Practice Set - 3 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

Which of the following best explains why free-float methodology is preferred in many indices?

Question 2

An investor tracking a market-cap weighted index is most exposed to movements in:

Question 3

An equal-weighted index compared to a market-cap weighted index generally requires:

Question 4

A broad market index is generally designed to:

Question 5

Which of the following is most likely a disadvantage of price-weighted indices?

Question 6

Can passive investing strategies experience tracking error relative to their benchmark indices?

Question 7

A company with very low liquidity may be excluded from an index mainly because:

Question 8

An investor assumes index investing guarantees profits because indices recover historically over time. This assumption is:

Question 9

The primary benefit of using an index as a benchmark is to:

Question 10

A broad index heavily concentrated in a few large companies may:

Question 11

A price-weighted index is likely to overemphasize:

Question 12

A sectoral index tracking only technology companies is most exposed to:

Question 13

Can an index continue rising while economic conditions weaken temporarily?

Question 14

A market capitalization-weighted index gives higher influence to companies primarily based on:

Question 15

Which of the following most accurately describes index rebalancing?

Question 16

An index with a small number of constituents is most likely to experience:

Question 17

Can two companies with identical market capitalization have different weights in a free-float index?

Question 18

Can index composition changes affect passive funds tracking that index?

Question 19

Can a company belong simultaneously to both a sectoral index and a broad market index?

Question 20

Practice Set - 3