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Question 1 of 25
1. Question
Investment is a risk free investment when
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Question 2 of 25
2. Question
Which of the following statements regarding riskaverse investors is correct?
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Question 3 of 25
3. Question
Responsibilities of portfolio manager include
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Question 4 of 25
4. Question
Which of the following measures the reward to volatility tradeoff by dividing the average portfolio excess return by the standard deviation of returns?
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Question 5 of 25
5. Question
What is the expected return of a zerobeta security?
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Question 6 of 25
6. Question
_____________is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories
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Question 7 of 25
7. Question
Which model predicts that all investors will hold the same portfolio in equilibrium?
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Question 8 of 25
8. Question
A Portfolio manager can hedge a share portfolio by
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Question 9 of 25
9. Question
Which of the following statements is correct according to the theory of arbitrage?
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Question 10 of 25
10. Question
XYZ company has an expected ROE of 10%. The dividend growth rate will be __________ if the firm follows a policy of paying 20% of earnings in the form of dividends.
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Question 11 of 25
11. Question
Capital gain is subtracted from return to stockholders to calculate
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Question 12 of 25
12. Question
In general, the value of an option rises when expected interest rates volatility increases. Whch type of bond is an exception for this
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Question 13 of 25
13. Question
The __________strategy is highly suitable for people who are experienced in the field and have a highrisk appetite.
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Question 14 of 25
14. Question
According to the TreynorBlack model, the weight of a security in the active portfolio depends on the ratio of __________ to __________.
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Question 15 of 25
15. Question
______________is a statistical measurement of dispersion around an average, which, for an investment, depicts how widely the returns varied over a certain period. It is the average distance from the mean of a sample. More specifically, it represents a dispersion of returns from the mean
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Question 16 of 25
16. Question
This type of risk is not specific to a particular company or industry, and it cannot be eliminated or reduced through diversification; it is just a risk that investors must accept.
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Question 17 of 25
17. Question
In regression of capital asset pricing model, an intercept of excess returns is classified as
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Question 18 of 25
18. Question
The asset allocation which seeks to take advantage of short term movements and opportunities in investment markets is called
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Question 19 of 25
19. Question
Historically, P/E ratios have tended to be
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Question 20 of 25
20. Question
Growth in earnings per share is primarily resultant of growth in
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Question 21 of 25
21. Question
Which of the following must be stated in terms of expected returns and risk. An investor’s tolerance for risk must be established before returns objectives can be stated?
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Question 22 of 25
22. Question
Calculating effective duration consider a 20year, semiannualpay bond with an 8% coupon that is currently priced at Rs 908.00 to yield 9%. If the yield declines by 50 basis points (to 8.5%), the price will increase to Rs 952.30, and if the yield increases by 50 basis points (to 9.5%), the price will decline to Rs 866.80. Based on these prices and yield changes, calculate the effective duration of this bond.
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Question 23 of 25
23. Question
Jatin purchased a stock for Rs 2,000. He paid a commission fee to his broker amounting to Rs 15. Therefore, the cost basis of John is Rs 2,015 (Rs 2,000 + Rs 15). Jatin sold the stock for Rs 3,000. Again he paid his broker a commission of Rs 15. Therefore, his net proceeds are Rs 2,985 (Rs 3,000 – Rs 15). He was also paid dividends amounting to Rs 100. Therefore, the simple return of the investment is:
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Question 24 of 25
24. Question
Mr. Charan has a portfolio with 25 different equities. The portfolio beta is 1.2. By what percentage should the market move so that the expected return from his portfolio is 18% using the Capital Asset Pricing Model Approach(CAPM)? Risk free rate is 5.5%
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Question 25 of 25
25. Question
Mr. Sharma wants to achieve the goal of education of his son after 5 years. The funds required would be Rs.15,00,000 in today’s terms. He wants to invest monthly for the goal. You suggest an asset allocation strategy where he should invest monthly in equity and debt in ratio 60:40. What approximate amount per month is required to be allocated to equity and debt schemes?(Assume inflation rate 6%, Equity returns 12% and Debt returns 8%).
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