Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis – I - Question Paper

II. Value stock usually have a PEG ratio more than one.

III. PEG ratio is particularly helpful in valuing small and mid-cap growth stocks, which typically pay no dividend.

(a) Only (I) above (b) Only (II) above

(c) Only (III) above (d) Both (I) and (III) above

(e) Both (II) and (III) above.
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15.
Which of the subsequent statements are actual with respect to residual income method for calculating economic value added (EVA)?

I. It involves calculation of difference ranging from 2 returns of identical risk level.

II. Under this method EVA = (Sales ­­– Operating expenses) – (WACC) (Net assets).

III. This method is also called spread method.

IV. The method focuses on the factors that create growth in a company.

(a) Both (I) and (III) above (b) Both (II) and (III) above

(c) (I), (II) and (III) above (d) (I), (III) and (IV) above

(e) (II), (III) and (IV) above.
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16.
Which of the subsequent is not an assumption made under tech. analysis?

(a) Market value is determined solely by the interaction of supply and demand

(b) Ignoring minor fluctuations in the market, stock prices tend to move in patterns which persists for an appreciable period of time

(c) modifications in pattern are caused by shifts in supply and demand

(d) Supply and demand are governed only by rational factors

(e) a few chart trends tend to repeat themselves.
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17.
Which of the subsequent statements are actual with respect to the subsequent graph depicting Dow Theory?



I. The reversal occurs at point ‘a’.

Earning:   Approval pending.