SECURITY ANALYSIS AND PORTfolio

Security Ananysis And Portfolio Managamnent
I DE NTIAL
CONF
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Risk on a portfolio of assets is always same as the risk on
individual asset.
Correct Answer False
Your Answer False
Multiple Choice Single Answer

Question The price of the index futures contract is defined as :-
Correct Answer Future price = Spot price + Carry cost
Your Answer Future price = Spot price + Carry cost

Question In India we have index futures contracts based on :-
Correct Answer S&P CNX Nifty and the BSE sensex
Your Answer S&P CNX Nifty and the BSE sensex
Match The Following

Question Correct Answer Your Answer
Future value of a series of Future value of annuity Future value of annuity

cash flows occurring at
the end of each period.
Value today of a stream of Present Value Present Value
cash flows that occurs in
future.
Value at a certain future Future Value Future Value
date today of a stream of
cash flows that occurs
over a period of time.
Series of equal payments Present value of annuity Present value of annuity
or receipts occurring at
regular intervals of time.
True/False
Question Bond ratings by credit rating agencies provide superior and low
cost information to the investor serving as a basis for a proper
risk-return trade off by investors.
Correct Answer True
Confidential
Your 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
Your Answer Indicates in black if the closing price is lower than the opening
opening price
Select The Blank

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

Question Which are the different styles of displaying charts?
Correct Answer Bar and line charts , Candle stick charts , Point and figure charts
Your Answer Bar and line charts , Candle stick charts , Point and figure charts
True/False
Question A higher value of current ratio indicates a better short term
solvency of the firm.
Correct Answer True
Your Answer True

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
Your Answer A simple and useful tool in technical analysis , Prices move in
resistance

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

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/-
Your Answer Rs. 6083/-

Question More than half the variation in stock price could be attributed to
which factor?
Correct Answer Market influence
Your Answer Market influence
Match The Following

Technical collaboration of 1981 1981

Bharat Forge with SIFCO
industries USA
Bharat Forge was 1961 1961
incorporated at Mumbai
Shares of 100 each 1971 1971
subdivided of Bharat forge
930000 bonus shares 1976 1976
issued by Bharat Forge
True/False
Question A rally that develops on contracting volumes is suspect and
warns of a potential trend reversal in price
Correct Answer True
Your Answer True

Question What does lower level of unemployment indicates?
Correct Answer Positive economic conditions
Your Answer Positive economic conditions
Confidential
Question What is the objective of Portfolio management?
Correct Answer To Minimize risk and maximize return
Your Answer To Minimize risk and maximize return
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
Your Answer Transitional

Question What are the features of point and figure charts?
Correct Answer Charts are constructed using a combination of X's and O's
known as boxes. , X's show that the prices are moving up , O's
show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and O's
Select The Blank

Question The 8% taxable savings bonds are repayable after ________
years.
Correct Answer 6
Your Answer 6

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

covenants
Your Answer Collateral , Call provision , Sinking fund and protective
covenants

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
Your Answer To earn a profit while restricting the downside risk , To use the
contract
Select The Blank
Confidential
Question Current liabilities include all liabilities due in the next ________
and provisions.
Correct Answer 12 months
Your Answer 3 months
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
Your Answer Default risk

Question Mutual fund schemes could be broadly classified as :-
Correct Answer Open ended scheme , Close ended scheme
Your Answer Open ended scheme , Close ended scheme
True/False
Question Balance of payments surplus augments foreign reserves of the
country and have a favourable impact on he exchange rate.
Correct Answer True
Your Answer True
Select The Blank

Question ________ model is based on the principle that an initial phase
where the growth rate is not stable and subsequent steady
growth rate and remains for the long-term.
Correct Answer The Two-Stage dividend discount
Your Answer The Two-Stage dividend discount
True/False
Question The cost structure remaining the same, better price realisation
results in lower gross profit ratio.
Your Answer False
Select The Blank

Question ________ ratio is estimated by dividing the market value of a
firm's assets by the replacement cost of these assets.
Correct Answer Market value to replacement cost ratio
Confidential
Your Answer Market value to replacement cost ratio

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
Your Answer Secured second largest customer in China , Appointed a

Question The financial contract between the issuer and the purchaser of
the bonds is termed as :-
Correct Answer Bond indenture
Your Answer Bond indenture
True/False
Question With the use of diversification you can reduce the risk.
Correct Answer True
Your Answer True

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
Your Answer A contract between two parties , Where buyer receives a
Select The Blank

Question Dow Jones transportation average was previously known as
________.
Correct Answer Rail average
Your Answer Rail average

Question What are the features of company fixed deposits?
Correct Answer Interest rate offered is higher than banks , No benefits under 80
L , No TDS for interest income upto Rs. 5000
Confidential
Your Answer Interest rate offered is higher than banks , No benefits under 80

Question In estimating the growth of a firm, analyst's forecasts have an
advantage over historical data-based models because :-
Correct Answer They incorporate more recent information about the firm and
inputs future prospects
Your Answer They incorporate more recent information about the firm and
inputs future prospects

Question What do you understand by money supply?
Correct Answer Total money in existence at any given time
Your Answer Total money in existence less borrowings
Select The Blank

Question Under ________ EMH investors cannot earn abnormal/superior
profits on securities on a consistent basis.
Correct Answer Semi-strong form
Your Answer Weak form

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
Your Answer Cannot give indication of the inclination of market participants to
purchase stock
Select The Blank

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

Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8%
after 5 years?
Correct Answer Rs.14.693/-
Your Answer Rs.14.693/-
True/False
Confidential
Question Equity shares is a high return high risk instrument.
Correct Answer True
Your Answer True
True/False
Question The returns of sector specific funds are solely dependant on the
performance of the respective sectors / industries.
Correct Answer True
Your Answer True
True/False
Question Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
Your Answer True

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
Your Answer Research and development , Capital investment and focus on

Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3
years. He wanted to know what is the present value of this
amount, if the rate of interest is 9% p.a ?
Correct Answer Rs.1,15,827/-
Your Answer Rs.1,15,827/-

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
Your Answer Selecting a set of scrips to be used , Fixing starting date ,
Confidential
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
Total Sets 11
SET 1
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
Weak form model is also termed as Random walk model

Investors are rational Efficient market hypothesis
Securities current prices fully reflect all Weak form EMH
historical information
Framework on efficient capital markets, a Fama
review of theory and empirical work
Development of Dow's principles William Peter Hamilton

Breadth Indicator Advance/decline line
Momentum indicator MACD
Trend lines Useful tool in technical analysis
Under options contract When you expect When you expect prises to rise, then you take
prices to fall, then, you take a long position a short position by selling puts.
by buying puts.
A contract where both the parties are equally Futures contract
responsible
The amount which the buyer of the option Option price
has to pay to the option writer to induce him
to accept the risk associated with the
contract.
NSE&BSE are regulated by Securities Exchange Board of India
Equity shares High risk High risk

Government Securities No risk Low risk
Bank Deposits Low risk No risk
Mutual Funds Average risk Average risk
Risk free investment Actual returns = expected returns

Risk Volatility in the return
Variance Measure of dispersion
Returns Future benefits from investments
H-Model For Valuing Growth Initial growth rate is not constant but linearly
falls over time to reach the stable growth rate
Confidential
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
Future value of a series of cash flows Future value of annuity

occurring at the end of each period.
Value today of a stream of cash flows that Present Value
occurs in future.
Value at a certain future date today of a Future Value
stream of cash flows that occurs over a
period of time.
Series of equal payments or receipts Present value of annuity
occurring at regular intervals of time.
MCX Commodity Exchange

Sensex BSE Index
Nifty NSE Index
Lifex ET Index
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.
A contract where both the parties are equally Futures contract
responsible
The amount which the buyer of the option Option price
has to pay to the option writer to induce him
to accept the risk associated with the
contract.
Ratio used as a measure of relative value PEG ratio

The market value of the firms assets divided Market value to replacement cost ratio
by the replacement cost of these assets
key determiner of revenue multiples Profit margin
The market value of the equity in a firm Price to book value ratio
reflects the markets expectations of the firms
earnings power and cash flows.
Growth of income 40-60 % debt, 40-60 % equities

Current income Short term debt portfolio
Confidential
Stability of principal Fixed - income portfolio
appreciation 75-100 % in equities
The yield to maturity is same as the Geometric mean return or the internal rate of
return
Periodic interest payments and principal Debt instrument/Bonds
repayment at the time of maturity
The actual yield earned by an investor on a Realised yield
bond
Present value interest factor of annuities and Yield to maturity
present value interest factor
Expiration period for options Nine months

The world's first largest options exchange Chicago Board of options exchange
The most popular pricing options model Black Scholes

published in the year 1973
When the writer gives the buyer of the option Put option
the right to sell the underlying asset on or
before the expiry date
Weak form model is also termed as Random walk model

Investors are rational Efficient market hypothesis
Securities current prices fully reflect all Weak form EMH
historical information
Framework on efficient capital markets, a Fama
review of theory and empirical work
Confidential
SET 1
Question Measures of ________ tells us what we can expect a typical or middle data point of a
distribution to be.
Correct Answer Central tendency
Question Capital expenditure -depreciation +change in working capital -(new debt issued - debt
repaid) =
Correct Answer Equity reinvested in business
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
Question What do you understand by term pioneering stage in the industry life cycle analysis?
Correct Answer Slow sales growth product recently introduced
Question In India futures on individual securities have been introduced by :-

Correct Answer BSE & NSE

Correct Answer Collateral , Call provision , Sinking fund and protective covenants
Question The compounded annual return of Kisan Vikas patra is ________.

Correct Answer 0.084
Question ________ measures the profitability of operations without considering the influence of
financial structure and tax rate.
Correct Answer Earnings power
Question The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer 5
Question The govt allowed public sector banks and institutions in mutual funds in ________.
Correct Answer Early 90's
Question Which ratios are commonly used?

Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt equity ratio
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?
Question The ________ phase is characterized by resistance area and support level.
Correct Answer Transition
Question ________ is due to the fact that a borrower may not pay interest and/or principal on
time.
Confidential
Question What do you understand by the term redemption price?
Correct Answer Price or NAV at which a scheme purchases its units
Question Investment decisions can be viewed as an integrated process to which security analysis
makes its unique contribution.
Correct Answer True
Question Secondary reactions occurs because of ________ which arise in the market as a result of
over optimism and over pessimism.
Correct Answer Technical distortions
Question Five paisa.com is an example of on line trading portal.

Correct Answer True
Question What is the percentage of variation the market and industry influence account for?
Correct Answer 2/3rd
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
Correct Answer True
Question Post office monthly schemes have a 10 year tenor.

Question Till 1990's secular Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually.
Question The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,
Buying bonds issued to banks and financial institutions
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
Question Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as
well as current.
Correct Answer True
Question A pattern which does not result in reversal of a trend but reaffirmation of the underlying
trend is called ________.
Correct Answer Consolidation pattern
Confidential
Question The risk associated to get the required rate of return on the stock is measure by market
beta.
Correct Answer True
Question Acid test ratio is more stringent measure of liquidity compared to the ________.
Correct Answer Current ratio
Question What are the SEBI regulations with respect to mutual funds?
Correct Answer Mutual funds to be registered with SEBI before the launching any scheme ,
2/3rds of the directors of the trustee company must be independent , An AMC approved by SEBI
manages the fund
Question Default is normally evaluated and indicated by the rating assigned to the debt
instruments by independent credit ratings agencies.
Correct Answer True
Question In case of fixed income securities like debentures, you get the return in the form of
dividend.
Question What are the assumptions of the Dow theory?

Correct Answer Majority of stocks follow the underlying trend of the market most of the time
Question The Peer group of Bharat Forge consists of which all companies?
Correct Answer Am forge industries , Kalyani Forge , EL Forge
Question We can compare the price earning ratio of a market to its historical average to make
judgements about, whether market is :-
Correct Answer Under valued or over valued
Question What is the rate of interest on the tax free bonds issue by the government?
Correct Answer 6.5%

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
Question What are the features of public provident scheme?

Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available from
7th year
Question Investments could be made in retail government securities through :-

Correct Answer Primary dealers
Question What were the Chairman's comments during the speech in the Annual report of the FY
2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports , Highest pre
and post tax profits
Confidential
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
Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded annually.
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
Question Quick assets consist of current assets less inventories.

Correct Answer True
SET 2
Question 1 :-
Correct Answer Dividends , Interests , Capital appreciation
Question 2 Currently in India index options are both European and American in nature.
Question 3 The cost structure remaining the same, better price realisation results in lower gross
profit ratio.
Question 4 What are short term trends?

Correct Answer Trends which interrupt the course of the intermediate cycle
Question 5 What were the achievements of Bharat Forge during the year 2003?
Question 6 A segment is more attractive when there are actual or potential substitutes for the
product.
Question 7 The regulations of SEBI with respect to mutual funds were fully revised in the year
________.
Correct Answer 1996
Question 8 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
Question 9 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
Question 10 Efficient market hypothesis is based on the assumption that market comprises
of :-
Confidential
Correct Answer Rational Investors
Question 11 Co variance of asset with market portfolio 85 and variance of market portfolio
is 100 then beta is :-
Question 12 The ________ phase is characterized by resistance area and support level.
Question 13 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:-
Question 14 What are the features of candle stick charts?

Question 15 Bond ratings by credit rating agencies provide superior and low cost
information to the investor serving as a basis for a proper risk-return trade off by investors.
Correct Answer True
Question 16 ________ is affected by the leverage decisions of the firm.

Question 18 What does flow-of fund analysis help in understanding?

Correct Answer Availability of money for the stock market
Question 19 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
Question 20 ________ refers to the possibility that there may not be a readily available
market for the particular bond.
Correct Answer Liquidity risk
Question 21 The govt allowed public sector banks and institutions in mutual funds in
________.
Question 22 What are the features of point and figure charts?

Correct Answer Charts are constructed using a combination of X's and O's known as boxes. ,
X's show that the prices are moving up , O's show that the prices are moving down
Question 23 A security represent evidence of :-

Correct Answer A property right
Question 24 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?
Confidential
Question 25 The value of the stock in the ________ model is sensitive to the estimates of
the growth rate.
Correct Answer The Gordons dividend growth
Question 27 In India futures on individual securities have been introduced by :-

Question 28 During the 1980's rate of savings in India has hovered around what percentage?
Correct Answer 0.21
Question 29 The arithmetic mean is a set of observations is calculated by finding the sum
values and dividing by the number of observations.
Correct Answer True
Question 30 Investment in gilt edged securities carry a higher element of risk.


Question 32 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
Question 33 Dow Jones transportation average was previously known as ________.

Question 34 What are the features of company fixed deposits?

Correct Answer Interest rate offered is higher than banks , No benefits under 80 L , No TDS for
interest income upto Rs. 5000
Question 35 An option is :-
Correct Answer A contract between two parties , Where buyer receives a privilege for which he
pays a premium , Where the seller accepts an obligation for which he receives a fee
Question 36 The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Question 37 Following a decline, heavy volume with little price change is indicative of
accumulation and is normally a bearish factor.
Question 38 In case of assured returns, A scheme cannot promise returns unless such returns
are fully guaranteed by sponsor or AMC.
Correct Answer True
Question 39 Security analysis serves the investment decision maker by identifying

________securities.
Correct Answer Under priced
Confidential
Question 40 The computation of return on a bond involves considering :-
Correct Answer The entire sequence of cash flows , The timing of cash flows , Calculating the
internal rate of return
Question 41 Formula for calculation of portfolio variance requires :-

Correct Answer Expected return on portfolio , Expected return on assets , Weight of asset in the
portfolio
Question 42 ________ absorbs the excess demand or supply generated by hedgers and
assume the risk of price fluctuations.
Correct Answer Speculators
Question 43 The issuing firm enjoys the flexibility to call the bonds if the interest rates fall
significantly and it can issue :-
Correct Answer New bonds at a lower rates
Question 44 A ________ rally for stocks generally takes place because of an improved
outlook for business conditions over what was anticipated.
Correct Answer Bear market
Question 45 Speculators buy or sell futures contract in an attempt to earn a profit.

Correct Answer True
Question 46 What were the objectives for 2002-03 the chairman of Bharat forge had
emphasised on in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value added products ,
Continue reducing costs
Question 47 Which are the most popular types of orders placed through an online trading
account?
Correct Answer Limit orders , Market orders
SET 3
Question 1 UTI was set up in the year ________.

Correct Answer 1963
Question 2 When was the first mutual fund set up?

Correct Answer 1963
Question 3 A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer True
Question 4 A firm's growth is determined by how much is re-invested into new assets and the
quality of these investments, and these includes :-
Correct Answer Acquisitions , Building distribution channels , Expanding marketing
capabilities and investing in new facilities
Question 5 Which of the following are important momentum indicators used widely?
Confidential
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving average
convergence divergence(MACD)
Question 6 An ________ is a series of equal payments or receipts occurring at regular intervals of

time.
Correct Answer Annuity
Question 7 How can transition phases be projected?

Correct Answer Transition phases are signalled by clearly definable price patterns
Question 8 If the price of a share at the beginning of the year was Rs.50/-, dividend received
during the year was Rs.10/-per share and the price at the end is Rs.60/-. What is the rate of return?
Correct Answer 0.4
Question 9 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
Question 10 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
Question 11 Investment decisions can be viewed as an integrated process to which security

analysis makes its unique contribution.
Correct Answer True
Question 12 An option is a contract which gives the buyer ________ to buy or sell shares of
the underlying security at a specific price on or before a specific date.
Correct Answer Right but not obligation
Question 13 Measures of ________ tells us what we can expect a typical or middle data
point of a distribution to be.
Question 14 Which ratios are commonly used?

Correct Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
Question 15 What were the Chairman's comments during the speech in the Annual report of
the FY 2002-03?
Question 16 Debentures rated ________ are judged to offer sufficient safety of timely
payment of interest and repayment of principal.
Correct Answer "BBB"
Question 17 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
Confidential
Question 18 Quick assets consist of current assets less inventories.
Correct Answer True
Question 19 In India we have index futures contracts based on :-

Question 20 Who are the constituents of a mutual fund?

Correct Answer Sponsor & trustees , Asset management company , Custodian
Question 21 Investment is a risk free investment when :-

Correct Answer Actual return is = expected return
Question 22 If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Question 23 A price rise accompanied by expanding volume denotes a potential trend

reversal.
Question 25 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
Question 26 What are the features of Kisan Vikas Patra?

Correct Answer Term is for 8 years seven months , Provision of premature withdrawal , Interest
rate is 8.4% compounded annually
Question 27 Investing in this avenue enable you participate in the equity market indirectly :-
Correct Answer Mutual Funds
Question 28 ________ identified five forces that determine the intrinsic long run profit
attractiveness of a market or market segment.
Correct Answer Michael Porter
Question 29 In any Economy, bridge is created between savers and who need the funds by
this system :-
Correct Answer Financial
Question 30 Agriculture account for how much portion of the economy?

Correct Answer Quarter
Question 31 Post office monthly schemes have a 10 year tenor.

Question 32 ________ ratio indicates the margin available after meeting the manufacturing
expenses.
Correct Answer Gross Profit margin
Confidential
Question 34 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
Question 35 There may be convertible clause which gives the debenture holder the option to
convert the debentures into equity shares.
Correct Answer True
Question 36 ________is a hybrid form of security which has characteristics of both equity
and debentures
Correct Answer Preference shares
Question 37 Who operates the sinking fund under the sinking fund provision of a firm?
Correct Answer The bond trustee or the issuer
Question 38 The security analysis process will achieve :-

Correct Answer True picture of a company , Normal earning power , Projection of future
profitability
Question 39 Debentures rated "BB" refers ________ of timely payment of interest and
principal.
Correct Answer Inadequate safety
Question 40 How did Dow use the behaviour of stock markets?

Correct Answer As a barometer of business conditions rather than a basis for forecasting stock
prices
Question 41 The return to the bond investor can be measured in terms of :-

Correct Answer Current yield , Yield to maturity , Realised yield
Question 42 The growth period in the industry life cycle is defined as :-

Correct Answer Period of rapid market acceptance and substantial profit improvement
Question 43 The Derivative market is divided into Future market and ________ market.
Correct Answer Options
Question 44 What are the features of short-term trends?

Question 45 Default is normally evaluated and indicated by the rating assigned to the debt
Correct Answer True
Question 46 The Dow theory was published in a series of editorials in the ________.
Correct Answer Wall street journal
Question 47 PPF is a good retirement planning and tax saving vehicle.

Correct Answer True
Confidential
SET 4
Question 1 ________ deal in futures to offset a pre-existing risk.
Correct Answer Hedger
Question 2 Bonds and Debentures represent long term debt instruments.

Question 3 What is the limitation of Flow-of funds analysis method?

Correct Answer Cannot give indication of the inclination of market participants to purchase
stock
Question 4 The growth rate in the initial phase is not constant but declines linearly over time to
reach the stable growth rate in steady state is a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model
unlike the classic two stage model
Question 5 Which are the different types of accounts offered to investors by the stock brokers?
Correct Answer Cash trading , Margin trading
Question 6 Sentiment indicators are based on what assumption

Correct Answer Different groups of investors are consistent in their actions at major market
turning points
Question 7 What are the features of Retail government securities (G-secs) ?

Correct Answer Safest investment option available , Demat account is required for investment ,
Choice of tenure varies from less than 1 year to 30 years
Question 8 Under ________ EMH investors cannot earn abnormal/superior profits on securities
on a consistent basis.
Question 9 While calculating geometric mean calculation of root is not important.

