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Understanding Index
Understanding Index
Q1. The market impact cost on a trade of Rs. 4 million of the S&P CNX Nifty works
out to be about 0.06.This means that if S&P CNX Nifty is at 4000, a sell order of that
value will go through at a price of Rs. ___________
a) 3997.6
b) 3996
c) 3999.5
d) 3995.5
Q2. Exchange traded fund (ETFs) first came into existence in the ___________
a) USA in 1993
b) UK in 1990
c) China in 1995
d) Germany in 1980
Q3. The index NIFTY, CNX NIFTY JUNIOR, MINI NIFTY 50 are owned, computed and
maintained by _____
a) India Index Services & Products Limited
b) NSEIL
c) S&P
d) CRISIL
Q4. Assume that the base value of a market capitalization weighted index were
1000 and the base market capitalization were Rs.70,000 cr. If the current market
capitalization is Rs.1,40,000 cr, the index is at Rs._________
a) 2110
b) 2350
c) 2250
d) 2000
Q5. Which of the following statement is TRUE about impact cost ?
a) The market impact cost on a trade of Rs. 3 million of the full Nifty works out
to be about 0.05%
b) Market impact cost is a measure of the volatility of the market
c) For a stock to qualify for inclusion into the Nifty, it has to have market impact
cost of 1% when doing Nifty trades of half a crore rupees.
d) Impact cost reflects the cost faced when actually trading a stock
Q6. The market impact cost on a trade of Rs. 3 million of the S&P CNX Nifty works
out to be about 0.06.This means that if S&P CNX Nifty is at 3825, a buy order of that
value will go through at a price of roughly Rs. ___________
a) 3822
b) 3830
c) 3826
d) 3828
Q7. The most popular stock index futures contract in the world is based on ________,
traded on ______
a) S&P 500 Index, Chicago Mercantile Exchange
b) Dow Jones Industrial Average, New York Stock Exchange
c) S&P 500 Index, NASDAQ
d) Dow Jones Industrial Average, Chicago Mercantile Exchange
Q8. If a portfolio has a beta of 0.80, a 10% fall in the index will cause ________ in the
value of the portfolio
a) 10% rise
b) 8% rise
c) 8% fall
d) 10% fall
Q9. Which of the following statement is true about market index ?
A. A good stock market index is one, which captures the behavior of the overall
equity market.
B. A market index is very important for its use as a barometer for market
behavior
C. A stock index number is the current relative value of a weighted average of
the prices of a pre-defined group of equities.
D. A market index acts as a benchmark portfolio performance.
(i)
B
(ii)
A&C
(iii)
A,B,C &D
(iv)
B&D
Q10. ________ provide exposure to an index or a basket of securities that trade on
the exchange like a single stock
a) Index funds
b) ETFs
c) Open ended equity funds
d) Close ended equity funds
Q11. A market index is very important for its use __________
a) In passive fund management by index funds
b) As an underlying in derivative instruments
c) As a benchmark portfolio performance
d) All of the above
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Q25. The methodology of computing S&P CNX Nifty shifted from __________ method
to ____________ method with effect from June 26, 2009.
a) Price weighted, market capitalization weighted
b) Market capitalization weighted, free float market capitalization
c) Price weighted, free float market capitalization