McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Commerce (M.com) , Master of Business Administration (MBA) .
Chapters
| 201. |
__________ is the organisations, institutions that provide long term funds. |
| A. | Capital market |
| B. | Money market |
| C. | Primary market |
| D. | Secondary market |
| Answer» A. Capital market | |
| 202. |
When securities are allotted to institutional investors & some selected individuals is referred to as _________. |
| A. | Initial public offer |
| B. | Offer through prospectus |
| C. | Private placement |
| D. | Offer for sale |
| Answer» C. Private placement | |
| 203. |
Stock exchange is known as __________ market for securities. |
| A. | Primary market |
| B. | Secondary market |
| C. | Capital market |
| D. | None of the above |
| Answer» B. Secondary market | |
| 204. |
_________ is a market for lending & borrowing of short term funds. |
| A. | Money market |
| B. | Primary market |
| C. | Capital market |
| D. | All of the above |
| Answer» A. Money market | |
| 205. |
____________ is also called zero coupon bond. |
| A. | Trade bills |
| B. | Call money |
| C. | Treasury bills |
| D. | Commercial papers |
| Answer» C. Treasury bills | |
| 206. |
Which of the following are the instruments of money market? |
| A. | Call money |
| B. | Certificate of deposits |
| C. | Trade bills |
| D. | All of the above |
| Answer» A. Call money | |
| 207. |
The short term financial instruments traded in money market is commonly called |
| A. | Call money |
| B. | Certificate of deposits |
| C. | Trade bills |
| D. | Commercial Paper |
| Answer» D. Commercial Paper | |
| 208. |
Which of the following statements is not true with regard to money market? |
| 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. |
| Answer» B. It is situated at specific locations. | |
| 209. |
Which of the following statements is not true with regard to Treasury bills? |
| 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. |
| Answer» C. They carry high risk of default. | |
| 210. |
Which of the following statements is not true with regard to Commercial paper? |
| 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. |
| Answer» A. Is a long-term unsecured promissory note with a fixed maturity period. | |
| 211. |
Which of the following statements is not true with regard to Call money? |
| A. | It is short-term finance repayable on demand. |
| B. | Its maturity period ranges from one day to fifteen days. |
| C. | There is a direct relationship between call rates and other short-term money market instruments. |
| D. | It is used for inter-bank transactions. |
| Answer» C. There is a direct relationship between call rates and other short-term money market instruments. | |
| 212. |
Which of the following statements is not true with regard to capital market? |
| A. | The funds are raised for a short period of time. |
| B. | Both debt and equity funds can be raised. |
| C. | It is classified into two types. |
| D. | All of the above |
| Answer» A. The funds are raised for a short period of time. | |
| 213. |
Which of the following statements is not true with regard to primary market? |
| A. | Is also known as the old issues market. |
| B. | It facilitates the transfer of investible funds from savers to entrepreneurs. |
| C. | It deals with new securities being issued for the first time. |
| D. | It facilitates the transfer of investible funds from savers to entrepreneurs. |
| Answer» A. Is also known as the old issues market. | |
| 214. |
Which of the following statements is not true with regard to stock exchange? |
| A. | It provides a platform for buying and selling of new securities. |
| B. | It curbs the marketability of the securities. |
| C. | By providing a ready market, it extends liquidity to the securities. |
| D. | It provides a platform for buying and selling of old securities.` |
| Answer» B. It curbs the marketability of the securities. | |
| 215. |
Which of the following is not a protective function of stock exchange? |
| A. | Prohibition of fraudulent and unfair trade practices. |
| B. | Controlling insider trading. |
| C. | Regulation of takeover bids by companies. |
| D. | Promotion of fair practices and code of conduct in securities market. |
| Answer» C. Regulation of takeover bids by companies. | |
| 216. |
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? |
| A. | 6 |
| B. | 7 |
