Top 350+ Solved Security Analysis and Investment Management MCQ Questions Answer
Q. Which of the following statements regarding portfolio revisions is/are incorrect?
a. For effective implementation of constant Dollar value plan, it is necessary to estimate the possibility and extent of downward fluctuation of the aggressive portfolio
b. Constant ratio plan becomes less aggressive in sales when the stock price rise
c. During a sustained rise or fall of stock prices the constant ratio plan gives higher profit than other two formula plans.
d. Variable ratio plan stock portfolio becomes more aggressive when stock prices rise and vice versa.
Q. Price movement between two Steel company stocks would generally have a ______ co- variance
a. Positive
b. Negative
c. Zero
d. all
Q. . If a Portfolio manager consistently obtains a high Sharpe’s measure, the portfolio manager has exhibited
a. Above average forecasting ability
b. Above average selection ability
c. The market supports market efficiency in strong form
d. Both (a) and (b) above.
Q. The critical variable in the determination of the success of the active portfolio is
a. Jensen’s Alpha / Non-Systematic Risk
b. Jensen’s Alpha / Systematic Risk
c. Gamma / Non-Systematic Risk
d. Gamma / Systematic Risk
Q. Other things being same, the price of American call option on a stock is positively correlated with the following factors, except
a. The exercise price
b. The time to expiration
c. The stock volatility
d. The stock price
Q. What is a call?
a. An option to sell stock at a specified price
b. An option to buy stock at a specified price
c. An option to sell stock on a specified date
d. An option to buy stock on a specified date
Q. The intrinsic value of an out-of-the-money call option is
a. The Call Premium
b. The stock price minus the exercise price
c. Negative
d. Zero
Q. The commitment of current funds in anticipation of receiving a larger future flow of funds iscalled
a. A financial asset
b. A real asset
c. An investment
d. Gambling
Q. A(n) _____ is a legally documented claim on an asset, while a _____ is an actual, tangible asset which may be seen, felt, held, or collected.
a. Real asset; financial asset
b. Financial asset; real asset
c. Indirect equity claim; direct equity claim
d. Direct equity claim; indirect equity claim
Q. When ranking security returns, the data shows that the annualized returns are as follows, ranked from highest return to lowest return.
a. Large stocks, small stocks, long-term corporate bonds, long-term government bonds, treasury bills
b. Small stocks, large stocks, long-term corporate bonds, long-term government bonds, treasury bills
c. Small stocks, large stocks, treasury bills, long-term government bonds, long-term corporate bonds
d. Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks
Q. When ranking the riskiness of securities using the standard deviation, the highest risk security to the lowest risk security is as follows:
a. Small stocks, large stocks, long-term government bonds, U.S. treasury bills
b. Long-term government bonds, small stocks, large stocks, U.S. treasury bills
c. Large stocks, small stocks, long-term government bonds, U.S. treasury bills
d. Small stocks, long-term government bonds, large stocks, U.S. treasury bills