Question 10 To measure the movement of stocks in the market which indices were
constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones Transportation Average
Question 11 ________ take long or short positions only with the intention of making profits
by getting out of the market when conditions favor them.
Question 12 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
Question 13 Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True
Question 14 ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remains for the long-term.
Confidential
Question 15 Investors in high tax bracket would benefit by investing in equity schemes.
Question 16 The security market is the market for :-

Correct Answer Equity , Debt , Derivatives
Question 17 ________ ratio is estimated by dividing the market value of a firm's assets by
the replacement cost of these assets.
Question 18 In a typical stock market cycle which are the types of trends?
Correct Answer Trends upward , Trend downward , Sideway trend
Question 19 ________involves a simultaneous sale and repurchase agreement.

Correct Answer Repos
Question 21 Sensex is the index of Calcutta Stock Exchange.

Question 22 Mutual fund schemes could be broadly classified as :-

Question 23 Under futures market ________ process provides for collection of losses that
have already occurred.
Correct Answer The daily settlement
Question 24 What was the final analysis on the performance of Bharat forge for the year FY
02?
Correct Answer Aim to become US$1 billion Company by Fy 08 from US$100 million , Stock
currently trades at 15 times its FY 05 consensus EPS forecasts , Stock will trade at an inexpensive
PEG of 0.6x.
Question 25 What are intermediate trends?

Correct Answer They are counter-cyclical trends within the confines of a primary trend
Question 26 Gilt Edged Securities are :-

Correct Answer State Govt. , Quasi-Govt , Central Govt
Question 27 Fundamental analysis focuses on predicting the future price of a security and
Technical analysis on estimating the intrinsic value of a security.
Question 28 Current liabilities include all liabilities due in the next ________ and
provisions.
Question 29 What are index funds?

Correct Answer Investment in securities in the same weightage which replicates a particular
index
Confidential
Question 30 S&P NSE 50 index is known as ________.
Correct Answer NIFTY
Question 31 ________seeks to safeguard against potential losses on the outstanding position

in futures market.
Correct Answer Initial margin
Question 32 If rupee weakens against the dollar, it has favourable impact for the importers.
Question 33 What are the ways of measuring relative strength?

Correct Answer Calculate the rates of return and classify securities that have earned superior
historical returns , Calculating certain ratios will help in analyzing whether a security has relative
strength
Question 35 ________ ratio is the ratio of net profit to the sales.

Correct Answer Net Profit Margin
Question 36 The risk associated to get the required rate of return on the stock is measure by
market beta.
Correct Answer True
Question 37 The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Correct Answer Interest rates are falling
Question 38 What are the assumptions of the Dow theory?

Correct Answer Majority of stocks follow the underlying trend of the market most of the time
Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded

Question 40 The basic inputs of the general model are expected dividends and required rate
of return on stock.
Correct Answer True
Question 41 How many measures of money supply are used commonly?

Correct Answer 2
Question 42 European style options are more expensive than American style because they
offer greater flexibility to the buyer.
Question 43 Under which simple model the value of the stock is the present value of
expected dividends on it :-
Correct Answer The Dividend discount model
Question 44 What are the different types of profitability ratios?

Correct Answer Gross profit margin ratio , Earnings power , Return on equity
Confidential
Question 45 The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market ,
Buying bonds issued to banks and financial institutions
Question 46 Avenues can be broadly classified into the which type of assets?
Correct Answer Financial and Real
Question 47 Stock Exchanges are the part of :-

Correct Answer Secondary market
SET 5
Question The value of the stock in the ________ model is sensitive to the estimates of the
growth rate.
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
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
Question Debentures rated ________ are judged to offer sufficient safety of timely payment of
interest and repayment of principal.
Question Stock Exchanges are the part of :-

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
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

Question The normal relationship is for the volume to expand on rallies and contract on
declines.
Correct Answer True
Confidential
Question In case of assured returns, A scheme cannot promise returns unless such returns are
fully guaranteed by sponsor or AMC.
Correct Answer True

Correct Answer A simple and useful tool in technical analysis , Prices move in trends , The
trend lines represent points of support and resistance
time.

Question A firm uses a combination of equity and debt for financing its assets.
Correct Answer True
Question A pattern which does not result in reversal of a trend but reaffirmation of the
underlying trend is called ________.
Question Policies of the government and the attitude of the government towards the industry
have a considerable influence on the industry.
Correct Answer True
Question The index futures symbols of BSE are represented as :-

Correct Answer BSX JAN 2005 (January contract)
Question The growth rate in the initial phase is not constant but declines linearly over time to
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model
unlike the classic two stage model
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
Question Investors in high tax bracket would benefit by investing in equity schemes.
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
Question ________ deal in futures to offset a pre-existing risk.

Question More than half the variation in stock price could be attributed to which factor?
Confidential
Price pattern Resistance level Head and shoulders formation
Primary trendLast between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to as long as 6 months Last between 3 weeks to as
long as 6 months
Short term trend Last 1 to 3-4 weeks Last 1 to 3-4 weeks
Question ________are good benchmark to compare the ratios for a firm.

Correct Answer Industry averages
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

Question When we invest in only one asset we are not exposed to any specific or market risk.
Question In India, the futures on individual securities have been introduced from :-
Correct Answer 2001
Question ________ measures the efficiency of credit management.

Correct Answer Average collection period

Question What are the ways of measuring relative strength?

strength

Correct Answer True
Question A security analysis is done :-

Correct Answer For decision making for investments
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?
Confidential
Question Dow Jones transportation average was previously known as ________.
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
Correct Answer True
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

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
MCX Commodity Exchange Commodity Exchange

Sensex BSE Index BSE Index
Nifty NSE Index NSE Index
Lifex ET Index Gold Index
Question A pledge of real assets as insurance against the non-payment of default by the buyer
represents
Correct Answer Collateral
Question Bearish actions come from a series of declining peaks and troughs.
Correct Answer True
Question Who developed Dow's Principles and organised them into a theory as it is known
today?
Correct Answer William Peter Hamilton Your Answer Charles.H.Dow
SET6
Question ________ is affected by the leverage decisions of the firm.

Question Debentures rated "BB" refers ________ of timely payment of interest and principal.
Question S&P NSE 50 index is known as ________.

Confidential
Question The risk associated to get the required rate of return on the stock is measure by market
beta.
Correct Answer True
NSE&BSE are regulated by Securities Exchange Board of India 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 Options contract
A contract where both the parties are equally responsible Futures contract 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 Option price
Question A segment is unattractive if the buyers possess strong or growing bargaining powers.
Correct Answer True
Question Debt instruments that have a maturity period of more than one year are called as :-
Correct Answer Bonds
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
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
Question A higher value of current ratio indicates a better short term solvency of the firm.
Correct Answer True
Question ________seeks to safeguard against potential losses on the outstanding position in

futures market.
Question Risk can be referred as the ________ in the return with respect to the expected return.
Question The return to the bond investor can be measured in terms of :-

Question Certificate of Deposits offers high rate of interest than Treasury Bills.
Correct Answer True
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
Question Which of the following are important momentum indicators used widely?
Confidential
Question What is Gross National Product ?
Correct Answer Gross income generated from within the country
Question An ________ is a series of equal payments or receipts occurring at regular intervals of

time.
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
Question Which market is affected with the improving and higher growth rate in economy?
Correct Answer Stock market
Ratio used as a measure of relative value PEG ratio PEG ratio

The market value of the firms assets divided by the replacement cost of these assets Market value to
replacement cost ratio Market value to replacement cost ratio
Key determiner of revenue multiples Profit margin 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 Price earning ratio
Question Features of PSU Bonds are :-

Correct Answer No TDS , Transferable by endorsement , No stamp duty on transfer
Question If a rupee weakens against the dollars it has favourable impact for the exporters.
Correct Answer True
Question Credit rating companies assign ratings for which of these investments?
Correct Answer Company deposits
Question If rupee weakens against the dollar, it has favourable impact for the importers.

Question ________ is the value at a certain future date today of a stream of cash flows that occurs
Correct Answer Future value
Question The basic assumption of Technical analysis is that, price discounts everything and it is
the outcome of all forces affecting a stock.
Confidential
Correct Answer True
Dow Jones transportation average was previously known as Rail average Logistics average Road
average Freight average.
SET 7
Question While calculating geometric mean calculation of root is not important.

Question What could be a better approach to flow-of -funds analysis?

Correct Answer An examination of liquidity trends in the banking system
Question The Asset management company of the mutual fund must have 50% independent
directors.
Correct Answer True
Correct Answer True
Question Investment is a risk free investment when :-

Question The govt allowed public sector banks and institutions in mutual funds in ________.
Question The returns of sector specific funds are solely dependant on the performance of the
respective sectors / industries.
Correct Answer True


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
Question Secondary reactions occurs because of ________ which arise in the market as a result
of over optimism and over pessimism.
Confidential
Question In a heads and shoulders formation the deeper the pattern, the greater is the ________
significance once it is completed
Correct Answer Bearish
Question Debt is less riskier source of finance than equity.

Question The arithmetic mean is a set of observations is calculated by finding the sum values
and dividing by the number of observations.
Correct Answer True
Question What does flow-of fund analysis help in understanding?

Question The normal relationship is for the volume to expand on rallies and contract on
declines. Correct Answer True
Question Growth of the firm can be estimated through :-

Correct Answer Firm's past earnings/historical growth rate , Estimates made by equity research
analyst who follow the firm , Estimates from a firm's fundamentals
Question The security analysis process will achieve :-

Correct Answer True picture of a company , Normal earning power , Projection of future
profitability
Question The general dividend model is based on the principle of :-

Correct Answer Present value of the expected future cash flow

Question What are the features of bank deposits?

Correct Answer Interest is presently around 6% , Benefits under section 80 L , Banks offer
cheque facility for investors making it convenient to withdraw
Question Risk on a portfolio of assets is always same as the risk on individual asset.
Question UTI was set up in the year ________.

Correct Answer 1963

Correct Answer Selecting a set of scrips to be used , Fixing starting date , Calculating market
capitalisation
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
Confidential
Correct Answer Realised yield , Current yield , Yield to maturity

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
Question When the firm is not raising equity by issuing new shares, the growth rate in net
profits is given by :-
Question A ________ rally for stocks generally takes place because of an improved outlook for
business conditions over that was anticipated.
Question Characteristics of Preference shares are :-

Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in
7 to 12 years
Correct Answer Mutual funds to be registered with SEBI before the launching any scheme ,
2/3rds of the directors of the trustee company must be independent , An AMC approved by SEBI
manages the fund
Question The bond issuing firm enjoys the flexibility of being able to call the bonds if :-
Question We can compare the price earning ratio of a market to its historical average to make
judgements about, whether market is :-
Question The growth rate is used to forecast future revenues and earnings and are inputs in
valuing :- Correct Answer Stable firms


Question An option is a contract which gives the buyer ________ to buy or sell shares of the
underlying security at a specific price on or before a specific date.
Confidential
Growth of income 40-60 % debt, 40-60 % equities 40-60 % debt, 40-60 % equities
Current income Short term debt portfolio Fixed - income portfolio
Stability of principalFixed - income portfolio Short term debt portfolio
appreciation 75-100 % in equities75-100 % in equities
Question An investor with a higher tolerance of risk should tilt his portfolio in favour of
________.
Correct Answer Stocks



Correct Answer It connects closing prices from one period to the next , It is ideal for securities
with no high or low price data
Ratio used as a measure of relative value PEG ratio Price to book value ratio
The market value of the firms assets divided by the replacement cost of these assets Market
value to replacement cost ratio Market value to replacement cost ratio
key determiner of revenue multiples Profit margin 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 Price earning ratio
SET 8
Question Gilt Edged Securities are :-

Correct Answer Central Govt , State Govt. , Quasi-Govt
Question What is GDP at factor cost ?

Correct Answer Excludes net income received from abroad

Question The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Question Formula for calculation of portfolio variance requires :-

Correct Answer Expected return on portfolio , Expected return on assets , Weight of asset in the
portfolio
Question The Two-Stage dividend discount model is based on the assumption of :-
Confidential
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
Question With the introduction of on-line trading by NSE and BSE, the role of regional stock
exchanges have diminished.
Correct Answer True
Question The price earning ratio can be estimated for the firms with negative earnings per
share. Correct Answer False
Question ________ absorbs the excess demand or supply generated by hedgers and assume the
risk of price fluctuations. Correct Answer Speculators
Question Who are the constituents of a mutual fund?

Question A share certificate indicates that the investor owns a certain number of shares.
Correct Answer True
Question How can transition phases be projected?

Question Balance of payments surplus augments foreign reserves of the country and have a
favourable impact on he exchange rate.
Correct Answer True
Question What are the features of post office monthly income scheme?
Correct Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10%
on completion of term
NSE Nifty Nifty

SEBI Redressal of investor complaints Redressal of investor complaints
NAV Net asset value Net asset value
AMFI Association of mutual funds of India Association of mutual funds of India
2002-03?
Confidential
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
Question When was the Dow theory first published?

Correct Answer Between 1900 and 1902

Correct Answer Charts are constructed using a combination of X's and O's known as boxes. ,
X's show that the prices are moving up , O's show that the prices are moving down
Question The ________ phase carries a lot of significance because it marks the turning point
between a rising and a falling market.
Question When a debenture is sold to the general public a ________ is appointed.

Correct Answer Trustee
Question A security is said to be ________ if its current market price is over its intrinsic value.
Correct Answer Over priced
Question What are the different types of profitability ratios?


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 :-
Question When was the first mutual fund set up?

Correct Answer 1963
Question What is the art of technical analysis?

Correct Answer To identify trend changes at an early stage and maintain investment posture till
the trend has reversed
Question In any Economy, bridge is created between savers and who need the funds by this
system :- Correct Answer Financial
Question The basic inputs of the general model are expected dividends and required rate of
return on stock. Correct Answer True
Confidential
Correct Answer True
Question Bonds and Debentures represent long term debt instruments.

Question The expected price of the stock at the end of the holding period is determined by
future dividends and the value of the stock is the present value of dividends through infinity are the
underlying assumptions of :-
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
Question What are the features of Kisan Vikas Patra?

Question ________ is the ratio of the market price per share to the earnings per share.
Correct Answer Price earning ratio
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
Question ________ is the value today of a stream of cash flows that occurs in future.
Correct Answer Present value
Question Under futures market ________ process provides for collection of losses that have
already occurred. Correct Answer The daily settlement
Question A security represent evidence of :-

The yield to maturity is same as the Geometric mean return or the internal rate of return
Geometric mean return or the internal rate of return
Periodic interest payments and principal repayment at the time of maturity Debt instrument/Bonds
Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Yield to maturity
Present value interest factor of annuities and present value interest factor Yield to maturity
Interest rate risk
Question A price rise accompanied by expanding volume denotes a potential trend reversal.
SET 9
Confidential
distribution to be.
Question ________ ratio indicates the margin available after meeting the manufacturing
expenses.
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?
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
Question The 6.________% tax saving bonds of government of India have a tenure of 5 years.
Correct Answer 5
Expiration period for options Nine months Nine months

The world's first largest options exchange Chicago Board of options exchange New York
board of Options exchange
The most popular pricing options model published in the year 1973 Black Scholes Black
Scholes
When the writer gives the buyer of the option the right to sell the underlying asset on or before the
expiry date Put option Put option
Question Currently in India index options are both European and American in nature.
Question Return can be in the form of :-

Question The Derivative market is divided into Future market and ________ market.
Confidential
Question European style options are more expensive than American style because they offer
greater flexibility to the buyer.
Correct Answer True
Average collection period Similar to debtors turnover How fast the inventory is being converted
Turnover ratios Help measure the efficiency of utilisation of assets Help measure the
efficiency of utilisation of assets
Debt Equity ratio Debt / Equity Debt / Equity
quick assets Highly liquid assets Highly liquid assets
Question In a typical stock market cycle which are the types of trends?
Question What is a resistance level?

Correct Answer A point where there is opposition to further price rise
Question Debentures rated as "A" are judged to offer ________ of timely payment of interest
and principal. Correct Answer Adequate safety
Correct Answer True

Question How would you rate a portfolio with 90% investment in stocks?
Correct Answer Highly aggressive
time. Correct Answer Default risk
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
Question Agriculture account for how much portion of the economy?

Question How did Dow use the behaviour of stock markets?

Correct Answer As a barometer of business conditions rather than a basis for forecasting stock
prices
Question ________ take long or short positions only with the intention of making profits by
getting out of the market when conditions favor them.
Confidential
Question In case of fixed income securities like debentures, you get the return in the form of
dividend. Correct Answer False
Question What are primary trends?

Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the
business cycle
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 True
Question The Dow theory was published in a series of editorials in the ________.
Correct Answer True
Question The greater the deviation of the actual returns from the actual return :-
Correct Answer Greater the variance


7th year
Question Which are the different types of accounts offered to investors by the stock brokers?
Question In a forward contract there is :-

Correct Answer No Exchange of cash
Question Under EMH it is assumed that if markets are efficient, securities are priced to provide
a :- Correct Answer Normal returns for their given level of risk
Correct Answer True
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 :-
Confidential
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
Question The growth period in the industry life cycle is defined as :-

Correct Answer Period of rapid market acceptance and substantial profit improvement

Question A rally that develops on contracting volumes is suspect and warns of a potential trend
reversal in price Correct Answer True

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
Question Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4% compounded
SET 10
Question What does a transitional phase indicate?

Correct Answer It marks the turning point between a rising and falling market
Correct Answer True
Question The issuing firm enjoys the flexibility to call the bonds if the interest rates fall
Question The sideways trend is essentially a transitional one which separates the two major
market movements.
Correct Answer True
Question More than half the variation in stock price could be attributed to which factor?


Confidential
Question Security analysis serves the investment decision maker by identifying
________securities.
Question Under ________ EMH investors cannot earn abnormal/superior profits on securities
on a consistent basis.
Correct Answer True

Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded annually.


Periodic interest payments and principal repayment at the time of maturity Debt instrument/Bonds
Debt instrument/Bonds
The actual yield earned by an investor on a bond Realised yield Realised yield
Present value interest factor of annuities and present value interest factor Yield to maturity
Yield to maturity

Question Mr. Shekhar invests Rs.50,000/- in a scheme of LIC, the rate of interest is 8%
Confidential
Question Dividend discount model is considered as the simplest model for :-
Correct Answer Valuing Equity
Question ________ refers to the possibility that there may not be a readily available market for
the particular bond.
Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3 years. He wanted to
know what is the present value of this amount, if the rate of interest is 9% p.a ?

7th year



Correct Answer Selecting a set of scrips to be used , Fixing starting date , Calculating market
capitalisation
Question The arithmetic mean is a set of observations is calculated by finding the sum values
and dividing by the number of observations.
Correct Answer True
Correct Answer True
Weak form model is also termed as Random walk model Weak form EMH
Investors are rational Efficient market hypothesisPassive managers
Securities current prices fully reflect all historical information Weak form EMH Strong form
Framework on efficient capital markets, a review of theory and empirical work Fama Fama
Question What are intermediate trends?

Correct Answer They are counter-cyclical trends within the confines of a primary trend
Question ________involves a simultaneous sale and repurchase agreement.

Confidential
Question In any Economy, bridge is created between savers and who need the funds by this
system :- Correct Answer Financial

Correct Answer Interest is presently around 6% , Benefits under section 80 L , Banks offer
cheque facility for investors making it convenient to withdraw
Question What are the important macro economic indicators?

Correct Answer GNP growth rate , Price Conditions , Monsoons
Question If index future is taken under futures contract, the underlying asset would be :-
Correct Answer Stock index
Question European style options are more expensive than American style because they offer
greater flexibility to the buyer.
Question ________ model is based on the principle that an initial phase where the growth rate is
not stable and subsequent steady growth rate and remains for the long-term.
Question ________ absorbs the excess demand or supply generated by hedgers and assume the
risk of price fluctuations.


Correct Answer True
Question When a firm can grow net profits by issuing equity, the expected growth rate in net
profits is determined by
Correct Answer Equity reinvestment rate X return on equity
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

SET 11
Question With the introduction of on-line trading by NSE and BSE, the role of regional stock
exchanges have diminished.
Correct Answer True
Confidential
Question All trades in the futures market are cash settled on a ________ basis.
Correct Answer T+1

strength

Question ________seeks to safeguard against potential losses on the outstanding position in

futures market.
Question The historical growth rate and the past earnings of a firm are used in valuing :-
Question Under futures market ________ process provides for collection of losses that have
already occurred.

Question What does a Balanced fund seek to achieve?

Correct Answer Growth and regular income

Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in 7
to 12 years
Question Fundamental analysis focuses on predicting the future price of a security and Technical
analysis on estimating the intrinsic value of a security.
Question The growth rate in the initial phase is not constant but declines linearly over time to
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-Model unlike
the classic two stage model
Question There may be convertible clause which gives! the deb enture holder the option to convert
the debentures into equity shares.
Confidential
Correct Answer True
Correct Answer True
Question When we invest in only one asset we are not exposed to any specific or market risk.
Correct Answer True
Question What are the warning indicators to be considered before analysing the financial
statements of a firm ?
Question ________ identified five forces that determine the intrinsic long run profit attractiveness
of a market or market segment.
2002-03?
Correct Answer 146% growth in exports , Highest pre and post tax profits , Best year in the history
of the company
Question The regulations of SEBI with respect to mutual funds were fully revised in the year
________.
Correct Answer 1996
Question What are short term trends?


distribution to be.

Correct Answer ! Indicate s in black if the closing price is lower than the opening price , Indicates
Confidential
Correct Answer True

speculation , Either to honour or walk away from the c! ontract

Question The ratios between profits and investments are called rate of return measures.
Correct Answer True
Question Where are gilt funds invested?

Correct Answer Government securities
Question What are the features of public providen! t scheme

7th year
Question What levels if increased will have unfavourable impact on the stock market?
Correct Answer Higher levels of taxation
Question The margining system is future contract is based on ________ recommendations.

