Portfolio Management-Quiz to check your knowledge!
Portfolio management can be understood as managing of securities of a person as per his requirement. Security analysis means the entire process of estimating return and risk for individual securities. Security Analysis and Portfolio Management are two very important aspect of financial management and these are essential function
of a finance manager.
Just making the investment is not the task done. Portfolio management involves investment in such a way that it fullfills the need of the investor with minimum risk using various tools like security analysis.
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- Question 1 of 10
1. Question1 points
At the start of the Great Depression, Black Tuesday occurred whenCorrect
October 29, 1929, has become known as Black Tuesday because nearly 16.5 million shares of stock investments were hurriedly sold, causing the market to plummet. Prior to that day, bankers attempted to pool their money to buy enough stock to stabi- lize the increasingly volatile markets. Despite their efforts, the market continued to crash. Numerous factors are blamed for the crash. Some economists see high tariffs of the 1920s and failed policies of the Federal Reserve as major catalysts of the crash. Others blame the practice of buying on margin (buying stocks with loaned money) as a major cause because it artificially inflated stock prices. Still others blame irresponsible banking practices mixed with a decline in consumer spending.Incorrect
- Question 2 of 10
2. Question1 points
The Dust Bowl of the Great Depression occurred becauseCorrect
The Dust Bowl occurred in the Midwest from 1931 to 1940. It resulted from intensive farming practices that stripped the ground of the prairie grasses. When a massive drought hit and crops failed to grow, high winds sweeping over the plains carried off much of the remaining soil into massive dust clouds. These storms became known as “black bliz- zards” that reached as far as the East Coast. Nearly 60 percent of midwestern farmers lost their farms during this period, many migrating to California to find work as agricultural laborers. John Steinbeck captured the plight of these displaced farm families in his cel- ebrated novel The Grapes of Wrath.Incorrect
- Question 3 of 10
3. Question1 points
African-Americans during the Depression often experiencedCorrect
Many of the federal relief programs developed during the Depression furthered racial segregation in the country. African-Americans often found themselves barred from professional and skilled-labor job opportunities. The Social Security Act, passed in 1935, excluded farmers and domestic workers, an area of employment that contained a majority of African-American workers. Furthermore, policies during the Depression did little to address discrimination in private businesses. White businesses would often fire minority workers to open job opportunities for whites. Roosevelt, who appointed numerous African-Americans to midlevel government posts and created an unofficial “Black Cabinet,” rejected anti- lynching laws and the banning of poll taxes. A. Philip Randolph, an influential civil rights leader, did convince Roosevelt to create the Fair Employment Practices Committee, which enforced a ban on discriminatory hiring in the federal government and in corporations that received federal contracts.Incorrect
- Question 4 of 10
4. Question1 points
When faced with the stock market crash and the start of the Depression, Hoover supportedCorrect
When the market crashed in 1929, Hoover believed the key to recovery was a renewal of confidence in the economy. He felt the best way to address the economic conditions was through the voluntary controls put into place by private businesses. He organized a meeting of the nation’s economic leaders at which they promised to maintain wages and employment. However, as the economy worsened, this plan failed. Hoover also attempted to protect American businesses by signing the Hawley-Smoot Tariff into law in 1930. This protective tariff, the highest in the nation’s history, ended up further stifling international trade, which worsened the Depression. He also established the Reconstruction Finance Corporation in 1932 to prop up large corporations and banks. Despite these efforts, banks continued to fail, and unemployment rose.Incorrect
- Question 5 of 10
5. Question1 points
The main goal of the Bonus Army at the start of the Depression was toCorrect
During the summer of 1932, nearly 20,000 veterans of the First World War and their families gathered in Washington, D.C., to ask for the immediate payment of a pen- sion bonus they had been promised. The pension was not to become available until 1945, but the marchers found themselves unemployed and penniless following the stock market crash and ongoing Depression. The House of Representatives agreed to their request, but the Senate firmly stood against it. While some of the marchers left, many stayed and estab- lished “Hoovervilles,” shacks constructed of cardboard and scrap metal. General Douglas MacArthur was ordered by Hoover to remove the Bonus Army. MacArthur used force to do so, and many of the veterans were injured. This image of excessive force being used against downtrodden veterans of the U.S. military contributed to Franklin Roosevelt’s landslide election in 1932.Incorrect
