McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Commerce (M.com) , Bachelor of Banking and Insurance (BBI) .
| 1. |
Liquidity risk is : |
| A. | is risk investment bankers face. |
| B. | is lower for small OTC |
| C. | increases whenever interest rates increases |
| D. | is risk associated with secondary market transactions |
| Answer» C. increases whenever interest rates increases | |
| 2. |
Bond holders usually accept interest payment each. |
| A. | 1 year |
| B. | six months |
| C. | 2 months |
| D. | 2 years |
| Answer» B. six months | |
| 3. |
Passive management is also referred to as.......? |
| A. | index fund management |
| B. | index folio management |
| C. | interest free management |
| D. | none of these |
| Answer» A. index fund management | |
| 4. |
Multifactor asset pricing model that can be used to estimate the ......rate for the valuation of financial asset. |
| A. | discount |
| B. | interest |
| C. | expense |
| D. | risk |
| Answer» A. discount | |
| 5. |
Arbitrate pricing theory is an ................. model. |
| A. | asset pricing |
| B. | risk evaluation |
| C. | bond pricing |
| D. | none of these |
| Answer» A. asset pricing | |
| 6. |
CAMP stands for . |
| A. | capital asset pricing model |
| B. | capital assessment pricing model |
| C. | capital asset placement model |
| D. | none of these |
| Answer» A. capital asset pricing model | |
| 7. |
An asset risk premium is given by : |
| A. | the asset standard deviation |
| B. | the assets expected returns |
| C. | expected return per unit of standard deviation |
| D. | the excess of the assets expected return over the riskless rates |
| Answer» A. the asset standard deviation | |
| 8. |
Which of the following is an example of a depreciable asset? |
| A. | land |
| B. | cash |
| C. | account receivable |
| D. | equipment |
| Answer» D. equipment | |
| 9. |
While bond prices fluctuate , |
| A. | yeilds are constant |
| B. | coupon are constant |
| C. | the spread between yeilds is constant |
| D. | short term bond prices fluctuate even more |
| Answer» A. yeilds are constant | |
| 10. |
To calculate historical (realised) risk and return, use; |
| A. | ex-post data |
| B. | mean and variance of expected return |
| C. | probability distribution of possible states |
| D. | ex- ante data |
| Answer» A. ex-post data | |
| 11. |
A price weighted index is an arithmetic mean of |
| A. | future prices |
| B. | current prices |
| C. | quarter prices |
| D. | none of these |
| Answer» B. current prices | |
| 12. |
A firm that fails to pay dividends on its preferred stock is said to be ……… |
| A. | insolvent |
| B. | in arrears |
| C. | in sufferable |
| D. | delinquent |
| Answer» B. in arrears | |
| 13. |
............... is not a money market instrument. |
| A. | cerftificates of deposit |
| B. | a treasury bill |
| C. | a treasury bond |
| D. | commercial paper |
| Answer» C. a treasury bond | |
| 14. |
A bond that has no collateral is called ...................... .? |
| A. | collable bond |
| B. | a debenture |
| C. | a junk bond |
| D. | a mortgage |
| Answer» B. a debenture | |
| 15. |
The process of addition of more assets in an existing portfolio is called.....? |
| A. | portfolio revision |
| B. | portfolio addition |
| C. | portfolio exchanging |
| D. | none of these |
| Answer» A. portfolio revision | |
| 16. |
------is the amount left over after individual consumption. |
| A. | Investment |
| B. | Savings |
| C. | Surplus |
| D. | Money. |
| Answer» B. Savings | |
| 17. |
--- include “expensive stocks” that offer big rewards but have big risk. |
| A. | The patient portfolio |
| B. | Conservative portfolio |
| C. | Aggressive portfolio |
| D. | Efficient portfolio |
| Answer» B. Conservative portfolio | |
| 18. |
Find the odd one. |
| A. | Risk |
| B. | Return |
| C. | Safety |
| D. | Tax evasion |
| Answer» D. Tax evasion | |
| 19. |
An investor committed money for very short period expect…. |
| A. | Return from price fluctuation |
| B. | Dividend |
| C. | Benefit from both price variation and dividend |
| D. | None of these |
| Answer» A. Return from price fluctuation | |
| 20. |
Investment in precious metals are included in ……… asset class. |
| A. | Liquid assets |
| B. | Financial assets |
| C. | Real assets |
| D. | Monetary assets |
| Answer» C. Real assets | |
| 21. |
The investment process begins with ------ |
| A. | Investment policy |
| B. | Security analysis |
| C. | Portfolio construction |
| D. | Fundamental analysis |
| Answer» A. Investment policy | |
| 22. |
Total risk includes--------- |
| A. | Systematic risk only |
| B. | Unsystematic risk only |
| C. | Both a and b above |
| D. | Only diversifiable risks |
| Answer» C. Both a and b above | |
| 23. |
Systematic risk includes------ |
| A. | Market risk |
| B. | Interest rate risk |
| C. | Purchasing power risk |
| D. | All the above |
| Answer» D. All the above | |
| 24. |
Which among the following statements are true about unsystematic risk? |
| A. | It is diversifiable |
| B. | It is company specific |
| C. | Both a and b |
| D. | a only |
| Answer» C. Both a and b | |
| 25. |
Which among the following is true about systematic risk? |
| A. | It is not diversifiable |
| B. | a only |
| C. | Its measure is Beta |
| D. | Both a and c |
| Answer» D. Both a and c | |
| 26. |
According to Graham, a stock should have a current ratio of at least--- |
| A. | One |
