Strategic Finance - 5

Strategic Finance - 5

Multiple Choice Multiple Answer
Question
The financial framework of a merger decision covers 3 interrelated aspects i.e. :-
Correct Answer
Financing techniques in mergers , Analysis of merger as a capital budgeting decision , Determining the firm's value


Select The Blank
Question
A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback.
Correct Answer
Seven


True/False
Question
Management of working capital refers to the management of total assets and liabilities of a company.
Correct Answer
False


True/False
Question
optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.
Correct Answer
False


True/False
Question
Appraisal value of a firm can be acquired from an independent appraisal agency.
Correct Answer
True


True/False
Question
Accounting standards (AS - 13) is now mandatory.
Correct Answer
True


True/False
Question
The accounting records serve as the major source of cost data.
Correct Answer
True


Multiple Choice Multiple Answer
Question
To gather costs means to do the following actions to support the costing of the activities :-
Correct Answer
To capture , To construct , To synthesize the correct cost figures


Select The Blank
Question
If firms have same technology ________ makes the difference i.e. firms become more productive .
Correct Answer
Solid human resource team


Select The Blank
Question
In many companies, there is no formal record of________.
Correct Answer
Investment in employees


True/False
Question
The activity model is normally created by an activity Accountant.
Correct Answer
False


True/False
Question
The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer
True


Select The Blank
Question
The total cost of the activity model allocated by the applied activity drivers to the output of the activity model is called________.
Correct Answer
The cost of the output


Multiple Choice Multiple Answer
Question
A firm using a conservative policy for determining the requirements of current assets :-
Correct Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales


Multiple Choice Multiple Answer
Question
The budgetary records are useful for:-
Correct Answer
Validating accounting costs , Providing a rationale for division of costs , Replacing missing data


Multiple Choice Single Answer
Question
When a company has resorted to buyback of its shares it cannot make a further issue of the same kind of securities within a period of how many months?
Correct Answer
6 months


Multiple Choice Single Answer
Question
The bottom line of ABC Process is :-
Correct Answer
To achieve a better method of doing the right business pf the organisation


Select The Blank
Question
The most popular kind of dividend policy is one that pays a ________.
Correct Answer
Regular, steady dividend


Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Job security , Better opportunities within the firm , Higher compensation


Match The Following
Question
Correct Answer

Amount involved in buy back
Not to exceed 25 % of the total paid up capital

Articles of Association
Authorize buy back of securities

Board of Directors
Resolution permitting the buy back of shares

Shares to be bought back
Fully paid up


Multiple Choice Single Answer
Question
A high payout policy means :-
Correct Answer
More current dividends


Match The Following
Question
Correct Answer

Earning per share
Acquisition is considered to be a function of the impact of the merger on the EPS

Book value
Divide net worth by the number of equity shares outstanding

Appraisal value
Provides a list of the reasonableness of results obtained through methods base upon the going concern concept

Market value
Indicate the consensus of the investors


Select The Blank
Question
In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________
Correct Answer
Replacement cost


Select The Blank
Question
The advantage of ________ is that the company is not required to wait for the payment by the bill issuer.
Correct Answer
Bill discounting
Multiple Choice Single Answer
Question
In a growth firm, internal rate is :-
Correct Answer
More than opportunity


Multiple Choice Multiple Answer
Question
Shortage costs are mainly in the form of :-
Correct Answer
Disruption in production schedule , Loss of sales , Loss of customer goodwill


Multiple Choice Multiple Answer
Question
Shortcomings of accounting numbers consist of the following :-
Correct Answer
Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers

Multiple Choice Single Answer
Question
Internal financing means the firm finances all investments through :-
Correct Answer
Retained earnings


Multiple Choice Single Answer
Question
The earning power of the company approach includes :-
Correct Answer
Mainly discounting of all future earnings


Multiple Choice Single Answer
Question
A firm should consider acquisition as a :-
Correct Answer
Capital budget decision


Multiple Choice Single Answer
Question
Firms which have marked seasonality in their operations usually have :-
Correct Answer
Highly fluctuating working capital requirement


Multiple Choice Single Answer
Question
Decrease in leverage results in increasing the :-
Correct Answer
Overall cost of capital


Select The Blank
Question
Segment expense includes ________.
Correct Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment


Multiple Choice Single Answer
Question
the amount of working capital required to meet long term, minimum needs is called :-
Correct Answer
Permanent working capital


Select The Blank
Question
The costs should be gathered & allocated within the organisation at the ________ structural layer.
Correct Answer
Lowest possible



Multiple Choice Multiple Answer
Question
The acquiring firm for any M & A will require data about the target firm which will include :-
Correct Answer
Quality of management , Production capabilities , Profitability

Multiple Choice Single Answer
Question
Segment assets are determined after :-
Correct Answer
Deducting related allowances / provisions reported as direct offsets


Multiple Choice Multiple Answer
Question
For M & As, the acquiring firm needs industry data on :-
Correct Answer
Market growth , Nature of competition , Degree of regulation


Select The Blank
Question
Implicit & Explicit costs are included in the ________.
Correct Answer
Price of a product


Multiple Choice Multiple Answer
Question
In a merger decision, the value of a firm depends upon:-
Correct Answer
Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm


True/False
Question
To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.
Correct Answer
True


True/False
Question
Segment result is segment revenue less segment expenses.
Correct Answer
True


