Security Analysis And Portfolio Management - 9
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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)
Multiple Choice Multiple Answer
Question 14 Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios ,
Debt service coverage ratios
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question 20 Who are the constituents of a
mutual fund?
Correct Answer Sponsor & trustees , Asset
management company ,
Custodian
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question 38 The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning
power , Projection of future profitability
Multiple Choice Multiple Answer
Question 41 The return to the bond investor can be
measured in terms of :-
Correct Answer Current yield , Yield to maturity , Realised
yield
Multiple Choice Multiple Answer
Question 5 Which are the different types of accounts offered to
investors by the stock brokers?
Correct Answer Cash trading , Margin trading
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question 16 The security market is the market for :-
Correct Answer Equity , Debt , Derivatives
Multiple Choice Multiple Answer
Question 18 In a typical stock market cycle which are the types of
trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Multiple Choice Multiple Answer
Question 22 Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme
Multiple Choice Multiple Answer
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.
Multiple Choice Multiple Answer
Question 26 Gilt Edged Securities are :-
Correct Answer State Govt. , Quasi-Govt , Central Govt
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question 44 What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on
equity
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
stable and lasts n years
Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer
Multiple Choice Multiple 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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question How can the financial statements can be manipulated while
giving the estimates for growth?
Correct Answer Change method of rate of depreciation , Change method of stock
valuation , Inflating sales for current year by advancing sales for
the following year
Multiple Choice Multiple Answer
Question The underlying assumptions of Technical analysis are that :-
Correct Answer Prices move in predictable patterns , Market value is determined
by supply & demand , Investors are emotional than being rational
Multiple Choice Multiple Answer
Question Which are the different styles of displaying charts?
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning power , Projection of
future profitability
Multiple Choice Multiple Answer
Question The return to the bond investor can be measured in terms of :-
Correct Answer Current yield , Yield to maturity , Realised yield
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question What are the important macro economic indicators?
Correct Answer GNP growth rate , Price Conditions , Monsoons
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
Multiple Choice Single Answer
Question Stock Exchanges are the part of :-
Correct Answer Secondary market
Multiple Choice Single Answer
Question The index futures symbols of BSE are represented as :-
Correct Answer BSX JAN 2005 (January contract)
Multiple Choice Single Answer
Question More than half the variation in stock price could be attributed
to which factor?
Correct Answer Market influence
Multiple Choice Single Answer
Question In India we have index futures contracts based on :-
Correct Answer S&P CNX Nifty and the BSE sensex
Multiple Choice Single Answer
Question In India, the futures on individual securities have been
introduced from :-
Correct Answer 2001
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 Single Answer
Question A security analysis is done :-
Correct Answer For decision making for investments
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 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
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
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
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
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
Multiple Choice Single Answer
Question What is a load fund?
Correct Answer Fund charging a fee for entry and exit
Multiple Choice Single Answer
Question Investment is a risk free investment when :-
Correct Answer Actual return is = expected return
Multiple Choice Single Answer
Question Debt instruments that have a maturity period of more than one
year are called as :-
Correct Answer Bonds
Multiple Choice Single Answer
Question 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/-
Multiple Choice Single Answer
Question Which of these is a short-maturity debt issue?
Correct Answer Money market funds and gilts
Multiple Choice Single Answer
Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Multiple Choice Single Answer
Question During the 1980's rate of savings in India has hovered around
what percentage?
Correct Answer 0.21
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
Multiple Choice Single Answer
Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average
Security Analysis And Portfolio Management - 8
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
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
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
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 ,
H-Model 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
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
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
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
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
Multiple Choice Multiple Answer
Question The features of bond are :-
Correct Answer Collateral , Call provision , Sinking fund and protective
covenants
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
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
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
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
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
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
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
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
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
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
Multiple Choice Multiple Answer
Question 1 Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question 47 Which are the most popular types of orders
placed through an online trading account?
Correct Answer Limit orders , Market orders
Security Analysis And Portfolio Management - 7
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
Select The Blank
Question ________ ratio indicates the margin available after meeting
the manufacturing expenses.
Correct Answer Gross Profit margin
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
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
Select The Blank
Question The ________ phase is characterized by resistance area
and support level.
Correct Answer Transition
Select The Blank
Question The 6.________% tax saving bonds of government of India
have a tenure of 5 years.
Correct Answer 5
Match The Following
Question- Correct Answer
Expiration period for
options
-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
When the writer gives
the buyer of the option
the right to sell the
underlying asset on or
before the expiry date
-Put option
Multiple Choice Multiple Answer
Question An option is :-
Correct Answer A contract between two parties , Where buyer receives a
privilege for which he pays a premium ,Where the seller
accepts an obligation for which he receives a fee
True/False
Question Currently in India index options are both European and
American in nature.
Correct Answer False
Multiple Choice Multiple Answer
Question Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation
Multiple Choice Multiple Answer
Question Which of the following are important momentum indicators
used widely?
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) ,
Moving average convergence divergence(MACD)
Select The Blank
Question The Derivative market is divided into Future market and
________ market.
Correct 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
True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True
Match The Following
Question- Correct Answer
Average collection period Similar to debtors
turnover
-How fast the inventory is
being converted
Help measure the
efficiency of utilisation of
assets
-Debt Equity ratio Debt / Equity
Quick assets- Highly liquid assets
Multiple Choice Multiple Answer
Question In a typical stock market cycle which are the types of trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Multiple Choice Single Answer
Question What is a resistance level?
Correct 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
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
Select The Blank
Question ________ measures the efficiency of credit management.
Correct Answer Average collection period
Multiple Choice Single Answer
Question How would you rate a portfolio with 90% investment in
stocks?
Correct 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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question Agriculture account for how much portion of the economy?
Correct Answer Quarter
Multiple Choice Single Answer
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
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
True/False
Question In case of fixed income securities like debentures, you get
the return in the form of dividend.
Correct Answer False
Multiple Choice Single Answer
Question What are primary trends?
Correct Answer Reflection of investor's attitudes towards unfolding
fundamentals in the business cycle
Multiple Choice Single 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/-
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
Multiple Choice Single Answer
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/-
Select The Blank
Question The Dow theory was published in a series of editorials in the
________.
Correct Answer Wall street journal
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 The greater the deviation of the actual returns from the
actual return :-
Correct Answer Greater the variance
Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on
transfer
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question Which are the different types of accounts offered to investors
by the stock brokers?
Correct Answer Cash trading , Margin trading
Multiple Choice Single Answer
Question In a forward contract there is :-
Correct Answer No Exchange of cash
Multiple Choice Single Answer
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
True/False
Question If a rupee weakens against the dollars it has favourable
impact for the exporters.
Correct Answer True
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
Multiple Choice Single Answer
Question The growth period in the industry life cycle is defined as :-
Correct Answer Period of rapid market acceptance and substantial profit
improvement
Multiple Choice Single Answer
Question What is the objective of Portfolio management?
Correct Answer To Minimize risk and maximize return
True/False
Question A rally that develops on contracting volumes is suspect and
warns of a potential trend reversal in price
Correct Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
Correct Answer False
Multiple Choice Single Answer
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
Multiple Choice Single Answer
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/-
Wednesday, March 2, 2011
Security Analysis And Portfolio Management - 6
Security Analysis And Portfolio Management - 6
Multiple Choice Multiple Answer
Question Gilt Edged Securities are :-
Correct Answer Central Govt , State Govt. , Quasi-Govt
Multiple Choice Single Answer
Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
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
Select The Blank
Question The 8% taxable savings bonds are repayable after ________
years.
Correct Answer 6
Multiple Choice Multiple Answer
Question Formula for calculation of portfolio variance requires :-
Correct Answer Expected return on portfolio , Expected return on assets ,
Weight of asset in the portfolio
Multiple Choice Multiple Answer
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
Select The Blank
Question Risk can be referred as the ________ in the return with
respect to the expected return.
Correct Answer Volatility
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
True/False
Question The price earning ratio can be estimated for the firms with
negative earnings per share.
Correct Answer False
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations.
Correct Answer Speculators
Multiple Choice Multiple Answer
Question Who are the constituents of a mutual fund?
Correct Answer Sponsor & trustees , Asset management company ,
Custodian
True/False
Question A share certificate indicates that the investor owns a certain
number of shares.
Correct Answer True
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry
influence account for?
Correct Answer 2/3rd
Multiple Choice Single Answer
Question How can transition phases be projected?
Correct 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
Multiple Choice Multiple Answer
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
Match The Following
Question -Correct Answer
NSE- Nifty
SEBI -Redressal of investor
complaints
NAV- Net asset value
AMFI- Association of mutual
funds of India
Multiple Choice Multiple Answer
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
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
Multiple Choice Single Answer
Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902
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
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
Multiple Choice Single Answer
Question Credit rating companies assign ratings for which of these
investments?
Correct Answer Company deposits
Select The Blank
Question When a debenture is sold to the general public a ________
is appointed.
