Top 350+ Solved Security Analysis and Investment Management MCQ Questions Answer
Q. Equity does NOT include
a. cash and paid-in capital
b. common stock and paid-in capital
c. paid-in capital and retained earnings
d. common stock, paid-in capital and retained earnings
Q. If you were confident that the price of stock X would drop dramatically within two Months ,which of the following investment transactions would yield the highest return on your investment?
a. Purchase stock X
b. Sell stock X short
c. Purchase a call on stock X
d. Purchase a put on stock X
Q. In a private limited company, the maximum number ofmembers are limited to:
a. 20
b. 50
c. 100
d. 200
Q. Shares which are not affected by market movements are known as:
a. Offensive shares
b. Growth shares
c. Defensive shares
d. Income shares
Q. Exposure indicates
a. Sensitivity to changes in risk
b. Sensitivity to changes in asset prices
c. Sensitivity to changes in portfolio
d. Sensitivity to changes in assets
Q. Which of the following securities is most liquid?
a. Money market instruments
b. Capital market instruments
c. Gilt-edged securities
d. Index Futures
Q. Which of the following goals will be considered by the individuals who invest in upcoming companies and wait till the companies to grow and then harvest their profits and move on to other company?
a. Short-term high priority goals
b. Money making goals
c. Long-term high priority goals
d. Lower priority goals
Q. A purely passive strategy is defined as
a. One that uses only index funds.
b. One that allocates assets in fixed proportions that do not vary with market conditions.
c. One that is mean-variance efficient.
d. Both A and B.
Q. Which of the following is on the horizontal axis of the Security Market Line?
a. Standard deviation
b. Beta
c. Expected return
d. Required return
Q. Particulars Falcon International Triumph International Average Return (%) 10 8 Average Volatility (%) 12 15 For the portfolio to yield lower risk than the individual stocks, the correlation coefficient of stocks should be
a. Less than 1.25
b. Less than 0.85
c. Less than 0.80
d. More than 0.83
Q. An Investor can form a portfolio that lies to the right of the optimal risky portfolio on asset allocation line byI. Lend some money at the risk free rate and invest the remainder in the optimal risky portfolio. II. Borrow some money at the risk free rate and invest in the optimal risky portfolio III. Such a portfolio cannot be formed IV. Invest only in risky assets
a. Only (I) above
b. Only (II) above
c. Only (III) above
d. Only (IV) above
Q. Analysis carried out on the performance of a fund for last year is compiled as under:Total selectivity 2.50% Net selectivity 1.53% of portfolio 0.90 Return on market index 13.00% Standard deviation of market returns 13.50% Risk free return, Rf 8.00% The total risk ( i) of portfolio is
a. 11.1%
b. 12.2%
c. 13.8%
d. 14.8%
Q. Mr. Zaffar has following scrips in his portfolio: Scrip Beta Proportion of investment (%) Reliance .83 .25 Infosys .8 .25 Reymond 1.4 .35 IndiaBulls 1.2 .15 If the risk free rate is 6% and return on the market is 16%, what will be the expected return on his portfolio?
a. 12.54%
b. 13.28%
c. 14.12%
d. 16.80%
Q. Which of the following is/are disadvantage(s) of indexing of bond portfolio? I. Advisory fee schedule is high II. In past, returns earned by most active fund managers has much exceeded those of index portfolio III. Loss of opportunity for incremental returns.
a. Only (I) above
b. Only (II) above
c. Only (III) above
d. Both (II) and (III) above