Multiple Choice Single Answer
Question
The main factor affecting the profits is :-
Correct Answer
The magnitude of sales of the business


True/False
Question
Retained earnings are the most important internal sources of financing the growth of the firm.
Correct Answer
True


Select The Blank
Question
________ are those operating assets that are employed by a segment in its operating activities.
Correct Answer
Segment assets


Multiple Choice Multiple Answer
Question
The direct costs tier normally only includes the following :-
Correct Answer
The personnel payroll , Supplies , Individual rental equipment


Multiple Choice Multiple Answer
Question
Accounting numbers are not influenced by :-
Correct Answer
Dividend policy , Time span of money , Financial and business risk





Strategic Finance - 4


Select The Blank
Question
Total risk reduces if operations of combining firms are ________.
Correct Answer
Negatively correlated


Multiple Choice Single Answer
Question
The Public announcement of share buy back has to be made at least :-
Correct Answer
7 Days prior to the commencement of buy back


Multiple Choice Multiple Answer
Question
It is the activity accountant's job to do the following for the existing organisational structure :-
Correct Answer
To define the costs , To refine the costs , To document the costs



Multiple Choice Multiple Answer
Question
Operating economies occur due to indivisibilities of resources like :-
Correct Answer
People , Equipment , Overheads


Select The Blank
Question
The amount to be invested by any single investor in a commercial paper shall not be less than Rs. ________.
Correct Answer
25 lacs


True/False
Question
A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly.
Correct Answer
True


Multiple Choice Single Answer
Question
The development aspect of training in firms focus on :-
Correct Answer
Promotion to higher job levels


Multiple Choice Multiple Answer
Question
The main assumptions for stock repurchase models are as follows :-
Correct Answer
The market is efficient , There is perfect competition in the securities market


Multiple Choice Single Answer
Question
AS 17 is mandatory for all commercial, industrial & business reporting enterprises whose turnover for the accounting period :-
Correct Answer
Exceeds 50 crores


Select The Blank
Question
If the segment result of a segment includes interest or dividend income its segment assets will not include ________.
Correct Answer
Payables


Select The Blank
Question
Economies of scale arises with increase in volume of production leading to________.
Correct Answer
Reduction in the cost of production



Multiple Choice Single Answer
Question
When a change in the method of depreciation is made :-
Correct Answer
Depreciation is recalculated in accordance with the new method



Multiple Choice Multiple Answer
Question
One of the advantages of trade credit is its flexibility i.e. the firm does not :-
Correct Answer
Have to sign a note , Pledge collateral , Adhere to strict payment schedule


Select The Blank
Question
Depreciation is ________ of an asset.
Correct Answer
Loss of value



Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural



Multiple Choice Single Answer
Question
If a firm opts for restrictive policy then the investments in current assets is :-
Correct Answer
Low



Multiple Choice Single Answer
Question
When the seller asks for the payment before making the delivery in order to avoid all risks it is known as
Correct Answer
Cash before delivery


True/False
Question
An activity model is a tool to assist in understanding & defining the organisation.
Correct Answer
True



True/False
Question
It is possible to place a single value for the acquired firm.
Correct Answer
False


Multiple Choice Multiple Answer
Question
In the disclosures in financial statements, there are significant restrictions on :-
Correct Answer
The right of ownership , Realisability of investments , The remittance of income & proceeds of disposal


Multiple Choice Single Answer
Question
The depreciable assets are assets which are expected to be used :-
Correct Answer
During more than 1 accounting period



True/False
Question
Short term financing is meant for funding working capital of a company.
Correct Answer
True

Multiple Choice Multiple Answer
Question
The existence of significant influence by an investor is usually evidenced in the following ways :-
Correct Answer
Participation in policy making processes , Material transactions between the investor & the investee , Interchange of managerial personnel

Multiple Choice Multiple Answer
Question
The important steps involved in the analysis of mergers & acquisitions are:-
Correct Answer
Planning , Searching & screening , Financial evaluation

Match The Following
Question
Correct Answer

Unsecured loans
Form of debt not backed by the pledge of specific assets

Line of credit
Does not constitute any legal commitments on the part of the bank

Revolving credit agreements
While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow

Transaction loan
The cash flow ability of the borrower to pay the loan is usually of paramount importance


Multiple Choice Multiple Answer
Question
The financial managers of a company consume a great deal of their time in activities like :-
Correct Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables



True/False
Question
Dividends increase the current returns for shareholders.
Correct Answer
True



True/False
Question
Book value is based on the balance sheet value of owner's equity.
Correct Answer
True


Select The Blank
Question
the commercial paper may be issued in the multiples of ________.
Correct Answer
5 lakhs


Select The Blank
Question
In presenting the reconciliation segment result should be reconciled to ________.
Correct Answer
Enterprise net profit or loss


Select The Blank
Question
Another meaning of bear hug is ________.
Correct Answer
Hostile takeover



Multiple Choice Single Answer
Question
Funds borrowed for a period of 1 year or less is called :-
Correct Answer
Short term finance



Multiple Choice Multiple Answer
Question
Financial statements classify the following into separate categories :-
Correct Answer
Fixed assets , Investments , Current assets


Multiple Choice Single Answer
Question
Any addition or extension to an existing asset which retains a separate identify & is capable of being used after the existing asset is disposed of :-
Correct Answer
Is depreciated independently