Correct 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
Multiple Choice Multiple Answer
Question What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Select The Blank
Question Dow Jones transportation average was previously known as
________.
Correct Answer Rail average
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question When was the first mutual fund set up?
Correct Answer 1963
Multiple Choice Single Answer
Question Which market is affected with the improving and higher
growth rate in economy?
Correct Answer Stock market
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question In any Economy, bridge is created between savers and who
need the funds by this system :-
Correct 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
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
True/False
Question Bonds and Debentures represent long term debt
instruments.
Correct Answer False
Multiple Choice Single Answer
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
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
True/False
Question If rupee weakens against the dollar, it has favourable impact
for the importers.
Correct Answer False
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ is the ratio of the market price per share to the
earnings per share.
Correct Answer Price earning ratio
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ is the value today of a stream of cash flows that
occurs in future.
Correct 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
Multiple Choice Single Answer
Question A security represent evidence of :-
Correct Answer A property right
Match The Following
Question- Correct Answer
The yield to maturity is
same as the
-Geometric mean return
or the internal rate of
return
payments and principal
repayment at the time of
maturity
Debt instrument/Bonds Debt instrument/Bonds
The actual yield earned
by an investor on a bond
Realised yield Yield to maturity
Present value interest
factor of annuities and
present value interest
factor
Yield to maturity Interest rate risk
True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
Security Analysis And Portfolio Management - 5
Select The Blank
Question ________ measures the profitability of operations without
considering the influence of financial structure and tax rate.
Correct Answer Earnings power
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
Multiple Choice Single Answer
Question What could be a better approach to flow-of -funds analysis?
Correct Answer An examination of liquidity trends in the banking system
True/False
Question The Asset management company of the mutual fund must
have 50% independent directors.
Correct Answer True
True/False
Question A higher value of current ratio indicates a better short term
solvency of the firm.
Correct Answer True
Multiple Choice Single Answer
Question Investment is a risk free investment when :-
Correct 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
True/False
Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries.
Correct Answer True
Multiple Choice Single Answer
Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost
Multiple Choice Multiple 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
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
Select The Blank
Question Secondary reactions occurs because of ________ which
arise in themarket as a result of over optimism and over
pessimism.
Correct Answer Technical distortions
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
True/False
Question Debt is less riskier source of finance than equity.
Correct Answer False
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
Multiple Choice Single Answer
Question What does flow-of fund analysis help in understanding?
Correct Answer Availability of money for the stock market
True/False
Question The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer True
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning power ,
Projection of future profitability
Multiple Choice Single Answer
Question The general dividend model is based on the principle of :-
Correct Answer Present value of the expected future cash flow
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 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
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
Select The Blank
Question UTI was set up in the year ________.
Correct Answer 1963
Multiple Choice Multiple Answer
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
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
Multiple Choice Multiple Answer
Question The return to the bond investor can be measured in terms of
:-
Correct Answer Realised yield , Current yield , Yield to maturity
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
Select The Blank
Question Debentures rated "BB" refers ________ of timely payment of
interest and principal.
Correct Answer Inadequate safety
Multiple Choice Single Answer
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
Multiple Choice Single 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
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question The bond issuing firm enjoys the flexibility of being able to
call the bonds if :-
Correct Answer Interest rates are falling
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
Multiple Choice Single Answer
Question The growth rate is used to forecast future revenues and
earnings and are inputs in valuing :-
Correct Answer Stable firms
Multiple Choice Single Answer
Question A security analysis is done :-
Correct Answer For decision making for investments
Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
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
Match The Following
Question- Correct Answer
Growth of income- 40-60 % debt, 40-60 %
equities
Current income Short term debt portfolio
Stability of principal- Fixed - income portfolio
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
Select The Blank
Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Multiple Choice Multiple Answer
Question Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme
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
Match The Following
Question- Correct Answer
Ratio used as a measure
of relative value
PEG ratio
The market value of the
firms assets divided by
the replacement cost of
these assets
-Market value to
replacement cost ratio
Key determiner of
revenue multiples
-Profit margin
The market value of the
equity in a firm reflects
the markets expectations
of the firms earnings
power and cash flows.
-Price to book value ratio
Security Analysis And Portfolio Management - 4
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
Multiple Choice Single Answer
Question Capital expenditure -depreciation +change in working capital -(new debt
issued - debt repaid) =
Correct Answer Equity reinvested in business
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question What do you understand by term pioneering stage in the industry life cycle
analysis?
Correct Answer Slow sales growth product recently introduced
Multiple Choice Single Answer
Question In India futures on individual securities have been introduced by :-
Correct Answer BSE & NSE
Multiple Choice Multiple Answer
Question The features of bond are :-
Correct 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
Select The Blank
Question ________ measures the profitability of operations without considering the
influence of financial structure and tax rate.
Correct Answer Earnings power
Select The Blank
Question The 6.________% tax saving bonds of government of India have a tenure of
5 years.
Correct Answer 5
Select The Blank
Question The govt allowed public sector banks and institutions in mutual funds in
________.
Correct Answer Early 90's
Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt equity
ratio
Multiple Choice Single Answer
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/-
Select The Blank
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
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 Single Answer
Question What do you understand by the term redemption price?
Correct 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
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
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry influence account
for?
Correct Answer 2/3rd
Match The Following
Question- Correct Answer
Price pattern- Resistance level
Primary trend -Last between 1-2 years
Intermediate trend- Last between 3 weeks to as long as 6 months
Short term trend -Last 1 to 3-4 weeks
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 With the use of diversification you can reduce the risk.
Correct Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
Correct Answer False
Multiple Choice Single Answer
Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Multiple Choice Single Answer
Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded
annually. What will be the value of his investment after 3 years?
Correct Answer Rs. 29775/-
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
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
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
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 The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True
Select The Blank
Question Acid test ratio is more stringent measure of liquidity compared to the
________.
Correct Answer Current ratio
Multiple Choice Multiple Answer
Question 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
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
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
Correct Answer False
Multiple Choice Single Answer
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
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
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
Multiple Choice Single Answer
Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question Investments could be made in retail government securities through :-
Correct Answer Primary dealers
Multiple Choice Multiple Answer
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
Multiple Choice Multiple 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
Multiple Choice Single Answer
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/-
Multiple Choice Multiple Answer
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
Match The Following
Question- Correct Answer
Weak form model is also termed as -Random walk model
Investors are rational -Efficient market hypothesis
Securities current prices fully reflect all historical information -Weak form EMH
Framework on efficient capital markets, -a review of theory and empirical work
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
Multiple Choice Multiple Answer
Question Gilt Edged Securities are :-
Correct Answer Central Govt , State Govt. , Quasi-Govt
Multiple Choice Single Answer
Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad
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
Select The Blank
Question The 8% taxable savings bonds are repayable after ________
years.
Correct Answer 6
Multiple Choice Multiple Answer
Question Formula for calculation of portfolio variance requires :-
Correct Answer Expected return on portfolio , Expected return on assets ,
Weight of asset in the portfolio
Multiple Choice Multiple Answer
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
Select The Blank
Question Risk can be referred as the ________ in the return with
respect to the expected return.
Correct Answer Volatility
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
True/False
Question The price earning ratio can be estimated for the firms with
negative earnings per share.
Correct Answer False
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations.
Correct Answer Speculators
Multiple Choice Multiple Answer
Question Who are the constituents of a mutual fund?
Correct Answer Sponsor & trustees , Asset management company ,
Custodian
True/False
Question A share certificate indicates that the investor owns a certain
number of shares.
Correct Answer True
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry
influence account for?
Correct Answer 2/3rd
Multiple Choice Single Answer
Question How can transition phases be projected?
Correct 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
Multiple Choice Multiple Answer
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
Match The Following
Question -Correct Answer
NSE- Nifty
SEBI -Redressal of investor
complaints
NAV- Net asset value
AMFI- Association of mutual
funds of India
Multiple Choice Multiple Answer
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
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
Multiple Choice Single Answer
Question When was the Dow theory first published?
Correct Answer Between 1900 and 1902
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
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
Multiple Choice Single Answer
Question Credit rating companies assign ratings for which of these
investments?
Correct Answer Company deposits
Select The Blank
Question When a debenture is sold to the general public a ________
is appointed.
Correct 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
Multiple Choice Multiple Answer
Question What are the different types of profitability ratios?
Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Select The Blank
Question Dow Jones transportation average was previously known as
________.
Correct Answer Rail average
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question When was the first mutual fund set up?
Correct Answer 1963
Multiple Choice Single Answer
Question Which market is affected with the improving and higher
growth rate in economy?
Correct Answer Stock market
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question In any Economy, bridge is created between savers and who
need the funds by this system :-
Correct 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
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
True/False
Question Bonds and Debentures represent long term debt
instruments.
Correct Answer False
Multiple Choice Single Answer
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
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
True/False
Question If rupee weakens against the dollar, it has favourable impact
for the importers.
