Quiznetik

Investment Management | Set 2

1. Who does “blue chip “denotes

Correct : D. shares consistently yielding high returns

2. Financial derivatives are mainly used for

Correct : C. hedging risk

3. The instrument that are marked to the market are

Correct : B. future

4. In an option contract, if the option can be exercised only at the time of maturity, it is called

Correct : D. european option

5. The predetermined price at which an underlying assets has to be bought or sold in an option contract is called

Correct : B. exercise price

6. A combination of forwards by two counterparties with opposite but matching needs is called

Correct : A. swap

7. Mutual fund are very popular in

Correct : A. u.s.a

8. The pattern of investment of a mutual fund is oriented fixed income yielding securities under

Correct : B. income fund scheme

9. In India ,the company which actually deals with the corpus of the mutual fund is called

Correct : C. asset management company

10. Find out the odd one

Correct : B. share certificate

11. This fund is one that is available for subscription all through the year.

Correct : A. open ended fund

12. This fund is open for subscription only during a specified period

Correct : B. closed ended fund

13. These funds are stocks funds that invest in stocks with the potential for long term capital appreciation

Correct : C. growth fund

14. The aim of this fund is to provide regular and steady income to investor.

Correct : D. income fund

15. Stock mutual funds also sometimes called

Correct : D. equity fund

16. Mutual funds are

Correct : C. both a and b

17. Uti-64 is a

Correct : A. open ended fund

18. Credit rating is mandatory

Correct : C. debentures

19. Systematic risk is also known as

Correct : A. unavoidable risk

20. Unsystematic risk is also known as

Correct : D. both b and c

21. Investor can build a risk free portfolio, when two assets have ---------correlation

Correct : C. perfect negative

22. A set of securities held by an individual investor is called --------

Correct : A. portfolio

23. Which of the following helps in reduction of risk in portfolio management?

Correct : D. diversification

24. The risk in portfolio is measured through the

Correct : C. variance co-variance matrix

25. If an investment assures a fixed return in the future, then the standard deviation of return will be

Correct : A. 0

26. The securities contact act was passed in

Correct : B. 1956

27. In secondary market

Correct : A. second hand securities are traded

28. The first stock exchange was set up in

Correct : B. mumbai

29. Over the counter market is for

Correct : B. buying /selling of unlisted securities

30. over the counter market is a part of

Correct : B. secondary market

31. Which speculator expect fall in prices in future

Correct : B. bear

32. Which speculator expects a rise in price in future?

Correct : A. bull

33. When a right to purchase a security is given it is called

Correct : B. call option

34. OTCEI deals in

Correct : B. industrial securities

35. The first stock exchange which was fully computerized was

Correct : C. otcei

36. Interest rate risk is associated with

Correct : D. bank rate

37. Volatile stock has beta value

Correct : A. greater than one

38. Total risk in a security usually measured by

Correct : B. standard deviation

39. Systematic risk is measured with

Correct : C. beta

40. The term beta is synonymous with

Correct : A. systematic risk

41. Which one of the following is a cash assets

Correct : A. deposits created out of loans

42. The component of capital market is

Correct : B. government securities market

43. Goverenment bond is a

Correct : B. long term security

44. The market for short term loans is known as

Correct : C. money market

45. Bills drawn and acceptance payable after three months are called

Correct : B. usance bills

46. The market which helps commercial banks to maintain their SLR requirements is

Correct : A. call money market

47. The certificate which evidences an unsecured corporate debt of short term maturity is

Correct : A. short term loan certificate

48. The major player in the Indian money market is

Correct : C. commercial banks

49. A person appointed by a stock broker to assist him in the business of securities trading is called

Correct : C. authorized clerk

50. An order for the purchase of securities at fixed prices is known as

Correct : A. limit order

51. Speculators who neither buy nor sell securities in the market ,but still trade on them are called

Correct : B. stags

52. ________ securities are generally issued for a fixed period and redeemable by the issuer at the end of that period.

Correct : B. debt

53. _______ is a document which either creates a debt or acknowledges it.

Correct : B. debentures

54. __________ instruments are those instruments, which have a maturity period of less than one year

Correct : A. money market

55. G-Secs are issued by the______ on behalf of the Government of India.

Correct : A. reserve bank of india

56. ‘Gilt Securities’ are issued by _________.

