Question:

The __________ is the indicated dividend divided by the closing price of the stock.

A.

Income

B.

Share

C.

Yield

D.

Earning

Answer» b. Share

Question:

REITs stand for

A.

Real estate investment trades

B.

Real estate investing trades

C.

Real estate investment trusts

D.

Real estate investment trusts

Answer» c. Real estate investment trusts

Question:

Shares which are not affected by market movements are known as:

A.

Offensive shares

B.

Growth shares

C.

Defensive shares

D.

Income shares

Answer» c. Defensive shares

Question:

If a firm’s beta was calculated as 0.6 in a regression equation, Merrill Lynch would state the adjusted beta at a number

A.

Less than 0.6 but greater than zero.

B.

Between 0.6 and 1.0.

C.

Between 1.0 and 1.6.

D.

Greater than 1.6.

Answer» b. Between 0.6 and 1.0.

Question:

Which of the following is not a test of semi-strong form efficiency?

A.

stock splits.

B.

accounting changes.

C.

dividend announcements.

D.

insider transactions.

Answer» d. insider transactions.

Question:

Systematic risk is higher when:

A.

α > 0.

B.

α < 0.

C.

α > 1.

D.

β > 1

Answer» a. α > 0.

Question:

The commission received by investment banker is known as

A.

Additive

B.

Differential

C.

Difference

D.

Increment

Answer» b. Differential

Question:

While bond prices fluctuate,

A.

yields are constant

B.

coupons are constant

C.

the spread between yields is constant

D.

short-term bond prices fluctuate even more

Answer» b. coupons are constant

Question:

Which of the following accounting statements form the backbone of financial analysis of a company?

A.

The income statement (profit & loss),

B.

The balance sheet

C.

Statement of cash flows

D.

All of the above

Answer» d. All of the above

Question:

Which of the following statements is/are not correct with respect to the ‘Constant Mix Strategies’ of asset allocation?I. Investors adopting these strategies tend to maintain an exposure to stocks that are in constant proportion of their wealth. II. The risk-tolerance level of the investors varies proportionately with the level of theirwealth. III. Reversals in stock markets oppose constant mix strategies over the buy and hold IV. strategies.

A.

Only (I) above

B.

Only (II) above

C.

Only (III) above

D.

Both (I) and (II) above

Answer» c. Only (III) above