What is the definition of momentum in the context of the stock market?

The speed at which the markets move The rate of change of stock returns or the index The quantity of motion an object has All of the above

How is the rate of change of return calculated?

Ending value divided by starting value Ending value minus starting value [Ending value/starting value]-1 Starting value divided by ending value

What is a tracking universe in the context of building a momentum portfolio?

A list of all stocks available on the BSE and NSE A collection of stocks that exhibit the highest momentum A basket of stocks from which the momentum portfolio is selected A portfolio of stocks with the highest market capitalization

What is the recommended number of stocks to include in a momentum portfolio?

5-10 stocks 10-15 stocks 20-25 stocks 30-35 stocks

When does a price-based momentum strategy perform poorly?

When the market is trending up When the market is trending down When the market is experiencing high volatility Both B and C

What is the core idea behind momentum strategies?

To identify undervalued stocks To predict market crashes To identify momentum and ride the wave To diversify investments across different sectors

What is a key consideration when creating a momentum portfolio?

The portfolio should only include stocks with positive returns The portfolio should be rebalanced regularly The portfolio should only include large-cap stocks The portfolio should be held for at least one year

What is an example of a fundamental-based momentum strategy?

Selecting stocks based on their P/E ratio Selecting stocks based on their dividend yield Selecting stocks based on their quarterly sales growth Selecting stocks based on their historical stock price performance

What is a recommended approach to capital allocation in a momentum portfolio?

Allocate capital equally across all stocks Allocate more capital to stocks with higher momentum Allocate capital based on backtesting results All of the above

What is a potential drawback of a price-based momentum strategy?

It requires frequent trading It can underperform in a down trending market It is difficult to implement It is not suitable for long-term investors