McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration in Finance (BBA Finance) .
| 251. |
Lara wants to buy a bond and hold it until it matures. Which of the following must occur if Lara is to realize a holding period return equal to the bond’s yield to maturity? |
| A. | She must reinvest all coupons to earn the yield to maturity. |
| B. | The issuer must not call the bond away early. |
| C. | The issuer must make all payments in full and on schedule. |
| D. | All of the above must occur. |
| Answer» D. All of the above must occur. | |
| 252. |
Bonds rated double A and higher are called: |
| A. | speculative grade bonds. |
| B. | supreme bonds. |
| C. | high-grade bonds. |
| D. | investment grade bonds. |
| Answer» C. high-grade bonds. | |
| 253. |
A top down analysis of a firm starts with ____________. |
| A. | the relative value of the firm |
| B. | the absolute value of the firm |
| C. | the domestic economy |
| D. | the global economy |
| Answer» D. the global economy | |
| 254. |
Studies of stock price reactions to news are called |
| A. | reaction studies. |
| B. | event studies. |
| C. | drift studies. |
| D. | both reaction studies and drift studies. |
| Answer» B. event studies. | |
| 255. |
__________ was the grandfather of technical analysis. |
| A. | Harry Markowitz |
| B. | William Sharpe |
| C. | Charles Dow |
| D. | Benjamin Graham |
| Answer» C. Charles Dow | |
| 256. |
The goal of the Dow theory is to |
| A. | identify head and shoulder patterns. |
| B. | identify breakaway points. |
| C. | identify resistance levels. |
| D. | identify long-term trends. |
| Answer» D. identify long-term trends. | |
| 257. |
A long-term movement of prices, lasting from several months to years is called _______. |
| A. | a minor trend |
| B. | a primary trend |
| C. | an intermediate trend |
| D. | trend analysis |
| Answer» B. a primary trend | |
| 258. |
Two popular moving average periods are |
| A. | 90-day and 52 week |
| B. | 180-day and three year |
| C. | 180-day two year |
| D. | 200-day and 53 week |
| Answer» D. 200-day and 53 week | |
| 259. |
Which of the following statements is false with respect to different features of an efficient market? |
| A. | Information arbitrage efficiency is said to exist, if the participants do not have any scope to reap abnormal profits using information that is of common knowledge |
| B. | Fundamental valuation efficiency is said to exist, if the price of an asset is neither undervalued nor overvalued |
| C. | Full insurance efficiency is said to exist, if participants can adopt hedging as an effective tool against possible risk in future |
| D. | Allocation efficiency is said to exist, if the market channelizes resources into projects where the marginal efficiency of capital adjusted for risk differences is lowest |
| Answer» D. Allocation efficiency is said to exist, if the market channelizes resources into projects where the marginal efficiency of capital adjusted for risk differences is lowest | |
| 260. |
If security prices exhibits semi-strong form of efficiency, one will not gain if he |
| A. | Depicts the prices in the form of charts to identify pattern which will beat the market. |
| B. | Buys stock of a company which has declared a bonus issue or has gone for a stock split |
| C. | Refers to insiders’ advice |
| D. | Both (a) and (b) above. |
| Answer» D. Both (a) and (b) above. | |
| 261. |
__________ would mean that no investor would be able to outperform the market with trading strategies based on publicly available information. |
| A. | Semi strong form efficiency |
| B. | Weak-form efficiency |
| C. | Strong form efficiency |
| D. | none |
| Answer» A. Semi strong form efficiency | |
| 262. |
The need to have an understanding about the ability of themarket to imbibe information into the prices has led to countless attempts to study and characterize the levels of efficiency of different segments of the financial markets. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 263. |
If the market is _______, the period after a favorable (unfavorable) event would not generate returns beyond (less than) what is suggested by an equilibrium model such as CAPM |
| A. | Semi strong form efficiency |
| B. | Weak-form efficiency |
| C. | Strong form efficiency |
| D. | none |
| Answer» A. Semi strong form efficiency | |
| 264. |
Markets are inefficient when prices of securities assimilate and reflect information about them. |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 265. |
Stock returns are generally expected to be independent across weekdays, but a number of studies have found returns on Monday to be lower than in the rest of the week. This departure from market efficiency is also sometimes called the _____ effect. |
