1. Which one is the biggest Stock market of Pakistan?

a) Lahore Stock Exchange

b) Karachi Stock Exchange
c) Islamabad Stock Exchange
d) None of them
2. Stock Brokers are your link to?
a) Currency market
b) Money market
c) Stock market
d) Both a & c
3. While selecting a broker you ensure that the broker is registered with?
a) SECP
b) FIA
c) KSE
d) None of them
4. Stock Brokers job is to help you get?
a) Lowest price available
b) Highest price available
c) Best price available
d) All of them
5. Stock Brokers helps you to?
a) Sell Shares
b) Buy Shares
c) Both a & b
d) None
6. All the registered brokers are listed at
a) KSE
b) SECP
c) None of them
d) Both a & b
7. Account opened with the broker is called?
a) Current account
b) Trading account
c) Non-Current account
d) Debit account
8. The Account opened with broker should be on the name of>
a) Broker’s name
b) Investor’s name
c) Third part’s name
d) All of above
9. One can participate in stock market by
a) Invest directly
b) Invest indirectly
c) Both
d) None
10. The delivery of shares performed manually in Physical form, if company has not entered
a) Share Allocation System
b) Central Depository System
c) Share Distribution System
d) None
11. Central Depository System is the system of
a) Electronic book-entry System
b) Manual book-entry System
c) Semi electronic book-entry System
d) Semi-manual book-entry System
12. CDS is set up to eliminate
a) Electronic transfer of securities
b) Physical transfer of securities
c) Both a & b
d) None
13. CDS is managed by the
a) KSE
b) SECP
c) CDC
d) All of them
14. Which one is not the advantage of CDS?
a) Electronic book-entry System
b) Physical book-entry System
c) Record and transfer securities electronically
d) No Physical change of hands of securities
15. A broker may open and operate any number of sub-accounts on behalf of
a) Buyer
b) Seller
c) Client
d) None of them
16. Market risk is also called
a) Non diversifiable risk and systematic risk
b) diversifiable risk and systematic risk
c) systematic risk and unique risk
d) Non diversifiable and Unique
17. Risk that arise due to possibility of host government harmful actions is called
a) Market Risk
b) Product risk
c) Business Risk
d) Political Risk
18. Which of the following risk is associated in international investment?
a) Market Risk
b) Product risk
c) Business Risk
d) Political Risk
19. As per CAPM model total risk of the security is equal to
a) Diversifiable risk
b) Non Diversifiable risk
c) Both
d) Non of above
20. BETA of market portfolio is
a) 0.5
b) -1
c) 0
d) 1
21. The market risk premium slop
a) Security market line
b) Opportunity line
c) Capital market line
d) Non of these
22. According to CAPM over Priced Securities have
a) Negative Alphas
b) Positive Alphas
c) Zero Alphas
d) Negative Betas
23. Beta coefficient is used to measure market risk which is an index of

a) coefficient risk volatility

b) market risk volatility
c) stock market volatility
d) portfolio market portfolio
e)
24. Beta of risk free asset is
a) 2
b) 1
c) 0
 d) -1
25. CAPM asserts that Portfolio returns are
a) Diversifications
b) Economic Factors
c) Systematic Risk
d) Specific Risk
26. The market Premium is 15% and risk free rate is 5% , beta is 0.2. What is return of asset under
CAPM?
a) 3%
b) 20%
c) 7%
d) 8%

27. If an asset’s expected return plots above security line, the asset is:

a) Under Priced
b) Over Priced
c) Both
d) Fairly priced
28. Risk free return is the return of

a) Fixed return of bonds/ debentures

b) Return of equity instruments
c) Return of any security
d) None of above

29. Risk free return denotes in formula with

a) Rf

b) Rt

c) Fr

D) Tf

30.Which of the following is not the assumption of CA

a) All investors are averse to risk.

b) Markets are highly efficient. All investors have equal access to all available information.
c) All investors can borrow and lend unlimited amounts under a risk-free rate.
d) Alpha coefficient is the only measure of risk

