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What is the least likely to be true about ETF?
Merging of a non performing fund in a performing is called?
The intermediary which design prospectus advertising and fulfill all formalities by regulator is called?
What is the greatest difficulty to change behavioral biases for someone?
An individual who only needs one orange Might purchase three if the price is shows one for $2.33, three for $7. What kind of information processing bias it is.
Which is not the work of Reserve Bank of India?
An investor who rebalances his portfolio after every two year and brings the portfolio back to original allocation what kind of assets allocation it is.
Which is a passive assets allocation among this asset allocation?
Which is true about security market line (SML)?
Common stock owners along with voting right have preemptive rights also what does it refer to
Manish is having some outstanding towards home loan & credit card and running some mutual fund investment. Manish has got an inheritance of fixed deposit. What shall he do with that money.
The form of market is which technical and fundamental both kind of analyses is useless is called?
If the efficient market hypothesis is true what will be the logical action?
In tactical allocation when portfolio is switched between financial services industry to auto section for bather returns what it is called?
Out of below mentioned financial investment is not a part of Money market?
Who do major investment is govt. securities?
What can be the highest maturity period for issuance of treasury bills?
The bias can Cause a person to discount consistent historical performance of an investment in favor of a hot streak?
Which metric is used to evaluate the performance of an ETF?
What is true regarding NRI investment in Real Estate in India?
A woman has 1000 shares of ABC ltd. Company issued 1:2 right share. Calculate the amount of money she will receive in case she sells renunciation right of half of eligible shares in secondary market in 260 Rs per share
ABCD company has outstanding shares of 1million, company declares bonus share of 2 for 1 your client has 1000 shares of that company, if company growth rate is 6% that what is the percentage of your shares clients in that company
If dividend received is a cash inflow for cash flow statement. What will be the position of dividend reinvestment in cash flow statement?
The net cash inflow amount does not necessarily equal money available for use in investment, what is the correct reason for this?
Select the item which comes in cash flow statement?
Cash flow statement of an average family will show?
What is not true regarding special needs and goals in budgeting & financial planners?
In what from REIT share return with the investor?
An approach of changing asset allocation which does not have to follow the market cycle but follow seasonal or annual trends called?
Investor who wants to lock either purchase or sales price in future is called?
Amit believes that be can predict the future value of a stock and will certainly make money out of a particular investment. What kind of bias it is?
Real return of a mutual fund is 6% and Inflation is 2.5% what are the returns adjusting the inflation?
Kush think that due to some reason the stock market will not perform for some 2-3 months and when it actually happens Kush develops a belief about his predictability even without a logical reason. What kind of bias it is.
Investor who trade in same stock in two different markets and benefit from the momentary price difference is called?
A strategy of assets allocation which require constant attention and portfolio shifted between riskless and risky assets according to market is called?
What is not true regarding customization of benchmark?
Why bias which popularly described as irrational exuberance is hard to get traced?
What are the criteria to classify agricultural commodities from below?
What is true about suboptimal decision making by investors and fund managers?
Why is a mutual fund (collective or pooled investment scheme) technically calling an open-end investment company?
Your client has invested $8,000 in a term deposit that will mature in exactly 8 years’ time from today. The term deposit pays 4.8% annual interest compounded once each year. The maturity value of the term deposit is most likely closest to:
Which of the following statements is most likely correct?
A lender evaluates how much income is available for debt service when evaluating a potential borrower. This is known as evaluating a borrower’s:
An investment manager who analyzes past prices and trading volumes in order to predict future changes in the prices of securities is most likely engaging in:
Which of the following is a reasonable description of duration in reference to bonds?
Mr. X wants to use his accumulated investment of Rs. 7 lakhs in a mutual fund scheme towards his son’s higher education after 14 years from today. The scheme has given a return of 11.5% in the last five years. The higher education he is considering costs Rs.14 lakh today, as against Rs.10 lakh some 5 years ago when his son was born. What is the quantum of fresh monthly investment needed for the next 14 years to achieve this goal?
The standard deviation of returns for Stock S and Bond B are 18% and 8% respectively. if the correlation between the two stocks is -0 50, which is closest to the standard deviation for a portfolio consisting of 65% invested in Stocks and 35% in Bonds?
Josie takas a loan of Rs. 5,00,000 from the Bank of India at 8.75% p.a. and decides to pay it back in EMI (Equated Monthly Installments) in 7 years. At the end of the 5th year, she decides to prepay her entire outstanding loan. What is the amount she is liable to pay to the bank to close her loan?
