Top 350+ Solved Security Analysis and Investment Management MCQ Questions Answer
Q. An investment in common stock carries a higher return than a bank certificate of deposit. The difference in returns is called
a. The risk-free rate
b. The real rate of return
c. The risk premium
d. The beta
Q. What are the components in determining the real rate of return?
a. The risk premium
b. The inflation factor
c. The required rate of return
d. Neither a) nor b)
Q. What is the risk-free rate in an environment where the real rate is 3% and inflation is running at 3%? Use either method found in chapter one.
a. 14.5% or just 14%
b. 10.21% or just 10%
c. 6.09% or just 6%
d. 9.09% or just 9%
Q. Which of the following investments would theoretically always carry the highest risk premium?
a. U.S. treasury bill
b. Common stock
c. Preferred stock
d. Corporate bond
Q. _____, because of increasing replacement value and scarcity, perform best in periods of high inflation.
a. Real assets
b. Common stock
c. Preferred stock
d. Financial assets
Q. The two components that make up the risk-free rate are
a. Real rate of return and capital gains
b. Risk-free assets and capital gains
c. Real rate of return and the inflation factor
d. Real assets and the inflation factor
Q. Which of the following terms represents an upper price limit for a stock, based on the quantity of willing sellers?
a. Support.
b. Channel.
c. Trendline.
d. Resistance.
Q. The daily high price is represented on a candlestick chart by the:
a. channel.
b. trendline.
c. shadow.
d. real body.
Q. The daily opening price is represented on a candlestick chart by the:
a. channel.
b. real body.
c. trendline.
d. shadow.
Q. Which of the following do technical analysts believe is a lower bound on a stock’s price?
a. Moving average.
b. Shadow.
c. Resistance.
d. Support.
Q. Which of the following is a sentiment indicator?
a. Odd-lot trading.
b. Advance-decline line.
c. Trendline.
d. Relative strength ratio.
Q. Which of the following is a breadth indicator?
a. Advance-decline line.
b. Put/call ratio.
c. Odd-lot trading.
d. Channel.
Q. On which of the following does a hammer sometimes appear?
a. Moving average chart.
b. Point-and-figure chart.
c. Candlestick chart.
d. Bar chart.
Q. The number of stocks hitting new 52-week highs is a(n):
a. intermediate trend indicator.
b. breadth indicator.
c. sentiment indicator.
d. primary trend indicator.