SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Subject: Security Analysis and Portfolio Management

Sample Questions:
Section I: Subjective Questions

1. Explain Certificates of Deposits.

2. Explain profitability ratios.

3. What is Portfolio Management?

4. What is systematic risk?

5. How is Buy and Hold strategy used for Bonds?

6. Explain the Closed-ended Fund Scheme of mutual fund.

7. Explain the weak form of efficiency hypothesis.

8. Explain the Capital Asset Pricing Model.

Section II: Objective Questions

Multiple Choice Single Response

1. It can be used as a guarantee for raising loans?

1] Company Deposits

2] National Saving Certificates

3] Provident Funds Deposits

4] Kisan Vikas Patra

2. These certificates indicate that the investor owns a certain number of shares

1] Debenture

2] Bond

3] Share

4] National Saving

3. The mechanism for public issue of debentures is almost same as

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

1] Private issue of equity

2] Public issue of certificates

3] Public issue of equity

4] Private issue of bonds

4. In yields to maturity, NPV of a bond is

1] Equal to one

2] More than one

3] Less than zero

4] Equal to zero

5. Mathematical average for internal and ratio variables is given by

1] Median

2] Mode

3] Mean

4] Summation

6. The mechanism for public issue of debentures is almost same as

1] Private issue of equity

2] Public issue of certificates

3] Public issue of equity

4] Private issue of bonds.

7. When a bond pays a periodic interest there is a risk that the interest payment may
have to be reinvested at

1] Lower capital rate

2] Lower interest rate

3] Higher capital rate

4] Higher interest rate

8. An active strategy is followed by investment professionals and aggressive investors

who want to earn
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

these type of returns after adjustment of risk.

1] Normal returns

2] Superior returns

3] Ordinary returns

4] No returns

9. A mutual fund is a trust that pools the savings of number of investors who share

1] Idea

2] Money

3] Common financial goal

4] all investments

10. These certificates indicate that the investor owns a certain number of shares

1] Debenture

2] Bond

3] Share

4] National Saving

Multiple Choice Multiple Response

11. NSE exchange is _

1] Ringless
2] International
3] National
4] Computerised
12. Certificates of deposits are popular due to

1] Risk free nature of investments

2] Maturity period

3] Flexibility in denominations

4] Fixed Income

13. In provident fund contribution is made

1] Daily

2] Monthly
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

SCDL

Page 6 of 7

3] Yearly

4] Quarterly

14. Bonds are subject to diverse risk, such as

1] Interest rate risk

2] Default risk

3] Fiscal risk

4] Call Risk

15. Market structure analysis monitors the trends of

1] Various price indices

2] Foreign institutional investors

3] Market cycles

4] Market volume

16. The limitation of flow-of-funds approach is that

1] They give no indication about the willingness of the market participants to sell at
a given price.

2] They measure the availability of money for the stock market.

3] They give liquidity trends in the banking system

4] They give no indication of the inclination of market participants to use this

money for the purchase of stock.

17. Certificates of deposits are popular due to

1] Risk free nature of investments

2] Maturity period

3] Flexibility in denominations

4] Fixed Income

18. Security includes warrants, coupons, etc. issued by

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

1] Bodies

2] ICAI

3] Organisations

4] RBI

Fill in the Blanks

19. According to ________ , investment risk refers to an uncertain rate of return.

1] Security Control Regulation Act

2] Reserve Bank of India

3] David Scott

4] Michael Porter

20. Treasury bill is issued by ________ .

1] Seller

2] Treasurer

3] Government

4] Dealer

21. Government securities are issued through ________ .

1] Sale

2] Private placement

3] Auction mechanism

4] Public placement

22. Countercyclical trends within the confinement of a primary trend are known as
________ price movements.

1] Secondary

2] Market

3] Intermediate

4] Governments
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

23. In the bond valuation model the future cash payments are to be received by the
________ .

1] Government of India

2] Issuer of the bond

3] Relatives of the bondholder

4] Owner of the bond

24. Kisan Vikas Patra is a scheme of the ________ .

1] Banks

2] Post Offices

3] Financial Institutions

4] Companies

25. Purchasing power risk is also called as ________ .

1] Insolvency risk

2] Unsystematic risk

3] Inflation risk

4] Specific risk

26. With ________ , you can insure a stock by trading selling price.

1] Call option

2] Buy option

3] Stock exchange

4] Put option

27. ________ considered more important while investing in Indian markets.

1] Thinking of the investor

2] Forecasting ability of the investor

3] Government pressure

4] Investor's family information

28. An important issue in structuring a portfolio is the consequences of ________ .

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

1] Loss

2] Income

3] Expense

4] Profit

State True or False

29. Investing in portfolio increases the risk as compared to investing completely in any
one asset.

30. Non-convertible debentures are converted to equity share after specific time.

31. Economic and political stability does not affect the stock market

32. Bond are the liabilities of the investors.

33. It was found that the result of filter test is no better than buy and hold strategy.

34. According to Benjamin Graham, an investor should never have less than 25% of his
funds in stock for investment.

35. Median is the value of the variable where 50 % cases are below value.

36. Company deposits are fixed deposits from the Public.

37. When investor reach to portfolio execution, at that time all important issues have
been cleared by the investor

38. Open ended scheme is available for subscription and repurchase on a continuing
basis.

Match the Following

39. 1] Government securities 1] fixed income securities

2] Income Tax Act 2] 1961
3] Increase in market price of asset 3] Capital appreciation
4] short term instrument 4] commercial paper

5] 1962

6] inflation

40. 1] Future contracts 1] Standardized forward contract

2] Index futures 2] Financial futures
3] Nifty 3] 200 or multiples
4] BSE SENSEX 4] 50

5] 90
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Subject: Security Analysis and Portfolio Management

6] 100 or multiple

41. 1] Valuation of security 1] CAPM

2] Mean return of the portfolio 2] RP
3] Actual rate of return on security i in 3] Xi
the portfolio
4] Proportion of security i in the total 4] Ri
portfolio

5] RX

6] Xr

42. 2] Traditional Portfolio Theory 1] Markowitz

3] Modern Portfolio Theory 2] Subject nature
4] CAPM 3] Beta

2] Traditional Portfolio Theory 4] Sharp and Linter

5] Objective nature

6] Marshall