A form of the EMH which states that security prices fully reflect all relevant publicly available information is known as:

• A) Strong form
• B) Weak form
• C) Semi strong form
• D) None of the given options

Which of the following statement is TRUE about yield to maturity?

• A) Yield to maturity is always less than the yield to call
• B) Yield to maturity is inversely related to bond price
• C) Yield to maturity tends to fall with a rise in duration
• D) Yield to maturity will be less than the current yield for bonds purchased at a discount

If we segregate the Government bonds from bond issued by the institutions, this classification is on the basis of:

• A) Security behind the bond
• B) Nature of issuer
• C) Income stream
• D) Annuity stream

Which of the following bond will be more volatile to price changes?

• A) 10-year bond with 8% coupon rate
• B) 10-year bond with 6% coupon rate
• C) 10-year bond with 7% coupon rate
• D) 10-year bond with 5% coupon rate

Financial instrument whose return is derived from the return on another instrument is known as a (n):

• A) Fixed income security
• B) Derivative security
• C) Money market security
• D) Equity security

Which of the following is NOT a source of Return on Equity (ROE)?

• A) Book value per share
• B) Leverage
• C) Return on assets
• D) Sales per total assets

Which of the following is the point of difference between cash flow statement and income statement?

• A) Purchases
• B) All of the given options
• C) Cash items
• D) Non-cash items

Which of the following highlights expense control, asset utilization and debt utilization?

• A) Qualitative analysis
• B) Quantitative analysis
• C) DuPont analysis
• D) Financial modeling analysis

By which of the following analysis an investor could spot the degree to which a company is leveraged, or indebted?

• A) Security analysis
• B) Qualitative analysis
• C) Balance Sheet analysis
• D) Technical analysis

In top-down approach of fundamental analysis, investors begin their analysis with:

• A) Company
• B) Industry
• C) Market
• D) Economy

Which of the following is a non-cash item for company?

• A) Purchase of raw material on cash
• B) Depreciation
• C) Interest payment
• D) Dividend payment

Which of the following moves inversely to each other?

• A) Coupon rates and leverage ratios
• B) Interest rates and activity ratios
• C) Discount rates and P/E ratios
• D) Interest rates and debt to equity ratios

Return on equity depends on the product of all of the following, EXCEPT:

• A) Financial leverage
• B) Market value per share
• C) Total asset turnover
• D) Profit margin on sales

When inflation and interest rates are low, P/E ratios tend to be.

• A) Average
• B) Minimum
• C) Low
• D) High

In which of the following approaches of stock valuation, the capitalization of expected income is done?

• A) Communicative approach
• B) Present value approach
• C) Integrated eclectic approach
• D) Multiple of earnings approach

There is _________ relationship between P/E ratio and interest rates.

• A) Linear
• B) No
• C) Direct
• D) Inverse

What will be the effect on intrinsic value if the risk premium and required rate of return rises?

• A) It will rise
• B) It will fluctuate
• C) It will have no effect
• D) It will fall

Which of the following ratios measure, how a company finances its assets?

• A) Leverage ratio
• B) Price to sales ratio
• C) Debt coverage ratio
• D) Price to book value ratio

One of the main objectives of the income statement is to determine:

• A) Total cash outflow and inflow
• B) Debt and equity ratio of the company
• C) Profits or losses of company
• D) Total assets of the company

ARS Company’s total sales for the year 2009 are Rs.500,000. Sales returns are of Rs.50,000. What will be the value of net sales for the company?

• A) Rs.550, 000
• B) Rs.425, 000
• C) Rs.475, 000
• D) Rs.450, 000