2003-03? Correct Answer Research and development , Capital investment and focu
s on balance sheet , Overseas acquisitions Your Answer Focus on mergers , Resear
ch and development , Capital investment and focus on balance sheet
Multiple Choice Multiple Answer Question What were the objectives for 2002-03 th
e chairman of Bharat forge had emphasised on in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value add
ed products , Continue reducing costs Your Answer Maintain aggressive exports th
rust , Increase shares of value added products , Continue reducing costs
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 A
nswer True
Your Answer True
Multiple Choice Single Answer Question What does lower level of unemployment ind
icates? Correct Answer Positive economic conditions Your Answer Economic slowdow
n
Multiple Choice Single Answer Question The GDP growth rate in the economy in rea
l terms has fluctuated between :Correct Answer 4% and 5% Your Answer 4% and 5%
Multiple Choice Single Answer Question Mr.Rohan invests Rs.25,000/- today. The r
ate of interest is 6% compounded annually. What will be the value of his investm
ent after 3 years? Correct Answer Rs. 29775/Your Answer Rs. 29775/-
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 invest
ment after 5 years?
Correct Answer Rs.14.693/Your Answer Rs.14.693/-
True/False Question When you are making an investment you are expecting certain
future benefits from your investment. Correct Answer True Your Answer True
Multiple Choice Single Answer Question What is the limitation of Flow-of funds a
nalysis method? Correct Answer Cannot give indication of the inclination of mark
et 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 You
r Answer True
Multiple Choice Multiple Answer
Question Which are the different types of accounts offered to investors by the s
tock brokers? Correct Answer Cash trading , Margin trading Your Answer General t
rading , Cash trading , Credit trading
Select The Blank Question Under the options contract ________ gives the holder t
he right, but not the obligation to buy or sell the underlying instrument only o
n the expiry date. Correct Answer European option Your Answer American option
Select The Blank Question An investor with a higher tolerance of risk should til
t his portfolio in favour of ________. Correct Answer Stocks Your Answer Bank de
posits
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market. Correct Ans
wer Transitional Your Answer
Sideways
Multiple Choice Multiple Answer 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 Your Ans
wer H- Model for valuing growth , H-Two stage model for growth , H-Model unlike
the classic two stage model
Select The Blank Question Acid test ratio is more stringent measure of liquidity
compared to the ________. Correct Answer Current ratio Your Answer Current rati
o
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s based on the assumption of :Correct Answer An initial phase where the growth i
s not a stable growth rate , A subsequent steady state of growth rate being stab
le and lasts n years , A stable growth phase lasts forever Your Answer An initia
l 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 for
ever
True/False Question While calculating geometric mean calculation of root is not
important. Correct Answer False Your Answer False
True/False Question The labour conditions do not play an important role in the i
ndustry analysis. Correct Answer False Your Answer False
Select The Blank Question ________ measures the efficiency of credit management.
Correct Answer Average collection period Your Answer Average collection period
Select The Blank Question ________ measures the profitability of operations with
out considering the influence of financial structure and tax rate. Correct Answe
r Earnings power Your Answer Earnings power
Multiple Choice Single Answer Question Which market is affected with the improvi
ng and higher growth rate in economy? Correct Answer Stock market Your Answer St
ock market
True/False Question Certificate of Deposits offers high rate of interest than Tr
easury Bills. Correct Answer True Your Answer True
Multiple Choice Single Answer Question What do you understand by money supply? C
orrect Answer Total money in existence at any given time Your Answer Total money
in existence at any given time
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
Multiple Choice Multiple Answer Question What are the features of trend lines Co
rrect Answer A simple and useful tool in technical analysis , Prices move in tre
nds , The trend lines represent points of support and resistance Your Answer A s
imple 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 poten
tial trend reversal. Correct Answer False Your Answer True
Multiple Choice Multiple Answer Question Mutual fund schemes could be broadly cl
assified as :Correct Answer Open ended scheme , Close ended scheme Your Answer O
pen ended scheme , Close ended scheme , Balance fund
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
Match The Following Question Correct Answer Your Answer
Future value of a series of cash flows occurring at the end of each period. Futu
re value of annuity Future value of annuity
Value today of a stream of cash flows that occurs in future. Present Value Prese
nt Value
Value at a certain future date today of a stream of cash flows that occurs over
a period of time. Future Value Future Value
Series of equal payments or receipts occurring at regular intervals of time. Pre
sent value of annuity Present value of annuity
Select The Blank Question A line is defined as a price movement two or three wee
ks or longer, during which period the price variation of both averages moves wit
hin a price range of approximately________%. Correct Answer
5 5 Your Answer
True/False Question Following a decline, heavy volume with little price change i
s indicative of accumulation and is normally a bearish factor. Correct Answer Fa
lse Your Answer True
Multiple Choice Single Answer Question The greater the deviation of the actual r
eturns from the actual return :Correct Answer Greater the variance Your Answer G
reater the variance
True/False Question A segment is unattractive if the buyers possess strong or gr
owing bargaining powers. Correct Answer True Your Answer False
Select The Blank
Question ________ refers to the possibility that there may not be a readily avai
lable market for the particular bond. Correct Answer Liquidity risk Your Answer
Liquidity risk
Multiple Choice Single Answer Question What is GDP at factor cost ? Correct Answ
er Excludes net income received from abroad Your Answer Includes indirect taxes
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Answer Market influence Your Ans
wer Market influence
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer
Question What does a transitional phase indicate? Correct Answer It marks the tu
rning 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 pay
out ratio and the growth rate and a decreasing function of the riskiness of the
firm. Correct Answer True Your Answer True
Multiple Choice Single Answer Question The issuing firm enjoys the flexibility t
o call the bonds if the interest rates fall significantly and it can issue :Corr
ect 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 s
eparates the two major market movements. Correct Answer True Your Answer False
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Answer Market influence Your Ans
wer Market influence
Multiple Choice Multiple Answer Question Features of PSU Bonds are :Correct Answ
er No TDS , Transferable by endorsement , No stamp duty on transfer Your Answer
No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Single Answer Question What do you understand by money supply? C
orrect Answer Total money in existence at any given time Your Answer Total money
in existence at any given time
Select The Blank Question Security analysis serves the investment decision maker
by identifying ________securities. Correct Answer
Under priced Your Answer Under priced
Multiple Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The
rate of interest is 4% compounded annually. What will be the value of his inves
tment after 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/-
Select The Blank Question Under ________ EMH investors cannot earn abnormal/supe
rior profits on securities on a consistent basis. Correct Answer Semi-strong for
m Your Answer Semi-strong form
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 A
nswer True Your Answer True
True/False Question While calculating geometric mean calculation of root is not
important. Correct Answer False Your Answer False
Select The Blank Question Risk can be referred as the ________ in the return wit
h respect to the expected return. Correct Answer Volatility Your Answer Volatili
ty
Multiple Choice Single Answer Question Mr.Rohan invests Rs.25,000/- today. The r
ate of interest is 6% compounded annually. What will be the value of his investm
ent after 3 years? Correct Answer Rs. 29775/Your Answer Rs. 29775/-
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Current yield , Yield to maturity , Realise
d yield Your Answer
Realised yield
Multiple Choice Multiple Answer Question Which are the different styles of displ
aying charts? Correct Answer Bar and line charts , Candle stick charts , Point a
nd figure charts Your Answer Bar and line charts , Candle stick charts , Point a
nd figure charts
Select The Blank Question ________ measures the profitability of operations with
out considering the influence of financial structure and tax rate. Correct Answe
r Earnings power Your Answer Earnings power
Match The Following Question Correct Answer Your Answer
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 Yie
ld to maturity Yield to maturity
Multiple Choice Single Answer Question A security analysis is done :Correct Answ
er For decision making for investments Your Answer For decision making for inves
tments
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years? Correct Answer Rs. 73466/Your Answer Rs. 7346
6/-
Multiple Choice Single Answer Question Dividend discount model is considered as
the simplest model for :Correct Answer Valuing Equity Your Answer
Valuing Equity
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 invest
ment after 5 years? Correct Answer Rs.14.693/Your Answer Rs.14.693/-
Select The Blank Question ________ refers to the possibility that there may not
be a readily available market for the particular bond. Correct Answer Liquidity
risk Your Answer Liquidity risk
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,5
0,000/- at the end of 3 years. He wanted to know what is the present value of th
is amount, if the rate of interest is 9% p.a ? Correct Answer Rs.1,15,827/Your A
nswer Rs.1,15,827/-
Multiple Choice Multiple Answer
Question What are the features of public provident scheme? Correct Answer 15 yea
r instrument , Rate of interest is 8% , Partial withdrawal is available from 7th
year Your Answer 15 year instrument , Rate of interest is 8% , Partial withdraw
al is available from 7th year
Multiple Choice Multiple Answer Question What are the features of candle stick c
harts? 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 openi
ng price Your Answer Indicates in black if the closing price is lower than the o
pening price , Indicates in white if the closing price is higher than the openin
g price
Multiple Choice Single Answer Question A security represent evidence of :Correct
Answer A property right Your Answer A property right
Multiple Choice Multiple Answer Question Major steps involved in construction of
a index are :Correct Answer Selecting a set of scrips to be used , Fixing start
ing date , Calculating market capitalisation
Your Answer Selecting a set of scrips to be used , Fixing starting date , Calcul
ating market capitalisation
True/False Question The arithmetic mean is a set of observations is calculated b
y finding the sum values and dividing by the number of observations. Correct Ans
wer True Your Answer True
True/False Question With the use of diversification you can reduce the risk. Cor
rect Answer True Your Answer True
Match The Following Question Correct Answer Your Answer
Weak form model is also termed as Random walk model Weak form EMH
Investors are rational Efficient market hypothesis Passive 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 Fa
ma Fama
Multiple Choice Single Answer Question What are intermediate trends? Correct Ans
wer 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
Select The Blank Question ________involves a simultaneous sale and repurchase ag
reement. Correct Answer Repos Your Answer Repos
Multiple Choice Single Answer Question In any Economy, bridge is created between
savers and who need the funds by this system :Correct Answer Financial
Your Answer Banking
Multiple Choice Multiple Answer Question What are the features of bank deposits?
Correct Answer Interest is presently around 6% , Benefits under section 80 L ,
Banks offer cheque facility for investors making it convenient to withdraw Your
Answer Interest is presently around 6% , Banks offer cheque facility for investo
rs making it convenient to withdraw
Multiple Choice Multiple Answer Question What are the important macro economic i
ndicators? Correct Answer GNP growth rate , Price Conditions , Monsoons Your Ans
wer GNP growth rate , Price Conditions , Monsoons
Multiple Choice Single Answer Question If index future is taken under futures co
ntract, the underlying asset would be :Correct Answer Stock index Your Answer St
ock index
True/False
Question European style options are more expensive than American style because t
hey offer greater flexibility to the buyer. Correct Answer False Your Answer Fal
se
Select The Blank Question ________ model is based on the principle that an initi
al phase where the growth rate is not stable and subsequent steady growth rate a
nd remains for the long-term. Correct Answer The Two-Stage dividend discount You
r Answer The Two-Stage dividend discount
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Answer Speculator
s Your Answer Speculators
Select The Blank Question When a debenture is sold to the general public a _____
___ is appointed. Correct Answer Trustee Your Answer
Trustee
True/False Question Five paisa.com is an example of on line trading portal. Corr
ect Answer True Your Answer True
Multiple Choice Single Answer Question When a firm can grow net profits by issui
ng equity, the expected growth rate in net profits is determined by :Correct Ans
wer Equity reinvestment rate X return on equity Your Answer Equity reinvestment
rate X return on equity
Multiple Choice Multiple Answer Question Explain what are leverage ratios ? Corr
ect Answer Help in assessing the risk arising using the debt capital , Debt equi
ty ratio and interest coverage ratio and DSCR are important leverage ratios , De
bt is riskier source of finance as it entails fixed outgo of periodic payments Y
our Answer Help in assessing the risk arising using the debt capital , Debt equi
ty ratio and interest coverage ratio and DSCR are important leverage ratios , De
bt is riskier source of finance as it entails fixed outgo of periodic payments
Multiple Choice Multiple Answer
Question An options contract allows the investor :Correct Answer To earn a profi
t while restricting the downside risk , To use the options for speculation , Eit
her 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 h
onour or walk away from the contract
True/False Question If rupee weakens against the dollar, it has favourable impac
t for the importers. Correct Answer False Your Answer False
Select The Blank Question UTI was set up in the year ________. Correct Answer 19
63 Your Answer 1963
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Measures of __
______ tells us what we can expect a typical or middle data point of a distribut
ion to be. Correct Answer Central tendency Your Answer Variance
Multiple Choice Single Answer Question Capital expenditure -depreciation +change
in working capital -(new debt issued - debt repaid) = Correct Answer Equity rei
nvested in business Your Answer Equity reinvested in business Multiple Choice Mu
ltiple Answer Question What were the objectives for 2002-03 the chairman of Bhar
at forge had emphasised on in the annual report for 2001 - 02 Correct Answer Mai
ntain aggressive exports thrust , Increase shares of value added products , Cont
inue reducing costs Your Answer Maintain aggressive exports thrust , Increase sh
ares of value added products , Continue reducing costs Multiple Choice Single An
swer Question What do you understand by term pioneering stage in the industry li
fe cycle analysis? Correct Answer Slow sales growth product recently introduced
Your Answer Highest sales Multiple Choice Single Answer Question In India future
s on individual securities have been introduced by :Correct Answer BSE & NSE You
r Answer NSE Multiple Choice Multiple Answer Question The features of bond are :
Correct Answer Collateral , Call provision , Sinking fund and protective covenan
ts Your Answer Collateral , Call provision , Sinking fund and protective covenan
ts Select The Blank Question The compounded annual return of Kisan Vikas patra i
s ________. Correct Answer 0.084 Your Answer 0.084 Select The Blank Question ___
_____ measures the profitability of operations without considering the influence
of financial structure and tax rate. Correct Answer Earnings power Your Answer
Net profit margin Select The Blank Question The 6.________% tax saving bonds of
government of India have a tenure of 5 years. Correct Answer 5 Your Answer 5 Sel
ect The Blank
Question The govt allowed public sector banks and institutions in mutual funds i
n ________. Correct Answer Early 90's Your Answer Early 90's Multiple Choice Mul
tiple Answer Question Which ratios are commonly used? Correct Answer Interest co
verage ratios , Debt service coverage ratios , Debt equity ratio Your Answer Deb
t equity ratio , Interest coverage ratios , Debt service coverage ratios Multipl
e Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The rate o
f interest is 4% compounded annually. What will be the value of his investment a
fter 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/Select The Blank Ques
tion The ________ phase is characterized by resistance area and support level. C
orrect Answer Transition Your Answer Horizontal Select The Blank Question ______
__ is due to the fact that a borrower may not pay interest and/or principal on t
ime. Correct Answer Default risk Your Answer Default risk Multiple Choice Single
Answer Question What do you understand by the term redemption price? Correct An
swer Price or NAV at which a scheme purchases its units Your Answer Price or NAV
at which a scheme purchases its units True/False Question Investment decisions
can be viewed as an integrated process to which security analysis makes its uniq
ue contribution. Correct Answer True Your Answer True Select The Blank Question
Secondary reactions occurs because of ________ which arise in the market as a re
sult of over optimism and over pessimism. Correct Answer Technical distortions Y
our Answer Fundamental distortions True/False Question Five paisa.com is an exam
ple of on line trading portal.
Correct Answer True Your Answer True Multiple Choice Single Answer Question What
is the percentage of variation the market and industry influence account for? C
orrect Answer 2/3rd Your Answer 75% Match The Following Question Correct Answer
Your Answer Price pattern Resistance level Secondary reaction Primary trend Last
between 1-2 years Last between 1-2 years Intermediate trend Last between 3 week
s 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 Multiple Choice Multiple Answer Qu
estion 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 o
r 4 weeks , They interrupt the course of the intermediate cycle , They are usual
ly influenced by random news events True/False Question With the use of diversif
ication you can reduce the risk. Correct Answer True Your Answer True True/False
Question Post office monthly schemes have a 10 year tenor. Correct Answer False
Your Answer False Multiple Choice Single Answer Question Till 1990's secular In
dian economy's inflation rate has been of what percentage? Correct Answer 0.07 Y
our Answer 0.07 Multiple Choice Single Answer Question Mr.Rohan invests Rs.25,00
0/- today. The rate of interest is 6% compounded annually. What will be the valu
e of his investment after 3 years?
