Preview Questions Portfolio Manager | Role Specific Skill

Question 1: What does an increasing money supply typically signal for the stock market?

Which action should you take?

Choose only one option

It has no significant impact on stock prices

It results in inflationary pressures, negatively impacting stock prices

It leads to higher interest rates, decreasing stock market attractiveness

Increased liquidity may lead to higher stock prices as more capital flows into equities

Question 2: What is the best way to introduce new investment opportunities to existing clients?

Which action should you take?

Choose only one option

Only suggest opportunities that have already shown significant returns in the market

Present a one-size-fits-all strategy that focuses on maximizing returns without personalizing

Provide minimal information and allow the client to make an uninformed decision

Tailor the pitch to the client's unique investment profile, risk tolerance, and goals

Question 3: When conducting sector rotation in portfolio management, which of the following is most important when analyzing market cycles?

Which action should you take?

Choose only one option

Understanding the growth phase of the business cycle and allocating assets accordingly

Analyzing the government policies that affect individual sectors

Monitoring interest rate changes to predict sector performance

Identifying the most volatile sectors and investing in them for short-term profits

Question 4: When optimizing a multi-asset portfolio in a BFSI environment, which method is most effective for minimizing risk while maintaining desired returns?

Which action should you take?

Choose only one option

Maximum drawdown minimization

Mean-variance optimization

Risk parity approach

Capital asset pricing model (CAPM)

Question 5: Which method of valuation is commonly used for valuing startups or companies with unpredictable earnings?

Which action should you take?

Choose only one option

Price-to-earnings ratio (P/E)

Discounted Cash Flow (DCF)

Comparable Company Analysis

Precedent Transaction Analysis

Question 6: In asset-liability management (ALM), which key factor would most likely impact a financial institution's portfolio allocation?

Which action should you take?

Choose only one option

Credit risk, as it can impact the performance of financial assets held by the institution

Interest rate risk, as fluctuations can significantly affect both asset returns and liabilities

Regulatory changes, which could impose restrictions on asset classes or portfolio composition

Liquidity management, ensuring the institution can meet short-term obligations