Financial Education and Investment awareness

Module-2
INVESTMENT MANAGEMENT
1. The bonus commission given to LIC agents is the_______
a) Total of yearly commission
b) Average of 5 year commission
c) Percentage of 1year commission
d) Total of 3 average commission
Ans: c) percentage of 1year commission
2. As per IRDA guidelines the lock in period for ULTP is _______ years
a) 2
b) 3
c) 5
d) 10
Ans: c) 5
3. What is the supervisor level between the agents and branch office called.
a) Specified person
b) Development officer
c) Direct agents
d) Career agent
Ans: b) Development officer
4. Who is responsible for the deeds of agent in the eyes of common law?
a) The company
b) The principal
c) The insurer
d) The insured
Ans: b) The principal
5. Offering any concession to customer is illegal and is punishable under section
________of insurance act 1938.
a) 42
b) 41
c) 45
d) 47
Ans: b) 41
6. Broker is a mediator between the customer and the insurance company and charge
commission from the_______
a) Insured
b) Insurer
c) Re-insurer
d) Customer
Ans: b) iinsurer
7. Which of the following is not a private insurance company?
a) Oriental life insurance company
b) Life insurance corporation of India
c) Birla life insurance co.ltd
d) Reliance life insurance co.ltd
Ans: b) Life insurance corporation of India
8. If the company following the actual age method for determining the age of an individual
then in this case the company will calculate the
a) Age next birthday
b) Age last birthday
c) Age nearest birthday
d) Age on the day of commencement of public
Ans: b) Age last birthday
9. The premium charged by an insurance company depends on ______
a) Age of the insurance plan
b) Types of insurance plan
c) Participation in bonus
d) All of the above
Ans: d) all of the above
10. Which office LIO handles actual and investment functions.
a) Central office
b) Zonal office
c) Divisional office
d) Branch office
Ans: a) Central office
11. Stock market established on____
a) 1875
b) 1865
c) 1933
d) 1871
Ans: a)1875
12. What are the two animals are reference in stock market?
a) Cate & Dog
b) Tiger & lion
c) Bull & bear
d) No one
Ans: c) Bull & bear
13. The secondary market directly promotes capital formation? (True or False)
Ans: False, because it is the primary capital market that assists in capital formation by raising
fund.
14. Which of the following was Asia’s first stock market?
a) National stock market
b) Shanghai stock market
c) Bombay stock market
d) None of the above
Ans: c) Bombay stock market
15. Which animal indicates the fall in price of stock Market?
a) Lion
b) Bear
c) Cats
d) Bulls
Ans: b) Bear
 16. Which of the following statements is incorrect about the Securities Exchange Board of
India [SEBI]?
a) It was given statutary power by an ordinance in 1992
b) It is statutary body
c) It is a non-statutary body
d) None of the above
Ans: c) It is a non-statutary body
17. depositary participants are also called
a) Jabbar
b) Broker
c) Traders
d) Speculations
Ans: b) Broker
18. When was the national Stock Exchange of India established?
a) 1990
b) 1988
c) 1992
d) 1996
Ans: c) 1992
19. Primary market is also known as...
a) Money market
b) Financial market
c) Capital market
d) New issue market
Ans: d) New issue market
20. What are the trading and settlement procedure in secondary market?
a) Opening a demate account
b) Place order
c) Execution of the order
d) All of the above
Ans: d) All of the above
21. If an investor is attempting to buy a stock that is very volatile it would be best to
use_________
a) Market order
b) Limit order
c) Stop loss order
d) Contingency order
Ans: b) Limit order
22. Which of the following has helped to eliminate the use of stock certificate by placing
stock transaction on computers?