Correct Answer Rs. 29775/Your Answer Rs. 29775/Multiple Choice Multiple Answer Q
uestion The firm issuing bonds operating sinking fund and repurchases bonds eith
er :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 Calling in a certain number of bonds by lot , Buying bonds in the open ma
rket True/False Question A mutual fund is required to dispatch the dividend warr
ants to the unit holders within thirty days of the declaration of dividend. Corr
ect Answer True Your Answer True True/False Question Fixed assets turnover ratio
measures the efficiency of utilisation of total assets, fixed as well as curren
t. Correct Answer True Your Answer True Select The Blank Question A pattern whic
h does not result in reversal of a trend but reaffirmation of the underlying tre
nd is called ________. Correct Answer Consolidation pattern Your Answer Distribu
tion pattern 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
False Select The Blank Question Acid test ratio is more stringent measure of liq
uidity compared to the ________. Correct Answer Current ratio Your Answer Curren
t ratio Multiple Choice Multiple Answer Question What are the SEBI regulations w
ith respect to mutual funds? Correct Answer Mutual funds to be registered with S
EBI before the launching any scheme , 2/3rds of the directors of the trustee com
pany must be independent , An AMC approved by SEBI manages the fund
Your Answer Mutual funds to be registered with SEBI before the launching any sch
eme , 2/3rds of the directors of the trustee company must be independent , An AM
C approved by SEBI manages the fund True/False Question Default is normally eval
uated and indicated by the rating assigned to the debt instruments by independen
t credit ratings agencies. Correct Answer True Your Answer True True/False Quest
ion In case of fixed income securities like debentures, you get the return in th
e form of dividend. Correct Answer False Your Answer False Multiple Choice Singl
e Answer Question What are the assumptions of the Dow theory? Correct Answer Maj
ority 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 Multiple Choice Multiple Answer Question The Peer group of Bharat Forge con
sists of which all companies? Correct Answer Am forge industries , Kalyani Forge
, EL Forge Your Answer Am forge industries , Kalyani Forge , EL Forge Multiple
Choice Single Answer 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 Your Answer Under valued or over valued Multi
ple Choice Single Answer Question What is the rate of interest on the tax free b
onds issue by the government? Correct Answer 6.5% Your Answer 6.5% Multiple Choi
ce Multiple Answer Question What are the features of candle stick charts? Correc
t 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 , Dis
plays the correlation between the high and low prices Multiple Choice Multiple A
nswer
Question What are the features of public provident scheme? Correct Answer 15 yea
r instrument , Rate of interest is 8% , Partial withdrawal is available from 7th
year Your Answer 15 year instrument , Rate of interest is 8% , Partial withdraw
al is available from 7th year Multiple Choice Single Answer Question Investments
could be made in retail government securities through :Correct Answer Primary d
ealers Your Answer Primary dealers Multiple Choice Multiple Answer Question What
were the Chairman's comments during the speech in the Annual report of the FY 2
002-03? Correct Answer Best year in the history of the company , 146% growth in
exports , Highest pre and post tax profits Your Answer Best year in the history
of the company , 146% growth in exports , Highest pre and post tax profits Multi
ple Choice Multiple Answer Question An options contract allows the investor :Cor
rect Answer To earn a profit while restricting the downside risk , To use the op
tions for speculation , Either to honour or walk away from the contract Your Ans
wer To earn a profit while restricting the downside risk , To use the options fo
r speculation , Either to honour or walk away from the contract 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 yea
rs? Correct Answer Rs.14.693/Your Answer Rs.14.693/Multiple Choice Multiple Answ
er Question What were the achievements of Bharat Forge during the year 2003? Cor
rect Answer Secured second largest customer in China , Appointed a Company Secre
tary to act as compliance officer , New contracts won in passenger car component
s Your Answer Secured second largest customer in China , Appointed a Company Sec
retary to act as compliance officer , New contracts won in passenger car compone
nts Match The Following Question Correct Answer Your Answer Weak form model is a
lso termed as Random walk model Efficient market hypothesis Investors are ration
al Efficient market hypothesis Random walk model
Securities current prices fully reflect all historical information Weak form EMH
Weak form EMH Framework on efficient capital markets, a review of theory and em
pirical work Fama Strong form True/False Question Quick assets consist of curren
t assets less inventories. Correct Answer True Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank Question ________ measures the profitability of operations with
out considering the influence of financial structure and tax rate. Correct Answe
r Earnings power Your Answer Earnings power
True/False Question While calculating geometric mean calculation of root is not
important. Correct Answer False Your Answer False
Multiple Choice Single Answer Question What could be a better approach to flow-o
f -funds analysis?
Correct Answer An examination of liquidity trends in the banking system Your Ans
wer Analyzing the Fiscal issues
True/False Question The Asset management company of the mutual fund must have 50
% independent directors. Correct Answer True Your Answer True
True/False Question A higher value of current ratio indicates a better short ter
m solvency of the firm. Correct Answer True Your Answer True
Multiple Choice Single Answer Question Investment is a risk free investment when
:Correct Answer Actual return is = expected return Your Answer Actual return is
= expected return
Select The Blank Question The govt allowed public sector banks and institutions
in mutual funds in ________. Correct Answer Early 90's Your Answer Early 90's
True/False Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries. Correct Answer True You
r Answer True
Multiple Choice Single Answer Question The price of the index futures contract i
s defined as :Correct Answer Future price = Spot price + Carry cost Your Answer
Future price = Spot price + Carry cost
Multiple Choice Multiple Answer Question An options contract allows the investor
:Correct Answer To earn a profit while restricting the downside risk , To use t
he 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 op
tions for speculation , Either to honour or walk away from the contract
True/False Question The basic assumption of Technical analysis is that, price di
scounts everything and it is the outcome of all forces affecting a stock. Correc
t Answer True Your Answer True
Select The Blank Question Secondary reactions occurs because of ________ which a
rise in the market as a result of over optimism and over pessimism. Correct Answ
er Technical distortions Your Answer Technical distortions
Select The Blank Question In a heads and shoulders formation the deeper the patt
ern, the greater is the ________ significance once it is completed Correct Answe
r Bearish Your Answer Bearish
True/False Question Debt is less riskier source of finance than equity. Correct
Answer False Your Answer True
True/False Question The arithmetic mean is a set of observations is calculated b
y finding the sum values and dividing by the number of observations. Correct Ans
wer True Your Answer True
Multiple Choice Single Answer Question What does flow-of fund analysis help in u
nderstanding? Correct Answer Availability of money for the stock market Your Ans
wer Financial strength of various companies
True/False Question The normal relationship is for the volume to expand on ralli
es and contract on declines. Correct Answer True
Your Answer True
Multiple Choice Multiple Answer Question Growth of the firm can be estimated thr
ough :Correct Answer Firm's past earnings/historical growth rate , Estimates mad
e by equity research analyst who follow the firm , Estimates from a firm's funda
mentals Your Answer Firm's past earnings/historical growth rate , Estimates from
a firm's fundamentals , Forecasting future revenues and earnings
Multiple Choice Multiple Answer Question The security analysis process will achi
eve :Correct Answer True picture of a company , Normal earning power , Projectio
n of future profitability Your Answer True picture of a company , Normal earning
power , Projection of future profitability
Multiple Choice Single Answer Question The general dividend model is based on th
e principle of :Correct Answer Present value of the expected future cash flow Yo
ur Answer Present value of the expected future cash flow
Multiple Choice Single Answer Question The index futures symbols of BSE are repr
esented as :Correct Answer BSX JAN 2005 (January contract) Your Answer BSX JAN 2
005 (January contract)
Multiple Choice Multiple Answer Question What are the features of bank deposits?
Correct Answer Interest is presently around 6% , Benefits under section 80 L ,
Banks offer cheque facility for investors making it convenient to withdraw Your
Answer Interest is presently around 6% , Banks offer cheque facility for investo
rs making it convenient to withdraw
True/False Question Risk on a portfolio of assets is always same as the risk on
individual asset. Correct Answer False Your Answer False
Select The Blank Question UTI was set up in the year ________.
Correct Answer 1963 Your Answer 1963
Multiple Choice Multiple Answer Question Major steps involved in construction of
a index are :Correct Answer Selecting a set of scrips to be used , Fixing start
ing date , Calculating market capitalisation Your Answer Selecting a set of scri
ps to be used , Fixing starting date , Calculating market capitalisation
Select The Blank Question A line is defined as a price movement two or three wee
ks or longer, during which period the price variation of both averages moves wit
hin a price range of approximately________%. Correct Answer 5 Your Answer 5
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Realised yield , Current yield , Yield to m
aturity Your Answer Current yield , Yield to maturity
Multiple Choice Multiple Answer Question What are the features of candle stick c
harts? 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 openi
ng price Your Answer Indicates in black if the closing price is lower than the o
pening price , Indicates in white if the closing price is higher than the openin
g price
Select The Blank Question Debentures rated "BB" refers ________ of timely paymen
t of interest and principal. Correct Answer Inadequate safety Your Answer Inadeq
uate safety
Multiple Choice Single Answer 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 Your Answer Under priced and over priced
Multiple Choice Single Answer Question
When the firm is not raising equity by issuing new shares, the growth rate in ne
t profits is given by :Correct Answer Retention ratio X return on equity Your An
swer Price earning ratio X return on equity
Select The Blank Question A ________ rally for stocks generally takes place beca
use of an improved outlook for business conditions over what was anticipated. Co
rrect Answer Bear market Your Answer Bullish market
Multiple Choice Multiple Answer Question Characteristics of Preference shares ar
e :Correct Answer Carry a fixed rate of dividend , Dividend payable out of profi
t , Redemption in 7 to 12 years Your Answer Carry a fixed rate of dividend , Div
idend payable out of profit , Redemption in 7 to 12 years
Multiple Choice Multiple Answer Question What are the SEBI regulations with resp
ect to mutual funds? Correct Answer Mutual funds to be registered with SEBI befo
re the launching any scheme ,
2/3rds of the directors of the trustee company must be independent , An AMC appr
oved by SEBI manages the fund Your Answer Mutual funds to be registered with SEB
I before the launching any scheme , 2/3rds of the directors of the trustee compa
ny must be independent , An AMC approved by SEBI manages the fund
Multiple Choice Single Answer Question The bond issuing firm enjoys the flexibil
ity of being able to call the bonds if :Correct Answer Interest rates are fallin
g Your Answer Interest rates are falling
Multiple Choice Single Answer 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 Your Answer Under valued or over val
ued
Multiple Choice Single Answer Question The growth rate is used to forecast futur
e revenues and earnings and are inputs in valuing :Correct Answer Stable firms Y
our Answer High growth firms
Multiple Choice Single Answer Question A security analysis is done :Correct Answ
er For decision making for investments Your Answer For decision making for inves
tments
Multiple Choice Multiple Answer Question Which ratios are commonly used? Correct
Answer Debt equity ratio , Interest coverage ratios , Debt service coverage rat
ios Your Answer Debt equity ratio , Interest coverage ratios , Debt service cove
rage ratios
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 befo
re a specific date. Correct Answer Right but not obligation Your Answer Right bu
t not obligation
Match The Following Question Correct Answer
Your Answer
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 principal Fixed - income portfolio Short term debt portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Select The Blank Question An investor with a higher tolerance of risk should til
t his portfolio in favour of ________. Correct Answer Stocks Your Answer Stocks
Select The Blank Question S&P NSE 50 index is known as ________. Correct Answer
NIFTY Your Answer NIFTY
Multiple Choice Multiple Answer Question Mutual fund schemes could be broadly cl
assified as :Correct Answer Open ended scheme , Close ended scheme Your Answer O
pen ended scheme , Close ended scheme
Multiple Choice Multiple Answer Question What are the features of line charts? C
orrect Answer It connects closing prices from one period to the next , It is ide
al 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 Your Answer False
Match The Following Question Correct Answer Your Answer
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 as
sets Market value to replacement cost ratio Market value to replacement cost rat
io
Key determiner of revenue multiples Profit margin Profit margin
The market value of the equity in a firm reflects the markets expectations of th
e firms earnings power and cash flows. Price to book value ratio Price earning r
atio
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer Question Gilt Edged Securities are :Correct Answ
er Central Govt , State Govt. , Quasi-Govt
Your Answer Central Govt
Multiple Choice Single Answer Question What is GDP at factor cost ? Correct Answ
er Excludes net income received from abroad Your Answer Excludes net income rece
ived from abroad
Multiple Choice Multiple Answer Question What are the features of short-term tre
nds? 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 Y
our Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the i
ntermediate cycle , They are usually influenced by random news events
Select The Blank Question The 8% taxable savings bonds are repayable after _____
___ years. Correct Answer 6 Your Answer 6
Multiple Choice Multiple Answer
Question Formula for calculation of portfolio variance requires :Correct Answer
Expected return on portfolio , Expected return on assets , Weight of asset in th
e portfolio Your Answer Expected return on portfolio , Standard deviation , Weig
ht of asset in the portfolio
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s based on the assumption of :Correct Answer An initial phase where the growth i
s not a stable growth rate , A subsequent steady state of growth rate being stab
le and lasts n years , A stable growth phase lasts forever Your Answer An initia
l 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 for
ever
Select The Blank Question Risk can be referred as the ________ in the return wit
h respect to the expected return. Correct Answer Volatility Your Answer Differen
ce
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 True
True/False Question The price earning ratio can be estimated for the firms with
negative earnings per share. Correct Answer False Your Answer True
Multiple Choice Multiple Answer Question What were the achievements of Bharat Fo
rge during the year 2003? Correct Answer Secured second largest customer in Chin
a , Appointed a Company Secretary to act as compliance officer , New contracts w
on in passenger car components Your Answer Secured second largest customer in Ch
ina , Appointed a Company Secretary to act as compliance officer , New contracts
won in passenger car components
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Answer Speculator
s Your Answer Jobbers
Multiple Choice Multiple Answer Question Who are the constituents of a mutual fu
nd? Correct Answer Sponsor & trustees , Asset management company , Custodian You
r Answer Sponsor & trustees , Asset management company , Custodian
True/False Question A share certificate indicates that the investor owns a certa
in number of shares. Correct Answer True Your Answer True
Multiple Choice Single Answer Question What is the percentage of variation the m
arket and industry influence account for? Correct Answer 2/3rd Your Answer 2/3rd
Multiple Choice Single Answer Question How can transition phases be projected? C
orrect 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 Y
our Answer True
Multiple Choice Multiple Answer Question What are the features of post office mo
nthly income scheme? Correct Answer Rate of return is 8 % , Interest payable mon
thly , Investor earns bonus of 10% on completion of term Your Answer Rate of ret
urn is 8 % , Interest payable monthly , Investor earns bonus of 10% on completio
n of term
Match The Following Question Correct Answer Your Answer
NSE Nifty Nifty
SEBI Redressal of investor complaints Redressal of investor complaints
NAV Net asset value Net asset value
AMFI Association of mutual funds of India Association of mutual funds of India
Multiple Choice Multiple Answer Question What were the Chairman's comments durin
g 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 Your Answer Best year in the history of the company , 146% growth in exp
orts , Highest pre and post tax profits
Select The Blank Question Under the options contract ________ gives the holder t
he right, but not the obligation to buy or sell the underlying instrument only o
n the expiry date. Correct Answer European option Your Answer European option
Multiple Choice Single Answer Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902 Your Answer Between 1900 and 1902
Multiple Choice Multiple Answer Question What are the features of point and figu
re 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 Your Answer Charts are constructed using a combination o
f X's and O's known as boxes. , X's show that the prices are moving up , O's sho
w that the prices are moving down
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market. Correct Ans
wer Transitional Your Answer Transitional
Multiple Choice Single Answer Question Credit rating companies assign ratings fo
r which of these investments?
