Wednesday, March 2, 2011

Security Analysis And Portfolio Management - 9

Security Analysis And Portfolio Management - 9

Multiple Choice Multiple Answer
Question 4 A firm's growth is determined by how
much is re-invested into new assets and
the quality of these investments, and
these includes :-
Correct Answer Acquisitions , Building distribution
channels , Expanding marketing
capabilities and investing in new facilities


Multiple Choice Multiple Answer
Question 5 Which of the following are important
momentum indicators used widely?
Correct Answer Rate of change (ROC) , Relative strength
indicator (RSI) , Moving average
convergence divergence(MACD)

Multiple Choice Multiple Answer
Question 14 Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios ,
Debt service coverage ratios


Multiple Choice Multiple Answer
Question 15 What were the Chairman's comments during
the speech in the Annual report of the FY
2002-03?
Correct Answer Best year in the history of the company ,
146% growth in exports , Highest pre and
post tax profits


Multiple Choice Multiple Answer
Question 20 Who are the constituents of a
mutual fund?
Correct Answer Sponsor & trustees , Asset
management company ,
Custodian

Multiple Choice Multiple Answer
Question 26 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


Multiple Choice Multiple Answer
Question 38 The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning
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 , Realised
yield

Multiple Choice Multiple Answer
Question 5 Which are the different types of accounts offered to
investors by the stock brokers?
Correct Answer Cash trading , Margin trading

Multiple Choice Multiple Answer
Question 7 What are the features of Retail government securities
(G-secs) ?
Correct Answer Safest investment option available , Demat account is
required for investment , Choice of tenure varies from
less than 1 year to 30 years


Multiple Choice Multiple Answer
Question 10 To measure the movement of stocks in the market
which indices were constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones
Transportation Average

Multiple Choice Multiple Answer
Question 16 The security market is the market for :-
Correct Answer Equity , Debt , Derivatives

Multiple Choice Multiple Answer
Question 18 In a typical stock market cycle which are the types of
trends?
Correct Answer Trends upward , Trend downward , Sideway trend

Multiple Choice Multiple Answer
Question 22 Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme

Multiple Choice Multiple Answer
Question 24 What was the final analysis on the performance of
Bharat forge for the year FY 02?
Correct Answer Aim to become US$1 billion Company by Fy 08 from
US$100 million , Stock currently trades at 15 times its
FY 05 consensus EPS forecasts , Stock will trade at an
inexpensive PEG of 0.6x.

Multiple Choice Multiple Answer
Question 26 Gilt Edged Securities are :-
Correct Answer State Govt. , Quasi-Govt , Central Govt

Multiple Choice Multiple Answer
Question 33 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 help in analyzing whether a security
has relative strength


Multiple Choice Multiple Answer
Question 44 What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on
equity

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

Multiple Choice Multiple Answer
Question The Two-Stage dividend discount model is based on the assumption
of :-
Correct Answer An initial phase where the growth is not a stable growth rate , A
subsequent steady state of growth rate being stable and lasts n years
, A stable growth phase lasts forever
stable and lasts n years

Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer

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 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 capitalisation

Multiple Choice Multiple Answer
Question How can the financial statements can be manipulated while
giving the estimates for growth?
Correct Answer Change method of rate of depreciation , Change method of stock
valuation , Inflating sales for current year by advancing sales for
the following year

Multiple Choice Multiple Answer
Question The underlying assumptions of Technical analysis are that :-
Correct Answer Prices move in predictable patterns , Market value is determined
by supply & demand , Investors are emotional than being rational

Multiple Choice Multiple Answer
Question Which are the different styles of displaying charts?
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts

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

Multiple Choice Multiple Answer
Question Growth of the firm can be estimated through :-
Correct Answer Firm's past earnings/historical growth rate , Estimates made by
equity research analyst who follow the firm , Estimates from a
firm's fundamentals

Multiple Choice Multiple Answer
Question Characteristics of Preference shares are :-
Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years

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

Multiple Choice Multiple Answer
Question The security analysis process will achieve :-
Correct Answer 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 Current yield , Yield to maturity , Realised yield

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

Multiple Choice Multiple Answer
Question What are the important macro economic indicators?
Correct Answer GNP growth rate , Price Conditions , Monsoons
Multiple Choice Single Answer
Question When an investor invests in stock, expects to get the dividends and
an expected price for the period the stock is held is the rule of :-
Correct Answer The General model

