Banking Sector

Q 1The relevant banking ombudsman for filing a complain regarding credit card with central processing is the one under whose jurisdiction __________. (a) the head office of the bank falls (b) the central processing center of the bank falls (c) the nearest bank branch falls (d) None of the above

Q2 Which of the following is true of Reverse Repo rate? (a) Determined by free market forces (b) Lower than repo rate (c) benchmark for long term rates (d) Part of funding cost for commercial banks Q3 On which of the following grounds can banking ombudsman reject a complain? (a) Already taken to consumer court (b) Not approached bank first (c) Either of the above (d) None of the above Q4 "While granting a bank license, RBI considers all of the following, except ________." (a) ability to pay depositors (b) price of equity share of company (c) character of proposed management (d) whether public interest will be served by grant of license to the company Q5 Which of the following is an aspect of the first principle underlying Supervisory Review Process in Basel framework? (a) Banks should have a process for assessing their overall capital adequacy in relation to their risk profile. (b) Banks should have a strategy to maintain their capital level. (c) Both of the above. (d) None of the above. The act does not define a banking company. Q6 An agreement to sell becomes a sale when _________. (a) prescribed time elapses (b) prescribed conditions are fulfilled (c) Either of the above (d) None of the above Q7 Actionable claim cannot be a debt that is secured by _________. (a) Mortgage of immovable property (b) Hypothecation of movable property (c) Pledge of movable property

(d) All of the above Q8 "Tier 1 in the Basel framework includes each of the following, except ______." (a) Permanent shareholders equity (b) fully paid ordinary shares (c) perpetual non-cumulative preference shares (d) Undisclosed reserves Q9 The person to whom payment is to go under a bill of exchange is called _______. (a) Payee (b) Beneficiary (c) Either of the above (d) None of the above

Q10 "Each of the following has become a problem with MFIs in India, except _______." (a) Excessive financing (b) reach (c) financing for consumption (d) inappropriate modes of recovery Q11 Interest on savings bank accounts is paid on _______. (a) lowest balance between 10th and 30th of the month (b) lowest balance between 10th and the end of the month (c) daily balance during the month (d) lowest balance between 1st and 10th of the month Q12 Which of the following is / are demand liabilities? (a) Cash Certificates (b) Gold deposits (c) Current deposits (d) All of the above Q13 SHG stands for: (a) Society Housing Group (b) Society Household Group (c) Self House Group (d) Self Help Group Q14 Vehicle finance is made cheaper through _________. (a) Better insurance cover (b) Special arrangement with manufacturer (c) Navigation system in the car (d) Higher engine capacity

Q15 _________ is a key determinant indicating availability of banking services for the entire economy. (a) RTGS (b) NEFT (c) Reach of bank network (d) Number of bankers

Q16 _________ are a key vehicle through which RBI implements its monetary policy. (a) Banks (b) Governments (c) Corporations (d) NGOs

Q17 The third pillar in the Basel framework seeks to help participants to assess which of the following information? (a) Scope of application (b) Capital (c) Both of the above (d) None of the above

Q18 In which of the following situations would an agreement without consideration be valid? (a) in writing and registered (b) promise is to compensate some one who has already done something for the promisor (c) Either of the above (d) None of the above Q19 Which of the following is false of simple mortgage? (a) Registration is mandatory (b) Rights may be expressed in the mortgage deed or implied (c) Possession remains with mortgager (d) Mortgager accepts personal liability to pay mortgage money Q20 Cash credit is treated as out of order if ____________. (a) No credits continuously for 90 days (b) Credits not adequate to cover interest for 90 days (c) Either of the above (d) None of the above Q21 Handing over Warehouse Receipt is an example of ________. (a) Constructive Delivery (b) Actual delivery (c) Intangible delivery (d) None of the above Q22 International credit cards can be used by Indians for _________. (a) international travel (b) international magazines (c) international software (d) Any of the above Q23 Which of the following is true in the case of transfer of financial asset under SARFAESI? (a) "Charge does not need to be registered, even if borrower is company." (b) Original borrower does not need to be informed.

