Professional Documents
Culture Documents
Course
Sem
Title of the
Paper
PORTFOLIO MANAGEMENT
Staff Name
Dr. S. IRUDAYARAJ
Units
I
V
UNIT I
1.
a) tax compliance.
c) cost ascertainment
Answer: C
2.
b)
d)
b)
d)
a) ascertainment of costs.
c) apportion of costs.
Answer: A
4.
profit analysis.
a) each department.
c) each month.
Answer: B
3.
financial audit.
b)
d)
allocation of costs.
distribution of costs.
a)
c)
the
human
resource
b)
d)
Answer: A
5.
Multiple costing is a technique of using two or more costing methods for ascertainment of cost by
_____.
imputed cost.
b)
d)
historical cost.
b)
d)
four types.
b)
d)
chargeable expenses.
shutdown cost.
seven types.
sundry expenses.
a) office overhead.
c) distribution overhead.
Answer: D
11.
indirect cost.
a) major expenses.
c) overhead expenses.
Answer: B
10.
b)
d)
a) three types.
c) five types.
Answer: A
9.
The cost which is to be incurred even when a business unit is closed is a _____.
a) imputed cost.
c) sunk cost.
Answer: D
8.
Wages paid to a labour who was engaged in production activities can be termed as _______.
a) direct cost.
c) sunk cost.
Answer: A
7.
b)
d)
b)
d)
selling overhead.
production overhead.
Which one of the following is not considered for preparation of cost sheet?
a) Factory cost.
c) Labour cost.
Answer: B
b)
d)
12.
a) prime cost.
c) cost of production.
Answer: C
13.
b)
d)
estimation of cost.
b)
d)
b)
cost of sales.
estimation of units.
a) selling price.
c) value of goods produced I
Answer: A
15.
works cost.
Tender is an _______.
a) estimation of profit.
c) estimation of selling price.
Answer: C
14.
b)
d)
value of stocks.
a)
c)
d)
Answer: C
16.
a) factory overhead.
c) distribution overhead.
Answer: A
17.
selling overhead.
administration overhead.
a) material cost.
c) prime cost.
Answer: B
18.
b)
d)
b)
d)
labour cost.
direct expenses.
a)
material cost.
b)
labour cost.
c) prime cost.
Answer: D
19.
marginal costing.
b)
d)
cost sheet.
b)
d)
variable cost.
b)
d)
profit statement.
a) Earning profit
c) Fixing prices of the products
Answer: B
23.
budget.
a) fixed cost.
c) semi variable cost.
Answer: B
22.
b)
d)
A document which provides for the detailed cost centre and cost unit is _____.
a) tender.
c) invoice.
Answer: B
21.
factory cost.
a) direct cost.
c) cost sheet.
Answer: C
20.
d)
a)
c)
Product cost
Inventory values
b)
d)
Answer: D
24.
a)
Prime cost
b)
Factory cost
c)
Selling cost
d)
Cost of products
Answer: A
25.
26.
27.
28.
29.
30.
a) Prime cost
b) Factory overhead
c) Selling overhead
d) Non on the above
Answer: B
NBFCs offer higher interest rate because of
a) The best management funds b) The competition among the
NBFCs
c) The risk involved
d) The credit rating
Answer: C
Index schemes
a) Returns equals to index b) Reflect the market
returns
c) Are income schemes
d) Are tax saving schemes
Answer: A
The underwriter has to take up
a) The fixed portion of the b) The agreed portion of the
issue capital
unsubscribed part
c) The agreed portion or can d) None of the above
refuse it
Answer: B
Capital index bonds are linked with
a) BSE Sensex
b) NSE Nifty
c) Consumer price index
d) BSE-100
Answer: C
The minimum numbers of shares to be applied for is
a) 100
b) 200
c) 300
d) 500
Answer: B
UNIT II
31.
32.
33.
34.
35.
36.
37.
a) fixed cost.
b) variable cost.
c) semi variable cost.
d) semi fixed cost.
