S A P M BIT’S

1. Investment is the ----------------. (C)

A. market addition made to the nation’s capital stocks.
B. Persons commitment to buy a flat or a house.
C. Employment of funds on assets to earn returns
D. Employment of funds on goods and services that are used in production
process.
2. Speculator is a person --------------------. (D)
A. Who evaluates the performance of the company.
B. Who use his funds only.
C. Who is willing to take high risk for high return.
D. Who considers hearsays and market behaviours.
3. To frame the investment policy the investor should have (D)
A. Knowledge about the company and brokers.
B. Investible funds
C. Knowledge about the investment alternatives
D. Knowledge about the market with funds.

4. The stock is (D)

A. Small units of equal value called shares
B. Expressed in terms of money.
C. Expressed in terms of number of shares.
D. Fully paid p and partly paid up shares

5. Equity shareholders rights are listed below: One of the right is incorrect (A)
A. Right to have first claim in the case of winding up of the company.
B. Right to vote at the general body meeting of the company
C. Right to share profits in the form of the dividends.
D. Right to receive a copy of the statutory report.
6. In a limited company (C)
A. The shareholders have to divide the debt of the company and pay.
B. The shareholders are not liable to pay the debt
C. The shareholders have to pay the debt to the extent of their shares in the capital.
D. Common stock and preference shareholders have to pay the debt

7. Zero coupon bond shares its origin in (A)

A. U.S security market. B. Wall street.
C. Japan's security market D. Dalalstreet.

8. Capital Index bonds are linked with (C)

A. BSE Sensex B. NSE Nifty C. Consumer price index D. BSE-100

9. The aggressive investor buys more of -------- (C)

A. Money Market Instruments B. Gold C. Equity shares
D. Options and Futures
10. Financial intermediaries differ from other businesses in that both their assets and their
liabilities are mostly (D)
A. Illiquid B. Owned by government C. Real D. Financial
11. Sweat Equity is ---------------- (D)
A. A New class of equity shares B. Issued to the employees and directors
C. Issued to the investor also
D. Issued out of the class of equity shares already issued by the company.

12. Financial assets (D)

A. Contribute to the countrys productive capacity both directly and indirectly
B. Do not contribute to the countrys productive capacity both directly and indirectly
C. Directly contribute to the countrys productive capacity.
D. Indirectly contribute to the countrys productive capacity.
13. The broker has bought 10,000 ABC shares at Rs.200 and sold 8,000 shares at Rs.190 on
the same day the margin he has to pay is (C)
A. Gross exposure margin B. Special margin C. Mark to market margin
D. Concentration ratio margin
14. Which one of the following statements regarding orders is false? (D)
A. A market order is simply an order to buy or sell a stock immediately at the prevailing
market price
B. A limit sell order is where investors specify prices at which they are willing to sell a
security.
C. If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if
and when the share price falls below $45.
D. None of the above.
15. The use of the Internet to trade and underwrite securities (C)
A. Is illegal under SEC regulations B. Is regulated by the New York Stock Exchange.
C. Decreases underwriting costs for a new security issue. D. Increases underwriting costs
for a new security issue.
16. Sell Reliance X Company shares at Rs. 60/- . This order is a (B)
A. Best rate order B. Limit Order C. Discretionary order D. Stop Loss order
17. The Bombay Stock Exchange Ltd was originally known as (A)
A. The Native share and Stock Brokers Association
B. The Native share and stock brokers union
C. The Native Stock Brokers Association
D. The Native share and stock brokers association of India
18. Shares for short transactions (B)
A. Are usually borrowed from other brokers
B. Are typically shares held by the short seller's broker in street name?
C. Are borrowed from commercial banks.
D. B and C.

19. Assume you purchased 100 shares of common stock at $50 per share using 2,500 of your
own money. The initial margin requirement is 50%. If the maintenance margin is 30%, at
what prince would you get a margin call? (C)
A. $26.14
B. $50.00
C. $35.71
D. $77.12

20. Conventional theories presume that investors ____________ and behavioural finance
presumes that they ____________. (B)
A. are irrational; are irrational
B. are rational; may not be rational
C. are rational; are rational
D. may not be rational; may not be rational
21. Investment is the ----------------. (C)
A. market addition made to the nation’s capital stocks.
B. Persons commitment to buy a flat or a house.
C. Employment of funds on assets to earn returns
D. Employment of funds on goods and services that are used in production process.

22. To frame the investment policy the investor should have ( )

A. Knowledge about the company and brokers B. Investible
funds
C. Knowledge about the investment alternatives D. Knowledge about the market with
funds.

23. The stock is (D)

A. Small units of equal value called shares B. Expressed in terms of money.
C. Expressed in terms of number of shares. D. Fully paid up and partly paid up
shares

24. The aggressive investor buys more of -------- (C)

A. Money Market Instruments B. Gold C. Equity shares D. Options and
Futures

25. Financial assets (D)

A. Contribute to the country’s productive capacity both directly and indirectly
B. Do not contribute to the country’s productive capacity both directly and indirectly
C. Directly contribute to the country’s productive capacity.
D. Indirectly contribute to the country’s productive capacity.

26. If a person gives too much weight to recent information compared to prior beliefs, they
would make ________ errors (D)
A. Framing B. Selection bias C. Overconfidence D. Forecasting
28. Mumbai stock exchange was recognised on a permanent basis in (B)
A. 1956 B. 1957 C. 1950 D. 1958
29. Clearing and settlement operations of the NSE is carried out by (B)
A. National security Depository Ltd B. National Security Clearing co-operation
C. State bank of India D. By the exchange itself

30. The Index SENSEX has consisted of how many stocks? (B)
A. 25 Stocks B. 30 Stocks C. 33 Stocks D. 35 Stocks

31. According to SEBI guidelines (A)

A. All the new issues should be in the depository mode
B. All the A group shares should be traded through NSDL
C. All the B group shares should be traded through NSDL D. All the above are true

32. SEBI would not offer documents seeking listing on---- (A)
A. OTCEI B. NSE C. BSE D. ISE

33. The promoters contribution should not be less than (B)

A. 25% of the issue size B. 20% of the issue size
C. 30% of the issue size D. 33% of the issue size

34. At present the merchant bankers (C)

A. Are divided into four categories B. Are divided into three categories
C. Have to segregate fund and fee based activity D. Should have net worth of Rs.
3 cr

35. FII stands for (B)

A. Foreign Investors in India B. Foreign Institutional Investors
C. Foreign Indian Investors D. All are correct

36. Gross domestic product is a logical factor to analyse the economy in picking up a stock
because it
Indicates: (C)
A. Inflation or deflation B. The market value of assets
C. The status of the economy D. The condition of the stock market

37. A growth industry is defined as (D)

A. An industry with 15% rate of growth per annum
B. An industry where demand for its product is growing
C. An industry with high capital investment
D. An industry with average growth higher than the growth of economy

38.. Mr.A is a daring portfolio manager. He wants to increase the return of his portfolio. He
should choose stocks from (B)
A. Defensive industry B. Industry at growth stage
C. Industry in the maturity period D. Industry with more export potential

39. SML stands for: (B)

A. Stock Market Line B. Security Market Line C. Stock Market Level
D. None

40. SEBI is the regulatory of (C)

A. Banks in India B. Insurance Sector in India
C. Stock Markets in India D. Mutual Funds