Trading Challenge-TOA

Note: The order of the questions in this test are randomized. The order in which the questions appear may
not match the order in which the candidate sees the questions.

1. How many companies are included in SENSEX?

A. 30

B. 50

C. 100

D. 25

2. How many companies are included in NIFTY?

A. 30

B. 50

C. 100

D. 25

3. How many companies are included in DJIA?

A. 30

B. 50

C. 100

D. 25

4. How many companies are included in NASDAQ Composite?

A. 30

B. 50

C. 100

D. 25

5. What does the Bear stand for?

A. The bear means stocks are falling

B. The bear means stocks are going up

C. The bear is the sign that the stock market is closed

D. None of the above

6. Which statement about Blue Chip Stocks is correct?

 A. Earnings are used for reinvestment in order to maintain the growing trend of the
stocks
B. No dividends

C. They are traded below its market price

D. The stocks are consistently profitable with a dividend payment

7. What does "Short Selling" mean?

A. a. Selling securities that the investor has borrowed and prepared to buy back
later at a lower price
B. A trading strategy used to profit from a price decline

C. A and B

D. None of the above

8. The Indian Stock Market is regulated by

A. RBI

B. FINRA

C. SEBI

D. SEC

9. Share of profit, if distributed by management in cash is called as

A. Bonus

B. Rights

C. Dividend

D. Warrants

10. The share price of a security is decided by

A. Stock Exchange Management

B. Companies

C. Buyers and Sellers of that security

D. Government

11. The process of issuing shares to the public is called as

A. Right Issue

B. Bonus Issue

C. Initial Public Offer

D. None of the above

12. What is Stop Loss order?

 A. An order which get executed instantly

B. An order which gets executed only when the price reached a certain level

13. The stock price changes very frequently

A. Due to Buyers and Sellers actions

B. Due to Near Term Expectations

C. Due to Active Market Participants

D. All of the above

14. Spread is the:

A. Difference between the best buyer quantity and the best seller quantity

B. Difference between the best buyer price and the best seller price

C. Difference between the best buyer price and the next best buyer price

D. Difference between the best buyer quantity and the next best buyer quantity

15. Limit order is

A. a. An order which will certainly become a trade

B. An order which will be executed immediately

C. An order which will be executed only at a specific price or a better price

D. A Market Order

16. Stop Loss order is

A. An order which will be placed only by the broker

B. An order which will be executed only after triggering the Trigger Price

C. An order which will always be executed immediately

D. An order which will certainly become a trade

17. The concept of expiry date is not applicable in

A. Equity Shares

B. Future Contracts

C. Option Contracts

D. All of the above

18. What does Fundamental Analysis mean?

A. a. Studying the company

B. Studying the market participants

 C. Studying the market actions

D. All of the above

19. What does Fundamental studies involve?

A. a. Studying the Books of Accounts

B. Interacting with the key personals

C. Studying the Macro Economy

D. All of the above

20. Technical Analysis studies

A. Past traded prices of a company

B. Sales and Profits

C. PE Ratio, Book Values and Cash Flow

D. None of the above

21. Dow Theory, Gap Analysis etc are part of

A. Technical Analysis

B. Fundamental Analysis

C. Economics

D. None of the above

22. Which is the preferred chart type used to understand the Long Term price action?

A. Line Charts

B. Bar Charts

C. Candlestick Charts

D. No one can predict long term price action

23. Double Top is a

A. Bullish Indication

B. Bearish Indication

C. Two time profits

D. None of the above

24. Support level is

A. Where the supply is more

B. Where the demand is more

 C. Where the supply is equal to the demand

D. None of the above

25. The short term financial instruments traded in money market is commonly called

A. Bonds

B. Shares

C. Notes

D. Commercial Papers

26. Type of trading member who takes position every day and also liquidates it on the same day is classified as

A. day traders

B. broker traders

C. non-position traders

D. commercial traders

27. Type of trade members who take position for short period of time or sometimes for only few minutes are
classified as
A. scalpers