Abhey aged 36 has spare funds of Rs 100,000 immediately and annually over the next 4 for his family’s vacation goal which should be in place by his age 50 to fund next 25years. annual vacations. The current requirement of annual vacation spend is Rs 80,000 and subsequent requirement escalates annually at 5%. He can invest in 10% annual return instruments during entire accumulation period of vacation goal, and the vacation funds during utilization period are seen to draw from 6% per annum return instruments. What annual amount do you end investing after initial 5 years to achieve this goal?
Rahul has taken a loan of 20Lac rs for 15 years for house construction and wants to take another loan of 5 Lac rs for car purchase for 5 years. Rate of interest is 6.9% and 9% respectively. What amount of interest Rahul will pay for both of the loans for the entire period?
one of your client is a business man he is having 10 Cr in his current account in which he don’t earn interest he ask you to suggest some investment which should be risk free and easy to get liquidate .. what will you suggest
Your client needs fund for his 9 years old child for his education planning starting at 18 Year, that presently 900000 per year required in the beginning of the year for that 3 year course .inflation rate 2.5% , the annualized investment return is 6%. What amount/corpus required to invest today?
Which of the following has highest interest rate
A Bond of 10-year maturity issued at 100000 with coupon which paid semiannually 8.5%
Now only 18 months are left for the maturity and the yield is 9%, Bond market value of bond is at 120000.Your client wants to invest in this bond, at what price he will get if the rate is 9%.
Your client has 3 years left for his retirement, he has invested a huge amount in real estate in different locations he has never invested in any retirement schemes he comes to you for some investment plan what will you suggest .
Client is willing to invest 1 lac in a Small Cap /Junk stocks , he is anticipated a big movement in particular investment, What does it show ?.
Rank Portfolio P, Q, R on the basis of alpha- Return is 25%, 16%, 14% and market return is 13%. Standard Deviation is 18%, 7%, 9% and market SD is 7%. Beta is 1.5, 0.9, and 1.2. Risk free rate of return is 8%.
Rank Portfolio A, B, C on the basis of Treynor’s Ratio. Return is 22%, 14%, 16% and market return is 12%. Standard Deviation is 24%, 18%, 17% and market SD is 15%. Beta is 1.3, 0.9, and 1.1. Risk free rate of return is 6%.
Find the standard deviation of security A & B which has 80% and 20% of portfolio respectively and their standard deviation are 15% & 18% respectively. Correlation is .8 between two securities?
What is the present value of an annual bond with having maturity of 6 years with face value of 1000 Rs, having coupon of 8.25% and having yield of 7.90%
A private equity fund which offers an 80:20 ratio of profit sharing with a 10% hard hurdle ratio portfolio at the start was 100 Lac. And after 6 month it rose up to 120lac. Later, it reduced to 115lac and at the year end the value is 125lac. What is level of water mark and what will be the profit sheering at this level.
What is least likely to be true regarding private equity v/s venture capital?
A Bakery owner want to buy the wheat after 3 months but he wants to hedge against the price increase of the wheat. What is the startategy he will apply?
The current dividend on an equity share of Vertigo Limited is Rs2.00.Vertigo is expected to enjoy an above-normal growth rate of 20% for a period of 6years.Thereafter the growth rate will fall and stabilize at 10%.Equity investors require a return of 15%. The stock is trading at 90 rs in the market.According to the intrinsic value of the equity share how it is priced ?
What is the ytm of a bond which pays annual coupon having 10 yrs of Maturity at face value of 1000 Rs with a coupon rate of 9%? Presently trading on 972.50.
Security A & B has an EPS of 12 rs and 16 rs Respectively and they are trading at 200 and 220 rs respectively in the market, According to Price to earning Ratio which security has a more value to invest in ?
What two categories of information in the mutual fund registration statement (prospectus) are most important for potential investors to consider when they are trying to select the best fund to achieve their goals?
In addition to trading like shares of stock, how are closed-end investment companies (i.e., closed-end funds or listed investment companies) different from open-ended mutual fund companies?
What term correctly identifies the difference between the risk-free return and an investment’s total return?
Covariance is the statistical term for the correlation between two variables multiplied by the standard deviation for each variable. What does covariance show?
What generally happens on the secondary securities market?
If an investment’s return is 8.0% with a beta of .90 and an available risk-free rate of 2.5%, what is the Treynor ratio (T)?
What is the problem represented by using the LBMA Gold Price (bullion) as a benchmark to compare a fund of large-cap stocks?
What sequence best represents the risk-return trade-off from lowest risk to highest?
Factors such as changes in interest rates and changes in inflation contribute to:
To what investment risk may a bond be subject if it is not held to maturity that will not be present if it is held to maturity?
