ALLIANCE COLLEGE

Department of Accounting and Finance

Investment and Portfolio Management (AcFn4051) Mid Exam (30%)
time =50’

Name:_______________________________________ Batch:________ ID:___________

Part-I: Multiple Choices - Choose the correct answer from the given
alternatives (1.5pts each).
1. __________ is the present promise of dollars for a period of time in order to obtain future
payments or returns from the investment.
A. Gambling D. All of the above
B. Investing E. None of the above
C. Speculation
2. ___________ is a market / place where short term financial assets are traded.
A. Capital market D. All of the above
B. Bond market E. None of the above
C. Equity market
3. Which one of the following not true about real assets?
A. Real assets are determining the wealth of an economy.
B. Real assets only represent claims on financial assets.
C. Real assets are appreciated in value over the period.
D. All of the above
4. All of the followings are the role of financial assets and financial markets in the economy
except:
A. Consumption Timing C. All of the above
B. Allocation of Risk D. None of the above
5. From the following which statement is true?
A. Secondary market is a market at which new issued securities are Purchased and sold.
B. Financial intermediaries are institutions that match Surplus spending units with deficit
spending units.
C. Primary market is a market at which already issues of stocks, bonds, or other securities
typically are marketed to the public by investment bankers.
D. All of the above

1
 E. None of the above
6. Which one of the following is not true regarding finance?
A. It means resource
B. It describes a discipline
C. It monetary means of financing asset
D. It is the branch of economics
E. None of the above

7. The value of financial assets are affected by the followings, except:

A. Timing of assets expected cash flow
B. Investors’ required rate of return
C. Riskiness of the expected cash flow
D. None of the above
8. The market in which newly issued instruments are bought:
A. Capita market C. Primary market
B. Secondary market D. Money market

9. If financial securities have higher risk, their expected yield would be

higher.

A. True B. False

10. Change in price characterized as:

A. Portfolio C. Volatility
B. Asset classes D. Earnings

11. Among the following the one is the specialization area for finance?

A. Financial management C. Investment analysis

B. Security analysis D. All of the above

12. From the following which area of finance is served as financial

intermediaries?

A. International finance C. Financial institution

B. Business finance D. Public finance

13. From the types of finance the one deals with government revenue
and expenditure.

A. Private finance C. Corporate finance

B. Public finance D. International finance

14. _____ is grouping of financial securities.

A. Portfolio B. Efficient frontier

2
 C. Return D. Risk
15. The risk that cannot be diversified away is:
A. Firm-specific risk. C. Unique.
B. Market risk. D. Unsystematic risk.

16. Which one is not true regarding security market?

A. It is a system for direct flow of capital.
B. It determines the prices of assets traded.
C. It makes liquid financial assets.
D. It is means to raise a fund.
E. None of the above.
17. ______ is a market that trades the already existing financial
instruments.

A. Initial public offering D. Money market

B. Primary market E. Capital market
C. Secondary market

18. Which one is not traded in money market?

A. Treasury bill C. Commercial paper

B. Ordinary share D. Certificate of deposit

19. Which one is not true about investment?

A. An investor has a relatively shorter time horizon compare to that of a
speculator.
B. Investor expects regular income in the form of dividend whereas
Speculator looks for Capital appreciation.
C. An investor is generally risk averse whereas a speculator is generally
risk prone.
D. Investors expected return is consistent with the underlying
riskwhereas speculators assumed risk and anticipated return are
disproportionate.
20. In which condition the result is known with short time and show a fun
loving.

A. Investment C. Risk
B. Speculation D. Gambling

21. Which one of the following is not the feature of gambling?

A. High risk, short-term, specific objective
B. Luck, capital gain, moderate risk
C. High risk, luck, capital gain
D. Luck, specific objective, short-term

3
Answering Space

Part-I: T/F Part-II: Matching Part-III: Multiple choices

1. 2. 3. 4.
5. 6. 7. 8.
9. 10. 11. 12.
13. 14. 15. 16.
17. 18. 19. 20. 21.