| C. | 4 |
| D. | 2 |
| Answer» C. 4 | |
| 217. |
Which of the following statements is true with regard to financial markets? |
| A. | They link the households which save funds and business firms which invest these funds. |
| B. | They work as an intermediary between the savers and the investors by mobilising funds between them. |
| C. | They allocate funds available for investment into their most productive investment opportunity. |
| D. | All of the above |
| Answer» D. All of the above | |
| 218. |
The allocated function is performed by |
| A. | Financial market |
| B. | Capital market |
| C. | Money market |
| D. | All of the above |
| Answer» D. All of the above | |
| 219. |
It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. |
| A. | Primary market |
| B. | Secondary market |
| C. | Capital market |
| D. | Money market |
| Answer» B. Secondary market | |
| 220. |
It is an instrument of short-term borrowing by the Government of India maturing in less than one year. |
| A. | Commercial bill |
| B. | Treasury bill |
| C. | Call money |
| D. | None of the above |
| Answer» C. Call money | |
| 221. |
Who issues a treasury bill? |
| A. | Any nationalised bank |
| B. | Any private sector bank |
| C. | Reserve Bank of India |
| D. | All of the above |
| Answer» A. Any nationalised bank | |
| 222. |
Suppose an investor purchases a 91 days Treasury bill with a face value of ₹2,00,000 for ₹1,92,000. By holding the bill until the maturity date, the investor receives ₹2,00,000. What is the amount of interest received by him? |
| A. | ₹8,000 |
| B. | ₹80,000 |
| C. | ₹3,92,000 |
| D. | ₹2,00,000 |
| Answer» B. ₹80,000 | |
| 223. |
It is used as an alternative to bank borrowing for large and creditworthy companies, |
| A. | Commercial bill |
| B. | Commercial papers |
| C. | Call money |
| D. | None of the above |
| Answer» C. Call money | |
| 224. |
It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio. |
| A. | Commercial bill |
| B. | Commercial papers |
| C. | Call money |
| D. | None of the above |
| Answer» B. Commercial papers | |
| 225. |
A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit |
| 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 above |
| Answer» D. None of the above | |
| 226. |
It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. |
| A. | Commercial bill |
| B. | Commercial papers |
| C. | Call money |
| D. | None of the above |
| Answer» A. Commercial bill | |
| 227. |
The capital market consists of |
| A. | Development banks |
| B. | Commercial banks |
| C. | Stock exchanges |
| D. | All of the above |
| Answer» D. All of the above | |
| 228. |
A company can raise capital through the primary market in the form of |
| A. | Equity shares |
| B. | Preference shares |
| C. | Debentures |
| D. | All of the above |
| Answer» D. All of the above | |
| 229. |
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. |
| A. | Commercial papers |
| B. | Call money |
| C. | Commercial bill |
| D. | Certificate of deposit |
| Answer» D. Certificate of deposit | |
| 230. |
Which of the following participants represent capital market? |
| A. | Development banks |
| B. | Commercial banks |
| C. | Stock exchanges |
| D. | All of the above |
| Answer» D. All of the above | |
| 231. |
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. |
| A. | Private placement |
| B. | Offer through prospectus |
| C. | Offer for sale |
| D. | All of the above |
| Answer» B. Offer through prospectus | |
| 232. |
PK Enterprises Limited has sold an entire lot of 5,00,000 equity shares @ ₹9 each to Prosperous Bank Private Limited. The bank in turn will offer the shares to general public for subscription @ ₹11 per share. Identify the method of floatation being described in the given lines. |
| A. | Private placement |
| B. | Offer through prospectus |
| C. | Offer for sale |
| D. | Rights issue |
| Answer» C. Offer for sale | |
| 233. |
Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case. |
| A. | Offer through prospectus |
| B. | Offer for sale |
| C. | Rights issue |
| D. | Private placement |
| Answer» C. Rights issue | |
| 234. |
Stock Exchange works as a mechanism for valuation of securities through the forces of demand and supply. Identify the related function of performed by the stock exchanges. |
| A. | Providing liquidity and marketability to existing securities. |
| B. | Safety of transaction. |
