This quiz works best with JavaScript enabled. Home > Investments > Investment Management > Investment Management – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Investment Management Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What term describes a measure of how much an investment has gained or lost in value over a specific period, usually expressed as a percentage? A) Asset allocation. B) Capital gain. C) Rate of return. D) Liquidity ratio. Show Answer Correct Answer: C) Rate of return. 2. Mean variance model was given by A) Markowitz. B) Trainor. C) Jenson. D) Eugene fama. Show Answer Correct Answer: A) Markowitz. 3. Passive investors generally assume that markets are:a. b. c. d. A) Inefficient and can be consistently exploited. B) Random and unpredictable. C) Driven solely by short-term trends. D) Best navigated through frequent trading. Show Answer Correct Answer: B) Random and unpredictable. 4. ..... is an investment strategy where an investor seeks to purchase securities that are priced below their intrinsic value? A) Growth investing. B) Investment strategy. C) Investment Management. D) Value investing. Show Answer Correct Answer: D) Value investing. 5. Which among the statements is a potential challenge associated with sector rotation strategies? A) Limited diversification. B) Low potential for capital appreciation. C) Passive management approach. D) Consistent returns in all market conditions. Show Answer Correct Answer: A) Limited diversification. 6. What term describes the practice of buying a stock with borrowed money, hoping that the price will rise and allow the investor to profit? A) Short selling. B) Margin trading. C) Dividend investing. D) Dollar-cost averaging. Show Answer Correct Answer: B) Margin trading. 7. What is the primary risk associated with holding long-term bonds when interest rates rise? A) Inflation risk. B) Credit risk. C) Liquidity risk. D) Interest rate risk. Show Answer Correct Answer: D) Interest rate risk. 8. Why might investors choose to engage in international investing? A) To limit investment opportunities to domestic markets. B) To benefit from global economic growth and diversify risk. C) To concentrate risk in a single country's market. D) To avoid exposure to different economic conditions. Show Answer Correct Answer: B) To benefit from global economic growth and diversify risk. 9. What is a common risk associated with investing in specific emerging markets? A) Political and economic instability. B) Established regulatory frameworks. C) Limited growth potential. D) Lower volatility compared to developed markets. Show Answer Correct Answer: A) Political and economic instability. 10. During the ..... stage many new firms enter into market, the firms earns high profit, all firms compete with each other and only a few efficient firms are left to run the business and most of the other firms are wiped out. A) Expansion stage. B) Pioneering stage. C) Stagnation stage. D) Declining stage. Show Answer Correct Answer: B) Pioneering stage. 11. ABC Company has assets with a market value of 500 million rupiah. Based on the company's analysis, the market value of ABC Company's assets could fall to 300 million rupiah (with a probability of 60%) and rise to 900 million rupiah (with a probability of 40%) in one year. What is the Expected Return on Equity for Company ABC? A) 8%. B) 10.50%. C) 5.50%. D) 6.50. Show Answer Correct Answer: A) 8%. 12. Which of the following securities have potentially the highest risk level, and also have the highest potential return? A) Commercial paper. B) Bonds. C) Derivative securities. D) Preferred stocks. Show Answer Correct Answer: C) Derivative securities. 13. Investment may be defined as the process of sacrificing ..... in order to get ..... in the future? A) Current Resources & Saving. B) Current income & better returns. C) Better Future Returns & Income. D) Better Benefits & Capital Gain. Show Answer Correct Answer: B) Current income & better returns. 14. When considering various forms of cash investment, the treasurer should not consider the safety of the principal being invested. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 15. Investing guarantees you will grow your wealth A) True. B) False. Show Answer Correct Answer: B) False. 16. .... in accounting involves debt securities that a company intends and is able to hold until they mature. These securities are recorded on the balance sheet at their amortized cost and are typically listed as long-term assets. A) Available for Sale. B) Held to Maturity. C) Trading Securities. D) Tax Liability. Show Answer Correct Answer: B) Held to Maturity. 17. What is the term for the price at which a stock is currently trading on the market? A) Market value. B) Book value. C) Face value. D) By value. Show Answer Correct Answer: A) Market value. 18. According to the mean-variance criterion, which one of the following investments dominates all others? A) E(r) = 0.15 ; Variance = 0.25. B) E(r) = 0.10 ; Variance = 0.25. C) E(r) = 0.15 ; Variance = 0.20. D) None of the above. Show Answer Correct Answer: C) E(r) = 0.15 ; Variance = 0.20. 19. Letting go of risk for getting a return or vice versa is called as A) Investment decision. B) Risk return trade off. C) Feasible set of portfolios. D) Portfolio evaluation. Show Answer Correct Answer: B) Risk return trade off. 20. Which of the following is considered a direct real asset investment opportunity? A) Buying stocks in a construction company. B) Owning physical real estate properties. C) Purchasing shares of a commodity-focused mutual fund. D) Investing in a real estate investment trust (REIT). Show Answer Correct Answer: B) Owning physical real estate properties. ← PreviousNext →Related QuizzesInvestments QuizzesInvestment Management Quiz 1Investment Management Quiz 2Investment Management Quiz 3Investment Management Quiz 4Investment Management Quiz 5Investment Management Quiz 6Investment Management Quiz 7Investment Management Quiz 8Investment Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books