Which of the financial asset is NOT easily convertible into cash?

• A) Saving account
• B) Money market deposits
• C) Swaps
• D) Deposit certificates

Capitalization weighting must be adjusted for changes in all of the following, EXCEPT:

• A) Share repurchases
• B) Index components
• C) Primary stock offerings
• D) Total personal values

Which of the following has duration equal to its maturity?

• A) A 7 year bond with 3%coupon
• B) A 5 year bond with 6% coupon
• C) A zero-coupon bond
• D) A 10 year bond with 5% coupon

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