Correct Answer J R verma committee
Question Till 1990's secular Indian economy's inflation rate has been of what percentage?
Correct Answer 0.07
Question Capital expenditure -depreciation +change in working capital -(new debt issued - debt
repaid) =
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
Correct Answer True

Question If the price of a share at the beginning of the year was Rs.70/-, dividend received during
the year was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer 0.2
Question A segment is more attractive when there are actual or potential substitutes for the
product.
Correct Answer True
Confidential
Question What are index funds?
Correct Answer Investment in securities in the same weightage which replicates a particular index

Confidential
Select The Blank

Question The value of the stock in the ________ model is sensitive to
the estimates of the growth rate.
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.

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 :-
Select The Blank

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

Your Answer Money Market

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

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

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

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 Indicates in black if the closing price is lower than the
opening price , Indicates in white if the closing price is higher
than the opening price
Your Answer , Displays the correlation between the high and low prices
True/False
Question A firm uses a combination of equity and debt for financing its
assets.
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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 ________.
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


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

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.
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.
Select The Blank
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Question More than half the variation in stock price could be attributed
to which factor?
Match The Following

Price pattern Resistance level Head and shoulders

formation
Primary trend Last between 1-2 years Last between 1-2 years
Intermediate trend Last between 3 weeks to Last between 3 weeks to

as long as 6 months as long as 6 months
Select The Blank

Question ________are good benchmark to compare the ratios for a
firm.
Select The Blank

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

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

Question In India, the futures on individual securities have been
introduced from :-
Correct Answer 2001
Select The Blank



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

Question The Peer group of Bharat Forge consists of which all
companies?
True/False
Correct Answer True

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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?
Select The Blank

________.
Your Answer Freight average

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

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

covenants

Correct Answer A reflection of the idea that prices move in trends which are
determined by various factors
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Match The Following

Question A pledge of real assets as insurance against the non-payment
of default by the buyer represents
True/False
Question Bearish actions come from a series of declining peaks and
troughs.
Correct Answer True

Question Who developed Dow's Principles and organised them into a
theory as it is known today?
Correct Answer William Peter Hamilton
Your Answer Charles.H.Dow
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6. A segment is more attractive when there are actual or potential substitutes for the
product.
True
False
12. The GDP growth rate in the economy in real terms has fluctuated between :-
a)
4% and 5%
b)
3% and 4%
c)
6% and 7%
d) 5% and 6%
The sideways trend is essentially a transitional one which separates the two major
14.
market movements.
True
False
17. What is the minimum investment amount in G-secs?
a)
1000
b)
10000
c)
50000
d) 100000
30. The Two-Stage dividend discount model is best suited for the firms that are :-
a)
In high growth rate phase
b)
Expecting to maintain the growth rate phase steadily for a specific time period
c)
Expecting a established dividend payout ratio
d) Sources of high growth are expected to disappear after specific period of time
How can the financial statements can be manipulated while giving the
estimates for growth?
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a)
Change
method of
b) rate of
depreciation
c)
Change
d) method of
stock
valuation
Inflating
sales for
current year
by advancing
sales for the
following year
Changing
the
management
of the
company
frequently
Marks : 2
45. What are the ways of measuring relative strength?
a)
Calculate the rates of return and classify securities that have earned superior
historical returns
b)
Calculating certain ratios will help in analyzing whether a security has relative
c) strength
d) Calculating the Return on investment
Working out the high and low price fluctuations
46. The average investor in the market is driven more by emotions than by rational
analysis is a rule of :-
a)
Fundamental Analysis
b) Intrinsic value analysis
c) Economic Analysis
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d)
Technical analysis
49. What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment
b) Unstable economy
c) Higher levels of taxation
d) Low levels of interest rates
55. Why does every investor have different investment objectives?
a)
Since every investor has a different set of circumstances, needs and
opportunities
b)
Since it depends on their investment strategies
c)
Every investor has different risk bearing capacities
d)
Every investor has different perception of the markets
True/False
Correct Answer True
Your Answer True

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
Your Answer They last from 1 to 3 or 4 weeks , They interrupt the course of
news events

Question Who operates the sinking fund under the sinking fund provision
of a firm?
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Your Answer The bond trustee or the issuer
True/False
Bills.
Correct Answer True
Your Answer True

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
Your Answer Demerger of investment division and windmills , Nominee
True/False
Question While calculating geometric mean calculation of root is not
important.
Your Answer False

Question The objective of fundamental analysis for a security in a market
is to identify either it is :-
Your Answer Under priced and over priced
True/False
Correct Answer True
Your Answer True
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.
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Your Answer False
Select The Blank

Match The Following

Government Securities No risk No risk
Bank Deposits Low risk Low risk
Select The Blank

Question Secondary reactions occurs because of ________ which arise in
the market as a result of over optimism and over pessimism.
Your Answer Technical distortions
True/False
troughs.
Correct Answer True
Your Answer True

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

continuous basis
Your Answer Which is available only for subscription on a continuous basis
Match The Following

Turnover ratios Help measure the How fast the inventory is
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efficiency of utilisation of being converted
assets
Quick assets Highly liquid assets Highly liquid assets
Average collection period Similar to debtors turnover Similar to debtors turnover

Question The present value of all the future cash payments to be paid on
the security to the investor is termed as :-
Your Answer Intrinsic value of a security
Select The Blank

________.
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
Your Answer True

Question The commonly used charts to measure the movements in price
under the technical analysis are :-
Correct Answer Line Charts , Bar Charts , Point and Figure Charts
Your Answer Line Charts , Bar Charts , Point and Figure Charts

Your Answer GNP growth rate , Price Conditions , Monsoons
Select The Blank
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Question A security is said to be ________ if its current market price is
over its intrinsic value.
Your Answer Over priced

Your Answer Price or NAV at which a scheme purchases its units
Select The Blank

Question ________ is due to the fact that a borrower may not pay interest
and/or principal on time.

Correct Answer Term is for 8 years seven months , Provision of premature

withdrawal , Interest rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Provision of premature
withdrawal , Tax benefits under 80 L available

Your Answer An examination of liquidity trends in the banking system
True/False
Question Fundamental analysis focuses on predicting the future price of a
security and Technical analysis on estimating the intrinsic value
of a security.
Your Answer False

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Your Answer A reflection of the idea that prices move in trends which are
Select The Blank

years.
Correct Answer 6
Your Answer 6
Select The Blank

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

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

Question When a debenture is sold to the general public a ________ is
appointed.
Your Answer Trustee
True/False
Question The basic inputs of the general model are expected dividends
and required rate of return on stock.
Correct Answer True
Your Answer True

Your Answer Central Govt , State Govt. , Quasi-Govt
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Question Dividend discount model is considered as the simplest model for
:-
Your Answer Valuing Equity
True/False
Question The arithmetic mean is a set of observations is calculated by
finding the sum values and dividing by the number of
observations.
Correct Answer True
Your Answer True
Select The Blank

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

Correct Answer Expected return on portfolio , Expected return on assets , Weight

of asset in the portfolio
Your Answer Expected return on portfolio , Expected return on assets , Weight

Question What is the minimum investment amount in G-secs?
Correct Answer 1000
Your Answer 1000


Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Redemption in 7 to 12 years
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Your Answer Carry a fixed rate of dividend , Dividend payable out of profit ,
Select The Blank

support level.
Your Answer Transition
Select The Blank

Question In a heads and shoulders formation the deeper the pattern, the
greater is the ________ significance once it is completed
Your Answer Bearish

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
Your Answer Help in assessing the risk arising using the debt capital , Debt
True/False
Question Passive investment managers believe that markets are
inefficient and Active managers believe that markets are
efficient.
Your Answer False
Select The Blank

Your Answer NIFTY

Question Which of the following is a money market fund?
Correct Answer Commercial paper
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Your Answer Commercial paper

Question Capital expenditure -depreciation +change in working capital -
(new debt issued - debt repaid) =
Your Answer Equity reinvested in business
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Marks : 2
44. To measure the current yield on the bond, it's coupon rate is compared with :-
a)
Future estimated price
b) Prevailing market price
c) Prevailing book price
d) Historical market price
True/False
Question Investment in gilt edged securities carry a higher element of risk.
Your Answer False
Select The Blank

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

Question ________ of companies may open at higher or lower price than
the issue price.
Correct Answer IPO's
Your Answer Market price
True/False
Question Equity shares is a high return high risk instrument.
Correct Answer True
Your Answer True
True/False
Question When you are making an investment you are expecting certain
future benefits from your investment.
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Correct Answer True
Your Answer True

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
Your Answer An initial phase where the growth is not a stable growth rate , A

Question Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10
amount, if the rate of interest is 10% p.a:-

Your Answer Gross income generated from within the country

Your Answer Growth and regular income
Match The Following

Weak form model is also Random walk model Random walk model
termed as
Investors are rational Efficient market Efficient market hypothesis
hypothesis
Securities current prices Weak form EMH Weak form EMH
fully reflect all historical
information
Framework on efficient Fama Fama
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capital markets, a review
of theory and empirical
work

Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt
equity ratio
Your Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios

Question Under EMH it is assumed that if markets are efficient, securities
are priced to provide a :-
Correct Answer Normal returns for their given level of risk
Your Answer Normal returns for their given level of risk

Your Answer Dividends , Interests , Capital appreciation

Question Profits are non existent in pioneering stage because of :-
Correct Answer Heavy expenses on product introduction
Your Answer Heavy expenses on product introduction
Select The Blank

Question Measures of ________ tells us what we can expect a typical or
middle data point of a distribution to be.
Your Answer Central tendency
Select The Blank

Question ________ identified five forces that determine the intrinsic long
run profit attractiveness of a market or market segment.
Your Answer Michael Porter
Match The Following
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Lifex ET Index ET Index


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

after 5 years?

Correct Answer Firm's past earnings/historical growth rate , Estimates made by

equity research analyst who follow the firm , Estimates from a
firm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates made by
firm's fundamentals

Question What is the rate of interest on the tax free bonds issue by the
government?
Correct Answer 6.5%
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Your Answer 6.5%

Question Which of the following are important momentum indicators used
widely?
Correct Answer Moving average convergence divergence(MACD) , Rate of
change (ROC) , Relative strength indicator (RSI)
Your Answer Rate of change (ROC) , Relative strength indicator (RSI) ,
Moving average convergence divergence(MACD)
Select The Blank

Question ________ measures the profitability of operations without
considering the influence of financial structure and tax rate.
Your Answer Earnings power

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 :-
Your Answer The General model
Select The Blank

Your Answer Hedger

Your Answer Gross profit margin ratio , Return on equity , Debt service
coverage ratio

Question To measure the movement of stocks in the market which indices
were constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones Transportation
Average
Your Answer Dow Jones industrial Average , Dow Jones Transportation
Average
True/False
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Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact for
the importers.
Your Answer False
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
Your Answer True

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
Your Answer Do not believe that markets are efficient , Puts efforts to search

opening price
opening price
True/False
Your Answer False
Select The Blank
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Question The possibility of reduction of risk through the construction of a
portfolio depends on the value of ________ between the two
assets.
Your Answer Correlation coefficient
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
Your Answer 5
True/False
Question The performance of a scheme is reflected in its NAV which is
disclosed on a daily basis in case of open ended schemes.
Correct Answer True
Your Answer True

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
Your Answer Acquisitions , Building distribution channels , Expanding
True/False
Question Currently in India index options are both European and American
in nature.
Your Answer False

Your Answer A property right

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after 5 years?

Question When a firm can grow net profits by issuing equity, the expected
growth rate in net profits is determined by :-
Your Answer Equity reinvestment rate X return on equity
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation
of total assets, fixed as well as current.
Correct Answer True
Your Answer True
Select The Blank

Correct Answer 1963
Your Answer 1963
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully
revised in the year ________.
Correct Answer 1996
Your Answer 1996
Select The Blank

Question ________ take long or short positions only with the intention of
making profits by getting out of the market when conditions favor
them.
Your Answer Speculators

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Your Answer Total money in existence at any given time
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What is the objective of
fundamental analysis?
a)
To establish relationship between economic, industrial and
company indicators with a view to forecast the earnings and
b) dividends of the company
c) Analyse the macro economic environment
d) Analyse the company and sector profitability
To establish relationship between economic, industrial and

company indicators and compare it with the other sector
Select The Blank

Your Answer Price earning ratio

Question The investor in bonds receives income from :-
Correct Answer Interest payments at coupon rates , Capital gain/loss arising out
of the sale of the bond , Redemption of the bond of the issuer at
a contracted value
Your Answer Capital gain/loss arising out of the sale of the bond , Redemption
of the bond of the issuer at a contracted value , Interest
payments at coupon rates

Question Mr. Sharma is expecting to receive Rs. 50,000/- at the end of 5
amount, if the rate of interest is 6% p.a?

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Private information about the firm , Firm's specific information
and public information
Your Answer Macro economic information that may impact future growth ,

True/False
assets.
Correct Answer True
Your Answer True

companies?
Your Answer Am forge industries , Kalyani Forge , EL Forge

Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%
after 3 years?

Question Mr. Suhas is expecting to receive Rs.1,00,000/- at the end of 7
Correct Answer Rs. 62,275/-
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Your Answer Rs. 62,275/-
True/False
Correct Answer True
Your Answer True
Select The Blank

Question ________ is the value today of a stream of cash flows that
occurs in future.
Your Answer Present value

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
Your Answer You can use the amount to generate returns over the next one

Correct Answer It connects closing prices from one period to the next , It is ideal
for securities with no high or low price data
Your Answer It connects closing prices from one period to the next , It is ideal

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

Growth of income 40-60 % debt, 40-60 % 40-60 % debt, 40-60 %

equities equities
Current income Short term debt portfolio Short term debt portfolio
Stability of principal Fixed - income portfolio Fixed - income portfolio
Appreciation 75-100 % in equities 75-100 % in equities
Select The Blank

Question ________ refers to the possibility that there may not be a readily
available market for the particular bond.
Your Answer Liquidity risk
True/False
Question The cost structure remaining the same, better price realisation
Your Answer False
True/False
Correct Answer True
Your Answer True

Question What is balance of payments?
Correct Answer Credit and debit transactions of a country
Your Answer Credit and debit transactions of a country
Select The Blank

Question ________ absorbs the excess demand or supply generated by
hedgers and assume the risk of price fluctuations.
Confidential



Question In any Economy, bridge is created between savers and who
need the funds by this system :-
Your Answer Financial
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.
Your Answer Future value

Question How many measures of money supply are used commonly?
Correct Answer 2
Your Answer 2
True/False
Question PPF is a good retirement planning and tax saving vehicle.
Correct Answer True
Your Answer True

Correct Answer True picture of a company , Normal earning power , Projection of

future profitability
Your Answer True picture of a company , Normal earning power , Projection of
Select The Blank
Confidential
Your Answer Call risk
Select The Blank

Question Debentures rated "BB" refers ________ of timely payment of
interest and principal.
Your Answer Inadequate safety

Question What is the goal of the Dow theory?
Correct Answer To determine changes in the primary or major movement in the

market
Your Answer To determine changes in the primary or major movement in the
market

Your Answer Sponsor & trustees , Asset management company , Custodian

Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity
Your Answer Increased level of housing construction activity

2003?
Select The Blank

Question The 6.________% tax saving bonds of government of India have
a tenure of 5 years.
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Correct Answer 5
Your Answer 5
Select The Blank

Question The compounded annual return of Kisan Vikas patra is
________.
Your Answer 0.084
True/False
Question The labour conditions do not play an important role in the
industry analysis.
Your Answer False
Select The Blank

Question ________ is also known as random walk model.
Correct Answer Weak form EMH
Your Answer Weak form EMH

Question Futures contract on individual securities shall expire on the last
Thursday of the expiry month and if the last Thursday is a
trading holiday then the contract shall expire on the :-
Correct Answer Previous day
Your Answer Previous day
Match The Following


industries USA
930000 bonus shares 1976 1976
Confidential
Select The Blank
Question ________ ratio is estimated by dividing the market value of a
Select The Blank

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

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
Your Answer 0.05

Your Answer Current yield , Yield to maturity , Realised yield

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

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?

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purchase stock
purchase stock
Confidential
Select The Blank

Question The value of the stock in the ________ model is sensitive to
the estimates of the growth rate.
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.

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 :-
Select The Blank

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


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

Confidential
Private information about the firm , Firm's specific
information and public information

random news events
True/False
Correct Answer True
True/False
Correct Answer True

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


True/False
assets.
Confidential
Correct Answer True
Select The Blank

True/False
industry.
Correct Answer True


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

True/False
equity schemes.
Select The Blank

Select The Blank
Confidential

to which factor?
Match The Following


formation
Intermediate trend Last between 3 weeks to Last between 3 weeks to

as long as 6 months as long as 6 months
Select The Blank

Question ________are good benchmark to compare the ratios for a
firm.
Select The Blank

support level.
True/False
Correct Answer True

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True/False

introduced from :-
Correct Answer 2001
Select The Blank




companies?
True/False
Correct Answer True

Confidential
year 2003-03?
Select The Blank

________.

firms that are :-
True/False
dividend.
Correct Answer True

Correct Answer 0.05

covenants

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Match The Following

True/False
troughs.
Correct Answer True

kk LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank

Question ________ is affected by the leverage decisions of the
firm.
Select The Blank

Select The Blank

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

NSE&BSE are regulated by Securities Exchange Board of India 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 Options
contract
A contract where both the parties are equally responsible Futures

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

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

Question The present value of all the future cash payments to be
paid on the security to the investor is termed as :-

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
Your 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.
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Correct Answer True
Your Answer True
Select The Blank

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

Question Risk can be referred as the ________ in the return with
respect to the expected return.

Question The return to the bond investor can be measured in terms
of :-
True/False
Question Certificate of Deposits offers high rate of interest than
Treasury Bills.
Correct Answer True
Your 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
Your Answer True

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)
Your Answer Rate of change (ROC) , Relative strength indicator
(RSI) , Moving average convergence divergence(MACD)

Select The Blank

Question An ________ is a series of equal payments or receipts
occurring at regular intervals of time.
Your Answer Annuity

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?
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Correct Answer 0.15
Your Answer 0.15

Question Which market is affected with the improving and higher
growth rate in economy?
Your Answer Stock market
Match The Following

The market value of the firms assets divided by the replacement cost of
these assets Market value to replacement cost ratio Market value to
replacement cost ratio
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 Price earning ratio

Correct Answer No TDS , Transferable by endorsement , No stamp duty
on transfer
Your 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
Your Answer True

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

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

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
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.
True/False
discounts everything and it is the outcome of all forces affecting a
stock.
Correct Answer True
Your Answer True
********************************
Dow Jones transportation average was previously known as Rail average
Logistics average Road average Freight average.
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Page 1 of 8

Question 1 Return can be in the form of :-
True/False
Question 2 Currently in India index options are both European and American
in nature.
Your Answer False
True/False
Question 3 The cost structure remaining the same, better price realisation
Your Answer True

Your Answer They are counter-cyclical trends within the confines of a primary
trend

Question 5 What were the achievements of Bharat Forge during the year
2003?
True/False
Question 6 A segment is more attractive when there are actual or potential
substitutes for the product.
Your Answer True
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Select The Blank
Question 7 The regulations of SEBI with respect to mutual funds were fully
Correct Answer 1996
Your Answer 1996

Question 8 When the firm is not raising equity by issuing new shares, the
growth rate in net profits is given by :-
Your Answer Price earning ratio X return on equity

Question 9 The historical growth rate and the past earnings of a firm are
used in valuing :-
Your Answer Consistent stable firms, but not appropriate for high growth firms

Question 10 Efficient market hypothesis is based on the assumption that
market comprises of :-
Your Answer Heterogeneous investors

Question 11 Co variance of asset with market portfolio 85 and variance of
market portfolio is 100 then beta is :-
Your Answer 0.0085
Select The Blank

Question 12 The ________ phase is characterized by resistance area and
support level.

Question 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10
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Question 14 What are the features of candle stick charts?
opening price
price , Displays the correlation between the high and low prices ,
Displays a trend over the period of an year
True/False
Question 15 Bond ratings by credit rating agencies provide superior and low
Correct Answer True
Your Answer True
Select The Blank

Match The Following

Question 17 Correct Answer Your Answer
Development of Dow's William Peter Hamilton Charles H.dow

principles
Breadth Indicator Advance/decline line Advance/decline line
Momentum indicator MACD Moving average
Trend lines Useful tool in technical Useful tool in technical

analysis analysis

Your Answer Financial strength of various companies
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Question 19 What are the features of trend lines
resistance
resistance
Select The Blank

Question 20 ________ refers to the possibility that there may not be a readily
Your Answer Interest rate risk
Select The Blank

Question 21 The govt allowed public sector banks and institutions in mutual
funds in ________.
Your Answer Early 90's

Question 22 What are the features of point and figure charts?

