Pgdba 4th Sem Security Analysis & Portfolio Management - Combined

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank

Question The value of the stock in the ________ model is sensitive to
the estimates of the growth rate.
Correct The Gordons dividend growth
Answer
Select The Blank

Question The possibility of reduction of risk through the construction
of a portfolio depends on the value of ________ between the
two assets.
Correct Correlation coefficient
Answer
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 The General model
Answer
Select The Blank

Question Debentures rated ________ are judged to offer sufficient
safety of timely payment of interest and repayment of
principal.
Correct "BBB"
Answer

Question Stock Exchanges are the part of :-
Correct Secondary market
Answer
Your Answer Money Market
Multiple Choice Multiple Answer

Question Active investment managers :-
Correct Do not believe that markets are efficient , Puts efforts to
Answer search mispriced securities in the market , Are relatively
active traders in securities to acquire abnormal returns

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

Question What are the features of short-term trends?
Correct They last from 1 to 3 or 4 weeks , They interrupt the course
Answer of the intermediate cycle , They are usually influenced by
random news events
True/False
Question The normal relationship is for the volume to expand on
rallies and contract on declines.
Correct True
Answer
True/False
Question In case of assured returns, A scheme cannot promise returns
unless such returns are fully guaranteed by sponsor or AMC.
Correct True
Answer

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

Question ________ is due to the fact that a borrower may not pay
interest and/or principal on time.
Correct Default risk
Answer

Question What are the features of candle stick charts?
Correct Indicates in black if the closing price is lower than the
Answer opening price , Indicates in white if the closing price is
higher than the opening price
Your Answer , Displays the correlation between the high and low prices
True/False
Question A firm uses a combination of equity and debt for financing
its assets.
Correct True
Answer
Select The Blank

Question A pattern which does not result in reversal of a trend but
reaffirmation of the underlying trend is called ________.
Correct Consolidation pattern
Answer
True/False
Question Policies of the government and the attitude of the
government towards the industry have a considerable
influence on the industry.
Correct True
Answer

Question The index futures symbols of BSE are represented as :-
Correct BSX JAN 2005 (January contract)
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 stage model for
Answer growth , H-Model unlike the classic two stage model

Question What are the features of line charts?
Correct It connects closing prices from one period to the next , It is
Answer 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 False
Answer
Select The Blank
Question ________ bonds are generally called for prepayment after
interest rates have fallen, investors will not be able to find
comparable investment avenues.
Correct Call risk
Answer
Select The Blank

Question ________ deal in futures to offset a pre-existing risk.
Correct Hedger
Answer

Question More than half the variation in stock price could be
attributed to which factor?
Correct Market influence
Answer
Match The Following

Question Correct Answer Your Answer
Price pattern Resistance level Head and shoulders
formation
Primary trend Last between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to Last between 3 weeks to
as long as 6 months as long as 6 months
Short term trend 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 ________ phase is characterized by resistance area and
support level.
Correct Transition
Answer
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 True
Answer

Question In India we have index futures contracts based on :-
Correct S&P CNX Nifty and the BSE sensex
Answer
True/False
Question When we invest in only one asset we are not exposed to any
specific or market risk.
Correct False
Answer

Question In India, the futures on individual securities have been
introduced from :-
Correct 2001
Answer
Select The Blank

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

Question What do you understand by the term redemption price?
Correct Price or NAV at which a scheme purchases its units
Answer

Question What are the ways of measuring relative strength?
Correct Calculate the rates of return and classify securities that have
Answer earned superior historical returns , Calculating certain ratios
will help in analyzing whether a security has relative
strength
Your Answer Calculating the Return on investment

Question The Peer group of Bharat Forge consists of which all
companies?
Correct Am forge industries , Kalyani Forge , EL Forge
Answer
True/False
Question Five paisa.com is an example of on line trading portal.
Correct True
Answer

Question A security analysis is done :-
Correct For decision making for investments
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 Research and development , Capital investment and focus on
Answer balance sheet , Overseas acquisitions
Select The Blank

Question Dow Jones transportation average was previously known as
________.
Correct Rail average
Answer
Your Answer Freight average

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 steadily for a specific time period , Sources of
high growth are expected to disappear after specific period
of time
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 True
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 0.05
Answer

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

Question What is a technical approach to investment?
Correct A reflection of the idea that prices move in trends which are
Answer determined by various factors
Match The Following

MCX Commodity Exchange Commodity Exchange
Sensex BSE Index BSE Index
Nifty NSE Index NSE Index
Lifex ET Index Gold Index

Question A pledge of real assets as insurance against the non-payment
of default by the buyer represents
Correct Collateral
Answer
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct True
Answer

Question Who developed Dow's Principles and organised them into a
theory as it is known today?
Correct William Peter Hamilton
Answer
Your Answer Charles.H.Dow
kk 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 Blank

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

Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Your 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

Your Answer True
Match The Following

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 take a short
position by selling puts. Cost of Carry model Options
contract
A contract where both the parties are equally

responsible Futures contract 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 Option
price
True/False
Question A segment is unattractive if the buyers
possess strong or growing bargaining powers.
Correct Answer True
Your Answer True

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

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

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
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.
Correct Answer True
Your Answer True
Select The Blank

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

Question The return to the bond investor can be
measured in terms of :-
Correct Answer Current yield , Yield to maturity ,
Realised yield
Your 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
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 or before the expiry date
and the option can be exercised early.
Correct Answer True
Your Answer True

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)
Your Answer Rate of change (ROC) , Relative
strength indicator (RSI) , Moving average convergence
divergence(MACD)

Question What is Gross National Product ?
Correct Answer Gross income generated from
within the country
Your 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
Your Answer Annuity

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

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

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 replacement
cost ratio
Key determiner of revenue multiples Profit margin

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 Price earning
ratio

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

Question Credit rating companies assign ratings for
which of these investments?
Correct 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

Question What is the objective of Portfolio
management?
Correct Answer To Minimize risk and 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 ratio
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
Your 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
Your 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
Your Answer True
********************************

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
Select The Blank

Question
________ deal in futures to offset a pre-existing risk.
Correct Answer
Hedger
Your Answer
Hedger

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/-
Your Answer
Rs. 6083/-
Question
In estimating the growth of a firm, analyst's forecasts have an
advantage over historical data-based models because :-
Correct Answer
They incorporate more recent information about the firm and
inputs future prospects
Your Answer
They use the firm's growth rate based on the arithmetic
average and the geometric average

Question
In a forward contract there is :-
Correct Answer
No Exchange of cash
Your Answer
No Exchange of cash

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
Your Answer
A simple 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 of a
stream of cash flows that occurs over a period of time.
Correct Answer
Future 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 before a specific date.
Correct Answer
Right but not obligation
Your 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
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

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

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/-
Your Answer
Rs.14.693/-
True/False
Question
When we invest in only one asset we are not exposed to any
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
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 asset on or before the expiry date
Put option
Put option
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/-
Your Answer
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 meeting the
manufacturing expenses.
Correct Answer
Gross Profit margin
Your Answer
Gross Profit margin

Question
Gilt Edged Securities are :-
Correct Answer
Central Govt , State Govt. , Quasi-Govt
Your Answer

Question
Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of
3 years. He wanted to know what is the present value of this
amount, if the rate of interest is 9% p.a ?
Correct Answer
Rs.1,15,827/-
Your Answer
Rs.1,15,827/-

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
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 receipt
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

Question
Which market is affected with the improving and higher growth
rate in economy?
Correct Answer
Stock market
Your Answer
Stock 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
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 Answer
H- Model for valuing growth , H-Two stage model for growth ,
H-Model unlike the classic two stage model

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
Your Answer
As a barometer of business conditions rather than a basis for
True/False
Question
The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer
True
Your Answer
False

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
Your Answer
Maintain aggressive exports thrust , Increase shares of value
added products , Continue reducing costs

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

Question
The return to the bond investor can be measured in terms of :-
Correct Answer
Current yield , Yield to maturity , Realised yield
Your Answer
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

Question
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.
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 will trade at an inexpensive PEG of
0.6x.

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 impact
for the importers.
Correct Answer
False
Your Answer
False
True/False
Question
The labour conditions do not play an important role in the
industry analysis.
Correct Answer
False
Your Answer
False

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
Your Answer
Selecting a set of scrips to be used , Fixing starting date ,
Calculating market capitalisation
Select The Blank

Question
________ absorbs the excess demand or supply generated by
hedgers and assume the risk of price fluctuations.
Correct Answer
Speculators
Your Answer
Speculators
Select The Blank

Question
The ________ phase carries a lot of significance because it
marks the turning point between a rising and a falling market.
Correct Answer
Transitional
Your Answer
Transitional

Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%
after 3 years?
Correct Answer
Rs. 29775/-
Your Answer
Rs. 29775/-

Question
Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7
Correct Answer
Rs. 62,275/-
Your Answer
Rs. 62,275/-
Select The Blank

Question
A line is defined as a price movement two or three weeks or
longer, during which period the price variation of both
averages moves within a price range of
approximately________%.
Correct Answer
5
Your Answer
5
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/-
Your Answer
Rs. 73466/-

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
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 the
stock is measure by market beta.
Correct Answer
True
Your Answer
True

Question
Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10
amount, if the rate of interest is 10% p.a:-
Correct Answer
Rs. 9639/-
Your Answer
Rs. 9639/-

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
Your Answer
A reflection of the idea that prices move in trends which are

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
Your Answer
Research and development , Capital investment and focus on
balance sheet , Overseas acquisitions
True/False
Question
Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Correct Answer
False
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

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
Your Answer
Over valued

Question
What are short term trends?
Correct Answer
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
1963
Your Answer
1963
True/False
Question
European style options are more expensive than American
style because they offer greater flexibility to the buyer.
Correct Answer
False
Your Answer
False

Question
More than half the variation in stock price could be attributed to
which factor?
Correct Answer
Market influence
Your Answer
Market influence
Select The Blank

