INVESTMENT MANAGEMENT - 2 marks questions

Chapter 1 Investment
1. Guilt edged securities
2. Name any 2 creditorship securities
3. Financial risk
4. Expand CARE
5. Write any two non security kind of investment
6. Credit rating
7. What is gambling in investment?
8. Write any 2 schemes of UTI
9. Whole life policy
10. Write any 2 differences between investment & speculation.
11. What are creditorship securities?
12. Floating rate bonds
Floating rate notes (FRNs) are bonds that have a variable coupon, equal to a money market reference
rate, like LIBOR or federal funds rate, plus a spread. The spread is a rate that remains constant. Almost all
FRNs have quarterly coupons, i.e. they pay out interest every three months, though counter examples do
exist. At the beginning of each coupon period, the coupon is calculated by taking the fixing of the reference
rate for that day and adding the spread
Chapter 2 Fundamental & Technical Analysis
1. What is moving average analysis?
2. What do you mean by intrinsic value of share?
3. Write any 2 difference between fundamental & technical analysis.
4. What is money at call & short notice?
5. What is payout ratio?
6. What is call money market?
7. Why certain companies are called blue chips companies?
8. How to calculate quick ratio?
9. What are treasury bills?
Chapter 3 Financial Markets
1. Options
It is an arrangement either to buy or not to buy or to sell or not to sell the securities on the settlement date at
a certain contracted price.
2. Put option in the stock market
In case of put option a speculator has a right to sell or not to sell in certain quantity of security at a
agreed price on a the settlement date.
3. Cornering
It refers to a situation in which a speculator buys the entire or substantial part of securities available in the
stock market with the intension to create artificial scarcity or shortage & expects rise in prices & sells them
at a higher price with the intension of making profits.
4. Margin trading
It is type of speculative activity in which while purchasing securities, a trader has to open an account with
a broker & required to deposit certain sum of cash or securities as a guarantee to honour its commitments.
It provides a guarantee or safety for the brokers in execution or settlement of transactions.
 5. What do you mean by rigging the market?
Market rigging refers to forcing the prices of certain security to go up by creating artificial demand for such
securities. Thus a speculator creates artificial shortage or excess demand for the securities & expects huge
rise in prices.
6. Badla financiers
It is a type of speculative activity in which a speculator postpones his buying & selling activity whenever the
price is not moving in his favor on the settlement date. If the price is unfavorable the speculator postpones
settlement date until the price becomes favorable for him.
7. Arbitrage operations
In stock market the prices quoted in different stock exchanges varies according to the nature of securities or
location of stock exchange. A speculator under this trading system makes his purchases in that stock market
where the prices are cheaper & sells it immediately in that stock market where the prices are high.
8. Floor broker
A floor broker buys & sells securities on the floor of stock exchange. He is an independent & individual
member works for commission & also helps other brokers when they are busy & expect proportionate
compensation.
9. Loyalty coupons
10. Bonds

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and,
depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at
a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed
intervals. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor),
and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term
investments, or, in the case of government bonds, to finance current expenditure

11. Nifty
12. Book building
13. Commodity market
14. Write any 2 sub markets of capital market.
15. Financial market
16. Listing of securities
It refers to including of companies securities in the official list of stock exchange for the purpose of
trading. Listing ensures solvency, legal existence & guarantee of the company.
17. Sensex
18. Primary market
19. Secondary market
20. Rights shares
21. Who is a Bull?
22. What is system of depositories?
23. BOLT
24. Derivative trading
25. Zero coupon bonds
A zero-coupon bond (also called a discount bond or deep discount bond) is a bond bought at a price lower
than its face value, with the face value repaid at the time of maturity. It does not make periodic interest
payments, or have so-called "coupons," hence the term zero-coupon bond. When the bond reaches maturity,
its investor receives its par (or face) value.
26. Par value
 Par value, in finance and accounting, means stated value or face value. A bond selling at par has a
coupon rate such that the bond is worth an amount equivalent to its original issue value or its value upon
redemption at maturity.
27. Jobber in stock exchange
28. Forward delivery