(c) Both of the above (d) None of the above Q24 "When a customer deposits cheque with a bank for clearing, the customer becomes a _______." (a) Debtor (b) Principal (c) Creditor (d) Agent

Q25 "To be sure to receive same day credit on a Saturday, NEFT instruction has to be given by _______." (a) 12 Noon (b) 11:00 AM (c) 11:30 AM (d) 12:30 PM

Q26 Which of the following would make a consideration unlawful? (a) Forbidden by law (b) Not in writing (c) Both of the above (d) None of the above Q27 ________ account is maintained by businesses for their daily operations. (a) Current (b) Savings (c) Fixed Deposit (d) Recurring Deposit Q28 "In the BASEL framework, first pillar stands for:" (a) Minimum capital requirements (b) Market Discipline (c) Supervisory Review Process (d) Monetary stability Q29 "When a customer opts for a safe deposit locker, the bank becomes a _______." (a) Debtor (b) Creditor (c) Lessee (d) Lessor Q30 Fine in case of cheque bouncing can go up to _________. (a) twice the cheque amount (b) cheque amount (c) thrice the cheque amount (d) Rs. 5 lakh Q31 Which of the following is a secondary identifier _______. (a) Date of Birth (b) Nationality (c) Both of the above (d) None of the above Q32 Criminals use ______ to camouflage money flow from criminal activities and pass it off as regular legal money flows. (a) Money Laundering (b) Smuggling (c) Drug Trafficking (d) PayPal Q33 Usufructurary mortgage with personal liability of mortgager is nothing but ________. (a) Anomalous mortgage (b) English mortgage (c) Equitable mortgage (d) None of the above

Q34 _______ is an unconditional written order to pay money. (a) Bill of Exchange (b) Cheque (c) Both of the above (d) None of the above Q35 Under _________ working capital limits are determined based on financial projections. (a) Cashcredit (b) Overdraft (c) Bill Purchase (d) Bill Discount Q36 A fraud is discovered with respect to an loan that has turned NPA. When is the earliest that it can be treated as a doubtful asset? (a) Immediately (b) Has remained sub-standard for upto 2 quarters (c) Has remained NPA for upto 1 quarter (d) Has remained NPA for upto 1 year Q37 "BIS handles each of the following, except ________." (a) Forum to promote discussion and policy analysis (b) Centre for economic and monetary research (c) Credit rating of global banks (d) Prime counter-party for central banks Q38 "Between the four items - Deposits; Borrowings; Reserves & Surplus; and Capital, which would appear last in the balance sheet of a bank?" (a) Borrowings (b) Deposits (c) Reserves & Surplus (d) Capital Q39 Which of the following are covered in the Banking Ombudsman Scheme? (a) Scheduled Primary Co-operative Banks (b) RRBs (c) Both of the above (d) None of the above Q40 RBI has stated that KYC of banks should incorporate the following elements __________. (a) Customer Acceptance policy (b) Customer identification procedure (c) Monitoring of transactions (d) All of the above Q41 Which of the following are non-fund faced facilities?

(a) Financial Planning (b) Executor & Trustee (c) Locker (d) All of the above Q42 Investment classified under Held to Maturity category need not be _________. (a) recorded (b) marked to market (c) accounted for (d) traded Q43 RTGS Transfers _____________. (a) happen in batches of 1 hour (b) happen in batches of half an hour (c) are instantaneous (d) happen in batches of two hours Q44 Which of the following is / are RBI conditions applicable for banks declaring dividends? (a) To be paid out only from current year profits (b) Minimum capital adequacy of 9% to be maintained (c) Net NPAs to be below 7% (d) All of the above Q45 The largest commercial bank in the country is ________. (a) ICICI Bank (b) State Bank of India (c) Central Bank of India (d) Reserve Bank of India Q46 The second pillar in the Basel framework seeks to help participants to assess which of the following information? (a) Risk exposure (b) Risk assessment process (c) Both of the above (d) None of the above Q47 The minimum amount for secured lenders to take the benefit of SARFAESI is _______. (a) Rs. 1 lakh (b) Rs. 5 lakh (c) Rs. 10 lakh (d) Not specified Q48 Deposit insurance covers _______. (a) Savings (b) Current (c) Term (d) All of the above Q49 Which of the following is true of mortgage? (a) Lender is morgager

(b) Typical of hypothecation (c) Possession handed over when charge created (d) Transfer of interest on specific immoveable property

