Symbiosis International Education Centre 2008 M.B.A Business Administration SECURITY ANALYSIS - exam paper

Thursday, 31 January 2013 03:40Web

LIST OF ATTEMPTED ques. AND ANSWERS

True/False
ques. Investment in gilt edged securities carry a higher element of risk.
accurate ans False
Your ans False

choose The Blank
ques. The Derivative market is divided into Future market and ________ market.
accurate ans Options
Your ans Options

choose The Blank
ques. ________ of companies may open at higher or lower price than the problem price.
accurate ans IPO's
Your ans Market price

True/False
ques. Equity shares is a high return high risk instrument.
accurate ans True
Your ans True

True/False
ques. When you are making an investment you are expecting certain future benefits from your investment.
accurate ans True
Your ans True

Multiple option Multiple ans
ques. The Two-Stage dividend discount model is based on the assumption of :-
accurate ans An initial phase where the growth is not a stable growth rate , A following steady state of growth rate being stable and lasts n years , A stable growth phase lasts forever
Your ans An initial phase where the growth is not a stable growth rate , A following steady state of growth rate being stable and lasts n years , A stable growth phase lasts forever

Multiple option Single ans
ques. Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10 years. He wanted to know what is the current value of this amount, if the rate of interest is 10% p.a:-
accurate ans Rs. 9639/-
Your ans Rs. 9639/-

Multiple option Single ans
ques. What is Gross National Product ?
accurate ans Gross income generated from within the country
Your ans Gross income generated from within the country

Multiple option Single ans
ques. What does a Balanced fund seek to achieve?
accurate ans Growth and regular income
Your ans Growth and regular income

Match The subsequent
Question Correct Answer Your ans

Weak form model is also termed as Random walk model Random walk model

Investors are rational Efficient market hypothesis Efficient market hypothesis

Securities current prices fully reflect all historical information Weak form EMH Weak form EMH

Framework on efficient capital markets, a review of theory and empirical work Fama Fama

Multiple option Multiple ans
ques. Which ratios are commonly used?
accurate ans Interest coverage ratios , Debt service coverage ratios , Debt equity ratio
Your ans Debt equity ratio , Interest coverage ratios , Debt service coverage ratios

Multiple option Single ans
ques. Under EMH it is presumed that if markets are efficient, securities are priced to give a :-
accurate ans Normal returns for their provided level of risk
Your ans Normal returns for their provided level of risk

Multiple option Multiple ans
ques. Return can be in the form of :-
accurate ans Dividends , Interests , Capital appreciation
Your ans Dividends , Interests , Capital appreciation

Multiple option Single ans
ques. Profits are non existent in pioneering stage because of :-
accurate ans Heavy expenses on product introduction
Your ans Heavy expenses on product introduction

choose The Blank
ques. Measures of ________ tells us what we can expect a typical or middle data point of a distribution to be.
accurate ans Central tendency
Your ans Central tendency

choose The Blank
ques. ________ identified 5 forces that determine the intrinsic long run profit attractiveness of a market or market segment.
accurate ans Michael Porter
Your ans Michael Porter

Match The subsequent
Question Correct Answer Your ans

MCX Commodity Exchange Commodity Exchange

Sensex BSE Index BSE Index

Nifty NSE Index NSE Index

Lifex ET Index ET Index

Multiple option Multiple ans
ques. Mutual fund schemes could be broadly classified as :-
accurate ans Open ended scheme , Close ended scheme
Your ans Open ended scheme , Close ended scheme

Multiple option Multiple ans
ques. Which are the most popular kinds of orders placed through an online trading account?
accurate ans Limit orders , Market orders
Your ans Limit orders , Market orders

Multiple option Single ans
ques. Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded annually. What will be the value of his investment after five years?
accurate ans Rs.14.693/-
Your ans Rs.14.693/-

Multiple option Multiple ans
ques. Growth of the firm can be estimated through :-
accurate ans Firm's past earnings/historical growth rate , Estimates made by equity research analyst who follow the firm , Estimates from a firm's fundamentals
Your ans Firm's past earnings/historical growth rate , Estimates made by equity research analyst who follow the firm , Estimates from a firm's fundamentals

Multiple option Single ans
ques. What is the rate of interest on the tax free bonds problem by the government?
accurate ans 6.5%
Your ans 6.5%