a) Demate account
b) Securities Exchange commission
c) Depositary trust company
d) Variance of securities
Ans: a) Demate account
23. All new issue of being offered for public sales are registered with______
a) SEBI
b) New issue market
c) Monetary act of 1936
 d) Securities investor protection act of 1970
Ans: b) New issue market
24. A compaterised trading network that market buy and sell order electronically entered by
customer is _________
a) National Market system
b) Electronic communication of networks
c) Internet investment services
d) Global investment network
Ans: b) Electronic communication of networks
25. Which exchange members is assigned to a specific trading post?
a) Commission broker
b) Floor traders
c) Specialist
d) Dealer
Ans: c) specialist
26. The Dow theory was developed by
a) Stock broker by the name of dow
b) An editor of Wall Street journal by the name of dow
c) It was developed by share
d) It was developed by market & dow
Ans: b) An editor of Wall Street journal by the name of dow
27. Who is called a father of fundamental analysis?
a) Benjamin Graham
b) Tinbergen
c) William
d) Elliot wave
Ans: a) Benjamin Graham
28. __________ analysis refer the study of the variable that influence the future of firm both
qualitative & quantitative
a) Company analysis
b) Industrial analysis
c) Technical analysis
d) Economic analysis
Ans: a) company analysis
29. Technical analysis is...
a) To make an estimate of growth in a stock market
b) To find out the Market force of influencing stock market
c) To indicate the direction of the overall market
d) To analyse the economic activities of government
Ans: c) To indicate the direction of the overall market
30. The fundamental analysis approach has been associated with______
a) Uncertainties
b) Certainty
c) Ratios
d) Balance sheet
Ans: a) uncertainties
31. Risk of two securities with different expected return can be compared with___
a) Co- efficient of variation
 b) Standard deviation of securities
c) Variance of securities
d) None of the above
Ans: a) Co- efficient of variation
32. A portfolio having two risky securities canbe turned risk less if...
a) The Securities are completely positively correlated
b) If the correlation ranges between 0 and 1
c) The Securities are completely negatively correlated
d) None of the above
Ans: c) The Securities are completely negatively correlated
33. Efficient frontier comparison of____
a) Portfolio that have negatively correlated securities
b) Portfolio that have positively correlated securities
c) Inefficient portfolio
d) Efficient portfolio
Ans: d) Efficient portfolio
34. Efficient portfolio can be defined as those portfolio which for a given level of risk
provides
a) Maximum returns
b) Average returns
c) Minimum return
d) None of the above
Ans: c) minimum return
35. Capital market line is____
a) Capital allocation line of market portfy
b) Capital allocation line of risk free asset
c) Both a and b
d) None of the above
Ans: c) Both a and b
36. C,A,P,M account for
a) Unsystematic risk
b) Systematic risk
c) Both a and b
d) None of the above
Ans: b) systematic risk
37. The point of tangency between risk returns indifference causes and efficient frontier
highlights
a) Optimal Portfolio
b) Efficient Portfolio
c) Sub- optimal Portfolio
d) None of the above
Ans : a) optimal Portfolio
38. A portfolio companies two securities and the expected return in them is 12% and 6%
respectively determine return of portfolio if first security constitutes 40% of total portfy
a) 12.4%
b) 13.4%
c) 14.4%
d) 15.4%
Ans: c) 14.4%
39. Return on financial asset consists of capital yield and current yield.
a) True
b) False
Ans: a) True
40. There is no difference between the capital market line and security market line as both
the terms are same..
a) True
b) False
Ans : b) False
41. This types of risk can be avoided by diversifying property
a) Systematic risk
b) Unsystematic risk
c) Portfolio risk
d) Total risk
Ans: a) Systematic risk
42. Statistical measure of how closely variables especyin stock return move together
a) Variation co efficient
b) Certainty equivalent
c) Variance
d) Coveriance
Ans: d) covariance
43. Which of the following securities has the most possible risk as well as the highest
potential retuy?
a) Preferred stock
b) Commercial paper
c) Derivatives securities
d) Bonds
Ans: c) Derivatives securities
44. The ability to convert an asset repidly and without influencing it’s price is refered to as
_______
a) Scalability
b) Liquidy
c) Marketability
d) Minimal risk
Ans: c) marketability
45. ________is associywith buying law and selling high resulting in a significant
capitalgaies
a) Speculation
b) Gambling
c) Investing
d) Arbitrage
Ans: a) Speculation
46. The ________ market assist existing investors in selling their stock.
a) Primary market
b) Commodity market
c) Capital market
d) Secondary market
Ans: d) secondary market
47. Which of the following securities most likely to become virtually worthless if a company
declares bankruptcy?
a) Common stock
b) Preferred stock
c) Bond
d) None of the above
Ans: a) common stock
48. The process of holding in investment in shares in electronic form is _______
a) Dematerialisation
b) Demulvalisation
c) Speculation
d) None of the above
Ans: a) Dematerialisation
49. Shareholders founded investment program that traders in a variety of assets.
a) Mutual fund
b) Dividends
c) Share program
d) None of the above
Ans: a) Mutual fund
50. Amount of money paid to company shareholders on a regular basis.
a) Bonds
b) Profit
c) Cashback
d) Dividends
Ans: d) dividends