Correct Answer False
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ is the ratio of the market price per share to the
earnings per share.
Correct Answer Price earning ratio
Multiple Choice Multiple Answer
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
Select The Blank
Question ________ is the value today of a stream of cash flows that
occurs in future.
Correct 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
Multiple Choice Single Answer
Question A security represent evidence of :-
Correct Answer A property right
Match The Following
Question- Correct Answer
The yield to maturity is
same as the
-Geometric mean return
or the internal rate of
return
payments and principal
repayment at the time of
maturity
Debt instrument/Bonds Debt instrument/Bonds
The actual yield earned
by an investor on a bond
Realised yield Yield to maturity
Present value interest
factor of annuities and
present value interest
factor
Yield to maturity Interest rate risk
True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False
Security Analysis And Portfolio Management - 5
Select The Blank
Question ________ measures the profitability of operations without
considering the influence of financial structure and tax rate.
Correct Answer Earnings power
True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False
Multiple Choice Single Answer
Question What could be a better approach to flow-of -funds analysis?
Correct Answer An examination of liquidity trends in the banking system
True/False
Question The Asset management company of the mutual fund must
have 50% independent directors.
Correct Answer True
True/False
Question A higher value of current ratio indicates a better short term
solvency of the firm.
Correct Answer True
Multiple Choice Single Answer
Question Investment is a risk free investment when :-
Correct 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
True/False
Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries.
Correct Answer True
Multiple Choice Single Answer
Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost
Multiple Choice Multiple 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
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
Select The Blank
Question Secondary reactions occurs because of ________ which
arise in themarket as a result of over optimism and over
pessimism.
Correct Answer Technical distortions
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
True/False
Question Debt is less riskier source of finance than equity.
Correct Answer False
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
Multiple Choice Single Answer
Question What does flow-of fund analysis help in understanding?
Correct Answer Availability of money for the stock market
True/False
Question The normal relationship is for the volume to expand on rallies
and contract on declines.
Correct Answer True
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question The security analysis process will achieve :-
Correct Answer True picture of a company , Normal earning power ,
Projection of future profitability
Multiple Choice Single Answer
Question The general dividend model is based on the principle of :-
Correct Answer Present value of the expected future cash flow
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 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
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
Select The Blank
Question UTI was set up in the year ________.
Correct Answer 1963
Multiple Choice Multiple Answer
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
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
Multiple Choice Multiple Answer
Question The return to the bond investor can be measured in terms of
:-
Correct Answer Realised yield , Current yield , Yield to maturity
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
Select The Blank
Question Debentures rated "BB" refers ________ of timely payment of
interest and principal.
Correct Answer Inadequate safety
Multiple Choice Single Answer
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
Multiple Choice Single 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
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question The bond issuing firm enjoys the flexibility of being able to
call the bonds if :-
Correct Answer Interest rates are falling
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
Multiple Choice Single Answer
Question The growth rate is used to forecast future revenues and
earnings and are inputs in valuing :-
Correct Answer Stable firms
Multiple Choice Single Answer
Question A security analysis is done :-
Correct Answer For decision making for investments
Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
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
Match The Following
Question- Correct Answer
Growth of income- 40-60 % debt, 40-60 %
equities
Current income Short term debt portfolio
Stability of principal- Fixed - income portfolio
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
Select The Blank
Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Multiple Choice Multiple Answer
Question Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme
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
Match The Following
Question- Correct Answer
Ratio used as a measure
of relative value
PEG ratio
The market value of the
firms assets divided by
the replacement cost of
these assets
-Market value to
replacement cost ratio
Key determiner of
revenue multiples
-Profit margin
The market value of the
equity in a firm reflects
the markets expectations
of the firms earnings
power and cash flows.
-Price to book value ratio
Security Analysis And Portfolio Management - 4
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
Multiple Choice Single Answer
Question Capital expenditure -depreciation +change in working capital -(new debt
issued - debt repaid) =
Correct Answer Equity reinvested in business
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question What do you understand by term pioneering stage in the industry life cycle
analysis?
Correct Answer Slow sales growth product recently introduced
Multiple Choice Single Answer
Question In India futures on individual securities have been introduced by :-
Correct Answer BSE & NSE
Multiple Choice Multiple Answer
Question The features of bond are :-
Correct 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
Select The Blank
Question ________ measures the profitability of operations without considering the
influence of financial structure and tax rate.
Correct Answer Earnings power
Select The Blank
Question The 6.________% tax saving bonds of government of India have a tenure of
5 years.
Correct Answer 5
Select The Blank
Question The govt allowed public sector banks and institutions in mutual funds in
________.
Correct Answer Early 90's
Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt equity
ratio
Multiple Choice Single Answer
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/-
Select The Blank
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
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 Single Answer
Question What do you understand by the term redemption price?
Correct 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
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
True/False
Question Five paisa.com is an example of on line trading portal.
Correct Answer True
Multiple Choice Single Answer
Question What is the percentage of variation the market and industry influence account
for?
Correct Answer 2/3rd
Match The Following
Question- Correct Answer
Price pattern- Resistance level
Primary trend -Last between 1-2 years
Intermediate trend- Last between 3 weeks to as long as 6 months
Short term trend -Last 1 to 3-4 weeks
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 With the use of diversification you can reduce the risk.
Correct Answer True
True/False
Question Post office monthly schemes have a 10 year tenor.
Correct Answer False
Multiple Choice Single Answer
Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Multiple Choice Single Answer
Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded
annually. What will be the value of his investment after 3 years?
Correct Answer Rs. 29775/-
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
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
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
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 The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True
Select The Blank
Question Acid test ratio is more stringent measure of liquidity compared to the
________.
Correct Answer Current ratio
Multiple Choice Multiple Answer
Question 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
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
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
Correct Answer False
Multiple Choice Single Answer
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
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
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
Multiple Choice Single Answer
Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question Investments could be made in retail government securities through :-
Correct Answer Primary dealers
Multiple Choice Multiple Answer
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
Multiple Choice Multiple 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
Multiple Choice Single Answer
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/-
Multiple Choice Multiple Answer
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
Match The Following
Question- Correct Answer
Weak form model is also termed as -Random walk model
Investors are rational -Efficient market hypothesis
Securities current prices fully reflect all historical information -Weak form EMH
Framework on efficient capital markets, -a review of theory and empirical work
True/False
Question Quick assets consist of current assets less inventories.
Correct Answer True
Security Analysis And Portfolio Management - 3
Security Analysis And Portfolio Management - 3
Multiple Choice Single Answer
Question
A Portfolio means :-
Correct Answer
Combination of assets
Select The Blank
Question
The margining system is future contract is based on ________ recommendations.
Correct Answer
J R verma committee
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
Multiple Choice Single Answer
Question
If the price of a share at the beginning of the year was Rs.70/-, dividend received during the year was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer
0.2
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
Multiple Choice Single Answer
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
Multiple Choice Multiple Answer
Question
Return can be in the form of :-
Correct Answer
Dividends , Interests , Capital appreciation
Select The Blank
Question
Under ________ EMH investors cannot earn abnormal/superior profits on securities on a consistent basis.
Correct Answer
Semi-strong form
Multiple Choice Multiple Answer
Question
Which are the most popular types of orders placed through an online trading account?
Correct Answer
Limit orders , Market orders
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
Multiple Choice Single Answer
Question
What do you understand by the term Net asset value (NAV)?
Correct Answer
Market value of securities divided by the total units
Multiple Choice Single Answer
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
Match The Following
Question
Correct Answer
Technical collaboration of Bharat Forge with SIFCO industries USA
1981
Bharat Forge was incorporated at Mumbai
1961
Shares of 100 each subdivided of Bharat forge
1971
930000 bonus shares issued by Bharat Forge
1976
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
Select The Blank
Question
All trades in the futures market are cash settled on a ________ basis.
Correct Answer
T+1
True/False
Question
The ratios between profits and investments are called rate of return measures.
Correct Answer
True
Multiple Choice Multiple Answer
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.
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
Match The Following
Question
Correct Answer
Turnover ratios
Help measure the efficiency of utilisation of assets
Debt Equity ratio
Debt / Equity
Quick assets
Highly liquid assets
Average collection period
Similar to debtors turnover
Multiple Choice Single Answer
Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually. What will be the value of his investment after 3 years?
Correct Answer
Rs. 29775/-
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 Single Answer
Question
Stock Exchanges are the part of :-
Correct Answer
Secondary market
Multiple Choice Single Answer
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/-
Multiple Choice Single Answer
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
Multiple Choice Single 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/-
Multiple Choice Single Answer
Question
In any Economy, bridge is created between savers and who need the funds by this system :-
Correct Answer
Financial
True/False
Question
The returns of sector specific funds are solely dependant on the performance of the respective sectors / industries.