Correct Answer Company deposits Your Answer Company deposits
Select The Blank Question When a debenture is sold to the general public a _____
___ is appointed. Correct Answer Trustee Your Answer Trustee
Select The Blank Question A security is said to be ________ if its current marke
t price is over its intrinsic value. Correct Answer Over priced Your Answer Over
priced
Multiple Choice Multiple Answer Question What are the different types of profita
bility ratios? Correct Answer Gross profit margin ratio , Earnings power , Retur
n on equity Your Answer Gross profit margin ratio , Earnings power , Return on e
quity
Select The Blank Question Dow Jones transportation average was previously known
as ________. Correct Answer Rail average Your Answer Rail average
Multiple Choice Single Answer Question An agreement to buy or sell a specified q
uantity of an asset at a certain future date or a certain price is know as :Corr
ect Answer Forward contract Your Answer Forward contract
Multiple Choice Single Answer Question When was the first mutual fund set up? Co
rrect Answer 1963 Your Answer 1963
Multiple Choice Single Answer Question Which market is affected with the improvi
ng and higher growth rate in economy? Correct Answer Stock market Your Answer
Stock market
Multiple Choice Single Answer Question What is the art of technical analysis? Co
rrect 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
Multiple Choice Single Answer Question In any Economy, bridge is created between
savers and who need the funds by this system :Correct Answer Financial Your Ans
wer Financial
True/False Question The basic inputs of the general model are expected dividends
and required rate of return on stock. Correct Answer True Your Answer True
True/False
Question Quick assets consist of current assets less inventories. Correct Answer
True Your Answer True
True/False Question Bonds and Debentures represent long term debt instruments. C
orrect Answer False Your Answer True
Multiple Choice Single Answer Question The expected price of the stock at the en
d of the holding period is determined by future dividends and the value of the s
tock is the present value of dividends through infinity are the underlying assum
ptions of :Correct Answer The General model Your Answer The Dividend discount mo
del
True/False Question American option gives the holder the right, but not the obli
gation 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
True/False Question If rupee weakens against the dollar, it has favourable impac
t for the importers. Correct Answer False Your Answer False
Multiple Choice Multiple Answer Question What are the features of Kisan Vikas Pa
tra? Correct Answer Term is for 8 years seven months , Provision of premature wi
thdrawal , Interest rate is 8.4% compounded annually Your Answer Term is for 8 y
ears seven months , Interest rate is 8.4% compounded annually , Tax benefits und
er 80 L available
Select The Blank Question ________ is the ratio of the market price per share to
the earnings per share. Correct Answer Price earning ratio Your Answer Price ea
rning ratio
Multiple Choice Multiple Answer
Question What are the warning indicators to be considered before analysing the f
inancial statements of a firm ? Correct Answer Growth in profits outstripping th
e revenue growth by a large extent , Non operating expenses occur frequently , A
ccounting rules changed frequently Your Answer Growth in profits outstripping th
e revenue growth by a large extent , Non operating expenses occur frequently , A
ccounting rules changed frequently
Select The Blank Question ________ is the value today of a stream of cash flows
that occurs in future. Correct Answer Present value Your Answer Present value
Select The Blank Question Under futures market ________ process provides for col
lection of losses that have already occurred. Correct Answer The daily settlemen
t Your Answer The daily settlement
Multiple Choice Single Answer Question A security represent evidence of :Correct
Answer A property right
Your Answer A property right
Match The Following Question Correct Answer Your Answer
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 maturit
y
Present value interest factor of annuities and present value interest factor Yie
ld to maturity Interest rate risk
True/False Question A price rise accompanied by expanding volume denotes a poten
tial trend reversal. Correct Answer False Your Answer False
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank Question Measures of ________ tells us what we can expect a typ
ical or middle data point of a distribution to be. Correct Answer Central tenden
cy Your Answer Central tendency
Select The Blank Question ________ ratio indicates the margin available after me
eting the manufacturing expenses. Correct Answer Gross Profit margin Your Answer
Gross Profit margin
Multiple Choice Multiple Answer Question Which were the initiatives which the ch
airman said would focus on in 2003-04 in the speech in annual report for the yea
r 2003-03? Correct Answer Research and development , Capital investment and focu
s on balance sheet , Overseas acquisitions Your Answer Research and development
, Capital investment and focus on balance sheet ,
Overseas acquisitions
Multiple Choice Multiple Answer Question What developments had taken place durin
g the year 2000 in case of Bharat Forge Ltd.? Correct Answer Demerger of investm
ent division and windmills , Nominee director of UTI resigned and ceased to be t
he director - nomination withdrawn by UTI Your Answer Demerger of investment div
ision and windmills , Nominee director of UTI resigned and ceased to be the dire
ctor - nomination withdrawn by UTI
Select The Blank Question The ________ phase is characterized by resistance area
and support level. Correct Answer Transition Your Answer Transition
Select The Blank Question The 6.________% tax saving bonds of government of Indi
a have a tenure of 5 years. Correct Answer 5 Your Answer 5
Match The Following
Question Correct Answer Your Answer
Expiration period for options Nine months Nine months
The world's first largest options exchange Chicago Board of options exchange New
York board of Options exchange
The most popular pricing options model published in the year 1973 Black Scholes
Black Scholes
When the writer gives the buyer of the option the right to sell the underlying a
sset on or before the expiry date Put option Put option
Multiple Choice Multiple Answer Question An option is :Correct Answer A contract
between two parties , Where buyer receives a privilege for which he pays a prem
ium , Where the seller accepts an obligation for which he receives a fee Your An
swer 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 receive
s a fee
True/False Question Currently in India index options are both European and Ameri
can in nature. Correct Answer False Your Answer False
Multiple Choice Multiple Answer Question Return can be in the form of :Correct A
nswer Dividends , Interests , Capital appreciation Your Answer Dividends , Inter
ests , Capital appreciation
Multiple Choice Multiple Answer Question Which of the following are important mo
mentum indicators used widely? Correct Answer Rate of change (ROC) , Relative st
rength indicator (RSI) , Moving average convergence divergence(MACD) Your Answer
Rate of change (ROC) , Relative strength indicator (RSI) , Moving average conve
rgence divergence(MACD)
Select The Blank Question The Derivative market is divided into Future market an
d ________ market. Correct Answer Options
Your Answer Options
True/False Question European style options are more expensive than American styl
e because they offer greater flexibility to the buyer. Correct Answer False Your
Answer False
True/False Question A segment is unattractive if the buyers possess strong or gr
owing bargaining powers. Correct Answer True Your Answer True
Match The Following Question Correct Answer Your Answer
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
Multiple Choice Multiple Answer Question In a typical stock market cycle which a
re the types of trends? Correct Answer Trends upward , Trend downward , Sideway
trend Your Answer Trends upward , Trend downward , Sideway trend
Multiple Choice Single Answer Question What is a resistance level? Correct Answe
r A point where there is opposition to further price rise Your Answer A point wh
ere there is opposition to further price rise
Select The Blank Question Debentures rated as "A" are judged to offer ________ o
f timely payment of
interest and principal. Correct Answer Adequate safety Your Answer High safety
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 A
nswer True Your Answer True
Select The Blank Question ________ measures the efficiency of credit management.
Correct Answer Average collection period Your Answer Interest coverage ratio
Multiple Choice Single Answer Question How would you rate a portfolio with 90% i
nvestment in stocks? Correct Answer Highly aggressive Your Answer Highly aggress
ive
Select The Blank Question ________ is due to the fact that a borrower may not pa
y interest and/or principal on time. Correct Answer Default risk Your Answer Def
ault risk
Multiple Choice Multiple Answer Question The Gordon growth model is best suited
for firms :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 lowe
r that the growth in the economy , Which have well established dividend payout r
atio policy
Multiple Choice Single Answer Question Agriculture account for how much portion
of the economy? Correct Answer Quarter Your Answer Quarter
Multiple Choice Single Answer Question How did Dow use the behaviour of stock ma
rkets?
Correct Answer As a barometer of business conditions rather than a basis for for
ecasting stock prices Your Answer To predict trend patterns in stock prices
Select The Blank Question ________ take long or short positions only with the in
tention of making profits by getting out of the market when conditions favor the
m. Correct Answer Speculators Your Answer Hedgers
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 True
Multiple Choice Single Answer Question What are primary trends? Correct Answer R
eflection of investor's attitudes towards unfolding fundamentals in the business
cycle Your Answer Long term trends
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years? Correct Answer Rs. 73466/Your Answer Rs. 7346
6/-
True/False Question Default is normally evaluated and indicated by the rating as
signed to the debt instruments by independent credit ratings agencies. Correct A
nswer True Your Answer True
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 invest
ment after 5 years? Correct Answer Rs.14.693/Your Answer Rs.14.693/-
Select The Blank Question
The Dow theory was published in a series of editorials in the ________. Correct
Answer Wall street journal Your Answer Wall street journal
True/False Question The price earning ratio is an increasing function of the pay
out ratio and the growth rate and a decreasing function of the riskiness of the
firm. Correct Answer True Your Answer False
Multiple Choice Single Answer Question The greater the deviation of the actual r
eturns from the actual return :Correct Answer Greater the variance Your Answer G
reater the variance
Multiple Choice Multiple Answer Question Features of PSU Bonds are :Correct Answ
er No TDS , Transferable by endorsement , No stamp duty on transfer Your Answer
No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Multiple Answer Question What are the features of public provide
nt scheme? Correct Answer 15 year instrument , Rate of interest is 8% , Partial
withdrawal is available from 7th year Your Answer 15 year instrument , Rate of i
nterest is 8% , Partial withdrawal is available from 7th year
Multiple Choice Multiple Answer Question Which are the different types of accoun
ts offered to investors by the stock brokers? Correct Answer Cash trading , Marg
in trading Your Answer General trading , Cash trading , Margin trading
Multiple Choice Single Answer Question In a forward contract there is :Correct A
nswer No Exchange of cash Your Answer No Exchange of cash
Multiple Choice Single Answer Question Under EMH it is assumed that if markets a
re efficient, securities are priced to provide a :-
Correct Answer Normal returns for their given level of risk Your Answer Equal re
turns for their given level of risk
True/False Question If a rupee weakens against the dollars it has favourable imp
act for the exporters. Correct Answer True Your Answer True
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 :C
orrect 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 receip
t 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 receip
t
Multiple Choice Single Answer Question The growth period in the industry life cy
cle is defined as :Correct Answer Period of rapid market acceptance and substant
ial profit improvement Your Answer
Period of rapid market acceptance and substantial profit improvement
Multiple Choice Single Answer Question What is the objective of Portfolio manage
ment? Correct Answer To Minimize risk and maximize return Your Answer To Minimiz
e risk and maximize return
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 Tru
e
True/False Question Post office monthly schemes have a 10 year tenor. Correct An
swer False Your Answer False
Multiple Choice Single Answer Question The approach followed to assess the growt
h rate by looking at how much a firm
reinvests for future growth and the quality of its re-investments is :Correct An
swer Estimating growth from a firm's fundamentals Your Answer Earnings multiplie
r approach
Multiple Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The
rate of interest is 4% compounded annually. What will be the value of his inves
tment after 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/-
6.
A segment is more attractive when there are actual or potential substitutes for
the product.
True False
12. a)
The GDP growth rate in the economy in real terms has fluctuated between :-
4% and 5%
b)
3% and 4% 6% and 7% 5% and 6%
c)
d)
14.
The sideways trend is essentially a transitional one which separates the two maj
or market movements.
True False
17. a)
What is the minimum investment amount in G-secs?
b)
1000 10000
c)
50000 100000
d)
30.
The Two-Stage dividend discount model is best suited for the firms that are :-
a)
In high growth rate phase Expecting to maintain the growth rate phase steadily f
or a specific time period
b)
c)
Expecting a established dividend payout ratio Sources of high growth are expecte
d to disappear after specific period of time
d)
How can the financial statements can be manipulated while giving the estimates f
or growth?
a)
b)
Change method of rate of depreciation Change method of stock valuation Inflating
sales for current year by advancing sales for the following year Changing the m
anagement of the company frequently
c)
d)
Marks : 2
45.
What are the ways of measuring relative strength?
a)
Calculate the rates of return and classify securities that have earned superior
historical returns Calculating certain ratios will help in analyzing whether a s
ecurity has relative strength Calculating the Return on investment Working out t
he high and low price fluctuations
b)
c)
d)
46.
The average investor in the market is driven more by emotions than by rational a
nalysis is a rule of :-
a)
Fundamental Analysis Intrinsic value analysis Economic Analysis
b)
c)
Technical analysis
d)
49.
What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment Unstable economy Higher levels of taxation
b)
c)
Low levels of interest rates
d)
55.
Why does every investor have different investment objectives?
a)
Since every investor has a different set of circumstances, needs and opportuniti
es Since it depends on their investment strategies
b)
Every investor has different risk bearing capacities
c)
Every investor has different perception of the markets
d)
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False Question In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC. Correct Answer True
Your Answer True
Multiple Choice Multiple Answer Question What are the features of short-term tre
nds? 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 Y
our Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the i
ntermediate cycle , They are usually influenced by random news events
Multiple Choice Single Answer
Question Who operates the sinking fund under the sinking fund provision of a fir
m? Correct Answer The bond trustee or the issuer Your Answer The bond trustee or
the issuer
True/False Question Certificate of Deposits offers high rate of interest than Tr
easury Bills. Correct Answer True Your Answer True
Multiple Choice Multiple Answer Question What developments had taken place durin
g the year 2000 in case of Bharat Forge Ltd.? Correct Answer Demerger of investm
ent division and windmills , Nominee director of UTI resigned and ceased to be t
he director - nomination withdrawn by UTI Your Answer Demerger of investment div
ision and windmills , Nominee director of UTI resigned and ceased to be the dire
ctor - nomination withdrawn by UTI
True/False Question While calculating geometric mean calculation of root is not
important. Correct Answer False Your Answer False
Multiple Choice Single Answer 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 Your Answer Under priced and over priced
True/False Question A higher value of current ratio indicates a better short ter
m solvency of the firm. Correct Answer True Your Answer True
True/False Question A rise in interest rates will push the market prises of outs
tanding bonds where as a fall in interest rates will depress the market prices d
own. Correct Answer False Your Answer False
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market.
Correct Answer Transitional Your Answer Transitional
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
Select The Blank Question Secondary reactions occurs because of ________ which a
rise in the market as a result of over optimism and over pessimism. Correct Answ
er Technical distortions
Your Answer Technical distortions
True/False Question Bearish actions come from a series of declining peaks and tr
oughs. Correct Answer True Your Answer True
Multiple Choice Single Answer Question What is an open ended fund or scheme? Cor
rect Answer Which is available for subscription and repurchase on a continuous b
asis Your Answer Which is available only for subscription on a continuous basis
Match The Following Question Correct Answer Your Answer
Turnover ratios Help measure the efficiency of utilisation of assets How fast th
e inventory is being converted
Debt Equity ratio Debt / Equity Debt / Equity
Quick assets Highly liquid assets Highly liquid assets
Average collection period Similar to debtors turnover Similar to debtors turnove
r
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
Select The Blank Question Dow Jones transportation average was previously known
as ________. Correct Answer Rail average Your Answer Rail average
True/False Question The basic assumption of Technical analysis is that, price di
scounts everything and it is the outcome of all forces affecting a stock. Correc
t Answer True
Your Answer True
Multiple Choice Multiple Answer Question The commonly used charts to measure the
movements in price under the technical analysis are :Correct Answer Line Charts
, Bar Charts , Point and Figure Charts Your Answer Line Charts , Bar Charts , P
oint and Figure Charts
Multiple Choice Multiple Answer Question What are the important macro economic i
ndicators? Correct Answer GNP growth rate , Price Conditions , Monsoons Your Ans
wer GNP growth rate , Price Conditions , Monsoons
Select The Blank Question A security is said to be ________ if its current marke
t price is over its intrinsic value. Correct Answer Over priced Your Answer Over
priced
Multiple Choice Single Answer Question
What do you understand by the term redemption price? Correct Answer Price or NAV
at which a scheme purchases its units Your Answer Price or NAV at which a schem
e purchases its units
Select The Blank Question ________ is due to the fact that a borrower may not pa
y interest and/or principal on time. Correct Answer Default risk Your Answer Def
ault risk
Multiple Choice Multiple Answer Question What are the features of Kisan Vikas Pa
tra? Correct Answer Term is for 8 years seven months , Provision of premature wi
thdrawal , Interest rate is 8.4% compounded annually Your Answer Term is for 8 y
ears seven months , Provision of premature withdrawal , Tax benefits under 80 L
available
Multiple Choice Single Answer Question What could be a better approach to flow-o
f -funds analysis? Correct Answer An examination of liquidity trends in the bank
ing system Your Answer An examination of liquidity trends in the banking system
True/False Question Fundamental analysis focuses on predicting the future price
of a security and Technical analysis on estimating the intrinsic value of a secu
rity. Correct Answer False Your Answer False
Multiple Choice Single Answer Question What is a technical approach to investmen
t? 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 m
ove in trends which are determined by various factors
Select The Blank Question The 8% taxable savings bonds are repayable after _____
___ years. Correct Answer 6 Your Answer 6
Select The Blank Question Acid test ratio is more stringent measure of liquidity
compared to the ________.
