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