The standard deviation of returns for Stock S and Bond B are 20% and 8% respectively. If the correlation between the two stocks is 0.50, a portfolio consisting of 50% invested in Stocks and 50% in Bonds has a standard deviation closest to:
Which of the following is a reasonable description of Modified duration in reference to bonds?
Under typical scenarios what type of risk cannot be mitigated through diversification?
Why is a mutual fund (collective or pooled investment scheme) technically called an open-end investment company?
How are mutual funds priced?
Stock S has a standard deviation of 0.20 and Stock T has a standard deviation of 0.14. Stock S and Stock T have a perfect positive correlation of +1. According to Markowitz portfolio theory how much should be invested in each stock to minimize the portfolio’s Standard deviation?
Which of the following investment categories are listed from those generally considered to lowest risk to highest risk?
If investors objective is to replicate the performance of the S&P 500, should buy a(n):
What is the name of the factor that measures systematic risk?
Rank Portfolio P, Q, R on the basis of Jensen’s Alpha . Return is 25%, 16%, 14% and market return is 13%.
Standard Deviation is 18%, 7%, 9% .
Beta is 1.5, 0.9, and 1.2 respectively for P, Q R
Risk free rate of return is 8%.
Stock A has a beta of 0.90, stock B has a beta of 1.80, return of market is 10%, risk free rate if return is
6%. As per CAPM, find the required return ( minium expected return) of stock A and B.
Analyze stock X, Y, Z on the basis of Sharpe ratio. Returns expected are 20%, 12%, 15%. And Market
returns of 10%. Standard Deviation of securities are 25%, 16%, 19% and market standard deviation is
15%. Beta is 2.4, 1.2, 0.9 and risk-free rate of return is 6%. Arrange best to worst
Divyansh needs an annuity of 35000 in current Valuation starting after 15 years for 15 years period where discounting rate is 11% and inflation is 6%. He wants the cash flow in begin Mode. What should be his investment today
If an investor starts investing 6000 Per month for 10 years and needs 11 Lac Rs after 10 years what shall be the percentage Distribution of 6000 Rs to reach the goal after 10 Years. Rate of Different Assets has been given below:
Equity : 11%
Risk free : 6%
Basket of bond : 8%
Corporate bond : 7%
If an Investor has 5 Lac Rs is invested in Fund A. He is expecting interest rate to rise by 50 BPS and in a view, he is shifting his 75% of portfolio to Fund B. What will be his overall loss in p.c. if actually interest ratrises by 50 BPS .Modified Duration of Fund A is 7 years and for Fund B is 3 years.<
There is one Child whose age is 9 and parents Require education fund when child turns 18 for 3years, fees paid upfront for the entire degree, Current cost 900000 per year, Education inflation 3%, Return 6%, How much money needed today ?
According To CAPM Model what shall be the required rate of Return of the portfolio. Fund A has weight of 60% and Fund B has weight of 40%. Beta of Market is 1 . Beta of Security fund A is .8 and Fund B is .9 . Risk Free Rate of Return is 6% and Market Return is 15%.
What is valuation of the security if the market yield of same security is 5%. If dividend is 200 Rs and Risk-free rate is 4.5%, What is the valuation of the Security?
Sourabh took a home loan of 20 Lac of 20 years at the rate of 8.60% on 1 April 2012. In June 2016 interest rate revised to 9.20%. in October 2017 Sourabh decided to put 5 lac Rs in his loan account What is amount of interest he will save from this deposit.
Abhinav took a home loan of 25 Lac of 30 years at the rate of 8.5% on 1 May 2014. In June 2018 interest rate revised to 9%. in July 2020 Abhinav decided to put 10 lac Rs in his loan account What is amount of interest he will save from this deposit
Arrange the securities in best to worst on the basis of Sharpe ratio, Treynor Ratio, Alpha.Standard Deviation of Security ABC are 16%,14%,13% Respectively.Beta of Security ABC are .9,1.05,.85 Respectively.Returns Given by Security ABC are 25%,26.5%,23% ,Risk free return are 6% and Market Return are 15%
What is the Total volatility of whole portfolio of Security A & B. If Security A has 60% investment and Standard Deviation of Security A is 22% and 10% of Security B. Correlation of Security A & B .6
What is the required Rate of Return as per CAPM Model. Weight of Security A is 80% and for Security B is 20%. Beta of security A&B .8 and .95 Respectively. Standard Deviation of Security A&B is 16% and 20%. Market Returns are 18% and Risk Free is 6%
Arjun has two Kids and he want to do education planning for both children. One kid is 6-year-old and another one is 4 years old. He wants 500000 Rs for four years starting from age 18 for both kids at their respective age. What shall be the amount needed today. If rate of return expected is 11% and education expenses inflation is 6%.
