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WorksheetsPortfolio Analysis ( 57 )
Total questions: 57
Worksheet time: 43mins
When money is committed to another person for a period of time for earning higher returns, it is called
Savings
Investment
Surplus
Deficit
________ is the chance of loss or the variability of returns associated with a given asset.
Return
Value
Risk
Probability
In portfolio management which aspect should be maximized?
Return
Risk
Return and Risk
None of the above
What is the P/E ratio used for?
To calculate the market value of stocks
To determine the dividend yield of a stock
To measure the profitability of a company relative to stock price
To forecast future stock prices
What is a bull market?
A market waste stock prices are raising
A market where stock prices are falling
Market where there is high volatility
Market where there is low trading volume
What is a blue -chip stock ?
A Stock with a low market capitalisation
Stock issued by a new and rapidly growing company
Stock of a will established in financially stable company
Stock that is traded on the foreign exchange
What is a stock split ?
When a company divides its outstanding shares into a larger number of shares
When a company merges with another company
When a company buys back it's own shares from the market
When a company issues new shares to raise capital
What is insider trading?
Buying or selling stocks based on non public information
Buying or selling stocks based on public information
Investing in stocks without conducting any research
Investing in stocks based on technical analysis
When it comes to investing, what does the term "diversification" mean?
Putting all your money into a single investment
Spreading your investment across different assets
Investing in high risk assets only
Avoiding all forms of investments
__Is one of the popular methods used for equity valuation
Dividend Discount Model
Price Earning Model
CAPM Model
Sharpe Model
__is one of the indicators of economy analysis
Interest rates
Inflation
GDP
All of these
Company’s liability side of balance sheet represents
Application of Funds
Sources of Funds
Investment Activities of company
None of these
Aggressive investors would like to invest in the
Securities with beta value greater than one
Securities with beta value less than one
Small cap companies
Venture Capital and private equity
Risk premium is
Beta ratio minus cut off point
Security return minus mean return
Return for investing into government securities
Market return minus risk free return
Is not a systematic risk
Quality of product
Management related problems
. Employee related problems
All of these
It is case of maximum portfolio risk
Correlation coefficient is zero
Correlation coefficient is plus one
Correlation coefficient is minus one
All of these
Is a measure of portfolio risk
Variance
Co-variance
Standard Deviation
Beta
When you are optimist for future of market you should invest in
Securities with beta value greater than one
Securities with beta value less than one
. Large cap stocks
Bond Market
These stocks are relatively unaffected by the market movements
Growth Shares
Income Shares
Defensive Shares
Speculative shares
Is the multiplying factor that the market is willing to offer to the company’s future earning
EPS
DPS
PEG Ratio
P/E Ratio
P/E ratio lower than the industry as a whole means
Stock is overvalued
Stock is underprized
Stock is correctly prices
Stock should be sold
Market value of shares represents
Growth Potential of Company
Supply side of Company
Expectations of investors from company
Interaction of supply and Demand
Rising Trend line will have always
Higher highs and higher lows
Lower Highs and high lows
Lower lows and lower lows
All of these
Left side of bar chart represents
Opening price
Closing price
Days high price
Days low price
Large volume with rise in price indicates
Bear Market
Bull market
Tug of war between bull and bear
Resistance level
Is one of the qualitative aspects of company which one can go through before investing into company
Ratio Analysis
Minority shareholders
Cash Flow statement
Cash Flow statement
When company park its excess money in fixed deposit it falls under companies
Operating Activities
Investing Activities
Financing activities
All of these
Operating profit is also known as
PAT
Net Income
EBIT
ROE
Avoid ___companies as their objective is not maximising shareholders wealth.
PSU
Joint Stock Companies
Private Companies
Venture Capital
__this type is risk is beyond control of the individual or organization
Currency Risk
Commodity Risk
Country Risk
All of these
Markowitz model is also known as
CAPM MODEL
Gordon Model
Full covariance model
Diversification model
__is commonly preferred measure of variability.
Variance
Beta
Residual Variance
Standard deviation
__relates to the excess portfolio return to the systematic risk.
Ci Values
Jensen Measure
Treynor’s measure
efficient portfolio
If expected return is greater than CAPM return security is said to be
Under-priced
overpriced
Correctly Priced
None of these
If expected return is 13% and CAPM return is 15 % one should
Buy Security
Hold Security
Sell Security
All of these
__is the ratio between the dividend paid during the year and the current market price of share.
Dividend Pay-out Ratio
Dividend Yield
Retention Ratio
current Yield
__consists of sources and application of funds.
Cash flow statement
Balance Sheet
Income statement
All of these
_____ratio helps in analyzing whether current share price of the company is perceived as high or low.
Profitability Ratio
Enterprise value to sales ratio
Valuation Ratios
Activity Ratios
__are mentally stressful due to the shorter time frame
Day trader
Position Trader
Long term trader
Short term trader
.__this is a case of recapitalization of free reserves and surplus
Bonus Issue
Stock Split
DPS
Share buybacks
Optimum portfolio is
Set of efficient portfolios
Set of inefficient portfolios
Set of portfolios where risk is minimum and return is maximum
All of these
__Is not one of the activities of portfolio manager
Selection of security
Construction of feasible portfolio
Managing risk
constructing maximum variance portfolio
Most investors are risk averse which means:
they will assume more risk only if they are compensated by higher expected return
they will always invest in the investment with the lowest possible risk
they actively seek to maximize their return
they avoid the stock market due to the high degree of risk
stocks and bonds should be classified as;
Real Asset
Indirect Asset
Financial Assets
personal assets
The ________ of an asset is the change in value plus any cash distributions expressed as a percentage of the initial price or amount invested.
Return
Value
Risk
Probability
________ is the chance of loss or the variability of returns associated with a given asset.
Return
Value
Risk
Probability
Last year Mike bought 100 shares of Dallas Corporation common stock for $53 per share. During the year he received dividends of $1.45 per share. The stock is currently selling for $60 per share. What rate of return did Mike earn over the year?
11.7%
13.2%
14.1%
15.9%
Investors should not diversify their portfolio by putting money into different securities based on their appetite for risk.
True
False
Who are institutional investors in Financial assets? ( Choose 3)
Investment Companies
Government
Commercial Banks
Householders
Insurance Companies
After considering current market conditions an investor decides to place 60% of their funds in equities and the rest in bonds. This is an example of
security analysis
asset allocation
top down portfolio management
passive management
After much investigation an investor finds that Intel stock is currently under priced. This is an example of ______.
Asset allocation
Security analysis
passive management
top down portfolio management
........... ......... advise companies on issuing bonds and shares. They also advise on mergers and acquisitions Choose one
Investment Companies
Investment banks
Commercial Banks
Insurance Companies
__________ portfolio construction starts with asset allocation.
Bottom-up
Top Down
Upside down
Side-by-side
Which of the following is the best reason for an investor to be concerned with
the composition of a portfolio?
Risk reduction
Downside risk protection
Avoidance of investment disaster
Increase profitabiltiy
With respect to the portfolio management process, the asset allocation is deter-
mined in the:
planning step
feedback step
execution step
An analyst gathers the following information for the asset allocations of three
portfolios (see attachment). Which of the portfolios is most likely appropriate for a client who has a high
degree of risk tolerance?
Portfolio 1
Portfolio 2
Portfolio 3
Portfolio 1 & 3
Which of the following forms of pooled investments is subject to the least
amount of regulation?
Hedge Funds
Exchange Traded Funds
Closed-End Mutual Funds
Open-End Mutual Fund