Correct Answer Current ratio Your Answer Current ratio
Select The Blank Question An ________ is a series of equal payments or receipts
occurring at regular intervals of time. Correct Answer Annuity Your Answer Annui
ty
Select The Blank Question When a debenture is sold to the general public a _____
___ is appointed. Correct Answer Trustee Your Answer Trustee
True/False Question The basic inputs of the general model are expected dividends
and required rate of return on stock. Correct Answer True Your Answer True
Multiple Choice Multiple Answer Question Gilt Edged Securities are :Correct Answ
er Central Govt , State Govt. , Quasi-Govt Your Answer Central Govt , State Govt
. , Quasi-Govt
Multiple Choice Single Answer Question Dividend discount model is considered as
the simplest model for :Correct Answer Valuing Equity Your Answer Valuing Equity
True/False Question The arithmetic mean is a set of observations is calculated b
y finding the sum values and dividing by the number of observations. Correct Ans
wer True Your Answer True
Select The Blank Question Mutual fund is to be registered with ________ before r
aising funds from public. Correct Answer SEBI Your Answer SEBI
Multiple Choice Multiple Answer Question Formula for calculation of portfolio va
riance requires :Correct Answer Expected return on portfolio , Expected return o
n assets , Weight of asset in the portfolio Your Answer Expected return on portf
olio , Expected return on assets , Weight of asset in the portfolio
Multiple Choice Single Answer Question What is the minimum investment amount in
G-secs? Correct Answer 1000 Your Answer 1000
Multiple Choice Multiple Answer Question Which are the different styles of displ
aying charts? Correct Answer Bar and line charts , Candle stick charts , Point a
nd figure charts Your Answer Bar and line charts , Candle stick charts , Point a
nd figure charts
Multiple Choice Multiple Answer Question Characteristics of Preference shares ar
e :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
Select The Blank Question The ________ phase is characterized by resistance area
and support level. Correct Answer Transition Your Answer Transition
Select The Blank Question In a heads and shoulders formation the deeper the patt
ern, the greater is the ________ significance once it is completed Correct Answe
r Bearish Your Answer Bearish
Multiple Choice Multiple Answer Question Explain what are leverage ratios ? Corr
ect Answer Help in assessing the risk arising using the debt capital , Debt equi
ty ratio and interest coverage ratio and DSCR are important leverage ratios , De
bt is riskier source of finance as it entails fixed outgo of periodic payments Y
our Answer Help in assessing the risk arising using the debt capital , Debt equi
ty ratio and interest coverage ratio and DSCR are important leverage ratios , De
bt is riskier source of finance as it entails fixed outgo of periodic payments
True/False Question Passive investment managers believe that markets are ineffic
ient and Active managers believe that markets are efficient. Correct Answer Fals
e Your Answer False
Select The Blank Question S&P NSE 50 index is known as ________. Correct Answer
NIFTY Your Answer NIFTY
Multiple Choice Single Answer Question Which of the following is a money market
fund? Correct Answer Commercial paper Your Answer Commercial paper
Multiple Choice Single Answer 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
Marks : 2
44.
To measure the current yield on the bond, it's coupon rate is compared with :-
a)
Future estimated price Prevailing market price Prevailing book price
b)
c)
Historical market price
d)
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False Question Investment in gilt edged securities carry a higher element o
f risk. Correct Answer False Your Answer False
Select The Blank Question The Derivative market is divided into Future market an
d ________ market. Correct Answer Options Your Answer Options
Select The Blank Question ________ of companies may open at higher or lower pric
e than the issue price. Correct Answer IPO's Your Answer Market price
True/False Question Equity shares is a high return high risk instrument. Correct
Answer True Your Answer True
True/False Question When you are making an investment you are expecting certain
future benefits from your investment. Correct Answer True Your Answer True
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s based on the assumption of :Correct Answer An initial phase where the growth i
s not a stable growth rate , A subsequent steady state of growth rate being stab
le and lasts n years , A stable growth phase lasts forever Your Answer An initia
l 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 for
ever
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 thi
s amount, if the rate of interest is 10% p.a:Correct Answer Rs. 9639/Your Answer
Rs. 9639/-
Multiple Choice Single Answer Question What is Gross National Product ? Correct
Answer Gross income generated from within the country Your Answer Gross income g
enerated from within the country
Multiple Choice Single Answer
Question What does a Balanced fund seek to achieve? Correct Answer Growth and re
gular income Your Answer Growth and regular income
Match The Following Question Correct Answer Your Answer
Weak form model is also termed as Random walk model Random walk model
Investors are rational Efficient market hypothesis 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 Fa
ma Fama
Multiple Choice Multiple Answer Question Which ratios are commonly used? Correct
Answer
Interest coverage ratios , Debt service coverage ratios , Debt equity ratio Your
Answer Debt equity ratio , Interest coverage ratios , Debt service coverage rat
ios
Multiple Choice Single Answer Question Under EMH it is assumed that if markets a
re efficient, securities are priced to provide a :Correct Answer Normal returns
for their given level of risk Your Answer Normal returns for their given level o
f risk
Multiple Choice Multiple Answer Question Return can be in the form of :Correct A
nswer Dividends , Interests , Capital appreciation Your Answer Dividends , Inter
ests , Capital appreciation
Multiple Choice Single Answer Question Profits are non existent in pioneering st
age because of :Correct Answer Heavy expenses on product introduction Your Answe
r Heavy expenses on product introduction
Select The Blank
Question Measures of ________ tells us what we can expect a typical or middle da
ta point of a distribution to be. Correct Answer Central tendency Your Answer Ce
ntral tendency
Select The Blank Question ________ identified five forces that determine the int
rinsic long run profit attractiveness of a market or market segment. Correct Ans
wer Michael Porter Your Answer Michael Porter
Match The Following Question Correct Answer Your Answer
MCX Commodity Exchange Commodity Exchange
Sensex BSE Index BSE Index
Nifty NSE Index NSE Index
Lifex ET Index ET Index
Multiple Choice Multiple Answer Question Mutual fund schemes could be broadly cl
assified as :Correct Answer Open ended scheme , Close ended scheme Your Answer O
pen ended scheme , Close ended scheme
Multiple Choice Multiple Answer Question Which are the most popular types of ord
ers placed through an online trading account? Correct Answer Limit orders , Mark
et orders Your Answer Limit orders , Market orders
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 invest
ment after 5 years? Correct Answer Rs.14.693/Your Answer Rs.14.693/-
Multiple Choice Multiple Answer Question Growth of the firm can be estimated thr
ough :Correct Answer Firm's past earnings/historical growth rate , Estimates mad
e by equity research analyst who follow the firm , Estimates from a firm's funda
mentals Your Answer Firm's past earnings/historical growth rate , Estimates made
by equity research analyst who follow the firm , Estimates from a firm's fundam
entals
Multiple Choice Single Answer Question What is the rate of interest on the tax f
ree bonds issue by the government? Correct Answer 6.5% Your Answer 6.5%
Multiple Choice Multiple Answer Question Which of the following are important mo
mentum indicators used widely? Correct Answer Moving average convergence diverge
nce(MACD) , Rate of change (ROC) , Relative strength indicator (RSI) Your Answer
Rate of change (ROC) , Relative strength indicator (RSI) , Moving average conve
rgence divergence(MACD)
Select The Blank Question ________ measures the profitability of operations with
out considering the influence of financial structure and tax rate. Correct Answe
r Earnings power
Your Answer Earnings power
Multiple Choice Single Answer Question When an investor invests in stock, expect
s to get the dividends and an expected price for the period the stock is held is
the rule of :Correct Answer The General model Your Answer The General model
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 profita
bility ratios? Correct Answer Gross profit margin ratio , Earnings power , Retur
n on equity Your Answer Gross profit margin ratio , Return on equity , Debt serv
ice coverage ratio
Multiple Choice Multiple Answer Question To measure the movement of stocks in th
e market which indices were
constructed by Dow? Correct Answer Dow Jones industrial Average , Dow Jones Tran
sportation Average Your Answer Dow Jones industrial Average , Dow Jones Transpor
tation Average
True/False Question The price earning ratio is an increasing function of the pay
out ratio and the growth rate and a decreasing function of the riskiness of the
firm. Correct Answer True Your Answer True
True/False Question If rupee weakens against the dollar, it has favourable impac
t for the importers. 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 A
nswer True Your Answer True
Multiple Choice Multiple Answer Question Active investment managers :Correct Ans
wer Do not believe that markets are efficient , Puts efforts to search mispriced
securities in the market , Are relatively active traders in securities to acqui
re abnormal returns Your Answer Do not believe that markets are efficient , Puts
efforts to search mispriced securities in the market , Are relatively active tr
aders in securities to acquire abnormal returns
Multiple Choice Multiple Answer Question What are the features of candle stick c
harts? 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 openi
ng price Your Answer Indicates in black if the closing price is lower than the o
pening price , Indicates in white if the closing price is higher than the openin
g price
True/False Question Bonds and Debentures represent long term debt instruments. C
orrect Answer False Your Answer False
Select The Blank Question The possibility of reduction of risk through the const
ruction of a portfolio depends on the value of ________ between the two assets.
Correct Answer Correlation coefficient Your Answer Correlation coefficient
Select The Blank Question A line is defined as a price movement two or three wee
ks or longer, during which period the price variation of both averages moves wit
hin a price range of approximately________%. Correct Answer 5 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 Y
our Answer True
Multiple Choice Multiple Answer Question A firm's growth is determined by how mu
ch is re-invested into new assets and the quality of these investments, and thes
e includes :Correct Answer Acquisitions , Building distribution channels , Expan
ding marketing capabilities and investing in new facilities Your Answer Acquisit
ions , Building distribution channels , Expanding marketing capabilities and inv
esting in new facilities
True/False Question Currently in India index options are both European and Ameri
can in nature. Correct Answer False Your Answer False
Multiple Choice Single Answer Question A security represent evidence of :Correct
Answer A property right Your Answer A property right
Multiple Choice Single Answer Question Mr.Saurabh invests Rs. 5,000/- today. The
rate of interest is 4% compounded annually. What will be the value of his inves
tment after 5 years? Correct Answer Rs. 6083/Your Answer Rs. 6083/-
Multiple Choice Single Answer Question When a firm can grow net profits by issui
ng equity, the expected growth rate in net profits is determined by :Correct Ans
wer
Equity reinvestment rate X return on equity Your Answer Equity reinvestment rate
X return on equity
True/False Question Fixed assets turnover ratio measures the efficiency of utili
sation of total assets, fixed as well as current. Correct Answer True Your Answe
r True
Select The Blank Question UTI was set up in the year ________. Correct Answer 19
63 Your Answer 1963
Select The Blank Question The regulations of SEBI with respect to mutual funds w
ere fully revised in the year ________. Correct Answer 1996 Your Answer 1996
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 Single Answer Question What do you understand by money supply? C
orrect Answer Total money in existence at any given time Your Answer Total money
in existence at any given time
What is the objective of fundamental analysis?
a)
To establish relationship between economic, industrial and company indicators wi
th a view to forecast the earnings and dividends of the company Analyse the macr
o economic environment
b)
c)
Analyse the company and sector profitability To establish relationship between e
conomic, industrial and company indicators and compare it with the other sector
d)
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 Price earning ratio
Multiple Choice Multiple Answer Question The investor in bonds receives income f
rom :Correct Answer Interest payments at coupon rates , Capital gain/loss arisin
g out of the sale of the bond , Redemption of the bond of the issuer at a contra
cted value Your Answer Capital gain/loss arising out of the sale of the bond , R
edemption of the bond of the issuer at a contracted value , Interest payments at
coupon rates
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 thi
s amount, if the rate of interest is 6% p.a? Correct Answer Rs. 37363/Your Answe
r Rs. 37363/-
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,5
0,000/- at the end of 3 years. He wanted to know what is the present value of th
is amount, if the rate of interest is 9% p.a ?
Correct Answer Rs.1,15,827/Your Answer Rs.1,15,827/-
Multiple Choice Multiple Answer Question Equity analysts provides estimates of e
arnings and earnings growth for future, using historical data and :Correct Answe
r Macro economic information that may impact future growth , Private information
about the firm , Firm's specific information and public information Your Answer
Macro economic information that may impact future growth , Private information
about the firm , Firm's specific information and public information
Multiple Choice Multiple Answer Question What are the features of company fixed
deposits? Correct Answer Interest rate offered is higher than banks , No benefit
s under 80 L , No TDS for interest income upto Rs. 5000 Your Answer Interest rat
e offered is higher than banks , No benefits under 80 L , No TDS for interest in
come upto Rs. 5000
True/False Question A firm uses a combination of equity and debt for financing i
ts assets. Correct Answer True Your Answer True
Multiple Choice Multiple Answer Question The Peer group of Bharat Forge consists
of which all companies? Correct Answer Am forge industries , Kalyani Forge , EL
Forge Your Answer Am forge industries , Kalyani Forge , EL Forge
Multiple Choice Single Answer Question Mr.Rohan invests Rs.25,000/- today. The r
ate of interest is 6% compounded annually. What will be the value of his investm
ent after 3 years? Correct Answer Rs. 29775/Your Answer Rs. 29775/-
Multiple Choice Single Answer 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 thi
s amount, if the rate of interest is 7% p.a ? Correct Answer Rs. 62,275/Your Ans
wer 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 Your Answer True
Select The Blank Question ________ is the value today of a stream of cash flows
that occurs in future. Correct Answer Present value Your Answer Present value
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 :C
orrect 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 receip
t 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 receip
t
Multiple Choice Multiple Answer Question What are the features of line charts? C
orrect Answer It connects closing prices from one period to the next , It is ide
al 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 securit
ies with no high or low price data
Multiple Choice Single Answer Question What is the objective of Portfolio manage
ment? Correct Answer To Minimize risk and maximize return Your Answer To Minimiz
e risk and maximize return
True/False Question The risk associated to get the required rate of return on th
e stock is measure by market beta. Correct Answer True Your Answer True
Match The Following Question Correct Answer Your Answer
Growth of income 40-60 % debt, 40-60 % equities 40-60 % debt, 40-60 % equities
Current income Short term debt portfolio Short term debt portfolio
Stability of principal Fixed - income portfolio Fixed - income portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Select The Blank Question ________ refers to the possibility that there may not
be a readily available market for the particular bond. Correct Answer Liquidity
risk Your Answer Liquidity risk
True/False Question The cost structure remaining the same, better price realisat
ion results in lower gross profit ratio. Correct Answer False Your Answer False
True/False Question Five paisa.com is an example of on line trading portal. Corr
ect Answer
True Your Answer True
Multiple Choice Single Answer Question What is balance of payments? Correct Answ
er Credit and debit transactions of a country Your Answer Credit and debit trans
actions of a country
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Answer Speculator
s Your Answer Speculators
Multiple Choice Multiple Answer Question Major steps involved in construction of
a index are :Correct Answer Selecting a set of scrips to be used , Fixing start
ing date , Calculating market capitalisation Your Answer Selecting a set of scri
ps to be used , Fixing starting date , Calculating market capitalisation
Multiple Choice Single Answer Question In any Economy, bridge is created between
savers and who need the funds by this system :Correct Answer Financial Your Ans
wer Financial
Select The Blank Question ________ is the value at a certain future date today o
f a stream of cash flows that occurs over a period of time. Correct Answer Futur
e value Your Answer Future value
Multiple Choice Single Answer Question How many measures of money supply are use
d commonly? Correct Answer 2 Your Answer 2
True/False Question PPF is a good retirement planning and tax saving vehicle. Co
rrect Answer True Your Answer True
Multiple Choice Multiple Answer Question The security analysis process will achi
eve :Correct Answer True picture of a company , Normal earning power , Projectio
n of future profitability Your Answer True picture of a company , Normal earning
power , Projection of future profitability
Select The Blank Question ________ bonds are generally called for prepayment aft
er interest rates have fallen, investors will not be able to find comparable inv
estment avenues. Correct Answer Call risk Your Answer Call risk
Select The Blank Question Debentures rated "BB" refers ________ of timely paymen
t of interest and principal. Correct Answer Inadequate safety Your Answer Inadeq
uate safety
Multiple Choice Single Answer Question What is the goal of the Dow theory?
