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

(b) Fundamental evaluation efficiency is stated to exist, if the price of an asset is neither undervalued nor overvalued

(c) Full insurance efficiency is stated to exist, if participants can adopt hedging as an effective tool against possible risk in future

(d) Operational efficiency is stated to exist, if the operating cost are minimum possible to participants, but still provides a fair return to the intermediaries for their services

(e) Allocational efficiency is stated to exist, if the market channelizes resources into projects where the marginal efficiency of capital adjusted for risk differences is least.
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7.
Which of the subsequent statements is/are actual with respect to auction market?

I. In auction market, active market makers do not exist and demand and supply of the securities is directly related to the transaction price.

II. In market order, the price is determined by the maximum price, which a customer is willing to give, or the minimum price at which the customer is willing to sell the share.

III. In limit order system, the customer will accept the price fixed by the market.

(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.
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8.
In which of the subsequent stage, there is a growth in the demand, although number of companies within a growing industry will fail?

(a) Pioneering stage (b) Expansion stage

(c) Stabilization stage (d) Declining stage (e) Maturity stage.
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9.
Which of the subsequent is true, if entry barriers are low and exit barriers are high in the industry?

(a) Returns are low and stable (b) Returns are high and stable

(c) Returns are low and risky (d) Returns are high and risky

(e) Returns may vary depending on industry opted.

Earning:   Approval pending.