217 FIN SE – IL - FIN - 01 Securities Analysis & Portfolio Management

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MBA SEM-II 2021-22 Online Exam

S. P. Mandali's
Prin. N.G.Naralkar Institute of Career Development & Research
536 Shaniwar Peth, Appa Balwant Chowk (ABC Chowk) Pune-411030

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MBA SEM-II 2021-22 Online Exam

Total Questions : 25
Per Questions Mark : 1
Passing Mark : 10

Expected worth is the –

Inverse of standard deviation

Correlation between a security

Same as a discrete probability distribution

Weighted average of all possible outcomes

Clear selection

Positive Covariance indicates that –

Returns on two assets bear a tendency to offset each other i.e. if the return on A is above par, the return on B is likely to be below par. If the return on A is below par, the return on B is likely to be above par.

There is no distinct relationship between the movements in returns of two securities.

Returns on two assets tend to go together, i.e. if the return on A is above par, the return on B is also likely to be above par.

Higher discount rate should be used in capital budgeting to discount the cash flow.

Clear selection

Liquidity risk:

Is risk investments bankers face

Is lower for small companies

Is the risk associated with secondary market transactions

Increases whenever interest rates increase

Clear selection

Correlation Coefficient supplements and upgrades the –

Expected return

WACC

Covariance

Mean deviation

Clear selection

A risk associated with project and way considered by a well-diversified stockholder is classified as –

Expected risk

Beta risk

Industry risk

Returning risk

Clear selection

A corporate bond is a corporation’s write undertaking that it will refund a specific amount of money plus ---

Premium

Interest

Nothing

Security

Clear selection

The common stock of a company must provide a higher expected return than the debt of the same company because

There is less demand for a stock than for bonds.

There is greater demand for a stock than for bonds.

There is more systematic risk involved for the common stock.

There is a market premium required for bonds.

Clear selection

The advocates of the Efficient-market hypothesis (EMH) theory contend that securities markets are –

Perfect

Imperfect

Monopolistic

Perfect or at least not too imperfect

Clear selection

Dow Jones theory was formulated by-

John P. Dow

Charles H. Dow

James T. Dow

Michel R. Dow

Clear selection

Technical analysis takes …………approach to analyze the market

Long term

Short term

both

none of these

Clear selection

Technical analysis is based on…….. market data to develop market rules

External

Internal

both

none

Clear selection

In active portfolio management there is need of ……… change in the portfolio Components.

Periodic

predetermined

both

static

Clear selection

Unsystematic risk is risk ……… to all securities.

Specific

common

both

none

Clear selection

A combination of various investment products like bonds, shares, securities, mutual funds and so on is called as _______

Portfolio

Investment

Speculation

Gambling

Clear selection

An investor invests in assets known as

Securities

Block of Assets

Portfolio

None of the above

Clear selection

In Capital Market Line every investment is

Finitely divisible

Infinitely divisible

Both a & b

None of the above

Clear selection

Investments would score high only if there is a protection to

Real estate

Preferred stock

Government bonds

Common stock

Clear selection

Buying low and selling high, making a large capital gain is associated with ________

Investment

Speculation

Gambling

Arbitrage

Clear selection

_________ Risks cover the risk of market, interest rate risk and purchasing power risk.

Systematic

Unsystematic risk

Financial

Business

Clear selection

Risk due to internal environment of a firm or those affecting particular industry are referred to as ________

Unsystematic risk

Systematic risk

Normal risk

Abnormal risk

Clear selection

The fundamental analysis approach has been associated with __________.

Uncertainties

Certainties

Ratios

Balance sheet

Clear selection

Technical analysis is useful________

To make an estimate of growth in a stock market

To find out the market forces influencing stock market

To indicate the direction of the overall market

To analyse the economic activity of government.

Clear selection

Liquidity risk:

Is risk investments bankers face

Is lower for small companies

Is the risk associated with secondary market transactions

Increases whenever interest rates increase

Clear selection

Correlation Coefficient supplements and upgrades the –

Expected return

WACC

Covariance

Mean deviation

Clear selection

A risk associated with project and way considered by a well-diversified stockholder is classified as –

Expected risk

Beta risk

Industry risk

Returning risk

Clear selection

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