1.

Non-systematic risk is also known as

a. Riskless
b. market risk
c. random risk
d. company-specific risk
2. Which of the following is a breadth indicator
a. Advance-decline line
b. Channel
c. Put/call ratio
d. Odd-lot trading
3. The real rate of interest is approximately equal to?
a. the nominal rate minus the inflation rate
b. the inflation rate minus the nominal rate
c. the nominal
d. ss
4. Which of the following statement is true regarding efficient frontier?
a. Set of portfolios where there are no more diversification benefits.
b. S
c. S
d. Ss
5. The risk-free security has a beta equal to____________, while the market portfolio's
beta is equal to ____________
a. One; more than one
b. One; less than one
c. Zero; One
d. Less than zero; more than zero
6. Technical analysis and Fundament analysis?
a. Always incorporate
b. Does not deny the value of
c. Reject the value of
d. Have no connection with
7. Primary determinants of a good security market include all of the following expect?
a. a physical location
b. liquidity
c. transparency
d. efficient price discovery
8. Which of the following is characteristic of common stock as an investment
a. Ss
b. Ss
c. Ss
d. Ss
9. A statistic that measures how the returns of two risky assets move together to?
a. Correlation
b. standard deviation
c. covariance
d. variance
e. A and C
10. Which of the following members would you not find in the secondary stock market?
a. Investor
b. Stock exchanges
c. Stock Brokers
d. Companies
11. Which of the following is a characteristic of an efficient financial market?
a. Absence of underpriced or overpriced securities
b. Abundance of bargain opportunities
c. Necessity of active portfolio management
d. Focus on security analysis
12. A good time is characteristic by which of following situation?
a. Market Prices moving above the moving average
b. Market Prices moving below the moving average
c. Market prices exactly same as moving average
d. None of the given options
13. According to the Dow Theory, the primary trend represents a cycle lasting
approximately?
a. 3 to 3 ½ years.
b. 6 to 12 months
c. 4 to 4 ½ years
d. 3 to 6 months
e. 3 to 6 weeks
14. Given the capital allocation line, an investor’s optimal portfolio is the portfolio that?
a. maximizes her expected utility.
b. maximizes her risk
c. minimizes both her risk and return
d. maximizes her expected profit.
e. none of the above
15. Primary trend in Dow Theory is known as?
a. Wave
b. Triangle
c. Tide
d. Rounded Bottom
16. Which of the following statements is true according to the theory of arbitrage?
a. Negative alpha stocks cannot be arbitraged
b. Positive alpha stocks will quickly disappear
c. Low-beta stocks are consistently overpriced
d. High-beta stocks are consistently under priced
e. Rational investors will arbitrage in a manner consistent with their risk tolerance
17. The economic function of the capital markets?
a. Ss
b. S
c. S
d. S
e. S
18. Stock can be purchased for a combination of cash and borrowed funds in?
a. Margin Account
 b. Cash Account
c. IRA Account
d. Option Account
19. Assume that a security is fairly priced and has an expected rate of return of 0.13. The
market expected rate of return is 0.13 and the risk-free rate is 0.04. The beta of the stock
is?
a. 1.25
b. 1.7
c. 1
d. 0.95
e. None of these
20. An investment provides a 3% return semi-annually, its effective annual rate is?
a. 3.00%
b. 5.91%
c. 6.06%
d. 6.09%
e. None of these.
21. The trading of listed securities in BSE is known as
a. NA
b. NA
c. NA
d. NA
22. If a person holds diversified portfolio the risk a security add would be?
a. Ss
b. S
c. S
d. s
23. Efficient frontier?
a. Portfolios that have negatively correlated securities.
b. Portfolios that have positively correlated securities
c. Inefficient portfolios
d. Efficient portfolios
24. 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
25. Risk seeking investor will gave a utility function that is?
a. Ss
b. Ss
c. Ss
d. Ss
26. Transactions occur in primary financial market?
a. When a company issues stock or bonds for the first time and sells those
securities directly to investors, that transaction occurs on the primary market.
b. Ss
c. Ss
 d. Ss
27. What does price earning ratio indicate?
a. It Indicates how many interest payment could be made with a firm’s earning
b. It Indicates how much investor pay of Rs.1 earning of the company.
c. It indicates the percentage of earnings paid to shareholders.
d. It Indicates the per share profit available for distribution to the shareholders.
28. An efficient market reflects which of the following information?
a. Past, current and inferred information.
b. Future and pas information
c. Past and current information
d. Current and inferred information
29. In candlestick chart, what does white body candle depict?
a. Prices are moving down
b. Prices are moving up
c. Prices are constant
d. Prices are Fluctuation
30. Type of order would normally have the most rapid execution.
a. Market Orders
b. Limit Orders
c. Good till- Canceled order
d. Stop order
31. An investment has 10% probability of earning a 20 % rate of return, a 60% probability of
earning a 10% rate of return & 30% probability of losing 5%. What is expected rate of
return?
a. 60%
b. NA
c. NA
d. NA
32. NSE is ______ Market?
a. Ss
b. S
c. Ss
d. Ss
33. Grandfather of technical analysis?
a. Harry Markowitz
b. William Sharpe
c. Charles Dow
d. Benjamin Graham
34. Only way to protect investors from non-systematic risk?
a. Diversification
b. NA
c. NA
d. NA
35. According to Markowitz, an efficient portfolio is one that has the?
a. largest expected return for the smallest level of risk
b. largest expected return and zero risk
c. largest expected return for a given level of risk
 d. smallest level of risk
36. The risk-free security has a beta equal to____________, while the market portfolio's
beta is equal to ____________
a. One; more than one.
b. One; less than one
c. Zero; One
d. Less than zero; more than zero
37. Considered as a risk free financial asset?
a. Risk-Free Asset. An asset in which the return is known with certainty
b. Ss
c. Ss
d. Ss
38. The beta of the Nifty is?
a. One
b. Ss
c. Ss
d. Ss
39. Which of the following securities is a money market instrument?
a. Treasury note
b. Treasury bond
c. Municipal bond.
d. Commercial paper.
