Investment Management

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Questions and Answers

Which act provides legal backing for securities markets in India?

  • The Companies Act, 2013
  • Securities and Exchange Board of India (SEBI) Act, 1992 (correct)
  • The Consumer Protection Act, 2018
  • The Banking Regulation Act, 1949

Derivatives are categorized as non-financial investments.

False (B)

Name three types of investable securities that would be considered when valuing a portfolio.

Bonds, Debentures, Preference Shares

The analysis of prices and volume indicators to interpret trends in the market is known as ______ analysis.

<p>technical</p> Signup and view all the answers

Match the market efficiency form with its description:

<p>Weak Form = Security prices reflect all past market data. Semi-strong Form = Security prices reflect all publicly available information. Strong Form = Security prices reflect all information, including private or insider information.</p> Signup and view all the answers

Which elements are considered when analyzing an investment?

<p>All of the above (D)</p> Signup and view all the answers

Real estate is considered a financial investment.

<p>False (B)</p> Signup and view all the answers

Name two types of analysis that are used as part of fundamental analysis.

<p>Economic Analysis, Industry Analysis</p> Signup and view all the answers

The process of reassessing and adjusting a portfolio's asset allocation is known as portfolio ______ and appraisal.

<p>revision</p> Signup and view all the answers

Which of the following is a goal of investment?

<p>All of the above (D)</p> Signup and view all the answers

Company analysis is a technical analysis component.

<p>False (B)</p> Signup and view all the answers

Give two examples of non-financial investments.

<p>Real Estate, Gold</p> Signup and view all the answers

The concept that asset prices already incorporate all available information is related to the ______ Market Hypothesis.

<p>efficient</p> Signup and view all the answers

Which of the following is designed to provide tax advantages?

<p>Tax-sheltered Investments (C)</p> Signup and view all the answers

The analysis of security, return, and risk is not a necessary element of investment analysis.

<p>False (B)</p> Signup and view all the answers

What are two types of technical analysis?

<p>Various Prices and Volume Indicators, Indices and Moving Averages</p> Signup and view all the answers

Bonds and debentures are examples of ______ securities.

<p>investable</p> Signup and view all the answers

What does investment analysis primarily focus on?

<p>Evaluating assets for investment suitability (C)</p> Signup and view all the answers

Objectives of investment solely include financial outcomes.

<p>False (B)</p> Signup and view all the answers

Match the following concepts with their definitions:

<p>Fundamental Analysis = Evaluating securities by examining financial statements and economic indicators. Technical Analysis = Analyzing securities by considering market trends and price movements. Economic Analysis = Assessing overall economic conditions to project investment performance.</p> Signup and view all the answers

Flashcards

Meaning of Investment

The commitment of money or capital to purchase financial instruments or assets to gain profitable returns in the form of interest, dividends, or appreciation in the value of the instrument.

Investment Analysis

Examination of investment choices to forecast potential returns and risks.

Return

The periodic payment for investments or properties to the investor.

Risk

Possibility of losing some or all of the original investment.

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Objectives of Investment

The goals an investor sets for their investments.

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Return and Risk Analysis

Process of understanding potential profit relative to risk.

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Securities

Financial instruments that are tradable. Examples include: stocks and bonds.

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Derivatives

Contracts deriving value from an underlying asset.

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Tax-sheltered Investment

Investments that provide shelter from taxes.

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Fundamental Analysis

Examination of financial statements to assess value.

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Technical Analysis

Analyzing price and volume to predict future movements.

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Moving Averages

Helps visualize data trends using averages over time.

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Bonds and Debentures

Debt securities issued by companies or governments.

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Preference Shares

Stocks giving priority in dividends.

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Convertible Securities

Securities convertible into company's equity.

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Options and Futures

Claims on underlying assets with specific conditions.

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Efficient Market Hypothesis

This class states that it is impossible to consistently achieve returns in excess of average market returns on a risk-adjusted basis given all publicly available information.

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Semi-strong Market Efficiency

A portfolio selection strategy suggests that security prices fully reflect all information from public and private sources, including past information.

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Strong Market Efficiency

The market is considered to be in an efficient state if all information, whether public or private, is already reflected in market price

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Portfolio Revision

Reviewing portfolio to ensure alignment with goals.

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Study Notes

  • The Consumer Protection Act was established in 2018
  • The Securities and Exchange Board of India (SEBI) Act was established in 1992
  • Listed below are optional papers for study

Investment Management

  • Unit I includes the meaning of investment, nature and scope of investment analysis and elements of investment
  • Return, risk and time elements are included in Unit I
  • Objectives of investment, approaches to investment analysis, and security are also in Unit I
  • Also covered in Unit I are return and risk analysis, and the measurement of return and risk
  • Unit II includes the types of investments and financial investments
  • Securities and derivatives are types of investments listed in Unit II
  • Deposits and tax-sheltered investments are types of investments listed in Unit II
  • Non-financial investments like real estate, gold and their characteristics are in Unit II
  • Sources of financial information are also covered in Unit II
  • Unit III involves fundamental and technical analysis
  • Unit III includes fundamental analysis, economic analysis, industry analysis and company analysis
  • Technical analysis covers various prices and volume indicators, indices and moving averages
  • Interpretation of various types of trends and indices are in Unit III
  • Unit IV covers the valuation of investable securities
  • Bonds, debentures, preference shares, convertible securities and equity shares are several valuation of investable securities
  • Valuation of options and futures is also in Unit IV
  • Efficient Market Hypothesis and Portfolio Selections involves weak, semi-strong and strong markets
  • Testing of different forms of market efficiency and their significance are covered
  • Portfolio selection, traditional and modern approaches are covered
  • Portfolio revision and appraisal are covered

Marketing Management

  • Unit I includes the nature and scope of marketing
  • Core marketing concepts are found in Unit I
  • The evolution of modern marketing concepts are also in Unit I

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