Mehul is a Gold Trader and is worried of prices of Gold going down in the future. He wants to hedge himself against the prices fall in gold in future. What is the best course of action for him.
Achal want to invest in a particular stock and finds today it up by a substantial percentage and on the basis of this first information he assumes about his performance in future what kind of bias it is ?
If required rate of return is 12% and risk-free rate is 6% with benchmark return is 15%. What shall be the Beta?
Sreenivas buys a Call option of Stock ABC Ltd of a strike price of 150. He pays premium of 12 rs to buy. This call and now the market price of the stock is 135. Sreenivas wants to know what is profit and loss in current situation.
A semiannual bond having face value of Rs 1000 taken 3 years back and coupon is 9%. Today the market yield of similar bond is 7%. What shall be sale value of bond according to current market yield and what is the return generated over the years if bond original maturity was of 10 years
What does a stop order mandate when buying or selling a security?
Which of the following standard rights typically are extended to both common and preferred stockholders?
Do exchange traded funds (ETFs) that passively track an index normally have higher or lower fees compared with typical mutual funds and are they more or less tax-efficient?
Which one of the following is a correct example of non-systematic risk?
In a normally distributed sample, approximately what percentage of the data (returns) will lie within one standard deviation either side of the mean?
What is the correct Sharpe Ratio (S) given the following parameters: Portfolio return = 8.0% Risk-free return = 3.0% Standard deviation of the portfolio = 10.0% Market return = 7.0%?
What is the holding period return (HPR) for an investor who purchased 100 shares of stock for $40 per share and held the stock for four years, during which it paid dividends of $0.25, $0.26, $0.27 and $0.28 per share, respectively; then she sold the stock at the end of the four-year period for $50 per share?
Which one of the following assumptions of Markowitz’s Modern Portfolio Theory directly contrasts with a basic assumption of behavioral finance?
Arbitrage pricing theory (APT) can be used to determine an asset’s required return by looking at which two influences?
What does the capital market line (CML) show?
Once per year often is considered a good time-frame to evaluate a portfolio. What rationale should support the decision to rebalance a portfolio?
In addition to security selection, what activity best reflects tactical asset allocation?
What is the most professional way to develop a client investment portfolio?
ABC has €2,500,000 of interest bearing debt. The shareholder value using the year end discounted cash flow methodology for business valuation is most likely closest to:
Assume the following for Company XYZ
• Pre-tax income reported at £6.4 million in the most recent fiscal year which is likely for future years;
• Interest expense reported at £1,600,000 and depreciation and amortization of £4 million;
• £20 million of interest-bearing debt outstanding.
• Assume that following an analysis of Company ABC’s operations, risks and growth prospects, an EBITDA multiple of 6x is considered appropriate
The shareholder value using the multiple of EBITDA methodology for business valuation is most likely closest to:
Executive stock options typically cannot be exercised immediately following the date they are awarded by the company. What is the common term to identify the options status at which it can be used to purchase or receive company stock?
People may believe they are better at many things than other people around them, That is, they have unrealistically positive self-evaluations. What is the name of this bias?
What term is used to describe those who try to avoid having too much money?
What is the science of applying psychology to finance called?
In addition to supporting compliance to the exact letter of the law, what should a business culture promote if it’s focused on protecting consumers?
At its core, what does a reasonable definition of fiduciary state?
What is the definition of money laundering?
What is the ultimate objective of mandating compliance with regulatory requirements?
What is the primary purpose of financial regulation according to the International Monetary Fund?
Fiscal drag and fiscal boost are variations of what type of fiscal policy?
What is a typical business response when the government enacts legislation that increases costs to the business?
What are the three stages of money laundering (in order)?
Which one of the following best summarizes investment adviser responsibility toward clients?
Governments focus on using two primary policies to impact their economy, one of which is monetary. What is the second?
Which of the following is not an example of collecting a client’s quantitative information?
The focus of any financial management strategy will be on helping the client:
The first step in the financial management process is:
Your client is considering the purchase of a seven-year term deposit for $150,000 that pays an annual nominal interest rate of 2.65% compounded quarterly. The maturity value of the term deposit is most likely closest to:
Your client has an open-end lease for a car and will purchase the car at the end of the five year lease period for $7,800. Using an annual nominal interest assumption of 5.25% compounded annually, calculate the present value of the $7,800 that will be paid in five years time.
Your client has invested $8,000 in a term deposit that will mature in exactly 8 years time from today. The term deposit pays 4.8% annual interest compounded once each year. The maturity value of the term deposit is most likely closest to:
Which of the following is most likely to be considered a fixed cash outflow?