31. Risk of two securities with different expected return can be compared with
a) Coefficient of variation
b) Standard deviation
c) Variance of securities
d) None of the above
32. A portfolio having two risky securities can be turned risk less if

a)if securities are completely positively correlated

 b)if correlation ranges between zero and one

c)the securities are negatively correlated

d)none of the above

33. A portfolio comprises two securities and the expected return on them is 12 ⁒ and 16⁒
respectively. Determine return of portfolio if first security constitutes 40 of total

a) 12.4

b) 13.3

c) 14.4

d) 15.5

34. Which of the following four investments ……..is considered the safest?

a) commercial paper

b) corporate bonds

c) treasury bonds

d) treasury bills

35. ……… is a statistical measure of the variability of a distribution around mean ?

a)variance

b)expected rate of return

c)standard deviation

d)co-efficient of variation

36. The additional return we must expect to receive for assuming risk?

a)risk discount

b)par risk

c)risk premium

d)risk free rate

37. The total risk is calculated by adding unsystematic risk with

 a)systematic risk

b)market risk

c)country specific risk

d)all of the above

38. An investment proposal should be judge and accepted?

a)a return more than required by investor

b)a return equal to the return by the investor

c)a return less than required by investor

d)none of the above

39. The conventional measure of dispersion is-----------?

a) a probability distribution

b)the expected return

c)the standard deviation

d)coefficient of variation

40. CAPM accounts for;

a)unsystematic risk

b)systematic risk

c)both a and b

d)none of the above

41. Efficient portfolios can be defined as those portfolios which for a given level of risk provides

a)maximum return

b)average return

c)minimum return

d)none of the above

42. Marry owns a risky stock and anticipates earning 16.7 percent on her investment in that stock. The
best description of it?
 a)real return

b)market rate

c)expected rate

d)risk premium

43. Which term best refers to the practice of investing in a variety of diverse assets as a means of risk?

a)systematic

b)unsystematic

c)diversification

d)CAPM

44. Which one describe systematic risk?

a)diversifiable risk

b)asset specific risk

c)an individual security risk

d)risk that affects a large number of assets

45. The attitude towards risk in which an increased return is required for an increase risk

a)risk taker

b)risk aversion

c) a ,b

d)none of the above

46. According to future contracts, the long position states the

a) Purchase of forward contracts

b) Purchase of future contracts
c) Sales of future contracts
d) Sales of forward contracts

47. Which of the following is not correct concerning futures contracts?

a) Entails an obligation rather than an option.

b) Contract price is set at the beginning of the contract
c) Contracts are exchange-traded
 d) Gains or losses are recorded at contract expiration

48. What happens to the price of a futures contract as expiration draws closer?

a) It exceeds the spot price of the asset

b) It is exceeded by the spot price of the asset.
c) It approaches the spot price of the asset.
d) There is no relationship between futures price and spot price as the contract approaches
expiration.

49. The process of marking a futures contract to market means that:

a) The profitability of the contract is locked in from the onset of the contract.
b) The amount of commodity to be delivered changes as prices change.
c) Contractsare closed out as soon as they become unprofitable.
d) Profits or losses are posted to the contract daily.

50. The basic difference between speculators and hedgers in futures contracts is that speculators:

a) Will profit regardless of the direction of price change.

b) Are not protecting their commodity holdings.
c) Are concerned only with long-term price movements.
d) Take a position in more than one commodity at a time.

