Investment Management Quizz

1) What is the primary goal of investment management?

• A) Maximising short-term profits

• B) Achieving specific financial objectives

• C) Minimising all financial risks

• D) Speculating on stock prices

2. Which factor is NOT considered when determining an investor's risk tolerance?

• A) Investment goals

• B) Time horizon

• C) Color preference

• D) Investment style

3. The concept that suggests stock prices follow a random pattern is known as:

• A) Efficient Market Hypothesis

• B) Law of Small Numbers

• C) Random Walk Theory

• D) Market Volatility

4. Which of the following is NOT a characteristic of efficient markets?

• A) Prices reflect all available information

• B) Only insiders can achieve higher returns

• C) No advantage in trading based on news

• D) All participants have equal access to information

5. The phenomenon where stocks experience a significant price drop after missing earnings forecasts is known as:

• A) The Torpedo Effect

• B) Market Impact Cost

• C) Diversification Benefit

• D) Efficient Market

6. Diversification in investment portfolios is primarily used to:

• A) Guarantee profits

• B) Eliminate all risks

• C) Reduce the impact of volatility

• D) Focus on a single sector

7. What does the term "market capitalisation" refer to?

• A) The total value of a company's outstanding shares

• B) The overall size of the stock market

• C) The maximum market share a company can achieve

• D) The capital allocated for market research

8. Which investment strategy involves spreading investments across various asset classes?

• A) Market Timing

• B) Asset Allocation

• C) Tactical Investing

• D) Active Management

9. What is a key advantage of mutual funds?

• A) Fixed returns

• B) No risk involved

• C) Diversification

• D) High transaction costs

10. The "size effect" in investment refers to:

• A) The impact of a company's size on its operational efficiency

• B) Smaller companies often outperforming larger companies over time

• C) The market's tendency to favor large-cap stocks

• D) The effect of market capitalisation on trading volume