Question
A ________ rally for stocks generally takes place because of
an improved outlook for business conditions over what was
anticipated.
Correct Answer
Bear market
Your Answer
Bear market
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 , Provision of premature
withdrawal , Interest rate is 8.4% compounded annually

Question
What is Gross National Product ?
Correct Answer
Gross income generated from within the country
Your Answer

Question
Capital expenditure -depreciation +change in working capital
-(new debt issued - debt repaid) =
Correct Answer
Equity reinvested in business
Your Answer
Question
What levels if increased will have unfavourable impact on the
stock market?
Correct Answer
Higher levels of taxation
Your Answer
Low levels of interest rates

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
Your 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
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 and
________ market.
Correct Answer
Options
Your Answer
Present

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

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

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 Capitalisation model
True/False
Question
Sensex is the index of Calcutta Stock Exchange.
Correct Answer
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

Question
What is GDP at factor cost ?
Correct Answer
Excludes net income received from abroad
Your Answer
True/False
Question
Quick assets consist of current assets less inventories.
Correct Answer
True
Your Answer
True

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 lower that the growth in the
economy , Which have well established dividend payout ratio
policy , Whose earnings are steady and perpetual
Select The Blank

Question
Mutual fund is to be registered with ________ before raising
funds from public.
Correct Answer
SEBI
Your Answer
SEBI

Question
What does lower level of unemployment indicates?
Correct Answer
Positive economic conditions
Your Answer

Question
The GDP growth rate in the economy in real 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 tilt his
portfolio in favour of ________.
Correct Answer
Stocks
Your Answer
Stocks

Question
Avenues can be broadly classified into the which type of
assets?
Correct Answer
Financial and Real
Your Answer
Financial and Real

Question
Mutual fund schemes could be broadly classified as :-
Correct Answer
Open ended scheme , Close ended scheme
Your Answer
Match The Following

Question
Correct Answer
Your Answer
Development of Dow's principles

William Peter Hamilton
Breadth Indicator
Advance/decline line
Momentum indicator
MACD
MACD
Trend lines
Useful tool in technical analysis

Question
The bond issuing firm enjoys the flexibility of being able to call
the bonds if :-
Correct Answer
Interest rates are falling
Your Answer

Question
The issuing firm enjoys the flexibility to call the bonds if the
interest rates fall significantly and it can issue :-
Correct Answer
New bonds at a lower rates
Your Answer
True/False
Question
If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer
True
Your Answer
True

Question
What is the percentage of variation the market and industry
influence account for?
Correct Answer
2/3rd
Your Answer
2/3rd

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)
Your Answer
Rate of change (ROC) , Relative strength indicator (RSI) ,
Moving average convergence divergence(MACD)
Match The Following

Question
Correct Answer
Your Answer
Turnover ratios
Help measure the efficiency of utilisation of assets
Debt Equity ratio
Debt / Equity
Debt / Equity
Quick assets
Highly liquid assets
Average collection period

Similar to debtors turnover

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
True/False
Question
Policies of the government and the attitude of the government
towards the industry have a considerable influence on the
industry.
Correct Answer
True
Your Answer
True

Question
What do you understand by money supply?
Correct Answer
Total money in existence at any given time
Your 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
Your 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

Question
What is net national product also known as?
Correct Answer
National income
Your Answer
National income
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
True/False
Question
Currently in India index options are both European and
American in nature.
Correct Answer
False
Your Answer
False

Question
What is balance of payments?
Correct Answer
Credit and debit transactions of a country
Your Answer
Select The Blank

Question
Under ________ EMH investors cannot earn
abnormal/superior profits on securities on a consistent basis.
Correct Answer
Semi-strong form
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
Your Answer
True

Question
The security market is the market for :-
Correct Answer
Equity , Debt , Derivatives
Your Answer
38. In a perfectly efficient market all securities are correctly priced means there are no :-
a)
High priced and low priced securities
Increase priced and decrease priced securities

b)
Under priced and over priced securities
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
b)
c)
d)
Question
What are the different types of profitability ratios?
Correct Answer
Return on equity , Gross profit margin ratio , Earnings 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
Question
The security market is the market for :-
Correct Answer
Your Answer
Equity , Debt , Bank deposits
Question
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
well established dividend payout ratio policy
Question
A security analysis is done :-
Correct Answer
For decision making for investments
Your Answer
As per instruction of the company
Question
The average investor in the market is driven more by emotions than by rational
analysis is a rule of :-
Correct Answer
Technical analysis
Your Answer
Fundamental Analysis
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/-
Your Answer
Rs. 6083/-
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
Question
Explain what are leverage ratios ?
Correct Answer
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 periodic payments
Your 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
Your Answer
Focus on mergers , Research and development , Capital investment and focus
on balance sheet
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
Your Answer
Maintain aggressive exports thrust , 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 Answer
True
Your Answer
True
Question
What does lower level of unemployment indicates?
Correct Answer
Your Answer
Economic slowdown
Question
The GDP growth rate in the economy in real terms has fluctuated between :-
Correct Answer
4% and 5%
Your Answer
4% and 5%
Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded
Correct Answer
Rs. 29775/-
Your Answer
Rs. 29775/-
Question
Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded
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
Question
What is the limitation of Flow-of funds analysis method?
Correct Answer
Cannot give indication of the inclination of market 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
Your Answer
True

Question
Which are the different types of accounts offered to investors by the stock
brokers?
Correct Answer
Your Answer
General trading , Cash trading , Credit trading
Select The Blank
Question
Under the options contract ________ gives the holder the right, but not the
obligation to buy or sell the underlying instrument only on the expiry date.
Correct Answer
European option
Your Answer
American option
Select The Blank
Question
An investor with a higher tolerance of risk should tilt his portfolio in favour of
________.
Correct Answer
Stocks
Your Answer
Bank deposits
Select The Blank
Question
The ________ phase carries a lot of significance because it marks the turning
point between a rising and a falling market.
Correct Answer
Transitional
Your Answer
Sideways
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 Answer
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 ratio
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
Your Answer
steady state of growth rate being stable and lasts n years , A stable growth phase
lasts forever
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 industry analysis.
Correct Answer
False
Your Answer
False
Select The Blank
Question
________ measures the efficiency of credit management.
Correct Answer
Your Answer
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
Earnings power
Question
Which market is affected with the improving and higher growth rate in economy?
Correct Answer
Stock market
Your Answer
Stock market
True/False
Question
Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Question
Correct Answer
A simple and useful tool in technical analysis , Prices move in trends , The trend
lines represent points of support and resistance
Your Answer
True/False
Question
A price rise accompanied by expanding volume denotes a potential trend
reversal.
Correct Answer
False
Your Answer
True
Question
Correct Answer
Your Answer
Open ended scheme , Close ended scheme , Balance fund
Question
Features of PSU Bonds are :-
Correct Answer
No TDS , Transferable by endorsement , No stamp duty on transfer
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Future value of a series of cash flows occurring at the end of each period.
Future value of annuity
Value today of a stream of cash flows that occurs in future.

Present Value
Present 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.

Present value of annuity
Select The Blank
Question
A line is defined as a price movement two or three weeks or longer, during which
period the price variation of both averages moves within a price range of
Correct Answer
5
Your Answer
5
True/False
Question
Following a decline, heavy volume with little price change is indicative of
accumulation and is normally a bearish factor.
Correct Answer
False
Your Answer
True
Question
The greater the deviation of the actual returns from the actual return :-
Correct Answer
Greater the variance
Your Answer
True/False
Question
A segment is unattractive if the buyers possess strong or growing bargaining
powers.
Correct Answer
True
Your Answer
False
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
Question
Correct Answer
Your Answer
Includes indirect taxes
Question
More than half the variation in stock price could be attributed to which factor?
Correct Answer
Market influence
Your Answer
Market influence

Question
What does a transitional phase indicate?
Correct Answer
It marks the turning 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 payout ratio and the
growth rate and a decreasing function of the riskiness of the firm.
Correct Answer
True
Your Answer
True
Question
The issuing firm enjoys the flexibility to call the bonds if the interest rates fall
significantly and it can issue :-
Correct Answer
Your Answer
True/False
Question
The sideways trend is essentially a transitional one which separates the two
major market movements.
Correct Answer
True
Your Answer
False
Question
More than half the variation in stock price could be attributed to which factor?
Correct Answer
Market influence
Your Answer
Market influence
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Select The Blank
Question
Security analysis serves the investment decision maker by identifying
________securities.
Correct Answer
Under priced
Your Answer
Under priced
Question
Correct Answer
Rs. 6083/-
Your Answer
Rs. 6083/-
Select The Blank
Question
Under ________ EMH investors cannot earn abnormal/superior profits on
securities on a consistent basis.
Correct Answer
Semi-strong form
Your Answer
Semi-strong form
True/False
Question
Correct Answer
True
Your Answer
True
True/False
Question
Correct Answer
False
Your Answer
False
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
Question
Correct Answer
Rs. 29775/-
Your Answer
Rs. 29775/-
Question
Correct Answer
Your Answer
Realised yield
Question
Which are the different styles of displaying charts?
Correct Answer
Bar and line charts , Candle stick charts , Point and figure charts
Your Answer
Select The Blank
Question
Correct Answer
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
Periodic interest payments and principal repayment at the time of maturity

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
Yield to maturity
Yield to maturity
Question
Correct Answer
Your 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/-
Your Answer
Rs. 73466/-
Question
Dividend discount model is considered as the simplest model for :-
Correct Answer
Valuing Equity
Your Answer
Valuing Equity
Question
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
Question
Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3 years. He
wanted to know what is the present value of this amount, if the rate of interest is
9% p.a ?
Correct Answer
Rs.1,15,827/-
Your Answer
Rs.1,15,827/-

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
7th year
Question
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
Question
A security represent evidence of :-
Correct Answer
A property right
Your Answer
A property right
Question
Correct Answer
Selecting a set of scrips to be used , Fixing starting date , Calculating market
capitalisation
Your Answer
capitalisation
True/False
Question
The arithmetic mean is a set of observations is calculated by finding the sum
values and dividing by the number of observations.
Correct Answer
True
Your Answer
True
True/False
Question
With the use of diversification you can reduce the risk.
Correct 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