51. Why are most futures contracts not settled through delivery of the product?

a) Most contracts are settled through the margin account.

b) Most contracts expire with neither party having an obligation to the other party.
c) Most participants cancel their futures contracts through purchase of an option contract.
d) It is easier and cheaper to settle in cash or by offset
52. Which of the following statements about futures contracts is wrong? 

a) A futures contract is a marketable forward contract

b) Futures contracts have standardized features and a clearinghouse to mitigate default risk
c) Futures contracts can be used to fix the future selling price regardless of future changes in spot
market prices
d) The basis in futures is similar to a basis point in banks

53. The basis is defined as:

a) spot price minus forward price

b) futures price minus forward price
c) forward price minus spot price
d) spot price minus futures price

54. The cash price of wheat today is 410 cents per bushel, and the three-month futures price of the
same is 421 cents per bushel. The basis is:

a) -31 cents
b) 11 cents
c) -11 cents
d) 421 cents

55. If a farmer buys a corn option on futures:

a) The farmer has the right to deliver the corn, and will do so only if the price is favorable
b) The farmer must accept a corn futures contract, and not take physical possession of the corn
c) The farmer must deliver the corn at a fixed price
d) The farmer must deliver the corn at the market price
56. Standardized futures contracts exist for all of the following underlying assets except:

a) Gold.
b) Stock indexes.
c) Treasury bonds.
d) Common stocks.

57. Which of the following is false?

a) Futures contracts allow fewer delivery options than forward contracts.

b) Futures contracts are more liquid than forward contracts.
c) Futures contracts are marked to market.
d) Futures contracts trade on a financial exchange.

58. Which of the following does the most to reduce default risk for futures contracts?

a) High liquidity.
b) Flexible delivery arrangements.
c) Marking to market.
 d) Credit checks for both buyers and sellers.

59. Using futures contracts to transfer price risk is called:

a) Speculating.
b) Hedging.
c) Diversifying.
d) Arbitrage.

60. Which of the following has the right to sell an asset at a predetermined price?

a) A call buyer.
b) A call writer.
c) A put buyer.
d) A put writer.

61. Option contract is an agreement that give the

a) Owner obligation
b) Owner right
c) Owner duties
d) Owner responsible
62. Options come in
a) Four flavors
b)Three flavors
c) Eight flavor
d) Two flavor
63. An agent authority can be created
a) Only by expressly writing the term thereof
b) Only by implication
c ) Either expressively or impliedly
d) The principle only
64. Option contract have the potential for
a) Large profit
b) large loss
c) Large gains and loss
d) Dividend
65. Options occur in everyday life
a) Occasionally
b) Frequently
c) Sometime
d) Never
66. What is the minimum consideration required to create an agency
a)Minimum of rupees one lakh
 b) Minimum of rupees one thousand
c)Minimum of rupees ten thousand
d)No consideration at all is required
67. Which of the following feature is not essential for a contract?
a) It should be in writing
b) Free consent of parties competent to contract
c) Lawful consideration and with a lawful object
d) It should be declared void expressly
68. Which of the following investment strategies has unlimited profit t potential
a) Writing a call
b) Protective
c) Put covered call
d) Bull spread
69. Which of the following has the right to sell an asset at a predetermined price?
a) A call writer
b) A put writer
c) A put buyer
d) A call buyer
70. Which of the following is potentially obligated to sell an asset at a predetermined price?