Answer: B
The market psychology is affected by events
a) Tangible
b) Intangible
c) Fictitious
d) Both A & B
Answer: D
High leverage leads to
a) Market risk
b) Purchasing power risk
c) Finance risk
d) Interest rate risk
Answer: C
Decline in bank rate leads to
a) Market risk
b) Purchasing power risk
c) Finance risk
d) Interest rate risk
Answer: D
Inflation leads to
a) Market risk
b) Purchasing power risk
c) Finance risk
d) Interest rate risk
Answer: B
Kargil war leads to
a) Market risk
b) Purchasing power risk
c) Finance risk
d) Interest rate risk
Answer: A
Interest rate risk occurs when
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
required rate of return is 10% and the growth rate is 15 per cent. The
market price would be
a) Rs.50
b) Rs.55
c) Rs.45
d) Rs.40
Answer: D
If the current price is Rs.100, the required rate of return is 20% and
the dividend paid on a share of Rs.10 face value is Rs.3. What is the
expected growth rate?
a) 15%
b) 16%
c) 17%
d) 18%
Answer: C
Conceptual frame work of valuation through P/E ratio arises from
a) Multiple year holding model b) Constant growth model
c) Two stage growth model
d) Three stage growth model
Answer: B
Suppose a preferred stocks annual dividend is of Rs.3 and required
rate of return is 15per cent, what is its worth today?
a) Rs.20
b) Rs.25
c) Rs.30
d) Rs.15
Answer: A
When the security index moves upward haltingly for a significant
period of time, it is known as
a) Bear market
b) Risk market
c) Bull market
d) Security market
Answer: C
Systematic risk classified under
a) Two categories
b) Three categories
c) Four categories
Answer: B
61.
62.
63.
64.
65.
d) Five categories
UNIT III
Gross domestic product is a logical factor to analyze the economy in
picking up a stock because it indicates
a) Inflation or deflation
b) The market value of assets
c) The status of the economy
d) The condition of the stock
market
Answer: C
The fall in the interest rate is conducive to the stock market because
a) Money may flow from the b) Corporate can borrow at easy
bond market to stock market
terms
c) Brokers can do business at d) Both B and C
borrowed funds
Answer: D
One of the following factors leads the activity of stock market
a) Money supply
b) Per capita income
c) Unemployment rate
d) Manufacturing and trade
Answer: A
The rise of dividend tax from 10% to 20 % in a broader sense affects
a) The investor
b) The corporate
c) The stock market
d) The financial institutions
Answer: C
The LIFO inventory valuation technique results in
a) Underestimation
of
the b) Minimization of firms income
firms cost of goods sold
taxes during inflation
during inflationary period
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
a) Rs.5 Crores
b) Rs.3 Crores
c) Rs.2 Crores
d) Rs.1 Crores
Answer: B
Clearing and settlement operations of the NSE is carried out by
a) National security depository b) National security clearing coLtd.
operation
c) State bank of india
d) By the exchange itself
Answer: B
The accounting period cycle of NSE is
a) Wednesday to next Tuesday b) Tuesday to next Wednesday
c) Monday to next Friday
d) Wednesday to next Wednesday
Answer: A
Inter connected stock exchange is to interlink
a) The BSE, NSE, OTCEI
b) All the stock exchanges
c) Fifteen
regional
stock d) Fourteen
regional
stock
exchanges
exchanges
Answer: C
In the indian stock market, one of the following indices is calculated
without weights
a) Economic times ordinary b) Financial times ordinary share
share index
index
c) BSE-100
d) Business line- 250
Answer: A
The Sensex has
a) 25 stocks
b) 30 Stocks
c) 33 Stocks
d) 35 stocks
Answer: B
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
sell an asset
sell but not an obligation
Answer: D
The option is at the money when
a) Stock price > striking price
b) Striking price > stock price
c) Stock price = Striking price d) There is a high premium
Answer: C
Which one of the following statement is true
a) The premium of the call b) Option prices are not affected
option and the stock price is
by the dividends
very inversely related
c) Stock market volatility does d) The premium of the call option
not affect the option price
is directly related to stock price
Answer: D
The put option buyer gains
a) In the bullish market
b) In the bearish market
c) In the stable market
d) When the strike price is lower
than stock price
Answer: B
The black scholes option pricing theory is based on the following
97.
