Q1.
Risk is defined as deviation from the desired or expected outcome.
Q2.
All of the following represent systematic risk except:
Q3.
Which of the following statements about total risk is true?
Q4.
A change in the tax structure is an example of:
Q5.
An accounting fraud in a company is an example of:
Q6.
A strike in a company is an example of:
Q7.
2007-2009 recession is an instance of:
Q8.
In a perfectly diversified portfolio, total risk is equal to:
Q9.
Ravi is holding a 5 year bond issued at Rs. 1000 with a coupon of 8%. If the interest rates rise to 10% the next year, the most prominent type of risk faced by Ravi is:
Q10.
In Q9, if in the fifth year, the interest rates fall down to 6%, the risk that is of most concern to Ravi is:
Q11.
Rajesh holds a 3 year bond issued at Rs. 100 with a coupon of 10%. His friend Sandeep holds a 5 year bond issued at Rs. 100 with a coupon of 10%. Who of the two faces higher interest rate risk?
Q12.
An investor who holds the debt investments till maturity is __________ by the interest rate risk.
Q13.
____________ is the risk that proceeds received in the form of interest and principal from fixed income securities may or may not be able to earn the same interest as the original interest rate.
Q14.
If interest rates rise, __________ risk is reduced
Q15.
If interest rates decrease, bond prices ______ and ______ risk is reduced
Q16.
Lowering of credit rating of a fixed income instrument increases:
Q17.
Rating assigned by the credit rating agencies is a guarantee of the safety of a debt instrument
Q18.
Which of the following statement about ratings assigned by credit rating agencies is correct?
Q19.
An investor bought a security at a price of Rs. 110. The fair price of the security is Rs. 105. However the investor is not able to find a buyer for the security above Rs. 100. The investor is facing:
Q20.
An illiquid security has a
Q21.
An Indian exporter exports pharmaceutical raw materials to Italy. The risk most faced by the exporter is:
Q22.
An Indian importer is importing goods from another country. The importer will benefit from:
Q23.
The risk that one may need to spend Rs. 110 for a commodity which one can buy today for Rs. 100 is
Q24.
Inflation is cumulative and hence has a discounting effect over long periods.
Q25.
Imposition of inheritance tax in the country would be an instance of:
Q26.
The risk for a software firm that its new software application will become obsolete is an example of:
Q27.
Which of the following is not a business risk?
Q28.
An earthquake is an example of:
Q29.
The risk that an investor faces whether his investment manager will be able to produce returns over and above the benchmark is:
Q30.
Which of the following is not a measure of risk?
Q31.
_________ is a measure of total risk.
Q32.
Higher variance for an expected rate of return represents:
Q33.
Standard deviation is measured as:
Q34.
Beta does not measure:
Q35.
Beta of a portfolio = S (Wn * ßn) Where Wn is weight of n number of securities and ßn is the Beta of n number of securities
Q36.
Beta can be calculated as:
Q37.
__________ is a measure of the degree to which two variables, such as rates of return for investment assets, move together over time relative to their individual mean returns.
Q38.
___________ is a standardized measure of the relationship between two variables that range from -1.00 to +1.00
Q39.
_________ is an absolute measure of the relationship between two variables.
Q40.
Which of the following is/are true about correlation?
Q41.
Returns are positively correlated implies that:
Q42.
Diversification is possible with assets which are:
Q43.
A perfectly diversified portfolio comprises of assets which are:
Q44.
Risk can be managed by:
Q45.
________ risk can be managed
Q46.
Diversifying investments across securities within the same asset class is:
Q47.
An investor has invested in 5 different debt funds to reduce risk. He has managed risk by:
Q48.
An investor has invested in fixed income instruments, stocks, commodities and real estate. He has managed risk by:
Q49.
An investor investing in global securities has managed risk by:
Q50.
Hedging can be done through:
Q51.
Investment strategy where investment is made in order to reduce the risk of adverse price movement in an asset, by taking an off-setting position in related security is:
Q52.
An investor has bought a put option on an underlying asset. He has managed risk by
Q53.
A bank has exchanged its fixed rate liability with a floating one to reduce its asset and liabilities mismatch. The bank has ________ its risk.
Q54.
Hedging can be called as insurance
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