Investment Management Set 11
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This set of Investment Management Multiple Choice Questions & Answers (MCQs) focuses on Investment Management Set 11
Q1 | Lara wants to buy a bond and hold it until it matures. Which of the following must occur if Lara is to realize a holding period return equal to the bond’s yield to maturity?
- She must reinvest all coupons to earn the yield to maturity.
- The issuer must not call the bond away early.
- The issuer must make all payments in full and on schedule.
- All of the above must occur.
Q2 | Bonds rated double A and higher are called:
- speculative grade bonds.
- supreme bonds.
- high-grade bonds.
- investment grade bonds.
Q3 | A top down analysis of a firm starts with ____________.
- the relative value of the firm
- the absolute value of the firm
- the domestic economy
- the global economy
Q4 | Studies of stock price reactions to news are called
- reaction studies.
- event studies.
- drift studies.
- both reaction studies and drift studies.
Q5 | __________ was the grandfather of technical analysis.
- Harry Markowitz
- William Sharpe
- Charles Dow
- Benjamin Graham
Q6 | The goal of the Dow theory is to
- identify head and shoulder patterns.
- identify breakaway points.
- identify resistance levels.
- identify long-term trends.
Q7 | A long-term movement of prices, lasting from several months to years is called _______.
- a minor trend
- a primary trend
- an intermediate trend
- trend analysis
Q8 | Two popular moving average periods are
- 90-day and 52 week
- 180-day and three year
- 180-day two year
- 200-day and 53 week
Q9 | Which of the following statements is false with respect to different features of an efficient market?
- Information arbitrage efficiency is said to exist, if the participants do not have any scope to reap abnormal profits using information that is of common knowledge
- Fundamental valuation efficiency is said to exist, if the price of an asset is neither undervalued nor overvalued
- Full insurance efficiency is said to exist, if participants can adopt hedging as an effective tool against possible risk in future
- Allocation efficiency is said to exist, if the market channelizes resources into projects where the marginal efficiency of capital adjusted for risk differences is lowest
Q10 | If security prices exhibits semi-strong form of efficiency, one will not gain if he
- Depicts the prices in the form of charts to identify pattern which will beat the market.
- Buys stock of a company which has declared a bonus issue or has gone for a stock split
- Refers to insiders’ advice
- Both (a) and (b) above.
Q11 | __________ 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
Q12 | The need to have an understanding about the ability of themarket to imbibe information into the prices has led to countless attempts to study and characterize the levels of efficiency of different segments of the financial markets.
- True
- False
- none
- all
Q13 | If the market is _______, the period after a favorable (unfavorable) event would not generate returns beyond (less than) what is suggested by an equilibrium model such as CAPM
- Semi strong form efficiency
- Weak-form efficiency
- Strong form efficiency
- none
Q14 | Markets are inefficient when prices of securities assimilate and reflect information aboutthem.
- True
- False
- none
- all
Q15 | Stock returns are generally expected to be independent across weekdays, but a number of studies have found returns on Monday to be lower than in the rest of the week. This departure from market efficiency is also sometimes called the _____ effect.
- Monday-Friday
- Weekday
- Monday
- Weekend
Q16 | Fundamental analysis focuses on predicting the future price of a security and Technical analysis on estimating the intrinsic value of a security.
- False
- True
- none
- all
Q17 | Which are the popular types of orders placed through an online trading account?
- Limit orders
- Market orders
- Stop loss order
- All of the above
Q18 | What are the features of line charts?
- It connects closing prices from one period to the next
- It connects low prices from one period to the next
- It connects high prices from one period to the next
- None of the above
Q19 | A ________ provides an account of the total revenue generated by a firm during a period(usually a financial year, or a quarter)
- Accounting analysis statement
- financial re-engineering statement
- promotional expenses statement
- profit& loss statement
Q20 | What is Bottom-Up approach also known as?
- Company-industry-economy approach
- Economy -industry-Company approach
- Industry-economy-Company approach
- Company -economy-industry approach
Q21 | The objective of fundamental analysis for a security in a market is to identify either it is:
- Under priced
- Over priced
- Both under priced and over priced
- None of the above
Q22 | The daily opening price is represented on a candlestick chart by the:
- channel.
- real body.
- trendline.
- shadow.
Q23 | This type of risk is avoidable through proper diversification.
- portfolio risk
- systematic risk
- unsystematic risk
- total risk
Q24 | A statistical measure of the degree to which two variables (e.g., securities' returns) move together.
- coefficient of variation
- variance
- covariance
- certainty equivalent
Q25 | An "aggressive" common stock would have a "beta
- equal to zero.
- greater than one.
- equal to one.
- less than one.