Wednesday, March 2, 2011

Security Analysis and Portfolio Management -25

Security Analysis and Portfolio Management -25

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

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

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

True/False
Question The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True

Match The Following
Question- Correct Answer
NSE&BSE are regulated by- Securities Exchange Board of India
Under options contract When you expect prices to fall, then, you take a long position by
buying puts. When you expect prises to rise, then you take a short position by selling
puts.- Cost of Carry model

A contract where both the parties are equally responsible- Futures contract

The amount which the buyer of the option has to pay to the option writer to induce him to
accept the risk associated with the contract. -Option price

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

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

?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

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

True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True

Select The Blank
Question ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct 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

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

True/False
Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True

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

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)

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

Select The Blank
Question An ________ is a series of equal payments or receipts occurring at regular
intervals of time.
Correct Answer Annuity

Multiple Choice Single Answer
Question If the price of a share at the beginning of the year was Rs.100/-, no dividend
received during the year and the price at the end is Rs.115/-. What is the rate of return?
Correct Answer 0.15

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

Match The Following
Question- Correct Answer
Ratio used as a measure of relative value- PEG ratio

The market value of the firms assets divided by the replacement cost of these assets
-Market value to replacement cost ratio

Key determiner of revenue multiples- Profit margin

The market value of the equity in a firm reflects the markets expectations of the firms
earnings power and cash flows. -Price to book value ratio

Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct 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
Multiple Choice Single Answer
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits

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

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

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


Select The Blank
Question ________ is the value at a certain future date today of a stream of cash flows
that occurs over a period of time.
Correct Answer Future value

True/False
Question The basic assumption of Technical analysis is that, price discounts everything
and it is the outcome of all forces affecting a stock.
Correct Answer True



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