Investing Quiz with Answers

investment quiz

Investment Management Quiz:

Test your Knowledge about Investment Market, options, capital market and fundamentals of Investment Banking

Ques. What correctly describe “Sovereign Wealth Funds”.?
(A) These are the funds or the reserves of a government or central bank of a country which are invested further to earn profitable returns.
(B) These are the funds which were accumulated by some people over the years but were not put in active circulation as they retain them as Black Money for several years.
(C) The funds which are created to be used as relief funds or bailout packages are known as sovereign funds.
(a) Both B & C only
(b) Only B
(c) Only C
(d) Only A

Ans. (d)

Ques. The variability in a security’s returns resulting from fluctuations in the aggregate market is known as:
(a) Market risk
(b) Interest rate risk
(c) Purchasing power risk
(d) Regulation risk

Answer. (a)

Ques. Which of die following is not a criterion to select the Investment Bankers ?
(a) No professional memberships or incorporations are required
(b) General reputation in the market
(c) Good rapport with market intermediaries.
(d) Distribution network of the organization

Ans. (a)

Ques. ‘Stock Exchanges’ play a role in an economy which may be termed as __
(a) hardly useful
(b) useful but need strict regulation
(c) harmful to proper capital markets
(d) a gambling-where many investors get ruined a very Important segment to regulate inflation

Ans. (b)

Ques. Inflation risk is also known as.
(a) Market risk
(b) Interest rate risk
(c) Purchasing power
(d) Regulation risk

Answer. (c)

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Ques. Which of the following cannot be called a Debt Instrument as referred in financial transactions?
(a) Certificate of Deposits
(b) Bonds
(c) Stocks
(d) Commercial Papers

Ans. (c)

Ques. Which of the following types of accounts are known as ‘Demat Accounts’ ?
(a) Accounts which are Zero Balance Accounts.
(b) Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there.
(c) Accounts in which shares of various companies are traded in electronic form.
(d) Accounts which are operated through internet banking facility.

Ans. (c)

Ques. These are the market risks that cannot be diversified.
(a) Systematic risk
(b) Unsystematic risk
(c) Counterparty risk
(d) None of the above

Answer. (a)

Ques. If the intrinsic value of a share is less than the market price, which of the most reasonable?
(a) That shares have lesser degree of risk
(b) That market is over valuing the shares
(c) That the company is high dividend paying
(d) That market is undervaluing the share

Ans. (b)

Ques. These are instruments, which give a fixed rate of interest for a fixed period of maturity.
(a) Debts
(b) Equities
(c) Mutual fund
(d) Virtual office

Answer. (a)

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Ques. Investments made on a house property is a
(a) financial investment
(b) economic investment
(c) non negotiable financial investments
(d) non financial investments

Answer. (d)

Ques. In a company, the use of price-sensitive corporate information by the company people to make gains or cover losses is known as
(a) Insider trading
(b) Future trading
(c) Foreign trading
(d) Stock trading

Ans. (a)

Ques. Which of the following helps analyzing return to equity Shareholders?
(a) Return on Assets
(b) Earnings Per Share
(c) Net Profit Ratio
(d) Return on Investment

Ans. (b)

Ques. These are instruments, which give a fixed rate of interest for a fixed period of maturity.
(a) debts
(b) equities
(c) mutual funds
(d) virtual office

Answer. (a)

Ques. MCX is the index of which of the following stock exchanges?
(a) Hong Kong Stock Exchange
(b) Bombay Stock Exchange
(c) Crypto Exchange
(d) Multi Commodity Stock Exchange

Ans. (d)

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Ques. Which of the following is a non-depository institution ?
(a) Credit unions
(b) Commercial banks
(c) Mutual funds
(d) Regional rural banks

Ans. (c)

Ques. An investor becomes the owner of a company to the extent of the capital invested by him
(a) debts
(b) equities
(c) mutual fund
(d) virtual office

Answer. (b)

Ques. Which of the following types of accounts are known as ‘Demat Accounts’ ?
(a) Accounts which are Zero Balance Accounts.
(b) Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there.
(c) Accounts in which shares of various companies are traded in electronic form.
(d) Accounts which are operated through internet banking facility.

Ans. (c)

Ques. Capital market is a market for
(a) Short term funds and short term investments
(b) Short term funds and long term investments
(c) Long term funds and short term investments
(d) Long term funds and long term investments

Ans. (d)

Ques. Projected earnings growth is calculated by dividing current price of stock by __
(a) dividend
(b) earnings per share
(c) net income

Answer. (b)

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Ques. Basic objective of diversification is
(a) Increasing Return
(b) Maximising Return
(c) Decreasing Risk
(d) Maximizing Risk

Ans. (c)

Ques. What is the name of the system whereby a number of persons subscribe to an in­vested fund which becomes the property of the last survivor?
(a) Mutual fund
(b) Tontine
(c) Lotto
(d) Roulette

Ans. (b)

Question: Which of the following is the correct description of the Capital Market ? Capital Market comprises of—
(a) Stock Markets and Bond Markets
(b) Banks and Insurance Companies
(c) Central Bank and Banks
(d) Stock Markets and Banks

Ans. (a)

Question: Which of the following is not considered a money market instrument ?
(a) Treasury Bills
(b) Repurchase Agreement
(c) Commercial Paper
(d) Shares and Bonds

