LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer
Question
We can compare the price earning ratio of a market to its
historical average to make judgements about, whether market is
:Correct Answer Under valued or over valued
Your Answer
Under valued or over valued
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
Time
Multiple Choice Single Answer
Question
When a firm can grow net profits by issuing equity, the expected
growth rate in net profits is determined by :Correct Answer Equity reinvestment rate X return on equity
Your Answer
Price earning ratio X return on equity
Multiple Choice Single Answer
Question
What is a load fund?
Correct Answer Fund charging a fee for entry and exit
Your Answer
Fund charging a fee for entry and exit
Multiple Choice Multiple Answer
Question
What are the features of company fixed deposits?
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Your Answer
Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
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
Multiple Choice Single Answer
Question
Investment is a risk free investment when :Correct Answer Actual return is = expected return
Your Answer
Actual return is = expected return
True/False
Question
With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer
True
True/False
Question
A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
Your Answer
True
Multiple Choice Single Answer
Question
Debt instruments that have a maturity period of more than one
year are called as :Correct Answer Bonds
Your Answer
Bonds
Multiple Choice Single Answer
Question
Mr. Sharma is expecting to receive Rs. 50,000/- at the end of 5
years. He wanted to know what is the present value of this
amount, if the rate of interest is 6% p.a?
Correct Answer Rs. 37363/Your Answer
Rs. 37363/-
Multiple Choice Multiple Answer
Question
What are the features of point and figure charts?
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
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
Multiple Choice Multiple Answer
Question
What are the features of post office monthly income scheme?
Correct Answer Investor earns bonus of 10% on completion of term , Rate of
return is 8 % , Interest payable monthly
Your Answer
Rate of return is 8 % , Interest payable monthly , Investor earns
bonus of 10% on completion of term
True/False
Question
Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
Your Answer
False
True/False
Question
Debt is less riskier source of finance than equity.
Correct Answer False
Your Answer
True
Multiple Choice Multiple Answer
Question
The firm issuing bonds operating sinking fund and repurchases
bonds either :Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the
open market , Buying bonds issued to banks and financial
institutions
Your Answer
Calling in a certain number of bonds by lot , Buying bonds in the
open market , Buying bonds issued to banks and financial
institutions
Multiple Choice Single Answer
Question
Which of these is a short-maturity debt issue?
Correct Answer Money market funds and gilts
Your Answer
Money market funds and gilts
Multiple Choice Multiple Answer
Question
The features of bond are :Correct Answer Collateral , Call provision , Sinking fund and protective
covenants
Your Answer
Collateral , Call provision , Fixed returns
True/False
Question
Post office monthly schemes have a 10 year tenor.
Correct Answer False
Your Answer
False
True/False
Question
Five paisa.com is an example of on line trading portal.
Correct Answer True
Your Answer
True
Select The Blank
Question
Dow Jones transportation average was previously known as
________.
Correct Answer Rail average
Your Answer
Rail average
Multiple Choice Multiple Answer
Question
If option is given to you to receive Rs.1,000/- today or after one
year, you will choose to receive it today because :Correct Answer You can use the amount to generate returns over the next one
year , The purchasing power of Rs.1,000/- today is more than
what it will be one year from now , There is an element of
uncertainty associated with the future receipt
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
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
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
Under futures market ________ process provides for collection
of losses that have already occurred.
Correct Answer The daily settlement
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 Answer 1996
Your Answer
1996
Multiple Choice Multiple Answer
Question
The computation of return on a bond involves considering :Correct Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer
The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Multiple Choice Multiple Answer
Question
What are the features of line charts?
Correct Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Your Answer
It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Multiple Choice Multiple Answer
Question
Explain what are leverage ratios ?
Correct Answer Debt equity ratio and interest coverage ratio and DSCR are
important leverage ratios , Debt is riskier source of finance as it
entails fixed outgo of periodic payments , Help in assessing the
risk arising using the debt capital
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
Multiple Choice Multiple Answer
Question
What developments had taken place during the year 2000 in
case of Bharat Forge Ltd.?
Correct Answer Demerger of investment division and windmills , Nominee
director of UTI resigned and ceased to be the director nomination withdrawn by UTI
Your Answer
Demerger of investment division and windmills , Nominee
director of UTI resigned and ceased to be the director nomination withdrawn by UTI
True/False
Question
Penetration of a trend line denotes a bearish phase.
Correct Answer False
Your Answer
True
Multiple Choice Single Answer
Question
What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Your Answer
Market resistance to a price fall
Multiple Choice Multiple Answer
Question
The investor in bonds receives income from :Correct Answer Interest payments at coupon rates , Capital gain/loss arising out
of the sale of the bond , Redemption of the bond of the issuer at
a contracted value
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
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
Multiple Choice Single Answer
Question
During the 1980's rate of savings in India has hovered around
what percentage?
Correct Answer 0.21
Your Answer
0.22
Select The Blank
Question
The Dow theory states that there are simultaneously ________
movements in the stock market.
Correct Answer 3
Your Answer
3
Match The Following
Question
Correct Answer
Your Answer
Turnover ratios
Help measure the
Help measure the
efficiency of utilisation of
assets
efficiency of utilisation of
assets
Debt Equity ratio
Debt / Equity
Debt / Equity
Quick assets
Highly liquid assets
Highly liquid assets
Average collection period Similar to debtors turnover Similar to debtors turnover
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
Select The Blank
Question
________ ratio indicates the margin available after meeting the
manufacturing expenses.
Correct Answer Gross Profit margin
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 Answer Technical distortions
Your Answer
Bearish trends
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
Adequate safety
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"
Multiple Choice Single Answer
Question
A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :Correct Answer Over valued
Your Answer
Over valued
Multiple Choice Single Answer
Question
The average historical growth rate can be calculated as :Correct Answer Arithmetic average or a geometric average
Your Answer
Geometric average
Match The Following
Question
Correct Answer
Your Answer
Development of Dow's
principles
William Peter Hamilton
Charles H.dow
Breadth Indicator
Advance/decline line
Moving average
Momentum indicator
MACD
MACD
Trend lines
Useful tool in technical
analysis
Useful tool in technical
analysis