Your Answer Safety

Question 24 Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4%
after 5 years?
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Select The Blank
Question 25 The value of the stock in the ________ model is sensitive to the
estimates of the growth rate.
Your Answer The Gordons dividend growth
Match The Following

Under options contract Cost of Carry model Futures 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.
A contract where both the Futures contract Options contract
parties are equally
responsible
The amount which the Option price Transaction cost model
buyer of the option has to
pay to the option writer to
induce him to accept the
risk associated with the
contract.
NSE&BSE are regulated Securities Exchange Securities Exchange Board
by Board of India of India

Question 27 In India futures on individual securities have been introduced by
:-
Your Answer BSE & NSE

Question 28 During the 1980's rate of savings in India has hovered around
what percentage?
Correct Answer 0.21
Your Answer 0.24
True/False
Question 29 The arithmetic mean is a set of observations is calculated by
observations.
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Correct Answer True
Your Answer True
True/False
Your Answer True
True/False
Your Answer True

Question 32 Explain what are leverage ratios ?
Your Answer Debt equity ratio and interest coverage ratio and DSCR are
important leverage ratios , Debt is riskier source of finance as it
entails fixed outgo of periodic payments , Help in assessing the
risk arising using the equity
Select The Blank

Question 33 Dow Jones transportation average was previously known as
________.
Your Answer Logistics average

Question 34 What are the features of company fixed deposits?
Your Answer Interest rate offered is higher than banks , No TDS for interest
income upto Rs. 5000 , Considered to be a safe investment

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Select The Blank

Question 36 The 8% taxable savings bonds are repayable after ________
years.
Correct Answer 6
Your Answer 5
True/False
Question 37 Following a decline, heavy volume with little price change is
indicative of accumulation and is normally a bearish factor.
Your Answer True
True/False
Question 38 In case of assured returns, A scheme cannot promise returns
Correct Answer True
Your Answer False
Select The Blank

Question 39 Security analysis serves the investment decision maker by
identifying ________securities.
Your Answer Blue chip

Question 40 The computation of return on a bond involves considering :-
Correct Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the internal rate of return
Your Answer The entire sequence of cash flows , The timing of cash flows ,
Calculating the net present value of cash flows

Question 41 Formula for calculation of portfolio variance requires :-

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Your Answer Expected return on portfolio , Expected return on assets , Weight
Select The Blank

Question 42 ________ absorbs the excess demand or supply generated by
Your Answer Brokers

Question 43 The issuing firm enjoys the flexibility to call the bonds if the
interest rates fall significantly and it can issue :-
Your Answer New bonds at a lower rates
Select The Blank

Question 44 A ________ rally for stocks generally takes place because of an
improved outlook for business conditions over what was
anticipated.
Your Answer Bullish market
True/False
Question 45 Speculators buy or sell futures contract in an attempt to earn a
profit.
Correct Answer True
Your Answer True

Question 46 What were the objectives for 2002-03 the chairman of Bharat
forge had emphasised on in the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase shares of value
added products , Continue reducing costs
Your Answer Maintain aggressive exports thrust , Increase shares of value

Question 47 Which are the most popular types of orders placed through an
Your Answer Market orders , Hedging orders , Arbitrage orders
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Select The Blank

Correct Answer 1963
Your Answer 1963

Correct Answer 1963
Your Answer 1963
True/False
Question 3 A segment is unattractive if the buyers possess strong or
Correct Answer True
Your Answer True

Question 4 A firm's growth is determined by how much is re-invested into
includes :-
Your Answer Acquisitions , Expanding marketing capabilities and investing in
new facilities , Mergers

Question 5 Which of the following are important momentum indicators used
widely?
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) ,
Select The Blank

Question 6 An ________ is a series of equal payments or receipts occurring
at regular intervals of time.
Your Answer Annuity
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Correct Answer Transition phases are signalled by clearly definable price

patterns
Your Answer By working out the resistance and support levels

Question 8 If the price of a share at the beginning of the year was Rs.50/-,
dividend received during the year was Rs.10/-per share and the
price at the end is Rs.60/-. What is the rate of return?
Correct Answer 0.4
Your Answer 0.2

Question 9 If option is given to you to receive Rs.1,000/- today or after one

Question 10 As per the exhibit 18-1 for individual stock futures on NSE, the
Correct Answer 0.05
Your Answer 0.05
True/False
Question 11 Investment decisions can be viewed as an integrated process to
which security analysis makes its unique contribution.
Correct Answer True
Your Answer True
Select The Blank

Question 12 An option is a contract which gives the buyer ________ to buy or
sell shares of the underlying security at a specific price on or
before a specific date.
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Your Answer Right but not obligation
Select The Blank

Question 13 Measures of ________ tells us what we can expect a typical or

Correct Answer Debt equity ratio , Interest coverage ratios , Debt service
coverage ratios
coverage ratios

Question 15 What were the Chairman's comments during the speech in the
Annual report of the FY 2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports
, Highest pre and post tax profits
Your Answer Best year in the history of the company , 146% growth in exports
, Highest pre and post tax profits
Select The Blank

Question 16 Debentures rated ________ are judged to offer sufficient safety
Your Answer "BBB"
True/False
Question 17 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
Your Answer True
True/False
Correct Answer True
Your Answer True
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Question 19 In India we have index futures contracts based on :-

Question 20 Who are the constituents of a mutual fund?

Question 21 Investment is a risk free investment when :-
Your Answer Actual return is = expected return
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
Your Answer True
True/False
Question 23 A price rise accompanied by expanding volume denotes a
potential trend reversal.
Your Answer True
Match The Following

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Question 25 Active investment managers :-
Your Answer Believe that markets are efficient , Puts efforts to search



Question 27 Investing in this avenue enable you participate in the equity
market indirectly :-
Your Answer Mutual Funds
Select The Blank

Question 28 ________ identified five forces that determine the intrinsic long

Question 29 In any Economy, bridge is created between savers and who
Your Answer Economic

Your Answer Three fourths
True/False
Question 31 Post office monthly schemes have a 10 year tenor.
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Your Answer False
Select The Blank

Question 32 ________ ratio indicates the margin available after meeting the
manufacturing expenses.
Your Answer Gross Profit margin
Match The Following

Risk free investment Actual returns = expected Actual returns = expected

returns returns
Risk Volatility in the return Volatility in the return
Variance Measure of dispersion Measure of dispersion
Returns Future benefits from Future benefits from

investments investments

Question 34 Which were the initiatives which the chairman said would focus
03?
Your Answer Research and development , Capital investment and focus on
True/False
Question 35 There may be convertible clause which gives the debenture
holder the option to convert the debentures into equity shares.
Correct Answer True
Your Answer True
Select The Blank

Question 36 ________is a hybrid form of security which has characteristics of
both equity and debentures
Your Answer Preference shares
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Question 37 Who operates the sinking fund under the sinking fund provision
of a firm?


Select The Blank

Question 39 Debentures rated "BB" refers ________ of timely payment of

Correct Answer As a barometer of business conditions rather than a basis for

forecasting stock prices
Your Answer As a barometer of business conditions rather than a basis for

Question 41 The return to the bond investor can be measured in terms of :-
Your Answer Yield to maturity , Realised yield

Correct Answer Period of rapid market acceptance and substantial profit

improvement
Your Answer Period of rapid market acceptance and substantial profit
improvement
Select The Blank

Question 43 The Derivative market is divided into Future market and
________ market.
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Your Answer Options

Question 44 What are the features of short-term trends?
news events
Your Answer They last from 1 to 3 or 4 weeks , They interrupt the course of
news events
True/False
Question 45 Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit ratings
agencies.
Correct Answer True
Your Answer True
Select The Blank

Question 46 The Dow theory was published in a series of editorials in the
________.
Your Answer Wall street journal
True/False
Correct Answer True
Your Answer True
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Select The Blank

Your Answer Speculator
True/False
Your Answer True


purchase stock
purchase stock

Question 4 The growth rate in the initial phase is not constant but declines
linearly over time to reach the stable growth rate in steady state
is a phenomena of :-
Correct Answer H- Model for valuing growth , H-Two stage model for growth , H-
Model unlike the classic two stage model
Your Answer H- Model for valuing growth , H-Two stage model for growth , H-
Model like the classic two stage model

Question 5 Which are the different types of accounts offered to investors by
the stock brokers?
Your Answer General trading , Cash trading , Margin trading

Correct Answer Different groups of investors are consistent in their actions at

major market turning points
Your Answer Different groups of investors are consistent in their actions at
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Question 7 What are the features of Retail government securities (G-secs) ?
Correct Answer Safest investment option available , Demat account is required

for investment , Choice of tenure varies from less than 1 year to
30 years
Your Answer Securities can be bought from the RBI , Safest investment option
available , Demat account is required for investment
Select The Blank

Question 8 Under ________ EMH investors cannot earn abnormal/superior
Your Answer Semi-strong form
True/False
Question 9 While calculating geometric mean calculation of root is not
important.
Your Answer False

Question 10 To measure the movement of stocks in the market which indices
Correct Answer Dow Jones industrial Average , Dow Jones Transportation
Average
Your Answer Dow Jones Transportation Average
Select The Blank

Question 11 ________ take long or short positions only with the intention of
making profits by getting out of the market when conditions favor
them.
Your Answer Hedgers

Question 12 An agreement to buy or sell a specified quantity of an asset at a
certain future date or a certain price is know as :-
Your Answer Futures contract
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.
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Correct Answer True
Your Answer True
Select The Blank

Question 14 ________ model is based on the principle that an initial phase
True/False
Question 15 Investors in high tax bracket would benefit by investing in equity
schemes.
Your Answer True

Your Answer Equity , Debt , Bank deposits
Select The Blank

Question 17 ________ ratio is estimated by dividing the market value of a
Your Answer PEG ratio

Question 18 In a typical stock market cycle which are the types of trends?
Your Answer Trends upward , Trend downward , Flat trend
Select The Blank

Question 19 ________involves a simultaneous sale and repurchase
agreement.
Your Answer Repos
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Match The Following
H-Model For Valuing Initial growth rate is not Initial growth rate is not
Growth constant but linearly falls constant but linearly falls
over time to reach the over time to reach the
stable growth rate stable growth rate
The general model Expected dividends and Expected dividends in the
required rate of return next period, cost of equity
and expected growth rate
in dividends
The Gordons Growth Expected dividends in the Assessment of the growth
model next period, cost of equity rate by looking at how
and expected growth rate much a firm reinvests for
in dividends future growth and the
quality of its reinvestment
The Two-Stage Dividend Based on two Based on two
Discount Model extraordinary growth extraordinary growth phase
phase lasting n years and lasting n years and stable
stable growth phase that growth phase that lasts
lasts forever forever
True/False
Your Answer False

Your Answer Open ended scheme , Close ended scheme , Growth schemes
Select The Blank

Question 23 Under futures market ________ process provides for collection
of losses that have already occurred.
Your Answer The next day settlement

Question 24 What was the final analysis on the performance of Bharat forge
for the year FY 02?
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Correct Answer Aim to become US$1 billion Company by Fy 08 from US$100
million , Stock currently trades at 15 times its FY 05 consensus
EPS forecasts , Stock will trade at an inexpensive PEG of 0.6x.
Your Answer Aim to become US$1 billion Company by Fy 08 from US$100
million , Stock currently trades at 15 times its FY 05 consensus
EPS forecasts , Stock will trade at an inexpensive PEG of 0.6x.

Correct Answer They are counter-cyclical trends within the confines of a primary
trend
trend

True/False
Question 27 Fundamental analysis focuses on predicting the future price of a
of a security.
Your Answer True
Select The Blank

Question 28 Current liabilities include all liabilities due in the next ________
and provisions.

Correct Answer Investment in securities in the same weightage which replicates

a particular index
Your Answer Investment in securities in the same weightage which replicates
a particular index
Select The Blank

Confidential
Your Answer NIFTY
Select The Blank

Question 31 ________seeks to safeguard against potential losses on the
Your Answer Daily settlement
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact for
the importers.
Your Answer False

earned superior historical returns , Calculating certain ratios will
help in analyzing whether a security has relative strength
Your 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 ,
Calculating the Return on investment
Match The Following


Value today of a stream of Present Value Future Value
future.
Value at a certain future Future Value Present Value
Select The Blank

Confidential
Your Answer Net Profit Margin
True/False
Question 36 The risk associated to get the required rate of return on the stock
Correct Answer True
Your Answer True

Question 37 The bond issuing firm enjoys the flexibility of being able to call
the bonds if :-
Your Answer Interest rates are falling

Correct Answer Majority of stocks follow the underlying trend of the market most
of the time
Your Answer Majority of stocks follow the underlying trend of the market most
of the time

Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%
after 3 years?
True/False
Question 40 The basic inputs of the general model are expected dividends
Correct Answer True
Your Answer True

Correct Answer 2
Your Answer 2
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True/False
Question 42 European style options are more expensive than American style
because they offer greater flexibility to the buyer.
Your Answer True

Question 43 Under which simple model the value of the stock is the present
value of expected dividends on it :-
Your Answer The Dividend growth model

Your Answer Gross profit margin ratio , Earnings power , Return on equity

Question 45 The firm issuing bonds operating sinking fund and repurchases
bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the
open market , Buying bonds issued to banks and financial
institutions
Your Answer Buying bonds in the open market , Buying bonds issued to banks
and financial institutions , Calling in the bonds at premium

Your Answer Tangible and Intangible

Question 47 Stock Exchanges are the part of :-
Your Answer Secondary market
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Select The Blank

Question Measures of ________ tells us what we can expect a typical or middle data
Your Answer Variance

Question Capital expenditure -depreciation +change in working capital -(new debt
issued - debt repaid) =

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
Your Answer Maintain aggressive exports thrust , Increase shares of value added
products , Continue reducing costs

Question What do you understand by term pioneering stage in the industry life cycle
analysis?
Your Answer Highest sales

Your Answer NSE

Your Answer Collateral , Call provision , Sinking fund and protective covenants
Select The Blank

Your Answer 0.084
Select The Blank

Question ________ measures the profitability of operations without considering the
influence of financial structure and tax rate.
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Your Answer Net profit margin
Select The Blank

Question The 6.________% tax saving bonds of government of India have a tenure of
5 years.
Correct Answer 5
Your Answer 5
Select The Blank

Question The govt allowed public sector banks and institutions in mutual funds in
________.

Correct Answer Interest coverage ratios , Debt service coverage ratios , Debt equity
ratio
Your Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios

Select The Blank

Your Answer Horizontal
Select The Blank

Question ________ is due to the fact that a borrower may not pay interest and/or
principal on time.

Your Answer Price or NAV at which a scheme purchases its units
True/False
Question Investment decisions can be viewed as an integrated process to which
security analysis makes its unique contribution.
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Correct Answer True
Your Answer True
Select The Blank

Question Secondary reactions occurs because of ________ which arise in the market as
a result of over optimism and over pessimism.
Your Answer Fundamental distortions
True/False
Correct Answer True
Your Answer True

Question What is the percentage of variation the market and industry influence account
for?
Your Answer 75%
Match The Following

Price pattern Resistance level Secondary reaction
Intermediate trend Last between 3 weeks to as long as 6 months Last between 3 weeks to
as long as 6 months

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
Your Answer They last from 1 to 3 or 4 weeks , They interrupt the course of the
True/False
Correct Answer True
Your Answer True
True/False
Confidential
Your Answer False

Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Your Answer 0.07

Question Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6% compounded

Question The firm issuing bonds operating sinking fund and repurchases bonds either
:-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open
market , Buying bonds issued to banks and financial institutions
Your Answer Calling in a certain number of bonds by lot , Buying bonds in the open
market
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
Your Answer True
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
Correct Answer True
Your 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 ________.
Your Answer Distribution pattern
True/False
Question The risk associated to get the required rate of return on the stock is measure
by market beta.
Correct Answer True
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Your Answer False
Select The Blank

Question Acid test ratio is more stringent measure of liquidity compared to the
________.

Correct Answer Mutual funds to be registered with SEBI before the launching any
scheme , 2/3rds of the directors of the trustee company must be independent , An AMC
approved by SEBI manages the fund
Your Answer Mutual funds to be registered with SEBI before the launching any
scheme , 2/3rds of the directors of the trustee company must be independent , An AMC
True/False
Correct Answer True
Your Answer True
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
Your Answer False

Question What are the assumptions of the Dow theory?
Correct Answer Majority of stocks follow the underlying trend of the market most of
the time
Your Answer Majority of stocks follow the underlying trend of the market most of the
time


Question We can compare the price earning ratio of a market to its historical average
to make judgements about, whether market is :-
Your Answer Under valued or over valued
Confidential
Correct Answer 6.5%
Your Answer 6.5%

Correct Answer Indicates in black if the closing price is lower than the opening price ,
Indicates in white if the closing price is higher than the opening price
Your Answer 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 , Displays the
correlation between the high and low prices

Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is
available from 7th year
Your Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is

Your Answer Primary dealers

Question What were the Chairman's comments during the speech in the Annual report
of the FY 2002-03?
Correct Answer Best year in the history of the company , 146% growth in exports ,
Highest pre and post tax profits
Your Answer Best year in the history of the company , 146% growth in exports ,
Highest pre and post tax profits

options for speculation , Either to honour or walk away from the contract
Your 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

Question Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded
Confidential
Correct Answer Secured second largest customer in China , Appointed a Company
Secretary to act as compliance officer , New contracts won in passenger car components
Your Answer Secured second largest customer in China , Appointed a Company
Secretary to act as compliance officer , New contracts won in passenger car components
Match The Following

Weak form model is also termed as Random walk model Efficient market hypothesis
Investors are rational Efficient market hypothesis Random walk model
Securities current prices fully reflect all historical information Weak form EMH Weak
form EMH
Framework on efficient capital markets, a review of theory and empirical work Fama
Strong form
True/False
Correct Answer True
Your Answer True
Select The Blank

True/False
important.
Your Answer False
Confidential
Your Answer Analyzing the Fiscal issues
True/False
Question The Asset management company of the mutual fund must
have 50% independent directors.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Select The Blank

Question The govt allowed public sector banks and institutions in
mutual funds in ________.
True/False
Question The returns of sector specific funds are solely dependant on
the performance of the respective sectors / industries.
Correct Answer True
Your Answer True

Confidential
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
Your Answer To earn a profit while restricting the downside risk , To use
the options for speculation , Either to honour or walk away
from the contract
True/False
discounts everything and it is the outcome of all forces
affecting a stock.
Correct Answer True
Your Answer True
Select The Blank

Question Secondary reactions occurs because of ________ which
arise in the market as a result of over optimism and over
pessimism.
Your Answer Technical distortions
Select The Blank

Question In a heads and shoulders formation the deeper the pattern,
the greater is the ________ significance once it is completed
Your Answer Bearish
True/False
Your Answer True
True/False
observations.
Correct Answer True
Your Answer True
Confidential
Question What does flow-of fund analysis help in understanding?
True/False
Correct Answer True
Your Answer True

Correct Answer Firm's past earnings/historical growth rate , Estimates made

by equity research analyst who follow the firm , Estimates
from a firm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates from a
firm's fundamentals , Forecasting future revenues and
earnings

Correct Answer True picture of a company , Normal earning power ,

Projection of future profitability
Your Answer True picture of a company , Normal earning power ,

Your Answer Present value of the expected future cash flow

Your Answer BSX JAN 2005 (January contract)
Confidential
Correct Answer Interest is presently around 6% , Benefits under section 80 L

, Banks offer cheque facility for investors making it
convenient to withdraw
Your Answer Interest is presently around 6% , Banks offer cheque facility
for investors making it convenient to withdraw
True/False
individual asset.
Your Answer False
Select The Blank

Correct Answer 1963
Your Answer 1963


Select The Blank

longer, during which period the price variation of both
averages moves within a price range of
approximately________%.
Correct Answer 5
Your Answer 5

Question The return to the bond investor can be measured in terms of
:-
Correct Answer Realised yield , Current yield , Yield to maturity
Your Answer Current yield , Yield to maturity
Confidential
Your Answer Indicates in black if the closing price is lower than the
Select The Blank


Question The objective of fundamental analysis for a security in a
market is to identify either it is :-

Question When the firm is not raising equity by issuing new shares,
the growth rate in net profits is given by :-
Select The Blank

Question A ________ rally for stocks generally takes place because of
an improved outlook for business conditions over what was
anticipated.

Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit
, Redemption in 7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit
, Redemption in 7 to 12 years
Confidential
Correct Answer Mutual funds to be registered with SEBI before the launching
any scheme , 2/3rds of the directors of the trustee company
must be independent , An AMC approved by SEBI manages
the fund
Your Answer Mutual funds to be registered with SEBI before the launching
any scheme , 2/3rds of the directors of the trustee company
must be independent , An AMC approved by SEBI manages
the fund

Question The bond issuing firm enjoys the flexibility of being able to
call the bonds if :-
Your Answer Interest rates are falling

Question We can compare the price earning ratio of a market to its
historical average to make judgements about, whether
market is :-

Question The growth rate is used to forecast future revenues and
earnings and are inputs in valuing :-
Correct Answer Stable firms
Your Answer High growth firms

Your Answer For decision making for investments

coverage ratios
coverage ratios
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Select The Blank
Question An option is a contract which gives the buyer ________ to
buy or sell shares of the underlying security at a specific
price on or before a specific date.
Match The Following


equities equities
Stability of principal Fixed - income portfolio Short term debt portfolio
Select The Blank

Question An investor with a higher tolerance of risk should tilt his
portfolio in favour of ________.
Your Answer Stocks
Select The Blank

Your Answer NIFTY

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Your Answer It connects closing prices from one period to the next , It is
True/False
equity schemes.
Your Answer False
Match The Following

Ratio used as a measure PEG ratio Price to book value ratio

of relative value
The market value of the Market value to Market value to
firms assets divided by replacement cost ratio replacement cost ratio
the replacement cost of
these assets
Key determiner of Profit margin Profit margin
revenue multiples
The market value of the Price to book value ratio Price earning ratio
equity in a firm reflects
the markets expectations
of the firms earnings
power and cash flows.

