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
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
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
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
Ques. Inflation risk is also known as.
(a) Market risk
(b) Interest rate risk
(c) Purchasing power
(d) Regulation risk
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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
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.
Ques. These are the market risks that cannot be diversified.
(a) Systematic risk
(b) Unsystematic risk
(c) Counterparty risk
(d) None of the above
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
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
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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
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
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
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
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
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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
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
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.
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
Ques. Projected earnings growth is calculated by dividing current price of stock by __
(a) dividend
(b) earnings per share
(c) net income
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Ques. Basic objective of diversification is
(a) Increasing Return
(b) Maximising Return
(c) Decreasing Risk
(d) Maximizing Risk
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
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
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
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
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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
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
Ques. Which of the following is not used for long term financial needs?
(a) Equity Shares
(b) Preference Shares
(c) Debentures
(d) Trade Credit
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
Ques. Stock split is a form of
(a) Dividend Payment
(b) Bonus Issue
(c) Financial restructuring
(d) Dividend in kind
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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
Ques. FTSE is the stock exchange index of __
(a) New York
(b) Tokyo
(c) London
(d) Hong Kong
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
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
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
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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
Ques. In capital markets, major suppliers of trading instruments are
(a) government and corporations
(b) liquid corporations
(c) instrumental corporations
(d) none of these
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
Ques. The return of the share holder is __
(a) dividend
(b) rate of interest
(c) discount rate
(d) all of these
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
Ques. Where is Nasdaq headquarters?
(a) Mumbai
(b) New York
(c) Washington DC
(d) Los Angeles
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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
Ques. Capital market is the market for __
(a) long term assets
(b) short term assets
(c) medium term assets
(d) all of these
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
Ques. Making profit out of differences in prices of securities in two different markets is called __
(a) Dumping
(b) Swap
(c) Arbitrage
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
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
Ques. The best suited fund to business is __
(a) Income fund
(b) growth fund
(c) taxation fund
(d) no fund
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Ques. Market dealing with government securities is __
(a) gilt-edged
(b) share market
(c) primary market
(d) wholesale market
Ques. Market for extremely short period is __
(a) Money market
(b) Mutual fund market
(c) call money market
(d) all of these