Fama
Fama
Question
What are intermediate trends?
Correct Answer
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 agreement.
Correct Answer
Repos
Your Answer
Repos
Question
In any Economy, bridge is created between savers and who need the funds by
this system :-
Correct Answer
Financial
Your Answer
Banking
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 investors making
it convenient to withdraw
Question
What are the important macro economic indicators?
Correct Answer
GNP growth rate , Price Conditions , Monsoons
Your Answer
Question
If index future is taken under futures contract, the underlying asset would be :-
Correct Answer
Stock index
Your Answer
Stock index
True/False
Question
European style options are more expensive than American style because they
offer greater flexibility to the buyer.
Correct Answer
False
Your Answer
False
Select The Blank
Question
________ model is based on the principle that an initial phase where the growth
rate is not stable and subsequent steady growth rate and remains for the
long-term.
Correct Answer
The Two-Stage dividend discount
Your 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
Speculators
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.
Correct Answer
True
Your Answer
True
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
Your Answer
Question
Correct Answer
Your 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
Your Answer
True/False
Question
If rupee weakens against the dollar, it has favourable impact for the importers.
Correct Answer
False
Your Answer
False
Select The Blank
Question
Correct Answer
1963
Your Answer
1963
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
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

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
Your Answer Maintain aggressive exports thrust , Increase shares of value added
products , Continue reducing costs

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

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

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
Your Answer 0.084
Select The Blank

Question ________ measures the profitability of operations without considering the
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
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

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

Question Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4%
Correct Answer Rs. 6083/-
Your Answer Rs. 6083/-
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
Your Answer Default risk

Correct Answer 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 unique contribution.
Correct Answer True
Your 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
Correct Answer True
Your Answer True

Question What is the percentage of variation the market and industry influence
account for?
Correct Answer 2/3rd
Your Answer 75%
Match The Following

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

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
Your 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.
Your Answer False

Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Your Answer 0.07

Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded

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
Your 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
Select The Blank

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

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
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
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.
Your Answer False

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

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

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

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

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

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

Question Investments could be made in retail government securities through :-
Correct Answer Primary dealers
Your Answer Primary dealers

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
Your Answer Best year in the history of the company , 146% growth in exports ,
Highest pre and post tax profits

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
Your 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

Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded
Correct Answer Rs.14.693/-
Your Answer Rs.14.693/-

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
Your Answer Secured second largest customer in China , Appointed a Company

Secretary to act as compliance officer , New contracts won in passenger car components
Match The Following

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 reflect all historical information Weak form EMH Weak
form EMH
Framework on efficient capital markets, a review of theory and empirical work Fama
Strong form
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
Your Answer True
Select The Blank
Question
Correct Answer
Earnings power
Your Answer
Earnings power
True/False
Question
Correct Answer
False
Your Answer
False
Question
What could be a better approach to flow-of -funds analysis?
Correct Answer
An examination of liquidity trends in the banking system
Your Answer
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 term solvency of the firm.
Correct Answer
True
Your Answer
True
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
Your Answer
True
Question
The price of the index futures contract is defined as :-
Correct Answer
Future price = Spot price + Carry cost
Your Answer
Future price = Spot price + Carry cost
Question
An options contract allows the investor :-
Correct Answer
Your Answer
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
Your 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
Select The Blank
Question
In a heads and shoulders formation the deeper the pattern, the greater is the
________ significance once it is completed
Correct Answer
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
Correct Answer
True
Your Answer
True
Question
What does flow-of fund analysis help in understanding?
Correct Answer
Availability of money for the stock market
Your Answer
Financial strength of various companies
True/False
Question
The normal relationship is for the volume to expand on rallies and contract on
declines.
Correct Answer
True
Your Answer
True
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
Your Answer
Firm's past earnings/historical growth rate , Estimates from a firm's fundamentals
, Forecasting future revenues and earnings
Question
The security analysis process will achieve :-
Correct Answer
True picture of a company , Normal earning power , Projection of future
profitability
Your Answer
profitability
Question
The general dividend model is based on the principle of :-
Correct Answer
Present value of the expected future cash flow
Your Answer
Present value of the expected future cash flow
Question
The index futures symbols of BSE are represented as :-
Correct Answer
BSX JAN 2005 (January contract)
Your Answer
BSX JAN 2005 (January contract)
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 investors 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
Correct Answer
1963
Your Answer
1963
Question
Correct Answer
capitalisation
Your Answer
capitalisation
Select The Blank
Question
Correct Answer
5
Your Answer
5
Question
Correct Answer
Realised yield , Current yield , Yield to maturity
Your Answer
Current yield , Yield to maturity
Question
Correct Answer
Your Answer
Select The Blank
Question
Debentures rated "BB" refers ________ of timely payment of interest and
principal.
Correct Answer
Inadequate safety
Your Answer
Inadequate safety
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
Question
When the firm is not raising equity by issuing new shares, the growth rate in net
profits is given by :-
Correct Answer
Retention ratio X return on equity
Your Answer
Price earning ratio X return on equity
Select The Blank
Question
A ________ rally for stocks generally takes place because of an improved
outlook for business conditions over what was anticipated.
Correct Answer
Bear market
Your Answer
Bullish market
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
Your Answer
12 years
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
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
Question
The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Correct Answer
Your 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
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
Question
Correct Answer
Your Answer
Question
Which ratios are commonly used?
Correct Answer
Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
Your Answer
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
Your Answer
Match The Following
Question
Correct Answer
Your Answer
Growth of income
40-60 % debt, 40-60 % equities
Current income
Short term debt portfolio
Fixed - income portfolio
Stability of principal
Appreciation
75-100 % in equities
Select The Blank
Question
An investor with a higher tolerance of risk should tilt 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
Question
Correct Answer
Your 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
Your Answer
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
assets
Market value to replacement cost ratio
Key determiner of revenue multiples

Profit margin
Profit margin
The market value of the equity in a firm reflects the markets expectations of the
firms earnings power and cash flows.
Price earning ratio
Question
Correct Answer
Your Answer
Central Govt
Question
Correct Answer
Your Answer
Question
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
Select The Blank
Question
The 8% taxable savings bonds are repayable after ________ years.
Correct Answer
6
Your Answer
6

Question
Formula for calculation of portfolio variance requires :-
Correct Answer
Expected return on portfolio , Expected return on assets , Weight of asset in the
portfolio
Your Answer
Expected return on portfolio , Standard deviation , Weight of asset in the portfolio
Question
Correct Answer
steady state of growth rate being stable and lasts n years , A stable growth
phase lasts forever
Your Answer
phase lasts forever
Select The Blank
Question
Risk can be referred as the ________ in the return with respect to the expected
return.
Correct Answer
Volatility
Your Answer
Difference
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
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
Your Answer
Select The Blank
Question
Correct Answer
Speculators
Your Answer
Jobbers
Question
Who are the constituents of a mutual fund?
Correct Answer
Sponsor & trustees , Asset management company , Custodian
Your Answer
True/False
Question
A share certificate indicates that the investor owns a certain number of shares.
Correct Answer
True
Your Answer
True
Question
What is the percentage of variation the market and industry influence account
for?
Correct Answer
2/3rd
Your Answer
2/3rd
Question
How can transition phases be projected?
Correct 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
Your Answer
True
Question
What are the features of post office monthly income scheme?
Correct Answer
Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on
completion of term
Your Answer
Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on
completion 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
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
Your Answer
Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Select The Blank
Question
Under the options contract ________ gives the holder the right, but not the
obligation to buy or sell the underlying instrument only on the expiry date.
Correct Answer
European option
Your Answer
European option
Question
When was the Dow theory first published?
Correct Answer
Between 1900 and 1902
Your Answer
Between 1900 and 1902
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
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
Select The Blank
Question
Correct Answer
Transitional
Your Answer
Transitional
Question
Credit rating companies assign ratings for which of these investments?
Correct Answer
Company deposits
Your Answer
Company deposits
Select The Blank
Question
Correct Answer
Trustee
Your Answer
Trustee
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic
value.
Correct Answer
Over priced
Your Answer
Over priced
Question
Correct Answer
Gross profit margin ratio , Earnings power , Return on equity
Your Answer
Select The Blank
Question
Dow Jones transportation average was previously known as ________.
Correct Answer
Rail average
Your Answer
Rail average
Question
An agreement to buy or sell a specified quantity of an asset at a certain future
date or a certain price is know as :-
Correct Answer
Forward contract
Your Answer
Forward contract
Question
When was the first mutual fund set up?
Correct Answer
1963
Your Answer
1963
Question
Which market is affected with the improving and higher growth rate in economy?
Correct Answer
Stock market
Your Answer
Stock market
Question
What is the art of technical analysis?
Correct 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
Question
this system :-
Correct Answer
Financial
Your Answer
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.
Correct Answer
False
Your Answer
True
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
Correct Answer
False
Your Answer
False
Question
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
Your Answer
Price earning ratio

Question
What are the warning indicators to be considered before analysing the financial
statements of a firm ?
Correct Answer
Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting rules changed frequently
Your Answer
Growth in profits outstripping the revenue growth by a large extent , Non
operating expenses occur frequently , Accounting 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 collection of losses that
have already occurred.
Correct Answer
The daily settlement
Your Answer
The daily settlement
Question
Correct Answer
A property right
Your Answer
A property right
Match The Following
Question
Correct Answer
Your Answer



Realised yield
Yield to maturity
Yield to maturity
Interest rate risk
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
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
Central tendency
Select The Blank
Question
________ ratio indicates the margin available after meeting the manufacturing
expenses.
Correct Answer
Gross Profit margin
Your Answer
Gross Profit margin
Question
Correct Answer
Your 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
Your Answer
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 India have a tenure of 5
years.
Correct Answer
5
Your Answer
5
Match The Following