Q50 An indorser is liable to pay interest on delayed payment from ________. (a) date of indorsement (b) due date of instrument (c) date of notice of dishonour (d) None of the above Q51 Investment in FCNR may be made through ________. (a) Remittance from abroad (b) Transfer from NRE (c) Either of the above (d) None of the above Q52 Investment in NRO may be made through _________. (a) Remittance from abroad (b) Transfer from NRE (c) Either of the above (d) None of the above Q53 Which of the following can be a scheduled bank? (a) Public Sector Banks (b) Private Sector Banks (c) Co-operative Banks (d) All of the above Q54 Each of the following is a function of Reserve Bank of India except _______. (a) Lending to corporate (b) Regulate issue of bank notes (c) Secure monetary stability (d) Operate currency and credit system

Q55 "A borrower defaults on a secured loan of Rs. 50,000. The underlying security is worth Rs. 60,000. Which of the following is true? " (a) "Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower." (b) Bank cannot sell the underlying security because its value is higher than loan. (c) "Bank can retain the entire Rs. 60,000" (d) "The excess of Rs. 10,000 has to be shared equally between the bank and the borrower."

Q56 "A borrower who has been given notice of enforcement of security interest, replies with his objections. What is expected of the secured creditor? " (a) Consider the objections fairly (b) "If objections not acceptable, convey to borrower within 7 days" (c) Both of the above (d) None of the above Q57 Higher interest based on age is offered in which of the following accounts? (a) Savings (b) Term (c) Current (d) All of the above Q58 Open Market Operations is an important tool for central banks in ___________. (a) bullish equity market conditions (b) bearish equity market conditions (c) countries where debt market is developed (d) countries where debt market is under-developed Q59 CAMELS framework was first used in _______. (a) UK (b) Canada (c) India (d) US Q60 "Which of the following can benefit from SARFAESI, 2002?" (a) Banks (b) Financial Institutions (c) Both of the above (d) None of the above

Macroeconomics for Financial Markets

Q1 "Under the Banking Regulation Act, 1949, the RBI has been vested with extensive powers of supervision and control over banks." (a) TRUE (b) FALSE

Q2 ______ implies adjusted for inflation. (a)Positive (b) Unreal (c) Real (d) Negative

Q3 The ________ is measured at regular intervals and changes in the index are an indicator of the average price movement of a fixed basket of goods and services (that represent the entire economy).

(a) inflation index (b) stock price index

(c) deflation index (d) price index

Q4 _____ is the rate at which the central bank offers refinance to the commercial banks. (a) Level rate (b) Interest rate (c) Duration (d) Bank rate

Q5 "While wheat becomes an ingredient for producing the bread, the oven is only a tool to produce it. Such goods are called _____ Goods." (a) Producing (b) Revenue (c) Production (d) Capital

Q6 _______ expenditure results in creation of assets in the economy. (a) Depreciation (b) Revenue (c) Capital (d) Recurring

Q7 ______ is a comprehensive measure of a country's overall economic output. (a) GDP (b) ADP (c) MDP (d) LDP

Q8 "While _______ price inflation is more popular in India, the Consumer Price Index is a popular measure in developed nations like USA, UK. " (a) food (b) consumer (c) market (d) wholesale

Q9 The issuer of Currency in India is the ________. (a) IRDA (b) SEBI (c) FMC (d) RBI

Q10 "Trade among developed countries could not be explained by absolute advantage. To explain this, David Ricardo propounded the law of _______." (a) recovarable advantage

(b) relative advantage (c) theoritical advantage (d) comparitive advantage

Q11 A paper currency note does not have any intrinsic value or value of its own. Such type of money is called ______. (a) cash money (b) flat money (c) fiat money (d) real money

Q12 "To know whether there has been a genuine increase in economic activity and by how much, GDP measures need to be taken at _____ prices (that is, the price level of a particular year). " (a) maximum (b) fluctuating (c) constant (d) minimum

Q13 "A _____ refers to a situation when an unusually large number of depositors rush in to withdraw their deposits, fearing that the bank may fail." (a) bank run (b) bank fall (c) bank slowdown (d) bank implosion Q14 The financial market for securities with maturities of less than one year is known as _______. (a) derivatives market (b) cash market (c) money market (d) Rupee market Q15 "________ expenditure involves routine government expenditure, which does not create any asset for the government. " (a) Recurring (b) Capital (c) Depreciation

(d) Revenue

Q16 _____ are sales and purchases of government securities or bonds. (a) IMOs (b) SMOs (c) OMOs (d) LMOs Q17 _______ are instruments used by foreign investors not registered with the Indian regulators for taking an exposure in the domestic market. (a) International Notes (INs) (b) Participatory notes (PNs) (c) Credit Notes (CNs) (d) Promissory Notes (PNs)