Multiple option Multiple ans
ques. Which of the subsequent are important momentum indicators used widely?
accurate ans Moving avg. convergence divergence(MACD) , Rate of change (ROC) , Relative strength indicator (RSI)
Your ans Rate of change (ROC) , Relative strength indicator (RSI) , Moving avg. convergence divergence(MACD)

choose The Blank
ques. ________ measures the profitability of operations without considering the influence of financial structure and tax rate.
accurate ans Earnings power
Your ans Earnings power

Multiple option Single ans
ques. When an investor invests in stock, expects to get the dividends and an expected price for the period the stock is held is the rule of :-
accurate ans The General model
Your ans The General model

choose The Blank
ques. ________ deal in futures to offset a pre-existing risk.
accurate ans Hedger
Your ans Hedger

Multiple option Multiple ans
ques. What are the various kinds of profitability ratios?
accurate ans Gross profit margin ratio , Earnings power , Return on equity
Your ans Gross profit margin ratio , Return on equity , Debt service coverage ratio

Multiple option Multiple ans
ques. To measure the movement of stocks in the market which indices were constructed by Dow?
accurate ans Dow Jones industrial avg. , Dow Jones Transportation avg.
Your ans Dow Jones industrial avg. , Dow Jones Transportation avg.

True/False
ques. The price earning ratio is an increasing function of the payout ratio and the growth rate and a decreasing function of the riskiness of the firm.
accurate ans True
Your ans True

True/False
ques. If rupee weakens against the dollar, it has favourable impact for the importers.
accurate ans False
Your ans False

True/False
ques. A mutual fund is needed to dispatch the dividend warrants to the unit holders within thirty days of the declaration of dividend.
accurate ans True
Your ans True

Multiple option Multiple ans
ques. Active investment managers :-
accurate ans Do not believe that markets are efficient , Puts efforts to search mispriced securities in the market , Are relatively active traders in securities to acquire abnormal returns
Your ans Do not believe that markets are efficient , Puts efforts to search mispriced securities in the market , Are relatively active traders in securities to acquire abnormal returns

Multiple option Multiple ans
ques. What are the features of candle stick charts?
accurate ans Indicates in black if the closing price is lower than the opening price , shows in white if the closing price is higher than the opening price
Your ans Indicates in black if the closing price is lower than the opening price , shows in white if the closing price is higher than the opening price

True/False
ques. Bonds and Debentures represent long term debt instruments.
accurate ans False
Your ans False

choose The Blank
ques. The possibility of reduction of risk through the construction of a portfolio depends on the value of ________ ranging from the 2 assets.
accurate ans Correlation coefficient
Your ans Correlation coefficient

choose The Blank
ques. A line is described as a price movement 2 or 3 weeks or longer, during which period the price variation of both averages moves within a price range of approximately________%.
accurate ans 5
Your ans 5

True/False
ques. The performance of a scheme is reflected in its NAV which is disclosed on a daily basis in case of open ended schemes.
accurate ans True
Your ans True

Multiple option Multiple ans
ques. A firm's growth is determined by how much is re-invested into new assets and the quality of these investments, and these includes :-
accurate ans Acquisitions , Building distribution channels , Expanding marketing capabilities and investing in new facilities
Your ans Acquisitions , Building distribution channels , Expanding marketing capabilities and investing in new facilities

True/False
ques. Currently in India index choices are both European and American in nature.
accurate ans False
Your ans False

Multiple option Single ans
ques. A security represent evidence of :-
accurate ans A property right
Your ans A property right

Multiple option Single ans
ques. Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4% compounded annually. What will be the value of his investment after five years?
accurate ans Rs. 6083/-
Your ans Rs. 6083/-

Multiple option Single ans
ques. When a firm can grow net profits by issuing equity, the expected growth rate in net profits is determined by :-
accurate ans Equity reinvestment rate X return on equity
Your ans Equity reinvestment rate X return on equity

True/False
ques. Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as well as current.
accurate ans True
Your ans True

choose The Blank
ques. UTI was set up in the year ________.
accurate ans 1963
Your ans 1963

choose The Blank
ques. The regulations of SEBI with respect to mutual funds were fully revised in the year ________.
accurate ans 1996
Your ans 1996

choose The Blank
ques. ________ take long or short positions only with the intention of making profits by getting out of the market when conditions favor them.
accurate ans Speculators
Your ans Speculators

Multiple option Single ans
ques. What do you understand by money supply?
accurate ans Total money in existence at any provided time
Your ans Total money in existence at any provided time

Marks : 2

44.

To measure the current yield on the bond, it's coupon rate is compared with :-

Future estimated price

Prevailing market price

Prevailing book price

Historical market price

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False

Question

Investment in gilt edged securities carry a higher element of risk.

