Portfolio Management Services (PMS) Distributors Free Demo Test 3

Explanation:

Explanation:

Explanation:

When we calculate portfolio’s return in excess of the risk-free return and divide the excess return by the portfolio’s standard deviation, this risk adjusted return is called Sharpe ratio. For computing Sortino Ratio, portfolio’s return in excess of the risk-free return is divided by the portfolio’s semi-standard deviation. Thus, Sortino Ratio adjusts portfolio’s excess return to the downside risk. Like Sharpe and other risk adjusted return ratio, higher level of Sortino Ratio indicates superior performance.

Explanation:

Investment is the commitment of rupee for a period of time to earn :

a) pure time value of money – for investors postpone their current consumption

b) compensation for expected inflation during the period of investment for the change in the general price levels and

c) risk premium for the uncertainty of future payments

Explanation:

Pension Funds: A fund established to facilitate and organize the investment of the retirement funds contributed by the employees and employers.

The pension fund is a common asset pool meant to generate stable growth over the long term, and provides a retirement income for the employees.

Explanation:

A stock’s P/E tells us how much investor is willing to pay per rupee of earnings. In other words, a P/E ratio of 10 suggests that investors in the stock are willing to pay Rs. 10 for every Re. 1 of earnings that the company generates.

Explanation:

The term derivative has also been defined in section 45U(a) of the RBI act 1934 as follows: An instrument, to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating or credit index, price of securities (also called “underlying”), or a combination of more than one of them and includes interest rate swaps, forward rate agreements, foreign currency swaps, foreign currency-rupee swaps, foreign currency options, foreign currency-rupee options or such other instruments as may be specified by RBI from time to time.

Explanation:

Development of Investment Policy Statement (IPS) is the key step in the process of portfolio management. IPS is the road map that guides the investment process.

Either investors or their advisors draft the IPS specifying their investment objectives, goals, constraints, preferences and risks they are willing to take. All investment decision are based on IPS considering investors’ goal and objectives, risk appetite etc..

Explanation:

The formula to getNet from Gross after tax is –

Net = Gross – (Gross X Tax)

[Let Gross = G]

[Tax is 10% = 10/100 = 0.1}

Net amount is Rs 10000

10000 = G – (G x 0.1)

10000 = G – 0.1 G

[ 1G – 0.1G = .9G]

10000 = .9G

G = 10000/.9 = 11,111.11

Explanation:

FCCBs are foreign currency (usually dollar) denominated debt raised by companies in international markets but which have the option of converting into equity shares of the company before they mature. The payment of interest and repayment of principal is in foreign currency.