Q18 _______ typically refers to the use of borrowed funds to increase returns on any given investment. (a) Float (b) Deleverage (c)Margins (d) Leverage

Q19 Using GDP estimates at ______ prices helps us eliminate the effects of price level changes on the GDP. (a) minimum (b) fluctuating (c) maximum (d) constant

Q20 M1 + saving deposits with Post office savings banks =

(a) M5 (b) M3 (c) M4 (d) M2 Q21 Share capital is a source of funds for commercial banks. (a) TRUE (b) FALSE Q22 "No single commodity will give us correct picture of the general price increase in the economy. So, we must create a ______ by taking into account either all the commodities in the economy or a basket of sufficiently large number of commodities that broadly represent the economy. " (a) deflation index (b) stock price index (c) price index (d) inflation index

Q23 ____ is conventionally thought of in terms of branch plant or subsidiary company operations that are controlled by parent companies based in another country.

(a) FDI (b) FPI (c) ECB (d) ECP

Q24 A country is said to be running a positive trade balance when its exports ______ its imports

(a) exceed (b) is less than

Q25 "By taxing the income of the rich at a much higher rate than the income of the poor, the government attempts to reduce income inequality." (a) TRUE (b) FALSE

Q26 "In economics, the resources which are used to produce goods and services are called _______. "

(a) ?factors of products? (b) ?factors of production? (c) ?factors of productivity? (d) ?factors of produce?

Q27 Usages of commodities as the medium of exchange in the early days and measure of value correspond to what we presently call ______. (a) Cash' (b) Exchange' (c) ?Money? (d) Coins'

Q28 The essence of ________ is to explore ways to optimize the use of scare resources and to organize the society in a way that leads to the most efficient use of those resources. (a) Maths (b) History (c) Economics

(d) Geography

Q29 _______ receipts include tax and non-tax revenue received by the government.

(a) Fiscal (b) Revenue (c) Internal (d) External

Q30 Demand-pull inflation simply means that aggregate demand has been _______ above what the economy is capable of producing in the short run (a) pushed' (b) ?pulled? (c) transcended' (d) shot'

Q31 "When interest rates go down, prices of fixed interest bonds ?" (a) Remain unchanged (b) Go down (c) Go up

Q32 Governments raise resources mostly using ______. (a) incentives (b) coersion (c) dictats (d) taxes

Q33 Commercial banks through their fractional reserve system also help create _____ in the economy.

(a) buffer (b) money (c) liquidity (d) positivity Q34 "The Reserve Bank of India was established on April 1, 1935 under the _______, which was passed in the year 1934. " (a) Reserve Bank of India Act (b) Bank of India Act (c) Finance Act (d) Banking Regulator Act (e) I am not attempting the question Q35 A well functioning legal and a stable political system is essential for markets to operate efficiently. (a) FALSE (b) TRUE Q36 Inflation is the _____ of price increase. (a) difference (b) rate (c) sum (d) dispersion Q37 The overall _______ for a country in a given year is the sum of the surplus/ deficits of current and capital accounts (a) Balance on revenue account (b) Balance on capital account (c) Balance of Payments

(d) Balance of recurring account Q38 One of the important characteristics of the financial markets is that it is a source of _______. (a) zero risk (b) systemic risk (c) known risk (d) absolute risk Q39 M1 + time deposits with the banking system = (a) M3 (b) M2 (c) M1 (d) M4 Q40 Gift tax is an example of ______. (a) Direct tax (b) Indirect tax (c) I am not attempting the question Q41 A ______ system will only work only if two persons can be found whose disposable possessions mutually suit each other's wants. (a) payout (b) trade (c) transfer (d) barter

Q42 "_______ directly adds to production capacity in the host country and, other things remaining the same, contributes to capital formation and employment generation in the host country."