Multiple Choice Single Answer
Question
In value of assets approach the value of which of the following should be deducted to calculate the net assets available to the equity shareholders :-
Correct Answer
Outstanding preference shares



Multiple Choice Single Answer
Question
What is a very important factor in any kind of merger?
Correct Answer
Exchange ratio


Multiple Choice Single Answer
Question
When the working capital is less than its peak level :-
Correct Answer
The surplus is invested in liquid assets




True/False
Question
Baumul`s Model is similar to EOQ model in inventory management.
Correct Answer
True


True/False
Question
Sometimes the mechanisms may appear to be inputs for an activity.
Correct Answer
True


Multiple Choice Multiple Answer
Question
Accrued expenses represent :-
Correct Answer
Costless financing , An interest free source of financing



True/False
Question
The intellectual assets of a company are often worth 3 or 4 times the tangible book value.
Correct Answer
True


Match The Following
Question
Correct Answer

Terminal warehouse receipt
Inventory is stored with a public or terminal warehousing company

Floating lien
Loose arrangement as the lender may find it difficult to police
Chattel mortgage
Well suited for financial good inventories of capital goods

Trust receipt
Specifically identified by serial number or other means


Multiple Choice Multiple Answer
Question
The different types of floats are :-
Correct Answer
Postal float , Deposit float , Bank float


Multiple Choice Multiple Answer
Question
If a company is following multiple accounting system, the activity accountant will have to match data across :-
Correct Answer
Codes , Time periods , Systems

True/False
Question
AS 13 statement does not deal with operating or finance leases.
Correct Answer
True


Select The Blank
Question
The number of bidding centers shall not be less than ________ for buy back through book building.
Correct Answer
30

Select The Blank
Question
Market approach is used for companies whose shares are ________ on the Stock market.
Correct Answer
Listed

Strategic Finance - 2

Strategic Finance - 2

Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Higher compensation , Job security , Better opportunities within the firm


Select The Blank
Question
A geographical segment cannot be ________.
Correct Answer
Countries in different zones


Select The Blank
Question
A shareholder expects a higher rate of return as a firm's compensation for ________.
Correct Answer
Increased risk


Multiple Choice Single Answer
Question
Most companies focus only on :-
Correct Answer
Return on investment


Multiple Choice Multiple Answer
Question
As a general rule, an asset is :-
Correct Answer
A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses


Multiple Choice Multiple Answer
Question
In the disclosures in financial statements, there are significant restrictions on :-
Correct Answer
The right of ownership , Realisability of investments , The remittance of income & proceeds of disposal


Multiple Choice Single Answer
Question
Equity includes :-
Correct Answer
Development Rebate Reserve



Match The Following
Question
Correct Answer

Free cash flow theory
Enormous conflicts of interest between Stakeholders and shareholders

Net income approach
Cost of debt & equity do not change with a change in leverage ratio

Net operating income approach
The overall capitalization rate remains constant for all levels of financial leverages

Modigliani - Miller Theory
weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure


True/False
Question
Organisational changes are similar to mission changes.
Correct Answer
True

Multiple Choice Single Answer
Question
Which of the following is NOT A Characteristic of declining firm :-
Correct Answer
The optimum payout ratio for a declining firm is not 100 %


Select The Blank
Question
A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback.
Correct Answer
Seven


True/False
Question
Money becomes less valuable when received at a latter stage instead of in present time.
Correct Answer
True


Select The Blank
Question
The resource theory considers that the competitive position of a firm depends on its ________ Assets.
Correct Answer
Specific



Multiple Choice Multiple Answer
Question
A firm having aggressive policy of investing in current assets will show the following features :-
Correct Answer
Frequent production stoppages , High ROI

True/False
Question
Making decision on dividend is a very crucial area of financial management for a firm.
Correct Answer
True


Multiple Choice Single Answer
Question
Segment reporting comes under :-
Correct Answer
AS 17



True/False
Question
Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer
False



Multiple Choice Single Answer
Question
As per Pecking order theory, which is the costliest means of funding :-
Correct Answer
Equity Shares

Match The Following
Question
Correct Answer


Mechanisms
Performs or provides energy to an activity

Inputs
Information or material used to produce the output of an activity

Controls
Information or material that constrains an activity

Outputs
Information or material produced by an activity


True/False
Question
According to NOI Approach, any capital structure is optimum.
Correct Answer
True



Select The Blank
Question
The ________ often gives the best insight into the borrower's short term credit needs.
Correct Answer
Cash budget



Select The Blank
Question
If firms have same technology ________ makes the difference i.e. firms become more productive .
Correct Answer
Solid human resource team


True/False
Question
Explicit cost and implicit cost are the two parts of cost of debt.
Correct Answer
True


Select The Blank
Question
If a segment is not designated as a ________ it should be included as an unallocated reconciling item.
Correct Answer
Reportable segment

Multiple Choice Single Answer
Question
Research into true human resources accounting began in :-
Correct Answer
1960`s

Select The Blank
Question
Increase in cost of capital means decrease in ________.
Correct Answer
Profitability


True/False
Question
According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value.
Correct Answer
False



Multiple Choice Multiple Answer
Question
Accrued expenses represent :-
Correct Answer
Costless financing , An interest free source of financing