a) A put buyer
b) A call buyer
c) A call writer
d) A call buyer
71. Put option has the
a) Right
b)ethic
c )obligation
d) Both a & b
72. Option come in
a) sell
b)calls
c) calls and puts
d) puts
73. Option premium price you pay to
a) sell an option
b) Buy an option
c) Both a & b
d) None of above
74. A sub-agent is a person employed by and acting under the control of
a) the principle only
b) the original agent in the business of agency only
c) Set of
d) considered to be his approval
75. Which of this contract has three parties consisting of creditor, principle debtor and surety?
a) Contract of indemnity
b) contract of surety
c) contract of guarantee
d) pledge
76. The account used for keeping securities which are beneficially owned by the broker’s client
called
a) Investors account
b) Sub-account
c) Group client account
d) Personal account
77. Investors account can be operated by the
a) Broker
b) Buyer
c) Relevant account holder
d) All of them
78. An index represents a given security market is called
a) Global Stock market index
b) Stock market index
c) Market index
d) None of them
79. The Composite value of traded stocks group of secondary markets is classified as
a) Stock index
b) Primary index
c) Stock market index
d) Limited liability index
80. The form of market efficiency which states that prices of stock reflects the public and private
information of the firm is classified as;
a) Weak form of market efficiency
b) Strong form of market efficiency
c) Semi-strong form of market efficiency
d) Expensive form of market efficiency
81. The right of stockholders of firm that new shares must be offered to existing stockholders first
rather than new stock holders is classified as;
a) Non offered rights
b) Preemptive rights
c) Existing rights
d) Securitize rights
82. The price at which the stock is sold to investors by the investments bank is called;
a) Gross proceeds
b) Cumulative proceeds
c) Non-cumulative proceeds
d) Net proceeds
83. The stock market in which already issued stocks are resold and re-bought are classified as;
a) Red herring stock market
b) Preemptive stock market
c) Silence stock market
 d) Secondary stock market
84. The orders that are transacted at the best available price are classified as
a) Post orders
b) Transacted orders
c) Market orders
d) Available orders
85. Which term most accurately describes selling shares at a higher price than the price at which
they were bought?
a) Loss
b) Profit
c) Asset
d) Dividend
86. Which of the following are you unlikely to find traded officially on world stock markets?
a) Foreign currency
b) Insults
c) Company stock/shares
d) Gold
87. Over the life of the derivative contract, the value of derivative
a) Fluctuates with the price of the contract
b) Decreases
c) Increases
d) None of these
88. 29 A contract between a buyer and a seller entered into today regarding a transaction to
fulfilled at a future point in time is called
a) Fixed contract
b) Derivative contract
c) Forward contract
d) Future contract
89. Pakistan stock exchange consists of how many companies
a) 524
b) 546
c) 699
d) 800
90. The main purpose of the stock market is raising of capital through investment in;
a) International firm
b) Non- profit organization
c) Shares of listed companies
d) None of these
91. The oldest approach to common stock selection is:
a) fundamental analysis
b) technical analysis
c) random walk analysis
d) value analysis
92. Technical analysis reflects the idea that stock prices:
a) Move upward over time.
b) Move inversely over time.
c) Move in trends.
d) Move randomly.
93. According to the Dow Theory, daily fluctuations and secondary movements in the stock
market are used to identify the:
a) short-term trend
b) primary trend
c) moving average