B. explorers

C. temporary position holders

D. professional position holders

28. Type of traders who take position in market of future, which is based on expectations of prices of underlying
assets are classified as
A. Professional traders

B. Non-investment traders

C. Position traders

D. Future market traders

29. Markets in which derivatives are traded, are classified as

A. a. assets backed market

B. cash flow backed markets

C. mortgage backed markets

D. derivative securities markets

30. Stocks or shares that are sold to investors without transacting through financial institutions are classified as

A. direct transfer

B. indirect transfer
 C. global transfer

D. pension transfer

31. Difference between face value of bond and call price of bond is considered as

A. call premium

B. call provision

C. discount premium

D. discount provision

32. Type of bonds that pay coupon interest are classified as

A. forward bond

B. payment bonds

C. coupon bond

D. interest bonds

33. Preferred stock is considered as hybrid security because it includes

A. Representation of ownership interest

B. Fixed periodic payment

C. Higher liquidity

D. Both A and B

34. Type of bond whose present value is lesser than that of its face value is classified as

A. Discount bond

B. Premium bond

C. Coupon bond

D. Interest Bonds

35. Situation in which large portion of majority is borrowed from broker of investor is classified as

A. Future investment

B. Forward investment

C. leveraged investment

D. non-leveraged investment

36. In primary markets, property of shares which made it easy to sell newly issued security is considered as

A. increased liquidity

B. decreased liquidity
 C. money flow

D. large funds

37. Which of the following market does not have a physical location?

A. Hybrid market

B. Electronic market

C. Both ‘a’ and ’b’

D. None of the above

38. Foreign stocks trade in U.S. markets as:

A. Foreign Capital Units (FCUs)

B. Overseas Monetary Stocks (OMSs)

C. American Depositary Receipts (ADRs)

D. Foreign Dividend Stocks (FDSs)

39. In 1:50 stock split

A. Shareholders get 50 shares for every old share

B. Shareholders get one share for every 50 old shares

40. Convertible bonds may be converted into:

A. Subordinated debentures

B. Common stock

C. Equipment trust certificates

D. Warrants

41. Which of the following is true?

A. The initial public issues are made in primary market whereas all subsequent
issues are made in the secondary markets.
B. Primary markets are legal whereas secondary markets are not.

C. Primary markets deal in shares whereas secondary markets are meant for
debentures
D. Corporates raise resources directly from the investors through the Primary
Market, whereas in the Secondary Markets, investors buy and sell securities
from one another

42. Which of the following is the most suitable option for an investor with low-risk appetite?

A. Junk Bonds

B. Equities

C. Fixed Deposits
 D. Derivatives

43. The Best Sell order is the order with the

A. Average Buy price

B. Lowest Sell Price

C. Average Sell price

D. Highest Buy Price

44. Which of the following chart types does not show price gaps?

A. Bar

B. Line

C. Candlestick

D. All of the above

45. Beta measures

A. The relation between a portfolio’s return and market return

B. The relation between a portfolio’s volatility and market volatility

C. How much an individual stock’s return is related to the market return

D. How much an individual stock’s volatility is related to the market volatility

46. The process of protecting oneself against future price changes by shifting some or all of the risk to
someone else is called:
A. Speculating

B. Investing

C. Hedging

D. Gambling

47. The holders of which instrument are members of the company and have voting rights?

A. Commercial Paper

B. Treasury Bill

C. Debenture

D. Equity

48. Buying and selling of shares can be done through a ________

A. Depository

B. Bank

C. Stock Exchange
 D. Finance company

49. Which of the following are considered as roles of a stock exchange?a. It facilitates raising new capital for
companies.b. It helps to raise money for government projects.c. It promotes acquisitions and takeovers of
companies.d. Helps investors to diversify their investments.
A. I and II only

B. I, II and III only

C. I, II and IV only

D. I, II, III and IV

50. You have 100 shares of ABC Company. If the company makes a 1:4 bonus issue, how many shares of ABC
Company will you own after the distribution?
A. 20

B. 25

C. 120

D. 125