Question 1

What is the full form of ECB?
A)External Commercial Borrowings
B)External Commercial Bonds
C)Equity Capital Balance
D)None of the Above

Accepted Answer

External Commercial Borrowings (ECB) refer to loans, buyers' credit, suppliers' credit, securitized instruments such as floating rate notes and fixed rate bonds etc., availed from non-resident lenders with a minimum maturity of 3 years.

Question 2

For listed companies the prices are publically arrived at on the basis of demand and supply and hence stock exchange quotations reflect the real value of the security.

Accepted Answer

Stock exchange quotations reflect the real value of the security because the prices are publicly arrived at on the basis of demand and supply.

Question 3

SEBI started its actual functioning when…..
A)It was set up in 1988
B)RBI gave it a permission in 1989
C)SEBI Act was passed in 1992
D)It was registered

Accepted Answer

SEBI became fully functional and acquired statutory powers with the enactment of the SEBI Act in 1992. This act provided SEBI with the authority to regulate and supervise the securities market.

Question 4

Full Form of NEAT is
A)National Exchange for Automated Trading
B)National Equity Automated Trading
C)National Exchange for Analysis and Trading
D)None of the Above

Accepted Answer

NEAT stands for National Exchange for Automated Trading, which is the electronic trading system used by the National Stock Exchange of India.

Question 5

What is the full form of NSDL
A)National Stock Dealing Ltd.
B)National Securities Dealers Ltd.
C)National Securities Depository Ltd.
D)National Stock and Debt Ltd.

Accepted Answer

NSDL stands for National Securities Depository Ltd., which is an Indian central securities depository.

Question 6

Market making is a unique concept of which stock exchange of India?
A)NSE
B)BSE
C)ISE
D)OTCEI

Accepted Answer

Market making is a unique concept introduced by the Over The Counter Exchange of India (OTCEI) to ensure liquidity and continuous trading in securities.

Question 7

Capital Market in India plays a role in developing integration among:
A)Real Sector and Financial Sector
B)Long-term and Short-term interest costs
C)Equity and Debt Instruments
D)All of the above

Accepted Answer

The capital market in India plays a crucial role in developing integration among the real sector and financial sector by channeling savings to investments, between long-term and short-term interest costs by providing various financial instruments with different maturity periods, and between equity and debt instruments by offering a platform for both equity shares and debt securities. This integration facilitates efficient allocation of resources and supports economic growth.

Question 8

Sentence A - Through Rights issue fresh capital can be raised and Sentence B - Through a Bonus Issue Fresh capital can be raised.
A)Only Sentence A is true
B)Both Sentences A and B are true
C)Only Sentence of B is true
D)Both Sentences A and B are False

Accepted Answer

A Rights Issue is a way for companies to raise capital by issuing new shares to existing shareholders. A Bonus Issue, on the other hand, involves distributing additional shares to existing shareholders without any extra cost, using the company's accumulated earnings, and does not involve raising fresh capital.

Question 9

Book Building is basically ____________ of shares.
A)An auction
B)A process of listing
C)Credit rating
D)None of the Above

Accepted Answer

Book Building is essentially an auction process for shares, where the demand for the shares is gauged and the price is determined based on the bids received.

Question 10

In the process of Book Building if the public portion gets oversubscribed,…..
A)The size of the Public Portion is raised
B)The allotment is made on a proportionate basis
C)The placement portion is cancelled
D)None of the above

Accepted Answer

When the public portion of an offering gets oversubscribed during the book-building process, the allotment is typically made on a proportionate basis among all the subscribers. This ensures a fair distribution of shares among interested investors.

Question 11

Stock Futures, Stock Options, Index Futures and Index Options are ___________
A)Bonds
B)Combination of Equity and Debt
C)Equity Derivatives
D)None of the Above

Accepted Answer

Stock Futures, Stock Options, Index Futures, and Index Options are all types of equity derivatives. They derive their value from the underlying asset, which can be stocks or indexes, hence the term "equity derivatives."

Question 12

Which Stock Exchange of India was set up with an objective to meet the current international standards of securities market?
A)BSE
B)ISE
C)OTCEI
D)NSE

Accepted Answer

The National Stock Exchange of India (NSE) was set up with the objective to meet the current international standards of securities markets. It was established in 1992 and started trading in 1994, with a state-of-the-art electronic trading system that provided easy trading facility to the investors spread across the length and breadth of the country.

