Certified Equity Research Analyst Sample Questions

Sample Questions


1. If the capital markets are efficient, then the sale or purchase of any security at the prevailing market price is _______________.

A. Generally a zero NPV transaction

B. Always a positive NPV transaction

C. Is always a negative NPV transaction

D. None of the above

2. Financing decisions differ from investment decisions for which of the following reasons?

A. You cannot use NPV to evaluate financing decisions

B. The market for financial assets is more active

C. It is easier to find financing decisions with positive NPV than to find investment decisions with positive NPV

D. None of the above

3. Which of the following is not true about corporate securities market reforms?

A. The secondary market overcame the geographical barriers by moving to screen based trading

B. Counter-party risk is borne by investors

C. The trading cycle in the stock exchanges follow rolling settlement

D. The practice of allocation of resources among different competing entities as well as its terms by a central authority was discontinued.

4. If a client buys shares worth Rs. 90,000 and sells shares worth Rs. 1,10,000 through a stock-broker, then the maximum brokerage payable is _____.

A. Rs. 4,000

B. Rs. 6,000

C. Rs. 2,000

D. Rs. 5,000

5. The losses in a synthetic long call are ____.

A. limited

B. depends on the strike price

C. depends on the premium

D. unlimited

Answers: 1 (A), 2 (B), 3 (B), 4 (D), 5 (A)


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