40. Which of the following statements regarding risk averse investor is true?
a. They only care about the rate of return
b. They accept investments that are fair games.
c. They only accept risky investments that offer risk premiums over the risk-
free rate
d. They are willing to accept lower returns and high risk
e. They only care about the rate of return and accept investments that are fair
games
41. When a stock market price breaks through its moving average line from below a
technical analyst interpret this?
a. Buy
b. Sell
c. Hold
d. Wait and see
42. Portfolio theory as described by Markowitz is most concerned with?
a. the elimination of systematic risk
b. the effect of diversification on portfolio risk
c. the identification of unsystematic risk
d. active portfolio management to enhance returns
e. none of these
43. Real rate of return are typically less than nominal rates of return due to?
a. Inflation
b. Capital gain
c. Dividend payment
d. Recession
44. Which of the following is considered as a risk free financial asset?
a. Gold
b. Equity in a house
c. High grade corporate bonds
d. Treasury bill
45. Which of the following is true regarding price earnings ratio?
a. Earnings available to common stockholders/outstanding share
b. Market Price per share/dividend per share
c. Market Price per share/Earning per share
d. Dividend per share/earning per share
46. The efficient market hypothesis suggest that
a. NA
b. NA
c. NA
d. NA
47. Capital asset pricing theory, assets that portfolio return are best explain by
a. NA
b. NA
c. NA
d. NA
48. Which of the statement is true regarding earning per share
a. NA
b. NA
c. NA
d. NA
49. Olivia is a risk-acerse investor. Alex is a less risk averse than Olivia. Therefore
a. NA
b. NA
c. NA
d. NA
50. According to the CAPM, overpriced secure investment
a. NA
b. NA
c. NA
d. NA
51. If S price follow a random walk, it means that
a. NA
b. NA
c. NA
d. NA
52. which of the following is not an assumption of CAPM
a. NA
b. NA
c. NA
d. NA
53. Stop buy order is mostly by
a. NA
 b. NA
c. NA
d. NA
54. Beta and Standard variation differ as risk measurement of beta measure
a. NA
b. NA
c. NA
d. NA
55. Stock price follow a random call
a. NA
b. NA
c. NA
d. NA
56. Covariances between assets
a. Measure the degree of dependent between two assets
b. NA
c. NA
d. NA
57. which of the following statements about a security is true, if its beta>1
a. Security Is more Risky Than the Market
b. NA
c. NA
d. NA
58. which of the following is relevant to market breadth
a. Advance/Declining Ratio
b. NA
c. NA
d. NA
59. a company common stock is currently selling at 3 per share. its quartely dividend is rs
0.07 and the stock is expected to rise rs 3.30
a. NA
b. NA
c. NA
d. NA
60. which of the following statement is true if intrinsic value of security is lower than its
current value
a. The security is undervalued
b. NA
c. NA
d. NA
61. which of the following tell us how much stock purchasers must pay per rupee of earning
the firm generate for each share
a. P/E Ratio
b. NA
c. NA
d. NA
62. the measure of risk for a security held in a diversified portfolio is
 a. Standard deviation of return
b. NA
c. NA
d. NA
63. Which of the following is not a marketable security
a. Provident Fund
b. NA
c. NA
d. NA
64. arbitrage is the presence of a
a. Riskless Profit
b. NA
c. NA
d. NA
65. according to the theory of arbitrage
a. Rational Investor will pursue arbitrage consisitance with their risk tolerance
b. NA
c. NA
d. NA
66. Which of the following transaction would occur in primary market
a. Intial public Offering
b. NA
c. NA
d. NA
67. Which of the following is not fixed income security
a. Option
b. NA
c. NA
d. NA
68. Which of the following is true
a. Beta is maasure of Risk
b. NA
c. NA
d. NA
69. Capital market differ from money markey
a. The time to Maturity in capital market is long and maney market is short
b. NA
c. NA
d. NA
70. a bad time in market will persist when the market price move
a. Above the Moving Average
b. NA
c. NA
d. NA
71. a ratio that indicate the extent to which a firm could pay its current liabilities without
relying on the sale of inventory is know as
a. Quick Ratio
 b. NA
c. NA
d. NA
72. the average price of security or currency over a specified time period used to spot
pricing trends by smoothing out the large fluctuation is known as
a. Moving Average
b. NA
c. NA
d. NA
73. which of the following is not a requirement for an efficient market
a. The Adjustment Occuur Quickly
b. NA
c. NA
d. NA
74. An issue of equity to public by listed firm is referred to as
a. Initial Public Offering
b. NA
c. NA
d. NA
75. a company common stock is currently selling at 3 per share. its quartely dividend is rs
0.07 and the stock is expected to rise rs 3.30
a. 0.193
b. NA
c. NA
d. NA