Question 13

To provide a focal point for central bank (RBI) intervention for influencing liquidity and general level of interest rates in the economy is an important function of
A)Secondary Market
B)Money Market
C)Capital Market
D)Forex Market

Accepted Answer

The Money Market plays a crucial role in providing a focal point for central bank intervention to influence liquidity and the general level of interest rates in the economy. Central banks, like the RBI, use operations in the money market to implement monetary policy, affecting short-term interest rates and overall economic activity.

Question 14

Indigenous bankers and money lenders are constituents of _____________
A)Organised Money Market
B)Organised Stock Market
C)Unorganised Money Market
D)None of the Above

Accepted Answer

Indigenous bankers and money lenders are part of the unorganised money market, which operates outside the formal financial system and is not regulated by financial authorities.

Question 15

The purchase and sell of which of the following instrument is effected through Subsidiary General Ledger (SGL) account?
A)Treasury Bills
B)Options
C)Equity Shares
D)All of the Above

Accepted Answer

Treasury Bills are typically transacted through Subsidiary General Ledger (SGL) accounts, which are used by financial institutions to hold government securities. Options and Equity Shares are not typically transacted through SGL accounts.

Question 16

Minimum Subscription amount of a Certificate of Deposit is ___________.
A)Rs. 25,000
B)Rs. 50,000
C)Rs. 1,00,000
D)Rs. 5,00,000

Accepted Answer

The minimum subscription amount for a Certificate of Deposit in India is Rs. 1,00,000.

Question 17

Which instrument was introduced in year 1990 with a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowings?
A)Certificate of Deposit
B)Commercial Paper
C)Commercial Bill
D)None of the Above

Accepted Answer

Commercial Paper was introduced in 1990 as a short-term instrument for highly rated corporate borrowers to diversify their sources of short-term borrowings. It is an unsecured money market instrument issued in the form of a promissory note.

Question 18

When money is lent for more than a day and up to 14 days it is called as __________
A)Demand Money
B)Call Money
C)Put Money
D)Notice Money

Accepted Answer

Notice Money refers to the money lent for a period more than a day and up to 14 days. Unlike Call Money, which is lent for a very short period (usually overnight), Notice Money requires a notice before withdrawal.

Question 19

What type of relationship is there between call rates and short-term money market instruments such as CDs and CPs?
A)Inverse
B)Direct
C)Negative
D)None of the Above

Accepted Answer

Call rates are inversely related to short-term money market instruments such as CDs and CPs. When call rates increase, the demand for CDs and CPs decreases, causing their prices to fall. Conversely, when call rates decrease, the demand for CDs and CPs increases, causing their prices to rise.

Question 20

_______________ is an important tool to finance credit sales?
A)Commercial Bill
B)Commercial Paper
C)Certificate of Deposit
D)None of the Above

Accepted Answer

Commercial Bills are used to finance credit sales, allowing businesses to manage their short-term liquidity needs by converting sales on credit into cash.

Quiz 4: Stock Market and Financial Instruments in India

What is the full form of ECB?

For listed companies the prices are publically arrived at on the basis of demand and supply and hence stock exchange quotations reflect the real value of the security.

SEBI started its actual functioning when…..

Full Form of NEAT is

What is the full form of NSDL

Market making is a unique concept of which stock exchange of India?

Capital Market in India plays a role in developing integration among:

Sentence A - Through Rights issue fresh capital can be raised and Sentence B - Through a Bonus Issue Fresh capital can be raised.

Book Building is basically ____________ of shares.

In the process of Book Building if the public portion gets oversubscribed,…..

Stock Futures, Stock Options, Index Futures and Index Options are ___________

Which Stock Exchange of India was set up with an objective to meet the current international standards of securities market?

To provide a focal point for central bank (RBI) intervention for influencing liquidity and general level of interest rates in the economy is an important function of

Indigenous bankers and money lenders are constituents of _____________

The purchase and sell of which of the following instrument is effected through Subsidiary General Ledger (SGL) account?

Minimum Subscription amount of a Certificate of Deposit is ___________.

Which instrument was introduced in year 1990 with a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowings?

When money is lent for more than a day and up to 14 days it is called as __________

What type of relationship is there between call rates and short-term money market instruments such as CDs and CPs?

_______________ is an important tool to finance credit sales?