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Security Analysis and Investment Management Practice Test
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Security Analysis, Portfolio Management, and Financial Derivatives covers the many topics of modern investment analysis.

In finance, Security analysis is the evaluation and assessment of stocks or securities to determine their investment potential.

Investment management is the handling of financial assets and other investments. It is more than buying and selling investments. The management part includes devising a short- or long-term strategy for acquiring and disposing of portfolio holdings. It can also include banking, budgeting, and tax services and duties, as well.

Security Analysis and Investment Management Practice Test
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25 Questions

1. The beta of the market portfolio is:
2. Which of the following statements is/are true with respect to feasible set of portfolio? I. Feasible set is also known as opportunity set. II. It represents all the portfolios that could be formed from group of N securities. III. Feasible set is also called efficient set
3. If interest rates are expected to rise, you would expect
4. _________ above which it is difficult for the market to rise.
5. Which of the following patterns is the most reliable and widely used for indicating trend reversal?
6. The risk-free rate and the expected market rate of return are 0.06 and 0.12, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.2 is equal to
7. Common stock dividends are now taxed at a maximum rate of
8. The critical variable in the determination of the success of the active portfolio is ________.
9. When ranking the riskiness of securities using the standard deviation, the highest risk security to the lowest risk security is as follows:
10. The balance sheet of a company is a snapshot of the ______ of the firm at a point in time.
11. Analysts may use regression analysis to estimate the index model for a stock. When doing so, the slope of the regression line is an estimate of ______________.
12. Which statement is true regarding the Capital Market Line (CML)?
13. Which of the following statements pertaining to the Efficient Market Hypothesis (EMH) is/ are true?
14. If the risk free rate of return (Rf) is 7%, expected return on the market [E(Rm)] is 15%, and the return on stock X is 16%, the beta for the stock X using CAPM is
15. A stock with a relative strength of 3.0 will have a relative strength index of
16. Which of the following statements about the mean-variance criterion is correct?
17. __________ was the grandfather of technical analysis.
18. If a portfolio manager consistently obtains a high Sharpe measure, the manager's forecasting ability __________.
19. Which of the following investments would theoretically always carry the highest risk premium?
20. _____, because of increasing replacement value and scarcity, perform best in periods of high inflation.
21. In the Treynor-Black model
22. Stock market value can deviate from its fundamental value because of strong:
23. When Maurice Kendall examined the patterns of stock returns in 1953 he concluded that the stock market was __________. Now, these random price movements are believed to be _________.
24. You invest 55% of your money in security A with a beta of 1.4 and the rest of your money in security B with a beta of 0.9. The beta of the resulting portfolio is
25. Under ________ EMH investors cannot earn abnormal/superior profits on securities on a consistent basis.

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