Your Answer Central Govt

Your Answer Excludes net income received from abroad
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random news events
Your Answer They last from 1 to 3 or 4 weeks , They interrupt the course
random news events
Select The Blank

years.
Correct Answer 6
Your Answer 6

Correct Answer Expected return on portfolio , Expected return on assets ,

Weight of asset in the portfolio
Your Answer Expected return on portfolio , Standard deviation , Weight of
asset in the portfolio

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
Your Answer An initial phase where the growth is not a stable growth rate ,
A subsequent steady state of growth rate being stable and
lasts n years , A stable growth phase lasts forever
Select The Blank

Question Risk can be referred as the ________ in the return with
respect to the expected return.
Your Answer Difference
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
Your Answer True
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True/False
Question The price earning ratio can be estimated for the firms with
negative earnings per share.
Your Answer True

2003?
Company Secretary to act as compliance officer , New
contracts won in passenger car components
Company Secretary to act as compliance officer , New
contracts won in passenger car components
Select The Blank

Question ________ absorbs the excess demand or supply generated
by hedgers and assume the risk of price fluctuations.
Your Answer Jobbers

Correct Answer Sponsor & trustees , Asset management company ,

Custodian
Your Answer Sponsor & trustees , Asset management company ,
Custodian
True/False
Question A share certificate indicates that the investor owns a certain
number of shares.
Correct Answer True
Your Answer True

Question What is the percentage of variation the market and industry
influence account for?
Your Answer 2/3rd

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patterns
Your Answer Transition phases are signalled by clearly definable price
patterns
True/False
Question Balance of payments surplus augments foreign reserves of
the country and have a favourable impact on he exchange
rate.
Correct Answer True
Your Answer True

Question What are the features of post office monthly income
scheme?
Correct Answer Rate of return is 8 % , Interest payable monthly , Investor
earns bonus of 10% on completion of term
Your Answer Rate of return is 8 % , Interest payable monthly , Investor
earns bonus of 10% on completion of term
Match The Following

NSE Nifty Nifty
SEBI Redressal of investor Redressal of investor

complaints complaints
AMFI Association of mutual Association of mutual

funds of India funds of India

Question What were the Chairman's comments during the speech in
the Annual report of the FY 2002-03?
Correct Answer Best year in the history of the company , 146% growth in
exports , Highest pre and post tax profits
Your Answer Best year in the history of the company , 146% growth in
exports , Highest pre and post tax profits
Select The Blank

Question Under the options contract ________ gives the holder the
right, but not the obligation to buy or sell the underlying
instrument only on the expiry date.
Your Answer European option
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Your Answer Between 1900 and 1902

known as boxes. , X's show that the prices are moving up ,
O's show that the prices are moving down
known as boxes. , X's show that the prices are moving up ,
O's show that the prices are moving down
Select The Blank


investments?
Select The Blank

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

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Select The Blank

________.

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 :-
Your Answer Forward contract

Correct Answer 1963
Your Answer 1963

Question Which market is affected with the improving and higher
growth rate in economy?

Correct Answer To identify trend changes at an early stage and maintain

investment posture till the trend has reversed
Your Answer To identify trend changes at an early stage and maintain
investment posture till the trend has reversed

Your Answer Financial
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True/False
Question The basic inputs of the general model are expected
dividends and required rate of return on stock.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
Question Bonds and Debentures represent long term debt
instruments.
Your Answer True

Question The expected price of the stock at the end of the holding
period is determined by future dividends and the value of the
stock is the present value of dividends through infinity are the
underlying assumptions of :-
Your Answer The Dividend discount model
True/False
Question American option gives the holder the right, but not the
obligation to buy or sell the underlying instrument on or
before the expiry date and the option can be exercised early.
Correct Answer True
Your Answer True
True/False
Question If rupee weakens against the dollar, it has favourable impact
for the importers.
Your Answer False
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Your Answer Term is for 8 years seven months , Interest rate is 8.4%
compounded annually , Tax benefits under 80 L available
Select The Blank

Question ________ is the ratio of the market price per share to the
earnings per share.

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
Your Answer Growth in profits outstripping the revenue growth by a large
extent , Non operating expenses occur frequently ,
Accounting rules changed frequently
Select The Blank

Question ________ is the value today of a stream of cash flows that
occurs in future.
Your Answer Present value
Select The Blank

Question Under futures market ________ process provides for
collection of losses that have already occurred.
Your Answer The daily settlement

Match The Following

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The yield to maturity is Geometric mean return Geometric mean return or
same as the or the internal rate of the internal rate of return
return
Periodic interest Debt instrument/Bonds Debt instrument/Bonds
payments and principal
repayment at the time of
maturity
The actual yield earned Realised yield Yield to maturity
by an investor on a bond
Present value interest Yield to maturity Interest rate risk
factor of annuities and
present value interest
factor
True/False
Question A price rise accompanied by expanding volume denotes a
Your Answer False
Select The Blank

Question Measures of ________ tells us what we can expect a typical
or middle data point of a distribution to be.
Select The Blank

Question ________ ratio indicates the margin available after meeting
the manufacturing expenses.

year 2003-03?
Correct Answer Research and development , Capital investment and focus
on balance sheet , Overseas acquisitions
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Your Answer Research and development , Capital investment and focus
on balance sheet , Overseas acquisitions

Select The Blank

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

Question The 6.________% tax saving bonds of government of India
have a tenure of 5 years.
Correct Answer 5
Your Answer 5
Match The Following

Expiration period for Nine months Nine months

options
The world's first largest Chicago Board of options New York board of
options exchange exchange Options exchange
The most popular pricing Black Scholes Black Scholes
options model published
in the year 1973
When the writer gives Put option Put option
the buyer of the option
the right to sell the
underlying asset on or
before the expiry date


privilege for which he pays a premium , Where the seller
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privilege for which he pays a premium , Where the seller
True/False
Question Currently in India index options are both European and
American in nature.
Your Answer False


Question Which of the following are important momentum indicators
used widely?
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) ,
Select The Blank

________ market.
Your Answer Options
True/False
Question European style options are more expensive than American
style because they offer greater flexibility to the buyer.
Your Answer False
True/False
Correct Answer True
Your Answer True
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Match The Following
Average collection period Similar to debtors How fast the inventory is

turnover being converted
Turnover ratios Help measure the Help measure the
efficiency of utilisation of efficiency of utilisation of
assets assets

Your Answer Trends upward , Trend downward , Sideway trend

Question What is a resistance level?
Correct Answer A point where there is opposition to further price rise
Your Answer A point where there is opposition to further price rise
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of
timely payment of interest and principal.
Correct Answer Adequate safety
Your Answer High safety
True/False
dividend.
Correct Answer True
Your Answer True
Select The Blank

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Your Answer Interest coverage ratio

Question How would you rate a portfolio with 90% investment in
stocks?
Your Answer Highly aggressive
Select The Blank


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
Your Answer Growing at a rate equal to or lower that the growth in the
policy

Question Agriculture account for how much portion of the economy?
Your Answer Quarter

Question How did Dow use the behaviour of stock markets?

Your Answer To predict trend patterns in stock prices
Select The Blank

Question ________ take long or short positions only with the intention
of making profits by getting out of the market when
conditions favor them.
Your Answer Hedgers
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True/False
Question In case of fixed income securities like debentures, you get
the return in the form of dividend.
Your Answer True

Correct Answer Reflection of investor's attitudes towards unfolding

fundamentals in the business cycle
Your Answer Long term trends

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?
True/False
Question Default is normally evaluated and indicated by the rating
assigned to the debt instruments by independent credit
ratings agencies.
Correct Answer True
Your Answer True

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?
Select The Blank

Question The Dow theory was published in a series of editorials in the
________.
True/False
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Correct Answer True
Your Answer False

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

Correct Answer No TDS , Transferable by endorsement , No stamp duty on

transfer
transfer

Correct Answer 15 year instrument , Rate of interest is 8% , Partial

withdrawal is available from 7th year
Your Answer 15 year instrument , Rate of interest is 8% , Partial

Question Which are the different types of accounts offered to investors
by the stock brokers?

Your Answer No Exchange of cash

Question Under EMH it is assumed that if markets are efficient,
securities are priced to provide a :-
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Your Answer Equal returns for their given level of risk
True/False
Question If a rupee weakens against the dollars it has favourable
impact for the exporters.
Correct Answer True
Your Answer True

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
Your 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

Question The growth period in the industry life cycle is defined as :-

improvement
improvement

True/False
Correct Answer True
Your Answer True
True/False
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Your Answer False

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 :-
Your Answer Earnings multiplier approach

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?
Confidential


news events

resistance

opening price
Question The growth rate in the initial phase is not constant but declines
Correct Answer H- Model for valuing growth , H-Two stage model for growth ,
H-Model unlike the classic two stage model

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companies?

focus on in 2003-04 in the speech in annual report for the year
2003-03?

firms that are :-

covenants

Question What are the features of
company fixed deposits?
Correct Answer Interest rate offered is
higher than banks , No
benefits under 80 L , No
TDS for interest income
upto Rs. 5000
Your Answer Interest rate offered is
higher than banks , No
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benefits under 80 L , No
TDS for interest income
upto Rs. 5000

Question What are the features of point
and figure charts?
Correct Answer Charts are constructed using a
combination of X's and O's
known as boxes. , X's show that
the prices are moving up , O's
show that the prices are moving
down
Your Answer Charts are constructed using a
combination of X's and O's
known as boxes. , X's show that
the prices are moving up , O's
show that the prices are moving
down

Question What are the features of post
office monthly income scheme?
Correct Answer Investor earns bonus of 10% on
completion of term , Rate of
return is 8 % , Interest payable
monthly
Your Answer Rate of return is 8 % , Interest
payable monthly , Investor earns
bonus of 10% on completion of
term

Question The firm issuing bonds
operating sinking fund and
repurchases bonds either :-
Correct Answer Calling in a certain number
of bonds by lot , Buying
bonds in the open market ,
Buying bonds issued to
banks and financial
institutions
Your Answer Calling in a certain number
of bonds by lot , Buying
bonds in the open market ,
Buying bonds issued to
banks and financial
institutions

Question If option is given to you to
receive Rs.1,000/- today or after
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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
Your 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

Question The computation of return on a
bond involves considering :-
Correct Answer The entire sequence of cash flows
, The timing of cash flows ,
Calculating the internal rate of
return
Your Answer The entire sequence of cash flows
, The timing of cash flows ,
Calculating the internal rate of
return

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
Your Answer It connects closing prices from one
period to the next , It is ideal for
securities with no high or low price
data

Correct Answer Debt equity ratio and interest

coverage ratio and DSCR are
important leverage ratios , Debt is
riskier source of finance as it
entails fixed outgo of periodic
Confidential
payments , Help in assessing the
risk arising using the debt capital
Your 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

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
Your Answer Demerger of investment division
and windmills , Nominee director of
UTI resigned and ceased to be the
director - nomination withdrawn by
UTI

Question The investor in bonds receives income
from :-
Correct Answer Interest payments at coupon rates ,
Capital gain/loss arising out of the sale of
the bond , Redemption of the bond of the
issuer at a contracted value
Your Answer Interest payments at coupon rates ,
Capital gain/loss arising out of the sale of
the bond , Redemption of the bond of the
issuer at a contracted value

Question 1 Return can be in the form of :-

Question 5 What were the achievements of Bharat Forge
during the year 2003?
Correct Answer Secured second largest customer in China ,
Appointed a Company Secretary to act as
compliance officer , New contracts won in
passenger car components
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Your Answer Secured second largest customer in China ,
Appointed a Company Secretary to act as
compliance officer , New contracts won in
passenger car components

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
Your 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

Question 41 Formula for calculation of portfolio variance
requires :-
Correct Answer Expected return on portfolio , Expected return on
assets , Weight of asset in the portfolio
Your Answer Expected return on portfolio , Expected return on
assets , Weight of asset in the portfolio

Question 46 What were the objectives for 2002-03 the
chairman of Bharat forge had emphasised on in
the annual report for 2001 - 02
Correct Answer Maintain aggressive exports thrust , Increase
shares of value added products , Continue
reducing costs
Your Answer Maintain aggressive exports thrust , Increase
shares of value added products , Continue
reducing costs

Question 47 Which are the most popular types of orders
placed through an online trading account?
Your Answer Market orders , Hedging orders , Arbitrage orders

Question 4 A firm's growth is determined by how
much is re-invested into new assets and
the quality of these investments, and
these includes :-
Correct Answer Acquisitions , Building distribution
channels , Expanding marketing
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Your Answer Acquisitions , Expanding marketing
capabilities and investing in new facilities ,
Mergers

Question 5 Which of the following are important
momentum indicators used widely?
Correct Answer Rate of change (ROC) , Relative strength
indicator (RSI) , Moving average
Your Answer Rate of change (ROC) , Relative strength
indicator (RSI) , Moving average

Correct Answer Debt equity ratio , Interest coverage ratios ,

Debt service coverage ratios
Your Answer Debt equity ratio , Interest coverage ratios ,
Debt service coverage ratios

Question 15 What were the Chairman's comments during
the speech in the Annual report of the FY
2002-03?
Correct Answer Best year in the history of the company ,
146% growth in exports , Highest pre and
post tax profits
Your Answer Best year in the history of the company ,
146% growth in exports , Highest pre and
post tax profits

Question 20 Who are the constituents of a
mutual fund?
Correct Answer Sponsor & trustees , Asset
management company ,
Custodian
Your Answer Sponsor & trustees , Asset
management company ,
Custodian

Correct Answer Term is for 8 years seven months , Provision

of premature withdrawal , Interest rate is 8.4%
compounded annually
Your Answer Term is for 8 years seven months , Provision
of premature withdrawal , Interest rate is 8.4%
compounded annually
Confidential
Correct Answer True picture of a company , Normal earning

power , Projection of future profitability
Your Answer True picture of a company , Normal earning
power , Projection of future profitability

Question 41 The return to the bond investor can be
measured in terms of :-
Correct Answer Current yield , Yield to maturity , Realised
yield
Your Answer Yield to maturity , Realised yield

Question 5 Which are the different types of accounts offered to
investors by the stock brokers?

Question 7 What are the features of Retail government securities
(G-secs) ?
Correct Answer Safest investment option available , Demat account is
required for investment , Choice of tenure varies from
less than 1 year to 30 years
Your Answer Securities can be bought from the RBI , Safest
investment option available , Demat account is required
for investment

Question 10 To measure the movement of stocks in the market
which indices were constructed by Dow?
Correct Answer Dow Jones industrial Average , Dow Jones
Transportation Average
Your Answer Dow Jones Transportation Average

Confidential
Question 18 In a typical stock market cycle which are the types of
trends?
Your Answer Trends upward , Trend downward , Flat trend

Your Answer Open ended scheme , Close ended scheme , Growth

schemes

Question 24 What was the final analysis on the performance of
Bharat forge for the year FY 02?
Correct Answer Aim to become US$1 billion Company by Fy 08 from
US$100 million , Stock currently trades at 15 times its
FY 05 consensus EPS forecasts , Stock will trade at an
inexpensive PEG of 0.6x.
Your Answer Aim to become US$1 billion Company by Fy 08 from
FY 05 consensus EPS forecasts , Stock will trade at an
inexpensive PEG of 0.6x.


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

Correct Answer Gross profit margin ratio , Earnings power , Return on

equity
Your Answer Gross profit margin ratio , Earnings power , Return on
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equity

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
Your Answer Growing at a rate equal to or lower that the growth in the economy ,
Which have well established dividend payout ratio policy

Question The Two-Stage dividend discount model is based on the assumption
of :-
subsequent steady state of growth rate being stable and lasts n years
, A stable growth phase lasts forever
subsequent steady state of growth rate being stable and lasts n years
, A stable growth phase lasts forever

Your Answer No TDS , Transferable by endorsement , No stamp duty on transfer

contract
Your Answer Either to honour or walk away from the contract , To earn a profit
while restricting the downside risk , To use the options for
speculation


Your Answer Selecting a set of scrips to be used , Fixing starting date , Fixing
ending date

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
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the following year
Your Answer Change method of rate of depreciation , Change method of stock

the following year

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
Your Answer Prices move in predictable patterns , Investors are emotional
than being rational

Your Answer Candle stick charts , Point and figure charts , Bar and line charts



Correct Answer Firm's past earnings/historical growth rate , Estimates made by

firm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates made by
firm's fundamentals


Correct Answer Mutual funds to be registered with SEBI before the launching any
scheme , 2/3rds of the directors of the trustee company must be
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independent , An AMC approved by SEBI manages the fund
Your Answer Mutual funds to be registered with SEBI before the launching any
scheme , 2/3rds of the directors of the trustee company must be
independent , An AMC approved by SEBI manages the fund



Your Answer Realised yield

Correct Answer Interest is presently around 6% , Benefits under section 80 L ,

Banks offer cheque facility for investors making it convenient to
withdraw
Your Answer Interest is presently around 6% , Banks offer cheque facility for
investors making it convenient to withdraw


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 :-
Confidential

to which factor?


introduced from :-
Correct Answer 2001



Correct Answer 0.05

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historical average to make judgements about, whether market is
:-


Question What is a load fund?
Correct Answer Fund charging a fee for entry and exit
Your Answer Fund charging a fee for entry and exit


Question Debt instruments that have a maturity period of more than one
year are called as :-
Your Answer Bonds
Confidential

Question Which of these is a short-maturity debt issue?
Correct Answer Money market funds and gilts
Your Answer Money market funds and gilts

Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Your Answer Market resistance to a price fall

Question During the 1980's rate of savings in India has hovered around
what percentage?
Correct Answer 0.21
Your Answer 0.22

Question A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :-
Correct Answer Over valued
Your Answer Over valued

Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average
Your Answer Geometric average

Confidential
trend
Question 8 When the firm is not raising equity by issuing new shares, the

Question 9 The historical growth rate and the past earnings of a firm are
used in valuing :-
Your Answer Consistent stable firms, but not appropriate for high growth firms

Question 10 Efficient market hypothesis is based on the assumption that
market comprises of :-
Your Answer Heterogeneous investors

Question 11 Co variance of asset with market portfolio 85 and variance of
market portfolio is 100 then beta is :-
Your Answer 0.0085

Question 13 Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10

Confidential
Your Answer Safety

Question 24 Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4%
after 5 years?

Question 27 In India futures on individual securities have been introduced by
:-
Your Answer BSE & NSE

Question 43 The issuing firm enjoys the flexibility to call the bonds if the

Correct Answer 1963
Your Answer 1963


patterns
Your Answer By working out the resistance and support levels

Question 8 If the price of a share at the beginning of the year was Rs.50/-,
dividend received during the year was Rs.10/-per share and the
Correct Answer 0.4
Confidential
Your Answer 0.2

Question 27 Investing in this avenue enable you participate in the equity
market indirectly :-
Your Answer Mutual Funds

Question 29 In any Economy, bridge is created between savers and who
Your Answer Economic

Your Answer Three fourths

Question 37 Who operates the sinking fund under the sinking fund provision
of a firm?


Your Answer As a barometer of business conditions rather than a basis for


improvement
improvement

purchase stock
Confidential
purchase stock

Correct Answer Different groups of investors are consistent in their actions at

Your Answer Different groups of investors are consistent in their actions at

Question 12 An agreement to buy or sell a specified quantity of an asset at a

trend
trend


a particular index
a particular index

Correct Answer Majority of stocks follow the underlying trend of the market most
of the time
Your Answer Majority of stocks follow the underlying trend of the market most
of the time

Question 39 Mr.Rohan invests Rs.25,000/- today. The rate of interest is 6%
after 3 years?
Confidential
Correct Answer 2
Your Answer 2

Question 43 Under which simple model the value of the stock is the present
value of expected dividends on it :-
Your Answer The Dividend growth model

Your Answer Tangible and Intangible

Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-
Correct Answer Technical analysis
Your Answer Fundamental Analysis

Question What is the objective of an income fund?
Correct Answer To provide regular and steady income
Your Answer To provide guaranteed returns to investors

Your Answer Economic slowdown

Confidential
after 5 years?

Question Which market is affected with the improving and higher growth
rate in economy?



Question The greater the deviation of the actual returns from the actual
return :-

Your Answer Includes indirect taxes

which factor?
Confidential

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

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



a particular index
a particular index

Your Answer A study of macro economical changes

Confidential
Your Answer Trends which interrupt the course of the intermediate cycle

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

Question This is not a stock exchange :-
Correct Answer MCX
Your Answer MCX

Question Under EMH it is assumed that if markets are efficient, securities are
priced to provide a :-
Your Answer Normal returns for their given level of risk

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?


