Very Short Question Answer 1. Define the government budget. Government budget is defined as the estimate of income and expenditure by government for the coming fiscal year. 2. What are contains of the government budget? Contains of the budget are as follows: i. Actual income and expenditure of the previous fiscal year. ii. Revised income […]
Chapter 7: Common Stock Analysis and Valuation
Very Short Answer Question 1. What is economic analysis? Economic analysis is the process of studying general state of economy to assess economic movements in country and their impact on stock price. In the process of economic analysis, we study the pattern of movement in macroeconomic variables to forecast how they affect specific industry and […]
Chapter 6: Common Stock Fundamentals
Very Short Question Answer 1. List out the pros and cons of stock ownership. The pros or advantages of stock ownership are as follows: It offers substantial return opportunities. It is easily marketable. The market information on common stock is easily accessible. Common stock investment requires lower investment outlay. The cons or disadvantages of stock […]
Chapter 5: Modern Portfolio
Very Short Question Answer 1. How do you distinguish a growth portfolio from an income portfolio? A growth portfolio is one that offers a long-term capital appreciation to the investor. The example of growth portfolio is the portfolio of high growth common stock. On the other hand, the income portfolio ensures regular income such as […]
Chapter 4: Return and Risk
Very Short Question Answer 1. Differentiate between expected return and required return? The expected return refers to the rate of return expected from an investment. On the other hand required rate of return is the rate of return that an investment must earn to compensate against the level of risk involved in it. Expected return […]
Chapter 3: Investment Information and Securities Transactions
Very Short Question Answer 1. Differentiate the price – weighted index from the value – weighted index. Price weighted index is calculated by assigning weights in an index in proportion to the stock price of the underlying corporation. It is given by total of the market prices of all stocks in the sample divided by […]
Chapter 2: Markets and Transactions
Very Short Question Answer 1. State the roles of an investment banker. Investment bankers play .a number of roles in the primary market. One of the primary roles of an investment banker is to work as an intermediary between issuing corporations and investors through initial public offerings (IPOs). Similarly, they provide underwriting services for new […]
Chapter 1: Investment Environment
Very Short Question Answer 1. List out major characteristics of an investment. The most common characteristics of investment are as follows: Investment is undertaken with the expectation of earning a rate of return. Investment is the allocation of current saving with the expectation of more wealth for consumption in the future. Every investment involves risk […]
Chapter 8: Monetary Theory
Very Short Question Answer 1. Define money supply. Money supply is defined as the total stock of money held by people and financial institutions including the central bank at a particular point of time. In other words, money supply is the total quantity of money circulation in an economy. 2. What do you mean by […]