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Correct answers are shown in green. Attempted answers, if wrong, are in red.

Higher-beta stocks mean less volatility and are therefore considered to be less riskier. [ 1 Mark ] (a) FALSE (b) TRUE Q1 (c) I am not attempting the question _______ are amounts set aside from profits for an estimated expense or loss. [ 2 Marks ] (a) Long term assets (b) Liabilities (c) Provisions (d) Current assets Q2 (e) I am not attempting the question "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 13,456, while current liabilities amounted to 5456. The current ratio of ABC Ltd. Is _____." [ 3 Marks ] (a) 1.78 (b) 3.76 (c) 2.47 (d) 4.67 Q3 (e) I am not attempting the question A firm with a 5% growth rate and a return on equity of 15% will have a stable period pay-out ratio of _____. [ 2 Marks ] (a) 23% (b) 37% (c) 33% (d) 28% Q4 (e) I am not attempting the question "The Director's Report is a report submitted by the directors of a company Q5 to shareholders, informing them of the performance of the company under

their stewardship." [ 2 Marks ] (a) TRUE (b) FALSE (c) I am not attempting the question _______ is one of the most critical factors to be considered while investing in any company. [ 1 Mark ] (a) Management (b) Managing director (c) Location of the company (d) Auditors Q6 (e) I am not attempting the question This statement forms a part of the strong form of the Efficient Market Hypothesis. [ 1 Mark ] (a) "Long-term gains, for the management of a company, with access to inside information'." (b) "'No long-term gains, even for the management of a company, with access to inside information'." (c) "Short-term gains, for the management of a company, with access to inside information'." Q7 (d) I am not attempting the question The managing director represents the shareholders and it is his duty to report to the shareholders and the general public on the stewardship of the company by him or her. [ 2 Marks ] (a) TRUE (b) FALSE Q8 (c) I am not attempting the question The Balance Sheet details the financial position of a company on a particular date. [ 1 Mark ] Q9 (a) TRUE

(b) FALSE (c) I am not attempting the question _______ are those to whom the company owes money for raw materials and other articles used in the manufacture of its products. [ 2 Marks ] (a) Unsecured creditors (b) Secured debtors (c) Trade creditors (d) Trade debtors Q10 (e) I am not attempting the question "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 11,304, while current liabilities amounted to 4353. The current ratio of ABC Ltd. Is _____." [ 3 Marks ] (a) 3.46 (b) 1.6 (c) 4.35 (d) 2.6 Q11 (e) I am not attempting the question A procyclic economic indicator is one that moves in the opposite direction as the economy. [ 2 Marks ] (a) FALSE (b) TRUE Q12 (c) I am not attempting the question The Beta is a measure of the ______ of a security that cannot be avoided through diversification. [ 1 Mark ] (a) pro-cyclical risk (b) cyclical risk (c) un-systematic risk (d) systematic risk Q13 (e) I am not attempting the question

_________ uses financial analysis to envisage the movement of stock prices. [ 1 Mark ] (a) Fundamental analysis (b) Money analysis (c) Stock analysis (d) Inflation analysis Q14 (e) I am not attempting the question A negative beta shows that the asset ______ follows the market; the asset generally decreases in value if the market goes up. [ 2 Marks ] (a) directly (b) inversely Q15 (c) I am not attempting the question "Based on ABC Ltd.'s EPS of Rs. 123 for the year, the trailing 12 month PE of ABC Ltd. at a price of Rs. 1400 per share works out to be _____. " [ 3 Marks ] (a) 17.69 (b) 15.67 (c) 13.56 (d) 11.38 Q16 (e) I am not attempting the question The weak form of the ________ stipulates that current asset prices reflect past price and volume information. [ 1 Mark ] (a) Inefficient Market Hypothesis (b) Efficient Price Hypothesis (c) Efficient Market Hypothesis Q17 (d) I am not attempting the question "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 15,678, while current liabilities amounted to 6786. The current ratio of ABC Ltd. Is _____." [ 3 Marks ] Q18

