MCQs- CHAPTER 4- FUNDAMENTALS OF RESEARCH

Fundamental analysis focuses on studying aspects such as cyclical and secular macro-economic trends, the cost structure of the company, and its financial position. Technical indicators are not directly studied in fundamental analysis.

The objective of active investing is to earn a rate of return above the return generated by the broader asset class.

Short-term investors and traders largely rely on technical signals as business fundamentals seldom change drastically in the short-run. Long-term investors, medium-term investors, and value investors may focus on other factors.

Insider information refers to material non-public information that would immediately affect investment decisions if publishe

Speculation is associated with short-term activities that involve making calls with leveraged funds, while investing money is a long-term disciplined activity for creating wealth.

Technical analysis may be less suitable for long-term investing as past trends in share price may not reliably predict subsequent price movements. Business fundamentals, economic factors, and market sentiments are not directly relate

Trading volumes are important parameters to confirm a trend in technical analysis. Business fundamentals, economic factors, and market sentiments are not directly related to confirming a tren

According to technical analysis, past prices provide indications of the underlying trend and its direction. Company fundamentals, trading volumes, and market sentiments are not the primary focus.

Support and resistance levels in technical analysis represent points of buying and selling interest, not business fundamentals, high trading volumes, or market sentiments.

Technical analysis converts price and volume data into charts to identify trends and triggers for buying or selling a stock. Fundamental analysis, quantitative analysis, and qualitative analysis are distinct approaches.

Fundamental analysis includes all aspects mentioned, such as economic analysis, industry analysis, and company analysis.

The correct statement is that changes in accounting standards, business structures, and regulations limit the effectiveness of quantitative analysis in fundamental analysis.

Fundamental analysis is focused on long-term investing, where the value of equity shares is driven by the returns generated by a company on its share capital.

Mosaic analysis involves collating information from different sources to provide critical insights that may not be significant individually.

Passive investing involves investing in a broad set of securities that represent the asset class the investor wants to invest in.

According to fundamental analysis, if the market price of a share is below its fair value, it represents an attractive investment opportunity.

Research involves obtaining all necessary information, while analysis involves analyzing the available information to arrive at a conclusion.

Technical analysis focuses on studying historical market data - price and volume to forecast price movements. Company fundamentals, economic factors, and market sentiments are not directly considere

The statement is true. In technical analysis, the time span over which price and volume are observed does factor in the impact of long-term factors that influence prices over time.

The time span over which price and volume are observed factors in the impact of long-term factors influencing prices in technical analysis. Historical trading volumes, economic factors, and market sentiments play secondary roles.

In technical analysis, the impact of day-to-day fluctuations in prices is annulled by using moving averages, which help reduce the noise and identify underlying trends.

The primary limitation of applying a pure quantitative research approach in fundamental analysis is frequent changes in accounting standards and business models, which makes past data less useful for comparison with present market conditions.

Quantitative research in equity analysis involves studying finance and operational metrics of a company to assess its performance. It focuses on the underlying data rather than reading charts and patterns.

Investing involves upfront commitment of money for long-term returns, while trading focuses on short-term profits.