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 2 of 10

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Q11.
What are the major objectives of Portfolio Management with respect to investment?

a.

Maximizing tax liability and ensuring tax planning

b.

Ensuring liquidity and taking advantage of nearness of money

c.

Prioritizing high-risk investments for capital appreciation

d.

Allowing for high-risk investments for greater security

Discuss
Answer: (b).Ensuring liquidity and taking advantage of nearness of money Explanation:The major objectives of Portfolio Management include ensuring liquidity, capital appreciation, security of principal and return, stability of return, and tax planning.
Q12.
What factors does the selection of investment options in Portfolio Management depend on?

a.

Government policies and regulations

b.

Portfolio analysis and security analysis

c.

Market trends and industry competition

d.

Economic conditions and global events

Discuss
Answer: (b).Portfolio analysis and security analysis Explanation:The selection of investment options in Portfolio Management depends on security analysis and portfolio analysis, considering factors like potential growth of industries.
Q13.
What does the timing decision in Portfolio Management refer to?

a.

Timing the market for short-term gains

b.

Timing the purchase of securities for maximum returns

c.

Timing the sale of securities for tax planning

d.

Timing the market for long-term investments

Discuss
Answer: (b).Timing the purchase of securities for maximum returns Explanation:The timing decision in Portfolio Management involves buying securities when their prices are low and selling when they are high to maximize returns.
Q14.
What does Portfolio Evaluation in Portfolio Management involve?

a.

Assessing the political climate for investment decisions

b.

Analyzing the impact of global economic events on the portfolio

c.

Evaluating the performance of the portfolio in terms of risk and return

d.

Monitoring changes in government regulations for investment planning

Discuss
Answer: (c).Evaluating the performance of the portfolio in terms of risk and return Explanation:Portfolio Evaluation in Portfolio Management involves assessing the portfolio's performance over time in terms of risk and return, aiming for maximum return with minimum risk.
Q15.
What is the primary focus of activities in Portfolio Management?

a.

Efficient management of real estate assets

b.

Identification and allocation of investment in financial assets

c.

Maximizing tax liability for portfolio returns

d.

Exclusive focus on debentures of companies

Discuss
Answer: (b).Identification and allocation of investment in financial assets Explanation:The activities in Portfolio Management involve the identification of financial assets and the allocation of investments in those assets.
Q16.
What does the process of portfolio management include regarding the weights and portions of different assets?

a.

Exclusively focusing on a single asset class

b.

Ignoring the weights and portions to maximize risk

c.

Deciding and determining the weights and portions of different assets

d.

Leaving the weights and portions undetermined

Discuss
Answer: (c).Deciding and determining the weights and portions of different assets Explanation:Portfolio Management involves deciding and determining the weights and portions of different assets in the portfolio.
Q17.
What is one of the key activities in portfolio management related to securities within the identified asset classes?

a.

Portfolio Analysis

b.

Security Analysis

c.

Portfolio Revision

d.

Portfolio Evaluation

Discuss
Answer: (b).Security Analysis Explanation:The activity of selecting securities within the identified asset classes involves security analysis.
Q18.
What phase of portfolio management involves the evaluation of the performance of various securities and making necessary revisions?

a.

Security Analysis

b.

Portfolio Analysis

c.

Portfolio Revision

d.

Portfolio Evaluation

Discuss
Answer: (d).Portfolio Evaluation Explanation:Portfolio Evaluation in portfolio management involves assessing the performance of various securities and making revisions as necessary.
Q19.
What is Systematic Risk in the context of portfolio management?

a.

Risk specific to individual assets

b.

Risk common to an entire class of assets and cannot be diversified

c.

Risk arising from company-specific factors

d.

Risk associated with market fluctuations only

Discuss
Answer: (b).Risk common to an entire class of assets and cannot be diversified Explanation:Systematic Risk is the variability of return on stocks or portfolio due to changes in factors like the nation's economy, tax reforms, or world energy situations, common to an entire class of assets and cannot be diversified.
Q20.
Which of the following is a component of Systematic Risk?

a.

Country-specific Risk

b.

Social or Regulatory Risk

c.

Company-specific Risk

d.

Purchasing Power Risk

Discuss
Answer: (b).Social or Regulatory Risk Explanation:Social or Regulatory Risk is a component of Systematic Risk, arising from adverse legislation, harsh regulatory climate, or nationalization by a socialistic government.
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