(a) 3.56 (b) 4.45 (c) 2.31 (d) 1.67 (e) I am not attempting the question Examples where Efficient Market Hypothesis is purported to succeed are anomalies like cheap stocks outperforming the market in the long term. [ 2 Marks ] (a) FALSE (b) TRUE Q19 (c) I am not attempting the question Economic indicators allow analysis of economic performance and predictions?of future performance. [ 2 Marks ] (a) TRUE (b) FALSE Q20 (c) I am not attempting the question "Companies must diversify in order to spread the risks of economic slumps, therefore every diversification suits a company. " [ 2 Marks ] (a) TRUE (b) FALSE Q21 (c) I am not attempting the question "If the intrinsic value of a stock is below the market price, the investor would buy the stock because he believes that the stock price is going to fall and come closer to its intrinsic value." [ 1 Mark ] (a) TRUE (b) FALSE Q22 (c) I am not attempting the question "Stock A generates a return of 20% while stock B generates a return of 25%. The risk free-rate is 5%. Stock A has a standard deviation (risk) of Q23 20%, while stock B has a standard deviation of 15%. Which stock gives a

better risk adjusted return?" [ 2 Marks ] (a) B (b) A (c) I am not attempting the question Indian listed companies must periodically report their financial statements to the regulators only. [ 1 Mark ] (a) FALSE (b) TRUE Q24 (c) I am not attempting the question The?concept of time value of money?arises from the relative importance of ________. [ 1 Mark ] (a) physical asset vs. financial asset (b) assets now vs. in future (c) now vs. future (d) money vs. time Q25 (e) I am not attempting the question "It is upon the quality, competence and vision of the auditors that the future of company rests. " [ 1 Mark ] (a) TRUE (b) FALSE Q26 (c) I am not attempting the question A firm with a 7% growth rate and a return on equity of 20% will have a stable period pay-out ratio of _____. [ 2 Marks ] (a) 35% (b) 38% (c) 28% (d) 39% Q27 (e) I am not attempting the question

"Consider a stock, with an expected dividend per share next period of Rs. 1, a cost of equity of 15%, and an expected growth rate of 6% forever. The value of this stock is:" [ 2 Marks ] (a) 20 (b) 19 (c) 15 (d) 11 Q28 (e) I am not attempting the question Lower-beta stocks mean greater volatility and are therefore considered to be riskier. [ 1 Mark ] (a) TRUE (b) FALSE Q29 (c) I am not attempting the question "When an investor buys stock, she generally expects to get only one type of cash-flow - dividends. " [ 1 Mark ] (a) TRUE (b) FALSE Q30 (c) I am not attempting the question "Stock A generates a return of 12% while stock B generates a return of 15%. The risk free-rate is 5%. Stock A has a standard deviation (risk) of 15%, while stock B has a standard deviation of 20%. Which stock gives a better risk adjusted return?" [ 2 Marks ] (a) A (b) B Q31 (c) I am not attempting the question The _________ is an example of a procyclic economic indicator. [ 2 Marks ] (a) Gross Domestic Product (GDP) Q32 (b) Unemployment rate

(c) I am not attempting the question "Examples of leading indicators are the agricultural production, fixed capital investment etc." [ 1 Mark ] (a) TRUE (b) FALSE Q33 (c) I am not attempting the question "The?risk-free interest rate?is the theoretical?rate of return?of an investment with ______, including?default risk. " [ 1 Mark ] (a) zero risk (b) positive risk (c) negative risk (d) unlimited risk Q34 (e) I am not attempting the question The ________ allows for two stages of growth - an initial phase where the growth rate is not a stable growth rate and a subsequent steady state where the growth rate is stable and is expected to remain so for the long term. [ 1 Mark ] (a) later stage growth model (b) Brown growth (c) two-stage growth model (d) initial stage growth model Q35 (e) I am not attempting the question "Based on ABC Ltd.'s EPS of Rs. 108 for the year, the trailing 12 month PE of ABC Ltd. at a price of Rs. 1300 per share works out to be _____. " [ 3 Marks ] (a) 17.02 (b) 15.06 (c) 18.09 Q36 (d) 12.04

(e) I am not attempting the question Beta measures _______ risk. [ 1 Mark ] (a) cyclical (b) reducable (c) non-diversifiable (d) diversifiable Q37 (e) I am not attempting the question "Auditors are required to report any change, such as a change in accounting principles or the non-provision of charges that result in an increase or decrease in profits." [ 1 Mark ] (a) TRUE (b) FALSE Q38 (c) I am not attempting the question The _______ ratio measures the degree to which a firm generates sales with its total asset base. [ 1 Mark ] (a) net asset turnover (NAT) (b) current asset turnover (CAT) (c) total asset turnover (TAT) (d) basic asset turnover (BAT) Q39 (e) I am not attempting the question Fundamental analysis is a _________ methodology. [ 1 Mark ] (a) inflation valuationn (b) volume valuation (c) money valuation (d) stock valuation Q40 (e) I am not attempting the question "Consider a stock, with an expected dividend per share next period of Rs. 2.00, a cost of equity of 16%, and an expected growth rate of 6% forever. Q41 The value of this stock is:" [ 2 Marks ]