| A. | Monday-Friday |
| B. | Weekday |
| C. | Monday |
| D. | Weekend |
| Answer» B. Weekday | |
| 266. |
Fundamental analysis focuses on predicting the future price of a security and Technical analysis on estimating the intrinsic value of a security. |
| A. | False |
| B. | True |
| C. | none |
| D. | all |
| Answer» A. False | |
| 267. |
Which are the popular types of orders placed through an online trading account? |
| A. | Limit orders |
| B. | Market orders |
| C. | Stop loss order |
| D. | All of the above |
| Answer» D. All of the above | |
| 268. |
What are the features of line charts? |
| A. | It connects closing prices from one period to the next |
| B. | It connects low prices from one period to the next |
| C. | It connects high prices from one period to the next |
| D. | None of the above |
| Answer» A. It connects closing prices from one period to the next | |
| 269. |
A ________ provides an account of the total revenue generated by a firm during a period (usually a financial year, or a quarter) |
| A. | Accounting analysis statement |
| B. | financial re-engineering statement |
| C. | promotional expenses statement |
| D. | profit& loss statement |
| Answer» D. profit& loss statement | |
| 270. |
What is Bottom-Up approach also known as? |
| A. | Company-industry-economy approach |
| B. | Economy -industry-Company approach |
| C. | Industry-economy-Company approach |
| D. | Company -economy-industry approach |
| Answer» A. Company-industry-economy approach | |
| 271. |
The objective of fundamental analysis for a security in a market is to identify either it is: |
| A. | Under priced |
| B. | Over priced |
| C. | Both under priced and over priced |
| D. | None of the above |
| Answer» C. Both under priced and over priced | |
| 272. |
The daily opening price is represented on a candlestick chart by the: |
| A. | channel. |
| B. | real body. |
| C. | trendline. |
| D. | shadow. |
| Answer» B. real body. | |
| 273. |
This type of risk is avoidable through proper diversification. |
| A. | portfolio risk |
| B. | systematic risk |
| C. | unsystematic risk |
| D. | total risk |
| Answer» C. unsystematic risk | |
| 274. |
A statistical measure of the degree to which two variables (e.g., securities' returns) move together. |
| A. | coefficient of variation |
| B. | variance |
| C. | covariance |
| D. | certainty equivalent |
| Answer» C. covariance | |
| 275. |
An "aggressive" common stock would have a "beta" |
| A. | equal to zero. |
| B. | greater than one. |
| C. | equal to one. |
| D. | less than one. |
| Answer» B. greater than one. | |
| 276. |
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. |
| Answer» C. zero; one. | |
| 277. |
Beta is the slope of |
| A. | the security market line. |
| B. | the capital market line. |
| C. | a characteristic line. |
| D. | the CAPM. |
| Answer» C. a characteristic line. | |
| 278. |
A measure of "risk per unit of expected return." |
| A. | standard deviation |
| B. | coefficient of variation |
| C. | correlation coefficient |
| D. | beta |
| Answer» B. coefficient of variation | |
| 279. |
Which of the following securities have potentially the highest risk level, and also have the highest potential return? |
| A. | Commercial paper |
| B. | Bonds |
| C. | Preferred stocks |
| D. | Derivative securities |
| Answer» D. Derivative securities | |
| 280. |
The feasibility of converting an asset quickly and without significantly affecting its price is called: |
| A. | divisibility |
| B. | marketability |
| C. | liquidity |
| D. | low risk |
| Answer» B. marketability | |
| 281. |
The price of a T-bill today is $97 and its maturity value is $100. The maturity is 6 months from now. |
| A. | The dollar return to the investor would be $1 if held to maturity |
| B. | The investor cannot lose money, but its earnings are not known before the maturity date |
| C. | The dollar return to the investor would be $3 if the T-bill is held to maturity |
| D. | The investor can lose money on these T-bills if held to maturity |
| Answer» C. The dollar return to the investor would be $3 if the T-bill is held to maturity | |
| 282. |
Blue chip stocks: |
| A. | are common stocks of large, financially sound corporations with a good history of dividend payments and consistent earnings growth |
| B. | are common stocks of medium-size firms having earnings growth in excess of the industry average |
| C. | have high growth potential but are very risky |
| D. | tend to do well in recessionary periods, but do not do well when the economy is booming |
