Practice Set - 2 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

Can abnormal returns occur by chance in an efficient market?

Question 2

Which of the following is most likely true in an informationally efficient market?

Question 3

Can strong-form efficiency exist realistically if insider trading laws are actively enforced?

Question 4

Can passive investing strategies be supported by Efficient Market Hypothesis?

Question 5

An investor earns excess profits immediately after discovering publicly available but ignored information. This most likely suggests:

Question 6

Which activity is least likely to provide sustainable abnormal profits in a weak-form efficient market?

Question 7

A market where security prices instantly adjust after an earnings announcement is most consistent with:

Question 8

A market where neither technical nor fundamental analysis consistently works, but insider information may still help, is most consistent with:

Question 9

A perfectly efficient market would most likely make it difficult for active managers to:

Question 10

Can a market be weak-form efficient but not semi-strong efficient?

Question 11

Which form of efficiency directly challenges the usefulness of technical analysis?

Question 12

A portfolio manager claims that publicly available financial statements always provide opportunities for superior returns. This claim conflicts most with:

Question 13

Which of the following most strongly challenges weak-form efficiency?

Question 14

Which of the following would most strongly support semi-strong efficiency?

Question 15

Can informational efficiency coexist with occasional asset bubbles?

Question 16

The biggest challenge in proving strong-form efficiency empirically is:

Question 17

Can informational efficiency eliminate all investment risk?

Question 18

Which of the following is most consistent with informational efficiency?

Question 19

The strongest implication of strong-form efficiency is that:

Question 20

Can semi-strong market efficiency still allow profits from insider information?

Question 21

Can markets become temporarily inefficient during periods of panic or euphoria?

Question 22

A stock price continues rising gradually for weeks after positive earnings news. This most directly indicates:

Question 23

A company’s stock reacts before a public merger announcement because insiders leaked information. This most directly challenges:

Question 24

Can weak-form efficiency coexist with profitable insider trading?

Question 25

A trader consistently earns abnormal profits using only historical stock price charts in a market. This situation most directly contradicts:

Question 26

Can insider information still have value in a weak-form efficient market?

Question 27

An investor believes stock prices fully reflect all public data but not insider information. This belief aligns most with:

Question 28

If strong-form efficiency holds perfectly, which activity becomes least useful for earning abnormal returns?

Question 29

A hedge fund consistently profits from predictable post-announcement stock drifts. This most likely contradicts:

Question 30

A market where investors consistently exploit accounting disclosures for abnormal returns is likely:

Question 31

A stock consistently underreacts to earnings surprises. This most likely represents:

Question 32

A trader claims consistent profits using only publicly available macroeconomic news. If true, this most directly challenges:

Question 33

The primary assumption behind Efficient Market Hypothesis is that:

Question 34

Which market condition most weakens strong-form efficiency?

Question 35

A sudden stock price increase occurs immediately after unexpected merger news becomes public. This behavior supports:

Question 36

Practice Set - 2