| B. | Two |
| C. | Three |
| D. | Four |
| Answer» B. Two | |
| 27. |
--------is the process of combining together various investment assets to obtain optimum returns with minimum risk. |
| A. | Portfolio construction |
| B. | Portfolio analysis |
| C. | Portfolio evaluation |
| D. | Portfolio revision |
| Answer» A. Portfolio construction | |
| 28. |
Modern portfolio theory is a contribution by……… |
| A. | William sharp |
| B. | Benchamin Graham |
| C. | Stephen Rose |
| D. | Harry Markowitz |
| Answer» D. Harry Markowitz | |
| 29. |
MACD stands for ----- |
| A. | Managing asset classes for dividend |
| B. | Multiple asset class deposit |
| C. | Moving average convergence divergence |
| D. | Main asset class deposit |
| Answer» C. Moving average convergence divergence | |
| 30. |
The concept ’never putting all your eggs in one basket’ is explained in --- |
| A. | Markowitz Model |
| B. | Sharp single index Model |
| C. | Multi Index Model |
| D. | APT |
| Answer» A. Markowitz Model | |
| 31. |
Who introduced mean variance analysis in portfolio theory? |
| A. | William Sharp |
| B. | Harry Markowitz |
| C. | F.Amling |
| D. | Kritzman |
| Answer» B. Harry Markowitz | |
| 32. |
Unsystematic risk may arise due to the following reason. |
| A. | Change in interest rate |
| B. | Increase in population |
| C. | Employee strike in the company |
| D. | Exchange rate fluctuations |
| Answer» C. Employee strike in the company | |
| 33. |
A higher standard deviation is an indicator of---- |
| A. | Greater risk and higher potential returns |
| B. | Moderate risk and higher potential returns |
| C. | Lower risk and higher potential returns |
| D. | Greater risk and lower potential returns |
| Answer» A. Greater risk and higher potential returns | |
| 34. |
If the returns of two securities are unrelated, the covariance will be--- |
| A. | Positive |
| B. | Negative |
| C. | Zero |
| D. | One |
| Answer» C. Zero | |
| 35. |
Portfolios included in the risk return space is called------ |
| A. | Feasible set |
| B. | Efficient portfolio |
| C. | High return portfolio |
| D. | Risky portfolio |
| Answer» A. Feasible set | |
| 36. |
The concept efficient frontier is a contribution by----. |
| A. | Robert Rhea |
| B. | E.GeorgeSchaefer |
| C. | Charles H.Dow |
| D. | Harry Markowitz |
| Answer» D. Harry Markowitz | |
| 37. |
A fully diversified portfoliocontains securities which have--- |
| A. | Only unsystematic risk |
| B. | Both systematic and unsystematic risk |
| C. | Only systematic risk |
| D. | No risk |
| Answer» C. Only systematic risk | |
| 38. |
----- is the measure of risk in the case portfolio with two securities. |
| A. | Correlation |
| B. | Covariance |
| C. | Standard deviation |
| D. | Beta |
| Answer» C. Standard deviation | |
| 39. |
Value of Beta above 1 implies--- |
| A. | Higher risk than the market average |
| B. | Less risk than market average |
| C. | Less risk than risk free investment |
| D. | None of the above |
| Answer» A. Higher risk than the market average | |
| 40. |
CML stands for. |
| A. | Convergence Market Line |
| B. | Critical Market Line |
| C. | Critical Maturity Line |
| D. | Capital Market Line |
| Answer» D. Capital Market Line | |
| 41. |
------- is also called characteristic Lines. |
| A. | CML |
| B. | SML |
| C. | Efficient Frontier |
| D. | CAL |
| Answer» B. SML | |
| 42. |
Efficient frontier is situated at -------- boundary of opportunity set. |
| A. | North west |
| B. | North east |
| C. | South west |
| D. | South east |
| Answer» A. North west | |
| 43. |
Arbitrage Pricing Theory was introduced by--- |
| A. | Charles Dow |
| B. | Benchamin Graham |
| C. | William sharp |
| D. | Stephen S.Rose |
| Answer» D. Stephen S.Rose | |
| 44. |
Which pricing model provides no guidance on the determination of the risk premium factor? |
| A. | The Multifactor APT |
| B. | The CAPM |
| C. | Both CAPM &Multifactor APT |
| D. | Neither the CAPM nor Multifactor APT |
| Answer» A. The Multifactor APT | |
| 45. |
. -------- is an example for oscillators. |
| A. | ROC |
| B. | RSI |
| C. | MACD |
| D. | All the above |
| Answer» D. All the above | |
| 46. |
The APT differs from CAPM because the APT. |
| A. | Places more emphasis on market risk |
| B. | Recognizes multiple systematic risk factors |
| C. | Recognizes multiple unsystematic risk factors |
| D. | Minimizes the importance of diversification |
| Answer» B. Recognizes multiple systematic risk factors | |
| 47. |
----------- focus more on past price movement of a firm’s stock than on the underlying determinants of future profitability. |
| A. | Credit Analysis |
| B. | Fundamental Analysis |
| C. | Systems Analysis |
| D. | Technical Analysis |
| Answer» D. Technical Analysis | |
| 48. |
RAPM stands for ----- |
| A. | Risk Adjustment Performance Matrix |
| B. | Risk Adjusted Performance Measure |
| C. | Risk return Analysis of portfolio management |
| D. | Risk Adjusted portfolio Measure |
| Answer» A. Risk Adjustment Performance Matrix | |
| 49. |
Reward to variability Ratio is---- |
| A. | Traynor Ratio |
| B. | Sharp Ratio |
| C. | Jenson Ratio |
| D. | Book Market Ratio |
| Answer» B. Sharp Ratio | |
| 50. |
Reward to volatility Ratio is also called as---- |
| A. | Treynor Ratio |
| B. | Sharp Ratio |
| C. | Jenson Ratio |
| D. | Book market Ratio |
| Answer» A. Treynor Ratio | |
Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.