Correct Answer
True
Multiple Choice Multiple Answer
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
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
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer
Over priced
True/False
Question
European style options are more expensive than American style because they offer greater flexibility to the buyer.
Correct Answer
False
Select The Blank
Question
The 8% taxable savings bonds are repayable after ________ years.
Correct Answer
6
True/False
Question
If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer
True
True/False
Question
A share certificate indicates that the investor owns a certain number of shares.
Correct Answer
True
Select The Blank
Question
________ ratio is the ratio of net profit to the sales.
Correct Answer
Net Profit Margin
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 , H-Model unlike the classic two stage model
True/False
Question
The Asset management company of the mutual fund must have 50% independent directors.
Correct Answer
True
True/False
Question
Prices of stocks usually move in trends.
Correct Answer
True
Select The Blank
Question
Debentures rated ________ are judged to offer sufficient safety of timely payment of interest and repayment of principal.
Correct Answer
"BBB"
True/False
Question
A segment is more attractive when there are actual or potential substitutes for the product.
Correct Answer
True
True/False
Question
The sideways trend is essentially a transitional one which separates the two major market movements.
Correct Answer
True
Multiple Choice Multiple 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
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
Select The Blank
Question
The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer
5
Multiple Choice Single Answer
Question
In a perfectly efficient market all securities are correctly priced means there are no :-
Correct Answer
Under priced and over priced securities
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
Multiple Choice Single Answer
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/-
Security Analysis And Portfolio Management - 2
True/False
Question
When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer
False
True/False
Question
Bonds and Debentures represent long term debt instruments.
Correct Answer
False
Select The Blank
Question
________ deal in futures to offset a pre-existing risk.
Correct Answer
Hedger
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
Multiple Choice Single Answer
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/-
Multiple Choice Multiple Answer
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
True/False
Question
Penetration of a trend line denotes a bearish phase.
Correct Answer
False
Multiple Choice Single Answer
Question
Co variance of asset with market portfolio 85 and variance of market portfolio is 100 then beta is :-
Correct Answer
0.0085
Select The Blank
Question
The Dow theory states that there are simultaneously ________ movements in the stock market.
Correct Answer
3
True/False
Question
The ratios between profits and investments are called rate of return measures.
Correct Answer
True
Multiple Choice Multiple Answer
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
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
What is Bottom-Up approach also known as?
Correct Answer
Company-industry-economy approach
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
Multiple Choice Single Answer
Question
If the price of a share at the beginning of the year was Rs.100/-, no dividend received during the year and the price at the end is Rs.115/-. What is the rate of return?
Correct Answer
0.15
Select The Blank
Question
An investor with a higher tolerance of risk should tilt his portfolio in favour of ________.
Correct Answer
Stocks
True/False
Question
Investment decisions can be viewed as an integrated process to which security analysis makes its unique contribution.
Correct Answer
True
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question
What is a resistance level?
Correct Answer
A point where there is opposition to further price rise
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
Multiple Choice Multiple Answer
Question
An option is :-
Correct Answer
A contract between two parties , Where buyer receives a privilege for which he pays a premium , Where the seller accepts an obligation for which he receives a fee
Select The Blank
Question
________ is affected by the leverage decisions of the firm.
Correct Answer
Return on equity
Select The Blank
Question
The compounded annual return of Kisan Vikas patra is ________.
Correct Answer
0.084
Select The Blank
Question
________ ratio indicates the margin available after meeting the manufacturing expenses.
Correct Answer
Gross Profit margin
True/False
Question
With the use of diversification you can reduce the risk.
Correct Answer
True
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
Following a decline, heavy volume with little price change is indicative of accumulation and is normally a bearish factor.
Correct Answer
False
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
Match The Following
Question
Correct 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
Value at a certain future date today of a stream of cash flows that occurs over a period of time.
Future Value
Series of equal payments or receipts occurring at regular intervals of time.
Present value of annuity
Select The Blank
Question
The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer
Early 90's
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 Single Answer
Question
A security analysis is done :-
Correct Answer
For decision making for investments
Select The Blank
Question
All trades in the futures market are cash settled on a ________ basis.
Correct Answer
T+1
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
Select The Blank
Question
S&P NSE 50 index is known as ________.
Correct Answer
NIFTY
Multiple Choice Multiple Answer
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
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually. What will be the value of his investment after 3 years?
Correct Answer
Rs. 29775/-
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
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
Multiple Choice Single Answer
Question
What is the goal of the Dow theory?
Correct Answer
To determine changes in the primary or major movement in the market
Multiple Choice Multiple Answer
Question
What are the features of Retail government securities (G-secs) ?
Correct Answer
Safest investment option available , Demat account is required for investment , Choice of tenure varies from less than 1 year to 30 years
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
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
Multiple Choice Multiple Answer
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
Match The Following
Question
Correct Answer
Gross profit margin
Indicates the margin available after meeting the manufacturing expenses
ROE
Measure the profitability of equity funds
Earnings power
Measure the profitability of operations without considering the influence of financial structure and tax rate
Net profit margin
Ratio if net profit to sales
Security Analysis & Portfolio Management - 1
Select The Blank
Question
________involves a simultaneous sale and repurchase agreement.
Correct Answer
Repos
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
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
Market value to replacement cost ratio
True/False
Question
Bearish actions come from a series of declining peaks and troughs.
Correct Answer
True
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question
What are the important macro economic indicators?
Correct Answer
GNP growth rate , Price Conditions , Monsoons
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 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
Multiple Choice Single Answer
Question
The growth period in the industry life cycle is defined as :-
Correct Answer
Period of rapid market acceptance and substantial profit improvement
True/False
Question
A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct 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
Multiple Choice Multiple Answer
Question
The underlying assumptions of Technical analysis are that :-
Correct Answer
Prices move in predictable patterns , Market value is determined by supply & demand , Investors are emotional than being rational
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Select The Blank
Question
________ absorbs the excess demand or supply generated by hedgers and assume the risk of price fluctuations.
Correct Answer
Speculators
Multiple Choice Multiple Answer
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
True/False
Question
The price earning ratio can be estimated for the firms with negative earnings per share.
Correct Answer
False
Multiple Choice Single Answer
Question
What is Gross National Product ?
Correct Answer
Gross income generated from within the country
Multiple Choice Multiple Answer
Question
Formula for calculation of portfolio variance requires :-
Correct Answer
Expected return on portfolio , Expected return on assets , Weight of asset in the portfolio
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer
Over priced
Multiple Choice Single Answer
Question
What are sector specific funds?
Correct Answer
Scheme which invest in certain sectors
Multiple Choice Single Answer
Question
In India we have index futures contracts based on :-
Correct Answer
S&P CNX Nifty and the BSE sensex
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
Multiple Choice Single Answer
Question
What are intermediate trends?
Correct Answer
They are counter-cyclical trends within the confines of a primary trend
Multiple Choice Single Answer
Question
Investments could be made in retail government securities through :-
Correct Answer
Primary dealers
Your Answer
Primary dealers
Multiple Choice Single Answer
Question
The price of the index futures contract is defined as :-
Correct Answer
Future price = Spot price + Carry cost
Select The Blank
Question
When a debenture is sold to the general public a ________ is appointed.
Correct Answer
Trustee
Multiple Choice Single Answer
Question
During the 1980's rate of savings in India has hovered around what percentage?
Correct Answer
0.21
True/False
Question
PPF is a good retirement planning and tax saving vehicle.
Correct Answer
True
Select The Blank
Question
The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer
5
Multiple Choice Single Answer
Question
Financial assets can be classified as :-
Correct Answer
Marketable and non-marketable
True/False
Question
In case of fixed income securities like debentures, you get the return in the form of dividend.
Correct Answer
False
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
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
If the price of a share at the beginning of the year was Rs.100/-, no dividend received during the year and the price at the end is Rs.115/-. What is the rate of return?
Correct Answer
0.15
Multiple Choice Multiple Answer
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
Select The Blank
Question
The compounded annual return of Kisan Vikas patra is ________.
Correct Answer
0.084
True/False
Question
Sensex is the index of Calcutta Stock Exchange.
Correct Answer
False
Select The Blank
Question
Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer
Current ratio
Multiple Choice Multiple Answer
Question
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
A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer
True
Select The Blank
Question
________ of companies may open at higher or lower price than the issue price.
Correct Answer
IPO's
Match The Following
Question
Correct 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
Value at a certain future date today of a stream of cash flows that occurs over a period of time.
Future Value
Series of equal payments or receipts occurring at regular intervals of time.
Present value of annuity
Match The Following
Question
Correct Answer
Development of Dow's principles
William Peter Hamilton
Breadth Indicator
Advance/decline line
Momentum indicator
MACD
Trend lines
Useful tool in technical analysis
True/False
Question
Post office monthly schemes have a 10 year tenor.
