I am K.L.Dahiya SOL working in the Department of Commerce at SOL, University of Delhi.
M.Com, M.Phil, LL.B, Ph.D
Area of Interest
Quantitative and statistical Techniques
- Security analysis is the analysis of tradeable financial instruments called securities. These can be classified into debt securities, equities, or some hybrid of the two. More broadly, futures contracts and tradeable credit derivatives are sometimes included. Security analysis is typically divided into fundamental analysis, which relies upon the examination of fundamental business factors such as financial statements, and technical analysis, which focuses upon price trends and momentum. Quantitative analysis may use indicators from both areas.
- SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT This test is an introduction to investment alternatives, security analysis, and portfolio construction. Topics include: the environment in which investment decisions are made: (1) markets for the purchase and sales of securities, (2) risk and return--their measurement and use in the construction of the individual’s portfolio, (3) taxation, and (4) the efficiency of financial markets; as well as specific investments: (1) debt instruments—corporate bonds, federal government securities, and municipal bonds; (2) equity investments, (3) put and call options, (4) investment companies, and (5) nonfinancial assets such as real estate, gold, and collectibles. (3 s.h.) FIN-321-TE This is a two-hour examination in which you must answer 100 multiple-choice questions (worth 1 point each). A passing score is 60 out of 100 points. Here are the topics covered and their approximate importance on the test: I. THE ENVIRONMENT AND TOOLS OF INVESTING (25%) A. Mechanics of buying and selling securities B. Investment banking C. Taxation and tax shelters D. Risk and its measurement E. Diversification F. Time value of money G. Efficient markets H. Regulation II. INVESTING IN FIXED INCOME SECURITIES (20%) A. Variety of corporate debt B. Federal government bonds C. Municipal bonds D. Preferred stock E. Valuation of fixed income securities F. Yields: current yield, yield to maturity III. INVESTING IN COMMON STOCK (20%) A. Aggregate measures of stock prices B. Historical rates of return C. Valuation of common stock D. Analysis of financial statements E. Fundamentals and technical analysis IV. INVESTING IN OPTIONS, FUTURES, AND NONFINANCIAL ASSETS (20%) A. Puts and calls B. Warrants C. Commodities D. Real estate E. Collectibles F. Precious metals V. INVESTMENT COMPANIES AND THE CONSTRUCTION OF DIVERSIFIED PORTFOLIOS (15%) A. Closed-end investment companies B. Mutual funds C. Returns earned by investment companies Textbooks to help you prepare: Either text will provide adequate preparation, as will most college-level texts in this subject. Gup, Benton E. The Basics of Investing. Current edition. New York: John Wiley Mayo, Herbert B. Investments: An Introduction. Current edition. Eagan, MN: South-Western.'#SAMPLE QUESTIONS 1. A liquid asset may a. be converted into cash b. be converted into cash with little chance of loss c. not be converted into cash d. not be converted without loss 2. A negatively-sloped yield curve suggests that a. short-term rates exceed long-term rates, and the Federal Reserve is following a tight monetary policy b. short-term rates exceed long-term rates, and the Federal Reserve is following an easy monetary policy c. long-term rates exceed short-term rates, and the Federal Reserve is following a tight monetary policy d. long-term rates exceed short-term rates, and the Federal Reserve is following an easy monetary policy 3. What does the market price of a bond depend on? a. The coupon rate and terms of the indenture b. The coupon rate and maturity date c. The terms of the indenture, and maturity date d. The coupon rate, terms of the indenture, and maturity date 4. While bond prices fluctuate, a. yields are constant b. coupons are constant c. the spread between yields is constant d. short-term bond prices fluctuate even more 5. If interest rates rise, the price of preferred stock a. is not affected b. rises c. falls d. may rise or fall 6. Which of the following is true of municipal government debt? a. It pays more interest than corporate debt. b. It is often purchased by individuals with high incomes. c. It is exempt from estate taxation. d. It is not subject to interest rate risk. 7. The use of financial leverage by a firm may be measured by the a. ratio of debt to total assets b. firm’s beta coefficient c. firm’s retention of earnings d. ratio of the price of the firm’s stock price to its earnings 8. Which of the following is an example of a depreciable asset? a. Land b. Cash c. Accounts receivable d. Equipment 9. As the debt ratio increases, a. fewer assets are debt-financed, and the ratio of debt-to-equity increases b. fewer assets are debt-financed, and the ratio of debt-to-equity decreases c. more assets are debt-financed, and the ratio of debt-to-equity increases d. more assets are debt-financed, and the ratio of debt-to-equity decreases 10. The net asset value of a mutual fund investing in stock rises with a. higher stock prices b. lower equity values c. an increased number of shares d. increased liabilities 11. What do activity ratios measure? a. How rapidly assets flow through the firm b. How frequently the firm’s stock is traded c. The employee turnover rate d. The profitableness of accounts re