Unit – 3 Quiz

The return expectation on investments can be the amount received as

Financial products can be classified in terms of their

Non-marketable financial products includes

In which of the following cases deposit is split into units of smaller amounts for accounting purposes?

In a government company the holdings of Central Government should not be less than

What is an upward movement of prices following a decline, the opposite of a reaction?

Which of the following presents, where the current prices of securities fully reflect according to the available information about that security in an instantaneous and unbiased manner?

If market price of a share is Rs.45/-, and EPS is Rs.5, then P/E is

NIPS Ltd. paid dividends Rs.9/- per share and whose shares market price Rs.54/-. Then dividend yield will be

If a company paid out Rs.4/- per share in annual dividends and had Rs.10/- in EPS, the Dividend Payout Ratio would be

What type of bonds are issued at discount and redeemed at par and the difference between the face value and the purchase price is the return for an investor?

Calculate the yield on a long term government security using the following information
Bond default premium 0.72%
Yield on corporate bond = 11.2%

What is the interest rate that investors would receive if they held the bond until put date?

Fixed Income securities offer one of the most attractive investment opportunities with regard to

Which of the following sequences lists financial assets from lowest expected return to highest expected return?

Which of the following provides income that is fully exempt from taxation for the individual investor?

Which of the following is not an advantage of investing in bonds?

What type of mutual fund scheme does REMFs is, that invests only in real estate?

Which of the following funds provide investors with combined benefits of a open ended and close ended mutual funds?

Which of the following fund is associated with the highest risk?

Gilt Funds invest only in

The maximum load that a fund can charge is determined by the

It is often difficult to determine ownership rights of personal property because personal property can

The words “time, title, interest, and possession” are most likely related to which of the following concepts?

Closed-end funds have lower cash requirements than open-end funds because

Which of the following mutual funds solely invests in stocks?

Which one of the following statements regarding closed-end mutual funds is false?

Which of the following functions do investment companies perform for their investors?

Pools of money invested in a portfolio that is fixed for the life of the fund are called

The buyer of the PUT option has

A Trader can close a long position in a put option by

Forward contracts are of limited usefulness to financial institutions because

The price specified on an option that the holder can buy or sell the underlying asset is called

Elimination of riskless profit opportunities in the futures market is

After attaining __________ age of the girl child, Parents can not able open a Sukanya Samvridhi Account.

Parents can open maximum of how many accounts for each of their children

What is the minimum amount must be deposited in Sukanya Samvridhi Scheme initially?

The amount (Principal) invested in Kisan Vikas Patra would get doubled in how many months

To avail the facility of Cheque in Savings Account in Post office, what minimum amount is required to get open an account?

An alternative investment is an investment product other than the traditional investments of

An alternative investment is a relatively loose one and includes tangible assets such as

Of all the precious metals, ____________ is most popular as an investment.

What is minimum quantity of gold that can be subscribed under the Sovereign Gold Bond Scheme?

What is the maximum quantity of gold that can be issued to trust?

After how many years from the date of issue of the bond, the early redemption of bond is allowed?

If you invest Rs. 100 today, You will receive Rs. 25 after one year, Rs. 50 after second year, Rs. 25 after third year, Rs. 50 after fourth year. What is the Pay Back Period?

Mr. Y is into 30% tax bracket wants to invest one lakh rupees. ROI is 10%. What is the return he will get after taxation

What is the method of offering shares to investors in which the issue price is not fixed in advance but is determined through a bidding process?

Once the bidding period is over, who ascertains the demand function and decides the issue price and the pattern of allocation in consultation with the issuer?

Which is similar to the two-stage DDM model except that a gradual change in the growth rate is assumed rather than a sudden change?

Presently the trades pertaining to the rolling settlement are settled on a

A 5 year 7.5% semiannual coupon bond is currently priced at Rs.100. The face value of the bond is Rs.100. Calculate duration of the bond.

A T-bill with 91 days to maturity might be quoted at a price of Rs. 99.1763 per Rs. 100/-. T-bill is quoted as 365 days yield. The yield of this T-bill will be

In home loans, borrower should pay the EMI’s and in the meanwhile loan amount reduces and the home equity will increase but in case of reverse mortgage who would pay the EMI’s

What type of investment have the following characteristics and these distinguish it from other investments
(I) Illiquidity
(II) Management Burden
(III) Government Controls
(IV) Government Charges
(V) Lack of Information

What’s the value to you of a $1,000 face-value bond with an 8% coupon rate when your required rate of return is 15 percent?

If the intrinsic value of a stock is greater than its market value, which of the following is a reasonable conclusion?