d) intermediate trend
94. The two primary tools of a technical analyst are:
a) Level of the market index and volume.
b) Economic indicators and level of the market index.
c) Price and volume.
d) Price and technical indicators.

95. Which of the following is not true regarding the Dow Theory?
a) It is intended to forecast the start of a primary movement.
b) It does not forecast how long a movement will last.
c) It has a very high success rate.
d) It is subject to many criticisms.
96. A principal weakness of the Dow Theory is:
a) Its use of averages instead of indexes.
b) Its attention to general market movements.
c) That it pays too much attention to primary trends.
d) The many versions that are available.
97. Volume and specific calendar time are not considered important in a:
a) Pie chart.
b) point and figure chart
c) Bar chart.
d) Histogram.
98. What is usually shown at the bottom of a bar chart?
a. a point and figure chart
b. advance/decline line
c. closing price
d. volume
99. Which of the following is not a contrary trading rule?
 a) Relative strength ratio
b) Investment advisory opinions
c) Mutual fund liquidity positions
d) Put/call ratio
100. Which of the following is not one of the tests of a technical trading rule?
a. Transaction and other costs
b. Consistency
c. Return
d. Risk
101. Which of the following is a characteristic of the short interest ratio: It is:
a) Calculated daily as well as weekly.
b) Often interpreted without any additional information.
c) Between2 and 3 in recent times.
d) Considereda measure of investor sentiment.
102. In order to have confirmation of a major market trend under the Dow Theory,
the:
a) Industrial and utility averages must confirm each other.
b) Transportation and utility averages must confirm each. Other.
c) Utility average must lead the transportation average.
d) Transportation and industrial average must confirm each other.
103. When each successive peak and through a higher, it refers to as:
a) Upward trend
b) Downward trend
c) Horizontal trend
d) None of these
104. To compare the variation of two or more than two series, we use
e) Combined standard deviation
f) Corrected standard deviation
g) Coefficient of variation
h) Coefficient of skewness
105. Which of the following measures of dispersion is independent of the units
employed?
e) Coefficient of variation
f) Quartile deviation
g) Standard deviation
h) (d) Range
106. The positive square root of the mean of the squares of the alleviations of
observations from their mean is called:
e) Variance
f) Range
g) Standard deviation
h) Coefficient of variation
107. The variance is zero only if all observations are the:
e) Different
f) Square
g) Square root.
h) same
108. If the dispersion is small, the standard deviation is
(a) Large
(b) Zero
(c) Small
(d) Negative
109. Which of the following is an absolute measure of dispersion?
(a) Coefficient of variation
(b) Coefficient of dispersion
(c) Standard deviation
(d) Coefficient of skewness
110. Risk of two securities with different expected return can be compared with:
a) Coefficient of variation
b) Standard deviation of securities
c) Variance of Securities
d) none of the above
111. A measure of "risk per unit of expected return."
e) standard deviation
f) coefficient of variation
g) correlation coefficient
h) beta
112. The greater the beta, the            of the security involved.
e) greater the unavoidable risk
f) greater the avoidable risk
g) less the unavoidable risk
h) less the avoidable risk
113. This type of risk is avoidable through proper diversification.
e) portfolio risk
f) systematic risk
g) unsystematic risk
h) total risk
114. A statistical measure of the degree to which two variables (e.g., securities'
returns) move together.
e) coefficient of variation
f) variance
g) covariance
h) certainty equivalent

115. is a measure of the total production of the final goods and services in the economy during the
specified period usually a year
(a) GNP
(b) DGP
(c) IGR
(d) GDP

116. The price prevailing in market is called -----

 (a)Direct value
(b) Market value
(c) Market price
(d) Intrinsic value

117. A balance of payments deficit depletes the --------------of the country and has an adverse impact
on the exchange rate

(a)Forex exchange
(b) exchange rate
(c) stock exchange
(d) none of these

118. an industry is an ----------- group of companies

(a)Acrogenous
(b) Homogenous
(c) acrogenous
(d) all

119. the ------------ as well as state budgets prepared annually provides information on revenues
expenditures and deficit or surplus.

(a)Provisional budget
(b) central budget
(c) federal budget
(d) state budget

120. the bulk of Indian government expenditures goes towards administrations interest payments
and?

(a )Sports
(b) films industry
(C) agriculture
(d) Defense and subsidies

121. the effect of ------- o the corporate sector tends to be uneven. While certain industries may
benefits

(a)Balance of payments
(b) inflection
(c) expenditures
(d) reserves
122. A spell of good and monsoon imparts dynamism to the ------------------and buoyancy to the stock
market

(a)Industrial sector
(b) agriculture sector
(c) sports sector
(d) defense sector

123. ------------------for about a quarter of Indian economy and has important linkages direct and indirect

(a) State budget

(b) Agricultural accounts
(c) defenses
(d) expenditures

124. In the ------------------------ an attempt is made to analyze various fundamental or basic factors that
affect risk-rectum of the society.

(a)Technical approach
(b) Fundamental approach
(c) direct approach
(d) indirect approach

125. publicly listed companies play a major role in industrial sector and miner in-----------and -------

(a)services and sports sector

(b) Agricultural and industrial sector
(c) services and agricultural sector
(d) all of these

126. the analysis of the state economy at the -------- incorporates the performance of the economy in
the past how it’s performing in the present and how expected to perform in future-

(a)Primary level
(b) secondary level
(c) micro level
(d) Macro level

127. investment decision-making being continues in nature should attempt ------------..

