1. .

Assignment transfers the right, title and interest of the assignor to assignee

A. assignee

B. bailee

C. hypothecatee

D. None of these

2. What is portfolio management?

A. Refers to the management of the portfolio of investments of a particular person.

B. Decision of how much to invest, where to invest and how much to invest in each asset selected.

C. None of these

D. A and B both

3. A portfolio consists of a group of financial assets like: shares, stocks, bonds, debt instruments,
mutual funds, cash equivalents

A. True

B. False

4. Passive Portfolio Management means a. Follow market index, b .Invest as per market index, c. Not
too much research

A. True

B. False

5. Change in exchange rates could directly affect your overseas investments and indirectly affect the
securities of the companies, thus affecting the share value.

A. True

B. False

6. Total return =

A. (Yield + capital gain or loss) ÷ Investment at cost

B. (Yield - capital gain or loss) ÷ Investment at cost

C. (Yield + capital gain or loss) ÷ Capital Gain

D. None of these
7. HPR means

A. High Pressure Rank

B Holding Period Return

C. Holding at Par Return

8.. Correlation is always between -1 and 1.

8.. Correlation is always between -1 and 1.

A. 0 and 1

B. -1 and 0

C. -1 and 1

D. 1 and 2

9. Liquidation Risk is 1. Risk that investments would be infrequently traded. 2. Risk of liquidation at
unreasonable prices

A. 1 only

B. 2 only

C. 1 and 2 both

D. None of these

10. Company risk is the risk that the individual -------- in which you invest will fail to perform as
expected.

A. Industry

B. company

C. Sector

D. None of these

11. Portfolio Risk is the ---------- of the portfolio retunrs

A. beta

B. alfa

C. Standard deviation

D. None of these
12. A portfolio could be of

A. two securities

B. three securities

C. Many securities

D. All of these

13. Other things equal, diversification is most effective when classes of securities included in
portfolio have ______.

A. negatively correlated returns

B. positively correlated returns

C. high returns

D. uncorrelated returns

14. “A defensive stock is characterized by

A. Negative beta

B. Positive beta less than one

C. Positive beta more than one

D. Beta equal to one

Option 5

15. Insurance related complaints can be lodged with Insurance Ombudsman

A. False

B. True

16. Insurance Policy premium is based on-

A .Age

B .Build

C. Physical condition

D. All of these

17. The objective of a portfolio is to minimize the risk

A. True

B. False

18. Systematic Risk

A. Impact the entire market

B.Cannot be avoided, inherent in investment

C. Cannot be mitigated through diversification

D. All of these.

19. An investor has purchased shares of company A.He has invested Rs 1000.Company A has given
dividends of Rs 200 .After one year value of the investments in company A is Rs 1500.What is return
on Company A ?

A. 40%

B. 60%

C. 50%

D. 70%

20. Endowment Policy combines Investment + Risk Cover

A. True

B. False

21. Human Life Value Approach calculates the present value of the person’s future earnings

A. True

B. False

22. The Sharpe Ratio is defined as: (Portfolio Return – Risk-Free Rate) / Standard Deviation .

A. True

B. False

23. An investor has purchased shares of company B. He has invested Rs 1000. Company B has given
no dividend.After one year, value of the investments in company B is Rs 800.What is return on
Company A and B ?
A. 20%

B. no return

C. -20%

D. None of these

24. Ex-post Returns are the returns which already been generated by an investment.

(A)True

(B) False

25. A share has been purchased with the expectation that it will provide following dividends:Year 1:
Rs 10Year 2: Rs 50The above dividends would be termed as

A .Ex-ante returns

B. Ex-post returns

C.A and B both

D. None of these

26. Inflation risk refers to the risk that the rising costs of ------- will outpace the growth of your
investment over time.