(a) Greenfield ECP

(b) Greenfield FPI (c) Greenfield ECB (d) Greenfield FDI

Q43 "The ______ revenue of the Union Government includes administrative receipts, net contribution of public sector undertakings including railways, posts, currency and mint and other revenues." (a) tax (b) non-tax

Q44 "__________ tells us about what determines level of output in an economy, how are employment and prices determined; how money supply affects rate of interest" (a) Macroeconomics (b) Microeconomics Q45 Household savings is composed of both _______ and _______ savings. (a) "real, financial" (b) "financial, physical" (c) "cash, real" (d) "liquid, physical" Q46 "There have however been exceptions, when there have been sustained decline in the price level of goods and services. This phenomenon is called ______. " (a) counter inflation (b) inflation (c) hyper-inflation (d) deflation Q47 The ________ measures economic activity by adding all the incomes received by all the producers of output. (a) expenditure approach'

(b) income approach?

Q48 FDI stands for ______. (a) Foreign Derived Income (b) Foreign direct investment (c) Foreign Derivatives Investment (d) Foreign Disposable Investment

Q49 The wholesale price inflation is also called the ______ inflation (a) advanced (b) basic (c) headline (d) timeline

Q50 ______ analyzes and studies decisions of individual economic agents and how they interact in specific markets and allocate their limited resources to optimize their own wellbeing. (a) Macroeconomics (b) Microeconomics

Q51 "Resources are scarce, while human wants are _______. " (a) unlimited (b) limited

Q52 The insurance sector regulator in India is the ______. (a) IRDA (b) FMC

(c) SEBI (d) RBI

Q53 Every business enterprise involves _____. (a) risk (b) assured profits (c) sure losses (d) windfall gains Q54 The Forward Markets Commission (FMC) regulates ______ markets. (a) equity (b) cash (c) finance (d) commodities Q55 _______means that the country is buying goods and services that have been produced abroad. (a) Exporting (b) Importing Q56 The Inflation at any given time is measured by computing the percentage changes in the _______ at that point of time over the index prevailing one year previously. (a) price index (b) stock price index (c) deflation index (d) inflation index Q57 _______ is a measure of the extent to which the creation of money in the banking system causes the growth in the money supply to exceed growth in the monetary base. (a) Cash multiplier (b) Money multiplier

(c) Finance multiplier (d) Income multiplier

Q58 Capital goods tend to have a ______ lifetime.

(a) finite (b) infinite

Q59 "Labour, capital and land are considered to be __________. " (a) factors of production (b) factors of products (c) factors of productivity (d) factors of produce

Q60 "When a country sells its domestically produced goods and services abroad, the country is said to be ______. " (a) exporting (b) importing'

Fundamental Analysis Module

Q1 "If the intrinsic value of a stock is below the market price, the investor would buy the stock because he believes that the stock price is going to fall and come closer to its intrinsic value."

(a) TRUE (b) FALSE

Q2 A procyclic economic indicator is one that moves in the opposite direction as the economy. (a) FALSE (b) TRUE

Q3 A negative beta shows that the asset ______ follows the market; the asset generally decreases in value if the market goes up. (a) directly (b) inversely

Q4 Professionally managed companies are those that have at the helm a member of the controlling family. (a) FALSE (b) TRUE

Q5 "The moderately-strong form of the Efficient Market Hypothesis?stipulates that private information or insider information too, is quickly incorporated by market prices and therefore cannot be used to reap abnormal trading profits." (a) FALSE (b) TRUE

Q6 Examples where Efficient Market Hypothesis is purported to succeed are anomalies like cheap stocks outperforming the market in the long term. (a) FALSE (b) TRUE

Q7 Beta measures _______ risk. (a) cyclical (b) reducable (c) non-diversifiable (d) diversifiable

Q8 "Consider the stock of ABC Technologies Ltd. which has a beta of 0.5. This essentially points to the fact that based on past trading data, ABC Technologies Ltd. as a whole has been relatively more volatile as compared to the market as a whole."

(a) FALSE (b) TRUE

Q9 _______ are amounts set aside from profits for an estimated expense or loss.

(a) Long term assets (b) Liabilities (c) Provisions (d) Current assets

Q10 "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 11,304, while current liabilities amounted to 4353. The current ratio of ABC Ltd. Is _____."

(a) 3.46 (b) 1.6 (c) 4.35

(d) 2.6

Q11 "Consider a stock, with an expected dividend per share next period of Rs. 1, a cost of equity of 15%, and an expected growth rate of 6% forever. The value of this stock is:" (a) 20 (b) 19 (c) 15 (d) 11

Q12 The Auditor's Report will draw the attention of the reader to accounting changes and the effect that these have on the financial statements. (a) FALSE (b) TRUE

Q13 The _______ ratio measures the degree to which a firm generates sales with its total asset base.