(a) 30 (b) 35 (c) 25 (d) 20 (e) I am not attempting the question A firm with a 3% growth rate and a return on equity of 10% will have a stable period pay-out ratio of _____. [ 2 Marks ] (a) 30% (b) 25% (c) 26% (d) 22% Q42 (e) I am not attempting the question "_________, which accounting helps to standardize, is presented in the companies? financial reports. " [ 1 Mark ] (a) Internal information (b) Technical information (c) Financial information (d) Non public information Q43 (e) I am not attempting the question "In the bottom-up approach, an analyst investigates both international and domestic economic?indicators, such as GDP growth rates, energy prices, inflation and interest rates. " [ 1 Mark ] (a) TRUE (b) FALSE Q44 (c) I am not attempting the question "The?moderately-strong form of the Efficient Market Hypothesis?stipulates that private information or insider information too, is quickly incorporated by market prices and therefore cannot be used to reap abnormal trading profits." [ 2 Marks ] Q45

(a) FALSE (b) TRUE (c) I am not attempting the question Professionally managed companies are those that have at the helm a member of the controlling family. [ 1 Mark ] (a) FALSE (b) TRUE Q46 (c) I am not attempting the question The Auditor's Report will draw the attention of the reader to accounting changes and the effect that these have on the financial statements. [ 1 Mark ] (a) FALSE (b) TRUE Q47 (c) I am not attempting the question The more common secured loans of a company are fixed deposits and short term loans. [ 2 Marks ] (a) TRUE (b) FALSE Q48 (c) I am not attempting the question "Evidence in the psychology literature reveals that individuals have unlimited information processing capabilities, do not exhibit systematic bias in processing information, are not prone to making mistakes, and never tend to rely on the opinion of others." [ 2 Marks ] (a) TRUE (b) FALSE Q49 (c) I am not attempting the question The usual unsecured loans a company has are debentures and term loans. [ 2 Marks ] Q50 (a) TRUE

(b) FALSE (c) I am not attempting the question "To find the intrinsic value of a company, the fundamental analyst initially takes a bottom-up view of the company performance, its financial condition, industry analysis etc." [ 1 Mark ] (a) TRUE (b) FALSE Q51 (c) I am not attempting the question Rs. 100 of today's money invested for one year and earning 8% interest will be worth Rs. _____ after one year. [ 1 Mark ] (a) 110 (b) 108 (c) 120 (d) 125 Q52 (e) I am not attempting the question "Consider the stock of ABC Technologies Ltd. which has a beta of 0.5. This essentially points to the fact that based on past trading data, ABC Technologies Ltd. as a whole has been relatively more volatile as compared to the market as a whole." [ 2 Marks ] (a) FALSE (b) TRUE Q53 (c) I am not attempting the question "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s cash assets amounted to 7,797 , while current liabilities amounted to 3,050. The cash ratio of ABC Ltd. Is ______." [ 3 Marks ] (a) 2.56 (b) 3.68 (c) 4.67 (d) 3.45 Q54 (e) I am not attempting the question

Estimated EPS of ABC Ltd. for next year is Rs. 132. Assume PE multiple of 22 (Forward P/E) for the next year. Then the target price of ABC Ltd. works out to Rs. ____. [ 3 Marks ] (a) 2904 (b) 3240 (c) 2869 (d) 3567 Q55 (e) I am not attempting the question The published financial statements of a company in an _______ consist of its Balance Sheet as at the end of the accounting period detailing the financial condition of the company on that date. [ 1 Mark ] (a) Equity Report (b) Annual Report (c) Executive Report (d) Interim Report Q56 (e) I am not attempting the question Estimated EPS of ABC Ltd. for next year is Rs. 130. Assume PE multiple of 21 (Forward P/E) for the next year. Then the target price of ABC Ltd. works out to Rs. ____. [ 3 Marks ] (a) 2760 (b) 2730 (c) 2820 (d) 2790 Q57 (e) I am not attempting the question "According to the Efficient Market Hypothesis, stocks always tend to trade _________ on stock exchanges, making it impossible for investors to either consistently purchase undervalued stocks or sell stocks at inflated prices." [ 1 Mark ] (a) at their fair value Q58 (b) at their mis-priced value

(c) at their technical value (d) at their expected value (e) I am not attempting the question Companies pledge assets when they take ______ loans. [ 2 Marks ] (a) secured (b) unsecured Q59 (c) I am not attempting the question Behavioural Finance is a field of finance that proposes _______ theories to explain stock market anomalies. [ 2 Marks ] (a) relationship-based (b) neural-based (c) consumer-based (d) psychology-based Q60 (e) I am not attempting the question