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

II. A large part of stock B’s return can be eliminated by diversification.

III. Systematic risk of stock B is relatively high, resulting in a low beta.

IV. Stock A is an aggressive stock and Stock B is a defensive stock.

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

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

(e) (II), (III) and (IV) above.
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4.
Which of the subsequent statements are actual with respect to utility theory described in the form of quadratic function?

I. .

II. The expected utility is an decreasing function of the standard deviation of returns.

III. The utility function is an increasing function of return at a decreasing rate.

IV. The 1st derivative with respect to return is negative whereas the 2nd derivative is positive.

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

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

(e) All (I), (II), (III) and (IV) above.
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5.
How much additional percentage of shares an acquirer can acquire in any financial year, without making a public announcement to that fact, if an acquirer has acquired, with the provision of law, more than 15% but less than 75% of the shares or voting rights of the company?

(a) 2% (b) 5% (c) 8% (d) 10% (e) 12%.
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6.
Which of the subsequent statements is false with respect to various features of an efficient market?

(a) info arbitrage efficiency is stated to exist, if the participants do not have any scope to reap abnormal profits using info that is of common knowledge

Earning:   Approval pending.