If a company is liquidated, proceeds from asset sales are distributed to common shareholders:

after secured debt investor and preferred shareholder claims are paid

Asset allocation is important in determining overall investment performance because it:

determines most of the portfolio’s returns over time

What is a call option?

An option to buy stock at a specified price

Adding a security that has a low correlation to an existing portfolio will:

lower the overall variability of the portfolio

Technical indicators help

To show the direction of the overall stock market

The Price Earning Ratio (P/E) of a stock reflects

The market mood for the company's stock

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Investment Management Quiz

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Questions 25

Answers

1
The net asset value of a mutual fund investing in stock rises with
higher stock prices
an increased number of shares
lower equity values
increased liabilities
2
Return on equity is to measure _______________.
the return to preference holders
All the above
The intrinsic value of equity
the return on investment
3
Head and shoulder formation occurs at the end of a ___________ uptrend.
Short
None
Long
Both
4
__________ a logical and systematic method for estimating the future dividends and share price.
Company analysis
Fundamental analysis
None
Industrial analysis
5
Diversification will not help reduce a portfolio’s:
All the above
specific risk
overall risk
systematic risk
6
The financial statement to find what a company owns and owes others is called the:
balance sheet
cash flow statement
income statement
funds flow statement
7
If a company is liquidated, proceeds from asset sales are distributed to common shareholders:
after preferred shareholder but before unsecured debt investors
All the above
before unsecured debt investor and preferred shareholder claims are paid
after secured debt investor and preferred shareholder claims are paid
8
Asset allocation is important in determining overall investment performance because it:
determines most of the portfolio’s returns over time
helps determine the standard deviation of the portfolio
helps determine the covariance of the portfolio
helps determine the expected return of the portfolio
9
If interest rates rise, the price of preferred stock
falls
is not affected
may rise or fall
rises
10
The market value of shares is determined by ________________.
Beta
Demand and supply of shares
Unsystematic risk
Historical past data
11
In contrast to forward contracts, futures contracts:
are high risk
have negotiable expiration dates
have contract sizes tailored to investor needs
trade on organized exchanges
12
What is a call option?
An option to buy stock at a specified price
An option to buy stock on a specified date
An option to sell stock at a specified price
An option to sell stock on a specified date
13
In the bull market
b and c
Each bottom is higher than the previous bottom
The stock prices are increasing
Each peak is higher than the previous peak
14
Adding a security that has a low correlation to an existing portfolio will:
increase the overall variability of the portfolio
lower the overall variability of the portfolio
make the portfolio more risky
ensure the portfolio achieves a good rate of return
15
Where the closing price of the day is higher than the opening price ____________ chart is used.
Doji Candlestick
Black Candlestick
White candlestick
None
16
___________ is the simplest price chart.
Candlestick Chart
Bar Chart
Line chart
None
17
Technical indicators help
To indicate the economic activity
To show the direction of the overall stock market
To find out the present state of the stock market
To indicate the growth of the stock market
18
At which stage in the trading process cash is exchanged for securities?
Settlement
Confirmation
Clearing
Making contract note
19
Equity does NOT include
common stock, paid-in capital and retained earnings
cash and paid-in capital
paid-in capital and retained earnings
common stock and paid-in capital
20
_____ patterns provide a break to the earlier trend, which may be a rise or fall.
Continuation
Support and Resistance
None
Head and Shoulder
21
If a portfolio manager loses money because of bond valuation model he uses is flawed
investment risk
operational risk
Market Risk
compliance risk
22
The Price Earning Ratio (P/E) of a stock reflects
The dividend paid out for the company's stock
The market mood for the company's stock
The growth of the company
The earnings retained and invested in the company
23
_________ theory explains and identifies long term trends in price through technical analysis.
Dow theory
Markowitz theory
CAPM
Stock theory
24
The main aim of _______ analysis is to appraise the intrinsic value of security
Fundamental analysis
Industry analysis
Technical analysis
Company analysis
25
Which of following contains highest risk?
Debentures
Company deposit
Preference shares
Equity share

Investment Management Quiz Flashcards | StudBud