| Answer» A. are common stocks of large, financially sound corporations with a good history of dividend payments and consistent earnings growth | |
| 283. |
A ____________________ represents part ownership in a public firm. |
| A. | cumulative preferred stock |
| B. | preference share |
| C. | call option |
| D. | common stock |
| Answer» D. common stock | |
| 284. |
Variance calculation and measuring the Standard deviation is one way of measuring the ______ |
| A. | Risk |
| B. | Return |
| C. | Speculation |
| D. | Gambling |
| Answer» A. Risk | |
| 285. |
Labour strike, consumer preferences and management policies are making to arises out of uncertainty is known as ____________ |
| A. | Financial Risk |
| B. | Business Risk |
| C. | Unsystematic Risk |
| D. | Systematic Risk |
| Answer» C. Unsystematic Risk | |
| 286. |
Horse racing, game of cards, lottery are the typical examples of ______________ |
| A. | Investment |
| B. | Speculation |
| C. | Gambling |
| D. | Arbitrage |
| Answer» C. Gambling | |
| 287. |
Buying low and selling high, making a large capital gain is associated with ________ |
| A. | Investment |
| B. | Speculation |
| C. | Gambling |
| D. | Arbitrage |
| Answer» B. Speculation | |
| 288. |
The process of holding shares in electronic form is known as |
| A. | Demutualisation |
| B. | Dematerialisation |
| C. | Speculation |
| D. | None of the above |
| Answer» B. Dematerialisation | |
| 289. |
___ is the market which helps existing investors to sell their securities. |
| A. | Primary market |
| B. | Secondary market |
| C. | Capital market |
| D. | Commodity market |
| Answer» B. Secondary market | |
| 290. |
An order to buy or sell a specified quantity of a stock at a specified price or better is called a |
| A. | day order |
| B. | market order |
| C. | stop order |
| D. | not-held order |
| E. | limit order |
| Answer» E. limit order | |
| 291. |
The exchange generating the largest volume in the United States is the: |
| A. | New York Stock Exchange |
| B. | National Market System |
| C. | Pacific Stock Exchange |
| D. | Chicago Stock Exchange |
| Answer» A. New York Stock Exchange | |
| 292. |
Which of the following is not a characteristic of an exchange? |
| A. | It provides liquidity to individuals who acquire securities in the primary market. |
| B. | It requires one to be a member in order to be allowed to trade. |
| C. | Stocks traded on an exchange must meet minimum listing requirements. |
| D. | It allows exchange-listed issues to trade off the exchange floor with the aid of brokers. |
| Answer» D. It allows exchange-listed issues to trade off the exchange floor with the aid of brokers. | |
| 293. |
SENSEX is the index of --------------------. |
| A. | BOMBAY STOCK EXCHANGE |
| B. | NATIONAL STOCK EXCHANGE |
| C. | BOTH OF THESE |
| D. | NONE OF THESE |
| Answer» A. BOMBAY STOCK EXCHANGE | |
| 294. |
It acts like a bank and keeps securities in electronic form on behalf of the investor, |
| A. | Depository Participant |
| B. | Depository |
| C. | Stock Exchange |
| D. | None of these |
| Answer» B. Depository | |
| 295. |
On this day, the exchange will deliver the share or make payment to the other broker, |
| A. | PAY-IN DAY |
| B. | PAY-OUT DAY |
| C. | TRANSACTION DAY |
| D. | NONE OF THESE |
| Answer» B. PAY-OUT DAY | |
| 296. |
___ is the institution which provides a platform for trading of existing securities having longterm maturity. |
| A. | SEBI |
| B. | WTO |
| C. | Stock Exchange |
| D. | RBI |
| Answer» C. Stock Exchange | |
| 297. |
Which one of the following is not a function of financial market? |
| A. | Mobilisation of savings |
| B. | Price determination of securities |
| C. | Floating of companies |
| D. | Lowering transaction cost |
| Answer» C. Floating of companies | |
| 298. |
A _____________ is a person who acts as an intermediary between a buyer or seller in the market. |
| A. | broker |
| B. | floor broker |
| C. | registered competitive trader |
| D. | dealer |
| Answer» A. broker | |
| 299. |
100 shares of Reliance Ltd. are purchased on Monday. Provided there are no holidays in between, the settlement should take place on _____ _? |
| A. | Wednesday (T+2) |
| B. | Tuesday (T+1) |
| C. | Thursday (T+3) |
| D. | Friday (T+4) |
| Answer» A. Wednesday (T+2) | |
| 300. |
CDSL stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐. |
| A. | Central Depository Services Ltd. |
| B. | Central Derivatives Services Ltd. |
| C. | Central Deposit System Ltd |
| D. | Central Derivatives System Ltd |
| Answer» A. Central Depository Services Ltd. | |
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.