Multiple Choice Multiple Answer
Question
The direct costs tier normally only includes the following :-
Correct Answer
The personnel payroll , Supplies , Individual rental equipment



Multiple Choice Single Answer
Question
Fixed price tender offers are accompanied by an abnormal announcement period return of :-
Correct Answer
8 - 10 %



Multiple Choice Single Answer
Question
Many companies claim their main assets are their :-
Correct Answer
People


Multiple Choice Multiple Answer
Question
The main assumptions for stock repurchase models are as follows :-
Correct Answer
The market is efficient , There is perfect competition in the securities market


Multiple Choice Single Answer
Question
The Buy back of shares shall not be made from
Correct Answer
The promoters or persons in control of the company

True/False
Question
Opportunity costs and real costs decrease the market value of a firm.
Correct Answer
True


True/False
Question
Retained earnings are the most important internal sources of financing the growth of the firm.
Correct Answer
True



True/False
Question
The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer
True



Multiple Choice Multiple Answer
Question
Examples of accounting methods used by firm are :-
Correct Answer
FIFO , LIFO , Accrual Accounting


Multiple Choice Single Answer
Question
For the following process the valuation is needed to decide the price at which the deal will be possibly concluded :-
Correct Answer
Mergers & Acquisitions



True/False
Question
Diversification helps in preserving a firm's reputation & goodwill.
Correct Answer
True


Multiple Choice Single Answer
Question
According to Net Income Approach, the average cost of capital declines as the leverage ratio :-
Correct Answer
Increases



True/False
Question
Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than its form.
Correct Answer
False




Select The Blank
Question
Forfeiting is mostly used for ________.
Correct Answer
Big ticket items & durable goods


Multiple Choice Multiple Answer
Question
The financial framework of a merger decision covers 3 interrelated aspects i.e. :-
Correct Answer
Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision



True/False
Question
For determining exchange ratio, the model developed by Conn & Nielson is used.
Correct Answer
True


Multiple Choice Single Answer
Question
One of the important assumptions for capital structure theories is :-
Correct Answer
Debt and equity are the 2 kinds of funds used by the firm


Select The Blank
Question
________ are not diversible.
Correct Answer
Market related risks


Multiple Choice Multiple Answer
Question
The financial managers of a company consume a great deal of their time in activities like :-
Correct Answer
Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables




LIST OF ATTEMPTED QUESTIONS AND ANSWERS


Multiple Choice Multiple Answer
Question
The different types of floats are :-
Correct Answer
Postal float , Deposit float , Bank float


Multiple Choice Single Answer
Question
A low payout policy implies :-
Correct Answer
More retention of profits


True/False
Question
optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.
Correct Answer
False


Multiple Choice Single Answer
Question
Companies often need to value its own :-
Correct Answer
Shares



Select The Blank
Question
Postage is an example of ________ cost.
Correct Answer
Non traceable cost



Multiple Choice Single Answer
Question
Value added analysis :-
Correct Answer
Helps to identify potential activities that may be omitted immediately


Multiple Choice Multiple Answer
Question
Intangible assets include :-
Correct Answer
Preliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc


Multiple Choice Single Answer
Question
The Management of the Company may enter into a negotiated purchase, which is referred to as :-
Correct Answer
Greenfield


Multiple Choice Single Answer
Question
If the segment result of a segment includes interest expense its segment liabilities include :-
Correct Answer
The related interest bearing liabilities


Select The Blank
Question
As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage.
Correct Answer
Constant

Match The Following
Question
Correct Answer

Exit cost
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.

Historical costs
Sacrifice necessary to hire & train people

Substitution cost
Exit costs of the leaving employee & recruiting & training of the replacement

Opportunity cost
An asset value when they are the target of an alternative use.



Multiple Choice Single Answer
Question
Suppliers of equity are interested in :-
Correct Answer
High share prices


Multiple Choice Multiple Answer
Question
The 3 groups of participants in a firm are :-
Correct Answer
Suppliers of equity , Debt suppliers , Firm Managers


True/False
Question
It is possible to place a single value for the acquired firm.
Correct Answer
False


Select The Blank
Question
________ is never a part of the output.
Correct Answer
Mechanisms


Multiple Choice Multiple Answer
Question
Exit costs are classified into 3 categories namely :-
Correct Answer
Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay


True/False
Question
A transport corporation has a substantial working capital requirement.
Correct Answer
False


Select The Blank
Question
________ know the best about a firm's performance.
Correct Answer
Firm Managers


Multiple Choice Multiple Answer
Question
As per AS 13 Statement, the following are not considered as investments:-
Correct Answer
Shares , Debentures , Other securities held as stock in trade


Multiple Choice Multiple Answer
Question
The employer in offering the job contract assumes a range of legal obligations such as :-
Correct Answer
Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments
True/False
Question
It is essential that ABC must fit into the strategy of the company.
Correct Answer
True


True/False
Question
Trade credit creates book debts which the firm is expected to collect in the near future.
Correct Answer
True



Select The Blank
Question
At times managers invest in projects that improve the company's ________.
Correct Answer
Prestige or power


Select The Blank
Question
Business risk & financial risk do not have any influence on ________.
Correct Answer
Accounting numbers



True/False
Question
The objective of a dividend policy should be to maximize shareholder's return so that the value of his investment is maximized.
Correct Answer
False



True/False
Question
A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly.
Correct Answer True
Select The Blank
Question
________ is not a characteristic of financial conglomerates.
Correct Answer
Provide ineffective competitive process


Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural



Multiple Choice Single Answer
Question
If a firm opts for restrictive policy then the investments in current assets is :-
Correct Answer
Low

Match The Following
Question
Correct Answer

AS 17
Segment reporting

AS 19
Leases

AS 6
Depreciation accounting

AS 10
Accounting for fixed assets



True/False
Question
To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.
Correct Answer
True



Select The Blank
Question
Investors can reduce the company related risk by diversification of their investments in ________.
Correct Answer
Shares of a large number of companies



Multiple Choice Multiple Answer
Question
For ABC Analysis the available cost data :-
Correct Answer
Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources


Multiple Choice Multiple Answer
Question
The external staffing performance indicators include :-
Correct Answer
Compensation per Re. Profit , Personnel services head count , Profit per head


Select The Blank
Question
HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer
118 Bn


Select The Blank
Question
Segment expense includes ________.
Correct Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment



Multiple Choice Multiple Answer
Question
The important aspect of dividend policy is :-
Correct Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm


Select The Blank
Question
In today's fast moving world, the quickest way to get information on a firm is through ________.
Correct Answer
Internet



Multiple Choice Multiple Answer
Question
The main characteristics of operating economies are :-
Correct Answer
It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions


Multiple Choice Single Answer
Question
Segment liabilities do not include :-
Correct Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose


Multiple Choice Single Answer
Question
Which of the following company is reaping high market valuation due to showing human resources as an asset in its balance sheet information?
Correct Answer
Infosys


True/False
Question
In market value approach, interested parties never manipulate the stock markets.
Correct Answer
False


Multiple Choice Single Answer
Question
The stock value for a company will be considered to be fair value for ordinary transactions if the shares are :-
Correct Answer
Listed



True/False
Question
Planning helps an acquiring firm to identify the units it should drop & it should add.
Correct Answer
True



Multiple Choice Single Answer
Question
For paying dividends, firms will have a given amount of :-
Correct Answer
Cash available



Multiple Choice Single Answer
Question
The depreciation rates or the useful lives of the assets are disclosed only :-
Correct Answer
If they are different from the principle rates specified in the statute

Select The Blank
Question
Earning power of the company approach tries to value the ________.
Correct Answer
Current value of the assets

Strategic Finance - 1



Multiple Choice Single Answer
Question
One of the selective developments that has taken place in recent times is companies are going in for :-
Correct Answer
Activity based costing and management


True/False
Question
Diversification helps in preserving a firm's reputation & goodwill.
Correct Answer
True


True/False
Question
Cash dividends are taxable at ordinary tax rates.
Correct Answer
True



Multiple Choice Multiple Answer
Question
The 3 groups of participants in a firm are :-
Correct Answer
Suppliers of equity , Debt suppliers , Firm Managers

Multiple Choice Multiple Answer
Question
As per AS 13 Statement, the following are not considered as investments:-
Correct Answer
Shares , Debentures , Other securities held as stock in trade

Match The Following
Question
Correct Answer

Opportunity cost
An asset value when they are the target of an alternative use.

Exit cost
Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.

Historical costs
Sacrifice necessary to hire & train people

Substitution cost
Exit costs of the leaving employee & recruiting & training of the replacement


Multiple Choice Multiple Answer
Question
The acquiring firm for any M & A will require data about the target firm which will include :-
Correct Answer
Quality of management , Production capabilities , Profitability

Multiple Choice Single Answer
Question
Equity includes :-
Correct Answer
Development Rebate Reserve

Match The Following
Question
Correct Answer

Free cash flow theory
-Enormous conflicts of interest between Stakeholders and shareholders

Net income approach
-Cost of debt & equity do not change with a change in leverage ratio

Net operating income approach
-The overall capitalization rate remains constant for all levels of financial leverages

Modigliani - Miller Theory
-weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure


Select The Blank
Question
If a segment is not designated as a ________ it should be included as an unallocated reconciling item.
Correct Answer
Reportable segment


True/False
Question
For determining exchange ratio, the model developed by Conn & Nielson is used.
Correct Answer
True


Select The Blank
Question
In presenting the reconciliation segment result should be reconciled to ________.
Correct Answer
Enterprise net profit or loss



Select The Blank
Question
Identify disclosure on human resources as a societal concern & prepare international regulations comes under ________
Correct Answer
The compulsory method



Multiple Choice Single Answer
Question
Which is an example out of the following to which special consideration apply for depreciation :-
Correct Answer
Regenerative natural resources



True/False
Question
It is essential that ABC must fit into the strategy of the company.
Correct Answer
True


Select The Blank
Question
HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer
118 Bn

Select The Blank
Question
There is a ________ relationship between the number of employees & the use of operating supplies.
Correct Answer
Natural



Multiple Choice Multiple Answer
Question
The important aspect of dividend policy is :-
Correct Answer
To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm



Multiple Choice Multiple Answer
Question
The main characteristics of CAPM are :-
Correct Answer
It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)


True/False
Question
Current accounting system is able to provide actual value of employee capabilities & knowledge.
Correct Answer
False


Multiple Choice Single Answer
Question
In respect of depreciable assets, which do not have material value, depreciation is often allocated :-
Correct Answer
Fully in the accounting period for which they are acquired