Ans. (d)

Ques. Ratio of Net Income to Number of Equity Shares known as:
(a) Price Earnings Ratio
(b) Net Profit Ratio
(c) Earnings per Share
(d) Dividend per Share

Ans. (c)

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Ques. The availability of cash and other cash like marketable instrument that are useful in purchases and investments are commonly known as
(a) Cash crunch
(b) Liquidity
(c) Credit
(d) Market ability

Ans. (c)

Ques. Which of the following is not a criterion to select the Investment Bankers ?
(a) No professional memberships or incorporations are required
(b) General reputation in the market
(c) Good rapport with market intermediaries.
(d) Distribution network of the organisation
(e) None of these

Ans. (a)

Ques. Which of the following is not used for long term financial needs?
(a) Equity Shares
(b) Preference Shares
(c) Debentures
(d) Trade Credit

Ans. (d)

Ques. The process of the total valuation of the financial assets of a company is technically known as
(a) Market capitalization
(b) Gross Domestic Product
(c) Net wealth of the country
(d) Gross Domestic Resources

Ans. (a)

Ques. Stock split is a form of
(a) Dividend Payment
(b) Bonus Issue
(c) Financial restructuring
(d) Dividend in kind

Ans. (c)

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Ques. The real return to the investor sometimes gets reduced due to sudden rise in the prices of the commodities. This phenomenon in financial market is known as ____
(a) Market risk
(b) Inflation risk
(c) Credit risk
(d) Diversification of funds

Ans. (b)

Ques. FTSE is the stock exchange index of __
(a) New York
(b) Tokyo
(c) London
(d) Hong Kong

Ans. (c)

Ques. Which statement is correct in context to primary market?
(a) Investor can buy and sell securities throughout the year
(b) It deals with the securities already offered
(c) It has physical existence
(d) It provides funds directly to the corporate world

Ans. (d)

Ques. Barter cannot function well
(a) because goods are not always divisible
(b) because transaction costs are minimal
(c) because goods are always standardized
(d) none of these

Ans. (a)

Ques. Which of the following is the correct definition of “Hot Money” ?
1. This is the fund which is dumped into a country to get the advantage of a favourable interest rate and hence brings higher returns.
2. This is the fund which is provided by a bank in US $ at very short notice and at a very high rate of interest and for a longer period of repayment.
3. This is the fund which is pushed into market through Hawala or some other such illegal methods and sometimes referred also as Black Money.
(a) Only 1 is correct
(b) Both 1 and 2 are correct
(c) Only 3 is correct
(d) Both 1 and 3 are true

Ans. (a)

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Ques. The oldest Stock Exchange of Asia is
(a) Bombay Stock Exchange
(b) Calcutta Stock Exchange
(c) Tokyo Stock Exchange
(d) Dhaka Stock Exchange

Ans. (a)

Ques. In capital markets, major suppliers of trading instruments are
(a) government and corporations
(b) liquid corporations
(c) instrumental corporations
(d) none of these

Ans. (b)

Ques. Which street is famous for Stock Exchange Marketing?
(a) Fleet street, London
(b) Downing street, London
(c) Wall street, New York
(d) Broadway, New fork

Ans. (c)

Ques. The return of the share holder is __
(a) dividend
(b) rate of interest
(c) discount rate
(d) all of these

Ans. (a)

Ques. Which one of the following is correctly matched?
(a) Bombay Stock Exchange-SENSEX
(b) National Stock Exchange-NYSE
(c) New York Stock Exchange-NIFTY
(d) London Stock Exchange-NIKKE

Ans. (a)

Ques. Where is Nasdaq headquarters?
(a) Mumbai
(b) New York
(c) Washington DC
(d) Los Angeles

Ans. (a)

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Ques. Offer for sale method is also known as __
(a) sale out deals
(b) Bought out deals
(c) credit deals
(d) day deals

Ans. (b)

Ques. Capital market is the market for __
(a) long term assets
(b) short term assets
(c) medium term assets
(d) all of these

Ans. (a)

Ques. In a company, the use of price-sensitive corporate information by the company people to make gains or cover losses is known as
(a) Insider trading
(b) Future trading
(c) Foreign trading
(d) Stock trading

Ans. (a)

Ques. Making profit out of differences in prices of securities in two different markets is called __
(a) Dumping
(b) Swap
(c) Arbitrage

Ans. (c)

Ques. In primary markets, property of shares which made it easy to sell newly issued security is considered as
(a) increased liquidity
(b) decreased liquidity
(c) money flow
(d) None of these

Ans. (a)

Ques. The Great Depression began with which incident?
(a) Strike of the Workers
(b) Looting of banks
(c) Plunder of Banks
(d) The Wall Street Crash

Ans. (d)

Ques. The best suited fund to business is __
(a) Income fund
(b) growth fund
(c) taxation fund
(d) no fund

Ans. (b)

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Ques. Market dealing with government securities is __
(a) gilt-edged
(b) share market
(c) primary market
(d) wholesale market

Ans. (a)

Ques. Market for extremely short period is __
(a) Money market
(b) Mutual fund market
(c) call money market
(d) all of these

Ans. (c)

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MBA from one of the best universities, Vishal is our marketing guy with experience of 10+ years. He always inspires and empowers to explore more about in-depth topics in marketing, sales and entrepreneurship.

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