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SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

THIRD SEMESTER M.COM ELECTIVE :MC3E(F)02

Multiple Choice Questions

1. Liquidity risk is :
   1. is risk investment bankers face.
   2. is lower for small OTC

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   3. increases whenever interest rates increases
   4. is risk associated with secondary market transactions
2. Bond holders usually accept interest payment each.
   1. 1 year
   2. six months

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   3. 2 months
   4. 2 years
3. Passive management is also referred to as...?
   1. index fund management
   2. index folio management

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   3. interest free management
   4. none of these
4. Multifactor asset pricing model that can be used to estimate the ......rate for the valuation of financial asset.
   1. discount
   2. interest

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   3. expense
   4. risk
5. Arbitrate pricing theory is an ............ model.
   1. asset pricing
   2. risk evaluation

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   3. bond pricing
   4. none of these
6. CAMP stands for .
   1. capital asset pricing model
   2. capital assessment pricing model

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   3. capital asset placement model
   4. none of these
7. An asset risk premium is given by :
   1. the asset standard deviation
   2. the assets expected returns

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   3. expected return per unit of standard deviation
   4. the excess of the assets expected return over the riskless rates
8. Which of the following is an example of a depreciable asset?
   1. land
   2. cash

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   3. account receivable
   4. equipment
9. While bond prices fluctuate,
   1. yields are constant
   2. coupon are constant

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   3. the spread between yields is constant
   4. short term bond prices fluctuate even more
10. To calculate historical (realised) risk and return, use;
    1. ex-post data
    2. mean and variance of expected return

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    3. probability distribution of possible states
    4. ex- ante data
11. A price weighted index is an arithmetic mean of
    1. future prices
    2. current prices

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    3. quarter prices
    4. none of these
12. A firm that fails to pay dividends on its preferred stock is said to be ........
    1. insolvent
    2. in arrears

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    3. in sufferable
    4. delinquent
13. ........... is not a money market instrument.
    1. certificates of deposit
    2. a treasury bill

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    3. a treasury bond
    4. commercial paper
14. A bond that has no collateral is called ............?
    1. collable bond
    2. a debenture

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    3. a junk bond
    4. a mortgage
15. The process of addition of more assets in an existing portfolio is called.....?
    1. portfolio revision
    2. portfolio addition

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    3. portfolio exchanging
    4. none of these

ANSWER KEY

1.c 2.b 3. a 4.a 5.a 6.a 7.a 8.d 9.a 10.a 11.b 12.b 13.b 14.b 15.a

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Prepared by:

Sri. Nazar. K

Assistant Professor on contract,

School of Distance Education,

University of Calicut.

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