(a) net asset turnover (NAT) (b) current asset turnover (CAT) (c) total asset turnover (TAT) (d) basic asset turnover (BAT)

Q14 "Consider a stock, with an expected dividend per share next period of Rs. 2.00, a cost of equity of 16%, and an expected growth rate of 6% forever. The value of this stock is:" (a) 30 (b) 35 (c) 25 (d) 20

Q15 Estimated EPS of ABC Ltd. for next year is Rs. 130. Assume PE multiple of 21 (Forward P/E) for the next year. Then the target price of ABC Ltd. works out to Rs. ____.

(a) 2760

(b) 2730

(c) 2820

(d) 2790

Q16 "According to the Efficient Market Hypothesis, stocks always tend to trade _________ on stock exchanges, making it impossible for investors to either consistently purchase undervalued stocks or sell stocks at inflated prices." (a) at their fair value (b) at their mis-priced value (c) at their technical value (d) at their expected value

Q17 "Companies must diversify in order to spread the risks of economic slumps, therefore every diversification suits a company. " (a) TRUE (b) FALSE

Q18 The usual unsecured loans a company has are debentures and term loans. (a) TRUE (b) FALSE

Q19 _________ uses financial analysis to envisage the movement of stock prices.

(a) Fundamental analysis (b) Money analysis (c) Stock analysis (d) Inflation analysis

Q20 _______ is one of the most critical factors to be considered while investing in any company. (a) Management (b) Managing director

(c) Location of the company (d) Auditors

Q21 "Stock A generates a return of 12% while stock B generates a return of 15%. The risk free-rate is 5%. Stock A has a standard deviation (risk) of 15%, while stock B has a standard deviation of 20%. Which stock gives a better risk adjusted return?" (a) A (b) B

Q22 "To find the intrinsic value of a company, the fundamental analyst initially takes a bottom-up view of the company performance, its financial condition, industry analysis etc." (a) TRUE (b) FALSE

Q23 Higher-beta stocks mean less volatility and are therefore considered to be less riskier

(a) FALSE (b) TRUE

Q24 The more common secured loans of a company are fixed deposits and short term loans.

(a) TRUE (b) FALSE

Q25 A firm with a 3% growth rate and a return on equity of 10% will have a stable period pay-out ratio of _____. (a) 30% (b) 25% (c) 26% (d) 22%

Q26 Indian listed companies must periodically report their financial statements to the regulators only. (a) FALSE (b) TRUE

Q27 "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 13,456, while current liabilities amounted to 5456. The current ratio of ABC Ltd. Is _____." (a) 1.78 (b) 3.76 (c) 2.47 (d) 4.67

Q28 "When an investor buys stock, she generally expects to get only one type of cash-flow dividends. "

(a) TRUE

(b) FALSE

Q29 "In the bottom-up approach, an analyst investigates both international and domestic economic?indicators, such as GDP growth rates, energy prices, inflation and interest rates. " (a) TRUE (b) FALSE

Q30 A firm with a 7% growth rate and a return on equity of 20% will have a stable period pay-out ratio of _____. (a) 35% (b) 38% (c) 28% (d) 39%

Q31 "The?risk-free interest rate?is the theoretical?rate of return?of an investment with ______, including?default risk. " (a) zero risk (b) positive risk (c) negative risk (d) unlimited risk

Q32 A firm with a 5% growth rate and a return on equity of 15% will have a stable period pay-out ratio of _____. (a) 23% (b) 37% (c) 33% (d) 28%

Q33 "It is upon the quality, competence and vision of the auditors that the future of company rests. "

(a) TRUE

(b) FALSE

Q34 The managing director represents the shareholders and it is his duty to report to the shareholders and the general public on the stewardship of the company by him or her. (a) TRUE (b) FALSE

Q35 "Auditors are required to report any change, such as a change in accounting principles or the nonprovision of charges that result in an increase or decrease in profits."

(a) TRUE

(b) FALSE

Q36 Behavioural Finance is a field of finance that proposes _______ theories to explain stock market anomalies. (a) relationship-based (b) neural-based (c) consumer-based (d) psychology-based

Q37 The _________ is an example of a procyclic economic indicator. (a) Gross Domestic Product (GDP) (b) Unemployment rate

Q38 The Beta is a measure of the ______ of a security that cannot be avoided through diversification. (a) pro-cyclical risk (b) cyclical risk (c) un-systematic risk (d) systematic risk

Q39 "Evidence in the psychology literature reveals that individuals have unlimited information processing capabilities, do not exhibit systematic bias in processing information, are not prone to making mistakes, and never tend to rely on the opinion of others."