Question Financial assets can be classified as :-
Correct Answer Marketable and non-marketable
Your Answer Marketable and non-marketable
Confidential

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

investor groups
Your Answer Consists of an analysis of the financial positions of various
investor groups


Question What do you understand by term pioneering stage in the industry
life cycle analysis?
Your Answer Slow sales growth product recently introduced

Question Till 1990's secular Indian economy's inflation rate has been of
what percentage?
Correct Answer 0.07
Your Answer 0.07

investments?
Confidential
Question If index future is taken under futures contract, the underlying
asset would be :-
Your Answer Stock index

Question What is balance of payments?
Correct Answer Credit and debit transactions of a country
Your Answer Credit and debit transactions of a company

Question Profits are non existent in pioneering stage because of :-
Correct Answer Heavy expenses on product introduction
Your Answer Heavy expenses on product introduction

Question What is the indicator of buoyant economy?
Correct Answer Increased level of housing construction activity
Your Answer Increased level of housing construction activity

Your Answer It marks the turning point between a rising and falling market

:-

Question The present value of all the future cash payments to be
paid on the security to the investor is termed as :-
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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
Your Answer 0.15



Question What is the percentage of variation the market and industry influence account
for?
Your Answer 75%

Correct Answer 6.5%
Your Answer 6.5%

Question The growth rate is used to forecast future revenues and earnings and
are inputs in valuing :-

Question The objective of fundamental analysis for a security in a market is to
identify either it is :-
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Question We can compare the price earning ratio of a market to its historical
average to make judgements about, whether market is :-

Question The growth rate is used to forecast future revenues and earnings and
are inputs in valuing :-

Your Answer Transition phases are signalled by clearly definable price patterns


Correct Answer 1963
Your Answer 1963

Correct Answer To identify trend changes at an early stage and maintain investment
posture till the trend has reversed
Your Answer To identify trend changes at an early stage and maintain investment
posture till the trend has reversed

Question The expected price of the stock at the end of the holding period is
determined by future dividends and the value of the stock is the
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present value of dividends through infinity are the underlying
assumptions of :-
Your Answer The Dividend discount model

Question How would you rate a portfolio with 90% investment in stocks?
Your Answer Highly aggressive

Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the

business cycle
Your Answer Long term trends

Your Answer No Exchange of cash

Question Under EMH it is assumed that if markets are efficient, securities are
priced to provide a :-
Your Answer Equal returns for their given level of risk

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 :-
Your Answer Earnings multiplier approach
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.
Your Answer Time
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Select The Blank
Select The Blank

Your Answer 0.084
Select The Blank

Question Under futures market ________ process provides for collection of losses
that have already occurred.
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully revised in
the year ________.
Correct Answer 1996
Your Answer 1996
Select The Blank

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

Question ________ ratio indicates the margin available after meeting the
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Select The Blank

Question Secondary reactions occurs because of ________ which arise in the
market as a result of over optimism and over pessimism.
Your Answer Bearish trends
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of timely payment of
Your Answer Adequate safety
Select The Blank

Question Debentures rated ________ are judged to offer sufficient safety of timely
Your Answer "BBB"
Select The Blank

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

Correct Default risk
Answer
Select The Blank

Correct Consolidation pattern
Answer
Select The Blank

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Correct Call risk
Answer
Select The Blank

Correct Hedger
Answer
Select The Blank

Correct Industry averages
Answer
Select The Blank

support level.
Correct Transition
Answer
Select The Blank

Correct Average collection period
Answer
Select The Blank

Select The Blank

Question 20 ________ refers to the possibility that there may not be a readily available
Your Answer Interest rate risk
Select The Blank
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Question 21 The govt allowed public sector banks and institutions in mutual funds in
________.
Select The Blank

Question 36 The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Your Answer 5
Select The Blank

Question 39 Security analysis serves the investment decision maker by identifying
________securities.
Your Answer Blue chip
Select The Blank

Question 42 ________ absorbs the excess demand or supply generated by hedgers
and assume the risk of price fluctuations.
Your Answer Brokers
Select The Blank

Question 44 A ________ rally for stocks generally takes place because of an improved
outlook for business conditions over what was anticipated.
Select The Blank

Correct Answer 1963
Your Answer 1963
Select The Blank

Question 6 An ________ is a series of equal payments or receipts occurring at regular
intervals of time.
Your Answer Annuity
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Select The Blank
Question 12 An option is a contract which gives the buyer ________ to buy or sell
shares of the underlying security at a specific price on or before a specific
date.
Select The Blank

Question 13 Measures of ________ tells us what we can expect a typical or middle
data point of a distribution to be.
Select The Blank

Question 28 ________ identified five forces that determine the intrinsic long run profit
Select The Blank

Question 36 ________is a hybrid form of security which has characteristics of both
equity and debentures
Select The Blank

Question 39 Debentures rated "BB" refers ________ of timely payment of interest and
principal.
Select The Blank

Question 43 The Derivative market is divided into Future market and ________ market.
Your Answer Options
Select The Blank

Question 46 The Dow theory was published in a series of editorials in the ________.
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Select The Blank

Your Answer Speculator
Select The Blank

Question 8 Under ________ EMH investors cannot earn abnormal/superior profits on
securities on a consistent basis.
Select The Blank

Question 11 ________ take long or short positions only with the intention of making
profits by getting out of the market when conditions favor them.
Your Answer Hedgers
Select The Blank

Question 14 ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remains
for the long-term.
Select The Blank

Question 17 ________ ratio is estimated by dividing the market value of a firm's assets
by the replacement cost of these assets.
Your Answer PEG ratio
Select The Blank

Question 19 ________involves a simultaneous sale and repurchase agreement.
Your Answer Repos
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Select The Blank
Question 28 Current liabilities include all liabilities due in the next ________ and
provisions.
Select The Blank

Your Answer NIFTY
Select The Blank

Question 31 ________seeks to safeguard against potential losses on the outstanding
position in futures market.
Your Answer Daily settlement
Select The Blank

Select The Blank

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

Question An investor with a higher tolerance of risk should tilt his portfolio in favour
of ________.
Your Answer Bank deposits
Select The Blank

Question The ________ phase carries a lot of significance because it marks the
turning point between a rising and a falling market.
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Your Answer Sideways
Select The Blank

________.
Select The Blank

Your Answer Average collection period
Select The Blank

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
Your Answer 5
Select The Blank

Question ________ measures the profitability of equity funds invested in the firms.
Select The Blank

Question Risk can be referred as the ________ in the return with respect to the
expected return.
Select The Blank
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Correct Answer T+1
Your Answer T+1
Select The Blank

Question ________ ratio is the ratio of net profit to the sales.
Select The Blank

Your Answer Brokers
Select The Blank

Question A security is said to be ________ if its current market price is over its
intrinsic value.
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.
Select The Blank

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

Question In a heads and shoulders formation the deeper the pattern, the greater is
the ________ significance once it is completed
Your Answer Bearish
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Select The Blank
Question The govt allowed public sector banks and institutions in mutual funds in
________.
Select The Blank

Question Under ________ EMH investors cannot earn abnormal/superior profits on
Select The Blank

Question The 6.________% tax saving bonds of government of India have a tenure
of 5 years.
Correct Answer 5
Your Answer 5
Select The Blank

Question ________ is the ratio of the market price per share to the earnings per
share.
Select The Blank

Question ________ absorbs the excess demand or supply generated by hedgers
and assume the risk of price fluctuations.
Select The Blank

Correct Answer 1963
Your Answer 1963
True/False
Question The normal relationship is for the volume to expand on rallies and
contract on declines.
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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
True/False
assets.
Correct Answer True
True/False
industry.
Correct Answer True
True/False
equity schemes.
True/False
Correct Answer True
True/False
True/False
Correct Answer True
True/False
dividend.
Correct Answer True
True/False
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troughs.
Correct Answer True
True/False
agencies.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
individual asset.
Your Answer False
True/False
Your Answer True
True/False
Your Answer False
True/False
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Question With the introduction of on-line trading by NSE and BSE, the role
of regional stock exchanges have diminished.
Correct Answer True
Your Answer True
True/False
Question Penetration of a trend line denotes a bearish phase.
Your Answer True
True/False
efficient.
Your Answer False
True/False
Question 2 Currently in India index options are both European and American
in nature.
Your Answer False
True/False
Question 3 The cost structure remaining the same, better price realisation
Your Answer True
True/False
Question 6 A segment is more attractive when there are actual or potential
Your Answer True
True/False
Question 15 Bond ratings by credit rating agencies provide superior and low
Correct Answer True
Your Answer True
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True/False
Question 29 The arithmetic mean is a set of observations is calculated by
observations.
Correct Answer True
Your Answer True
True/False
Your Answer True
True/False
Question 37 Following a decline, heavy volume with little price change is
Your Answer True
True/False
Question 45 Speculators buy or sell futures contract in an attempt to earn a
profit.
Correct Answer True
Your Answer True
True/False
Question 11 Investment decisions can be viewed as an integrated process to
Correct Answer True
Your Answer True
True/False
Question 17 Given the accounting standards across firm, price to book value
valuation.
Correct Answer True
Your Answer True
True/False
Correct Answer True
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Your Answer True
True/False
Question 22 If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
Your Answer True
True/False
Question 23 A price rise accompanied by expanding volume denotes a
Your Answer True
True/False
Question 35 There may be convertible clause which gives the debenture
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
Your Answer True
True/False
Question 9 While calculating geometric mean calculation of root is not
important.
Your Answer False
True/False
Question 13 Certificate of Deposits offers high rate of interest than Treasury
Bills.
Correct Answer True
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Your Answer True
True/False
Your Answer False
True/False
Question 27 Fundamental analysis focuses on predicting the future price of a
of a security.
Your Answer True
True/False
Question 32 If rupee weakens against the dollar, it has favourable impact for
the importers.
Your Answer False
True/False
Question 36 The risk associated to get the required rate of return on the stock
Correct Answer True
Your Answer True
True/False
Question 40 The basic inputs of the general model are expected dividends
Correct Answer True
Your Answer True
True/False
Question 42 European style options are more expensive than American style
Your Answer True
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True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
industry analysis.
Your Answer False
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.
Your Answer True
True/False
Question Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.
Correct Answer True
Your Answer True
True/False
Question The Asset management company of the mutual fund must have 50%
independent directors.
Correct Answer True
Your Answer True
True/False
Question In case of fixed income securities like debentures, you get the return in the
form of dividend.
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Your Answer False
True/False
Your Answer False
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
Your Answer True
True/False
Question Prices of stocks usually move in trends.
Correct Answer True
Your Answer True
True/False
Question The sideways trend is essentially a transitional one which separates the
two major market movements.
Correct Answer True
Your Answer False
True/False
Correct Answer True
Your Answer True
True/False
Question A higher value of current ratio indicates a better short
term solvency of the firm.
Correct Answer True
Your Answer True
True/False
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discounts everything and it is the outcome of all forces affecting a
stock.
Correct Answer True
Your Answer True
True/False
Question Fixed assets turnover ratio measures the efficiency of utilisation of total
assets, fixed as well as current.
Correct Answer True
Your Answer True
True/False
Question The price earning ratio can be estimated for the firms with negative
earnings per share.
Your Answer True
True/False
Question A share certificate indicates that the investor owns a certain number of
shares.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank

Question The ________ phase carries a lot of significance because it marks the
turning point between a rising and a falling market.
True/False
Your Answer True
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True/False
Question A price rise accompanied by expanding volume denotes a potential
trend reversal.
Your Answer False
Select The Blank

Question The ________ phase is characterized by resistance area and support
level.
True/False
Question Currently in India index options are both European and American in
nature.
Your Answer False
Select The Blank

Question Debentures rated as "A" are judged to offer ________ of timely
payment of interest and principal.
True/False
Question A rally that develops on contracting volumes is suspect and warns of a
potential trend reversal in price
Correct Answer True
Your Answer True
Match The Following


formation
Intermediate trend Last between 3 weeks to as Last between 3 weeks to as

long as 6 months long as 6 months
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Match The Following
Match The Following


assets assets
Match The Following


principles
Breadth Indicator Advance/decline line Moving average
Momentum indicator MACD MACD

analysis analysis
Match The Following
Under options contract Cost of Carry model Futures 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.
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A contract where both the Futures contract Options contract
parties are equally
responsible
buyer of the option has to
pay to the option writer to
induce him to accept the
risk associated with the
contract.
NSE&BSE are regulated Securities Exchange Securities Exchange Board
by Board of India of India
Match The Following

Match The Following

Risk free investment Actual returns = expected Actual returns = expected

returns returns
Risk Volatility in the return Volatility in the return
Variance Measure of dispersion Measure of dispersion
Returns Future benefits from Future benefits from

investments investments
Match The Following

The general model Expected dividends and Expected dividends in the
required rate of return next period, cost of equity
and expected growth rate
in dividends
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The Gordons Growth Expected dividends in the Assessment of the growth
model next period, cost of equity rate by looking at how
and expected growth rate much a firm reinvests for
in dividends future growth and the
quality of its reinvestment
Match The Following


Value today of a stream of Present Value Future Value
future.
Value at a certain future Future Value Present Value
Match The Following

termed as
hypothesis
Securities current prices Weak form EMH Fama
information
Framework on efficient Fama Strong form
work
Match The Following


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industries USA

930000 bonus shares 1976 1976
Match The Following

The yield to maturity is Geometric mean return or Geometric mean return or

same as the the internal rate of return the internal rate of return
Periodic interest payments Debt instrument/Bonds Debt instrument/Bonds
and principal repayment at
the time of maturity
The actual yield earned by Realised yield Realised yield
an investor on a bond
Present value interest Yield to maturity Yield to maturity
factor
1. Treasury Bills 2 1. Foreign Institutional Investors
2. Commercial Papers 3 2. Government of India
3. Certificate of Deposits 4 3. Corporates
4. Bonds 5 4. Banks and Financial Institutions

5. Central/State Govts/PSU's
6. Post Office
1. ROE 3 1. Measure the profitability of operations without considering

the influence of financial structure and tax rate
2. Earnings 1 2. Ratio if net profit to sales
power
3. Net profit 2 3. Measure the profitability of equity funds
margin
4. Gross profit 6 4. Valuation ratio
margin
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5. Measures the profitability of debt funds
6. Indicates the margin available after meeting the
manufacturing expenses
1. SEBI 5 1. Nifty
2. NAV 2 2. Net asset value

3. AMFI 6 3. Net average value
4. NSE 1 4. Association of merchant financers of India
5. Redressal of investor complaints

6. Association of mutual funds of India
Match The Following


equities equities
Stability of principal Fixed - income portfolio Short term debt portfolio
Match The Following

Ratio used as a measure of PEG ratio Price to book value ratio

relative value
The market value of the Market value to replacement Market value to replacement
firms assets divided by the cost ratio cost ratio
replacement cost of these
assets
Key determiner of revenue Profit margin Profit margin
multiples
The market value of the Price to book value ratio Price earning ratio
equity in a firm reflects the
markets expectations of the
firms earnings power and
cash flows.
Match The Following

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Expiration period for options Nine months Nine months
The world's first largest Chicago Board of options New York board of Options
options exchange exchange exchange
The most popular pricing Black Scholes Black Scholes
options model published in
the year 1973
When the writer gives the Put option Put option
buyer of the option the right
to sell the underlying asset
on or before the expiry date
Confidential
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
Your Answer True
Select The Blank

Your Answer Past and present
Select The Blank

Correct Answer T+1
Your Answer T+1

historical returns , Calculating certain ratios will help in analyzing whether a
security has relative strength
Your Answer Calculate the rates of return and classify securities that have earned superior
historical returns , Calculating certain ratios will help in analyzing whether a

Your Answer GDP at market cost
Select The Blank

Question ________seeks to safeguard against potential losses on the outstanding
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Your Answer Next day settlement

Your Answer Stable firms, but not appropriate for high growth firms
Select The Blank

Question Under futures market ________ process provides for collection of losses that
have already occurred.
Your Answer The next day settlement
Select The Blank

Your Answer NIFTY

Your Answer Growth and regular income

Correct Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in
7 to 12 years
Your Answer Carry a fixed rate of dividend , Dividend payable out of profit , Redemption in
7 to 12 years
True/False
Question Fundamental analysis focuses on predicting the future price of a security and
Technical analysis on estimating the intrinsic value of a security.
Your Answer False
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Correct Answer Secured second largest customer in China , Appointed a Company Secretary
to act as compliance officer , New contracts won in passenger car
components
Your Answer Secured second largest customer in China , Appointed a Company Secretary
to act as compliance officer , New contracts won in passenger car
components

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

Your Answer New bonds at par
Select The Blank

Question Debentures rated "BB" refers ________ of timely payment of interest and
principal.
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True/False
Question When we invest in only one asset we are not exposed to any specific or
market risk.
Your Answer True
Match The Following

Weak form model is also Random walk model Efficient market hypothesis
termed as
Investors are rational Efficient market hypothesis Passive managers
Securities current prices fully Weak form EMH Random walk model
reflect all historical information
Framework on efficient capital Fama Fama
markets, a review of theory
and empirical work
True/False
Question A higher value of current ratio indicates a better short term solvency of the
firm.
Correct Answer True
Your Answer True

Question What are the warning indicators to be considered before analysing the
financial statements of a firm ?
Your Answer Growth in profits outstripping the revenue growth by a large extent , Non
Select The Blank

Question ________ identified five forces that determine the intrinsic long run profit
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Your Answer Philip Kotler

Question What were the Chairman's comments during the speech in the Annual report
of the FY 2002-03?
Correct Answer 146% growth in exports , Highest pre and post tax profits , Best year in the
history of the company
Your Answer Best year in the history of the company , 146% growth in exports , Highest pre
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully revised in the
year ________.
Correct Answer 1996
Your Answer 1990

Your Answer They are counter-cyclical trends within the confines of a primary trend
Select The Blank

Select The Blank

Question Measures of ________ tells us what we can expect a typical or middle data

Your Answer Indicates in black if the closing price is lower than the opening price , Displays
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the correlation between the high and low prices
True/False
Correct Answer True
Your Answer True
Match The Following

Growth of income 40-60 % debt, 40-60 % 100 % in mutual funds

equities
Stability of principal Fixed - income portfolio 100% debt

Your Answer To earn a profit while restricting the downside risk , To use the options for

Your Answer Gross profit margin ratio , Return on equity
True/False
Question The ratios between profits and investments are called rate of return
measures.
Correct Answer True
Your Answer False
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Question Where are gilt funds invested?
Correct Answer Government securities
Your Answer Government securities

Correct Answer 15 year instrument , Rate of interest is 8% , Partial withdrawal is available

from 7th year
Your Answer Interest is taxable under 80 L , Rate of interest is 8% , Partial withdrawal is

Question What levels if increased will have unfavourable impact on the stock market?
Correct Answer Higher levels of taxation
Your Answer Higher levels of unemployment
Select The Blank

Question The margining system is future contract is based on ________
recommendations.
Your Answer Fama committee

Question Till 1990's secular Indian economy's inflation rate has been of what
percentage?
Correct Answer 0.07
Your Answer 0.05


Question The objective of fundamental analysis for a security in a market is to identify
either it is :-
Confidential
Your Answer Increased price and decreased price
True/False
Correct Answer True
Your Answer True

Correct Answer Term is for 8 years seven months , Provision of premature withdrawal ,
Interest rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Provision of premature withdrawal ,
Interest rate is 8.4% compounded annually

Question If the price of a share at the beginning of the year was Rs.70/-, dividend
received during the year was Rs.5/-per share and the price at the end is
Rs.79/-. What is the rate of return?
Correct Answer 0.2
Your Answer 0.25
True/False
Question A segment is more attractive when there are actual or potential substitutes for
the product.
Correct Answer True
Your Answer False

Correct Answer Investment in securities in the same weightage which replicates a particular
index
Your Answer Investment in gilt edged securities which is similar to a particular index

Confidential
Your Answer Interest is taxable under 80 L , They last from 1 to 3 or 4 weeks , They
interrupt the course of the intermediate cycle
Confidential

historical average to make judgements about, whether market is
:-
Select The Blank

assets.
Your Answer Time


Question What is a load fund?
Correct Answer Fund charging a fee for entry and exit
Your Answer Fund charging a fee for entry and exit

True/False
agencies.
Correct Answer True
Your Answer True
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True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

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



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Correct Answer Investor earns bonus of 10% on completion of term , Rate of
return is 8 % , Interest payable monthly
Your Answer Rate of return is 8 % , Interest payable monthly , Investor earns
bonus of 10% on completion of term
True/False
individual asset.
Your Answer False
True/False
Your Answer True

Question The firm issuing bonds operating sinking fund and repurchases
bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the
institutions
Your Answer Calling in a certain number of bonds by lot , Buying bonds in the
institutions

Question Which of these is a short-maturity debt issue?
Correct Answer Money market funds and gilts
Your Answer Money market funds and gilts


covenants
Your Answer Collateral , Call provision , Fixed returns
True/False
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Your Answer False
True/False
Correct Answer True
Your Answer True
Select The Blank

________.

True/False
Correct Answer True
Your Answer True
Select The Blank

Question The compounded annual return of Kisan Vikas patra is
________.
Your Answer 0.084
Select The Blank

Question Under futures market ________ process provides for collection
of losses that have already occurred.
Confidential
Select The Blank

Question The regulations of SEBI with respect to mutual funds were fully
Correct Answer 1996
Your Answer 1996

Question The computation of return on a bond involves considering :-


Correct Answer Debt equity ratio and interest coverage ratio and DSCR are
important leverage ratios , Debt is riskier source of finance as it
entails fixed outgo of periodic payments , Help in assessing the
risk arising using the debt capital

True/False
Confidential
Your Answer True

Question What is Support level?
Correct Answer A point where the prices become relatively attractive for buyers
Your Answer Market resistance to a price fall

Correct Answer Interest payments at coupon rates , Capital gain/loss arising out
a contracted value
Your Answer Interest payments at coupon rates , Capital gain/loss arising out
a contracted value
True/False
efficient.
Your Answer False

Question During the 1980's rate of savings in India has hovered around
what percentage?
Correct Answer 0.21
Your Answer 0.22
Select The Blank

Correct Answer 3
Your Answer 3
Match The Following

Confidential
assets assets
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.
Select The Blank

Question ________ ratio indicates the margin available after meeting the
Select The Blank

Question Secondary reactions occurs because of ________ which arise in
the market as a result of over optimism and over pessimism.
Your Answer Bearish trends
Select The Blank

Select The Blank

Question Debentures rated ________ are judged to offer sufficient safety
Your Answer "BBB"
Confidential
Question A market that is trading at a Price earning ratio that is much
higher than its historical norms is considered to be :-
Correct Answer Over valued
Your Answer Over valued

Question The average historical growth rate can be calculated as :-
Correct Answer Arithmetic average or a geometric average
Your Answer Geometric average
Match The Following


principles
Breadth Indicator Advance/decline line Moving average
Momentum indicator MACD MACD

analysis analysis
Confidential
sapm.txt
Select The Blank
Select The Blank
Select The Blank

Your 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
Your Answer True
Match The Following
NSE&BSE are regulated by Securities Exchange Board of India 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 Options contract
A contract where both the parties are equally responsible Futures contract 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 Option price
True/False
Correct Answer True
Your Answer True
Question Debt instruments that have a maturity period of more than one year are called as :-
Page 1
Confidential
sapm.txt
Your Answer Bonds
Question The present value of all the future cash payments to be paid on the security to the investor is
termed as :-
Correct Answer Safest investment option available , Demat account is required for investment , Choice of
tenure varies from less than 1 year to 30 years
Your 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
Correct Answer True
Your Answer True
Select The Blank

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

True/False
Correct Answer True
Your 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
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Your Answer True
Correct Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving average convergence
divergence(MACD)
Your Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving average convergence
divergence(MACD)
Select The Blank
Question An ________ is a series of equal payments or receipts occurring at regular intervals of time.
Your Answer Annuity
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
Your Answer 0.15

Match The Following
The market value of the firms assets divided by the replacement cost of these assets Market value to replacement
cost ratio Market value to replacement cost ratio
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 Price earning ratio
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True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Select The Blank

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
Your 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.
True/False
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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
Your Answer True
********************************
Dow Jones transportation average was previously known as Rail average Logistics average Road average Freight
average.
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Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in

the business cycle
Your Answer Reflection of investor's attitudes towards unfolding fundamentals in
the business cycle

Correct Answer Debt equity ratio , Interest coverage ratios , Debt service coverage
ratios
Your Answer Debt equity ratio , Interest coverage ratios , Acid test ratio
True/False
Correct Answer True
Your Answer True

Question The computation of return on a bond involves considering :-

Question To measure the movement of stocks in the market which indices
Your Answer Dow Jones industrial Average , Dow Jones Transportation Average
Select The Blank

Question Under futures market ________ process provides for collection of
losses that have already occurred.

