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

ques. Paper
Security Analysis-I (211): January 2006


part A : Basic Concepts (30 Marks)



· This part consists of ques. with serial number one - 30.

· ans all ques..

· every ques. carries 1 mark.

· Maximum time for answering part A is 30 Minutes.





1.
Which of the subsequent is/are not a speculative transaction?

I. Contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations.

II. Contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss arising in ordinary course of business.

III. Contract entered into by a person to guard against loss through future price fluctuations in respect of his contracts for true delivery of goods manufactured by him or merchandise sold by him.

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

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

(e) All (I), (II) and (III) above.
< ans >

2.
Which of the subsequent statements are actual with respect to Beta?

I. Beta is the slope of the Security Market Line.

II. Beta measures the non-diversifiable risk.

III. Beta shows the manner in which a security’s return modifications systematically with modifications in the market’s return.

IV. Beta greater than 1 is referred to as an aggressive security.

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

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

(e) All (I), (II) (III) and (IV) above.
< ans >

3.
There are 2 stocks: Stock A and stock B.

Particulars
Stock A
Stock B
Market Index

Beta
1.53
0.81
1.00

Standard deviation
10.70%
16.84%
10.00%


With respect to this, which of the subsequent statements is/are not true?

I. The covariance ranging from Stock A and Stock B is 23.52 (%)2.

Earning:   Approval pending.