True/False Questions:

if the statement is true just mark letter of T

IF THE STATEMENT IS FALSE MARK F

1) In traditional view, investment is he current commitment of resources (monies) to achieve later benefits.

2) Individuals seeking investment rather than outright speculation/gambling will elect a less certain wealth stream over a more certain one.

3) Arbitrage is earning (almost sure) monies without investing anything.

4) Asset pricing is not related to risk.

5) The major use of futures and options is for speculation.

6) Asset allocation is the allocation of capital at the asset class level.

7) Asset class is a group of securities/assets with similar characteristics.

8) Investment Policy Statement (IPS) is a written document that sets out a clients return objectives and risk tolerance over the clients relevant time horizon, along with applicable constraints such as liquidity needs, tax considerations, regulatory requirements, and unique circumstances.

9) In practice, security selection is purely quantitative.

10) The valuation process consists of five steps.

11) Sell-side analysts are work at investment management firms, trusts and bank trust departments, and similar institutions.

12) Long research reports consist of five steps.

13) In a good report, key risk factors must be clear.

14) Quality of earnings analysis is the scrutiny of all financial statements to evaluate both the sustainability of a companys performance and how accurately the reported information reflects economic reality.

15) In a zero-growth dividend discount model, the assumption is that there is no growth in dividends.

16) Security selection is the last step for entire portfolio management process.

17) In an efficient market, technical analysis is useful.

18) In a semi-strong form efficient market, fundamental analysis is useless.

19) In passive portfolio management procedure, the portfolio is not diversified.

20) In active portfolio management procedure, there is no attempt to find undervalued securities.