Top 350+ Solved Security Analysis and Investment Management MCQ Questions Answer
Q. An example of a highly cyclical industry is ________.
a. the automobile industry
b. the tobacco industry
c. the food industry
d. A and B
Q. Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.
a. are irrational; are irrational
b. are rational; may not be rational
c. are rational; are rational
d. may not be rational; may not be rational
Q. Information processing errors consist ofI. forecasting errors II. overconfidence III. conservatism IV. framing
a. I and II
b. I and III
c. III and IV
d. I, II and III
Q. __________ was the grandfather of technical analysis.
a. Harry Markowitz
b. William Sharpe
c. Charles Dow
d. Benjamin Graham
Q. The goal of the Dow theory is to
a. identify head and shoulder patterns.
b. identify breakaway points.
c. identify resistance levels.
d. identify long-term trends.
Q. Which of the following statements pertaining to the Efficient Market Hypothesis (EMH) is/ are true?
a. Successive short run absolute price changes are independent
b. Market comprises of rational investors
c. Weak Form of EMH is also known as random walk model
d. All of (a), (b) and (c) above
Q. Which of the following statements is false with respect to different features of an efficient market?
a. Information arbitrage efficiency is said to exist, if the participants do not have any scope to reap abnormal profits using information that is of common knowledge
b. Fundamental valuation efficiency is said to exist, if the price of an asset is neither undervalued nor overvalued
c. Full insurance efficiency is said to exist, if participants can adopt hedging as an effective tool against possible risk in future
d. Allocation efficiency is said to exist, if the market channelizes resources into projects where the marginal efficiency of capital adjusted for risk differences is lowest
Q. According to the Efficient Market Hypothesis (EMH)I. Stocks with smaller beta will be consistently overpriced. II. Stocks with higher beta will be consistently underpriced. III. Positive alphas on stocks will not remain for a longer period.
a. Only (I) above
b. Only (III) above
c. Both (I) and (II) above
d. Both (II) and (III) above
Q. Which one of the following is the exponential factor for a 100-day Exponential Moving Average?
a. 0.01
b. 0.2
c. 0.02
d. 0.002
Q. Which of the following patterns is the most reliable and widely used for indicating trend reversal?
a. Gap Analysis
b. Stochastics
c. Moving Averages
d. Head and Shoulders
Q. A stock with a relative strength of 3.0 will have a relative strength index of
a. 125
b. 66.67
c. 75
d. 26
Q. __________ would mean that no investor would be able to outperform the market with trading strategies based on publicly available information.
a. Semi strong form efficiency
b. Weak-form efficiency
c. Strong form efficiency
d. all
Q. If the market is _______, the period after a favorable (unfavorable) event would not generate returns beyond (less than) what is suggested by an equilibrium model such as CAPM
a. Semi strong form efficiency
b. Weak-form efficiency
c. Strong form efficiency
d. all
Q. Markets are inefficient when prices of securities assimilate and reflect information about them.
a. True
b. False
c. none
d. all