(a) TRUE

(b) FALSE

Q40 The ________ allows for two stages of growth - an initial phase where the growth rate is not a stable growth rate and a subsequent steady state where the growth rate is stable and is expected to remain so for the long term.

(a) later stage growth model growth model

(b) Brown growth

(c) two-stage growth model (d) initial stage

Q41 "Based on ABC Ltd.'s EPS of Rs. 108 for the year, the trailing 12 month PE of ABC Ltd. at a price of Rs. 1300 per share works out to be _____. "

(a) 17.02

(b) 15.06

(c) 18.09

(d) 12.04

Q42 The weak form of the ________ stipulates that current asset prices reflect past price and volume information. (a) Inefficient Market Hypothesis (b) Efficient Price Hypothesis (c) Efficient Market Hypothesis

Q43 "The Director's Report is a report submitted by the directors of a company to shareholders, informing them of the performance of the company under their stewardship."

(a) TRUE

(b) FALSE

Q44 Lower-beta stocks mean greater volatility and are therefore considered to be riskier.

(a) TRUE

(b) FALSE

Q45 "Based on ABC Ltd.'s EPS of Rs. 123 for the year, the trailing 12 month PE of ABC Ltd. at a price of Rs. 1400 per share works out to be _____. "

(a) 17.69

(b) 15.67

(c) 13.56

(d) 11.38

Q46 The concept of time value of money arises from the relative importance of ________.

(a) physical asset vs. financial asset

(b) assets now vs. in future (c) now vs. future (d) money vs. time

Q47 "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s cash assets amounted to 7,797 , while current liabilities amounted to 3,050. The cash ratio of ABC Ltd. Is ______." (a) 2.56 (b) 3.68 (c) 4.67 (d) 3.45

Q48 This statement forms a part of the strong form of the Efficient Market Hypothesis. (a) "Long-term gains, for the management of a company, with access to inside information'." (b) "'No long-term gains, even for the management of a company, with access to inside information'." (c) "Short-term gains, for the management of a company, with access to inside information'."

Q49 Fundamental analysis is a _________ methodology. (a) inflation valuation (b) volume valuation (c) money valuation (d) stock valuation

Q50 "Stock A generates a return of 20% while stock B generates a return of 25%. The risk free-rate is 5%. Stock A has a standard deviation (risk) of 20%, while stock B has a standard deviation of 15%. Which stock gives a better risk adjusted return?"

(a) B

(b) A

Q51 The Balance Sheet details the financial position of a company on a particular date.

(a) TRUE

(b) FALSE

Q52 Economic indicators allow analysis of economic performance and predictions?of future performance. (a) TRUE (b) FALSE

Q53 Rs. 100 of today's money invested for one year and earning 8% interest will be worth Rs. _____ after one year. (a) 110 (b) 108 (c) 120 (d) 125

Q54 Companies pledge assets when they take ______ loans. (a) secured (b) unsecured

Q55 "_________, which accounting helps to standardize, is presented in the companies? financial reports. " (a) Internal information (b) Technical information information (c) Financial information (d) Non public

Q56 The published financial statements of a company in an _______ consist of its Balance Sheet as at the end of the accounting period detailing the financial condition of the company on that date. (a) Equity Report (b) Annual Report (c) Executive Report (d) Interim Report

Q57 _______ are those to whom the company owes money for raw materials and other articles used in the manufacture of its products.

(a) Unsecured creditors (b) Secured debtors (c) Trade creditors (d) Trade debtors

Q58 "As of March 31, with amounts expressed in Rs. crores, ABC Ltd.'s current assets amounted to 15,678, while current liabilities amounted to 6786. The current ratio of ABC Ltd. Is _____."

(a) 3.56

(b) 4.45

(c) 2.31

(d) 1.67

Q59 Estimated EPS of ABC Ltd. for next year is Rs. 132. Assume PE multiple of 22 (Forward P/E) for the next year. Then the target price of ABC Ltd. works out to Rs. ____.

(a) 2904

(b) 3240

(c) 2869 (d) 3567

Q60 "Examples of leading indicators are the agricultural production, fixed capital investment etc (a) TRUE (b) FALSE