Q1.
(I) Debt investors are owners of the business.
(II) Equity investors are lenders to the business.
Q2.
(I) Equity investors enjoy a fixed return or return of principal invested.
(II) Debt investors earn a fixed rate of interest and return of principal at maturity.
Q3.
The share of profits that is not distributed to shareholders is known as retained profits.
Q4.
(I) If the intrinsic value is perceived to be more than market value, the scrip is said to be overvalued.
(II) If the intrinsic value is perceived to be less than market value, the scrip is said to be undervalued.
Q5.
Intrinsic value of an equity share means:
Q6.
(I) Buy-side research is done by institutional investors.
(II) Sell-side research is done by broking houses.
Q7.
Which of the following is ranked last both in terms of profit sharing and receiving liquidation proceeds:
Q8.
Analysts estimate that the intrinsic value of an equity share is Rs.45. The share is quoting for Rs.50 in the market. Then we can say that the share is
Q9.
The reserves of a company rightfully belong to
Q10.
(I) Fundamental Analysis is a study of the financial statements and information pertaining to a stock, to estimate the future potential.
(II) Technical Analysis involves studying the price and volume patterns to understand how buyers and sellers are acting on existing price information.
Q11.
Earnings per share are the profit after taxes divided by the number of shares.
Q12.
If the market price per share is Rs. 5 and book value per share is Rs.10, what is Price to Book Value (PBV) ratio?
Q13.
If the share is trading in the stock market for a price of Rs.200 per share, company declared dividend of Rs.4 per share with a face value of Rs.10, what will be the dividend yield?
Q14.
If the price of equity shares moves up, the dividend yield also moves up.
Q15.
If a company has 50 numbers of shares with a face value of Rs.10 and the company earned a profit of Rs.10000 after taxes, what will be the Earnings per share?
Q16.
A bond is issued at a face value of Rs.100 and a coupon of 10% p.a. The interest rates in the market have increased subsequently. This bond is likely to quote at:
Q17.
(I) Top down approach begins at stock selection based on the business potential and its ratification by examining industry and macro indicators.
(II) Bottom up approach begins at macro factors and identifies sectors and stocks based on the identification of macro trends.
Q18.
Equity Investment can be evaluated by:
Q19.
Zero coupon bonds are also known as deep discount bonds.
Q20.
If a bond paying an annual coupon of 15% is trading in the markets for Rs.112.50, what will be the current yield?
Q21.
The rate which equates the present value of future cash flows from a bond with the current price of the bond is called the Yield to Maturity(YTM) of the bond.
Q22.
(I) A debenture holder is a debtor of the company.
(II) A debenture is usually secured on the assets of the company.
Q23.
If a company issues 1,000 equity shares of face value Rs.5 each, then what will be the equity capital?
Q24.
Which of the following is a method of valuation of equity shares?
Q25.
What is the net worth of a company?
Q26.
The members who invest in the company’s equity shares at a later stage in order to fund its subsequent expansions and operations, are called promoters.
Q27.
Analysts estimate that the intrinsic value of an equity share is Rs.100. The share is quoting for Rs.80 in the market. Then the share is called
Q28.
Which of the following key factor/factors should be considered when deciding on raising funds through equity or debt capital?
Q29.
(I) Equity analysis is to determine whether to buy or sell a stock at a given price.
(II) Equity valuation is to establish the fundamental reasons for investing in the particular stock.
Q30.
Which of the following are source/sources of information for equity analysis?
Q31.
The framework which is a simple description of the process of Equity analysis.
Q32.
Which of the following statement/statements is true?
Q33.
Dividend is declared as a percentage of the face value of the shares.
Q34.
(I) The higher the discount rate or yield, the higher the present value.
(II) The further ahead in future the cash flow is, the lower its present value.
Q35.
The basic feature/features of a debt instrument is:
Q36.
A debt security denotes a contract between the issuer and the lender.
Q37.
Which of the following statement/statements is correct?
Q38.
(I) A puttable bond gives the investor the right to seek redemption from the issuer before the original maturity date.
(II) Amortizing bonds are those in which the principal is repaid at the end/maturity.
Q39.
Debt instruments can be classified in two broad ways:
(I) By type of borrower
(II) By tenor/maturity of the instrument
Q40.
The Treasury Bills are issued for maturities of:
Q41.
A Collateralized Borrowing and Lending Obligation (CBLO) is an instrument used to lend and borrow for short periods, typically one to three days.
Q42.
(I) A repo is a transaction in which one participant borrows money at a pre-determined rate against the collateral of eligible security for a specified period of time.
(II)G-secs are issued through an electronic auction system managed by the Reserve Bank of India.
Q43.
If today’s Rs.10,000 is placed in a 2 year bank deposit earning simple interest of 12%, then what will be worth at the end of 2 years?
Q44.
Which of the risk/risks are relevant when investing in Debt Securities?
Q45.
A bond that promises 7% coupon over a 3 year tenor is a good investment only if inflation is below 7% over that period.
Q46.
(I) There is an inverse relationship between yield and price of a bond.
(II)Default risk is higher for secured debt.
Q47.
Which is not relevant when choosing between Debt and Equity
Q48.
(I) Call risk exists in puttable debt securities.
(II)Convertible debentures are debt instruments that can be converted into equity shares of the company at a future date.
Q50.
FCCBs are regulated by:
Q51.
Which of the following step/steps are involved in Equity Investment process?
Q52.
There are two notions of value in equity investing- intrinsic value and market price
Q53.
(I) Lenders do have directly control the management of a company.
(II)Interest to lenders is paid before taxes and before any distribution to equity investors.
Q54.
The process of distributing savings between equity and debt is known as Asset Allocation.
Q55.
(I) A bull market will be marked by falling dividend yields, as prices move up.
(II)A bear market will have a relatively higher and increasing dividend yields as prices tend to fall.
Q56.
The most popular commercial paper (CP) is:
Q57.
Government securities also called treasury bonds.
Q58.
(I) Tax-free bonds are mainly issued by PSUs in the infrastructure sector.
(II)Capital gains bonds are issued by National Highway Authority of India.
Q59.
Higher the credit rating, higher the credit spread and higher the rate which bonds can be issued.
Q60.
A rupee in hand today is more valuable than a rupee obtained in future.
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