Question
Correct Answer
Your Answer

Nine months
Nine months

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 asset
on or before the expiry date
Put option
Put option
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
Your 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
Your Answer
False
Question
Return can be in the form of :-
Correct Answer
Dividends , Interests , Capital appreciation
Your 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)
Your Answer
Select The Blank
Question
The Derivative market is divided into Future market and ________ market.
Correct Answer
Options
Your 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
Your Answer
False
True/False
Question
A segment is unattractive if the buyers possess strong or growing bargaining
powers.
Correct Answer
True
Your Answer
True
Match The Following
Question
Correct Answer
Your Answer

How fast the inventory is being converted
Turnover ratios
Debt Equity ratio

Debt / Equity
Debt / Equity
Quick assets
Question
In a typical stock market cycle which are the types of trends?
Correct Answer
Trends upward , Trend downward , Sideway trend
Your Answer
Trends upward , Trend downward , Sideway trend
Question
What is a resistance level?
Correct Answer
A point where there is opposition to further price rise
Your 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
Your Answer
High safety
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank
Question
________ measures the efficiency of credit management.
Correct Answer
Your Answer
Interest coverage ratio
Question
How would you rate a portfolio with 90% investment in stocks?
Correct Answer
Highly aggressive
Your 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
Your Answer
Default risk
Question
Correct Answer
well established dividend payout ratio policy , Whose earnings are steady and
perpetual
Your Answer
well established dividend payout ratio policy
Question
Agriculture account for how much portion of the economy?
Correct Answer
Quarter
Your Answer
Quarter
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
Your Answer
To predict trend patterns in 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
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
Question
What are primary trends?
Correct Answer
Reflection of investor's attitudes towards unfolding fundamentals in the business
cycle
Your Answer
Long term trends
Question
Correct Answer
Rs. 73466/-
Your 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
Your Answer
True
Question
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
Correct Answer
True
Your Answer
False
Question
The greater the deviation of the actual returns from the actual return :-
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Question
What are the features of public provident scheme?
Correct Answer
7th year
Your Answer
7th year
Question
Which are the different types of accounts offered to investors by the stock
brokers?
Correct Answer
Your Answer
General trading , Cash trading , Margin trading
Question
In a forward contract there is :-
Correct Answer
No Exchange of cash
Your Answer
No Exchange of cash
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
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
Your Answer
Question
The growth period in the industry life cycle is defined as :-
Correct Answer
Period of rapid market acceptance and substantial profit improvement
Your Answer
Period of rapid market acceptance and substantial profit improvement
Question
What is the objective of Portfolio management?
Correct Answer
To Minimize risk and maximize return
Your Answer
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
True/False
Question
Post office monthly schemes have a 10 year tenor.
Correct Answer
False
Your Answer
False
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
Your Answer
Earnings multiplier approach
Question
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. The GDP growth rate in the economy in real terms has fluctuated between :-
a)
4% and 5%
b)
3% and 4%
6% and 7%
c)
5% and 6%
d)
The sideways trend is essentially a transitional one which separates the two major
14.
market movements.
True
False
17. What is the minimum investment amount in G-secs?
a)
1000
b)
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

b)
Expecting to maintain the growth rate phase steadily for a specific time period
c)
Expecting a established dividend payout ratio
Sources of high growth are expected to disappear after specific period of time
d)
How can the financial statements can be manipulated while giving the
estimates for growth?
a)
Change
method of
rate of
b) depreciation
Change
method of
c) stock
valuation
d) Inflating
sales for
current year
by advancing
sales for the
following year
Changing
the
management
of the
company
frequently
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
b) Calculating certain ratios will help in analyzing whether a security has relative
strength
c) Calculating the Return on investment
Working out the high and low price fluctuations

d)
46. The average investor in the market is driven more by emotions than by rational
analysis is a rule of :-
a)
Fundamental Analysis
Intrinsic value analysis

b)
Economic Analysis
c)
Technical analysis
d)
49. What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment
Unstable economy
b)
c)
d)
55. Why does every investor have different investment objectives?
a)
Since every investor has a different set of circumstances, needs and
opportunities
b) Since it depends on their investment strategies

Every investor has different risk bearing capacities
c)
Every investor has different perception of the markets
d)
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
Question
Correct Answer
Your Answer

Question
Who operates the sinking fund under the sinking fund provision of a firm?
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 Treasury Bills.
Correct Answer
True
Your Answer
True
Question
What developments had taken place during the year 2000 in case of Bharat
Forge Ltd.?
Correct Answer
Your Answer
True/False
Question
Correct Answer
False
Your Answer
False
Question
The objective of fundamental analysis for a security in a market is to identify
either it is :-
Correct Answer
Your Answer
True/False
Question
A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer
True
Your Answer
True
True/False
Question
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.
Correct Answer
False
Your Answer
False
Select The Blank
Question
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 arise in the market as a
result of over optimism and over pessimism.
Correct Answer
Your Answer
True/False
Question
Bearish actions come from a series of declining peaks and troughs.
Correct Answer
True
Your Answer
True
Question
What is an open ended fund or scheme?
Correct Answer
Which is available for subscription and repurchase on a continuous basis
Your Answer
Which is available only for subscription on a continuous basis
Match The Following
Question
Correct Answer
Your Answer
Turnover ratios
How fast the inventory is being converted
Debt Equity ratio

Debt / Equity
Debt / Equity
Quick assets

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 discounts everything
and it is the outcome of all forces affecting a stock.
Correct Answer
True
Your Answer
True
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 , Point and Figure Charts
Question
What are the important macro economic indicators?
Correct Answer
Your Answer
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic
value.
Correct Answer
Over priced
Your Answer
Over priced
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 scheme purchases its units
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
Your Answer
Default risk
Question
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 , Provision of premature withdrawal , Tax
benefits under 80 L available
Question
What could be a better approach to flow-of -funds analysis?
Correct Answer
Your Answer
True/False
Question
Fundamental analysis focuses on predicting the future price of a security and
Technical analysis on estimating the intrinsic value of a security.
Correct Answer
False
Your Answer
False
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
Your Answer
A reflection of the idea that prices move 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
Annuity
Select The Blank
Question
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
Question
Correct Answer
Your Answer
Question
Dividend discount model is considered as the simplest model for :-
Correct Answer
Valuing Equity
Your Answer
Valuing Equity
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank
Question
Mutual fund is to be registered with ________ before raising funds from public.
Correct Answer
SEBI
Your Answer
SEBI
Question
Formula for calculation of portfolio variance requires :-
Correct Answer
portfolio
Your Answer
portfolio
Question
What is the minimum investment amount in G-secs?
Correct Answer
1000
Your Answer
1000
Question
Which are the different styles of displaying charts?
Correct Answer
Your Answer
Question
Characteristics of Preference shares are :-
Correct Answer
12 years
Your Answer
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 pattern, the greater is the
________ significance once it is completed
Correct Answer
Bearish
Your Answer
Bearish
Question
Correct Answer
Your Answer
True/False
Question
Passive investment managers believe that markets are inefficient and Active
managers believe that markets are efficient.
Correct Answer
False
Your Answer
False
Select The Blank
Question
S&P NSE 50 index is known as ________.
Correct Answer
NIFTY
Your Answer
NIFTY
Question
Which of the following is a money market fund?
Correct Answer
Commercial paper
Your Answer
Commercial paper
Question
Capital expenditure -depreciation +change in working capital -(new debt issued -
debt repaid) =
Correct Answer
Your Answer
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

b)
Prevailing book price
c)
Historical market price
d)
True/False
Question
Investment in gilt edged securities carry a higher element of risk.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The Derivative market is divided into Future market and ________ market.
Correct Answer
Options
Your Answer
Options
Select The Blank
Question
________ of companies may open at higher or lower price 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
Question
Correct Answer
phase lasts forever
Your Answer
phase lasts forever
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 this amount, if the rate of interest is 10%
p.a:-
Correct Answer
Rs. 9639/-
Your Answer
Rs. 9639/-
Question
Correct Answer
Your Answer

Question
What does a Balanced fund seek to achieve?
Correct Answer
Growth and regular income
Your Answer
Growth and regular income
Match The Following
Question
Correct Answer
Your Answer

Random walk model
Random walk model


Weak form EMH
Weak form EMH

Fama
Fama
Question
Which ratios are commonly used?
Correct Answer
Interest coverage ratios , Debt service coverage ratios , Debt equity ratio
Your Answer
Question
Under EMH it is assumed that if markets are efficient, securities are priced to
provide a :-
Correct Answer
Your Answer
Question
Return can be in the form of :-
Correct Answer
Your Answer
Question
Profits are non existent in pioneering stage because of :-
Correct Answer
Heavy expenses on product introduction
Your Answer
Heavy expenses on product introduction
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
Central tendency
Select The Blank
Question
________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.
Correct Answer
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
Question
Correct Answer
Your Answer
Question
Which are the most popular types of orders placed through an online trading
account?
Correct Answer
Limit orders , Market orders
Your Answer
Limit orders , Market orders
Question
Correct Answer
Rs.14.693/-
Your Answer
Rs.14.693/-
Question
Growth of the firm can be estimated through :-
Correct Answer
Your Answer
Question
What is the rate of interest on the tax free bonds issue by the government?
Correct Answer
6.5%
Your Answer
6.5%
Question
Which of the following are important momentum indicators used widely?
Correct Answer
Moving average convergence divergence(MACD) , Rate of change (ROC) ,
Relative strength indicator (RSI)
Your Answer
Select The Blank
Question
Correct Answer
Earnings power
Your Answer
Earnings power
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
Your Answer
The General model
Select The Blank
Question
________ deal in futures to offset a pre-existing risk.
Correct Answer
Hedger
Your Answer
Hedger
Question
Correct Answer
Your Answer
Gross profit margin ratio , Return on equity , Debt service coverage ratio
Question
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
Your Answer
Dow Jones industrial Average , Dow Jones Transportation Average
True/False
Question
Correct Answer
True
Your Answer
True
True/False
Question
Correct Answer
False
Your Answer
False
True/False
Question
Correct Answer
True
Your Answer
True
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
Your Answer
abnormal returns
Question
Correct Answer
Your Answer
True/False
Question
Bonds and Debentures represent long term debt instruments.
Correct Answer
False
Your Answer
False
Select The Blank
Question
The possibility of reduction of risk through the construction of a portfolio depends
on the value of ________ between the two assets.
Correct Answer
Correlation coefficient
Your Answer
Correlation coefficient
Select The Blank
Question
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
Your Answer
True
Question
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
Your Answer
Acquisitions , Building distribution channels , Expanding marketing capabilities
and investing in new facilities
True/False
Question
Currently in India index options are both European and American in nature.
Correct Answer
False
Your Answer
False
Question
Correct Answer
A property right
Your Answer
A property right
Question
Correct Answer
Rs. 6083/-
Your Answer
Rs. 6083/-
Question
When a firm can grow net profits by issuing equity, the expected growth rate in
net profits is determined by :-
Correct Answer
Your Answer
True/False
Question
Fixed assets turnover ratio measures the efficiency of utilisation of total assets,
fixed as well as current.
Correct Answer
True
Your Answer
True
Select The Blank
Question
Correct Answer
1963
Your Answer
1963
Select The Blank
Question
The regulations of SEBI with respect to mutual funds were 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
Question
Correct Answer
Your Answer
What is the objective of