Correct Answer
False
Multiple Choice Single Answer
Question
The growth rate is used to forecast future revenues and earnings and are inputs in valuing :-
Correct Answer
Stable firms
Multiple Choice Single Answer
Question
A Portfolio means :-
Correct Answer
Combination of assets
Select The Blank
Question
The margining system is future contract is based on ________ recommendations.
Correct Answer
J R verma committee
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
Multiple Choice Single Answer
Question
If the price of a share at the beginning of the year was Rs.70/-, dividend received during the year was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer
0.2
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
Multiple Choice Single Answer
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
Multiple Choice Multiple Answer
Question
Return can be in the form of :-
Correct Answer
Dividends , Interests , Capital appreciation
Select The Blank
Question
Under ________ EMH investors cannot earn abnormal/superior profits on securities on a consistent basis.
Correct Answer
Semi-strong form
Multiple Choice Multiple Answer
Question
Which are the most popular types of orders placed through an online trading account?
Correct Answer
Limit orders , Market orders
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
Multiple Choice Single Answer
Question
What do you understand by the term Net asset value (NAV)?
Correct Answer
Market value of securities divided by the total units
Multiple Choice Single Answer
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
Match The Following
Question
Correct Answer
Technical collaboration of Bharat Forge with SIFCO industries USA
1981
Bharat Forge was incorporated at Mumbai
1961
Shares of 100 each subdivided of Bharat forge
1971
930000 bonus shares issued by Bharat Forge
1976
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
Select The Blank
Question
All trades in the futures market are cash settled on a ________ basis.
Correct Answer
T+1
True/False
Question
The ratios between profits and investments are called rate of return measures.
Correct Answer
True
Multiple Choice Multiple Answer
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.
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
Match The Following
Question
Correct Answer
Turnover ratios
Help measure the efficiency of utilisation of assets
Debt Equity ratio
Debt / Equity
Quick assets
Highly liquid assets
Average collection period
Similar to debtors turnover
Multiple Choice Single Answer
Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually. What will be the value of his investment after 3 years?
Correct Answer
Rs. 29775/-
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 Single Answer
Question
Stock Exchanges are the part of :-
Correct Answer
Secondary market
Multiple Choice Single Answer
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/-
Multiple Choice Single Answer
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
Multiple Choice Single 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/-
Multiple Choice Single Answer
Question
In any Economy, bridge is created between savers and who need the funds by this system :-
Correct Answer
Financial
True/False
Question
The returns of sector specific funds are solely dependant on the performance of the respective sectors / industries.
Correct Answer
True
Multiple Choice Multiple Answer
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
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
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer
Over priced
True/False
Question
European style options are more expensive than American style because they offer greater flexibility to the buyer.
Correct Answer
False
Select The Blank
Question
The 8% taxable savings bonds are repayable after ________ years.
Correct Answer
6
True/False
Question
If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer
True
True/False
Question
A share certificate indicates that the investor owns a certain number of shares.
Correct Answer
True
Select The Blank
Question
________ ratio is the ratio of net profit to the sales.
Correct Answer
Net Profit Margin
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 , H-Model unlike the classic two stage model
True/False
Question
The Asset management company of the mutual fund must have 50% independent directors.
Correct Answer
True
True/False
Question
Prices of stocks usually move in trends.
Correct Answer
True
Select The Blank
Question
Debentures rated ________ are judged to offer sufficient safety of timely payment of interest and repayment of principal.
Correct Answer
"BBB"
True/False
Question
A segment is more attractive when there are actual or potential substitutes for the product.
Correct Answer
True
True/False
Question
The sideways trend is essentially a transitional one which separates the two major market movements.
Correct Answer
True
Multiple Choice Multiple 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
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
Select The Blank
Question
The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer
5
Multiple Choice Single Answer
Question
In a perfectly efficient market all securities are correctly priced means there are no :-
Correct Answer
Under priced and over priced securities
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
Multiple Choice Single Answer
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/-
Security Analysis And Portfolio Management - 2
True/False
Question
When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer
False
True/False
Question
Bonds and Debentures represent long term debt instruments.
Correct Answer
False
Select The Blank
Question
________ deal in futures to offset a pre-existing risk.
Correct Answer
Hedger
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
Multiple Choice Single Answer
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/-
Multiple Choice Multiple Answer
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
True/False
Question
Penetration of a trend line denotes a bearish phase.
Correct Answer
False
Multiple Choice Single Answer
Question
Co variance of asset with market portfolio 85 and variance of market portfolio is 100 then beta is :-
Correct Answer
0.0085
Select The Blank
Question
The Dow theory states that there are simultaneously ________ movements in the stock market.
Correct Answer
3
True/False
Question
The ratios between profits and investments are called rate of return measures.
Correct Answer
True
Multiple Choice Multiple Answer
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
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
What is Bottom-Up approach also known as?
Correct Answer
Company-industry-economy approach
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
Multiple Choice Single Answer
Question
If the price of a share at the beginning of the year was Rs.100/-, no dividend received during the year and the price at the end is Rs.115/-. What is the rate of return?
Correct Answer
0.15
Select The Blank
Question
An investor with a higher tolerance of risk should tilt his portfolio in favour of ________.
Correct Answer
Stocks
True/False
Question
Investment decisions can be viewed as an integrated process to which security analysis makes its unique contribution.
Correct Answer
True
Multiple Choice Single Answer
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
Multiple Choice Single Answer
Question
What is a resistance level?
Correct Answer
A point where there is opposition to further price rise
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
Multiple Choice Multiple Answer
Question
An option is :-
Correct Answer
A contract between two parties , Where buyer receives a privilege for which he pays a premium , Where the seller accepts an obligation for which he receives a fee
Select The Blank
Question
________ is affected by the leverage decisions of the firm.
Correct Answer
Return on equity
Select The Blank
Question
The compounded annual return of Kisan Vikas patra is ________.
Correct Answer
0.084
Select The Blank
Question
________ ratio indicates the margin available after meeting the manufacturing expenses.
Correct Answer
Gross Profit margin
True/False
Question
With the use of diversification you can reduce the risk.
Correct Answer
True
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
Following a decline, heavy volume with little price change is indicative of accumulation and is normally a bearish factor.
Correct Answer
False
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
Match The Following
Question
Correct 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
Value at a certain future date today of a stream of cash flows that occurs over a period of time.
Future Value
Series of equal payments or receipts occurring at regular intervals of time.
Present value of annuity
Select The Blank
Question
The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer
Early 90's
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 Single Answer
Question
A security analysis is done :-
Correct Answer
For decision making for investments
Select The Blank
Question
All trades in the futures market are cash settled on a ________ basis.
Correct Answer
T+1
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
Select The Blank
Question
S&P NSE 50 index is known as ________.
Correct Answer
NIFTY
Multiple Choice Multiple Answer
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
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
Multiple Choice Multiple Answer
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
Multiple Choice Single Answer
Question
Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually. What will be the value of his investment after 3 years?
Correct Answer
Rs. 29775/-
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
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
Multiple Choice Single Answer
Question
What is the goal of the Dow theory?
Correct Answer
To determine changes in the primary or major movement in the market
Multiple Choice Multiple Answer
Question
What are the features of Retail government securities (G-secs) ?
Correct Answer
Safest investment option available , Demat account is required for investment , Choice of tenure varies from less than 1 year to 30 years
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
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
Multiple Choice Multiple Answer
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
Match The Following
Question
Correct Answer
Gross profit margin
Indicates the margin available after meeting the manufacturing expenses
ROE
Measure the profitability of equity funds
Earnings power
Measure the profitability of operations without considering the influence of financial structure and tax rate
Net profit margin
Ratio if net profit to sales
Security Analysis & Portfolio Management - 1
Select The Blank
Question
________involves a simultaneous sale and repurchase agreement.
Correct Answer
Repos
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
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
Market value to replacement cost ratio
True/False
Question
Bearish actions come from a series of declining peaks and troughs.
Correct Answer
True
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
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
Question
What are the important macro economic indicators?
Correct Answer
GNP growth rate , Price Conditions , Monsoons
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 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
Multiple Choice Single Answer
Question
The growth period in the industry life cycle is defined as :-
Correct Answer
Period of rapid market acceptance and substantial profit improvement
True/False
Question
A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct 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
Multiple Choice Multiple Answer
Question
The underlying assumptions of Technical analysis are that :-
Correct Answer
Prices move in predictable patterns , Market value is determined by supply & demand , Investors are emotional than being rational
Multiple Choice Multiple Answer
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
Multiple Choice Multiple Answer
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
Select The Blank
Question
________ absorbs the excess demand or supply generated by hedgers and assume the risk of price fluctuations.
Correct Answer
Speculators
Multiple Choice Multiple Answer
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
True/False
Question
The price earning ratio can be estimated for the firms with negative earnings per share.
Correct Answer
False
Multiple Choice Single Answer
Question
What is Gross National Product ?