Correct Answer

False

Your Answer

False

Select The Blank

Question

The Derivative market is divided into Future market and ________ market.

Correct Answer

Options

Your Answer

Options

Select The Blank

Question

________ of companies may open at higher or lower price than the issue price.

Correct Answer

IPO's

Your Answer

Market price

True/False

Question

Equity shares is a high return high risk instrument.

Correct Answer

True

Your Answer

True

True/False

Question

When you are making an investment you are expecting certain future benefits from your investment.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple Answer

Question

The Two-Stage dividend discount model is based on the assumption of :-

Correct Answer

An initial phase where the growth is not a stable growth rate , A subsequent steady state of growth rate being stable and lasts n years , A stable growth phase lasts forever

Your Answer

An initial phase where the growth is not a stable growth rate , A subsequent steady state of growth rate being stable and lasts n years , A stable growth phase lasts forever

Multiple Choice Single Answer

Question

Mr. Tiwari is expecting to receive Rs.25,000/- at the end of 10 years. He wanted to know what is the present value of this amount, if the rate of interest is 10% p.a:-

Correct Answer

Rs. 9639/-

Your Answer

Rs. 9639/-

Multiple Choice Single Answer

Question

What is Gross National Product ?

Correct Answer

Gross income generated from within the country

Your Answer

Gross income generated from within the country

Multiple Choice Single Answer

Question

What does a Balanced fund seek to achieve?

Correct Answer

Growth and regular income

Your Answer

Growth and regular income

Match The Following

Question

Correct Answer

Your Answer

Weak form model is also termed as

Random walk model

Investors are rational

Efficient market hypothesis

Securities current prices fully reflect all historical information

Weak form EMH

Framework on efficient capital markets, a review of theory and empirical work

Fama

Multiple Choice Multiple Answer

Question

Which ratios are commonly used?

Correct Answer

Interest coverage ratios , Debt service coverage ratios , Debt equity ratio

Your Answer

Debt equity ratio , Interest coverage ratios , Debt service coverage ratios

Multiple Choice Single Answer

Question

Under EMH it is assumed that if markets are efficient, securities are priced to provide a :-

Correct Answer

Normal returns for their given level of risk

Your Answer

Normal returns for their given level of risk

Multiple Choice Multiple Answer

Question

Return can be in the form of :-

Correct Answer

Dividends , Interests , Capital appreciation

Your Answer

Dividends , Interests , Capital appreciation

Multiple Choice Single Answer

Question

Profits are non existent in pioneering stage because of :-

Correct Answer

Heavy expenses on product introduction

Your Answer

Heavy expenses on product introduction

Select The Blank

Question

Measures of ________ tells us what we can expect a typical or middle data point of a distribution to be.

Correct Answer

Central tendency

Your Answer

Central tendency

Select The Blank

Question

________ identified five forces that determine the intrinsic long run profit attractiveness of a market or market segment.

Correct Answer

Michael Porter

Your Answer

Michael Porter

Match The Following

Question

Correct Answer

Your Answer

MCX

Commodity Exchange

Sensex

BSE Index

Nifty

NSE Index

Lifex

ET Index

Multiple Choice Multiple Answer

Question

Mutual fund schemes could be broadly classified as :-

Correct Answer

Open ended scheme , Close ended scheme

Your Answer

Open ended scheme , Close ended scheme

Multiple Choice Multiple Answer

Question

Which are the most popular types of orders placed through an online trading account?

Correct Answer

Limit orders , Market orders

Your Answer

Limit orders , Market orders

Multiple Choice Single Answer

Question

Mr.Satish invests Rs.10,000/- today. The rate of interest is 8% compounded annually. What will be the value of his investment after 5 years?

Correct Answer

Rs.14.693/-

Your Answer

Rs.14.693/-

Multiple Choice Multiple Answer

Question

Growth of the firm can be estimated through :-

Correct Answer

Firm's past earnings/historical growth rate , Estimates made by equity research analyst who follow the firm , Estimates from a firm's fundamentals

Your Answer

Firm's past earnings/historical growth rate , Estimates made by equity research analyst who follow the firm , Estimates from a firm's fundamentals

Multiple Choice Single Answer

Question

What is the rate of interest on the tax free bonds issue by the government?

Correct Answer

6.5%

Your Answer

6.5%

Multiple Choice Multiple Answer

Question

Which of the following are important momentum indicators used widely?