A. Repo rate

B. MCLR

C inflation

D. None of these

27. The portfolio can be evaluated with the Treynor measure in this manner: Higher the Treynor
measure, better the portfolio

A. True

B. False

28. In contrast to the Treynor and Sharpe ratios that examine average returns for the total period
under consideration, Jensen's alpha calculates risk premiums in terms of beta (systematic,
undiversifiable risk)

A. True

B. False
29. Ex-ante Return are

A. expected to be generated.

B. dependent on future events and not certain.

C. Probability distribution is attached with the different expectations.

D. All of these

30. If actual return is 10% and inflation is 4% then the Real Return would be :

A. 5.769%

B. 7.569%

C. 7%

D. None of these

31. Tax Adjusted Return =Return *(1-Tax Rate)

A. True

B. False

32. Bancassurance means____________

A. Banks promising to give loans

B. Bank promising to pay interest

C. Banks selling insurance products

D. Assurance to repay loans

33. Par Value is value stated on the face of the bond.

A. True

B. False

34.. When a security is held till maturity then yield calculated is termed as ----

A. Yield to call

B. Coupon rate

C. Inflation rate
D. Yield to Maturity [YTM]

35. P/E ratio (Price to Earning ratio)= Market Price/EPS

A. Market Price/Book value

B. Market Price/EPS

C. Market Price/Loss

D. None of these

36. In Index investing

A. Objective is to create a portfolio similar to Index.

B. Return would be similar to that of Index.

C. Require passive management, have less operating expenses

D. All of these.

37. An investor who seeks a high level of return and is willing to bear the risks of such investments is
likely to be recommended

A. Aggressive portfolio

B.. Conservative portfolio

C. Moderate portfolio

D. None of these

38. Insurance is a form of risk management used to hedge against the risk of an uncertain loss

A. True

B. False

39. In Insurance, Consideration is -------:

A. Claim

B. Bonus

C. Premium

D. None of these

40. Insurable risk—In order for a risk to be insurable ,it must have certain characteristics—

A. The loss must occur by chance

B. The loss must be definite

C. The loss must be significant

D. All of these

41. Peril is an immediate, specific event causing a loss.

A. True

B. False

42. Types of perils—

A. .insured peril

B.. excluded peril

C.. other peril

D. All of these

43. Which one of the following Is NOT a type of Insurance?

A. Life Insurance

B. Health Insurance

C. General Insurance

D. Savings Account

44. Which one is not a type of Life Insurance Policies

A. Term Insurance Policy

B. Whole Life Policy

C. Property Insurance Policy

D. Money Back Policy

45. Tax Equivalent Return = Tax Adjusted Return / (1-Tax Rate)

A. True

B. False

46. Term Insurance Policy covers

A. death & survival benefits

B. Lump sum paid periodically. 20% + 20% + 20% + 40% of SA at predefined intervals

C. Full sum assured paid on death

D. All of these

47. The total required quantum of life insurance can be calculated using 2 different approaches as
follows: a .Human Life Value Approach., b.Need based approach

A. True
B. False

48. For cars travelling on public highways, travelling without insurance is an offence

A. False

B. True

C. Not sure

49. Why is Health Insurance important?

A. Rising medical costs

B. Uncertain hospital bills

C .Expensive / quality health care services

D. All of these

50. Premium under Health Insurance Policy is eligible for Tax deduction under Sec.80 D

A. False

B. True

51. Treynor measure is defined as Defined as: (Portfolio Return – risk free rate)/Beta

A. True

B. False

52. Systematic risk affects many assets or asset classes in the markets. It is outside our control.

A. True

B. False

C, Not sure

53. Which of the following is not a performance measurement tools to assist with portfolio
evaluation:

A. Treynor Measure

B. Sharpe Ratio.

C. Jensen Measure

D. Mean

54. ------- hazard arises from a person’s habit and values. the attempt to create a loss for the purpose
of claim from insurance co., filing of a false claim.

A. Moral

B. Morale

C. Legal

D.Physical
55.Some policies are subject to ‘’excess’’ or ‘’franchise’’

A. True

B. False

56.In insurance, the term ”uberrimae fides” means---

A. let the buyer beware

B. premium

C. Utmost good faith

D. claim amount

57. “Condition of average” is the insurance term used when calculating a payout against a claim
where the policy undervalues the sum insured. In the event of partial loss, the amount paid against a
claim will be in the same proportion as the value of the underinsurance.

A. True

B. False

C. It is called Assignment

58.Contribution is proportional sharing of loss by the insurers when more than one policy is taken by
the insured for the same peril. Under a contract of indemnity, the insured cannot profit from his or
her misfortune irrespective of the number of policies.

A. False

B. True

59. Bank deposits and Govt. securities are low risk. The only risk is of getting lower income than
inflation rate.

(A) True

(B) False

60. Normally – higher the risk, higher the return.

(A) True

(B) False