A cash flow statement most likely identifies a person’s:
Which of the following is least likely to be a disadvantage of working through the budgeting process?
Which of the following is most likely a disadvantage of working with a client through the personal budgeting process?
Which of the following is most likely a step in assessing the client’s situation in the analysis stage of the client relationship?
A lender evaluates how much income is available for debt service when evaluating a potential borrower. This is known as evaluating a borrower’s
Which of the following is an example of a step in the collection of client information stage of financial management?
Which of the following statements is not true with regards to bankruptcy?
The goal of strategic optimization is best described as:
Which of the following is not a step in the synthesis and recommendation stage of financial management?
What is the function of the International Organization of Securities Commissions (IOSCO)?
Which one of the following is the better way to operate as a financial adviser?
Under normal economic conditions what part of the business cycle typically follows recession?
What does ‘layering’ refer to when speaking about money laundering?
What are the two employer/employee components of a “tax wedge”?
I. Fees and other expenses
II. Disciplinary actions and current licenses
III. Agency relationships and affiliations
IV. Home address and phone number
Assume a financial adviser is considering two investment recommendations for a client. One involves payment to the adviser from the investment’s issuer and the other does not. Both options are suitable. Which option should the adviser choose to comply with a client first standard?
What are employment, consumer spending, housing, wages and prices components of?
What is an important component of enabling a financial adviser to address conflicts of interest?
In addition to identifying and verifying the customer’s identity, what additional identification requirement does the Financial Action Task Force (on Money Laundering), or FATF, say should be met?
What’s the term that refers to when a territory imports from another territory more than it exports?
What does prudential regulation require of financial firms?
Selective perception is most likely an aspect of what type of behavioural bias?
The point of tangency between the capital market line (CML) and the efficient frontier of risky assets most likely identifies the:
Assume the following for Company XYZ:
• Pre-tax income reported at £12.8 million in the most recent fiscal year which is likely for future years;
• Interest expense reported at £3,200,000 and depreciation and amortization of £8 million;
• £40 million of interest-bearing debt outstanding.
• Assume that following an analysis of Company ABC’s operations, risks and growth prospects, an EBITDA multiple of 8x is considered appropriate
The shareholder value using the multiple of EBITDA methodology for business valuation is most likely closest to:
How is nominal yield calculated compared with current yield?
Although there is flexibility regarding specific priorities and focus of each life stage, which life stage is likely to primarily be concerned with funding children’s education and establishing peak earning potential?
Regarding core/satellite asset allocation, which of the following statement is true?
Which one of the following would be true if an adviser agrees with the strong form of the Efficient Market Hypothesis (EMH)?
Which of the following equations correctly identifies the process to determine a company’s liquidity ratio?
What behavioral bias is an individual most likely exhibiting when they have unrealistically positive self-evaluations relative to the people around them?
A diversified portfolio will most likely result in the reduction of:
What is most likely not an advantage of an ETF?
Shares of a closed-end fund are trading at a 5% discount under NAV. If NAV is $10 per share, what is the current market price of the fund’s shares?
The lowest risk is most likely associated with the following mutual fund type:
The slope of the security market line (SML) represents the portion of an asset’s expected return attributable to:
Regarding Strategic asset allocation, which of the following statement is true?
Which one of the following best illustrates a correctly-stated client’s SMART goal?
Regarding ‘market timing’ as an investment strategy, which of the following statement is true?
What is the name of a behavioral bias that places a higher value on an owned asset over assets that are not owned?
Several methods exist to address a concentrated stock position. Which one of these is most similar to an equity collar?
Stock S has a standard deviation of 0.20 and Stock T has a standard deviation of 0.14. Stock S and Stock T have a perfect positive correlation of +1. According to Markowitz portfolio theory how much should be invested in each stock to minimize the portfolio’s variance?
If an investors objective is to replicate the performance of the S&P 500, should buy a(n):
With regard to the concept of Dynamic asset allocation, which of the following statement is true?
In what type of an economic environment might a corporation call a preferred stock or bond?
A mutual fund trades on the NYSE. Its recent price is $17 USD, but its Net Asset Value (NAV) is $19 USD. The fund is most likely:
What is the name of the behavioral bias where an individual has a tendency to respond to various situations differently based on the context in which a choice is presented?
In money psychology, which of the following most likely represents a combination of a hoarder and a spender?
You are advising a new client. He has a good understanding of the markets but is very focused on the shares of the his employer because the price has been rising for a long time and he is confident about what they are doing. Which of the following alternatives is a good solution for the issue?
Which one of the following is one of the measures evaluated as part of fundamental analysis?
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