Question An agreement to buy or sell a specified quantity of an asset at a
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Your Answer Forward contract
True/False
Correct Answer True
Your Answer True
Select The Blank

Question ________ identified five forces that determine the intrinsic long run
profit attractiveness of a market or market segment.
Select The Blank

Question Debentures rated "BB" refers ________ of timely payment of interest
and principal.
True/False
Question In case of fixed income securities like debentures, you get the return
in the form of dividend.
Your Answer False

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
Your Answer 0.15
True/False
Question If a rupee weakens against the dollars it has favourable impact for the
exporters.
Correct Answer True
Your Answer True
True/False
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Question Sensex is the index of Calcutta Stock Exchange.
Your Answer False

Correct Answer Term is for 8 years seven months , Provision of premature withdrawal
, Interest rate is 8.4% compounded annually
Your Answer Term is for 8 years seven months , Provision of premature withdrawal
, Interest rate is 8.4% compounded annually
Select The Blank

Question ________ model is based on the principle that an initial phase where
the growth rate is not stable and subsequent steady growth rate and
remains for the long-term.
Select The Blank

Question An investor with a higher tolerance of risk should tilt his portfolio in
favour of ________.
Your Answer Stocks
Select The Blank

Question ________ measures the profitability of equity funds invested in the
firms.


Question The firm issuing bonds operating sinking fund and repurchases
bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open
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Your Answer Calling in a certain number of bonds by lot , Buying bonds in the open
Select The Blank

Question A ________ rally for stocks generally takes place because of an
improved outlook for business conditions over what was anticipated.
Your Answer Bear market
True/False
Question Default is normally evaluated and indicated by the rating assigned to
the debt instruments by independent credit ratings agencies.
Correct Answer True
Your Answer True


purchase stock
purchase stock



Question Which year marked increase in growth rate?
Correct Answer 2003 -04
Your Answer 2003 -04
True/False
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bonds where as a fall in interest rates will depress the market prices
down.
Your Answer True
True/False
Question Because of statutory compulsion, generally Govt. securities are held
by banks, financial institutions, insurance companies etc.
Correct Answer True
Your Answer True

Question The greater the deviation of the actual returns from the actual return
:-
True/False
Correct Answer True
Your Answer True
Match The Following

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.
Your Answer Call risk
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Your Answer BSE
Match The Following

Growth of income 40-60 % debt, 40-60 % 75-100 % in equities

equities
Current income Short term debt portfolio Short term debt portfolio
Stability of principal Fixed - income portfolio Fixed - income portfolio
Appreciation 75-100 % in equities 100 % in mutual funds

Correct Answer Rate of return is 8 % , Interest payable monthly , Investor earns

bonus of 10% on completion of term
Your Answer Rate of return is 8 % , Investor earns bonus of 10% on completion of
term

Question During the 1980's rate of savings in India has hovered around what
percentage?
Correct Answer 0.21
Your Answer 0.21

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
Your Answer Demerger of investment division and windmills
True/False
Question Passive investment managers believe that markets are inefficient and
Active managers believe that markets are efficient.
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Your Answer True

compounded annually. What will be the value of his investment after
5 years?
Select The Blank

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


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 :-
Your Answer The General model

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
Your Answer Growing at a rate equal to or lower that the growth in the economy ,
Whose earnings are steady and perpetual , Value of stock is risky

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Your Answer Positive economic conditions
Select The Blank

Question Current liabilities include all liabilities due in the next ________ and
provisions.

Question The security market is the market for :-
Your Answer Equity , Debt , Derivatives
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Select The Blank
Question ________is a hybrid form of security which has characteristics of
both equity and debentures


Question The objective of fundamental analysis for a security in a market is to
identify either it is :-
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
Your Answer True

mispriced securities in the market , Are relatively active traders in
securities to acquire abnormal returns
Your 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

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
Your Answer In high growth rate phase , Expecting to maintain the growth rate
phase steadily for a specific time period , Expecting a established
dividend payout ratio
True/False
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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
Your Answer True

intermediate cycle , They are usually influenced by random news
events
Your 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

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
Your Answer Acquisitions , Building distribution channels , Expanding marketing
Select The Blank

Your Answer NIFTY
Select The Blank

Question The margining system is future contract is based on ________
recommendations.
Your Answer Fama committee

Correct Answer Interest payments at coupon rates , Capital gain/loss arising out of
the sale of the bond , Redemption of the bond of the issuer at a
contracted value
Your Answer Interest payments at coupon rates , Capital gain/loss arising out of
the sale of the bond , Redemption of the bond of the issuer at a
contracted value
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Your Answer Transition phases are signalled by clearly definable price patterns
Select The Blank

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

appointed.
Your Answer Trustee

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 :-
Your Answer Estimating growth from a firm's fundamentals
True/False
Correct Answer True
Your Answer True
Select The Blank

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Your Answer Indicates in black if the closing price is lower than the opening price ,

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)
Your Answer Rate of change (ROC) , Relative strength indicator (RSI) , Moving
Match The Following


formation
Primary trend Last between 1-2 years Resistance level
Intermediate trend Last between 3 weeks to as Last between 3 weeks to as

long as 6 months long as 6 months

Question As per the framework presented by Fama, EMH can be divided as :-
Correct Answer The weak form, semi-strong form & strong form
Your Answer The weak form & the strong form
Select The Blank

Question ________ measures the profitability of operations without considering
the influence of financial structure and tax rate.

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True/False
Question The Asset management company of the mutual fund must have 50%
independent directors.
Correct Answer True
Your Answer True


Your Answer Book value of an asset
Match The Following

H-Model For Valuing Initial growth rate is not Expected dividends and
Growth constant but linearly falls required rate of returns as
over time to reach the per the market price per
stable growth rate share to the earningsper
share
The general model Expected dividends and Initial growth rate is not
required rate of return constant but linearly falls
over time to reach the stable
growth rate
The Gordons Growth model Expected dividends in the Based on two extraordinary
next period, cost of equity growth phase lasting n years
and expected growth rate in and stable growth phase that
dividends lasts forever
The Two-Stage Dividend Based on two extraordinary Expected dividends in the
Discount Model growth phase lasting n next period, cost of equity
years and stable growth and expected growth rate in
phase that lasts forever dividends
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Question A pledge of real assets as insurance against the non-payment of
default by the buyer represents
Your Answer Collateral
Select The Blank

Question ________ ratio is estimated by dividing the market value of a firm's
assets by the replacement cost of these assets.
True/False
Question If rupee weakens against the dollar, it has favourable impact for the
importers.
Your Answer False
Select The Blank

Question The Dow theory was published in a series of editorials in the
________.
True/False
Question A higher value of current ratio indicates a better short term solvency
of the firm.
Correct Answer True
Your Answer True
True/False
Question Given the accounting standards across firm, price to book value
valuation.
Correct Answer True
Your Answer True

Question Debt instruments that have a maturity period of one year or less are
called as:-
Correct Answer Money market instruments
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Your Answer Bonds

Correct Answer Firm's past earnings/historical growth rate , Estimates made by equity
research analyst who follow the firm , Estimates from a firm's
fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates made by equity
research analyst who follow the firm , Estimates from a firm's
fundamentals
Select The Blank

Question The 6.________% tax saving bonds of government of India have a
tenure of 5 years.
Correct Answer 5
Your Answer 5


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
Your 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
Select The Blank

Correct Answer 1963
Your Answer 1963
True/False
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Correct Answer True
Your Answer True

Question The bond issuing firm enjoys the flexibility of being able to call the
bonds if :-
Your Answer Interest rates are constant


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
Your Answer A contract between two parties , Where buyer receives a privilege for
which he pays a premium , Where the seller accepts an obligation for
which he receives a fee
True/False
Your Answer False
True/False
Question A segment is more attractive when there are actual or potential
Correct Answer True
Your Answer True
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sapm - Akshat1
Select The Blank
Question The 8% taxable savings bonds are repayable after ________ years.
Correct Answer 6
Your Answer 6
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:-
Select The Blank

Question ________ is due to the fact that a borrower may not pay interest and/or principal on time.

Question Which year marked increase in growth rate?
Correct Answer 2003 -04
Your Answer 2003 -04
Select The Blank
Question Security analysis serves the investment decision maker by identifying ________securities.
Your Answer Under priced
Your Answer Collateral , Call provision , Sinking fund and protective covenants
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Match The Following

Correct Answer Price Conditions , Monsoons , GNP growth rate
Select The Blank
Question Debentures rated as "A" are judged to offer ________ of timely payment of interest and principal.
Correct Answer Reflection of investor's attitudes towards unfolding fundamentals in the business cycle
Your Answer Reflection of investor's attitudes towards unfolding fundamentals in the business cycle
True/False
Your Answer False
True/False
Question The returns of sector specific funds are solely dependant on the performance of the respective
sectors / industries.
Correct Answer True
Your Answer True
Question The average investor in the market is driven more by emotions than by rational analysis is a rule of
:-
Your Answer Technical analysis
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Question The firm issuing bonds operating sinking fund and repurchases bonds either :-
Correct Answer Calling in a certain number of bonds by lot , Buying bonds in the open market , Buying bonds
issued to banks and financial institutions
Your Answer Buying bonds issued to banks and financial institutions , Calling in a certain number of bonds by
lot , Buying bonds in the open market
True/False
Question The Asset management company of the mutual fund must have 50% independent directors.
Correct Answer True
Your Answer True
Correct Answer Which is available for subscription and repurchase on a continuous basis
Your Answer Which is available for subscription and repurchase on a continuous basis
True/False
Question A price rise accompanied by expanding volume denotes a potential trend reversal.
Your Answer False
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
Your 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
Question If the price of a share at the beginning of the year was Rs.70/-, dividend received during the year
was Rs.5/-per share and the price at the end is Rs.79/-. What is the rate of return?
Correct Answer 0.2
Your Answer 0.2
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
Your 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
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with the future receipt
True/False
Your Answer False
Your Answer 2/3rd

Correct Answer Interest payments at coupon rates , Capital gain/loss arising out of the sale of the bond ,
Redemption of the bond of the issuer at a contracted value
Your Answer Interest payments at coupon rates , Capital gain/loss arising out of the sale of the bond ,
Redemption of the bond of the issuer at a contracted value
True/False
Correct Answer True
Your Answer True
Question Debt instruments that have a maturity period of one year or less are called as:-
Correct Answer Money market instruments
Your Answer Short term debt instruments
Correct Answer 1963
Your Answer 1963
Select The Blank
True/False
Question A share certificate indicates that the investor owns a certain number of shares.
Correct Answer True
Your Answer True
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Select The Blank
Question ________ take long or short positions only with the intention of making profits by getting out of the
market when conditions favor them.
Your Answer Debt equity ratio , Interest coverage ratios , Debt service coverage ratios
Select The Blank
True/False
Your Answer False
Select The Blank
Your Answer Trustee
Question To measure the movement of stocks in the market which indices were constructed by Dow?
Your Answer Dow Jones industrial Average , Dow Jones Transportation Average
Correct Answer It connects closing prices from one period to the next , It is ideal for securities with no
high or low price data
Your Answer It connects closing prices from one period to the next , It is ideal for securities with no high
or low price data
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Correct Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on completion of
term
Your Answer Rate of return is 8 % , Interest payable monthly , Investor earns bonus of 10% on completion of
term
Select The Blank
Your Answer Hedger
True/False
Question A rise in interest rates will push the market prises of outstanding bonds where as a fall in interest
rates will depress the market prices down.
Your Answer False
Select The Blank
Question A ________ rally for stocks generally takes place because of an improved outlook for business
conditions over what was anticipated.
Your Answer Bear market
True/False
Question Following a decline, heavy volume with little price change is indicative of accumulation and is
normally a bearish factor.
Your Answer False
Match The Following
Gross profit margin Indicates the margin available after meeting the manufacturing expenses Valuation ratio
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ROE Measure the profitability of equity funds Measures the profitability of debt funds
Earnings power Measure the profitability of operations without considering the influence of financial structure
and tax rate Indicates the margin available after meeting the manufacturing expenses
Net profit margin Ratio if net profit to sales Measure the profitability of operations without considering the
influence of financial structure and tax rate
Select The Blank

Your Answer Options
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Question The greater the deviation of the actual returns from
the actual return :-
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.
True/False
Your Answer False

Question Free Float index considers this to calculate market
capitalisation :-
True/False
Question The performance of a scheme is reflected in its NAV
which is disclosed on a daily basis in case of open
ended schemes.
Correct Answer True
Your Answer True
Match The Following

Under options contract Cost of Carry model Options contract
Confidential
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.
A contract where both Futures contract Futures contract
the parties are equally
responsible
buyer of the option has
to pay to the option
writer to induce him to
accept the risk
associated with the
contract.
NSE&BSE are Securities Exchange Securities Exchange
regulated by Board of India Board of India
True/False
Question Balance of payments surplus augments foreign
reserves of the country and have a favourable impact
on he exchange rate.
Correct Answer True
Your Answer True

Correct Answer Charts are constructed using a combination of X's and
O's known as boxes. , X's show that the prices are
moving up , O's show that the prices are moving down
Your Answer Charts are constructed using a combination of X's and
O's known as boxes. , X's show that the prices are
moving up , O's show that the prices are moving down

Correct Answer To identify trend changes at an early stage and
maintain investment posture till the trend has reversed
Your Answer To identify trend changes at an early stage and
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maintain investment posture till the trend has reversed
True/False
Question Investment in gilt edged securities carry a higher
element of risk.
Your Answer False

Question What was the final analysis on the performance of
Bharat forge for the year FY 02?
Correct Answer Stock currently trades at 15 times its FY 05 consensus
EPS forecasts , Stock will trade at an inexpensive
PEG of 0.6x. , Aim to become US$1 billion Company
by Fy 08 from US$100 million
Your Answer Aim to become US$1 billion Company by Fy 08 from
FY 05 consensus EPS forecasts
True/False
Correct Answer True
Your Answer True

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
Your Answer True

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Correct Answer Reflection of investor's attitudes towards unfolding
Your Answer Reflection of investor's attitudes towards unfolding
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.
Select The Blank

Question The Derivative market is divided into Future market
and ________ market.
Your Answer Options
Match The Following

NSE Nifty Nifty
SEBI Redressal of investor Redressal of investor

complaints complaints
AMFI Association of mutual Association of mutual

funds of India funds of India

Question What do you understand by term pioneering stage in
the industry life cycle analysis?
Your Answer Slow sales growth product recently introduced

Correct Answer Which is available for subscription and repurchase on
a continuous basis
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Your Answer Which is available for subscription and repurchase on
a continuous basis

Question What are the SEBI regulations with respect to mutual
funds?
Correct Answer Mutual funds to be registered with SEBI before the
launching any scheme , 2/3rds of the directors of the
trustee company must be independent , An AMC
Your Answer Mutual funds to be registered with SEBI before the
launching any scheme , 2/3rds of the directors of the
trustee company must be independent , An AMC
Select The Blank

Question ________is a hybrid form of security which has
characteristics of both equity and debentures
Select The Blank

Question The 6.________% tax saving bonds of government of
India have a tenure of 5 years.
Correct Answer 5
Your Answer 5

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
Your Answer Prices move in predictable patterns , Market value is
determined by supply & demand , Security has a
intrinsic value at any given time
Select The Blank

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

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
Your Answer Expanding marketing capabilities and investing in new
facilities

Question What does flow-of fund analysis help in
understanding?
Your Answer Stock market movements

Correct Answer 15 year instrument , Rate of interest is 8% , Partial
Your Answer 15 year instrument , Rate of interest is 8% , Partial
Select The Blank

Question Current liabilities include all liabilities due in the next
________ and provisions.

Correct Answer True picture of a company , Normal earning power ,
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Your Answer True picture of a company , Normal earning power ,
Select The Blank

Question A ________ rally for stocks generally takes place
because of an improved outlook for business
conditions over what was anticipated.

Correct Answer Gross profit margin ratio , Earnings power , Return on
equity
Your Answer Gross profit margin ratio , Return on equity
Select The Blank

Question The value of the stock in the ________ model is
sensitive to the estimates of the growth rate.

Your Answer To provide regular and steady income

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?

Question The commonly used charts to measure the
movements in price under the technical analysis are :-
Correct Answer Line Charts , Bar Charts , Point and Figure Charts
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Your Answer Line Charts , Bar Charts
True/False
Question The normal relationship is for the volume to expand on
rallies and contract on declines.
Correct Answer True
Your Answer True

Correct Answer Firm's past earnings/historical growth rate , Estimates
made by equity research analyst who follow the firm ,
Estimates from a firm's fundamentals
Your Answer Firm's past earnings/historical growth rate , Estimates
from a firm's fundamentals , Forecasting future
revenues and earnings
Select The Blank

Question An option is a contract which gives the buyer
________ to buy or sell shares of the underlying
security at a specific price on or before a specific date.

Rs.100/-, no dividend received during the year and the
Correct Answer 0.15
Your Answer 0.15
True/False
Question Because of statutory compulsion, generally Govt.
securities are held by banks, financial institutions,
insurance companies etc.
Correct Answer True
Your Answer True
Select The Blank
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Question The ________ phase is characterized by resistance
area and support level.
Your Answer Horizontal

Correct Answer Interest is presently around 6% , Benefits under
section 80 L , Banks offer cheque facility for investors
making it convenient to withdraw
Your Answer Interest is presently around 6% , Banks offer cheque
facility for investors making it convenient to withdraw

Correct Answer 1000
Your Answer 1000
True/False
Your Answer False

Question Investments could be made in retail government
securities through :-
Confidential

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 :-
Your Answer Estimating growth from a firm's fundamentals

Question The objective of fundamental analysis for a security in a market
is to identify either it is :-

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

Confidential


Match The Following


assets assets

True/False
Question Investment decisions can be viewed as an integrated process to
Confidential
Correct Answer True
Your Answer True
Match The Following

Gross profit margin Indicates the margin Indicates the margin

available after meeting the available after meeting the
manufacturing expenses manufacturing expenses
ROE Measure the profitability of Measure the profitability of
equity funds equity funds
Earnings power Measure the profitability of Measure the profitability of
operations without operations without
considering the influence considering the influence
of financial structure and of financial structure and
tax rate tax rate
Net profit margin Ratio if net profit to sales Ratio if net profit to sales

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

Your Answer Macro economic information that may impact future growth ,

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

investor groups
Your Answer Consists of an analysis of the financial positions of various
investor groups

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Correct Answer Which is available for subscription and repurchase on a
continuous basis
Your 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
Your Answer 1992
Select The Blank

________ market.
Your Answer Options
Select The Blank

Question ________seeks to safeguard against potential losses on the

after 3 years?
Select The Blank

Select The Blank

Question Measures of ________ tells us what we can expect a typical or
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Question Which are the most popular types of orders placed through an
Your Answer Limit orders , Market orders
True/False
Correct Answer True
Your Answer True
Select The Blank

assets.
Select The Blank

Question Security analysis serves the investment decision maker by
True/False
Question The sideways trend is essentially a transitional one which
separates the two major market movements.
Correct Answer True
Your Answer True

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Question A firm's growth is determined by how much is re-invested into
includes :-
Your Answer Acquisitions , Building distribution channels , Expanding
True/False
assets.
Correct Answer True
Your Answer True

companies?


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

assumption of :-
stable growth phase lasts forever
True/False
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Your Answer False

Your Answer An examination of liquidity trends in the banking system

Question The historical growth rate and the past earnings of a firm are
used in valuing :-

Correct Answer 1000
Your Answer 1000
True/False
Correct Answer True
Your Answer True

Select The Blank

Correct Answer 3
Your Answer 3
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Question Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10

Your Answer Value of an underlying asset


Question What are sector specific funds?
Correct Answer Scheme which invest in certain sectors
Your Answer Scheme which invest in certain sectors
Select The Blank

Question The value of the stock in the ________ model is sensitive to the
Confidential
38. In a perfectly efficient market all securities are correctly priced means there are no :-
a)
High priced and low priced securities
b) Increase priced and decrease priced securities
Under priced and over priced securities

c)
Book priced and market priced securities
d)
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Marks : 2
42. What levels if increased will have unfavourable impact on the stock market?
a)
Higher levels of unemployment
b) Unstable economy
Higher levels of taxation

c)
Low levels of interest rates
d)
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Correct Answer Return on equity , Gross profit margin ratio , Earnings power
Your 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
Your Answer SEBI

Question The security market is the market for :-

Correct Answer Growing at a rate equal to or lower that the growth in the
policy , Whose earnings are steady and perpetual
Your Answer Growing at a rate equal to or lower that the growth in the
policy

Your Answer As per instruction of the company
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Question The average investor in the market is driven more by emotions
than by rational analysis is a rule of :-
Your Answer Fundamental Analysis

after 5 years?