98.
99.
assumption
a) The stock price movement is b) The
stock
pays
regular
taken to be random
dividends
c) There is cyclical change in d) The call option can be
interest rate
exercised any time during its
life period
Answer: A
An investor who anticipates fall in price of Telco shares after an year
could hedge his risk by
a) Buying future contracts now b) Selling the future contract now
itself
itself
c) Both of the above
d) Neither of the above
Answer: B
Margin money of the future contracts depends on
a) The nature of the buyer and b) The stock market indices
seller
movement
c) Speculative activity
d) Both A and B
Answer: D
Which of the following statement is true
a) Arbitrageurs simultaneously b) Arbitrageurs force the price of
buy and sell two different
stock index future contract to
securities
remain close to the underlying
index
c) Arbitrageurs make the price d) Arbitrageurs buy two different
stock index futures to
securities at the same price in
derivate from the underlying
different markets
index value
Answer: B
100. One of the following market index futures is different from others
a) Standard & poors 500
b) CMEs Standard and poors
Midcap-400
c) Nikkel-225
d) New york stock exchangecomposite stock index
Answer: D
101. An options is the ____ to buy or sell something on a specified date at
a specified price
a) Right
b) Obligation
c) Responsibility
d) Duty
Answer: A
102. Call option gives the particular of
a) Name of the company
b) Number of shares
c) Purchase price or exercise d) All the above
price
Answer: D
103. Put option is the right to the owner to ____ a security
a) Sell
b) Buy
c) Lease
d) None
Answer: A
104. For a given striking price, higher the stock price, the ____ will be the
call option price
a) Higher
b) Lower
c) Equal
d) None
Answer: A
105. ____ the option period, the higher will be the option price
a) Longer
b) Shorter
106.
107.
108.
109.
110.
111.
c) Medium
d) None
Answer: A
Put buyer has the right to sell the shares at the _____ price even if the
price falls
a) Increased
b) Decreased
c) Prefixed
d) None
Answer: C
The gains of the put buyer are the ___ of the put writer
a) Gains
b) Losses
c) Receipts
d) None
Answer: B
Future is a financial ____ which derives its value from the
underlying assets on future dates at a stated price and quantity
a) Asset
b) Liability
c) Contract
d) None
Answer: C
Market index futures are directly related to with _______
a) Stock market
b) Commodity market
c) Forex market
d) None
Answer: A
In a forward contract, _____ parties agree to buy and sell some
underlying asset on future date
a) One
b) Two
c) Three
d) None
Answer: B
_____ is the current market price at which an asset is bought or sold
for immediate payment and delivery.
112.
113.
114.
115.
116.
a) Spot price
b) Future price
c) Market price
d) Exercise price
Answer: A
The forward market has the problem of
a) Lack of centralization of b) Liquidity
trading
c) Counterparty risk
d) All the above
Answer: D
The stock index futures was introduced in _______
a) 1982
b) 1983
c) 1992
d) 1993
Answer: A
A ______ owns the stock and his aim is to protect himself against the
risk caused by the price changes
a) Hedger
b) Speculator
c) Gambler
d) None
Answer: A
______ each trading session, each customers position is estimated
according to the new settlement price of the index
a) During
b) At the beginning of
c) At the close of
d) None
Answer: C
______ is a person who simultaneously purchases and sells the same
shares in two different markets for different prices
a) Investor
b) Arbitrageur
c) Hedger
d) None
Answer: B
117. At the time of _____, the futures price is higher than the current
market
a) Optimism
b) Pessimism
c) Problem
d) None
Answer: A
118. ____ provides the facility of borrowing and lending of shares and
funds
a) Badla
b) Hedging
c) Arbitrage
d) None
Answer: A
119. Nifty contains a well-diversified portfolio of_____ stocks and Nifty is
selected as the base for stock index futures.
a) 10
b) 25
c) 50
d) 100
Answer: C
120. The black-Scholes theory says that the option price is determined by
______
a) The market price of the stock b) The exercise price
c) The life of the option
d) All the above
Answer:
UNIT - V
121. The common practice in the traditional approach is
a) To evaluate the entire stock b) To maximize the expected
market
return for a given level of risk
c) To evaluate the entire d) To select the portfolios
financial
plan
of
the
individual
122.