Multiple Choice Single Answer
Question
The depreciation rates or the useful lives of the assets are disclosed only :-
Correct Answer
If they are different from the principle rates specified in the statute


Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Job security , Better opportunities within the firm , Higher compensation



Select The Blank
Question
The ________ cost tier has the advantage of being the simplest to calculate and justify.
Correct Answer
Direct

Multiple Choice Multiple Answer
Question
To gather costs means to do the following actions to support the costing of the activities :-
Correct Answer
To capture , To construct , To synthesize the correct cost figures


True/False
Question
Odd lots purchase is not a method of buy back of shares.
Correct Answer
False


Multiple Choice Multiple Answer
Question
The overhead expenses include :-
Correct Answer
Utilities , Maintenance , Security


Multiple Choice Single Answer
Question
In a matching approach policy, :-
Correct Answer
There is a small risk if shortage of funds


Multiple Choice Single Answer
Question
The most important internal sources of financing the growth of the firm is through :-
Correct Answer
Retained earnings


True/False
Question
The intellectual assets of a company are often worth 3 or 4 times the tangible book value.
Correct Answer
True


Multiple Choice Multiple Answer
Question
Indicators of the value of an investment are obtained by :-
Correct Answer
Reference to its market value , The investee`s assets , The expected cash flows from the investment


Select The Blank
Question
Buy back through book building the process should be made through ________.
Correct Answer
An electronically linked transparent facility


Multiple Choice Multiple Answer
Question
Significant influence is the power to :-
Correct Answer
Participate in the operating policy decisions , Participate in the financial decisions



True/False
Question
An activity model is a tool to assist in understanding & defining the organisation.
Correct Answer
True


True/False
Question
Decisions related to working capital are repetitive & frequent.
Correct Answer
True

Select The Blank
Question
________ is not a characteristic of financial conglomerates.
Correct Answer
Provide ineffective competitive process

Multiple Choice Single Answer
Question
In the past, costing mainly focused on :-
Correct Answer
Manufacturing costs



Multiple Choice Multiple Answer
Question
A firm using a conservative policy for determining the requirements of current assets :-
Correct Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Multiple Answer
Question
The major conditions to be fulfilled for buyback of shares as per the legal provisions include :-
Correct Answer
Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1


Multiple Choice Single Answer
Question
Segment liabilities do not include :-
Correct Answer
Borrowings & other liabilities that are incurred for financing rather than operating purpose


Multiple Choice Single Answer
Question
The difference between current assets & current liabilities is known as :-
Correct Answer
Net working capital


Multiple Choice Single Answer
Question
The bottom line of ABC Process is :-
Correct Answer
To achieve a better method of doing the right business pf the organisation

Select The Blank
Question
Non value added activities helps ________.
Correct Answer
To analyse the activities more carefully


Multiple Choice Single Answer
Question
In value of assets method the following is also to be included as they are also of value to the company :-
Correct Answer
Non trading assets


Multiple Choice Single Answer
Question
Best practices, a tool for review process is similar to :-
Correct Answer
Bench marking


Select The Blank
Question
HLL is ________ % of subsidiary of Unilever PLC.
Correct Answer
0.516



Select The Blank
Question
traditionally avails are provided by ________.
Correct Answer
Banks

Security Analysis and Portfolio Management -25

Security Analysis and Portfolio Management -25

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

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

Select The Blank
Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY

True/False
Question The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True

Match The Following
Question- Correct Answer
NSE&BSE are regulated by- Securities Exchange Board of India
Under options contract When you expect prices to fall, then, you take a long position by
buying puts. When you expect prises to rise, then you take a short position by selling
puts.- Cost of Carry model

A contract where both the parties are equally responsible- Futures contract

The amount which the buyer of the option has to pay to the option writer to induce him to
accept the risk associated with the contract. -Option price

True/False
Question A segment is unattractive if the buyers possess strong or growing bargaining
powers.
Correct Answer True

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

?Multiple Choice Single Answer
Question The present value of all the future cash payments to be paid on the security to
the investor is termed as :-
Correct Answer Intrinsic value of a security

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

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 ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Answer Initial margin

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

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

True/False
Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True

True/False
Question American option gives the holder the right, but not the obligation to buy or
sell the underlying instrument on or before the expiry date and the option can be
exercised early.
Correct Answer True

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)
“
Multiple Choice Single Answer
Question What is Gross National Product ?
Correct Answer Gross income generated from within the country

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

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

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

Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer

True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Multiple Choice Single Answer
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits

True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False

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

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

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 the value at a certain future date today of a stream of cash flows
that occurs over a period of time.
Correct Answer Future value

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

Security Analysis and Portfolio Management - 24

Security Analysis and Portfolio Management - 24

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

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

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

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

Multiple Choice Single Answer
Question Stock Exchanges are the part of :-
Correct Answer Secondary market

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

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

Multiple Choice Multiple Answer
Question What are the features of short-term trends?
Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the
intermediate cycle , They are usually influenced by random news events

True/False
Question The normal relationship is for the volume to expand on rallies and contract
on declines.
Correct Answer True

True/False
Question In case of assured returns, A scheme cannot promise returns unless such
returns are fully guaranteed by sponsor or AMC.
Correct Answer True

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

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

Multiple Choice Multiple Answer
Question What are the features of candle stick charts?
Correct Answer Indicates in black if the closing price is lower than the opening
price , Indicates in white if the closing price is higher than the opening price