(a)Directly
(b) Systematically
 (c) indirectly
(d) none of these

129. the fundamental approach includes economic analysis, industry analysis and---------

(a)Micro analysis
( b) macro analysis
(c) company analysis
(d) none of these

130. A rise of interest rate depress corporate profitably and also leads increase in---------- by equity
investors.

(a)Inflection rate
(b) tax rate
(c) profit rate
(d) Discount rate

131. Coefficient variation of relative dispersion that is useful for___

a) Risk of asset
b) Return of asset
c) Portfolio
d) A and B both
132. A portfolio that minimizes return for given level of risk
a) Un efficient portfolio
b) Efficient portfolio
c) Diversification
d) None of these
133. Describe two series that move in the same direction
a) Diversification
b) Negative correlation
c) Positive correlation
d) A and B both
134. Describe two series that move in the opposite direction
a) Negative Correlation
b) Positive Correlation
c) Correlation
d) None of these
135. Combining Negative Correlated assets can reduce variability of
a) Portfolio
b) Risk
c) A and B
d) Return
136. Perfectly Positively Correlated is
a) +2
b) -2
c) +1
d) -1
137. Perfectly Negatively Correlated is
a) +2
b) -1
c) +1
d) -2
138. No interaction between their return is____
a) Correlated
b) Positive correlated
c) Negative correlated
d) Uncorrelated
139. Perfectly Positive Correlated series that moves____
a) Together
b) Opposite
c) A and B
d) None of these
140. Perfectly Negative Correlated series that moves___
a) Together
b) Opposite
c) A and B
d) None of these

141. The higher the standard deviation which means___

a) Greater Risk
b) Greater Return
c) Lower Risk
d) None of these
142. Correlation Coefficient which range from
a) -1 to +1
b) +1 to -1
c) +1 to 0
d) 0 to -1
143. The Correlation Coefficient for Uncorrelated asset is close to__
a) -1
b) +1
c) A and B
d) 0

144. The oldest approach to common stock selection is:

a) fundamental analysis
b) technical analysis
c) random walk analysis
d) value analysis
145. Technical analysis reflects the idea that stock prices:

a) Move upward over time.

b) Move inversely over time.
c) Move in trends.
d) Move randomly.
146. According to the Dow Theory, daily fluctuations and secondary movements in the stock
market are used to identify the:
a) short-term trend
b) primary trend
c) moving average

d) intermediate trend
147. The two primary tools of a technical analyst are:

a) Level of the market index and volume.

b) Economic indicators and level of the market index.
c) Price and volume.
d) Price and technical indicators.

148. Which of the following is not true regarding the Dow Theory?

a) It is intended to forecast the start of a primary movement.

b) It does not forecast how long a movement will last.
c) It has a very high success rate.
d) It is subject to many criticisms.
149. A principal weakness of the Dow Theory is:

a) Its use of averages instead of indexes.

b) Its attention to general market movements.
 c) That it pays too much attention to primary trends.
d) The many versions that are available.
150. Volume and specific calendar time are not considered important in a:

a) Pie chart.
b) point and figure chart
c) Bar chart.
d) Histogram.

151. What is usually shown at the bottom of a bar chart?

a) a point and figure chart

b) advance/decline line
c) closing price
d) volume
152. Which of the following is not a contrary trading rule?

a) Relative strength ratio

b) Investment advisory opinions
c) Mutual fund liquidity positions
d) Put/call ratio
153. Which of the following is not one of the tests of a technical trading rule?

a) Transaction and other costs

b) Consistency
c) Return
d) Risk
154. Which of the following is a characteristic of the short interest ratio: It is:

a) Calculated daily as well as weekly.

b) Often interpreted without any additional information.
c) Between2 and 3 in recent times.
d) Considereda measure of investor sentiment.
155. In order to have confirmation of a major market trend under the Dow Theory, the:

a) Industrial and utility averages must confirm each other.

b) Transportation and utility averages must confirm each. Other.
c) Utility average must lead the transportation average.
d) Transportation and industrial average must confirm each other.

156. When each successive peak and through a higher, it refers to as:
a) Upward trend
b) Downward trend
c) Horizontal trend
d) None of these