- Question 6 of 10
6. Question1 points
The main purpose of the Reconstruction Finance Corporation was toCorrect
The Reconstruction Finance Corporation (RFC) was established by Herbert Hoover in 1932 to provide credit to banks, railroads, farm mortgage associations, and other businesses to prevent further failures and collapse in these areas of the economy. The other goals refer to programs that were part of Franklin Roosevelt’s First and Second New Deal. The program that provided relief to homeowners facing foreclosure was the 1933 Home Owners’ Loan Corporation (HOLC), which offered low-cost mortgage refinancing. The program that attempted to increase the prices of agricultural goods by paying farmers to produce less was the Agricultural Adjustment Administration, also created in 1933. Several programs provided work relief for the unemployed by hiring them to complete public works projects such as roads and buildings and by funding arts programs; these programs included the Civilian Works Administration, Public Works Administration, and Works Progress Administration. To provide old-age pensions, disability payments, and unemployment ben- efits, the government established the Social Security Administration in 1935.Incorrect
- Question 7 of 10
7. Question1 points
How did Presidents Hoover and Roosevelt differ in their attempts to respond to the Great Depression?Correct
The election of 1932 marked a significant change in the way Americans viewed the role of government and the individual citizen. Hoover himself stated in 1932 that the election would be a “contest between two philosophies in government”: Hoover’s belief that the federal government could not and should not try to fix the average citizen’s problems, versus Roosevelt’s view that the Great Depression could be solved only through direct gov- ernment action in the form of far-reaching programs and direct relief. Hoover’s attempt to address the Depression through limited assistance and voluntary self-regulation of business seemed to fail, so Roosevelt was elected in a landslide, promising the nation a New Deal. The New Deal consisted of a wide range of government relief programs, new regulations, and recovery acts that affected all aspects of American business and society.Incorrect
- Question 8 of 10
8. Question1 points
What is the practice of buying on margin?Correct
The practice of buying on margin was a system where investors could purchase a stock at a fraction of its actual price and borrow money to cover the rest of the stock’s cost. Brokers could charge high rates of interest and at any time could demand full payment for the remainder of the money owed. If the stock price rose, the investor could sell the stock, repay the money, and still make a profit. If the stock price declined, however, investors were still responsible to repay the broker.Incorrect
- Question 9 of 10
9. Question1 points
Which of the following New Deal agencies was created to assist businesses most directly?Correct
The National Recovery Administration (NRA) was established in June 1933 as part of the National Industrial Recovery Act (NIRA). The purpose of this New Deal agency was to respond to the decline of industrial prices, the failure of many businesses, and the corresponding unemployment. The agency established industry codes to ensure fair business practices and regulated wages, working conditions, and working hours. The agency’s symbol was the Blue Eagle, and businesses that participated with the NRA placed Blue Eagle posters in their storefronts. However, the Supreme Court’s 1935 decision in Schechter v. United States declared the program unconstitutional, and NIRA was replaced by the National Labor Relations Act, which shifted government support to unions. The Civilian Conservation Corps and the Works Progress Administration provided direct relief to America’s unemployed by offering government jobs in federal works projects. The Home Owners’ Loan Corporation offered relief to homeowners by allowing them to refinance their mortgages at a lower cost to avoid foreclosure. The Tennessee Valley Authority devel- oped the Tennessee Valley and brought electricity into the region.Incorrect
- Question 10 of 10
10. Question1 points
What was Franklin Roosevelt’s “Brain Trust”?Correct
The “Brain Trust” was the nickname given to President Roosevelt’s unofficial advisers, whom he assembled during his campaign. They included prominent academics and leaders of business such as economist Rexford Tugwell and political scientist Raymond Moley.Incorrect