Multiple Choice Single Answer
Question Stock Exchanges are the part of :-
Correct Answer Secondary market

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

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

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 securities have been
introduced from :-
Correct Answer 2001

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

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

Multiple Choice Single Answer
Question As per the exhibit 18-1 for individual stock futures on NSE,
the price steps in respect of all futures contract admitted to
the dealings of the exchange shall be :-
Correct Answer 0.05

Multiple Choice Single 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 various factors

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

Multiple Choice Single Answer
Question Who developed Dow's Principles and organised them into a
theory as it is known today?
Correct Answer William Peter Hamilton

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 When a firm can grow net profits by issuing equity, the expected
growth rate in net profits is determined by :-
Correct Answer Equity reinvestment rate X return on equity

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

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

Multiple Choice Single Answer
Question Debt instruments that have a maturity period of more than one
year are called as :-
Correct 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 this
amount, if the rate of interest is 6% p.a?
Correct Answer Rs. 37363/-

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

Multiple Choice Single Answer
Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers

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

Multiple Choice Single Answer
Question A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :-
Correct Answer Over valued

Multiple Choice Single Answer
Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average






Security Analysis And Portfolio Management - 8

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 earnings and earnings
growth for future, using historical data and :-
Correct Answer Macro economic information that may impact future growth ,
Private information about the firm , Firm's specific information
and public information

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

Multiple Choice Multiple Answer
Question What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move in
trends , The trend lines represent points of support and
resistance

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

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

Multiple Choice Multiple Answer
Question What are the features of line charts?
Correct Answer It connects closing prices from one period to the next , It is
ideal for securities with no high or low price data

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 help in analyzing whether a security has relative strength

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 chairman said would
focus on in 2003-04 in the speech in annual report for the year
2003-03?
Correct Answer Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions

Multiple Choice Multiple Answer
Question The Two-Stage dividend discount model is best suited for the
firms that are :-
Correct Answer In high growth rate phase , Expecting to maintain the growth
rate phase steadily for a specific time period , Sources of high
growth are expected to disappear after specific period of time

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

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

Multiple Choice Multiple Answer
Question What are the features of point
and figure charts?
Correct Answer Charts are constructed using a
combination of X's and O's
known as boxes. , X's show that
the prices are moving up , O's
show that the prices are moving
down

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

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

Multiple Choice Multiple Answer
Question If option is given to you to
receive Rs.1,000/- today or after
one year, you will choose to
receive it today because :-
Correct Answer You can use the amount to
generate returns over the next
one year , The purchasing
power of Rs.1,000/- today is
more than what it will be one
year from now , There is an
element of uncertainty
associated with the future
receipt

Multiple Choice Multiple Answer
Question The computation of return on a
bond involves considering :-
Correct Answer The entire sequence of cash flows
, The timing of cash flows ,
Calculating the internal rate of
return

Multiple Choice Multiple Answer
Question What are the features of line
charts?
Correct Answer It connects closing prices from one
period to the next , It is ideal for
securities with no high or low price
data


Multiple Choice Multiple Answer
Question Explain what are leverage ratios ?
Correct Answer Debt equity ratio and interest
coverage ratio and DSCR are
important leverage ratios , Debt is
riskier source of finance as it
entails fixed outgo of periodic
payments , Help in assessing the
risk arising using the debt capital

Multiple Choice Multiple Answer
Question What developments had taken
place during the year 2000 in case
of Bharat Forge Ltd.?
Correct Answer Demerger of investment division
and windmills , Nominee director of
UTI resigned and ceased to be the
director - nomination withdrawn by
UTI


Multiple Choice Multiple Answer
Question The investor in bonds receives income
from :-
Correct Answer Interest payments at coupon rates ,
Capital gain/loss arising out of the sale of
the bond , Redemption of the bond of the
issuer at a contracted value

Multiple Choice Multiple Answer
Question 1 Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation

Multiple Choice Multiple Answer
Question 5 What were the achievements of Bharat Forge
during the year 2003?
Correct Answer Secured second largest customer in China ,
Appointed a Company Secretary to act as
compliance officer , New contracts won in
passenger car components