Your Answer To provide guaranteed returns to investors


Question Which were the initiatives which the chairman said would focus
03?
Your Answer Focus on mergers , Research and development , Capital
investment and focus on balance sheet

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
Your Answer Maintain aggressive exports thrust , Increase shares of value
Confidential
True/False
Correct Answer True
Your Answer True

Your Answer Economic slowdown


after 3 years?

after 5 years?
True/False
Correct Answer True
Your Answer True

Confidential
purchase stock
Your Answer Does not give specific information
True/False
Correct Answer True
Your Answer True

Question Which are the different types of accounts offered to investors by
the stock brokers?
Your Answer General trading , Cash trading , Credit 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.
Your Answer American option
Select The Blank

Question An investor with a higher tolerance of risk should tilt his portfolio
in favour of ________.
Your Answer Bank deposits
Select The Blank

Your Answer Sideways

Question The growth rate in the initial phase is not constant but declines
Your Answer H- Model for valuing growth , H-Two stage model for growth , H-
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Select The Blank

Question Acid test ratio is more stringent measure of liquidity compared to
the ________.

assumption of :-
True/False
important.
Your Answer False
True/False
industry analysis.
Your Answer False
Select The Blank

Select The Blank

Confidential
Question Which market is affected with the improving and higher growth
rate in economy?
True/False
Bills.
Correct Answer True
Your Answer True



resistance
resistance
True/False
Your Answer True

Confidential
Your Answer Open ended scheme , Close ended scheme , Balance fund


transfer
transfer
Match The Following


Value today of a stream of Present Value Present Value
future.
Value at a certain future Future Value Future Value
Select The Blank

Correct Answer 5
Your Answer 5
True/False
Question Following a decline, heavy volume with little price change is
Your Answer True

Question The greater the deviation of the actual returns from the actual
return :-
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True/False
Correct Answer True
Your Answer False
Select The Blank


Your Answer Includes indirect taxes

which factor?
Confidential
Score Card
Registration
200404214
Number:
Name: Manpreet Malhotra
Subject: Security Analysis & Portfolio Mgt.
Assignment Status
16/03/2006
As On:
Result for this Assignment

Assignment Date 15/03/2006
Number of Correct Questions 29
Number of Skipped Questions 11
Confidential
Number of Wrong Questions 17
Total Questions attempted 57
Total Marks obtained 62 Out of 100.
Result Pass
Click here to view the list of attempted question and answers.
Confidential

contract
Your Answer Either to honour or walk away from the contract , To earn a profit
while restricting the downside risk , To use the options for
speculation

Question Free Float index considers this to calculate market capitalisation
:-
True/False
bonds where as a fall in interest rates will depress the market
prices down.
Your Answer True

Question Who operates the sinking fund under the sinking fund provision
of a firm?

introduced from :-
Correct Answer 2001
Your Answer 2001
Select The Blank

Question ________ measures the profitability of equity funds invested in
the firms.
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True/False
Question Given the accounting standards across firm, price to book value
valuation.
Correct Answer True
Your Answer True
Select The Blank

Correct Answer 5
Your Answer 10
Select The Blank

Your Answer Interest coverage ratio


Your Answer Selecting a set of scrips to be used , Fixing starting date , Fixing
ending date
Select The Blank

True/False
troughs.
Correct Answer True
Your Answer True

2003?
Confidential

Question As per the exhibit 18-1 for individual stock futures on NSE, the
Correct Answer 0.05
Your Answer 0.05



which factor?


Your Answer Expected return on portfolio , Expected return on assets ,
Standard deviation

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
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the following year
Your Answer Change method of rate of depreciation , Change method of stock

the following year


a particular index
a particular index
Select The Blank

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

Your Answer ROE

coverage ratios
coverage ratios

Your Answer Open ended scheme , Close ended scheme , Growth schemes
True/False
Question If a rupee weakens against the dollars it has favourable impact
for the exporters.
Correct Answer True
Your Answer True
Confidential
opening price
opening price , Displays the correlation between the high and
low prices
Select The Blank

Question ________ identified five forces that determine the intrinsic long
Your Answer Harold Koontz
Match The Following

The general model Expected dividends and Expected dividends and
required rate of return required rate of return
The Gordons Growth Expected dividends in the Expected dividends in the
model next period, cost of equity next period, cost of equity
and expected growth rate and expected growth rate
in dividends in dividends
True/False
Question Because of statutory compulsion, generally Govt. securities are
held by banks, financial institutions, insurance companies etc.
Correct Answer True
Your Answer True

firms that are :-
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phase steadily for a specific time period , Sources of high growth
are expected to disappear after specific period of time
Your Answer In high growth rate phase , Expecting to maintain the growth rate
phase steadily for a specific time period , Expecting a
established dividend payout ratio
Match The Following

termed as
hypothesis
Securities current prices Weak form EMH Fama
information
Framework on efficient Fama Strong form
work


withdrawal , Tax benefits under 80 L available

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
Your Answer Prices move in predictable patterns , Investors are emotional
than being rational
True/False
Your Answer False
Select The Blank

Confidential

Your Answer A study of macro economical changes
True/False
Question There may be convertible clause which gives the debenture
Correct Answer True
Your Answer True
Select The Blank

Your Answer Trend analysis

Question An agreement to buy or sell a specified quantity of an asset at a
Select The Blank

Select The Blank

appointed.
Your Answer Brokers
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Question When the firm is not raising equity by issuing new shares, the
True/False
Question PPF is a good retirement planning and tax saving vehicle.
Correct Answer True
Your Answer True

Select The Blank


Question What is the aim of growth funds?
Correct Answer To provide capital appreciation over medium to long term
Your Answer To provide capital appreciation over medium to long term
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Select The Blank

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


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 :-
Select The Blank



mispriced securities in the market , Are relatively active traders in securities to acquire
abnormal returns

Question Equity analysts provides estimates of earnings and earnings growth for
future, using historical data and :-
Private information about the firm , Firm's specific information and public information

True/False
Confidential
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

trends , The trend lines represent points of support and resistance
Select The Blank

principal on time.

price , Indicates in white if the closing price is higher than the opening price
True/False
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 ________.
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


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 :-
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True/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.
Select The Blank


Question More than half the variation in stock price could be attributed to which
factor?
Match The Following

Intermediate trend Last between 3 weeks to as long as 6 monthsLast between 3 weeks

to as long as 6 months
Select The Blank

Select The Blank

Confidential
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

True/False
market risk.

Correct Answer 2001
Select The Blank



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

True/False
Correct Answer True

Confidential
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?
Select The Blank


Question The Two-Stage dividend discount model is best suited for the firms that
are :-
phase steadily for a specific time period , Sources of high growth are expected to
disappear after specific period of time
True/False
Correct Answer True

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


Match The Following

MCX Commodity ExchangeCommodity Exchange
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Question A pledge of real assets as insurance against the non-payment of default by
the buyer represents
True/False
Correct Answer True

Question Who developed Dow's Principles and organised them into a theory as it is
known today?
Select The Blank

Select The Blank

principal.
Select The Blank

Your Answer NIFTY
True/False
by market beta.
Correct Answer True
Your Answer True
Match The Following

Confidential
NSE&BSE are regulated by Securities Exchange Board of India 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 Options contract
A contract where both the parties are equally responsible Futures contract 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 Option price
True/False
Question A segment is unattractive if the buyers possess strong or growing bargaining
powers.
Correct Answer True
Your Answer True

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

Question The present value of all the future cash payments to be paid on the security to
the investor is termed as :-

Correct Answer Safest investment option available , Demat account is required for
investment , Choice of tenure varies from less than 1 year to 30 years
Your Answer Safest investment option available , Demat account is required for
True/False
firm.
Correct Answer True
Your Answer True
Select The Blank
Confidential
Select The Blank

expected return.

True/False
Correct Answer True
Your Answer True
True/False
sell the underlying instrument on or before the expiry date and the option can be
exercised early.
Correct Answer True
Your Answer True


Select The Blank

Question An ________ is a series of equal payments or receipts occurring at regular
intervals of time.
Your Answer Annuity
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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
Your Answer 0.15

Question Which market is affected with the improving and higher growth rate in
economy?
Match The Following

The market value of the firms assets divided by the replacement cost of these assets
Market value to replacement cost ratio Market value to replacement cost ratio
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 Price earning ratio

True/False
exporters.
Correct Answer True
Your Answer True

True/False
importers.
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Your Answer False

Select The Blank

________.

which he pays a premium , Where the seller accepts an obligation for which he receives a
fee
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.
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
Your Answer True
Select The Blank

of the growth rate.
Select The Blank
Confidential

Select The Blank



abnormal returns


True/False
on declines.
Correct Answer True
True/False
Correct Answer True
Confidential
Select The Blank

principal on time.

True/False
Correct Answer True
Select The Blank

True/False
Correct Answer True



True/False
Confidential
Select The Blank

Select The Blank


factor?
Match The Following


Select The Blank

Select The Blank

True/False
Correct Answer True

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True/False
market risk.

Correct Answer 2001
Select The Blank




True/False
Correct Answer True


Select The Blank

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are :-
True/False
Correct Answer True

Correct Answer 0.05


Match The Following


True/False
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Correct Answer True

known today?
Select The Blank

Select The Blank

principal.
Select The Blank

Your Answer NIFTY
True/False
by market beta.
Correct Answer True
Your Answer True
Match The Following


Board of India
contract
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True/False
powers.
Correct Answer True
Your Answer True

as :-
Your Answer Bonds


True/False
firm.
Correct Answer True
Your Answer True
Select The Blank

Select The Blank

expected return.
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True/False
Correct Answer True
Your Answer True
True/False
exercised early.
Correct Answer True
Your Answer True


Select The Blank

intervals of time.
Your Answer Annuity

Correct Answer 0.15
Your Answer 0.15

economy?
Confidential
Match The Following


True/False
exporters.
Correct Answer True
Your Answer True

True/False
importers.
Your Answer False

Select The Blank
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________.

fee
fee
Select The Blank

True/False
Correct Answer True
Your Answer True

True/False
Correct Answer True
Your Answer True

Question The issuing firm enjoys the flexibility to call the bonds if the interest rates
fall significantly and it can issue :-
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True/False
Correct Answer True
Your Answer False

factor?


Select The Blank

________securities.

Select The Blank

True/False
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Correct Answer True
Your Answer True
True/False
Your Answer False
Select The Blank

expected return.



Select The Blank

Match The Following

Periodic interest payments and principal repayment at the time of maturity Debt
instrument/Bonds Debt instrument/Bonds
Confidential
Present value interest factor of annuities and present value interest factor Yield to
maturity Yield to maturity


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?


Select The Blank

Question ________ refers to the possibility that there may not be a readily available

Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3 years. He
wanted to know what is the present value of this amount, if the rate of interest is 9% p.a ?

Confidential


True/False
Question The arithmetic mean is a set of observations is calculated by finding the
sum values and dividing by the number of observations.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Match The Following

Securities current prices fully reflect all historical information Weak form EMH
Strong form
Fama

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trend
trend
Select The Blank

Your Answer Repos

Question In any Economy, bridge is created between savers and who need the funds
by this system :-
Your Answer Banking

Banks offer cheque facility for investors making it convenient to withdraw


Question If index future is taken under futures contract, the underlying asset would
be :-
True/False
Question European style options are more expensive than American style because
they offer greater flexibility to the buyer.
Your Answer False
Select The Blank

Question ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remains for the long-
term.
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Select The Blank
Question ________ absorbs the excess demand or supply generated by hedgers and
Select The Blank

Your Answer Trustee
True/False
Correct Answer True
Your Answer True

Question When a firm can grow net profits by issuing equity, the expected growth
rate in net profits is determined by :-

equity ratio and interest coverage ratio and DSCR are important leverage ratios , Debt is
riskier source of finance as it entails fixed outgo of periodic payments

True/False
importers.
Your Answer False
Select The Blank
Confidential
Correct Answer 1963
Your Answer 1963
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Select The Blank

of the growth rate.
Select The Blank


Select The Blank



abnormal returns


True/False
Confidential
on declines.
Correct Answer True
True/False
Correct Answer True

Select The Blank

principal on time.

True/False
Correct Answer True
Select The Blank

True/False
Correct Answer True


Confidential

True/False
Select The Blank

Select The Blank


factor?
Match The Following


Select The Blank

Select The Blank

Confidential
True/False
Correct Answer True

True/False
market risk.

Correct Answer 2001
Select The Blank




True/False
Correct Answer True

Confidential
Select The Blank


are :-
True/False
Correct Answer True

Correct Answer 0.05


Match The Following

Confidential

True/False
Correct Answer True

known today?
Select The Blank

Select The Blank

principal.
Select The Blank

Your Answer NIFTY
True/False
by market beta.
Correct Answer True
Your Answer True
Match The Following

Confidential
Board of India
contract
True/False
powers.
Correct Answer True
Your Answer True

as :-
Your Answer Bonds


True/False
firm.
Correct Answer True
Your Answer True
Select The Blank
Confidential
Select The Blank

expected return.

True/False
Correct Answer True
Your Answer True
True/False
exercised early.
Correct Answer True
Your Answer True


Select The Blank

intervals of time.
Your Answer Annuity
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Correct Answer 0.15
Your Answer 0.15

economy?
Match The Following


True/False
exporters.
Correct Answer True
Your Answer True

True/False
importers.
Confidential
Your Answer False

Select The Blank

________.

fee
fee
Select The Blank

True/False
Correct Answer True
Your Answer True
Select The Blank

of the growth rate.
Select The Blank
Confidential

Select The Blank



abnormal returns


True/False
on declines.
Correct Answer True
True/False
Correct Answer True
Confidential
Select The Blank

principal on time.

True/False
Correct Answer True
Select The Blank

True/False
Correct Answer True



True/False
Confidential
Select The Blank

Select The Blank


factor?
Match The Following


Select The Blank

Select The Blank

True/False
Correct Answer True

Confidential
True/False
market risk.

Correct Answer 2001
Select The Blank




True/False
Correct Answer True


Select The Blank

Confidential

are :-
True/False
Correct Answer True

Correct Answer 0.05


Match The Following


True/False
Confidential
Correct Answer True

known today?
Select The Blank

Select The Blank

principal.
Select The Blank

Your Answer NIFTY
True/False
by market beta.
Correct Answer True
Your Answer True
Match The Following


Board of India
contract
Confidential
True/False
powers.
Correct Answer True
Your Answer True

as :-
Your Answer Bonds


True/False
firm.
Correct Answer True
Your Answer True
Select The Blank

Select The Blank

expected return.
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True/False
Correct Answer True
Your Answer True
True/False
exercised early.
Correct Answer True
Your Answer True


Select The Blank

intervals of time.
Your Answer Annuity

Correct Answer 0.15
Your Answer 0.15

economy?
Confidential
Match The Following


True/False
exporters.
Correct Answer True
Your Answer True

True/False
importers.
Your Answer False

Select The Blank
Confidential
________.

fee
fee
Select The Blank

True/False
Correct Answer True
Your Answer True

True/False
Correct Answer True
Your Answer True

Question The issuing firm enjoys the flexibility to call the bonds if the interest rates
fall significantly and it can issue :-
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True/False
Correct Answer True
Your Answer False

factor?


Select The Blank

________securities.

Select The Blank

True/False
Confidential
Correct Answer True
Your Answer True
True/False
Your Answer False
Select The Blank

expected return.



Select The Blank

Match The Following

Periodic interest payments and principal repayment at the time of maturity Debt
instrument/Bonds Debt instrument/Bonds
Confidential
Present value interest factor of annuities and present value interest factor Yield to
maturity Yield to maturity


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?


Select The Blank

Question ________ refers to the possibility that there may not be a readily available

Question Mr. Suresh is expecting to receive Rs.1,50,000/- at the end of 3 years. He
wanted to know what is the present value of this amount, if the rate of interest is 9% p.a ?

Confidential


True/False
Question The arithmetic mean is a set of observations is calculated by finding the
sum values and dividing by the number of observations.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Match The Following

Securities current prices fully reflect all historical information Weak form EMH
Strong form
Fama

Confidential
trend
trend
Select The Blank

Your Answer Repos

Question In any Economy, bridge is created between savers and who need the funds
by this system :-
Your Answer Banking

Banks offer cheque facility for investors making it convenient to withdraw


Question If index future is taken under futures contract, the underlying asset would
be :-
True/False
Question European style options are more expensive than American style because
they offer greater flexibility to the buyer.
Your Answer False
Select The Blank

Question ________ model is based on the principle that an initial phase where the
growth rate is not stable and subsequent steady growth rate and remains for the long-
term.
Confidential
Select The Blank
Question ________ absorbs the excess demand or supply generated by hedgers and
Select The Blank

Your Answer Trustee
True/False
Correct Answer True
Your Answer True

Question When a firm can grow net profits by issuing equity, the expected growth
rate in net profits is determined by :-


True/False
importers.
Your Answer False
Select The Blank
Confidential
Correct Answer 1963
Your Answer 1963
Confidential

True/False
Correct Answer True
Your Answer True

Question The issuing firm enjoys the flexibility to call the bonds if the
True/False
Question The sideways trend is essentially a transitional one which
separates the two major market movements.
Correct Answer True
Your Answer False

which factor?


transfer
transfer
Confidential
Select The Blank

Question Security analysis serves the investment decision maker by

after 5 years?
Select The Blank

True/False
Correct Answer True
Your Answer True
True/False
important.
Your Answer False
Select The Blank

Confidential

after 3 years?


Select The Blank

Match The Following

The yield to maturity is Geometric mean return or Geometric mean return or

same as the the internal rate of return the internal rate of return
Periodic interest payments Debt instrument/Bonds Debt instrument/Bonds
and principal repayment at
the time of maturity
The actual yield earned by Realised yield Realised yield
an investor on a bond
Present value interest Yield to maturity Yield to maturity
factor
Confidential


:-

after 5 years?
Select The Blank


Confidential


opening price
opening price



True/False
observations.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Match The Following

Confidential
Weak form model is also Random walk model Weak form EMH
termed as
Investors are rational Efficient market Passive managers
hypothesis
Securities current prices Weak form EMH Strong form
information
Framework on efficient Fama Fama
work

trend
trend
Select The Blank

Question ________involves a simultaneous sale and repurchase
agreement.
Your Answer Repos

Your Answer Banking


Banks offer cheque facility for investors making it convenient to
withdraw

Confidential

Question If index future is taken under futures contract, the underlying
asset would be :-
True/False
Question European style options are more expensive than American style
Your Answer False
Select The Blank

Question ________ model is based on the principle that an initial phase
Select The Blank

Question ________ absorbs the excess demand or supply generated by
Select The Blank

appointed.
Your Answer Trustee
True/False
Correct Answer True
Your Answer True
Confidential


contract
contract
True/False
Question If rupee weakens against the dollar, it has favourable impact for
the importers.
Your Answer False
Select The Blank

Correct Answer 1963
Your Answer 1963
Confidential

SECURITY ANALYSIS AND PORTfolio

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SECURITY ANALYSIS AND PORTfolio

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Security Ananysis And Portfolio Managamnent

Your Answer False

Multiple Choice Single Answer

Correct Answer Future price = Spot price + Carry cost

Your Answer Future price = Spot price + Carry cost

Multiple Choice Single Answer

Correct Answer S&P CNX Nifty and the BSE sensex

Your Answer S&P CNX Nifty and the BSE sensex

Match The Following

Future value of a series of Future value of annuity Future value of annuity

Multiple Choice Multiple Answer

Select The Blank

Your Answer Volatility

Multiple Choice Multiple Answer

Your Answer True

Multiple Choice Multiple Answer

Multiple Choice Single Answer

Multiple Choice Single Answer

Your Answer Rs. 6083/-

Multiple Choice Single Answer

Your Answer Market influence

Match The Following

Technical collaboration of 1981 1981

Your Answer True

Multiple Choice Single Answer

Correct Answer Positive economic conditions

Your Answer Positive economic conditions

Multiple Choice Single Answer

Correct Answer To Minimize risk and maximize return

Your Answer To Minimize risk and maximize return

Select The Blank

Your Answer Transitional

Multiple Choice Multiple Answer

Select The Blank

Multiple Choice Multiple Answer

Correct Answer Collateral , Call provision , Sinking fund and protective

Multiple Choice Multiple Answer

Select The Blank

Your Answer 3 months

Select The Blank

Your Answer Default risk

Multiple Choice Multiple Answer

Correct Answer Open ended scheme , Close ended scheme

Your Answer Open ended scheme , Close ended scheme

Your Answer True

Select The Blank

Your Answer The Two-Stage dividend discount

Your Answer False

Select The Blank

Multiple Choice Multiple Answer

Multiple Choice Single Answer

Your Answer Bond indenture

Correct Answer True

Your Answer True

Multiple Choice Multiple Answer

Correct Answer A contract between two parties , Where buyer receives a

Select The Blank

Your Answer Rail average

Multiple Choice Multiple Answer

Multiple Choice Single Answer

Multiple Choice Single Answer

Correct Answer Total money in existence at any given time

Your Answer Total money in existence less borrowings