SNS College of Technology
Coimbatore – 35
Department of Management Studies
Staff In-Charge : Dr. V. Prabakaran & [Link] P Remesh
Course : 16BA708 - Investment Management
Semester : III Class : II MBA
Academic Year : 2019 - 2020 - Odd Semester
Multiple Choice Questions
Unit IV : Technical Analysis
Topic : Portfolio Construction
1 The common practise in the traditional approach of portfolio construction is
a To evaluate the entire stock market
b To maximise the expected return for a given level of risk
c To evaluate the entire financial plan of the individual
d To select the portfolios
Ans : c
An investor is having a portfolio with the combination of stock and bonds in the ratio of
2
75:25. He is
a risk averse
b risk neutral
c a risk taker
d active in portfolio management
Ans : c
3 Diversification reduces
a interest rate risk
b market risk
c unique risk
d inflation risk
Ans : c
4 The NSE Nifty index fund consists of
a The Stocks of high market capitalisation in NSE
b Blue chip companies' stocks of the index
c All the stocks of the Nifty index
d Consists 90% of the stocks of the index leaving stocks of lesser importance
Ans : c
1
Unit IV : Technical Analysis
Topic : Portfolio Selection
1 In the active approach the investor continuously studies
a group related risk
b market related risk
c security specific risk
d all above
Ans : d
2 The buying and selling activities of the arbitrageur
a Increases the profit
b Brings equilibrium level
c Creates disequilibrium
d Reduces the profit margin
Ans : b
3 Passive management is a process of holding a well-diversified portfolio for
a Short term with buy and hold approach
b Long term with buy and hold approach
c Short term with buy and sell approach
d Long term with buy and sell approach
Ans : b
4 In the rupee cost averaging plan when the stock prices are low
a A prefixed amount is spent on shares
b Higher amount of money is allocated to shares
c Lower amount of money is allocated to shares
d More money is spent on bonds
Ans : a
Unit IV : Technical Analysis
Topic : Portfolio Evaluation
1 On the capital market line lies
a All the efficient and inefficient portfolios
b only the efficient portfolios
c All the efficient portfolios and securities
d All portfolios and securities
Ans : b
The security market line's first point is riskless asset with a beta of zero and the second
2
point on the line is beta of
a 1
b 1.5
c 2
d 0.5
Ans : a
2
3 The security market line describes the expected return for
a The efficient portfolio
b The inefficient portfolio
c All portfolios and assets
d The efficient and inefficient portfolios
Ans : c
4 The stock above the security market line is
a Overpriced
b Underpriced
c Appropriately priced
d Of high risk
Ans : b
5 Market imperfections may lead to
a Lower SML
b Higher SML
c Band of SML
d Non linear SML
Ans : c
Unit IV : Technical Analysis
Topic : Mutual Fund
The number of inputs required for a portfolio analysis involving N no of securities in
1
sharpe model is
a 3N+3
b 3N+5
c 3N+1
d 3N+2
Ans : d
2 The mutual funds that are listed in the stock exchanges are
a Closed end funds
b Stock indexed funds
c Open end funds
d Growth Schemes
Ans : a
3 The investors by investing in the mutual funds get
a Professional Management
b Diversification
c Return potential
d All the above
Ans : d
4 The Sharpe index assigns the high value to funds that have
a Low Standard deviations
b Higher returns
3
c Higher risk adjusted returns
d Higher risk premium
Ans : c
5 According to Treynor index, a steep slope would indicate
a The fund is yielding higher returns
b The fund's volatile return
c The fund is sensitive to the market
d The fund is not sensitive to the market
Ans : c
6 In the Treynor index, the performance of the fund depends on
a The riskless rate of return
b The risk premium and standard deviation of funds return
c The risk premium and beta coefficient
d The risk premium and the standard deviation
Ans : c
7 Jensen's performance index gives importance
a To the asset combination
b Professional Management
c The market condition
d The predictive ability of the manager
Ans : d
Unit IV : Technical Analysis
Topic : Dow Theory
1 Dow theory was developed to explain
a New york stock market movement
b The Dow Jones Industrial averages
c Security market price improvement
d The buy and sell strategy
Ans : b
2 Violation of a trend line means
a Moving away from the trend line
b Changing the direction
c Penetration of the trend line
d Cutting the rising trend line from above
Ans : c
According to the Dow Theory, daily fluctuations and secondary movements in the
3
stock market are used to identify the
a primary trend
b intermediate trend
c short-term trend
d seasonal pattern
Ans : a
4
4 Which of the following is not true regarding the Dow theory
a It is intended to forecast the start of a primary movement
b It does not forecast how long a movement will last
c It has a very high success rate
d It is subject to many criticisms
Ans : c