Multiple Choice Multiple Answer
Question 35 An option is :-
Correct Answer A contract between two parties , Where buyer
receives a privilege for which he pays a premium
, Where the seller accepts an obligation for which
he receives a fee


Multiple Choice Multiple Answer
Question 41 Formula for calculation of portfolio variance
requires :-
Correct Answer Expected return on portfolio , Expected return on
assets , Weight of asset in the portfolio


Multiple Choice Multiple Answer
Question 46 What were the objectives for 2002-03 the
chairman of Bharat forge had emphasised on in
the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase
shares of value added products , Continue
reducing costs


Multiple Choice Multiple Answer
Question 47 Which are the most popular types of orders
placed through an online trading account?
Correct Answer Limit orders , Market orders

Security Analysis And Portfolio Management - 7


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

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

Multiple Choice Multiple Answer
Question Which were the initiatives which the chairman said would
focus on in 2003-04 in the speech in annual report for the
year 2003-03?
Correct Answer Research and development , Capital investment and focus
on balance sheet , Overseas acquisitions

Multiple Choice Multiple Answer
Question What developments had taken place during the year 2000 in
case of Bharat Forge Ltd.?
Correct Answer Demerger of investment division and windmills , Nominee
director of UTI resigned and ceased to be the director -
nomination withdrawn by UTI

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

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

Match The Following
Question- Correct Answer
Expiration period for
options
-Nine months

The world's first largest
options exchange
-Chicago Board of options
exchange


The most popular pricing
options model published
in the year 1973
-Black Scholes

When the writer gives
the buyer of the option
the right to sell the
underlying asset on or
before the expiry date
-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 premium ,Where the seller
accepts an obligation for which he receives a fee

True/False
Question Currently in India index options are both European and
American in nature.
Correct Answer False


Multiple Choice Multiple Answer
Question Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation


Multiple Choice Multiple Answer
Question Which of the following are important momentum indicators
used widely?
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) ,
Moving average convergence divergence(MACD)


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

True/False
Question European style options are more expensive than American
style because they offer greater flexibility to the buyer.
Correct Answer False

True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True

Match The Following
Question- Correct Answer
Average collection period Similar to debtors
turnover
-How fast the inventory is
being converted


Help measure the
efficiency of utilisation of
assets
-Debt Equity ratio Debt / Equity

Quick assets- Highly liquid assets


Multiple Choice Multiple Answer
Question In a typical stock market cycle which are the types of trends?
Correct Answer Trends upward , Trend downward , Sideway trend

Multiple Choice Single Answer
Question What is a resistance level?
Correct Answer A point where there is opposition to further price rise

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

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

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

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 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

Multiple Choice Single Answer
Question Agriculture account for how much portion of the economy?
Correct Answer Quarter

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

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

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

Multiple Choice Single Answer
Question What are primary trends?
Correct Answer Reflection of investor's attitudes towards unfolding
fundamentals in the business cycle

Multiple Choice Single Answer
Question Mr. Shekhar invests Rs.50,000/- in a scheme of LIC, the rate
of interest is 8% compounded annually. What will be the
value of his investment after 5 years?
Correct Answer Rs. 73466/-

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

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/-

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

True/False
Question The price earning ratio is an increasing function of the payout
ratio and the growth rate and a decreasing function of the
riskiness of the firm.
Correct Answer True

Multiple Choice Single Answer
Question The greater the deviation of the actual returns from the
actual return :-
Correct 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

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


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

Multiple Choice Single Answer
Question In a forward contract there is :-
Correct 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

True/False
Question If a rupee weakens against the dollars it has favourable
impact for the exporters.
Correct 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 :-
Correct Answer You can use the amount to generate returns over the next
one year , The purchasing power of Rs.1,000/- today is more
than what it will be one year from now , There is an element
of uncertainty associated with the future receipt

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

Multiple Choice Single Answer
Question What is the objective of Portfolio management?
Correct Answer To Minimize 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

True/False
Question Post office monthly schemes have a 10 year tenor.
Correct Answer False

Multiple Choice Single Answer
Question The approach followed to assess the growth rate by looking
at how much a firm reinvests for future growth and the quality
of its re-investments is :-
Correct Answer Estimating growth from a firm's fundamentals

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
investment after 5 years?
Correct Answer Rs. 6083/-

No comments:

Post a Comment