Correct Answer
Gross income generated from within the country
Multiple Choice Multiple Answer
Question
Formula for calculation of portfolio variance requires :-
Correct Answer
Expected return on portfolio , Expected return on assets , Weight of asset in the portfolio
Select The Blank
Question
A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer
Over priced
Multiple Choice Single Answer
Question
What are sector specific funds?
Correct Answer
Scheme which invest in certain sectors
Multiple Choice Single Answer
Question
In India we have index futures contracts based on :-
Correct Answer
S&P CNX Nifty and the BSE sensex
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
Multiple Choice Single Answer
Question
What are intermediate trends?
Correct Answer
They are counter-cyclical trends within the confines of a primary trend
Multiple Choice Single Answer
Question
Investments could be made in retail government securities through :-
Correct Answer
Primary dealers
Your Answer
Primary dealers
Multiple Choice Single Answer
Question
The price of the index futures contract is defined as :-
Correct Answer
Future price = Spot price + Carry cost
Select The Blank
Question
When a debenture is sold to the general public a ________ is appointed.
Correct Answer
Trustee
Multiple Choice Single Answer
Question
During the 1980's rate of savings in India has hovered around what percentage?
Correct Answer
0.21
True/False
Question
PPF is a good retirement planning and tax saving vehicle.
Correct Answer
True
Select The Blank
Question
The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer
5
Multiple Choice Single Answer
Question
Financial assets can be classified as :-
Correct Answer
Marketable and non-marketable
True/False
Question
In case of fixed income securities like debentures, you get the return in the form of dividend.
Correct Answer
False
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
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
If the price of a share at the beginning of the year was Rs.100/-, no dividend received during the year and the price at the end is Rs.115/-. What is the rate of return?
Correct Answer
0.15
Multiple Choice Multiple Answer
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
Select The Blank
Question
The compounded annual return of Kisan Vikas patra is ________.
Correct Answer
0.084
True/False
Question
Sensex is the index of Calcutta Stock Exchange.
Correct Answer
False
Select The Blank
Question
Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer
Current ratio
Multiple Choice Multiple Answer
Question
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
A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer
True
Select The Blank
Question
________ of companies may open at higher or lower price than the issue price.
Correct Answer
IPO's
Match The Following
Question
Correct 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
Value at a certain future date today of a stream of cash flows that occurs over a period of time.
Future Value
Series of equal payments or receipts occurring at regular intervals of time.
Present value of annuity
Match The Following
Question
Correct Answer
Development of Dow's principles
William Peter Hamilton
Breadth Indicator
Advance/decline line
Momentum indicator
MACD
Trend lines
Useful tool in technical analysis
True/False
Question
Post office monthly schemes have a 10 year tenor.
Correct Answer
False
Multiple Choice Single Answer
Question
The growth rate is used to forecast future revenues and earnings and are inputs in valuing :-
Correct Answer
Stable firms
Tuesday, March 1, 2011
Project Finance - 3
Project Finance - 3
Select The Blank
Question
The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.
Correct Answer
Detailed Project report
Multiple Choice Single Answer
Question
End use method of Commercial appraisal technique is :-
Correct Answer
A list of industries wherein the product is used is made and quantity and volume is arrived at
True/False
Question
The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer
True
Select The Blank
Question
Depreciation is sometimes treated as ________ funds.
Correct Answer
Source
Multiple Choice Multiple Answer
Question
Casual methods of Demand forecasting consists of :-
Correct Answer
Consumption-level method , Econometric method
Multiple Choice Multiple Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Multiple Choice Single Answer
Question
The statement which shows the movement of cash into and out of firm's kittie is known as :-
Correct Answer
Cash flow statement
True/False
Question
Name of the finance manager comes under the Project organisation category of the Project report.
Correct Answer
True
Multiple Choice Single Answer
Question
Cost of laying roads comes under :-
Correct Answer
Land and site cost
True/False
Question
Debt Service means payment of installments and interest against an amount borrowed as per terms of loan.
Correct Answer
True
Multiple Choice Single Answer
Question
Infrastructural projects include :-
Correct Answer
Power Generation and Distribution
True/False
Question
The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.
Correct Answer
False
Select The Blank
Question
A Project has a ________ represented by growth, maturity and decay.
Correct Answer
Life cycle
Select The Blank
Question
Position regarding requirement and training of operational staff comes under the ________ category of Project report.
Correct Answer
Project organisation
Multiple Choice Single Answer
Question
Receivables is categorised under :-
Correct Answer
Current assets and liabilities
True/False
Question
Managerial problems in a project are the most pervasive.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Disposition of funds includes :-
Correct Answer
Increase in working capital , Preliminary expenses , Dividend
True/False
Question
A project is unique and no two projects are similar.
Correct Answer True
True/False
Question
The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The objectives of the funds flow statement is as follows :-
Correct Answer
To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business
Select The Blank
Question
Under the SPACE Model, Customer loyalty is determined under the ________ dimension.
Correct Answer
Company's competitive advantage
True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer
True
Multiple Choice Single Answer
Question
The ratio which indicates the ability of the company to meet current obligations is termed as :-
Correct Answer
Current ratio
Multiple Choice Multiple Answer
Question
While choosing the location for a project, the following factors should be considered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Multiple Choice Multiple Answer
Question
The sources of long term and medium term finance are :-
Correct Answer
Equity shares , Public deposit
Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Match The Following
Question
Correct Answer
Organisation and Management
Strikes/lay-offs/lockouts etc.
Material inputs and utilities
Stock of raw material
Working capital
Sanctioned bank limit
Marketing
Pricing policy
Multiple Choice Multiple Answer
Question
Management qualities includes :-
Correct Answer
Honesty , Financial resources , Initiative
Select The Blank
Question
________ in liabilities involves inflow of funds.
Correct Answer
Increase
Select The Blank
Question
The ________ market is longer the order of the day since this is an era of professionalization and specialised services are available at cost.
Correct Answer
Monopolistic
Multiple Choice Multiple Answer
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Moving Averages method , Trend Projection method
Multiple Choice Single Answer
Question
Borrower's contribution towards Working capital is known as :-
Correct Answer
Margin money
Multiple Choice Single Answer
Question
A project objective which states "What' is to be viewed" is termed as :-
Correct Answer
Strategic perspective
Multiple Choice Single Answer
Question
The basic characteristic of a project is :-
Correct Answer
That it involves current outlay of funds in expectation of future benefits
Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Select The Blank
Question
Under ________ method, the forecasts are modified in the light of observed errors.
Correct Answer
Exponential smoothing
Multiple Choice Single Answer
Question
The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :-
Correct Answer
Internal rate of return
Multiple Choice Multiple Answer
Question
In the Detailed Project Report, Technical aspects includes :-
Correct Answer
Plant capacity , Quality standards , Raw material requirement
True/False
Question
Delay in recruitment of staff may lead to cost and time overrun
Correct Answer
True
Multiple Choice Single Answer
Question
The basic document for facilitating Project financing is the :-
Correct Answer
Detailed Project report
Multiple Choice Multiple Answer
Question
External sources of cash are as follows :-
Correct Answer
Issue of new shares , Long term loans , Short term borrowings
Multiple Choice Multiple Answer
Question
The following are the sources of funds :-
Correct Answer
Operating Profit , Non operating Income
Select The Blank
Question
Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose.
Correct Answer
Dividend
Multiple Choice Multiple Answer
Question
Limitations of fund flow statement are :-
Correct Answer
It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions
Match The Following
Question
Correct Answer
Project appraisal
It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment
Program
It is large in scope, is activity oriented and is not necessarily time bound
Project
It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources
Pre-feasibility study
It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising
Multiple Choice Single Answer
Question
Psychographic market appraisal answers to :-
Correct Answer
Why they buy?
Project Finance - 2
Multiple Choice Multiple Answer
Question
Financing plans consists of :-
Correct Answer
Internal accruals , Share capital , Term loans
Multiple Choice Multiple Answer
Question
Ratios relating to working capital are :-
Correct Answer
Current ratio , Internal measure , Quick ratio
True/False
Question
Export Market is a technique used for forecasting under Commercial appraisal technique.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The sources of cash are :-
Correct Answer
Cash from operations , Sale of machinery , Issue of new shares
Multiple Choice Single Answer
Question
Past trend method of Commercial appraisal technique is :-
Correct Answer
Adopted as a guide depending on the consumption pattern of the society as a whole
Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Select The Blank
Question
Detailed Project Report is generally prepared from a ________ report with additional information.
Correct Answer
Feasibility
Multiple Choice Single Answer
Question
The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Multiple Choice Single Answer
Question
The acronym for 'LPG' is :-
Correct Answer
Liberalisation, Privatisation and Globalisation
True/False
Question
Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Defaults category of the Project report may be in respect of :-
Correct Answer
Term loans , Principal , Interest
Multiple Choice Multiple Answer
Question
The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer
Stars , Question marks
Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer
Marketing
Multiple Choice Single Answer
Question
Cost of the Project encompasses :-
Correct Answer
The total of all items of outlay associated with a project
Select The Blank
Question
Cost of fencing comes under the ________ category of the Project report.