Correct Answer To determine changes in the primary or major movement in the mark
et Your Answer To determine changes in the primary or major movement in the mark
et
Multiple Choice Multiple Answer Question Who are the constituents of a mutual fu
nd? Correct Answer Sponsor & trustees , Asset management company , Custodian You
r Answer Sponsor & trustees , Asset management company , Custodian
Multiple Choice Single Answer Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity Your Answer Inc
reased level of housing construction activity
Multiple Choice Multiple Answer Question What were the achievements of Bharat Fo
rge during the year 2003? Correct Answer Secured second largest customer in Chin
a , Appointed a Company Secretary to act as compliance officer , New contracts w
on in passenger car components Your Answer Secured second largest customer in Ch
ina , Appointed a Company Secretary to act as compliance officer , New contracts
won in passenger car components
Select The Blank Question The 6.________% tax saving bonds of government of Indi
a have a tenure of 5 years. 5 5 Correct Answer Your Answer
Select The Blank Question The compounded annual return of Kisan Vikas patra is _
_______. Correct Answer 0.084 Your Answer 0.084
True/False Question The labour conditions do not play an important role in the i
ndustry analysis. Correct Answer False Your Answer False
Select The Blank Question ________ is also known as random walk model. Correct A
nswer Weak form EMH Your Answer Weak form EMH
Multiple Choice Single Answer Question Futures contract on individual securities
shall expire on the last Thursday of the expiry month and if the last Thursday
is a trading holiday then the contract shall expire on the :Correct Answer Previ
ous day Your Answer Previous day
Match The Following Question Correct Answer Your Answer
Technical collaboration of Bharat Forge with SIFCO industries USA 1981 1981
Bharat Forge was incorporated at Mumbai 1961 1961
Shares of 100 each subdivided of Bharat forge 1971 1971
930000 bonus shares issued by Bharat Forge 1976 1976
Select The Blank Question ________ ratio is estimated by dividing the market val
ue of a firm's assets by the replacement cost of these assets. Correct Answer Ma
rket value to replacement cost ratio Your Answer Market value to replacement cos
t ratio
Select The Blank Question Debentures rated ________ are judged to offer sufficie
nt safety of timely payment of interest and repayment of principal. Correct Answ
er "BBB" Your Answer "BBB"
Multiple Choice Single Answer Question As per the exhibit 18-1 for individual st
ock 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 Your Answer 0.05
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Current yield , Yield to maturity , Realise
d yield Your Answer
Current yield , Yield to maturity , Realised yield
Multiple Choice Single Answer Question A derivative is a product whose value is
derived from :Correct Answer Value of an underlying asset Your Answer Value of a
n underlying asset
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years? Correct Answer Rs. 73466/Your Answer Rs. 7346
6/-
Multiple Choice Single Answer Question What is the limitation of Flow-of funds a
nalysis method? Correct Answer Cannot give indication of the inclination of mark
et participants to purchase stock Your Answer Cannot give indication of the incl
ination of market participants to purchase stock
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
Multiple Choice Multiple Answer Question Equity analysts provides estimates of e
arnings and earnings growth for future, using historical data and :Correct Answe
r Macro economic information that may impact future growth , Private information
about the firm , Firm's specific information and public information
Multiple Choice Multiple Answer Question What are the features of short-term tre
nds? Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course
of the intermediate cycle , They are usually influenced by random news events
Multiple Choice Multiple Answer Question What are the features of trend lines Co
rrect Answer A simple and useful tool in technical analysis , Prices move in tre
nds , The trend lines represent points of support and resistance
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 whi
te if the closing price is higher than the opening price Your Answer , Displays
the correlation between the high and low prices Multiple Choice Multiple Answer
Question The growth rate in the initial phase is not constant but declines linea
rly 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-M
odel unlike the classic two stage model
Multiple Choice Multiple Answer Question What are the features of line charts? C
orrect Answer It connects closing prices from one period to the next , It is ide
al for securities with no high or low price data
Multiple Choice Multiple Answer Question What are the ways of measuring relative
strength? Correct Answer Calculate the rates of return and classify securities
that have earned superior historical returns , Calculating certain ratios will h
elp in analyzing whether a security has relative strength Your Answer Calculatin
g the Return on investment
Multiple Choice Multiple Answer Question The Peer group of Bharat Forge consists
of which all companies? Correct Answer Am forge industries , Kalyani Forge , EL
Forge
Multiple Choice Multiple Answer Question Which were the initiatives which the ch
airman said would focus on in 2003-04 in the speech in annual report for the yea
r 2003-03? Correct Answer Research and development , Capital investment and focu
s on balance sheet , Overseas acquisitions
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s 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 tim
e
Multiple Choice Multiple Answer Question The features of bond are :Correct Answe
r Collateral , Call provision , Sinking fund and protective covenants
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
What are the features of company fixed deposits? Interest rate offered is higher
than banks , No benefits under 80 L , No TDS for interest income upto Rs. 5000
Interest rate offered is higher than banks , No benefits under 80 L , No TDS for
interest income upto Rs. 5000 What are the features of point and figure charts?
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 C
harts are constructed using a combination of X's and O's known as boxes. , X's s
how that the prices are moving up , O's show that the prices are moving down
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
What are the features of post office monthly income scheme? Investor earns bonus
of 10% on completion of term , Rate of return is 8 % , Interest payable monthly
Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10%
on completion of term
Multiple Choice Multiple Answer Question Correct Answer
The firm issuing bonds operating sinking fund and repurchases bonds either :Call
ing in a certain number of bonds by lot , Buying bonds in the open market ,
Your Answer
Buying bonds issued to banks and financial institutions Calling in a certain num
ber of bonds by lot , Buying bonds in the open market , Buying bonds issued to b
anks and financial institutions
Multiple Choice Multiple Answer Question
Correct Answer
Your Answer
If option is given to you to receive Rs.1,000/- today or after one year, you wil
l choose to receive it today because :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 associate
d with the future receipt You can use the amount to generate returns over the ne
xt 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 f
uture receipt
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
The computation of return on a bond involves considering :The entire sequence of
cash flows , The timing of cash flows , Calculating the internal rate of return
The entire sequence of cash flows , The timing of cash flows , Calculating the
internal rate of return
Multiple Choice Multiple Answer Question Correct Answer
What are the features of line charts? 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 securit
ies with no high or low price data
Multiple Choice Multiple Answer Question Correct Answer
Explain what are leverage ratios ? Debt equity ratio and interest coverage ratio
and DSCR are important leverage ratios , Debt is riskier source of finance as i
t entails fixed outgo of periodic payments , Help in assessing the risk arising
using the debt capital 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 periodi
c payments
Your Answer
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
What developments had taken place during the year 2000 in case of Bharat Forge L
td.? Demerger of investment division and windmills , Nominee director of UTI res
igned and ceased to be the director - nomination withdrawn by UTI Demerger of in
vestment division and windmills , Nominee director of UTI resigned and ceased to
be the director - nomination withdrawn by UTI
Multiple Choice Multiple Answer Question Correct Answer
Your Answer
The investor in bonds receives income from :Interest payments at coupon rates ,
Capital gain/loss arising out of the sale of the bond , Redemption of the bond o
f the issuer at a contracted value Interest payments at coupon rates , Capital g
ain/loss arising out of the sale of the bond , Redemption of the bond of the iss
uer at a contracted value
Multiple Choice Multiple Answer Question 1
Return can be in the form of :-
Correct Answer Your Answer Multiple Choice Multiple Answer Question 5 Correct An
swer
Dividends , Interests , Capital appreciation Dividends , Interests , Capital app
reciation
Your Answer
What were the achievements of Bharat Forge during the year 2003? Secured second
largest customer in China , Appointed a Company Secretary to act as compliance o
fficer , New contracts won in passenger car components Secured second largest cu
stomer in China , Appointed a Company Secretary to act as compliance officer , N
ew contracts won in passenger car components
Multiple Choice Multiple Answer Question 35 Correct Answer
An option is :A contract between two parties , Where buyer receives a privilege
for which he pays a premium , Where the seller accepts an obligation for which h
e receives a fee A contract between two parties , Where buyer receives a privile
ge for which he pays a premium , Where the seller accepts an obligation for whic
h he receives a fee
Your Answer
Multiple Choice Multiple Answer Question 41 Correct Answer Your Answer
Formula for calculation of portfolio variance requires :Expected return on portf
olio , Expected return on assets , Weight of asset in the portfolio Expected ret
urn on portfolio , Expected return on assets , Weight of asset in the portfolio
Multiple Choice Multiple Answer Question 46 Correct Answer Your Answer
What were the objectives for 2002-03 the chairman of Bharat forge had emphasised
on in the annual report for 2001 - 02 Maintain aggressive exports thrust , Incr
ease shares of value added products , Continue reducing costs Maintain aggressiv
e exports thrust , Increase shares of value added products , Continue reducing c
osts
Multiple Choice Multiple Answer Question 47
Which are the most popular types of orders placed through an online trading acco
unt?
Correct Answer Your Answer Multiple Choice Multiple Answer Question 4
Limit orders , Market orders Market orders , Hedging orders , Arbitrage orders A
firm's growth is determined by how much is re-invested into new assets and the
quality of these investments, and these includes :Acquisitions , Building distri
bution channels , Expanding marketing capabilities and investing in new faciliti
es Acquisitions , Expanding marketing capabilities and investing in new faciliti
es , Mergers
Correct Answer
Your Answer
Multiple Choice Multiple Answer Question 5 Correct Answer
Your Answer
Which of the following are important momentum indicators used widely? Rate of ch
ange (ROC) , Relative strength indicator (RSI) , Moving average convergence dive
rgence(MACD) Rate of change (ROC) , Relative strength indicator (RSI) , Moving a
verage convergence divergence(MACD)
Multiple Choice Multiple Answer Question 14 Correct Answer Your Answer
Which ratios are commonly used? Debt equity ratio , Interest coverage ratios , D
ebt service coverage ratios Debt equity ratio , Interest coverage ratios , Debt
service coverage ratios
Multiple Choice Multiple Answer Question 15 Correct Answer Your Answer
What were the Chairman's comments during the speech in the Annual report of the
FY 2002-03? Best year in the history of the company , 146% growth in exports , H
ighest pre and post tax profits Best year in the history of the company , 146% g
rowth in exports , Highest pre and post tax profits
Multiple Choice Multiple Answer Question 20 Who are the constituents of a mutual
fund? Correct Answer Sponsor & trustees , Asset management company ,
Your Answer
Custodian Sponsor & trustees , Asset management company , Custodian
Multiple Choice Multiple Answer Question 26 What are the features of Kisan Vikas
Patra? Correct Answer Your Answer Term is for 8 years seven months , Provision
of premature withdrawal , Interest rate is 8.4% compounded annually Term is for
8 years seven months , Provision of premature withdrawal , Interest rate is 8.4%
compounded annually
Multiple Choice Multiple Answer Question 38 The security analysis process will a
chieve :Correct Answer Your Answer True picture of a company , Normal earning po
wer , Projection of future profitability True picture of a company , Normal earn
ing power , Projection of future profitability
Multiple Choice Multiple Answer Question 41 The return to the bond investor can
be measured in terms of :Correct Answer Current yield , Yield to maturity , Real
ised yield Your Answer Yield to maturity , Realised yield Multiple Choice Multip
le Answer Question 5 Which are the different types of accounts offered to invest
ors by the stock brokers? Correct Answer Cash trading , Margin trading Your Answ
er General trading , Cash trading , Margin trading
Multiple Choice Multiple Answer Question 7 What are the features of Retail gover
nment securities (G-secs) ? Correct Answer Safest investment option available ,
Demat account is required for investment , Choice of tenure varies from less tha
n 1 year to 30 years Your Answer Securities can be bought from the RBI , Safest
investment option available , Demat account is required for investment
Multiple Choice Multiple Answer Question 10 To measure the movement of stocks in
the market which indices were constructed by Dow?
Correct Answer Your Answer
Dow Jones industrial Average , Dow Jones Transportation Average Dow Jones Transp
ortation Average
Multiple Choice Multiple Answer Question 16 The security market is the market fo
r :Correct Answer Your Answer Equity , Debt , Derivatives Equity , Debt , Bank d
eposits
Multiple Choice Multiple Answer Question 18 In a typical stock market cycle whic
h are the types of trends? Correct Answer Trends upward , Trend downward , Sidew
ay trend Your Answer Trends upward , Trend downward , Flat trend
Multiple Choice Multiple Answer Question 22 Mutual fund schemes could be broadly
classified as :Correct Answer Your Answer Open ended scheme , Close ended schem
e Open ended scheme , Close ended scheme , Growth schemes
Multiple Choice Multiple Answer Question 24 What was the final analysis on the p
erformance 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 tim
es 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 milli
on , Stock currently trades at 15 times its FY 05 consensus EPS forecasts , Stoc
k will trade at an inexpensive PEG of 0.6x. Multiple Choice Multiple Answer Ques
tion 26 Gilt Edged Securities are :Correct Answer Your Answer State Govt. , Quas
i-Govt , Central Govt Central Govt , State Govt. , Quasi-Govt
Multiple Choice Multiple Answer Question 33 What are the ways of measuring relat
ive strength? Correct Answer Calculate the rates of return and classify securiti
es that have earned superior historical returns ,
Your Answer
Calculating certain ratios will help in analyzing whether a security has relativ
e strength Calculate the rates of return and classify securities that have earne
d superior historical returns , Calculating certain ratios will help in analyzin
g whether a security has relative strength , Calculating the Return on investmen
t
Multiple Choice Multiple Answer Question 44 What are the different types of prof
itability ratios? Correct Answer Your Answer Gross profit margin ratio , Earning
s power , Return on equity Gross profit margin ratio , Earnings power , Return o
n equity
Multiple Choice Multiple Answer Question The Gordon growth model is best suited
for firms :Correct Answer Your Answer Growing at a rate equal to or lower that t
he growth in the economy , Which have well established dividend payout ratio pol
icy , Whose earnings are steady and perpetual Growing at a rate equal to or lowe
r that the growth in the economy , Which have well established dividend payout r
atio policy
Multiple Choice Multiple Answer Question The Two-Stage dividend discount model i
s based on the assumption of :Correct Answer An initial phase where the growth i
s not a stable growth rate , A subsequent steady state of growth rate being stab
le and lasts n years , A stable growth phase lasts forever Your Answer An initia
l 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 for
ever Multiple Choice Multiple Answer Question Features of PSU Bonds are :Correct
Answer Your Answer No TDS , Transferable by endorsement , No stamp duty on tran
sfer No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Multiple Answer Question An options contract allows the investor
:Correct Answer Your Answer To earn a profit while restricting the downside ris
k , To use the options for speculation , Either to honour or walk away from the
contract Either to honour or walk away from the contract , To earn a profit whil
e restricting the downside risk , To use the options for speculation
Multiple Choice Multiple Answer Question Major steps involved in construction of
a index are :Correct Answer Your Answer Selecting a set of scrips to be used ,
Fixing starting date , Calculating market capitalisation Selecting a set of scri
ps to be used , Fixing starting date , Fixing ending date
Multiple Choice Multiple Answer Question How can the financial statements can be
manipulated while giving the estimates for growth? Correct Change method of rat
e of depreciation , Change method of Answer stock valuation , Inflating sales fo
r current year by advancing sales for the following year Your Answer Change meth
od of rate of depreciation , Change method of stock valuation , Inflating sales
for current year by advancing sales for the following year Multiple Choice Multi
ple Answer Question The underlying assumptions of Technical analysis are that :C
orrect Answer Your Answer Prices move in predictable patterns , Market value is
determined by supply & demand , Investors are emotional than being rational Pric
es move in predictable patterns , Investors are emotional than being rational
Multiple Choice Multiple Answer Question Which are the different styles of displ
aying charts? Correct Answer Your Answer Bar and line charts , Candle stick char
ts , Point and figure charts Candle stick charts , Point and figure charts , Bar
and line charts
Multiple Choice Multiple Answer Question What are the features of public provide
nt scheme? Correct Answer Your Answer 15 year instrument , Rate of interest is 8
% , Partial withdrawal is available from 7th year 15 year instrument , Rate of i
nterest is 8% , Partial withdrawal is available from 7th year
Multiple Choice Multiple Answer Question Growth of the firm can be estimated thr
ough :Correct Answer Your Answer Firm's past earnings/historical growth rate , E
stimates made by equity research analyst who follow the firm , Estimates from a
firm's fundamentals Firm's past earnings/historical growth rate , Estimates made
by equity research analyst who follow the firm , Estimates from a firm's fundam
entals
Multiple Choice Multiple Answer Question Characteristics of Preference shares ar
e :Correct Answer Your Answer Carry a fixed rate of dividend , Dividend payable
out of profit , Redemption in 7 to 12 years Carry a fixed rate of dividend , Div
idend payable out of profit , Redemption in 7 to 12 years
Multiple Choice Multiple Answer Question What are the SEBI regulations with resp
ect to mutual funds? Correct Answer Your Answer Mutual funds to be registered wi
th 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 Mutual f
unds 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 m
anages the fund
Multiple Choice Multiple Answer Question The security analysis process will achi
eve :Correct Answer Your Answer True picture of a company , Normal earning power
, Projection of future profitability True picture of a company , Normal earning
power , Projection of future profitability
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Your Answer Current yield , Yield to maturi
ty , Realised yield Realised yield
Multiple Choice Multiple Answer Question What are the features of bank deposits?
