SAPM

Which of the following is a primary objective of security analysis?

• Maximizing sales

• Minimizing operational costs

• Estimating the intrinsic value of securities

• Reducing tax liability

Which model is commonly used to calculate the expected return of a security based on its risk?

• Capital Asset Pricing Model (CAPM)

• Dividend Discount Model (DDM)

• Price-to-Earnings Ratio (P/E)

• Efficient Market Hypothesis (EMH)

Which type of analysis focuses on evaluating a company’s financial statements, earnings, and growth potential?

• Technical Analysis

• Quantitative Analysis

• Fundamental Analysis

• Statistical Analysis

What does the P/E ratio represent in security analysis?

• Price of stock to earnings per share

• Profit to equity ratio

• Price of stock to equity value

• Premium to earnings

Which of the following is an assumption of the Efficient Market Hypothesis (EMH)?

• Markets are predictable

• Investors behave irrationally

• All available information is reflected in the stock price

• Stock prices are manipulated by large players

In the context of security analysis, what is "beta" a measure of?

• Company profitability

• Stock volatility relative to the market

• Earnings growth rate

• Dividend payout ratio

Which of the following is an example of a technical analysis tool?

• Income Statement

• Moving Average

• Balance Sheet

• Price-to-Book Ratio

Which of the following is used to assess the risk-free rate in security analysis?

• Corporate bonds

• Treasury bills

• Preferred shares

• Junk bonds

The Dividend Discount Model (DDM) assumes that:

• Stock price is based on projected future earnings

• Stock price is based on the present value of future dividends

• Stock price is determined by market demand

• Stock price is irrelevant to dividends

Which financial metric is commonly used to evaluate a company's profitability?

• Return on Equity (ROE)

• Current Ratio

• Debt-to-Equity Ratio

• Price-to-Sales Ratio