fundamental analysis?
a)
To establish relationship between economic, industrial and
company indicators with a view to forecast the earnings and
dividends of the company
b)
Analyse the macro economic environment
c) Analyse the company and sector profitability

d) company indicators and compare it with the other sector

Select The Blank
Question
________ is affected by the leverage decisions of the firm.
Correct Answer
Return on equity
Your Answer
Price earning ratio
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
Your Answer
Capital gain/loss arising out of the sale of the bond , Redemption of the bond of
the issuer at a contracted value , Interest payments at coupon rates
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/-
Your Answer
Rs. 37363/-
Question
9% p.a ?
Correct Answer
Rs.1,15,827/-
Your Answer
Rs.1,15,827/-
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
Your 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
Your Answer
True/False
Question
A firm uses a combination of equity and debt for financing its assets.
Correct Answer
True
Your Answer
True
Question
The Peer group of Bharat Forge consists of which all companies?
Correct Answer
Am forge industries , Kalyani Forge , EL Forge
Your Answer
Question
Correct Answer
Rs. 29775/-
Your Answer
Rs. 29775/-
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 this amount, if the rate of interest is 7% p.a
?
Correct Answer
Rs. 62,275/-
Your Answer
Rs. 62,275/-
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank
Question
Correct Answer
Present value
Your Answer
Present value
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
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
True
Match The Following
Question
Correct Answer
Your Answer
Growth of income
Current income
Appreciation
Select The Blank
Question
Correct Answer
Liquidity risk
Your Answer
Liquidity risk
True/False
Question
The cost structure remaining the same, better price realisation results in lower
gross profit ratio.
Correct Answer
False
Your Answer
False
True/False
Question
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Speculators
Your Answer
Speculators
Question
Correct Answer
capitalisation
Your Answer
capitalisation
Question
this system :-
Correct Answer
Financial
Your Answer
Financial
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
Your Answer
Future value
Question
How many measures of money supply are used commonly?
Correct Answer
2
Your Answer
2
True/False
Question
PPF is a good retirement planning and tax saving vehicle.
Correct Answer
True
Your Answer
True
Question
Correct Answer
profitability
Your Answer
profitability
Select The Blank
Question
________ bonds are generally called for prepayment after interest rates have
fallen, investors will not be able to find comparable investment avenues.
Correct Answer
Call risk
Your Answer
Call risk
Select The Blank
Question
principal.
Correct Answer
Inadequate safety
Your Answer
Inadequate safety
Question
What is the goal of the Dow theory?
Correct Answer
To determine changes in the primary or major movement in the market
Your Answer
Question
Correct Answer
Your Answer
Question
What is the indicator of buoyant economy?
Correct Answer
Increased level of housing construction activity
Your Answer
Question
Correct Answer
Your Answer
Select The Blank
Question
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
Correct Answer
False
Your Answer
False
Select The Blank
Question
________ is also known as random walk model.
Correct Answer
Weak form EMH
Your Answer
Weak form EMH
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
Previous day
Your Answer
Previous day
Match The Following
Question
Correct Answer
Your Answer
Technical collaboration of Bharat Forge with SIFCO industries USA

1981
1981

1961
1961

1971
1971

1976
1976
Select The Blank
Question
________ ratio is estimated by dividing the market value of a firm's assets by the
replacement cost of these assets.
Correct Answer
Your Answer
Select The Blank
Question
Debentures rated ________ are judged to offer sufficient safety of timely
payment of interest and repayment of principal.
Correct Answer
"BBB"
Your Answer
"BBB"
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
Your Answer
0.05
Question
Correct Answer
Your Answer
Question
A derivative is a product whose value is derived from :-
Correct Answer
Value of an underlying asset
Your Answer
Question
Correct Answer
Rs. 73466/-
Your Answer
Rs. 73466/-
Question
Correct Answer
Your Answer

Question
Active investment managers :-
Correct Answer
abnormal returns
Question
Correct Answer
Macro economic information that may impact future growth , Private
information about the firm , Firm's specific information and public information
Question
Correct Answer
Question
Correct Answer

Question
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
, Displays the correlation between the high and low prices
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
Question
Correct 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
Your Answer
Calculating the Return on investment
Question
Correct Answer
Question
Correct 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
Question
The features of bond are :-
Correct Answer
Collateral , Call provision , Sinking fund and protective covenants
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
Your Answer Interest rate offered is
higher than banks , No
benefits under 80 L , No
TDS for interest income
upto Rs. 5000

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
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

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
Your Answer Rate of return is 8 % , Interest
payable monthly , Investor
earns bonus of 10% on
completion of term

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 ,
Buying bonds issued to
banks and financial
institutions

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
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
receipt

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
Your Answer The entire sequence of cash flows
, The timing of cash flows ,
Calculating the internal rate of
return

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
Your Answer It connects closing prices from
one period to the next , It is ideal
for securities with no high or low
price data

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
Your Answer 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 periodic payments

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
Your Answer Demerger of investment division
and windmills , Nominee director
of UTI resigned and ceased to be
the director - nomination
withdrawn by UTI

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
Your 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

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

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
Your Answer Secured second largest customer in China ,
Appointed a Company Secretary to act as
compliance officer , New contracts won in
passenger car components

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
Your 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

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
Your Answer Expected return on portfolio , Expected return
on assets , Weight of asset in the portfolio

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
Your Answer Maintain aggressive exports thrust , Increase
shares of value added products , Continue
reducing costs

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

orders
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
Your Answer Acquisitions , Expanding marketing
capabilities and investing in new
facilities , Mergers

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)
Your Answer Rate of change (ROC) , Relative
strength indicator (RSI) , Moving
average convergence
divergence(MACD)

Question 14 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

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
Your Answer Best year in the history of the company ,
146% growth in exports , Highest pre and
post tax profits

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

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

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

power , Projection of future profitability
Your Answer True picture of a company , Normal earning
power , Projection of future profitability

Question 41 The return to the bond investor can be
measured in terms of :-
Correct Answer Current yield , Yield to maturity , Realised
yield
Your Answer Yield to maturity , Realised yield

Question 5 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

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
Your Answer Securities can be bought from the RBI , Safest
investment option available , Demat account is
required for investment

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
Your Answer Dow Jones Transportation Average

Question 16 The security market is the market for :-
Correct Answer Equity , Debt , Derivatives
Your Answer Equity , Debt , Bank deposits

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

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

schemes

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.
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 will trade at
an inexpensive PEG of 0.6x.

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

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
Your 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 , Calculating
the Return on investment

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

equity
Your Answer Gross profit margin ratio , Earnings power , Return on
equity

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 lower that the growth in the economy ,
Which have well established dividend payout ratio policy

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
Your 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

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

Question An options contract allows the investor :-
Correct To earn a profit while restricting the downside risk , To use the
Answer options for speculation , Either to honour or walk away from the
contract
Your Answer Either to honour or walk away from the contract , To earn a
profit while restricting the downside risk , To use the options for
speculation
Question Major steps involved in construction of a index are :-
Correct Selecting a set of scrips to be used , Fixing starting date ,

Answer Calculating market capitalisation
Your Answer Selecting a set of scrips to be used , Fixing starting date ,
Fixing ending date

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

Question The underlying assumptions of Technical analysis are that :-
Correct Prices move in predictable patterns , Market value is

Answer determined by supply & demand , Investors are emotional than
being rational
Your Answer Prices move in predictable patterns , Investors are emotional
than being rational

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

Question What are the features of public provident scheme?
Correct 15 year instrument , Rate of interest is 8% , Partial withdrawal

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

Question Growth of the firm can be estimated through :-
Correct Firm's past earnings/historical growth rate , Estimates made by

Answer equity research analyst who follow the firm , Estimates from a
firm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates made by
equity research analyst who follow the firm , Estimates from a
firm's fundamentals
Question Characteristics of Preference shares are :-
Correct Carry a fixed rate of dividend , Dividend payable out of profit ,

Answer 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

Question What are the SEBI regulations with respect to mutual funds?
Correct Mutual funds to be registered with SEBI before the launching

Answer any scheme , 2/3rds of the directors of the trustee company
must be independent , An AMC approved by SEBI 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

Question The security analysis process will achieve :-
Correct True picture of a company , Normal earning power , Projection

Answer of future profitability
Your Answer True picture of a company , Normal earning power , Projection
of future profitability

Question The return to the bond investor can be measured in terms of :-
Correct Current yield , Yield to maturity , Realised yield

Answer
Your Answer Realised yield

Question What are the features of bank deposits?
Correct Interest is presently around 6% , Benefits under section 80 L ,