Correct Answer Your Answer Interest is presently around 6% , Benefits under sec
tion 80 L , Banks offer cheque facility for investors making it convenient to wi
thdraw Interest is presently around 6% , Banks offer cheque facility for investo
rs making it convenient to withdraw
Multiple Choice Multiple Answer Question What are the important macro economic i
ndicators? Correct Answer Your Answer GNP growth rate , Price Conditions , Monso
ons GNP growth rate , Price Conditions , Monsoons
Multiple Choice Single Answer Question When an investor invests in stock, expect
s to get the dividends and an expected price for the period the stock is held is
the rule of :Correct Answer The General model Multiple Choice Single Answer Que
stion Stock Exchanges are the part of :Correct Answer Your Answer Secondary mark
et Money Market
Multiple Choice Single Answer Question The index futures symbols of BSE are repr
esented as :Correct Answer BSX JAN 2005 (January contract)
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Market influence Answer Multiple
Choice Single Answer Question In India we have index futures contracts based on
:Correct Answer S&P CNX Nifty and the BSE sensex
Multiple Choice Single Answer Question In India, the futures on individual secur
ities have been introduced from :Correct 2001 Answer Multiple Choice Single Answ
er Question What do you understand by the term redemption price? Correct Answer
Price or NAV at which a scheme purchases its units
Multiple Choice Single Answer Question A security analysis is done :Correct Answ
er For decision making for investments
Multiple Choice Single Answer Question As per the exhibit 18-1 for individual st
ock futures on NSE, the price steps in respect of all futures contract admitted
to the dealings of the exchange shall be :Correct 0.05 Answer Multiple Choice Si
ngle Answer Question What is a technical approach to investment? Correct Answer
A reflection of the idea that prices move in trends which are determined by vari
ous factors
Multiple Choice Single Answer Question A pledge of real assets as insurance agai
nst the non-payment of default by the buyer represents Correct Collateral Answer
Multiple Choice Single Answer Question Who developed Dow's Principles and organ
ised them into a theory as it is known today? Correct William Peter Hamilton Ans
wer Your Answer Charles.H.Dow
Multiple Choice Single Answer Question We can compare the price earning ratio of
a market to its historical average to make judgements about, whether market is
:Correct Under valued or over valued Answer Your Answer Under valued or over val
ued Multiple Choice Single Answer Question When a firm can grow net profits by i
ssuing equity, the expected growth rate in net profits is determined by :Correct
Equity reinvestment rate X return on equity Answer Your Answer Price earning ra
tio X return on equity Multiple Choice Single Answer Question What is a load fun
d? Correct Answer Your Answer Fund charging a fee for entry and exit Fund chargi
ng a fee for entry and exit
Multiple Choice Single Answer Question Investment is a risk free investment when
:Correct Answer Your Answer Actual return is = expected return Actual return is
= expected return
Multiple Choice Single Answer Question Debt instruments that have a maturity per
iod of more than one year are called as :Correct Bonds Answer Your Answer Bonds
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 thi
s amount, if the rate of interest is 6% p.a? Correct Rs. 37363/Answer Your Answe
r Rs. 37363/Multiple Choice Single Answer Question Which of these is a short-mat
urity debt issue? Correct Answer Your Answer Money market funds and gilts Money
market funds and gilts
Multiple Choice Single Answer Question What is Support level? Correct Answer You
r Answer A point where the prices become relatively attractive for buyers Market
resistance to a price fall
Multiple Choice Single Answer Question During the 1980's rate of savings in Indi
a has hovered around what percentage? Correct 0.21 Answer Your Answer 0.22 Multi
ple Choice Single Answer Question A market that is trading at a Price earning ra
tio that is much higher than its historical norms is considered to be :Correct O
ver valued Answer
Your Answer
Over valued
Multiple Choice Single Answer Question The average historical growth rate can be
calculated as :Correct Answer Your Answer Arithmetic average or a geometric ave
rage Geometric average
Multiple Choice Single Answer Question 4 What are short term trends? Correct Ans
wer Your Answer Trends which interrupt the course of the intermediate cycle
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 Retention ratio
X return on equity Answer Your Answer Price earning ratio X return on equity Mul
tiple Choice Single Answer Question 9 The historical growth rate and the past ea
rnings of a firm are used in valuing :Correct Stable firms, but not appropriate
for high growth firms Answer Your Answer Consistent stable firms, but not approp
riate for high growth firms Multiple Choice Single Answer Question 10 Efficient
market hypothesis is based on the assumption that market comprises of :Correct R
ational Investors Answer Your Answer Heterogeneous investors Multiple Choice Sin
gle Answer Question 11 Co variance of asset with market portfolio 85 and varianc
e of market portfolio is 100 then beta is :Correct 0.0085 Answer Your Answer 0.0
085
Multiple Choice Single Answer
Question 13 Correct Answer Your Answer
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:Rs. 9639/Rs. 9639/-
Multiple Choice Single Answer Question 18 What does flow-of fund analysis help i
n understanding? Correct Answer Your Answer Availability of money for the stock
market Financial strength of various companies
Multiple Choice Single Answer Question 23 A security represent evidence of :Corr
ect Answer Your Answer A property right Safety
Multiple Choice Single Answer Question 24 Mr.Saurabh invests Rs. 5,000/- today.
The rate of interest is 4% compounded annually. What will be the value of his in
vestment after 5 years? Correct Rs. 6083/Answer Your Answer Rs. 6083/Multiple Ch
oice Single Answer Question 27 In India futures on individual securities have be
en introduced by :Correct BSE & NSE Answer Your Answer BSE & NSE
Multiple Choice Single Answer Question 43 The issuing firm enjoys the flexibilit
y to call the bonds if the interest rates fall significantly and it can issue :C
orrect New bonds at a lower rates Answer Your Answer New bonds at a lower rates
Multiple Choice Single Answer Question 2 When was the first mutual fund set up?
Correct 1963
Answer Your Answer
1963
Multiple Choice Single Answer Question 7 How can transition phases be projected?
Correct Answer Your Answer Transition phases are signalled by clearly definable
price patterns By working out the resistance and support levels
Multiple Choice Single Answer Question 8 If the price of a share at the beginnin
g of the year was Rs.50/-, dividend received during the year was Rs.10/-per shar
e and the price at the end is Rs.60/-. What is the rate of return? Correct 0.4 A
nswer Your Answer 0.2 Multiple Choice Single Answer Question 27 Investing in thi
s avenue enable you participate in the equity market indirectly :Correct Mutual
Funds Answer Your Answer Mutual Funds Multiple Choice Single Answer Question 29
In any Economy, bridge is created between savers and who need the funds by this
system :Correct Financial Answer Your Answer Economic
Multiple Choice Single Answer Question 30 Agriculture account for how much porti
on of the economy? Correct Answer Your Answer Quarter Three fourths
Multiple Choice Single Answer Question 37 Who operates the sinking fund under th
e sinking fund provision of a firm? Correct The bond trustee or the issuer Answe
r Your Answer The bond trustee or the issuer Multiple Choice Single Answer Quest
ion 40 How did Dow use the behaviour of stock markets?
Correct Answer Your Answer
As a barometer of business conditions rather than a basis for forecasting stock
prices As a barometer of business conditions rather than a basis for forecasting
stock prices
Multiple Choice Single Answer Question 42 The growth period in the industry life
cycle is defined as :Correct Answer Your Answer Period of rapid market acceptan
ce and substantial profit improvement Period of rapid market acceptance and subs
tantial profit improvement Multiple Choice Single Answer Question 3 What is the
limitation of Flow-of funds analysis method? Cannot give indication of the incli
nation of market participants to purchase stock Cannot give indication of the in
clination of market participants to purchase stock
Correct Answer Your Answer
Multiple Choice Single Answer Question 6 Sentiment indicators are based on what
assumption Correct Answer Your Answer Different groups of investors are consiste
nt in their actions at major market turning points Different groups of investors
are consistent in their actions at major market turning points
Multiple Choice Single Answer Question 12 An agreement to buy or sell a specifie
d quantity of an asset at a certain future date or a certain price is know as :C
orrect Forward contract Answer Your Answer Futures contract Multiple Choice Sing
le Answer Question 25 What are intermediate trends? Correct Answer Your Answer T
hey are counter-cyclical trends within the confines of a primary trend They are
counter-cyclical trends within the confines of a primary trend
Multiple Choice Single Answer Question 29 What are index funds? Correct Answer Y
our Answer Investment in securities in the same weightage which replicates a par
ticular index Investment in securities in the same weightage which replicates a
particular index
Multiple Choice Single Answer
Question 38 Correct Answer Your Answer
What are the assumptions of the Dow theory? Majority of stocks follow the underl
ying trend of the market most of the time Majority of stocks follow the underlyi
ng trend of the market most of the time
Multiple Choice Single Answer Question 39 Mr.Rohan invests Rs.25,000/- today. Th
e rate of interest is 6% compounded annually. What will be the value of his inve
stment after 3 years? Correct Rs. 29775/Answer Your Answer Rs. 29775/-
Multiple Choice Single Answer Question 41 How many measures of money supply are
used commonly? Correct Answer Your Answer 2 2
Multiple Choice Single Answer Question 43 Under which simple model the value of
the stock is the present value of expected dividends on it :Correct The Dividend
discount model Answer Your Answer The Dividend growth model
Multiple Choice Single Answer Question 46 Avenues can be broadly classified into
the which type of assets? Correct Financial and Real Answer Your Answer Tangibl
e and Intangible Multiple Choice Single Answer Question The average investor in
the market is driven more by emotions than by rational analysis is a rule of :Co
rrect Technical analysis Answer Your Answer Fundamental Analysis
Multiple Choice Single Answer 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
Multiple Choice Single Answer Question What does lower level of unemployment ind
icates? Correct Answer Your Answer Positive economic conditions Economic slowdow
n
Multiple Choice Single Answer Question The GDP growth rate in the economy in rea
l terms has fluctuated between :Correct 4% and 5% Answer Your Answer 4% and 5%
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 invest
ment after 5 years? Correct Rs.14.693/Answer Your Answer Rs.14.693/Multiple Choi
ce Single Answer Question Which market is affected with the improving and higher
growth rate in economy? Correct Stock market Answer Your Answer Stock market
Multiple Choice Single Answer Question What do you understand by money supply? C
orrect Answer Your Answer Total money in existence at any given time Total money
in existence at any given time
Multiple Choice Single Answer Question What is Gross National Product ? Correct
Answer Your Answer Gross income generated from within the country Gross income g
enerated from within the country
Multiple Choice Single Answer Question The greater the deviation of the actual r
eturns from the actual return :Correct Greater the variance Answer Your Answer G
reater the variance Multiple Choice Single Answer Question What is GDP at factor
cost ? Correct Answer Your Answer Excludes net income received from abroad Incl
udes indirect taxes
Multiple Choice Single Answer Question More than half the variation in stock pri
ce could be attributed to which factor? Correct Market influence Answer Your Ans
wer Market influence Multiple Choice Single Answer Question Free Float index con
siders this to calculate market capitalisation :Correct Actual no. of shares ava
ilable Answer Your Answer Actual no. of shares available Multiple Choice Single
Answer Question The Top-down approach is also known as :Correct Answer Your Answ
er Economy-industry-company approach Economy-industry-company approach
Multiple Choice Single Answer Question What is a technical approach to investmen
t? Correct Answer Your Answer A reflection determined A reflection determined of
the idea that prices move in trends which are by various factors of the idea th
at prices move in trends which are by various factors
Multiple Choice Single Answer Question What are index funds? Correct Answer Your
Answer Investment in securities in the same weightage which replicates a partic
ular index Investment in securities in the same weightage which replicates a par
ticular index
Multiple Choice Single Answer Question What could be a better approach to flow-o
f -funds analysis? Correct Answer Your Answer An examination of liquidity trends
in the banking system A study of macro economical changes
Multiple Choice Single Answer Question The general dividend model is based on th
e principle of :Correct Answer Your Answer Present value of the expected future
cash flow Present value of the expected future cash flow
Multiple Choice Single Answer Question What are short term trends? Correct Answe
r Your Answer Trends which interrupt the course of the intermediate cycle Trends
which interrupt the course of the intermediate cycle
Multiple Choice Single Answer Question What is the aim of growth funds? Correct
Answer Your Answer To provide capital appreciation over medium to long term To p
rovide capital appreciation over medium to long term
Multiple Choice Single Answer Question This is not a stock exchange :Correct Ans
wer Your Answer MCX MCX
Multiple Choice Single Answer Question Under EMH it is assumed that if markets a
re efficient, securities are priced to provide a :Correct Answer Normal returns
for their given level of risk Your Answer Normal returns for their given level o
f risk
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years?
Correct Answer Your Answer
Rs. 73466/Rs. 73466/-
Multiple Choice Single Answer Question The price of the index futures contract i
s defined as :Correct Answer Your Answer Future price = Spot price + Carry cost
Future price = Spot price + Carry cost
Multiple Choice Single Answer Question Financial assets can be classified as :Co
rrect Answer Your Answer Marketable and non-marketable Marketable and non-market
able
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,5
0,000/- at the end of 3 years. He wanted to know what is the present value of th
is amount, if the rate of interest is 9% p.a ? Correct Rs.1,15,827/Answer Your A
nswer Rs.1,15,827/Multiple Choice Single Answer Question What is Flow-of-funds a
nalysis? Correct Answer Your Answer Consists of an analysis of the financial pos
itions of various investor groups Consists of an analysis of the financial posit
ions of various investor groups
Multiple Choice Single Answer 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 thi
s amount, if the rate of interest is 7% p.a ? Correct Rs. 62,275/Answer Your Ans
wer Rs. 62,275/Multiple Choice Single Answer Question What do you understand by
term pioneering stage in the industry life cycle analysis?
Correct Answer Your Answer
Slow sales growth product recently introduced Slow sales growth product recently
introduced
Multiple Choice Single Answer Question Till 1990's secular Indian economy's infl
ation rate has been of what percentage? Correct 0.07 Answer Your Answer 0.07 Mul
tiple Choice Single Answer Question Credit rating companies assign ratings for w
hich of these investments? Correct Company deposits Answer Your Answer Company d
eposits Multiple Choice Single Answer Question If index future is taken under fu
tures contract, the underlying asset would be :Correct Stock index Answer Your A
nswer Stock index Multiple Choice Single Answer Question What is balance of paym
ents? Correct Answer Your Answer Credit and debit transactions of a country Cred
it and debit transactions of a company
Multiple Choice Single Answer Question Profits are non existent in pioneering st
age because of :Correct Answer Your Answer Heavy expenses on product introductio
n Heavy expenses on product introduction
Multiple Choice Single Answer Question What is the indicator of buoyant economy?
Correct Answer Your Answer Increased level of housing construction activity Inc
reased level of housing construction activity
Multiple Choice Single Answer Question What does a transitional phase indicate?