| C. | Pricing of security. |
| D. | Spreading of equity cult. |
| Answer» C. Pricing of security. | |
| 235. |
Stock exchanges provide an opportunity to the investors to disinvest and invest. Identify the related function of the stock exchange. |
| A. | Providing scope for speculation. |
| B. | Providing liquidity and marketability to existing securities. |
| C. | Pricing of security. |
| D. | Spreading of equity cult. |
| Answer» B. Providing liquidity and marketability to existing securities. | |
| 236. |
The process of holding shares in electronic form is known as |
| A. | Demutualisation |
| B. | Dematerialisation |
| C. | Speculation |
| D. | None of the above |
| Answer» B. Dematerialisation | |
| 237. |
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 |
| A. | Regulatory function |
| B. | Protective function |
| C. | Developmental function |
| D. | None of the above |
| Answer» A. Regulatory function | |
| 238. |
It acts like a bank and keeps securities in electronic form on behalf of the investor, |
| A. | Depository Participant |
| B. | Depository |
| C. | Stock exchange |
| D. | None of the above |
| Answer» B. Depository | |
| 239. |
It serves as an intermediary between the investor and the depository who is authorised to maintain the accounts of dematerialised shares. |
| A. | Depository Participant |
| B. | Depository |
| C. | Stock exchange |
| D. | None of the above |
| Answer» A. Depository Participant | |
| 240. |
It is a number assigned to each transaction by the stock exchange and is printed on the contract note. |
| A. | PAN number |
| B. | Unique Order Code |
| C. | Contract Note |
| D. | None of the above |
| Answer» B. Unique Order Code | |
| 241. |
Identify the correct sequence of steps to be followed in the trading procedure at Stock Exchange |
| 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 order |
| Answer» C. Opening a trading account and Demat account, Placing an order, Execution of order, Settlement of order | |
| 242. |
The mandatory detail that an investor has to provide to the broker at the time of opening a demat account is |
| A. | Date of birth and address |
| B. | PAN number |
| C. | Residential status (Indian/NRI) |
| D. | Bank account details. |
| Answer» B. PAN number | |
| 243. |
It is a legally enforceable document which is issued by a stock broker within 24 hours of the execution of a trade order. |
| A. | PAN number |
| B. | Unique Order Code |
| C. | Contract Note |
| D. | None of the above |
| Answer» C. Contract Note | |
| 244. |
On this day, the exchange will deliver the share or make payment to the other broker, |
| A. | Pay-in day |
| B. | Pay-out day |
| C. | Transaction day |
| D. | None of the above |
| Answer» B. Pay-out day | |
| 245. |
When is a trade confirmation slip issued to the investor? |
| A. | On placing an order |
| B. | On execution of the order |
| C. | On settlement of the order |
| D. | None of the above |
| Answer» B. On execution of the order | |
| 246. |
After the trade has been executed, the broker issues a Contract Note to the investor within |
| A. | 52 hours |
| B. | 24 hours |
| C. | 48 hours |
| D. | 12 hours |
| Answer» B. 24 hours | |
| 247. |
SEBI has constituted a committee under TK Viswanathan for ________. |
| A. | Fair market conduct |
| B. | Manufacturing market conduct |
| C. | Partial market conduct |
| D. | Both a and c |
| Answer» A. Fair market conduct | |
| 248. |
SEBI has launched an online registration system for? |
| A. | REITs |
| B. | InvITs |
| C. | P-notes |
| D. | Only a and b |
| Answer» D. Only a and b | |
| 249. |
Which trading individuals has SEBI decided to grant a unified license to operate in commodity derivative and equity markets? |
| A. | Clearing Members |
| B. | Brokers |
| C. | NBFCs |
| D. | Only a and b |
| Answer» D. Only a and b | |
| 250. |
What is the latest amendment to the FPI regulations by capital and commodities market regulator SEBI? |
| A. | Barring Indians, NRIs and entities beneficially owned by NRIs from trading |
| B. | Barring Indians, NRIs, and entities beneficially owned by NRIs from being owners of participatory notes |
| C. | Barring Indians and NRIs from FDI in India |
| D. | None of the above |
| Answer» B. Barring Indians, NRIs, and entities beneficially owned by NRIs from being owners of participatory notes | |
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