AC5030 Session 8 Recap

Question 1

_____ is the process of determining whether or not a security is worth to be included in a portfolio

Accepted Answer

Security valuation, stock valuation

Question 2

Current prices of securities reflecting all information instantly and fully is a

Accepted Answer

Strong-form efficiency

Question 3

Efficient market was first defined by

Accepted Answer

Eugene Fama

Question 4

investing into well-diversified portfolio without attempting to search for mispriced securities

Accepted Answer

Passive Investment

Question 5

Current prices of securities instantly and fully reflecting all information of the past history is

Accepted Answer

Weak-form efficiency

Question 6

One among the below is NOT an asset class

Accepted Answer

investors

Question 7

Selling securities _________ the size of a portfolio

Accepted Answer

Decreases

Question 8

Investment of additional funds is done to increase the overall size of the portfolio

Accepted Answer

True

Question 9

Concept very similar to the idea of a ‘fair game'

Accepted Answer

Efficient Markets Hypothesis

Question 10

______ involves construction of an investor’s portfolio and continuously updating it

Accepted Answer

investment process, active investment

Question 11

_____ leads to very low transaction charges

Accepted Answer

Investors investing as per efficient markets hypothesis, Passive Fund Management

Question 12

Investment involves buying and selling securities frequently, this involves large brokerage fee

Accepted Answer

True

Question 13

Updating or re-balancing a portfolio is done by

Accepted Answer

buying new securities, selling existing securities

Question 14

____is essentially the search for recurrent and predictable patterns in stock prices

Accepted Answer

Technical Analysis, volumes and price analysis, statistical analysis of past price behaviour

Question 15

_______are securities that are grouped together that share similar characteristics

Accepted Answer

Investment Classes, Asset Classes

Question 16

The maturity of money market instruments is usually

Accepted Answer

less than a year

Question 17

A financial theory stating that stock market prices cannot be predicted

Accepted Answer

Efficient Market Hypothesis, Random Walk

Question 18

Buying and holding a diversified portfolio without attempting to identify mispriced securities is

Accepted Answer

Passive Investment

Question 19

Semi-strong-form efficiency is where current prices of securities instantly and fully reflect

Accepted Answer

all publicly available information

Question 20

One of the below does not trade in commodities market

Accepted Answer

sheep skin

Question 21

The process of looking for ‘undervalued’ and ‘overvalued’ securities

Accepted Answer

Active Fund Management

Questions 21