Correct : A. reserve bank of india

57. This is the stock valuation method that uses financial data to predict price movements.

Correct : A. fundamental analysis

58. Advance decline line is a ______

Correct : A. indicator

59. This is the level is the level that the technical analyst believes a stock price will not fall below.

Correct : B. resistance level

60. This pattern occurs when a stock price drops to a similar price level twice within a few weeks or months.

Correct : C. double bottom

61. Most of such stocks pay dividends and hence investors would like to buy and hold for long periods. Such a portfolio is called;

Correct : A. patient portfolio

62. This portfolio invests in “expensive stocks” that offer big rewards but also carry big risks.

Correct : B. aggressive portfolio

63. A portfolio that provides highest returns at a given level of risk.

Correct : C. efficient portfolio

64. Each contract is custom designed, and hence is unique in terms of contract size, expiration date and the asset type and quality.

Correct : A. forward contract

65. These contracts are standardized and hence trade in stock exchanges

Correct : B. future contract

66. The credit risk of future is __________ than that of forwards:

Correct : A. lower

67. The buyer or holder of the option purchases the right from the seller for a consideration called;

Correct : B. premium

68. this option give the holder or buyer, the right to buy specified quantity of the underlying asset at a specified price on or before a specified time..

Correct : A. call option

69. This option gives the holder or buyer, the right to sell specified quantity of the underlying asset at a specified price on or before a specified time.

Correct : B. put option

70. ______________is a financial contract, between two or more parties, whose value is derived from the future value of an underlying asset.

Correct : D. derivative contract

71. _____________ use derivatives markets to reduce or eliminate the risk associated with price of an asset

Correct : C. hedgers

72. In ____________Derivatives, underlying asset can be commodities.

Correct : C. commodity

73. ______________ contract is a one to one bipartite contract, which is to be performed in future at the terms decided today.

Correct : A. forward contract

74. ____________ contracts are standardized and hence traded in stock exchanges

Correct : B. future contract

75. No credit risk involved in __________ contract because of the involvement of clearing house.

Correct : B. future contract

76. Futures are highly standardized, whereas each ____________ is unique

Correct : A. forward contract

77. ______________ option give the holder or buyer, the right to buy specified quantity of the underlying asset at a specified price on or before a specified time

Correct : A. call option

78. ___________ option gives the holder or buyer, the right to sell specified quantity of the underlying asset at a specified price on or before a specified time

Correct : B. put option

79. The following one is a financial asset

Correct : C. shares

80. Goverenment bond is a

Correct : C. medium term security

81. The certificate which evidences an unsecured corporate debt of short term maturity is

Correct : D. commercial paper

82. The major player in the Indian money market is

Correct : D. reserve bank of india

83. A person appointed by a stock broker to assist him in the business of securities trading is called

Correct : A. sub broker

84. Political constancy is chief aspect concerning

Correct : D. Country risk

85. Systematic risk is higher when:

Correct : A. Α > 0.

86. In the stock-price beta estimation for the Coca-Cola Company, the dependent variable is the:

Correct : D. Value of the S&P 500 Index.

87. If the beta of a stock is 1.8 and the overall market declines 20%, the expected return is:

Correct : A. -36%

88. Total risk for common stocks is:

Correct : A. The sum of systematic risk and diversifiable risk.

89. The tracking error of an optimized portfolio can be expressed in terms of the ____________ of the portfolio and thus reveal ____________.

Correct : C. Beta; portfolio performance

90. A portfolio comprises of two stocks A and B. Stock A gives a return of 8%and stock B Gives a return of 7%. Stock A has a weight of 60% in the portfolio. What is the Portfolio Return?

Correct : D. 8%

91. Shares which are not affected by market movements are known as:

Correct : C. Defensive shares

92. Exposure indicates

Correct : D. Sensitivity to changes in assets

93. Which of the following securities is most liquid?

Correct : B. Capital market instruments

94. Which of the following goals will be considered by the individuals who invest in upcoming companies and wait till the companies to grow and then harvest their profits and move on to other company?

Correct : C. Long-term high priority goals

95. A purely passive strategy is defined as

Correct : B. One that allocates assets in fixed proportions that do not vary with market conditions.

96. An industry in the expansion stage of its life cycle is indicated by its

Correct : D. High Default

97. Which of the following is true of municipal government debt?

Correct : B. It is often purchased by individuals with high incomes.

98. The net asset value of a mutual fund investing in stock rises with

Correct : B. Lower equity values

99. Equity does NOT include

Correct : A. Cash and paid-in capital

100. A liquid asset may

Correct : B. Be converted into cash with little chance of loss