Investment Analysis Quiz

______________would mean that no investor would be able to outperform the market with trading strategies based on publicly available information.

• Semi strong form efficiency

• Weak-form efficiency

• Strong form efficiency

• None of the above

A company's _______________ provide the most accurate information to its management and shareholders about its operations.

• advertisements

• financial statements

• products

• vision statement

_____________ fund managers try to replicate the performance of a benchmark index, by replicating the weights of its constituent stocks.

• Active

• Passive

Unlike term insurance, ____________ ensure a return of capital to the policyholder on maturity, along with the death benefits.

• high premium or low premium policies

• fixed or variable policies

• assurance or endowment policies

• growth or value policies

Gross Profit Margin = Gross Profit / Net Sales

• FALSE

• TRUE

Security of ABC Ltd. trades in the spot market at Rs. 595. Money can be invested at 10% per annum. The fair value of a one-month futures contract on ABC Ltd. is (using continuously compounded method):

• 630.05

• 620.05

• 600.05

• 610.05

Accounts payable appear in the Balance Sheet of companies.

• TRUE

• FALSE

A portfolio comprises of two stocks A and B. Stock A gives a return of 8% and stock B gives a return of 7%. Stock A has a weight of 60% in the portfolio. What is the portfolio return?

• 9.3%

• 11.5%

• 10.2%

• 7.6%

Evidence accumulated through research over the past two decades suggests that during many episodes the markets are not efficient even in the weak form.

• FALSE

• TRUE

Mr. A buys a Put Option at a strike price of Rs. 100 for a premium of Rs. 5. On expiry of the contract the underlying shares are trading at Rs. 106. Will Mr. An exercise his option?

• No

• Yes