Security Analysis and Portfolio Management Set 3

81. ___ is also called characteristic Lines.
A. CML
B. SML
C. Efficient Frontier
D. CAL

Answer

B. SML

82. Efficient frontier is situated at ___ boundary of opportunity set.
A. North west
B. North east
C. South west
D. South east

Answer

A. North west

83. Arbitrage Pricing Theory was introduced by ___
A. Charles Dow
B. Benchamin Graham
C. William sharp
D. Stephen S.Rose

Answer

D. Stephen S.Rose

84. Which pricing model provides no guidance on the determination of the risk premiumfactor?
A. The Multifactor APT
B. The CAPM
C. Both CAPM &Multifactor APT
D. Neither the CAPM nor Multifactor APT

Answer

A. The Multifactor APT

85. ___ is an example for oscillators.
A. ROC
B. RSI
C. MACD
D. All the above

Answer

D. All the above

86. The APT differs from CAPM because the APT.
A. Places more emphasis on market risk
B. Recognizes multiple systematic risk factors
C. Recognizes multiple unsystematic risk factors
D. Minimizes the importance of diversification

Answer

B. Recognizes multiple systematic risk factors

87. ___ focus more on past price movement of a firm’s stock than on the underlyingdeterminants of future profitability.
A. Credit Analysis
B. Fundamental Analysis
C. Systems Analysis
D. Technical Analysis

Answer

D. Technical Analysis

88. RAPM stands for ___
A. Risk Adjustment Performance Matrix
B. Risk Adjusted Performance Measure
C. Risk return Analysis of portfolio management
D. Risk Adjusted portfolio Measure

Answer

A. Risk Adjustment Performance Matrix

89. Reward to variability Ratio is ___
A. Traynor Ratio
B. Sharp Ratio
C. Jenson Ratio
D. Book Market Ratio

Answer

B. Sharp Ratio

90. Reward to volatility Ratio is also called as ___
A. Treynor Ratio
B. Sharp Ratio
C. Jenson Ratio
D. Book market Ratio

Answer

A. Treynor Ratio

91. Michel C. Jenson introduced;
A. Reward to variability ratio
B. Reward to volatility Ratio
C. Differential return measure
D. Price book ratio

Answer

C. Differential return measure

92. Treynor Ratio is calculated using ___
A. Standard deviation
B. Beta
C. Alpha
D. Both Alpha and Beta

Answer

B. Beta

93. When alpha ‘p’ is positive, it shows ___
A. Superior return
B. Neutral performance
C. Worst performance
D. None of the above

Answer

A. Superior return

94. Which of the following is a defensiveshares?
A. Beta>1
B. Beta<1
C. Beta=1
D. Beta=0

Answer

B. Beta<1

95. NSE established on ___
A. 1875
B. 1785
C. 1990
D. 1992

Answer

D. 1992

96. ___ is a person who believes in lower expected return at reduced risk.
A. Hedgers
B. Arbitrageurs
C. Speculators
D. Spreaders

Answer

D. Spreaders

97. Who is the author of the book”Security Analysis and The Intelligent Investor”
A. John Maynard Keynes
B. Kritzman
C. Benjamin Graham
D. Harry Markowitz

Answer

C. Benjamin Graham

98. ___ is putting money at risk by betting on an uncertain outcome with the hope thatyou might win money.
A. Investment
B. Gambling
C. Financing
D. Portfolio

Answer

B. Gambling

99. Total risk is associated with ___
A. Standard deviation
B. Beta
C. Alpha
D. Correlation

Answer

A. Standard deviation

100. Which of the following is not related with a bond?
A. Dividend
B. Residential maturity
C. ESOP
D. Spot interest rate

Answer

D. Spot interest rate

101. ___ is the bonds issued at a considerable discount and repaid at par.
A. Deep discount bond
B. Callable bond
C. Floating rate note
D. Junk bonds

Answer

A. Deep discount bond

102. Which of the following is a PSU bond?
A. Cumulative Interest bonds
B. Step up bonds
C. Tax free bonds
D. Monthly return bonds

Answer

C. Tax free bonds

103. ___ are issued by a group of multinational banks.
A. Domestic bonds
B. Foreign bonds
C. Euro bonds
D. Junk bonds

Answer

C. Euro bonds

104. YTM is the most widely used measure to know the return on ___
A. Equity
B. Derivatives
C. Bonds
D. Preference shares

Answer

C. Bonds

105. ___ is the discount rate that makes present value of single cash inflow to cost of thebond.
A. Current yield
B. YTC
C. YTM
D. Spot interest rate

Answer

D. Spot interest rate

106. YTC is used in the case of ___ bonds.
A. Irredeemable
B. Callable bonds
C. Redeemed on maturity
D. Convertible

Answer

B. Callable bonds

107. Bond price-yield relationship is referred to as ___
A. Concave
B. Convex
C. Linear
D. Rectangular hyperbola

Answer

B. Convex

108. Bond pricing theorems was introduced by—
A. Harry Markowitz
B. Kritzman
C. F.Amling
D. Burton G.Malkiel

Answer

D. Burton G.Malkiel

109. Bond price will move ___ to market interest changes.
A. Inversely
B. Positively
C. Constant
D. Randomly

Answer

A. Inversely

110. ___ is a measure of interest rate sensitivity of a bond.
A. YTM
B. HTC
C. Duration
D. Current yield

Answer

C. Duration

111. The theory of bond immunisation was introduced by ___
A. Redington
B. F.Amling
C. Burton G.Malkiel
D. Kritzman

Answer

A. Redington

112. ___ is a hedging method against the risk associated with changes in interest rates.
A. Macaules duration
B. Bond convexity
C. Bond immunisation
D. Effective duration

Answer

C. Bond immunisation

113. Which of the following relates to industry analysis?
A. Infrastructure facilities
B. Competitive forces
C. Interest rate
D. Market share

Answer

B. Competitive forces

114. Which is the most popular multiplier for valuing shares?
A. EPS/ stock price
B. P/E Ratio
C. Constant growth mode
D. One year holding model

Answer

B. P/E Ratio

115. ___ ratio is used to estimate the value of stocks by the investors rather than adoptingdiscounting models.
A. Price to sales ratio
B. Price to book ratio
C. Price earnings ratio
D. Dividend pay-out ratio

Answer

C. Price earnings ratio

116. ___ is the study of historical stock prices and stock market behaviour to identifyrecurring pattern.
A. Fundamental Analysis
B. Technical Analysis
C. Economy Analysis
D. Industry Analysis

Answer

B. Technical Analysis

117. Dow Theory relates to ___
A. Primary trend
B. Short term trend
C. Seasonal pattern
D. Intermediate trend

Answer

A. Primary trend

118. Find the odd one.
A. Head and shoulder
B. Flags
C. Triangles
D. Candle sticks

Answer

D. Candle sticks

119. Price movements inzigzagfashion with any rise or fall interrupted by countermovements are known as ___
A. Trend Reversal
B. Consolidation
C. Reactions
D. Penetration

Answer

C. Reactions

120. Which among the following is a market indicator?
A. Oscillators
B. MACD
C. Odd-lot-index
D. Moving average

Answer

C. Odd-lot-index

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