QUIZ - 2

Q1. Conceptual framework of valuation through P/E ratio arises from :

a) Multiple year holding model

b) Constant growth model
c) Two-stage growth model
d) Three-stage growth model

Q2. Mr. A purchase a stock in the stock market.His holding period return depends on the :

a) Purchase price of the stock

b) Selling price of the stock
c) Dividend paid to the stock
d) All of the above

Q3. The chartist believes that charts :

a) Spot the current trend for buying and selling

b) Indicate the future action to be taken
c) Shows historical movements
d) All of the above

Q4. Which of these is true of share price ?

a) They move either in a declining or increasing trend

b) They may remain flat for a period
c) The movements of the share prices from a straight line
d) The increasing or decreasing movement may be zigzag

Q5.In a weak efficient market, the stock price reflects :

a) The company’s financial performance

b) The past price of the scrip
c) The demand for the scrip
d) The past price and traded volumes

Q6. Markowitz approach has roots in :

a) Good portfolio management

b) Proper entry and exit in the market
c) Estimation of stock return
d) Analyzing the risk and return related to stocks
Q7. Diversification reduces :

a) Interest rate risk

b) Market risk
c) Unique risk
d) Inflation risk

Q8. An investor gets 15% return from X’s stock . The inflation rate is 7%. His real rate of return is :

a) 7.48
b) 8.00
c) 2.5
d) 7.84

Q9. The statistical tool used to measure a company’s risk is :

a) Mean
b) Mode
c) Variance
d) Co-variance

Q10. Mr. Karthik purchased treasury bills since :

a) The returns are certain

b) Minimum variation in the return
c) The return is certain and the variation is nil
d) There is assurance of full payment of principal