Answer Banks offer cheque facility for investors making it convenient to
withdraw
Your Answer Interest is presently around 6% , Banks offer cheque facility for
investors making it convenient to withdraw

Question What are the important macro economic indicators?
Correct GNP growth rate , Price Conditions , Monsoons

Answer
Your Answer GNP growth rate , Price Conditions , Monsoons
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
Question Stock Exchanges are the part of :-
Correct Answer Secondary market
Your Answer Money Market

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

Question More than half the variation in stock price could be
attributed to which factor?
Answer

Question In India we have index futures contracts based on :-
Correct S&P CNX Nifty and the BSE sensex
Answer

Question In India, the futures on individual securities have been
introduced from :-
Correct 2001
Answer

Correct Price or NAV at which a scheme purchases its units
Answer

Question A security analysis is done :-
Correct For decision making for investments
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 0.05
Answer


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

Question Who developed Dow's Principles and organised them into a
theory as it is known today?
Correct William Peter Hamilton
Answer
Your Answer Charles.H.Dow
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

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

Question What is a load fund?
Correct Fund charging a fee for entry and exit

Answer
Your Answer Fund charging a fee for entry and exit
Question Investment is a risk free investment when :-
Correct Actual return is = expected return

Answer
Your Answer Actual return is = expected return

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

Question Mr. Sharma is expecting to receive Rs. 50,000/- at the end of 5
amount, if the rate of interest is 6% p.a?
Correct Rs. 37363/-
Answer

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

Answer
Your Answer Money market funds and gilts

Question What is Support level?
Correct A point where the prices become relatively attractive for buyers
Answer
Your Answer Market resistance to a price fall

Question During the 1980's rate of savings in India has hovered around
what percentage?
Correct 0.21
Answer
Your Answer 0.22

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

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

Answer
Your Answer Geometric average

Question 4 What are short term trends?
Correct Trends which interrupt the course of the intermediate cycle

Answer
Your Answer They are counter-cyclical trends within the confines of a
primary trend
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

Question 9 The historical growth rate and the past earnings 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 appropriate for high growth
firms

Question 10 Efficient market hypothesis is based on the assumption that
market comprises of :-
Correct Rational Investors
Answer
Your Answer Heterogeneous investors

Question 11 Co variance of asset with market portfolio 85 and variance of
market portfolio is 100 then beta is :-
Correct 0.0085
Answer
Your Answer 0.0085

Question 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10
amount, if the rate of interest is 10% p.a:-
Correct Rs. 9639/-
Answer

Question 18 What does flow-of fund analysis help in understanding?
Correct Availability of money for the stock market

Answer
Your Answer Financial strength of various companies

Question 23 A security represent evidence of :-
Correct A property right

Answer
Your Answer Safety

Question 24 Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is
4% compounded annually. What will be the value of his
Correct Rs. 6083/-
Answer

Question 27 In India futures on individual securities have been introduced
by :-
Correct BSE & NSE
Answer
Your Answer BSE & NSE

Question 43 The issuing firm enjoys the flexibility to call the bonds if the
interest rates fall significantly and it can issue :-
Correct New bonds at a lower rates
Answer
Your Answer New bonds at a lower rates

Question 2 When was the first mutual fund set up?
Correct 1963
Answer
Your Answer 1963

Question 7 How can transition phases be projected?
Correct Transition phases are signalled by clearly definable price

Answer patterns
Your Answer By working out the resistance and support levels

Question 8 If the price of a share at the beginning of the year was Rs.50/-,
dividend received during the year was Rs.10/-per share and
the price at the end is Rs.60/-. What is the rate of return?
Correct 0.4
Answer
Your Answer 0.2

Question 27 Investing in this avenue enable you participate in the equity
market indirectly :-
Correct Mutual Funds
Answer
Your Answer Mutual Funds

Question 29 In any Economy, bridge is created between savers and who
need the funds by this system :-
Correct Financial
Answer
Your Answer Economic

Question 30 Agriculture account for how much portion of the economy?
Correct Quarter
Answer
Your Answer Three fourths

Question 37 Who operates the sinking fund under the sinking fund
provision of a firm?
Correct The bond trustee or the issuer
Answer
Your Answer The bond trustee or the issuer

Question 40 How did Dow use the behaviour of stock markets?
Correct As a barometer of business conditions rather than a basis for
Answer forecasting stock prices
Your Answer As a barometer of business conditions rather than a basis for

Question 42 The growth period in the industry life cycle is defined as :-
Correct Period of rapid market acceptance and substantial profit

Answer improvement
Your Answer Period of rapid market acceptance and substantial profit
improvement
Question 3 What is the limitation of Flow-of funds analysis method?
Correct Cannot give indication of the inclination of market participants

Answer to purchase stock
Your Answer Cannot give indication of the inclination of market participants
to purchase stock

Question 6 Sentiment indicators are based on what assumption
Correct Different groups of investors are consistent in their actions at

Answer major market turning points
Your Answer Different groups of investors are consistent in their actions at
major market turning points

Question 12 An agreement to buy or sell a specified quantity of an asset at
a certain future date or a certain price is know as :-
Correct Forward contract
Answer
Your Answer Futures contract

Question 25 What are intermediate trends?
Correct They are counter-cyclical trends within the confines of a

Answer primary trend
Your Answer They are counter-cyclical trends within the confines of a
primary trend

Question 29 What are index funds?
Correct Investment in securities in the same weightage which

Answer replicates a particular index
Your Answer Investment in securities in the same weightage which
replicates a particular index

Question 38 What are the assumptions of the Dow theory?
Correct Majority of stocks follow the underlying trend of the market

Answer most of the time
Your Answer Majority of stocks follow the underlying trend of the market
most of the time

Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%
after 3 years?
Correct Rs. 29775/-
Answer

Question 41 How many measures of money supply are used commonly?
Correct 2
Answer
Your Answer 2

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

Question 46 Avenues can be broadly classified into the which type of
assets?
Correct Financial and Real
Answer
Your Answer Tangible and Intangible

Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-
Correct Technical analysis
Answer
Your Answer Fundamental Analysis

Question What is the objective of an income fund?
Correct To provide regular and steady income

Answer
Your Answer To provide guaranteed returns to investors

Question What does lower level of unemployment indicates?
Correct Positive economic conditions

Answer
Your Answer Economic slowdown

Question The GDP growth rate in the economy in real terms has
fluctuated between :-
Correct 4% and 5%
Answer
Your Answer 4% and 5%

Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8%
after 5 years?
Correct Rs.14.693/-
Answer
Your Answer Rs.14.693/-

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

Question What do you understand by money supply?
Correct Total money in existence at any given time

Answer
Your Answer Total money in existence at any given time

Question What is Gross National Product ?
Correct Gross income generated from within the country

Answer
Your Answer Gross income generated from within the country
Question The greater the deviation of the actual returns from the actual
return :-
Correct Greater the variance
Answer
Your Answer Greater the variance

Question What is GDP at factor cost ?
Correct Excludes net income received from abroad

Answer
Your Answer Includes indirect taxes

Question More than half the variation in stock price could be attributed to
which factor?
Answer
Your Answer Market influence

Question Free Float index considers this to calculate market
capitalisation :-
Correct Actual no. of shares available
Answer
Your Answer Actual no. of shares available

Question The Top-down approach is also known as :-
Correct Economy-industry-company approach

Answer
Your Answer Economy-industry-company approach

Your Answer A reflection of the idea that prices move in trends which are

Question What are index funds?
Correct Investment in securities in the same weightage which

Answer replicates a particular index
Your Answer Investment in securities in the same weightage which
replicates a particular index
Question What could be a better approach to flow-of -funds analysis?
Correct An examination of liquidity trends in the banking system

Answer
Your Answer A study of macro economical changes

Question The general dividend model is based on the principle of :-
Correct Present value of the expected future cash flow

Answer
Your Answer Present value of the expected future cash flow

Question What are short term trends?
Correct Trends which interrupt the course of the intermediate cycle

Answer
Your Answer Trends which interrupt the course of the intermediate cycle

Question What is the aim of growth funds?
Correct To provide capital appreciation over medium to long term

Answer
Your Answer To provide capital appreciation over medium to long term

Question This is not a stock exchange :-
Correct Answer MCX
Your Answer MCX

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 Normal returns for their given level of risk

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

Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost
Your Answer Future price = Spot price + Carry cost

Question Financial assets can be classified as :-
Correct Answer Marketable and non-marketable
Your Answer Marketable and non-marketable

Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of
3 years. He wanted to know what is the present value of this
Correct Rs.1,15,827/-
Answer
Your Answer Rs.1,15,827/-

Question What is Flow-of-funds analysis?
Correct Consists of an analysis of the financial positions of various

Answer investor groups
Your Answer Consists of an analysis of the financial positions of various
investor groups

Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7
Correct Rs. 62,275/-
Answer
Your Answer Rs. 62,275/-

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

Question Till 1990's secular Indian economy's inflation rate has been of
what percentage?
Correct 0.07
Answer
Your Answer 0.07

Question Credit rating companies assign ratings for which of these
investments?
Correct Company deposits
Answer
Your Answer Company deposits

Question If index future is taken under futures contract, the underlying
asset would be :-
Correct Stock index
Answer
Your Answer Stock index

Question What is balance of payments?
Correct Credit and debit transactions of a country

Answer
Your Answer Credit and debit transactions of a company

Question Profits are non existent in pioneering stage because of :-
Correct Heavy expenses on product introduction

Answer
Your Answer Heavy expenses on product introduction

Question What is the indicator of buoyant economy?
Correct Increased level of housing construction activity

Answer
Your Answer Increased level of housing construction activity

Question What does a transitional phase indicate?
Correct It marks the turning point between a rising and falling market
Answer
Your Answer It marks the turning point between a rising and falling market

Question Dividend discount model is considered as the simplest model
for :-
Correct Valuing Equity
Answer
Your Answer Valuing Equity

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

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

Question What is the objective of Portfolio management?
Correct Answer To Minimize risk and maximize return
Your Answer To Minimize risk and maximize return