Correct Answer Your Answer
It marks the turning point between a rising and falling market It marks the turn
ing point between a rising and falling market
Multiple Choice Single Answer Question Dividend discount model is considered as
the simplest model for :Correct Valuing Equity Answer Your Answer Valuing Equity
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 Multipl
e 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 M
ultiple Choice Single Answer Question What is the objective of Portfolio managem
ent? Correct Answer To Minimize risk and maximize return Your Answer To Minimize
risk and maximize return
Multiple Choice Single Answer Question Capital expenditure -depreciation +change
in working capital -(new debt issued - debt repaid) = Correct Answer Equity rei
nvested in business Your Answer Equity reinvested in business Multiple Choice Si
ngle Answer Question What is the percentage of variation the market and industry
influence account for? Correct Answer 2/3rd Your Answer 75%
Multiple Choice Single Answer
Question What is the rate of interest on the tax free bonds issue by the governm
ent? Correct Answer 6.5% Your Answer 6.5% Multiple Choice Single Answer Question
Investments could be made in retail government securities through :Correct Answ
er Primary dealers Your Answer Primary dealers
Question The growth rate is used to forecast future revenues and earnings and ar
e inputs in valuing :Correct Answer Stable firms Your Answer High growth firms
Multiple Choice Single Answer 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 Your Answer Under priced and over priced
Multiple Choice Single Answer 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 Your Answer Under valued or over val
ued
Multiple Choice Single Answer Question The growth rate is used to forecast futur
e revenues and earnings and are inputs in valuing :Correct Answer Stable firms Y
our Answer High growth firms
Multiple Choice Single Answer Question How can transition phases be projected? C
orrect Answer Transition phases are signalled by clearly definable price pattern
s Your Answer Transition phases are signalled by clearly definable price pattern
s
Multiple Choice Single Answer Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902 Your Answer Between 1900 and 1902
Multiple Choice Single Answer Question When was the first mutual fund set up? Co
rrect Answer 1963 Your Answer 1963
Multiple Choice Single Answer Question What is the art of technical analysis? Co
rrect 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 Multipl
e Choice Single Answer Question The expected price of the stock at the end of th
e 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
Multiple Choice Single Answer Question How would you rate a portfolio with 90% i
nvestment in stocks? Correct Answer Highly aggressive Your Answer Highly aggress
ive
Multiple Choice Single Answer Question What are primary trends? Correct Answer R
eflection of investor's attitudes towards unfolding fundamentals in the business
cycle Your Answer Long term trends Multiple Choice Single Answer Question In a
forward contract there is :Correct Answer No Exchange of cash Your Answer No Exc
hange of cash
Multiple Choice Single Answer
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 Answ
er Equal returns for their given level of risk
Multiple Choice Single Answer Question The approach followed to assess the growt
h 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 fundam
entals Your Answer Earnings multiplier approach
Select The Blank Question The possibility of reduction of risk through the const
ruction of a portfolio depends on the value of ________ between the two assets.
Correct Correlation coefficient Answer Your Answer Time Select The Blank Questio
n Dow Jones transportation average was previously known as ________. Correct Ans
wer Your Answer Rail average Rail average
Select The Blank Question The compounded annual return of Kisan Vikas patra is _
_______. Correct Answer Your Answer 0.084 0.084
Select The Blank Question Under futures market ________ process provides for col
lection of losses that have already occurred. Correct The daily settlement Answe
r Your Answer The daily settlement Select The Blank Question The regulations of
SEBI with respect to mutual funds were fully revised in the year ________. Corre
ct 1996 Answer
Your Answer
1996
Select The Blank Question The Dow theory states that there are simultaneously __
______ movements in the stock market. Correct 3 Answer Your Answer 3 Select The
Blank Question Under the options contract ________ gives the holder the right, b
ut not the obligation to buy or sell the underlying instrument only on the expir
y date. Correct European option Answer Your Answer European option
Select The Blank Question ________ ratio indicates the margin available after me
eting the manufacturing expenses. Correct Gross Profit margin Answer Your Answer
Gross Profit margin Select The Blank Question Secondary reactions occurs becaus
e of ________ which arise in the market as a result of over optimism and over pe
ssimism. Correct Technical distortions Answer Your Answer Bearish trends Select
The Blank Question Debentures rated as "A" are judged to offer ________ of timel
y payment of interest and principal. Correct Adequate safety Answer Your Answer
Adequate safety
Select The Blank Question Debentures rated ________ are judged to offer sufficie
nt safety of timely payment of interest and repayment of principal. Correct "BBB
" Answer Your Answer "BBB"
Select The Blank Question The value of the stock in the ________ model is sensit
ive to the estimates of the growth rate. Correct Answer The Gordons dividend gro
wth Select The Blank Question ________ is due to the fact that a borrower may no
t pay interest and/or principal on time. 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 Co
nsolidation pattern Select The Blank Question ________ bonds are generally calle
d for prepayment after interest rates have fallen, investors will not be able to
find comparable investment avenues. Correct Answer Call risk Select The Blank Q
uestion ________ deal in futures to offset a pre-existing risk. Correct Answer H
edger
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 t
he firm. Correct Answer Your Answer Return on equity Return on equity
Select The Blank Question 20 ________ refers to the possibility that there may n
ot be a readily available market for the particular bond. Correct Liquidity risk
Answer Your Answer Interest rate risk Select The Blank Question 21 The govt all
owed public sector banks and institutions in mutual funds in ________. Correct E
arly 90's Answer Your Answer Early 90's Select The Blank Question 36 The 8% taxa
ble savings bonds are repayable after ________ years. Correct Answer Your Answer
6 5
Select The Blank Question 39 Security analysis serves the investment decision ma
ker by identifying ________securities. Correct Under priced Answer Your Answer B
lue chip Select The Blank Question 42 ________ absorbs the excess demand or supp
ly generated by hedgers and assume the risk of price fluctuations. Correct Specu
lators Answer Your Answer Brokers Select The Blank Question 44 A ________ rally
for stocks generally takes place because of an improved outlook for business con
ditions over what was anticipated.
Correct Answer Your Answer
Bear market Bullish market
Select The Blank Question 1 UTI was set up in the year ________. Correct Answer
Your Answer 1963 1963
Select The Blank Question 6 An ________ is a series of equal payments or receipt
s occurring at regular intervals of time. Correct Annuity Answer Your Answer Ann
uity 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 Right but not obligation Answer Your Answer
Right but not obligation Select The Blank Question 13 Measures of ________ tells
us what we can expect a typical or middle data point of a distribution to be. C
orrect Central tendency Answer Your Answer Central tendency Select The Blank Que
stion 28 ________ identified five forces that determine the intrinsic long run p
rofit attractiveness of a market or market segment. Correct Michael Porter Answe
r Your Answer Michael Porter Select The Blank Question 36 ________is a hybrid fo
rm of security which has characteristics of both equity and debentures Correct P
reference shares Answer Your Answer Preference shares
Select The Blank Question 39 Debentures rated "BB" refers ________ of timely pay
ment of interest and principal. Correct Inadequate safety Answer Your Answer Ina
dequate safety Select The Blank Question 43 The Derivative market is divided int
o Future market and ________ market. Correct Options Answer Your Answer Options
Select The Blank Question 46 The Dow theory was published in a series of editori
als in the ________. Correct Answer Your Answer Wall street journal Wall street
journal
Select The Blank Question 1 ________ deal in futures to offset a pre-existing ri
sk. Correct Answer Your Answer Hedger Speculator
Select The Blank Question 8 Under ________ EMH investors cannot earn abnormal/su
perior profits on securities on a consistent basis. Correct Semi-strong form Ans
wer 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. Correct Speculators Answer Your Answer Hedgers Select The Blank Question 1
4 ________ model is based on the principle that an initial phase where the growt
h rate is not stable and subsequent steady growth rate and remains for the long-
term.
Correct Answer Your Answer
The Two-Stage dividend discount 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 Market
value to replacement cost ratio Answer Your Answer PEG ratio
Select The Blank Question 19 ________involves a simultaneous sale and repurchase
agreement. Correct Answer Your Answer Repos Repos
Select The Blank Question 28 Current liabilities include all liabilities due in
the next ________ and provisions. Correct 12 months Answer Your Answer 12 months
Select The Blank Question 30 S&P NSE 50 index is known as ________. Correct Answ
er Your Answer NIFTY NIFTY
Select The Blank Question 31 ________seeks to safeguard against potential losses
on the outstanding position in futures market. Correct Initial margin Answer Yo
ur Answer Daily settlement
Select The Blank Question 35 ________ ratio is the ratio of net profit to the sa
les. Correct Answer Your Answer Net Profit Margin Net Profit Margin
Select The Blank Question Mutual fund is to be registered with ________ before r
aising funds from public. Correct SEBI Answer Your Answer SEBI
Select The Blank Question An investor with a higher tolerance of risk should til
t his portfolio in favour of ________. Correct Stocks Answer Your Answer Bank de
posits
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market. Correct Tra
nsitional Answer Your Answer Sideways
Select The Blank Question Acid test ratio is more stringent measure of liquidity
compared to the ________. Correct Current ratio Answer Your Answer Current rati
o
Select The Blank Question ________ measures the efficiency of credit management.
Correct Answer Your Answer Average collection period Average collection period
Select The Blank Question ________ measures the profitability of operations with
out considering the influence of financial structure and tax rate. Correct Earni
ngs power Answer 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 th
e price variation of both averages moves within a price range of approximately__
______%.
Correct Answer Your Answer
5 5
Select The Blank Question ________ measures the profitability of equity funds in
vested in the firms. Correct Answer Your Answer Return on equity Return on equit
y
Select The Blank Question Risk can be referred as the ________ in the return wit
h respect to the expected return. Correct Volatility Answer Your Answer Differen
ce Select The Blank Question All trades in the futures market are cash settled o
n a ________ basis. Correct Answer Your Answer T+1 T+1
Select The Blank Question ________ ratio is the ratio of net profit to the sales
. Correct Answer Your Answer Net Profit Margin Net Profit Margin
Select The Blank Question When a debenture is sold to the general public a _____
___ is appointed. Correct Answer Your Answer Trustee Brokers
Select The Blank Question A security is said to be ________ if its current marke
t price is over its intrinsic value. Correct Over priced Answer Your Answer Over
priced
Select The Blank Question ________ is the value at a certain future date today o
f a stream of cash flows that occurs over a period of time. Correct Future value
Answer Your Answer Future value Select The Blank Question Mutual fund is to be
registered with ________ before raising funds from public. Correct SEBI Answer Y
our Answer SEBI Select The Blank Question In a heads and shoulders formation the
deeper the pattern, the greater is the ________ significance once it is complet
ed Correct Bearish Answer Your Answer Bearish
Select The Blank Question The govt allowed public sector banks and institutions
in mutual funds in ________. Correct Early 90's Answer Your Answer Early 90's Se
lect The Blank Question Under ________ EMH investors cannot earn abnormal/superi
or profits on securities on a consistent basis. Correct Semi-strong form Answer
Your Answer Semi-strong form Select The Blank Question The 6.________% tax savin
g bonds of government of India have a tenure of 5 years. Correct 5 Answer Your A
nswer 5
Select The Blank Question ________ is the ratio of the market price per share to
the earnings per share.
Correct Answer Your Answer
Price earning ratio Price earning ratio
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Speculators Answe
r Your Answer Speculators
Select The Blank Question UTI was set up in the year ________. Correct Answer 19
63 Your Answer 1963
True/False Question Correct Answer True/False Question Correct Answer True/False
Question Correct Answer True/False Question Correct Answer True/False
The normal relationship is for the volume to expand on rallies and contract on d
eclines. True
In case of assured returns, A scheme cannot promise returns unless such returns
are fully guaranteed by sponsor or AMC. True
A firm uses a combination of equity and debt for financing its assets. True
Policies of the government and the attitude of the government towards the indust
ry have a considerable influence on the industry. True
Question Correct Answer True/False Question Correct Answer True/False Question C
orrect Answer True/False Question Correct Answer True/False Question Correct Ans
wer True/False Question Correct Answer
Investors in high tax bracket would benefit by investing in equity schemes. Fals
e 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. True When we
invest in only one asset we are not exposed to any specific or market risk. Fal
se Five paisa.com is an example of on line trading portal. True A mutual fund is
required to dispatch the dividend warrants to the unit holders within thirty da
ys of the declaration of dividend. True Bearish actions come from a series of de
clining peaks and troughs. True
Default is normally evaluated and indicated by the rating assigned to the debt i
nstruments by independent credit ratings agencies. True True
True/False Question
Correct Answer Your Answer True/False Question Correct Answer Your Answer True/F
alse Question
With the use of diversification you can reduce the risk. True True
A segment is unattractive if the buyers possess strong or growing bargaining pow
ers.
Correct Answer Your Answer True/False Question Correct Answer Your Answer True/F
alse Question Correct Answer Your Answer True/False Question Correct Answer Your
Answer
True True
Risk on a portfolio of assets is always same as the risk on individual asset. Fa
lse False
Debt is less riskier source of finance than equity. False True
Post office monthly schemes have a 10 year tenor. False False
True/False Question Correct Answer Your Answer True/False Question Correct Answe
r Your Answer True/False Question Correct Answer Your Answer
With the introduction of on-line trading by NSE and BSE, the role of regional st
ock exchanges have diminished. True True
Penetration of a trend line denotes a bearish phase. False True
Passive investment managers believe that markets are inefficient and Active mana
gers believe that markets are efficient. False False
True/False Question 2 Correct Answer Your Answer True/False Question 3 Correct A
nswer Your Answer True/False Question 6 Correct Answer Your Answer True/False Qu
estion 15 Correct Answer Your Answer True/False Question 29 Correct Answer Your
Answer True/False Question 30 Correct Answer Your Answer True/False Question 37
Correct Answer
Currently in India index options are both European and American in nature. False
False
The cost structure remaining the same, better price realisation results in lower
gross profit ratio. False True
A segment is more attractive when there are actual or potential substitutes for
the product. False True Bond ratings by credit rating agencies provide superior
and low cost information to the investor serving as a basis for a proper risk-re
turn trade off by investors. True True
The arithmetic mean is a set of observations is calculated by finding the sum va
lues and dividing by the number of observations. True True
Investment in gilt edged securities carry a higher element of risk. False True
Following a decline, heavy volume with little price change is indicative of accu
mulation and is normally a bearish factor. False
Your Answer True/False Question 45 Correct Answer Your Answer True/False Questio
n 11 Correct Answer Your Answer True/False Question 17 Correct Answer Your Answe
r True/False Question 18 Correct Answer Your Answer True/False Question 22 Corre
ct Answer Your Answer True/False Question 23 Correct Answer Your Answer
True
Speculators buy or sell futures contract in an attempt to earn a profit. True Tr
ue Investment decisions can be viewed as an integrated process to which security
analysis makes its unique contribution. True True Given the accounting standard
s across firm, price to book value ratios can be compared across similar firms f
or signs of under valuation. True True
Quick assets consist of current assets less inventories. True True
If a rupee weakens against the dollars it has favourable impact for the exporter
s. True True
A price rise accompanied by expanding volume denotes a potential trend reversal.
False True
True/False Question 35
There may be convertible clause which gives the debenture holder the option to c
onvert the debentures into equity shares.
Correct Answer Your Answer True/False Question 47 Correct Answer Your Answer Tru
e/False Question 2 Correct Answer Your Answer True/False Question 9 Correct Answ
er Your Answer True/False Question 13 Correct Answer Your Answer True/False Ques
tion 21 Correct Answer Your Answer True/False Question 27 Correct Answer Your An
swer
True True PPF is a good retirement planning and tax saving vehicle. True True Bo
nds and Debentures represent long term debt instruments. False True
While calculating geometric mean calculation of root is not important. False Fal
se
Certificate of Deposits offers high rate of interest than Treasury Bills. True T
rue
Sensex is the index of Calcutta Stock Exchange. False False
Fundamental analysis focuses on predicting the future price of a security and Te
chnical analysis on estimating the intrinsic value of a security. False True
True/False
Question 32 Correct Answer Your Answer True/False Question 36 Correct Answer You
r Answer True/False Question 40 Correct Answer Your Answer
If rupee weakens against the dollar, it has favourable impact for the importers.