True/False
Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True

Select The Blank
Question A pattern which does not result in reversal of a trend but reaffirmation of
the underlying trend is called ________.
Correct Answer Consolidation pattern

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

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

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

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

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

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

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

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

Match The Following
Question -Correct Answer
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

Select The Blank
Question ________are good benchmark to compare the ratios for a firm.
Correct Answer Industry averages

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

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

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

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

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

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

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

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

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

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

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

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

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

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

True/False
Question A mutual fund is required to dispatch the dividend warrants to the unit
holders within thirty days of the declaration of dividend.
Correct Answer True

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

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

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

Match The Following
Question- Correct Answer
MCX -Commodity Exchange
Sensex -BSE Index
Nifty- NSE Index
Lifex- ET Index

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

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

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

Security Analysis and Portfolio Management - 23

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

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

Select The Blank
Question S&P NSE 50 index is known as ________.
Correct Answer NIFTY

True/False
Question The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True

Match The Following
Question -Correct Answer
NSE&BSE are regulated by- Securities Exchange Board of India.
Under options contract When you expect prices to fall, then, you take a long position by
buying puts. When you expect prises to rise, then you take a short position by selling
puts. -Cost of Carry model .
A contract where both the parties are equally responsible -Futures contract.
The amount which the buyer of the option has to pay to the option writer to induce him to
accept the risk associated with the contract. -Option price

True/False
Question Asegment is unattractive if the buyers possess strong or growing bargaining
powers.
Correct Answer True

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

Multiple Choice Single Answer
Question The present value of all the future cash payments to be paid on the security to
the investor is termed as :-
Correct Answer Intrinsic value of a security

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

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 ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Correct Answer Initial margin

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

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

True/False
Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True

True/False
Question American option gives the holder the right, but not the obligation to buy or
sell the underlying instrument on or before the expiry date and the option can be
exercised early.
Correct Answer True

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)

Multiple Choice Single Answer
Question What is Gross National Product ?
Correct Answer Gross income generated from within the country

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

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

Multiple Choice Multiple Answer
Question Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer

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

Multiple Choice Single Answer
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Correct Answer False

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

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

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 the value at a certain future date today of a stream of cash flows
that occurs over a period of time.
Correct Answer Future value
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

Security Analysis and Portfolio Management - 22
Select The Blank
Question The value of the stock in the ________ model is sensitive to the
estimates of the growth rate.
Correct Answer The Gordons dividend growth

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


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



Select The Blank
Question Debentures rated ________ are judged to offer sufficient safety of
timely
payment of interest and repayment of principal.
Correct Answer "BBB"
Multiple Choice Single Answer
Question Stock Exchanges are the part of :-
Correct Answer Secondary market

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

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

Multiple Choice Multiple Answer
Question What are the features of short-term trends?
Correct Answer They last from 1 to 3 or 4 weeks , They interrupt the course
of the intermediate cycle , They are usually influenced by random news events

True/False
Question The normal relationship is for the volume to expand on rallies and
contract on declines.
Correct Answer True

True/False
Question In case of assured returns, A scheme cannot promise returns unless
such returns are fully guaranteed by sponsor or AMC.
Correct Answer True

Multiple Choice Multiple Answer
Question What are the features of trend lines
Correct Answer A simple and useful tool in technical analysis , Prices move
in trends , The trend lines represent points of support and resistance
Select The Blank
Question ________ is due to the fact that a borrower may not pay interest
and/or
principal on time.
Correct Answer Default risk

Multiple Choice Multiple Answer
Question What are the features of candle stick charts?
Correct Answer Indicates in black if the closing price is lower than the
opening price , Indicates in white if the closing price is higher than the opening
price

True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Correct Answer True

Select The Blank
Question A pattern which does not result in reversal of a trend but
reaffirmation of the underlying trend is called ________.
Correct Answer Consolidation pattern

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

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

Multiple Choice Multiple Answer
Question The growth rate in the initial phase is not constant but declines
linearly over time to reach the stable growth rate in steady state is a phenomena of
Correct Answer H- Model for valuing growth , H-Two stage model for growth ,
HModel unlike the classic two stage model
Multiple Choice Multiple Answer
Question What are the features of line charts?
Correct Answer It connects closing prices from one period to the next , It
is ideal for securities with no high or low price data

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

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

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

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

Match The Following
Question- Correct Answer

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

Select The Blank
Question ________are good benchmark to compare the ratios for a firm.
Correct Answer Industry averages

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

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

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

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

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

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

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

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


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

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

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

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

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


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

True/False
Question A mutual fund is required to dispatch the dividend warrants to the
unit holders within thirty days of the declaration of dividend.
Correct Answer True

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

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

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

Match The Following
Question -Correct Answer
MCX -Commodity Exchange
Sensex- BSE Index

Nifty- NSE Index

Lifex -ET Index

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

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

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

Security Analysis And Portfolio Management - 21

Security Analysis And Portfolio Management - 21

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

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

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

Select The Blank
Question ________ measures the profitability of equity funds invested in
the firms.
Correct Answer Return on equity

True/False
Question Given the accounting standards across firm, price to book value
ratios can be compared across similar firms for signs of under
valuation.
Correct Answer True

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

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

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 Risk can be referred as the ________ in the return with respect
to the expected return.
Correct Answer Volatility

