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

(d)
The increase in the price of a bond associated with the modifications in the interest rates will be at a diminishing rate as the term to maturity increases

(e)
For a provided change in a bond’s YTM, the percentage price change will be lower for low coupon bonds than for high coupon bonds.


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13.
Which of the subsequent statements is/are not actual with respect to an Exchange Traded Fund (ETF)?

I. ETFs primarily invest in the securities of companies that are included in a opted market index.

II. The NAV of the ETF is equal to the value of the underlying index.

III. ETFs cannot be bought or sold on a daily basis like stocks.

(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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14.
Which of the subsequent statements is actual regarding the semi-strong from of Efficient Market Hypothesis?

(a)
Stock prices fully reflect all historical price info

(b)
Runs test is used to test the semi-strong form of market efficiency

(c)
Stock prices fully reflect all relevant info including insider info

(d)
Stock prices are not predictable using the publicly available info

(e)
Relationship ranging from the historical P/E ratios and risk-adjusted market performance supports semi-strong form of market efficiency.


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15.
Which of the subsequent statements is not actual about the moving average?

(a)
tech. analysts observe moving averages more for crossovers than for the modifications in direction

(b)
When the moving avg. rises above the price line, a reversal in bullish pattern is signaled

(c)
The price line that falls beneath a rising moving avg. only shows a secondary reaction and not a pattern reversal

(d)
A moving avg. represents a smoothened pattern and therefore does not act as a support/resistance line

(e)
If the moving avg. is flat or has already begun to change direction, a crossover by the price line is a fairly reliable indicator of pattern reversal.


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16.
The Earnings per share (EPS) of a company registered an increase in the year 2005-2006. Which of the subsequent arguments most seriously weakens this statement?

Earning:   Approval pending.