LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Security Analysis & Portfolio Management_6

Select The Blank

Question Measures of ________ tells us what we can expect a typical or middle data point of a
distribution 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 reinvested in business
Your Answer Equity reinvested in business

Multiple Choice Multiple Answer

Question What were the objectives for 2002-03 the chairman of Bharat forge had emphasised on in
the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value added products ,
Continue reducing costs

Multiple Choice Single Answer

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

Multiple Choice Single Answer

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

Multiple Choice Multiple Answer

Question The features of bond are :-
Correct Answer Collateral , Call provision , Sinking fund and protective covenants
Your Answer Collateral , Call provision , Sinking fund and protective covenants

Select The Blank

Question The compounded annual return of Kisan Vikas patra is ________.
Correct 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

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

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 ratios

Select The Blank

Question The ________ phase is characterized by resistance area and support level.
Correct 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 time.
Correct Answer Default risk

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

True/False
Question Investment decisions can be viewed as an integrated process to which security analysis
makes its unique contribution.
Correct Answer True

Select The Blank

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

True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True

Multiple Choice Single Answer

Question What is the percentage of variation the market and industry influence account for?
Correct 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 weeks to as long as 6 months Last between 3 weeks to
as long as 6
months
Short term trend Last 1 to 3-4 weeks Last 1 to 3-4 weeks
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 Multiple Choice Multiple Answer
Question What are the features of short-term trends?
Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the intermediate
cycle ,They are usually influenced by random news events

True/False
Question With the use of diversification 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 Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
Your Answer 0.07

Multiple Choice Multiple Answer

Question The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,
Buying
bonds issued to banks and financial institutions
Your Answer Calling in a certain number of bonds by lot , Buying bonds in the open market

True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit holders within thirty
days of the declaration of dividend.
Correct Answer True
Your Answer True

True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as
well as current.
Correct Answer True

Select The Blank

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

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

Multiple Choice Multiple Answer

Question What are the SEBI regulations with respect to mutual funds?
Correct Answer Mutual funds to be registered with SEBI before the launching any scheme , 2/3rds
of the directors of the trustee company must be independent , An AMC approved by SEBI manages
the fund

True/False
Question Default is normally evaluated and indicated by the rating assigned to the debt instruments
by independent credit ratings agencies.
Correct Answer True
Your Answer True

True/False
Question In case of fixed income securities like debentures, you get the return in the form of
dividend.
Correct Answer False
Your Answer False

Multiple Choice Single Answer

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

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 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

Multiple Choice Single Answer

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

Multiple Choice Multiple Answer

Question What were the achievements of Bharat Forge during the year 2003?
Correct Answer Secured second largest customer in China , Appointed a Company Secretary to
act as compliance officer , New contracts won in passenger car components

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Multiple Choice Multiple Answer
Question What are the features of candle stick charts?
Correct Answer Indicates in black if the closing price is lower than the opening price , Indicates in
white if the closing price is higher than the opening price
Your Answer Indicates in black if the closing price is lower than the opening price , Indicates in
white if the closing price is higher than the opening price , Displays the correlation between the high
and low prices

Multiple Choice Multiple Answer

Question What are the features of public provident scheme?
Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from 7th
year
Your Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from 7th
year

Multiple Choice Single Answer

Question Investments could be made in retail government securities through :-
Correct Answer Primary dealers
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
2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports , Highest pre and
post tax profits

Multiple Choice Multiple Answer

Question An options contract allows the investor :-
Correct Answer To earn a profit while restricting the downside risk , To use the options for
speculation , Either to honour or walk away from the contract

Multiple Choice Single Answer

Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded annually.
What will be the value of his investment after 5 years?
Correct Answer Rs.14.693/-

True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
Match The Following
Question Correct Answer Your Answer

Weak form model is also termed as Random walk model Efficient market hypothesis
Investors are rational Efficient market hypothesis Random walk model
Securities current prices fully Weak form EMH Weak form EMH
reflect all historical information
Framework on efficient capital markets, a review of theory and empirical work Fama Strong form

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

7
 manages the fund
Your Answer Mutual funds to be registered with SEBI before the launching any scheme , 2/3rds of
the directors of the trustee company must be independent , An AMC approved by SEBI
manages the fund

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 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 valued

Multiple Choice Single Answer

Question The growth rate is used to forecast future revenues and earnings and are inputs in
valuing :-
Correct Answer Stable firms

Your Answer High growth firms

Multiple Choice Single Answer

Question A security analysis is done :-

Correct Answer For decision making for investments

Your Answer For decision making for investments

Multiple Choice Multiple Answer

Question Which ratios are commonly used?

Correct Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios

Your Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios

Select The Blank

Question An option is a contract which gives the buyer ________ to buy or sell shares of the
underlying security at a specific price on or before a specific date.
Correct Answer Right but not obligation

Your Answer Right but not obligation

Match The Following

Question Correct Answer Your Answer

Growth of income 40-60 % debt, 40-60 % equities 40-60 % debt, 40-60 % equities
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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

9
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.

Correct Answer False

Your Answer True

Multiple Choice Single Answer

Question The expected price of the stock at the end of the holding period is determined by
future dividends and the value of the stock is the present value of dividends
through infinity are the underlying assumptions of :-
Correct Answer The General model

Your Answer The Dividend discount model

True/False
Question American option gives the holder the right, but not the obligation to buy or sell the
underlying instrument on or before the expiry date and the option can be
exercised early.
Correct Answer True

Your Answer True

True/False
Question If rupee weakens against the dollar, it has favourable impact for the importers.

Correct Answer False

Your Answer False

Multiple Choice Multiple Answer

Question What are the features of Kisan Vikas Patra?

Correct Answer Term is for 8 years seven months , Provision of premature withdrawal , Interest
rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Interest rate is 8.4% compounded annually ,
Tax benefits under 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

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

11
 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 returns from the actual return :-

Correct Answer Greater the variance

Your Answer Greater the variance

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

Multiple Choice Multiple Answer

Question What are the features of public provident scheme?

Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from
7th year
Your Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from
7th year

Multiple Choice Multiple Answer

Question Which are the different types of accounts offered to investors by the stock
brokers?
Correct Answer Cash trading , Margin trading

Your Answer General trading , Cash trading , Margin trading

Multiple Choice Single Answer

Question In a forward contract there is :-

Correct Answer No Exchange of cash

Your Answer No Exchange 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 Answer Equal returns for their given level of risk

True/False
Question If a rupee weakens against the dollars it has favourable impact for the exporters.

Correct Answer True

Your Answer True 12

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