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

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

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

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

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 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 Single Answer
Question What are index funds?
Correct Answer Investment in securities in the same weightage which
replicates
a particular index

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

Select The Blank
Question ________ measures the profitability of operations without
considering the influence of financial structure and tax rate.
Correct Answer Earnings power

Multiple Choice Multiple Answer
Question Which ratios are commonly used?
Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios

Multiple Choice Multiple Answer
Question Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme

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 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 ________ identified five forces that determine the intrinsic long
run profit attractiveness of a market or market segment.
Correct Answer Michael Porter

Match The Following
Question -Correct Answer

H-Model For Valuing
Growth -Initial growth rate is not
constant but linearly falls
over time to reach the
stable growth rate
The general model -Expected dividends and
required rate of return

The Gordons Growth
model- Expected dividends in the
next period, cost of equity
and expected growth rate
in dividends


The Two-Stage Dividend
Discount Model -Based on two
extraordinary growth
phase lasting n years and
stable growth phase that
lasts forever


True/False
Question Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.
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
rat phase steadily for a specific time period , Sources of high growth

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 - Fama
Framework on efficient
capital markets, a review
of theory and empirical
work

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

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


True/False
Question Sensex is the index of Calcutta Stock Exchange.
Correct Answer
Answer False
Select The Blank
Question ________ refers to the possibility that there may not be a readily
available market for the particular bond.
Correct Answer Liquidity risk

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 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct Answer True

Select The Blank
Question ________are good benchmark to compare the ratios for a firm.
Correct Answer Industry averages

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

Select The Blank
Question ________ ratio is the ratio of net profit to the sales.
Correct Answer Net Profit Margin

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

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 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

True/False
Question PPF is a good retirement planning and tax saving vehicle.
Correct Answer True

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

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

Security Analysis And Portfolio Management - 20

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

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

Multiple Choice Multiple Answer
Question The security market is the market for :-
Correct Answer Equity , Debt , Derivatives

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

Multiple Choice Single Answer
Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-
Correct Answer Technical analysis

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

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


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 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 A mutual fund is required to dispatch the dividend warrants to
the unit holders within thirty days of the declaration of dividend.
Correct Answer True

Multiple Choice Single Answer
Question What does lower level of unemployment indicates?
Correct Answer Positive economic conditions

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

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 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/-

True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
Correct Answer True

Multiple Choice Single Answer
Question What is the limitation of Flow-of funds analysis method?
Correct Answer Cannot give indication of the inclination of market
participants to
purchase stock

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

Select The Blank
Question Under the options contract ________ gives the holder the right,
but not the obligation to buy or sell the underlying instrument
only on the expiry date.
Correct Answer European option

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


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 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

True/False
Question While calculating geometric mean calculation of root is not
important.
Correct Answer False

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

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

Select The Blank
Question ________ measures the profitability of operations without
considering the influence of financial structure and tax rate.
Correct Answer Earnings power

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

True/False
Question Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True

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

Multiple Choice Single Answer
Question What is Gross National Product ?
Correct Answer Gross income generated from within the country

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


True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
Correct Answer False


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 Features of PSU Bonds are :-
Correct Answer No TDS , Transferable by endorsement , No stamp duty on
transfer


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 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

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 Single Answer
Question The greater the deviation of the actual returns from the actual
return :-
Correct Answer Greater the variance

True/False
Question A segment is unattractive if the buyers possess strong or
growing bargaining powers.
Correct Answer True

Select The Blank
Question ________ refers to the possibility that there may not be a readily
available market for the particular bond.
Correct Answer Liquidity risk

Multiple Choice Single Answer
Question What is GDP at factor cost ?
Correct Answer Excludes net income received from abroad

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

Security Analysis And Portfolio Management - 19
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 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 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 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 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 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 Return can be in the form of :-
Correct Answer Dividends , Interests , Capital appreciation
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/-


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 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


True/False
Question Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.
Correct Answer True

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

Multiple Choice Single Answer
Question What is the highest denomination offered by Kisan Vikas patra
instruments?
Correct Answer 50000

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 What is Flow-of-funds analysis?
Correct Answer Consists of an analysis of the financial positions of various
investor groups

Multiple Choice Single Answer
Question What is an open ended fund or scheme?
Correct Answer Which is available for subscription and repurchase on a
continuous basis

Select The Blank
Question The SEBI act was passed in the year ________.
Correct Answer 1992

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

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

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

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

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


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

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 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 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

True/False
Question A firm uses a combination of equity and debt for financing its
assets.
Correct Answer True

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

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

True/False
Question A price rise accompanied by expanding volume denotes a
potential trend reversal.
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

Multiple Choice Single Answer
Question The historical growth rate and the past earnings of a firm are
used in valuing :-
Correct Answer Stable firms, but not appropriate for high growth firms

Multiple Choice Single Answer
Question What is the minimum investment amount in G-secs?
Correct Answer 1000

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

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/-

Select The Blank
Question The Dow theory states that there are simultaneously ________
movements in the stock market.
Correct Answer 3

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 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10
years. He wanted to know what is the present value of this
amount, if the rate of interest is 10% p.a:-
Correct Answer Rs. 9639/-

Multiple Choice Single Answer
Question A derivative is a product whose value is derived from :-
Correct Answer Value of an underlying asset

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 What are sector specific funds?
Correct Answer Scheme which invest in certain sectors

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