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Tuesday, November 10, 2009

Security Analysis and Portfolio Management - 24

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 Answer The Gordons dividend growth

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

Multiple Choice Single Answer Question When an investor invests in stock, expects to get the dividends and an expected price for the period the stock is held is the rule of :Correct Answer The General model

Select The Blank Question Debentures rated ________ are judged to offer sufficient safety of timely payment of interest and repayment of principal.

Correct Answer "BBB"

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

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

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

Multiple Choice Multiple Answer Question What are the features of short-term trends? Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the

intermediate cycle , They are usually influenced by random news events

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

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

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

Multiple Choice Multiple Answer Question 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 , 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 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

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

Multiple Choice Single Answer Question The index futures symbols of BSE are represented as :-

Correct Answer BSX JAN 2005 (January contract)

Multiple Choice Multiple Answer Question The growth rate in the initial phase is not constant but declines linearly over time to reach the stable growth rate in steady state is a phenomena of :Correct Answer H- Model for valuing growth , H-Two stage model for growth , HModel unlike the classic two stage model

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

True/False Question Investors in high tax bracket would benefit by investing in equity schemes. Correct Answer False

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

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

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 monthsLast between 3 weeks to 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 Answer Industry averages

Select The Blank

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

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

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

True/False Question When we invest in only one asset we are not exposed to any specific or market risk. Correct Answer False

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

Select The Blank

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

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

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

Multiple Choice Multiple Answer Question The Peer group of Bharat Forge consists of which all companies? Correct Answer Am forge industries , Kalyani Forge , EL Forge

True/False Question Five paisa.com is an example of on line trading portal. Correct Answer True

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

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

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

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

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

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

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

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

Match The Following Question Correct Answer Your Answer MCX Commodity ExchangeCommodity Exchange

Sensex BSE Index BSE Index Nifty NSE Index NSE Index Lifex ET Index Gold Index

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

True/False Question Bearish actions come from a series of declining peaks and troughs. Correct Answer True

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