Correct Answer
Land and site development
Multiple Choice Multiple Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Select The Blank
Question
Inflow of funds may not necessarily result in ________.
Correct Answer
Inflow of cash
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.
Correct Answer
True
Multiple Choice Single Answer
Question
Sources of funds include :-
Correct Answer
Increase in secured borrowing
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails, Products call for Hold.
Correct Answer
Average Business Strength and Medium Industry Attractiveness
Multiple Choice Multiple Answer
Question
As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
True/False
Question
Ratios are based only on the information which has been recorded in the financial statements.
Correct Answer
True
True/False
Question
Trend projection method is the important technique for forecasting demand.
Correct Answer
True
Multiple Choice Single Answer
Question
"Fly by night" operator mentality is a :-
Correct Answer
Management quality
Multiple Choice Multiple Answer
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Multiple Choice Single Answer
Question
A Project is a temporary endeavor to achieve some specific objectives within a :-
Correct Answer
Predefined time
Multiple Choice Single Answer
Question
Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer
Cost and time overrun
True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
Multiple Choice Multiple Answer
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Multiple Answer
Question
After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :-
Correct Answer
Aggressive Posture , Competitive Posture , Defensive Posture
True/False
Question
The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects.
Correct Answer
True
Multiple Choice Single Answer
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
True/False
Question
Change in the project concept itself may lead to cost and time overrun.
Correct Answer
True
Select The Blank
Question
The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach.
Correct Answer
Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment
Select The Blank
Question
Details regarding Internal accruals comes under the ________ category of Project report.
Correct Answer
Financing plan
Match The Following
Question
Correct Answer
Increase in current liabilities
Decreases working capital
Increase in liabilities
Inflow of funds
Decrease in liabilities
Outflow of funds
Increase in current assets
Increases working capital
Multiple Choice Multiple Answer
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Multiple Choice Multiple Answer
Question
The data for ratio analysis is obtained from :-
Correct Answer
Profit and Loss Account , Balance Sheet
Multiple Choice Single Answer
Question
The industrial concern earned profits by increasing the sales volume under the :-
Correct Answer
Sales concept
Multiple Choice Single Answer
Question
The entire life of the project is taken into account under :-
Correct Answer
Average rate of return method
Match The Following
Question
Correct Answer
General functional layout
Present the general relationship between equipment buildings and civil works
Location
Broad area such as city, industrial belt etc.
Site
Specific piece of land where the project would be set up
Plant layout
Physical layout of the factory
Multiple Choice Single Answer
Question
Geographic market appraisal answers to :-
Correct Answer
Where do the customers live?
True/False
Question
In the BCG Matrix, the key term of Cash Cows require further commitment of funds.
Correct Answer
False
True/False
Question
For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.
Correct Answer
False
Select The Blank
Question
A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.
Correct Answer
Share
Select The Blank
Question
Commission outstanding is ________ of funds.
Correct Answer
Application
Project Finance - 1
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question
The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.
Correct Answer
Detailed Project report
True/False
Question
The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Multiple Choice Single Answer
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price - Variables)
True/False
Question
Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back.
Correct Answer
True
Multiple Choice Single Answer
Question
Liabilities side of Balance sheet includes :-
Correct Answer
Unsecured loans
Multiple Choice Single Answer
Question
Net Working Capital means :-
Correct Answer
Current assets less Current liabilities
Multiple Choice Multiple Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.
Correct Answer
True
True/False
Question
Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to the organisation.
Correct Answer
True
Select The Blank
Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.
Correct Answer
Fund
Multiple Choice Multiple Answer
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer
Marketing
Multiple Choice Multiple Answer
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Trend Projection method , Moving Averages method
Multiple Choice Single Answer
Question
Disposal of fixed assets is categorised under :-
Correct Answer Miscellaneous
Multiple Choice Multiple Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Match The Following
Question
Correct Answer
Project organisation
Finance manager
General category of Project report
Location of factory
Cost aspect of the project report
Consultancy fees
Financing plan
Unsecured loans
Multiple Choice Multiple Answer
Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Demand forecasting , Promotion , Distribution
Multiple Choice Multiple Answer
Question
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Multiple Choice Multiple Answer
Question
Sources of funds includes :-
Correct Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing
Match The Following
Question
Correct Answer
Moving into new areas/product lines
Diversification Projects
Suppliers' credit
Short term finance
Deferred credit
Long term finance
Setting up new units
New Projects
Multiple Choice Single Answer
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Multiple Choice Single Answer
Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Multiple Choice Multiple Answer
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
True/False
Question
The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison.
Correct Answer
False
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Multiple Choice Multiple Answer
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Multiple Choice Single Answer
Question
The cost of Plant and Machinery may be adjusted for a possible increase known as :-
Correct Answer
Escalation
Multiple Choice Single Answer
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
True/False
Question
The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer
True
True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Select The Blank
Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Cost and time overrun
Multiple Choice Multiple Answer
Question
Financing plans consists of :-
Correct Answer
Share capital , Term loans , Internal accruals
Select The Blank
Question
Retained earnings is a source of ________ finance.
Correct Answer
Internal
Select The Blank
Question
In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.
Correct Answer
True
Multiple Choice Single Answer
Question
The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer
True
Multiple Choice Multiple Answer
Question
While choosing the location for a project, the following factors should be considered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Multiple Choice Single Answer
Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Development rebate reserve
Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Multiple Choice Multiple Answer
Question
As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
Multiple Choice Single Answer
Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :-
Correct Answer
Portfolio Planning Tools
Select The Blank
Question
Position regarding requirement and training of operational staff comes under the ________ category of Project report.
Correct Answer
Project organization
Multiple Choice Single Answer
Question
The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :-
Correct Answer
Activity orientation
Select The Blank
Question
The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.
Correct Answer
Detailed Project report
Multiple Choice Single Answer
Question
End use method of Commercial appraisal technique is :-
Correct Answer
A list of industries wherein the product is used is made and quantity and volume is arrived at
True/False
Question
The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer
True
Select The Blank
Question
Depreciation is sometimes treated as ________ funds.
Correct Answer
Source
Multiple Choice Multiple Answer
Question
Casual methods of Demand forecasting consists of :-
Correct Answer
Consumption-level method , Econometric method
Multiple Choice Multiple Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Multiple Choice Single Answer
Question
The statement which shows the movement of cash into and out of firm's kittie is known as :-
Correct Answer
Cash flow statement
True/False
Question
Name of the finance manager comes under the Project organisation category of the Project report.
Correct Answer
True
Multiple Choice Single Answer
Question
Cost of laying roads comes under :-
Correct Answer
Land and site cost
True/False
Question
Debt Service means payment of installments and interest against an amount borrowed as per terms of loan.
Correct Answer
True
Multiple Choice Single Answer
Question
Infrastructural projects include :-
Correct Answer
Power Generation and Distribution
True/False
Question
The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.
Correct Answer
False
Select The Blank
Question
A Project has a ________ represented by growth, maturity and decay.
Correct Answer
Life cycle
Select The Blank
Question
Position regarding requirement and training of operational staff comes under the ________ category of Project report.
Correct Answer
Project organisation
Multiple Choice Single Answer
Question
Receivables is categorised under :-
Correct Answer
Current assets and liabilities
True/False
Question
Managerial problems in a project are the most pervasive.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Disposition of funds includes :-
Correct Answer
Increase in working capital , Preliminary expenses , Dividend
True/False
Question
A project is unique and no two projects are similar.
Correct Answer True
True/False
Question
The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The objectives of the funds flow statement is as follows :-
Correct Answer
To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business
Select The Blank
Question
Under the SPACE Model, Customer loyalty is determined under the ________ dimension.
Correct Answer
Company's competitive advantage
True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer
True
Multiple Choice Single Answer
Question
The ratio which indicates the ability of the company to meet current obligations is termed as :-
Correct Answer
Current ratio
Multiple Choice Multiple Answer
Question
While choosing the location for a project, the following factors should be considered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Multiple Choice Multiple Answer
Question
The sources of long term and medium term finance are :-
Correct Answer
Equity shares , Public deposit
Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Match The Following
Question
Correct Answer
Organisation and Management
Strikes/lay-offs/lockouts etc.
Material inputs and utilities
Stock of raw material
Working capital
Sanctioned bank limit
Marketing
Pricing policy
Multiple Choice Multiple Answer
Question
Management qualities includes :-
Correct Answer
Honesty , Financial resources , Initiative
Select The Blank
Question
________ in liabilities involves inflow of funds.
Correct Answer
Increase
Select The Blank
Question
The ________ market is longer the order of the day since this is an era of professionalization and specialised services are available at cost.
