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QUIZ

The document discusses various financial terms and concepts related to securities markets. It includes 30 multiple choice questions about topics like securitization, yield to maturity, investment banks, private placement, and regulatory bodies like SEBI. It tests understanding of core concepts and participants in securities markets.

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rinkirola7576
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47 views4 pages

QUIZ

The document discusses various financial terms and concepts related to securities markets. It includes 30 multiple choice questions about topics like securitization, yield to maturity, investment banks, private placement, and regulatory bodies like SEBI. It tests understanding of core concepts and participants in securities markets.

Uploaded by

rinkirola7576
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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a. It allows loans to be made.

b. It channels funds from lenders-savers to borrowers-spenders.


c. It allows common stock to be traded.
d. It determines the level of interest rates.
2. A transaction where financial securities are issued against the cash flow generated from a pool
of assets is called
a. Securitization
b. Credit Default Swaps
c. Credit Linked Notes
d. Total Return Swaps
3. The interest rate that equates the present value of payments received from a debt instrument
with its value today is the:
a. Simple interest rate.
b. Yield to maturity.
c. Discount rate.
d. Real interest rate.
4. An important financial institution that assists in the initial sale of securities in the primary
market is the:
a. Investment bank.
b. Brokerage house.
c. Commercial bank.
d. Stock exchange.
5. Which of the following can be described as involving direct finance?
a. A corporation buys commercial paper issued by another corporation.
b. People buy shares in a mutual fund.
c. An insurance company buys shares of common stock in the over-the-counter markets.
d. A corporation takes out a loan from a bank.
6. SEBI has prescribed the Code of Conduct for the sub-brokers in __________.
a. Indian Contract Act, 1872
b. Securities Contracts (Regulation) Act, 1956
c. Companies Act, 1956
d. SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992
7. The following are participants in the securities markets ______.
a. Underwriters
b. Debenture Trustees
c. Venture Capital Funds
d. All of the above
8. In private placement, issuance is done to _____.
a. more than 50 persons
b. less than 100 persons
c. less than 50 persons
d. less than 10 persons
9. ______ deals with issue, allotment and transfer of securities and various aspects relating to
company management.
a. Companies Act, 1956
b. Depositories Act, 1996
c. Capital Issues (Control) Act, 1947
d. None of the above
10. A company making a public issue of securities has to file a draft prospectus with ____.
a. RBI
b. SEBI
c. Ministry of Finance
d. None of the above
11. For public and rights issues of debt instruments, it is mandatory to obtain credit rating from a
registered credit rating agency.
a. True
b. False
12. Promoters’ contribution in case of public issues by unlisted companies and promoters’
shareholding in case of ‘offers for sale’ shall not be less than ____ of post issue capital
a. 50%
b. 15%
c. 20%
d. 30%
13. Foreign Currency Convertible Bonds (FCCBs) are also known as _______.
a. Euro Issues
b. Dollar Issues
c. Convertible credit securities
d. Convertible credit bonds
14. _____ is the discount rate which makes its net present value equal to zero.
a. Accrued Interest rate
b. Compounding
c. Discounting
d. Internal Rate of Return (IRR)
15. The Dividend Growth Model approach assumes that the price of equity stock depends
ultimately on the dividend expected from it.
a. True
b. False

16. Which of the following is the regulatory body for equity markets in India?
a. RBI
b. SEBI
c. SEC
d. Equity and fixed income department of India
17. Share holders in a limited company are not liable for _____________.
a. The debt of the company if his shares are fully paid-up.
b. The paid amount of capital in that company
c. The assets of the limited company
d. The goodwill of the company
18. SEBI is the regulator of capital markets in India and has statutory powers for protecting the
investors and promoting the development of securities market. Securities markets in India are
also regulated by ____________.
a. Department of Company Affairs
b. Securities Appellate Tribunal
c. Department of Economic affairs
d. All of the above
19. A venture capitalist provides seed financing
a. at the "idea" stage of a new business
b. at the product development stage.
c. at the time of the IPO.
d. in the year prior to the public offering.
20. In an underwritten offer, the risk is borne by
a. an investment banker
b. an issuer
c. investors
d. a selling group
21. The Glass-Steagall Act of 1933 separated
a. insurance from credit.
b. investment banking from mutual funds.
c. investment banking from commercial banking.
d. insurance from mutual funds.
22. Venture capital firms use multiple-scenario analysis and _________ to estimate the value of
new businesses they finance.
a. future value analysis
b. comparable public company comparisons
c. regression analysis
d. correlation analysis
23. GDR stands for
a. Global Demand Receipt
b. Global Depository Receipt
c. Global Direct Revenue
d. Gross Demand Revenue
24. When a leveraged buyout transaction is led by the firm's management then the transaction is
called:
a. IPO
b. MBO
c. LBOM
d. CFO
25. Junk bonds are bonds with:
a. AAA or Aaa ratings
b. BBB or Baa ratings
c. BB or Ba ratings or lower
d. D rated bonds
26. A Company can issue sweat equity shares as soon as it started business.
a. Yes
b. No
27. A company to issue sweat equity shares must pass a.
a. Special resolution
b. Ordinary resolution
c. Unanimous resolution
d. None of these
28. Bonds that are sold in a foreign country and are denominated in that country’s currency are
known as
a. Foreign bonds.
b. Eurobonds.
c. Eurocurrencies.
d. Eurodollars.
29. A zero coupon bond will have zero _____ risk
a. Reinvestment risk
b. Interest Rate risk
c. Default risk
d. Inflation risk
30. Which one of the following is not a typical exit route for Private Equity Investor ?
a. IPO
b. NCD
c. Buy back
d. Strategic sale
31. Fungible means, as shares would not have distinguishing features such as distinctive nos.,
certificate nos. etc., and __________.
a. they are freely transferable.
b. different securities of same company are interchangeable
c. same securities of a company are interchangeable.
d. similar securities of different companies are interchangeable.
32. The registered owner of securities held in demat form is:
a. The Depository participant
b. The Depository
c. SEBI
33. The Depository account that an Approved Intermediary opens for the purpose of carrying on
the business of securities lending and borrowing is called _________ .
a. Lending and Borrowing account.
b. Intermediary account.
c. Clearing Member account.
d. Beneficial owner account.
34. ______ is a clearing member but not a trading member.
a. Clearing Banks
b. Self Clearing Member
c. Clearing Member
d. Custodian
35. ______ is the total number of outstanding contracts that are held by market participants at the
end of each day.
a. Outstanding position
b. Outstanding Interest
c. Open position
d. Open Interest
36. The main object of the Securities Contracts (Regulation) Act 1956 is
a. to control the monopolistic and restrictive trade practices followed by the listed
Companies.
b. to prevent undesirable transactions in securities by regulating the business of dealing
therein
c. to protect the interest of the investors and promote and develop the securities market
d. to consolidate and amend the law relating to companies and certain other associations
37. 'Lock In period' can be observed for newly listed securities.
a. True
b. False
38. The _____ market is a market for very short term funds.
a. call money
b. put money
c. equity
d. debt
39. "DRs issued on the securities of foreign companies, and listed on the Indian exchanges are
called ______________. "
a. IDRs
b. GDRs
c. VDRs
d. ADRs
40. Estimated EPS of ABC Ltd. for next year is Rs. 130. Assume PE multiple of 21 for the next
year. Then the target price of ABC Ltd. works out to Rs. ____.
a. 2760
b. 2730
c. 2820
d. 2790

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