Portfolio Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Portfolio Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Portfolio Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Portfolio Management mcq questions that explore various aspects of Portfolio Management problems. Each MCQ is crafted to challenge your understanding of Portfolio Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Portfolio Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Portfolio Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Portfolio Management knowledge to the test? Let's get started with our carefully curated MCQs!

Portfolio Management MCQs | Page 1 of 10

Discover more Topics under IC 89 Management Accounting

Q1.
What is the primary focus of Portfolio Management?

a.

Maximizing investments in government securities

b.

Balancing risk against performance

c.

Minimizing time factor in investments

d.

Focusing solely on equities

Discuss
Answer: (b).Balancing risk against performance Explanation:Portfolio Management involves making decisions about the investment mix and policy, balancing risk against performance. It aims to optimize the selection of investments, considering anticipated returns, associated risks, and investor requirements.
Q2.
Why is time considered a key factor in investments in government securities?

a.

Because government securities have high returns

b.

Because government securities have low risk

c.

Because government securities require a longer investment horizon

d.

Because government securities involve complex calculations

Discuss
Answer: (c).Because government securities require a longer investment horizon Explanation:Time is a key factor in government securities due to their nature, often requiring a longer investment horizon for optimal returns.
Q3.
What two factors should an investor consider in any investment?

a.

Profit and loss

b.

Time and risk

c.

Long-term and short-term

d.

Equities and options

Discuss
Answer: (b).Time and risk Explanation:Investors should understand the two basic factors in any investment: time and risk.
Q4.
How is Portfolio Management defined?

a.

Making decisions only about equities

b.

A complex process of investment management

c.

Maximizing investments in real assets

d.

Focusing solely on short-term investor requirements

Discuss
Answer: (b).A complex process of investment management Explanation:Portfolio Management is defined as a complex process of making decisions about the investment mix and policy, considering various factors.
Q5.
What does Portfolio Management involve?

a.

Owning a portfolio of investments without analysis

b.

Analyzing government securities exclusively

c.

Making decisions for investment without risk assessment

d.

Analyzing, selecting, and quantifying the right investments in a portfolio

Discuss
Answer: (d).Analyzing, selecting, and quantifying the right investments in a portfolio Explanation:Portfolio Management involves analyzing, selecting, and quantifying the right investments in a portfolio, requiring a thorough analysis and decision-making process.
Q6.
What is Fundamental Analysis primarily focused on?

a.

Intrinsic value and supply-demand dynamics

b.

Quantitative factors and market trends

c.

Technical indicators and economic conditions

d.

Evaluating intrinsic value through economic and financial factors

Discuss
Answer: (d).Evaluating intrinsic value through economic and financial factors Explanation:Fundamental Analysis involves evaluating a security's intrinsic value by examining economic, financial, and qualitative factors.
Q7.
What does Fundamental Analysis attempt to study?

a.

Only macro-economic factors

b.

Only organization-specific factors

c.

Both macro-economic and organization-specific factors

d.

Only industry conditions

Discuss
Answer: (c).Both macro-economic and organization-specific factors Explanation:Fundamental Analysis attempts to study both macro-economic factors (overall economy and industry conditions) and organization-specific factors (financial condition and management).
Q8.
What is the basic objective of making investments in stocks?

a.

Achieving macro-economic stability

b.

Earning higher returns by selling stocks at higher prices

c.

Generating income through dividends only

d.

Speculating on short-term market trends

Discuss
Answer: (b).Earning higher returns by selling stocks at higher prices Explanation:The basic objective of making investments in stocks is to earn higher returns by selling stocks at higher prices.
Q9.
What does Technical Analysis assume about the price of a stock?

a.

It depends on supply and demand in the market

b.

It is solely influenced by intrinsic value

c.

It is unrelated to market trends

d.

It relies on fundamental economic indicators

Discuss
Answer: (a).It depends on supply and demand in the market Explanation:Technical Analysis assumes that the price of a stock depends on supply and demand in the market, with little correlation to intrinsic value.
Q10.
What factors should every investor understand through research work?

a.

Only risks associated with investments

b.

Only the relationship between risk and return

c.

Only the present conditions of financial markets

d.

Various issues, including risks, risk-return relationship, and financial market conditions

Discuss
Answer: (d).Various issues, including risks, risk-return relationship, and financial market conditions Explanation:Investors should understand various issues, including risks, risk-return relationship, and financial market conditions, through research work.
Page 1 of 10