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

Question What is the percentage of variation the market and industry influence
account for?
Correct Answer 2/3rd
Your Answer 75%

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

Question Investments could be made in retail government securities through :-
Correct Answer Primary dealers
Your Answer Primary dealers
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

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

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

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

Question How can transition phases be projected?
Correct Answer Transition phases are signalled by clearly definable price patterns
Your Answer Transition phases are signalled by clearly definable price patterns

Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902
Your Answer Between 1900 and 1902

Question When was the first mutual fund set up?
Correct Answer 1963
Your Answer 1963

Question What is the art of technical analysis?
Correct 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

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

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

Question What are primary trends?
Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the

business cycle
Your Answer Long term trends

Question In a forward contract there is :-
Correct Answer No Exchange of cash
Your Answer No Exchange of cash

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

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
Your Answer Earnings multiplier approach
Select The Blank

Question The possibility of reduction of risk through the construction of a portfolio
depends on the value of ________ between the two assets.
Correct Correlation coefficient
Answer
Your Answer Time
Select The Blank

Question Dow Jones transportation average was previously known as ________.
Correct Rail average

Answer
Your Answer Rail average
Select The Blank

Question The compounded annual return of Kisan Vikas patra is ________.
Correct 0.084
Answer
Your Answer 0.084
Select The Blank

Question Under futures market ________ process provides for collection of losses
that have already occurred.
Correct The daily settlement
Answer
Your Answer The daily settlement
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully revised
in the year ________.
Correct 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, but not
the obligation to buy or sell the underlying instrument only on the expiry
date.
Correct European option
Answer
Your Answer European option
Select The Blank

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

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

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

Question Debentures rated ________ are judged to offer sufficient safety of timely
Correct "BBB"
Answer
Your Answer "BBB"
Select The Blank
Question The value of the stock in the ________ model is sensitive to the estimates of the
growth rate.
Correct Answer The Gordons dividend growth
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
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
Select The Blank

Question ________ bonds are generally called for prepayment after interest rates
have fallen, investors will not be able to find comparable investment
avenues.
Correct Answer Call risk
Select The Blank

Question ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
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.
Select The Blank

Correct Answer Average collection period
Select The Blank
Question 16 ________ is affected by the leverage decisions of the firm.
Correct Return on equity

Answer
Select The Blank

Question 20 ________ refers to the possibility that there may not 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 allowed public sector banks and institutions in mutual funds in
________.
Correct Early 90's
Answer
Select The Blank

Question 36 The 8% taxable savings bonds are repayable after ________ years.
Correct 6
Answer
Your Answer 5
Select The Blank

Question 39 Security analysis serves the investment decision maker by identifying
________securities.
Correct Under priced
Answer
Your Answer Blue chip
Select The Blank

Question 42 ________ absorbs the excess demand or supply generated by hedgers
and assume the risk of price fluctuations.
Correct Speculators
Answer
Your Answer Brokers
Select The Blank

Question 44 A ________ rally for stocks generally takes place because of an
improved outlook for business conditions over what was anticipated.
Correct Bear market
Answer
Your Answer Bullish market
Select The Blank

Question 1 UTI was set up in the year ________.
Correct 1963
Answer
Your Answer 1963
Select The Blank

Question 6 An ________ is a series of equal payments or receipts occurring at
regular intervals of time.
Correct Annuity
Answer
Your Answer Annuity
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.
Correct Central tendency
Answer
Your Answer Central tendency
Select The Blank

Question 28 ________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.
Correct Michael Porter
Answer
Your Answer Michael Porter
Select The Blank

Question 36 ________is a hybrid form of security which has characteristics of both
equity and debentures
Correct Preference shares
Answer
Your Answer Preference shares
Select The Blank
Question 39 Debentures rated "BB" refers ________ of timely payment of interest
and principal.
Correct Inadequate safety
Answer
Your Answer Inadequate safety
Select The Blank

Question 43 The Derivative market is divided into Future market and ________
market.
Correct Options
Answer
Your Answer Options
Select The Blank

Question 46 The Dow theory was published in a series of editorials in the ________.
Correct Wall street journal

Answer
Your Answer Wall street journal
Select The Blank

Question 1 ________ deal in futures to offset a pre-existing risk.
Correct Hedger
Answer
Your Answer Speculator
Select The Blank

Question 8 Under ________ EMH investors cannot earn abnormal/superior profits
on securities on a consistent basis.
Correct Semi-strong form
Answer
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 14 ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and
remains for the long-term.
Correct The Two-Stage dividend discount
Answer
Your Answer 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 Repos
Answer
Your Answer 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 NIFTY
Answer
Your Answer NIFTY
Select The Blank

Question 31 ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Initial margin
Answer
Your Answer Daily settlement
Select The Blank

Question 35 ________ ratio is the ratio of net profit to the sales.
Correct Net Profit Margin

Answer
Your Answer Net Profit Margin
Select The Blank
Question Mutual fund is to be registered with ________ before raising funds from
public.
Correct SEBI
Answer
Your Answer SEBI
Select The Blank

Question An investor with a higher tolerance of risk should tilt his portfolio in
favour of ________.
Correct Stocks
Answer
Your Answer Bank deposits
Select The Blank

Question The ________ phase carries a lot of significance because it marks the
turning point between a rising and a falling market.
Correct Transitional
Answer
Your Answer Sideways
Select The Blank

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

Correct Average collection period

Answer
Your Answer Average collection period
Select The Blank

Question ________ measures the profitability of operations without considering
the influence of financial structure and tax rate.
Correct Earnings 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 the price variation of both averages moves within a
price range of approximately________%.
Correct 5
Answer
Your Answer 5
Select The Blank

Question ________ measures the profitability of equity funds invested in the firms.
Correct Return on equity

Answer
Select The Blank

Question Risk can be referred as the ________ in the return with respect to the
expected return.
Correct Volatility
Answer
Your Answer Difference
Select The Blank

Question All trades in the futures market are cash settled on a ________ basis.
Correct T+1
Answer
Your Answer T+1
Select The Blank

Question ________ ratio is the ratio of net profit to the sales.
Correct Net Profit Margin

Answer
Your Answer Net Profit Margin
Select The Blank

Question When a debenture is sold to the general public a ________ is appointed.
Correct Trustee
Answer
Your Answer Brokers
Select The Blank

Question A security is said to be ________ if its current market 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 of 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
Your Answer SEBI
Select The Blank

Question In a heads and shoulders formation the deeper the pattern, the greater
is the ________ significance once it is completed
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
Select The Blank

Question Under ________ EMH investors cannot earn abnormal/superior profits
on securities on a consistent basis.
Correct Semi-strong form
Answer
Your Answer Semi-strong form
Select The Blank

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

Question ________ is the ratio of the market price per share to the earnings per
share.
Correct Price earning ratio
Answer
Your Answer 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
Answer
Your Answer Speculators
Select The Blank
Question
Correct Answer
1963
Your Answer
1963
True/False
Question The normal relationship is for the volume to expand on rallies and
contract on declines.
Correct Answer True
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
True/False
Question A firm uses a combination of equity and debt for financing
its assets.
Correct True
Answer
True/False
Question Policies of the government and the attitude of the
government towards the industry have a considerable
influence on the industry.
Correct True
Answer
True/False
Question Investors in high tax bracket would benefit by investing in
equity schemes.
Correct False
Answer
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 True
Answer
True/False
Question When we invest in only one asset we are not exposed to any
Correct False
Answer
True/False
Correct True
Answer
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 True
Answer
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct True
Answer
True/False
Question Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.
Correct True
Answer
Your Answer True
True/False
Correct True
Answer
Your Answer True
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct True
Answer
Your Answer True
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct False
Answer
Your Answer False
True/False
Question Debt is less riskier source of finance than equity.
Correct False
Answer
Your Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
Correct False
Answer
Your Answer False
True/False
Question With the introduction of on-line trading by NSE and BSE, the
role of regional stock exchanges have diminished.
Correct True
Answer
Your Answer True
True/False
Question Penetration of a trend line denotes a bearish phase.
Correct False
Answer
Your Answer True
True/False
Question Passive investment managers believe that markets are
inefficient and Active managers believe that markets are
efficient.
Correct False
Answer
Your Answer False
True/False
Question 2 Currently in India index options are both European and
American in nature.
Correct False
Answer
Your Answer False
True/False
Question 3 The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Correct False
Answer
Your Answer True
True/False
Question 6 A segment is more attractive when there are actual or potential
substitutes for the product.
Correct False
Answer
Your Answer True
True/False
Question 15 Bond ratings by credit rating agencies provide superior and
low cost information to the investor serving as a basis for a
proper risk-return trade off by investors.
Correct True
Answer
Your Answer True
True/False
Question 29 The arithmetic mean is a set of observations is calculated by
finding the sum values and dividing by the number of
observations.
Correct True
Answer
Your Answer True
True/False
Question 30 Investment in gilt edged securities carry a higher element of
risk.
Correct False
Answer
Your Answer True
True/False
Question 37 Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Correct False
Answer
Your Answer True
True/False
Question 45 Speculators buy or sell futures contract in an attempt to earn a
profit.
Correct True
Answer
Your Answer True
True/False
Question 11 Investment decisions can be viewed as an integrated process
to which security analysis makes its unique contribution.
Correct True
Answer
Your Answer True
True/False
Question 17 Given the accounting standards across firm, price to book
value ratios can be compared across similar firms for signs of
under valuation.
Correct True
Answer
Your Answer True
True/False
Question 18 Quick assets consist of current assets less inventories.
Correct True
Answer
Your Answer True
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct True
Answer
Your Answer True
True/False
Question 23 A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct False
Answer
Your Answer True
True/False
Question 35 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct True
Answer
Your Answer True
True/False
Question 47 PPF is a good retirement planning and tax saving vehicle.
Correct True
Answer
Your Answer True
True/False
Question 2 Bonds and Debentures represent long term debt instruments.
Correct False
Answer
Your Answer True
True/False
Question 9 While calculating geometric mean calculation of root is not
important.
Correct False
Answer
Your Answer False
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct True
Answer
Your Answer True
True/False
Question 21 Sensex is the index of Calcutta Stock Exchange.
Correct False
Answer
Your Answer False
True/False
Question 27 Fundamental analysis focuses on predicting the future price of
a security and Technical analysis on estimating the intrinsic
value of a security.
Correct False
Answer
Your Answer True
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact
for the importers.
Correct False
Answer
Your Answer False
True/False
Question 36 The risk associated to get the required rate of return on the
stock is measure by market beta.
Correct True
Answer
Your Answer True
True/False
Question 40 The basic inputs of the general model are expected dividends
and required rate of return on stock.
Correct True
Answer
Your Answer True
True/False
Question 42 European style options are more expensive than American
style because they offer greater flexibility to the buyer.
Correct False
Answer
Your Answer True
True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
Correct True
Answer
Your Answer True
True/False
Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries.
Correct True
Answer
Your Answer True
True/False
Question The labour conditions do not play an important role in the
industry analysis.
Correct False
Answer
Your Answer False
True/False
Question 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.
Your Answer True
True/False
Question Because of statutory compulsion, generally Govt. securities
are held by banks, financial institutions, insurance companies
etc.
Correct True
Answer
Your Answer True
True/False
Question The Asset management company of the mutual fund must have 50%
independent directors.
Correct True
Answer
Your Answer True
True/False
Question In case of fixed income securities like debentures, you get the return in
the form of dividend.
Correct False
Answer
Your Answer False
True/False
Question Investment in gilt edged securities carry a higher element of risk.
Correct False
Answer
Your Answer False
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 True
Answer
Your Answer True
True/False
Question Prices of stocks usually move in trends.
Correct True
Answer
Your Answer True
True/False
Question The sideways trend is essentially a transitional one which separates the
two major market movements.
Correct True
Answer
Your Answer False
True/False
Correct True
Answer
Your Answer True
True/False
Question A higher value of current ratio indicates a better short
term solvency of the firm.
Correct Answer True
Your Answer True
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
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
Your Answer True
True/False
Question The price earning ratio can be estimated for the firms with negative
earnings per share.
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 because it marks the
turning point between a rising and a falling market.
Correct Answer Transitional
Your Answer Transitional
True/False
Question Bonds and Debentures represent long term debt instruments.
Your Answer True
True/False
Question A price rise accompanied by expanding volume denotes a potential
trend reversal.
Your Answer False
Select The Blank