Correct Answer
Monopolistic
Multiple Choice Multiple Answer
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Moving Averages method , Trend Projection method
Multiple Choice Single Answer
Question
Borrower's contribution towards Working capital is known as :-
Correct Answer
Margin money
Multiple Choice Single Answer
Question
A project objective which states "What' is to be viewed" is termed as :-
Correct Answer
Strategic perspective
Multiple Choice Single Answer
Question
The basic characteristic of a project is :-
Correct Answer
That it involves current outlay of funds in expectation of future benefits
Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Select The Blank
Question
Under ________ method, the forecasts are modified in the light of observed errors.
Correct Answer
Exponential smoothing
Multiple Choice Single Answer
Question
The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :-
Correct Answer
Internal rate of return
Multiple Choice Multiple Answer
Question
In the Detailed Project Report, Technical aspects includes :-
Correct Answer
Plant capacity , Quality standards , Raw material requirement
True/False
Question
Delay in recruitment of staff may lead to cost and time overrun
Correct Answer
True
Multiple Choice Single Answer
Question
The basic document for facilitating Project financing is the :-
Correct Answer
Detailed Project report
Multiple Choice Multiple Answer
Question
External sources of cash are as follows :-
Correct Answer
Issue of new shares , Long term loans , Short term borrowings
Multiple Choice Multiple Answer
Question
The following are the sources of funds :-
Correct Answer
Operating Profit , Non operating Income
Select The Blank
Question
Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose.
Correct Answer
Dividend
Multiple Choice Multiple Answer
Question
Limitations of fund flow statement are :-
Correct Answer
It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions
Match The Following
Question
Correct Answer
Project appraisal
It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment
Program
It is large in scope, is activity oriented and is not necessarily time bound
Project
It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources
Pre-feasibility study
It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising
Multiple Choice Single Answer
Question
Psychographic market appraisal answers to :-
Correct Answer
Why they buy?
Project Finance - 2
Multiple Choice Multiple Answer
Question
Financing plans consists of :-
Correct Answer
Internal accruals , Share capital , Term loans
Multiple Choice Multiple Answer
Question
Ratios relating to working capital are :-
Correct Answer
Current ratio , Internal measure , Quick ratio
True/False
Question
Export Market is a technique used for forecasting under Commercial appraisal technique.
Correct Answer
True
Multiple Choice Multiple Answer
Question
The sources of cash are :-
Correct Answer
Cash from operations , Sale of machinery , Issue of new shares
Multiple Choice Single Answer
Question
Past trend method of Commercial appraisal technique is :-
Correct Answer
Adopted as a guide depending on the consumption pattern of the society as a whole
Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Select The Blank
Question
Detailed Project Report is generally prepared from a ________ report with additional information.
Correct Answer
Feasibility
Multiple Choice Single Answer
Question
The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Multiple Choice Single Answer
Question
The acronym for 'LPG' is :-
Correct Answer
Liberalisation, Privatisation and Globalisation
True/False
Question
Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer
True
Multiple Choice Multiple Answer
Question
Defaults category of the Project report may be in respect of :-
Correct Answer
Term loans , Principal , Interest
Multiple Choice Multiple Answer
Question
The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer
Stars , Question marks
Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer
Marketing
Multiple Choice Single Answer
Question
Cost of the Project encompasses :-
Correct Answer
The total of all items of outlay associated with a project
Select The Blank
Question
Cost of fencing comes under the ________ category of the Project report.
Correct Answer
Land and site development
Multiple Choice Multiple Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Select The Blank
Question
Inflow of funds may not necessarily result in ________.
Correct Answer
Inflow of cash
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.
Correct Answer
True
Multiple Choice Single Answer
Question
Sources of funds include :-
Correct Answer
Increase in secured borrowing
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails, Products call for Hold.
Correct Answer
Average Business Strength and Medium Industry Attractiveness
Multiple Choice Multiple Answer
Question
As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
True/False
Question
Ratios are based only on the information which has been recorded in the financial statements.
Correct Answer
True
True/False
Question
Trend projection method is the important technique for forecasting demand.
Correct Answer
True
Multiple Choice Single Answer
Question
"Fly by night" operator mentality is a :-
Correct Answer
Management quality
Multiple Choice Multiple Answer
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Multiple Choice Single Answer
Question
A Project is a temporary endeavor to achieve some specific objectives within a :-
Correct Answer
Predefined time
Multiple Choice Single Answer
Question
Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer
Cost and time overrun
True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
Multiple Choice Multiple Answer
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
Multiple Choice Multiple Answer
Question
After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :-
Correct Answer
Aggressive Posture , Competitive Posture , Defensive Posture
True/False
Question
The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects.
Correct Answer
True
Multiple Choice Single Answer
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
True/False
Question
Change in the project concept itself may lead to cost and time overrun.
Correct Answer
True
Select The Blank
Question
The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach.
Correct Answer
Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment
Select The Blank
Question
Details regarding Internal accruals comes under the ________ category of Project report.
Correct Answer
Financing plan
Match The Following
Question
Correct Answer
Increase in current liabilities
Decreases working capital
Increase in liabilities
Inflow of funds
Decrease in liabilities
Outflow of funds
Increase in current assets
Increases working capital
Multiple Choice Multiple Answer
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Multiple Choice Multiple Answer
Question
The data for ratio analysis is obtained from :-
Correct Answer
Profit and Loss Account , Balance Sheet
Multiple Choice Single Answer
Question
The industrial concern earned profits by increasing the sales volume under the :-
Correct Answer
Sales concept
Multiple Choice Single Answer
Question
The entire life of the project is taken into account under :-
Correct Answer
Average rate of return method
Match The Following
Question
Correct Answer
General functional layout
Present the general relationship between equipment buildings and civil works
Location
Broad area such as city, industrial belt etc.
Site
Specific piece of land where the project would be set up
Plant layout
Physical layout of the factory
Multiple Choice Single Answer
Question
Geographic market appraisal answers to :-
Correct Answer
Where do the customers live?
True/False
Question
In the BCG Matrix, the key term of Cash Cows require further commitment of funds.
Correct Answer
False
True/False
Question
For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.
Correct Answer
False
Select The Blank
Question
A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.
Correct Answer
Share
Select The Blank
Question
Commission outstanding is ________ of funds.
Correct Answer
Application
Project Finance - 1
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question
The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.
Correct Answer
Detailed Project report
True/False
Question
The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Multiple Choice Single Answer
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price - Variables)
True/False
Question
Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back.
Correct Answer
True
Multiple Choice Single Answer
Question
Liabilities side of Balance sheet includes :-
Correct Answer
Unsecured loans
Multiple Choice Single Answer
Question
Net Working Capital means :-
Correct Answer
Current assets less Current liabilities
Multiple Choice Multiple Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.
Correct Answer
True
True/False
Question
Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to the organisation.
Correct Answer
True
Select The Blank
Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.
Correct Answer
Fund
Multiple Choice Multiple Answer
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer
Marketing
Multiple Choice Multiple Answer
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Trend Projection method , Moving Averages method
Multiple Choice Single Answer
Question
Disposal of fixed assets is categorised under :-
Correct Answer Miscellaneous
Multiple Choice Multiple Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Match The Following
Question
Correct Answer
Project organisation
Finance manager
General category of Project report
Location of factory
Cost aspect of the project report
Consultancy fees
Financing plan
Unsecured loans
Multiple Choice Multiple Answer
Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Demand forecasting , Promotion , Distribution
Multiple Choice Multiple Answer
Question
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Multiple Choice Multiple Answer
Question
Sources of funds includes :-
Correct Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing
Match The Following
Question
Correct Answer
Moving into new areas/product lines
Diversification Projects
Suppliers' credit
Short term finance
Deferred credit
Long term finance
Setting up new units
New Projects
Multiple Choice Single Answer
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Multiple Choice Single Answer
Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Multiple Choice Multiple Answer
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
True/False
Question
The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison.
Correct Answer
False
Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Multiple Choice Multiple Answer
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Multiple Choice Single Answer
Question
The cost of Plant and Machinery may be adjusted for a possible increase known as :-
Correct Answer
Escalation
Multiple Choice Single Answer
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
True/False
Question
The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer
True
True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Select The Blank
Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Cost and time overrun
Multiple Choice Multiple Answer
Question
Financing plans consists of :-
Correct Answer
Share capital , Term loans , Internal accruals
Select The Blank
Question
Retained earnings is a source of ________ finance.
Correct Answer
Internal
Select The Blank
Question
In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.
Correct Answer
True
Multiple Choice Single Answer
Question
The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer
True
Multiple Choice Multiple Answer
Question
While choosing the location for a project, the following factors should be considered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Multiple Choice Single Answer
Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Development rebate reserve
Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Multiple Choice Multiple Answer
Question
As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
Multiple Choice Single Answer
Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :-
Correct Answer
Portfolio Planning Tools
Select The Blank
Question
Position regarding requirement and training of operational staff comes under the ________ category of Project report.
Correct Answer
Project organization
Multiple Choice Single Answer
Question
The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :-
Correct Answer
Activity orientation
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