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Chapter 1- INVESTMENTS LANDSCAPE
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What adjustment is made to the real risk-free rate to obtain the nominal risk-free rate?
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1 point
Addition
Subtraction
Multiplication
Division
What type of risk is introduced by the uncertainty of converting an investment into cash at its economic value?
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1 point
Financial risk
Market risk
Liquidity risk
Political risk
An investor wants to evaluate the volatility of returns due to changes in demand-supply dynamics in financial markets. Which type of risk should the investor consider?
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1 point
Market risk
Business risk
Interest rate risk
Regulatory risk
Which risk is associated with the possibility of financial loss arising from movements in the demand-supply position in financial markets?
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1 point
Country risk
Market risk
Geopolitical risk
Regulatory risk
In which market segment do investors directly purchase newly-issued securities from the issuing companies?
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1 point
Secondary Market
Tertiary Market
Quaternary Market
Primary Market
Which entity ensures that members on the Stock Exchange meet their obligations to deliver funds or securities?
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1 point
Stock Exchanges
Depositories
Clearing Corporation
Merchant Bankers
Which participant holds securities in electronic form for investors and provides transaction services related to dematerialized securities?
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1 point
Custodians
Stock Exchanges
Depository Participants
Registrars and Transfer Agents
What is the primary motivation for investors pursuing the objective of regular income?
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1 point
Long-term growth
Tax savings
Capital preservation
Income generation
What distinguishes financial assets from real assets in terms of their nature?
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1 point
Financial assets are tangible
Real assets are intangible
Financial assets are liquid
Real assets are highly speculative
What is the primary characteristic of financial assets that distinguishes them from real assets?
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1 point
Tangible nature
High appreciation potential
Greater liquidity
Intrinsic value
What does the required rate of return represent for investors when making investment decisions?
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1 point
Guaranteed return on investment
Expected return from investment
Minimum rate of return for investors
Assured rate of return
An investor is analyzing the impact of borrowing on the volatility of stockholder's income. Which type of risk is the investor assessing?
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1 point
Country risk
Financial risk
Market risk
Business risk
What type of risk relates to the means of converting an asset into cash and the ease of asset conversion?
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1 point
Market risk
Business risk
Liquidity risk
Regulatory risk
An investor sells government bonds to another investor through an electronic trading platform. Which market segment does this transaction occur in?
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1 point
Secondary Market
Tertiary Market
Quaternary Market
Primary Market
Who provides assistance to issuers in accessing the security market with an issuance of securities and acts as underwriters to the issue?
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1 point
Depositories
Custodians
Merchant Bankers
Registrars and Transfer Agents
Who acts as an intermediary between buyers and sellers, facilitating transactions in already issued securities?
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1 point
Stock Exchanges
Custodians
Depositories
Clearing Corporation
When investors aim to reduce their tax burden by investing in select alternatives, which investment objective aligns with this goal?
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1 point
Capital Preservation
Capital Appreciation
Regular Income
Tax Saving
Which term refers to the commitment of savings with an expectation of receiving a higher amount in return, involving a systematic process of risk assessment and asset allocation?
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1 point
Saving
Investment
Speculation
Capital Appreciation
When estimating the required rate of return, what adjustment is made to the nominal risk-free rate to account for the risk premium associated with investments?
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1 point
Addition
Subtraction
Multiplication
Division:
What type of risk arises from the volatility of returns due to changes in exchange rates when converting investments back into the investor's home currency?
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1 point
Political risk
Market risk
Exchange rate risk
Interest rate risk
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