Correct Answer

Moving average convergence divergence(MACD) , Rate of change (ROC) , Relative strength indicator (RSI)

Your Answer

Rate of change (ROC) , Relative strength indicator (RSI) , Moving average convergence divergence(MACD)

Select The Blank

Question

________ measures the profitability of operations without considering the influence of financial structure and tax rate.

Correct Answer

Earnings power

Your Answer

Earnings power

Multiple Choice Single Answer

Question

When an investor invests in stock, expects to get the dividends and an expected price for the period the stock is held is the rule of :-

Correct Answer

The General model

Your Answer

The General model

Select The Blank

Question

________ deal in futures to offset a pre-existing risk.

Correct Answer

Hedger

Your Answer

Hedger

Multiple Choice Multiple Answer

Question

What are the different types of profitability ratios?

Correct Answer

Gross profit margin ratio , Earnings power , Return on equity

Your Answer

Gross profit margin ratio , Return on equity , Debt service coverage ratio

Multiple Choice Multiple Answer

Question

To measure the movement of stocks in the market which indices were constructed by Dow?

Correct Answer

Dow Jones industrial Average , Dow Jones Transportation Average

Your Answer

Dow Jones industrial Average , Dow Jones Transportation Average

True/False

Question

The price earning ratio is an increasing function of the payout ratio and the growth rate and a decreasing function of the riskiness of the firm.

Correct Answer

True

Your Answer

True

True/False

Question

If rupee weakens against the dollar, it has favourable impact for the importers.

Correct Answer

False

Your Answer

False

True/False

Question

A mutual fund is required to dispatch the dividend warrants to the unit holders within thirty days of the declaration of dividend.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple Answer

Question

Active investment managers :-

Correct Answer

Do not believe that markets are efficient , Puts efforts to search mispriced securities in the market , Are relatively active traders in securities to acquire abnormal returns

Your Answer

Do not believe that markets are efficient , Puts efforts to search mispriced securities in the market , Are relatively active traders in securities to acquire abnormal returns

Multiple Choice Multiple Answer

Question

What are the features of candle stick charts?

Correct Answer

Indicates in black if the closing price is lower than the opening price , Indicates in white if the closing price is higher than the opening price

Your Answer

Indicates in black if the closing price is lower than the opening price , Indicates in white if the closing price is higher than the opening price

True/False

Question

Bonds and Debentures represent long term debt instruments.

Correct Answer

False

Your Answer

False

Select The Blank

Question

The possibility of reduction of risk through the construction of a portfolio depends on the value of ________ between the two assets.

Correct Answer

Correlation coefficient

Your Answer

Correlation coefficient

Select The Blank

Question

A line is defined as a price movement two or three weeks or longer, during which period the price variation of both averages moves within a price range of approximately________%.

Correct Answer

Your Answer

True/False

Question

The performance of a scheme is reflected in its NAV which is disclosed on a daily basis in case of open ended schemes.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple Answer

Question

A firm's growth is determined by how much is re-invested into new assets and the quality of these investments, and these includes :-

Correct Answer

Acquisitions , Building distribution channels , Expanding marketing capabilities and investing in new facilities

Your Answer

Acquisitions , Building distribution channels , Expanding marketing capabilities and investing in new facilities

True/False

Question

Currently in India index options are both European and American in nature.

Correct Answer

False

Your Answer

False

Multiple Choice Single Answer

Question

A security represent evidence of :-

Correct Answer

A property right

Your Answer

A property right

Multiple Choice Single Answer

Question

Mr.Saurabh invests Rs. 5,000/- today. The rate of interest is 4% compounded annually. What will be the value of his investment after 5 years?

Correct Answer

Rs. 6083/-

Your Answer

Rs. 6083/-

Multiple Choice Single Answer

Question

When a firm can grow net profits by issuing equity, the expected growth rate in net profits is determined by :-

Correct Answer

Equity reinvestment rate X return on equity

Your Answer

Equity reinvestment rate X return on equity

True/False

Question

Fixed assets turnover ratio measures the efficiency of utilisation of total assets, fixed as well as current.

Correct Answer

True

Your Answer

True

Select The Blank

Question

UTI was set up in the year ________.

Correct Answer

1963

Your Answer

1963

Select The Blank

Question

The regulations of SEBI with respect to mutual funds were fully revised in the year ________.

Correct Answer

1996

Your Answer

1996

Select The Blank

Question

________ take long or short positions only with the intention of making profits by getting out of the market when conditions favor them.

Correct Answer

Speculators

Your Answer

Speculators

Multiple Choice Single Answer

Question

What do you understand by money supply?

Correct Answer

Total money in existence at any given time

Your Answer

Total money in existence at any given time

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