When the market’s required rate of return for a particular bond is much less than its coupon rate, the bond is selling at

The AMFI code of ethics does not cover the following prescriptions

The Expense Ratio as a measure of a fund’s performance is defined by a fund’s

An AMC cannot explain adverse variations between expense estimates for the scheme on offer and actual expenses for past schemes in

Concerning real property, a joint tenancy interest and a community property interest are alike in which of the following ways?

A contract of sale states that the earnest money deposit is to be placed in an interest-bearing account with any interest earned to be given to the buyer. This is

What is a type of intermediary that pools the funds of the investors who seek the same general investment objective and invests them in a number of different types of financial claims?

What is a pool of money, which is collected from many investors and is invested by an asset management company to achieve some common objectives of the investors?

Which of the following characteristics apply to unit investment trusts?
(I) Most are invested in fixed-income portfolios.
(II) They are actively managed portfolios.
(III) The sponsor pools securities, then sells public shares in the trust.
(IV) The portfolio is fixed for the life of the fund.

Of the following types of mutual funds, an investor that wishes to invest in a diversified portfolio of stocks worldwide (including the U.S.) should choose

A mutual fund had average daily assets of $3.0 billion in 2009. The fund sold $600 million worth of stock and purchased $700 million worth of stock during the year. The fund’s turnover ratio is

A mutual fund had average daily assets of $4.0 billion in 2009. The fund sold $1.5 billion worth of stock and purchased $1.6 billion worth of stock during the year. The fund’s turnover ratio is

A type of contract in which contract holder has right to sell an asset at specific period for predetermining price is classified as

When a financial institution hedges the interest-rate risk for a specific asset, the hedge is called a

If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by

15, and at expiration the market price is 120

If you buy a put option on treasury futures at 120, and at expiration the market price is 115

In case of a Savings Account in Post Office, what maximum amount of interest earned per year on deposited money is tax free

What is the maximum deposit allowed under National Savings Certificates (NSC) Scheme (5 years short term)?

Which deposit account is for individuals to save money and earn the modest interest for that money held in the account?

Compared to investors with long investment time horizons, investors with short investment time horizons most likely require

A firm can borrow at an interest rate of 10%. Its marginal tax rate is 40%. What is its cost of debt?

Which of the following sources of funds for capital investment involves a tax adjustment to determine the cost of capital?

Mr. X has purchased a plan in which he is paying Rs. 5000 p.a. for first five years then Rs. 10,000 p.a. for next three years after that Rs. 2,000 p.a. for two years. He will get Rs. 5,00,000 after twenty years from now. Calculate the yield/ IRR of this plan

Ms. Shilpa currently holding one lakh equity shares of XYZ Ltd. Right shares have been issued in the ratio of 2:5 @ Rs. 10 per share, Ms. Shilpa renounces 50% of right shares to Ms. Kavya @ Rs.2 per share. Calculate the cost of equity shares to Ms. Shilpa.

Calculate the yield on a long term corporate bond having some probability of default if its bond default premium and the return on long term government paper are 0.72% and 9.50% respectively.

Virgo Airlines will pay a $4 dividend next year on its common stock, which is currently selling at $100 per share. What is the market’s required return on this investment if the dividend is expected to grow at 5% forever?

Real estate professionals have long supported strict standards of ethics and practice. Followed by all states and federal regulatory agencies, which of the following imposes ethical obligations and minimum standards that must be followed by all real estate professionals providing formal estimates of market value?

Growth Fund had year-end assets of $862,000,000 and liabilities of $12,000,000. There were 32,675,254 shares in the fund at year-end. What was Growth Fund’s Net Asset Value?

Pinnacle Fund had year-end assets of $825,000,000 and liabilities of $25,000,000. If Pinnacle’s NAV was $32.18, how many shares must have been held in the fund?

The Profitability Fund had NAV per share of $17.50 on January 1, 2009. On December 31 of the same year the fund’s NAV was $19.47. Income distributions were $0.75 and the fund had capital gain distributions of $1.00. Without considering taxes and transactions costs, what rate of return did an investor receive on the Profitability fund last year?

Suppose you sell a call and buy one share of stock. What is your cash payoff when the option expires?

Assume you are holding Treasury securities and have sold futures to hedge against interest rate risk. If interest rates fall

Suppose you expected all interest rates to rise in the future, but long-term rates to rise more than short-term rates. Then a cash management strategy might invest a relatively larger percentage of total cash assets in

Which scheme is a popular long term investment option backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from Tax?

A company’s $100 par perpetual preferred stock has a dividend rate of 7 percent and a required rate of return of 11 percent. The company’s earnings are expected to grow at a constant rate of 3 percent per year. If the market price per share for the preferred stock is $75, the preferred stock is most appropriately described as being

An investor purchases a 1-month out-of-the-money American call option on a stock. A week later, the stock price is less than the call option strike price. The time value of the option is most likely