False False
The risk associated to get the required rate of return on the stock is measure b
y market beta. True True
The basic inputs of the general model are expected dividends and required rate o
f return on stock. True True
True/False Question 42 Correct Answer Your Answer
European style options are more expensive than American style because they offer
greater flexibility to the buyer. False True
True/False Question Correct Answer Your Answer True/False Question Correct Answe
r Your Answer
When you are making an investment you are expecting certain future benefits from
your investment. True True
The returns of sector specific funds are solely dependant on the performance of
the respective sectors / industries. True True
True/False Question Correct Answer
The labour conditions do not play an important role in the industry analysis. Fa
lse
Your Answer True/False Question Correct Answer Your Answer True/False Question C
orrect Answer Your Answer
False
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. False True
Because of statutory compulsion, generally Govt. securities are held by banks, f
inancial institutions, insurance companies etc. True True
True/False Question Correct Answer Your Answer True/False Question Correct Answe
r Your Answer
The Asset management company of the mutual fund must have 50% independent direct
ors. True True
In case of fixed income securities like debentures, you get the return in the fo
rm of dividend. False False
True/False Question Correct Answer Your Answer True/False Question Correct Answe
r Your Answer
Investment in gilt edged securities carry a higher element of risk. False False
American option gives the holder the right, but not the obligation to buy or sel
l the underlying instrument on or before the expiry date and the option can be e
xercised early. True True
True/False Question Correct Answer Your Answer
Prices of stocks usually move in trends. True True
True/False Question Correct Answer Your Answer
The sideways trend is essentially a transitional one which separates the two maj
or market movements. True False
True/False Question Correct Answer Your Answer
With the use of diversification you can reduce the risk. True True
True/False Question A higher value of current ratio indicates a better short ter
m solvency of the firm. Correct Answer True
Your Answer True
True/False Question The basic assumption of Technical analysis is that, price di
scounts everything and it is the outcome of all forces affecting a stock. Correc
t Answer True
Your Answer True True/False Question Fixed assets turnover ratio measures the ef
ficiency of utilisation of total assets, fixed as well as current. Correct Answe
r 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 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
Select The Blank Question The ________ phase carries a lot of significance becau
se it marks the turning point between a rising and a falling market. Correct Ans
wer Transitional Your Answer True/False Question Transitional
Bonds and Debentures represent long term debt instruments.
Correct Answer False Your Answer True
True/False Question
A price rise accompanied by expanding volume denotes a potential trend reversal.
Correct Answer False Your Answer False
Select The Blank Question The ________ phase is characterized by resistance area
and support level. Correct Answer Transition Your Answer True/False Question Tr
ansition
Currently in India index options are both European and American in nature.
Correct Answer False Your Answer False
Select The Blank Question Debentures rated as "A" are judged to offer ________ o
f timely payment of interest and principal. Correct Answer Adequate safety Your
Answer True/False Question High safety
A rally that develops on contracting volumes is suspect and warns of a potential
trend reversal in price Correct Answer True Your Answer True
Match The Following Question Correct Answer Your Answer Price pattern Resistance
level Head and shoulders formation Primary trend Last between 1-2 years Last be
tween 1-2 years Intermediate trend Last between 3 weeks to as long as 6 months L
ast between 3 weeks to as long as 6 months Short term trend Last 1 to 3-4 weeks
Last 1 to 3-4 weeks
Match The Following Question
Correct Answer Your Answer MCX Commodity Exchange Commodity Exchange Sensex BSE
Index BSE Index Nifty NSE Index NSE Index Lifex ET Index Gold Index
Match The Following Question Correct Answer Your Answer Turnover ratios Help mea
sure the efficiency of utilisation of assets Help measure the efficiency of util
isation of assets Debt Equity ratio Debt / Equity Debt / Equity Quick assets Hig
hly liquid assets Highly liquid assets Average collection period Similar to debt
ors turnover Similar to debtors turnover
Match The Following Question Correct Answer Your Answer Development of Dow's pri
nciples William Peter Hamilton Charles H.dow Breadth Indicator Advance/decline l
ine Moving average Momentum indicator MACD MACD Trend lines Useful tool in techn
ical analysis Useful tool in technical analysis Match The Following Question 26
Correct Answer Your Answer 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 Futures con
tract A contract where both the parties are equally responsible Futures contract
Options contract The amount which the buyer of the option has to pay to the opt
ion writer to induce him to accept the risk associated with the contract. Option
price Transaction cost model NSE&BSE are regulated by Securities Exchange Board
of India Securities Exchange Board of India
Match The Following Question 24 Correct Answer Your Answer Equity shares High ri
sk High risk Government Securities No risk Low risk Bank Deposits Low risk No ri
sk Mutual Funds Average risk Average risk
Match The Following Question 33 Correct Answer Your Answer Risk free investment
Actual returns = expected returns Actual returns = expected returns Risk Volatil
ity in the return Volatility in the return Variance Measure of dispersion Measur
e of dispersion Returns Future benefits from investments Future benefits from in
vestments
Match The Following Question 20 Correct Answer Your Answer H-Model For Valuing G
rowth Initial growth rate is not constant but linearly falls over time to reach
the stable growth rate Initial growth rate is not constant but linearly falls ov
er time to reach the stable growth rate The general model Expected dividends and
required rate of return Expected dividends in the next period, cost of equity a
nd expected growth rate in dividends The Gordons Growth model Expected dividends
in the next period, cost of equity and expected growth rate in dividends Assess
ment of the growth rate by looking at how much a firm reinvests for future growt
h and the quality of its reinvestment The Two-Stage Dividend Discount Model Base
d on two extraordinary growth phase lasting n years and stable growth phase that
lasts forever Based on two extraordinary growth phase lasting n years and stabl
e growth phase that lasts forever
Match The Following Question 34 Correct Answer Your Answer Future value of a ser
ies of cash flows occurring at the end of each period. Future value of annuity F
uture value of annuity Value today of a stream of cash flows that occurs in futu
re. Present Value Future Value Value at a certain future date today of a stream
of cash flows that occurs over a period of time. Future Value
Present Value Series of equal payments or receipts occurring at regular interval
s of time. Present value of annuity Present value of annuity
Match The Following Question Correct Answer Your Answer Weak form model is also
termed as Random walk model Random walk model Investors are rational Efficient m
arket hypothesis Efficient market hypothesis Securities current prices fully ref
lect all historical information Weak form EMH Fama Framework on efficient capita
l markets, a review of theory and empirical work Fama Strong form
Match The Following Question Correct Answer Your Answer Technical collaboration
of Bharat Forge with SIFCO industries USA 1981 1981 Bharat Forge was incorporate
d at Mumbai 1961 1961 Shares of 100 each subdivided of Bharat forge 1971
1971 930000 bonus shares issued by Bharat Forge 1976 1976
Match The Following Question Correct Answer Your Answer 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 Th
e actual yield earned by an investor on a bond Realised yield Realised yield Pre
sent value interest factor of annuities and present value interest factor Yield
to maturity Yield to maturity
1. Treasury Bills 2. Commercial Papers 3. Certificate of Deposits 4. Bonds 3
1. Foreign Institutional Investors 2. Government of India 3. Corporates 5 4. Ban
ks and Financial Institutions 5. Central/State Govts/PSU's
6. Post Office 1. ROE 2. Earnings power 3. Net profit margin 4. Gross profit mar
gin 3 1 2 6 1. Measure the profitability of operations without considering the i
nfluence of financial structure and tax rate 2. Ratio if net profit to sales 3.
Measure the profitability of equity funds 4. Valuation ratio 5. Measures the pro
fitability of debt funds 6. Indicates the margin available after meeting the man
ufacturing expenses 1. SEBI 2. NAV 3. AMFI 4. NSE 5 2 6 1. Nifty 2. Net asset va
lue 3. Net average value 4. Association of merchant financers of India 5. Redres
sal of investor complaints 6. Association of mutual funds of India
Match The Following Question Correct Answer Your Answer 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 principal Fixed - income p
ortfolio Short term debt portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Match The Following Question Correct Answer Your Answer Ratio used as a measure
of relative value PEG ratio Price to book value ratio The market value of the fi
rms assets divided by the replacement cost of these assets Market value to repla
cement cost ratio Market value to replacement cost ratio Key determiner of reven
ue multiples Profit margin Profit margin The market value of the equity in a fir
m reflects the markets expectations of the firms earnings power and cash flows.
Price to book value ratio Price earning ratio
Match The Following Question Correct Answer Your Answer Expiration period for op
tions Nine months Nine months The world's first largest options exchange Chicago
Board of options exchange New York board of Options exchange
The most popular pricing options model published in the year 1973 Black Scholes
Black Scholes When the writer gives the buyer of the option the right to sell th
e underlying asset on or before the expiry date Put option Put option
What is the objective of fundamental analysis?
a)
To establish relationship between economic, industrial and company indicators wi
th a view to forecast the earnings and dividends of the company Analyse the macr
o economic environment
b)
c)
Analyse the company and sector profitability To establish relationship between e
conomic, industrial and company indicators and compare it with the other sector
d)
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 Price earning ratio
Multiple Choice Multiple Answer Question The investor in bonds receives income f
rom :Correct Answer Interest payments at coupon rates , Capital gain/loss arisin
g out of the sale of the bond , Redemption of the bond of the issuer at a contra
cted value Your Answer Capital gain/loss arising out of the sale of the bond , R
edemption of the bond of the issuer at a contracted value , Interest payments at
coupon rates
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 thi
s amount, if the rate of interest is 6% p.a? Correct Answer Rs. 37363/Your Answe
r Rs. 37363/-
Multiple Choice Single Answer Question Mr. Suresh is expecting to receive Rs.1,5
0,000/- at the end of 3 years. He wanted to know what is the present value of th
is amount, if the rate of interest is 9% p.a ? Correct Answer Rs.1,15,827/Your A
nswer Rs.1,15,827/-
Multiple Choice Multiple Answer
Question Equity analysts provides estimates of earnings and earnings growth for
future, using historical data and :Correct Answer Macro economic information tha
t may impact future growth , Private information about the firm , Firm's specifi
c information and public information Your Answer Macro economic information that
may impact future growth , Private information about the firm , Firm's specific
information and public information
Multiple Choice Multiple Answer Question What are the features of company fixed
deposits? Correct Answer Interest rate offered is higher than banks , No benefit
s under 80 L , No TDS for interest income upto Rs. 5000 Your Answer Interest rat
e offered is higher than banks , No benefits under 80 L , No TDS for interest in
come upto Rs. 5000
True/False Question A firm uses a combination of equity and debt for financing i
ts assets. Correct Answer True Your Answer True
Multiple Choice Multiple Answer Question The Peer group of Bharat Forge consists
of which all companies? Correct Answer Am forge industries , Kalyani Forge , EL
Forge
Your Answer Am forge industries , Kalyani Forge , EL Forge
Multiple Choice Single Answer Question Mr.Rohan invests Rs.25,000/- today. The r
ate of interest is 6% compounded annually. What will be the value of his investm
ent after 3 years? Correct Answer Rs. 29775/Your Answer Rs. 29775/-
Multiple Choice Single Answer 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 thi
s amount, if the rate of interest is 7% p.a ? Correct Answer Rs. 62,275/Your Ans
wer 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 Your Answer Tru
e
Select The Blank
Question ________ is the value today of a stream of cash flows that occurs in fu
ture. Correct Answer Present value Your Answer Present value
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 :C
orrect 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 receip
t 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 receip
t
Multiple Choice Multiple Answer Question What are the features of line charts? C
orrect Answer It connects closing prices from one period to the next , It is ide
al 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 Single Answer Question What is the objective of Portfolio manage
ment?
Correct Answer To Minimize risk and maximize return Your Answer To Minimize risk
and maximize return
True/False Question The risk associated to get the required rate of return on th
e stock is measure by market beta. Correct Answer True Your Answer True
Match The Following Question Correct Answer Your Answer
Growth of income 40-60 % debt, 40-60 % equities 40-60 % debt, 40-60 % equities
Current income Short term debt portfolio Short term debt portfolio
Stability of principal Fixed - income portfolio Fixed - income portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Select The Blank Question ________ refers to the possibility that there may not
be a readily available market for the particular bond. Correct Answer Liquidity
risk Your Answer Liquidity risk
True/False Question The cost structure remaining the same, better price realisat
ion results in lower gross profit ratio. Correct Answer False Your Answer False
True/False Question Five paisa.com is an example of on line trading portal. Corr
ect Answer True Your Answer True
Multiple Choice Single Answer Question What is balance of payments?
Correct Answer Credit and debit transactions of a country Your Answer Credit and
debit transactions of a country
Select The Blank Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations. Correct Answer Speculator
s Your Answer Speculators
Multiple Choice Multiple Answer Question Major steps involved in construction of
a index are :Correct Answer Selecting a set of scrips to be used , Fixing start
ing date , Calculating market capitalisation Your Answer Selecting a set of scri
ps to be used , Fixing starting date , Calculating market capitalisation
Multiple Choice Single Answer Question In any Economy, bridge is created between
savers and who need the funds by this system :Correct Answer Financial Your Ans
wer Financial
Select The Blank Question ________ is the value at a certain future date today o
f a stream of cash flows that occurs over a period of time. Correct Answer Futur
e value Your Answer Future value
Multiple Choice Single Answer Question How many measures of money supply are use
d commonly? Correct Answer 2 Your Answer 2
True/False Question PPF is a good retirement planning and tax saving vehicle. Co
rrect Answer True Your Answer True
Multiple Choice Multiple Answer Question The security analysis process will achi
eve :Correct Answer True picture of a company , Normal earning power , Projectio
n of future profitability
Your Answer True picture of a company , Normal earning power , Projection of fut
ure profitability
Select The Blank Question ________ bonds are generally called for prepayment aft
er interest rates have fallen, investors will not be able to find comparable inv
estment avenues. Correct Answer Call risk Your Answer Call risk
Select The Blank Question Debentures rated "BB" refers ________ of timely paymen
t of interest and principal. Correct Answer Inadequate safety Your Answer Inadeq
uate safety
Multiple Choice Single Answer Question What is the goal of the Dow theory? Corre
ct Answer To determine changes in the primary or major movement in the market Yo
ur Answer To determine changes in the primary or major movement in the market
Multiple Choice Multiple Answer
Question Who are the constituents of a mutual fund? Correct Answer Sponsor & tru
stees , Asset management company , Custodian Your Answer Sponsor & trustees , As
set management company , Custodian
Multiple Choice Single Answer Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity Your Answer Inc
reased level of housing construction activity
Multiple Choice Multiple Answer Question What were the achievements of Bharat Fo
rge during the year 2003? Correct Answer Secured second largest customer in Chin
a , Appointed a Company Secretary to act as compliance officer , New contracts w
on in passenger car components Your Answer Secured second largest customer in Ch
ina , Appointed a Company Secretary to act as compliance officer , New contracts
won in passenger car components
Select The Blank Question The 6.________% tax saving bonds of government of Indi
a have a tenure of 5 years. Correct Answer 5 Your Answer 5
Select The Blank Question The compounded annual return of Kisan Vikas patra is _
_______. Correct Answer 0.084 Your Answer 0.084
True/False Question The labour conditions do not play an important role in the i
ndustry analysis. Correct Answer False Your Answer False
Select The Blank Question ________ is also known as random walk model. Correct A
nswer Weak form EMH Your Answer Weak form EMH
Multiple Choice Single Answer Question Futures contract on individual securities
shall expire on the last Thursday of the expiry month and if the last Thursday
is a trading holiday then the contract shall expire on the :Correct Answer Previ
ous day
Your Answer Previous day
Match The Following Question Correct Answer Your Answer
Technical collaboration of Bharat Forge with SIFCO industries USA 1981 1981
Bharat Forge was incorporated at Mumbai 1961 1961
Shares of 100 each subdivided of Bharat forge 1971 1971
930000 bonus shares issued by Bharat Forge 1976 1976
Select The Blank Question ________ ratio is estimated by dividing the market val
ue of a firm's assets by the replacement cost of these assets. Correct Answer Ma
rket value to replacement cost ratio Your Answer Market value to replacement cos
t ratio
Select The Blank Question Debentures rated ________ are judged to offer sufficie
nt safety of timely payment of interest and repayment of principal. Correct Answ
er "BBB" Your Answer "BBB"
Multiple Choice Single Answer Question As per the exhibit 18-1 for individual st
ock 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 Your Answer 0.05
Multiple Choice Multiple Answer Question The return to the bond investor can be
measured in terms of :Correct Answer Current yield , Yield to maturity , Realise
d yield Your Answer Current yield , Yield to maturity , Realised yield
Multiple Choice Single Answer Question A derivative is a product whose value is
derived from :Correct Answer Value of an underlying asset
Your Answer Value of an underlying asset
Multiple Choice Single Answer Question Mr. Shekhar invests Rs.50,000/- in a sche
me of LIC, the rate of interest is 8% compounded annually. What will be the valu
e of his investment after 5 years? Correct Answer Rs. 73466/Your Answer Rs. 7346
6/-
Multiple Choice Single Answer Question What is the limitation of Flow-of funds a
nalysis method? Correct Answer Cannot give indication of the inclination of mark
et participants to purchase stock Your Answer Cannot give indication of the incl
ination of market participants to purchase stock

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