123.
124.
125.
126.
127.
Answer: C
The need for constant income depends on the
a) Market risk
b) Inflation risk
c) Interest risk
d) Unique risk
Answer: B
The highly liquid security is
a) Mutual fund units
b) Treasury bills
c) Shares
d) Commercial papers
Answer: B
Investors invest more in stock during their
a) Early career period
b) Mid-career level
c) Retirement stage with huge d) All the above mentioned period
money
Answer: A
An investor is having a portfolio with the combination of stock and
bonds in the ratio of 75:25, he is
a) Risk averse
b) Risk neutral
c) A risk taker
d) Active in portfolio management
Answer: C
In the active approach the investor continuously studies
a) Group related risk
b) Market related risk
c) Security specific risk
d) All the above
Answer: D
Diversification reduces
a) Interest rate risk
b) Market rate risk
c) Unique risk
d) Inflation risk
Answer: C
return
Answer: C
133. The unsystematic risk is explained by
a) Variance of the index
b) Unexplained variance of the
index
c) Explained variance of the d) None of the above
index
Answer: B
134. The relationship between potential unsystematic risk and reward is
given by
a) Excess return to beta ratio
b) Excess return to securitys
Standard deviation ratio
c) Excess return to securitys d) Excess return to beta square
variance ratio
ratio
Answer: A
135. Corner portfolio are calculated where a
a) Security enters
b) Security leaves
c) Security enters or leaves
d) Security with high extreme
value enters
Answer: C
136. The efficient frontier becomes a straight line through out because of
the
a) Introduction of risk free b) Introduction of lending
assets
c) Introduction of lending and d) Introduction of borrowing
borrowing
Answer: C
137. The security market line describes the expected return for
138.
139.
140.
141.
142.
Answer: C
The stock above the security market line is
a) Overpriced
b) Underpriced
c) Appropriately
d) Of high risk
Answer: B
Market imperfections may lead to
a) Lower SML
b) Higher SML
c) Band of SML
d) Non-linear SML
Answer: C
The buying and selling activities of the arbitrageur
a) Increased the profit
b) Brings equilibrium level
c) Creates disequilibrium
d) Reduces the profit margin
Answer: B
According to APT theory, an investor would try to increase returns
from his portfolio
a) By increasing the risk
b) By increasing the portfolio
funds
c) By reducing the risk
d) Without increasing the portfolio
funds
Answer: D
In an arbitrage portfolio, the change in the proportions of different
securities will add up to
a) Zero
b) Greater than one
c) Less than one
d) Equal to one
143.
144.
145.
146.
147.
148.
Answer: A
The mutual funds that are listed in the stock exchanges are
a) Closed-end funds
b) Stock indexed funds
c) Open-end funds
d) Growth schemes
Answer: A
The investors by investing in the mutual funds get
a) Professional management
b) Diversification
c) Return potential
d) All the above
Answer: D
The Sharpe index assigns the high value to funds that have
a) Low standard deviations
b) Higher returns
c) Higher risk adjusted returns d) Higher risk premium
Answer: C
According to Treynor index, a steep slope would indicate
a) The fund is yielding higher b) The funds volatile return
returns
c) The fund is sensitive to the d) The fund is not sensitive to the
market
market
Answer: C
In the Treynor index, the performance of the fund depends on
a) The riskless rate of return
b) The risk premium and standard
deviation of funds return
c) The risk premium and beta d) The risk premium and the
coefficient
standard deviation
Answer: C
Jensens performance index gives importance
a) To the asset combination
b) Professional management
Answer: D
149. The NSE Nifty index fund consists of
a) The stocks of high market b)
capitalization in NSE
c) All the stocks of the Nifty d)
index
Answer: C
150. The market timer is a
a) Professional
portfolio b) Active portfolio manager
manager
c) Passive portfolio manager
d) None of the above
Answer: B
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