Question 1

Under this method of floatation in primary market, a subscription is invited from general public to invest in the securities of a company through the issue of advertisement.

Accepted Answer

A)  Private placement
B)  Offer through prospectus
C)  Offer for sale
D)  All of the aboveE) A) and B)
F) C) and D)

Question 2

_______ is a link between savers & borrowers, helps to establish a link between savers & investors

Accepted Answer

A)  Marketing
B)  Financial market
C)  Money market
D)  None of theseE) C) and D)
F) B) and D)

Question 3

Identify the correct sequence of steps to be followed in the trading procedure at Stock Exchange

Accepted Answer

A)  Opening a trading account and Demat account, Placing an order, Settlement of order, Execution of order
B)  Settlement of order, Opening a trading account and Demat account, Placing an order, Execution of order
C)  Opening a trading account and Demat account, Placing an order, Execution of order, Settlement of order
D)  Placing an order, Opening a trading account and Demat account, Execution of order, Settlement of orderE) C) and D)
F) None of the above

Question 4

Which trading individuals has SEBI decided to grant a unified license to operate in commodity derivative and equity markets?

Accepted Answer

A)  Clearing Members
B)  Brokers
C)  NBFCs
D)  Only a and bE) B) and D)
F) A) and B)

Question 5

Which of the following statements is not true with regard to Commercial paper?

Accepted Answer

A)  Is a long-term unsecured promissory note with a fixed maturity period.
B)  It usually has a maturity period of 15 days to one year.
C)  It is sold at a discount and redeemed at par.
D)  Companies use this instrument for bridge financing.E) B) and D)
F) None of the above

Question 6

Which of the following statements is not true with regard to money market?

Accepted Answer

A)  It involves low market risk.
B)  It is situated at specific locations.
C)  Deals in unsecured and short-term debt instruments.
D)  The instruments traded are highly liquid.E) A) and B)
F) None of the above

Question 7

Which of the following statements is not true with regard to Treasury bills?

Accepted Answer

A)  Are issued in the form of a promissory note.
B)  They are highly liquid and have assured yield
C)  They carry high risk of default.
D)  They are available for a minimum amount of ?25,000 and in multiples thereof.E) None of the above
F) B) and C)

Question 8

Which financial body has asked intermediaries and companies to make regulatory payments in digital mode?

Accepted Answer

A)  SEBI
B)  RBI
C)  NSE
D)  BSEE) B) and C)
F) A) and D)

Question 9

A company can raise capital through the primary market in the form of

Accepted Answer

A)  Equity shares
B)  Preference shares
C)  Debentures
D)  All of the aboveE) A) and B)
F) B) and C)

Question 10

It is an instrument of short-term borrowing by the Government of India maturing in less than one year.

Accepted Answer

A)  Commercial bill
B)  Treasury bill
C)  Call money
D)  None of the aboveE) A) and D)
F) A) and B)

Question 11

It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.

Accepted Answer

A)  Commercial bill
B)  Commercial papers
C)  Call money
D)  None of the aboveE) A) and B)
F) None of the above

Question 12

It acts like a bank and keeps securities in electronic form on behalf of the investor,

Accepted Answer

A)  Depository Participant
B)  Depository
C)  Stock exchange
D)  None of the aboveE) C) and D)
F) B) and D)

Question 13

The value of one unit of investment in Mutual fund is called the _______________.

Accepted Answer

A)  Net Asset Value
B)  Issue value
C)  Market value
D)  Gross Asset valueE) B) and C)
F) None of the above

Question 14

A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit

Accepted Answer

A)  Expensive in comparison with banks who raise funds from these sources.
B)  Cheaper in comparison with banks who raise funds from these sources.
C)  Creates no effect on other sources.
D)  None of the aboveE) A) and B)
F) C) and D)

Question 15

One of the common irregularities noted by the Securities and Exchange Board of India during the inspection of a stock exchange was that it was dealing with unregistered subbrokers. Identify the related function of Securities and Exchange Board of India

Accepted Answer

A)  Regulatory function
B)  Protective function
C)  Developmental function
D)  None of the aboveE) C) and D)
F) B) and C)

Question 16

The process of holding shares in electronic form is known as

Accepted Answer

A)  Demutualisation
B)  Dematerialisation
C)  Speculation
D)  None of the aboveE) A) and B)
F) C) and D)

Question 17

Raj Enterprises wishes to invest ?1,10,000 in treasury bills. What is the maximum number of treasury bills it can buy with this fund?

Accepted Answer

A)  6
B)  7
C)  4
D)  2E) A) and B)
F) A) and D)

Question 18

They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high.

Accepted Answer

A)  Commercial papers
B)  Call money
C)  Commercial bill
D)  Certificate of depositE) A) and C)
F) A) and B)

Question 19

Stock exchanges provide an opportunity to the investors to disinvest and invest. Identify the related function of the stock exchange.

Accepted Answer

A)  Providing scope for speculation.
B)  Providing liquidity and marketability to existing securities.
C)  Pricing of security.
D)  Spreading of equity cult.E) B) and C)
F) A) and C)

Question 20

The capital market consists of

Accepted Answer

A)  Development banks
B)  Commercial banks
C)  Stock exchanges
D)  All of the aboveE) A) and D)
F) C) and D)

Exam 11: Understanding the Link Between Savers, Borrowers, and Investors: Exploring Financial Markets and Stock Exchange Functions

Raj Enterprises wishes to invest ?1,10,000 in treasury bills. What is the maximum number of treasury bills it can buy with this fund?

Correct AnswerverifiedShow Answer

A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit

Correct AnswerverifiedShow Answer

It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.

Correct AnswerverifiedShow Answer

A company can raise capital through the primary market in the form of

Correct AnswerverifiedShow Answer

Which trading individuals has SEBI decided to grant a unified license to operate in commodity derivative and equity markets?

Correct AnswerverifiedShow Answer

Under this method of floatation in primary market, a subscription is invited from general public to invest in the securities of a company through the issue of advertisement.

Correct AnswerverifiedShow Answer

The process of holding shares in electronic form is known as

Correct AnswerverifiedShow Answer

It is an instrument of short-term borrowing by the Government of India maturing in less than one year.

Correct AnswerverifiedShow Answer

One of the common irregularities noted by the Securities and Exchange Board of India during the inspection of a stock exchange was that it was dealing with unregistered subbrokers. Identify the related function of Securities and Exchange Board of India

Correct AnswerverifiedShow Answer

Which of the following statements is not true with regard to Commercial paper?

Correct AnswerverifiedShow Answer

Identify the correct sequence of steps to be followed in the trading procedure at Stock Exchange

Correct AnswerverifiedShow Answer

They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high.

Correct AnswerverifiedShow Answer

_______ is a link between savers & borrowers, helps to establish a link between savers & investors

Correct AnswerverifiedShow Answer

Which financial body has asked intermediaries and companies to make regulatory payments in digital mode?

Correct AnswerverifiedShow Answer

Which of the following statements is not true with regard to Treasury bills?

Correct AnswerverifiedShow Answer

Which of the following statements is not true with regard to money market?

Correct AnswerverifiedShow Answer

The value of one unit of investment in Mutual fund is called the _______________.

Correct AnswerverifiedShow Answer

It acts like a bank and keeps securities in electronic form on behalf of the investor,

Correct AnswerverifiedShow Answer

The capital market consists of

Correct AnswerverifiedShow Answer

Stock exchanges provide an opportunity to the investors to disinvest and invest. Identify the related function of the stock exchange.

Correct AnswerverifiedShow Answer

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