Question The ________ phase is characterized by resistance area and support
level.
Your Answer Transition
True/False
Question Currently in India index options are both European and American in
nature.
Your Answer False
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of timely
payment of interest and principal.
Correct Answer Adequate safety
Your Answer High safety
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
Match The Following

Question
Correct Answer
Your Answer
Price pattern
Resistance level
Head and shoulders formation
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
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
Debt Equity ratio

Debt / Equity
Debt / Equity
Quick assets

Match The Following
Question
Correct Answer
Your Answer
Development of Dow's principles

Charles H.dow
Breadth Indicator
Moving average
Momentum indicator
MACD
MACD
Trend lines
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 contract
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 option 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 risk
High risk
Government Securities
No risk
Low risk
Bank Deposits
Low risk
No risk
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
Volatility in the return
Volatility in the return
Variance
Measure of dispersion
Measure of dispersion
Returns
Future benefits from investments
Future benefits from investments
Match The Following
Question 20
Correct Answer
Your Answer
H-Model For Valuing Growth

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 over 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 and expected growth rate
in dividends
The Gordons Growth model

Expected dividends in the next period, cost of equity and expected growth rate
in dividends
Assessment of the growth rate by looking at how much a firm reinvests for future
growth and the quality of its reinvestment
The Two-Stage Dividend Discount Model

Based 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 stable growth
phase that lasts forever
Match The Following

Question 34
Correct Answer
Your Answer
Future value of a series of cash flows occurring at the end of each period.
Value today of a stream of cash flows that occurs in future.

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 intervals of time.

Match The Following

Question
Correct Answer
Your Answer

Random walk model
Random walk model


Weak form EMH
Fama

Fama
Strong form
Match The Following

Question
Correct Answer
Your Answer

1981
1981

1961
1961

1971
1971

1976
1976
Match The Following

Question
Correct Answer
Your Answer



Realised yield
Realised yield
Yield to maturity
Yield to maturity
1. Treasury Bills 1. Foreign Institutional

Investors
2. Commercial Papers 3 2. Government of
India
3. Certificate of
Deposits 3. Corporates
4. Bonds 5 4. Banks and Financial
Institutions
5. Central/State
Govts/PSU's
6. Post Office
1. ROE 3 1. Measure the profitability of operations without considering

the influence of financial structure and tax rate
2. Earnings 1
power 2. Ratio if net profit to sales
3. Net profit 2
margin 3. Measure the profitability of equity funds
4. Gross profit 6
margin 4. Valuation ratio
5. Measures the profitability of debt funds

6. Indicates the margin available after meeting the
manufacturing expenses
1. SEBI 5
1. Nifty
2. NAV 2
2. Net asset value
3. AMFI 6
3. Net average value
4. NSE 4. Association of merchant financers of
India
5. Redressal of investor
complaints
6. Association of mutual funds of
India
Match The Following

Question
Correct Answer
Your Answer
Growth of income
Current income
Appreciation
Match The Following

Question
Correct Answer
Your 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
Key determiner of revenue multiples

Profit margin
Profit margin
The market value of the equity in a firm reflects the markets expectations of the firms
earnings power and cash flows.
Price earning ratio
Match The Following

Question
Correct Answer
Your Answer

Nine months
Nine months

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 asset on or
before the expiry date
Put option
Put option
What is the objective of

fundamental analysis?
a)
company indicators with a view to forecast the earnings and
dividends of the company
b)
Analyse the macro economic environment
c) Analyse the company and sector profitability

d) company indicators and compare it with the other sector
Select The Blank
Question
________ is affected by the leverage decisions of the firm.
Correct Answer
Return on equity
Your Answer
Price earning ratio
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
Your Answer
Capital gain/loss arising out of the sale of the bond , Redemption of the bond of
the issuer at a contracted value , Interest payments at coupon rates
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/-
Your Answer
Rs. 37363/-
Question
9% p.a ?
Correct Answer
Rs.1,15,827/-
Your Answer
Rs.1,15,827/-

Question
Correct Answer
Your Answer
Question
What are the features of company fixed deposits?
Correct Answer
Your Answer
True/False
Question
A firm uses a combination of equity and debt for financing its assets.
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Question
Correct Answer
Rs. 29775/-
Your Answer
Rs. 29775/-
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 this amount, if the rate of interest is 7% p.a
?
Correct Answer
Rs. 62,275/-
Your Answer
Rs. 62,275/-
True/False
Question
Correct Answer
True
Your Answer
True
Select The Blank

Question
Correct Answer
Present value
Your Answer
Present value
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
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
True
Match The Following
Question
Correct Answer
Your Answer
Growth of income
Current income
Appreciation
Select The Blank
Question
Correct Answer
Liquidity risk
Your Answer
Liquidity risk
True/False
Question
The cost structure remaining the same, better price realisation results in lower
gross profit ratio.
Correct Answer
False
Your Answer
False
True/False
Question
Correct Answer
True
Your Answer
True
Question
Correct Answer
Your Answer
Select The Blank
Question
Correct Answer
Speculators
Your Answer
Speculators
Question
Correct Answer
capitalisation
Your Answer
capitalisation
Question
this system :-
Correct Answer
Financial
Your Answer
Financial
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
Your Answer
Future value
Question
How many measures of money supply are used commonly?
Correct Answer
2
Your Answer
2
True/False
Question
PPF is a good retirement planning and tax saving vehicle.
Correct Answer
True
Your Answer
True
Question
Correct Answer
profitability
Your Answer
profitability
Select The Blank
Question
________ bonds are generally called for prepayment after interest rates have
fallen, investors will not be able to find comparable investment avenues.
Correct Answer
Call risk
Your Answer
Call risk
Select The Blank
Question
principal.
Correct Answer
Inadequate safety
Your Answer
Inadequate safety
Question
What is the goal of the Dow theory?
Correct Answer
Your Answer

Question
Correct Answer
Your Answer
Question
What is the indicator of buoyant economy?
Correct Answer
Your Answer
Question
Correct Answer
Your Answer
Select The Blank
Question
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
Correct Answer
False
Your Answer
False
Select The Blank
Question
________ is also known as random walk model.
Correct Answer
Weak form EMH
Your Answer
Weak form EMH
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
Previous day
Your Answer
Previous day
Match The Following
Question
Correct Answer
Your Answer

1981
1981

1961
1961

1971
1971

1976
1976
Select The Blank
Question
________ ratio is estimated by dividing the market value of a firm's assets by the
replacement cost of these assets.
Correct Answer
Your Answer
Select The Blank
Question
Debentures rated ________ are judged to offer sufficient safety of timely
Correct Answer
"BBB"
Your Answer
"BBB"
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
Your Answer
0.05
Question
Correct Answer
Your Answer
Question
A derivative is a product whose value is derived from :-
Correct Answer
Your Answer
Question
Correct Answer
Rs. 73466/-
Your Answer
Rs. 73466/-
Question
Correct Answer
Your Answer

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Correct Answer True

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Under options contract When you expect prices to fall,

A contract where both the parties are equally

The amount which the buyer of the option has to pay

Multiple Choice Single Answer

Multiple Choice Single Answer

Multiple Choice Multiple Answer

Select The Blank

Select The Blank

Multiple Choice Multiple Answer

Multiple Choice Multiple Answer

Multiple Choice Single Answer

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Multiple Choice Single Answer

Multiple Choice Single Answer

Match The Following

Ratio used as a measure of relative value PEG ratio

The market value of the firms assets divided by the

Key determiner of revenue multiples Profit margin

The market value of the equity in a firm reflects the