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FINE004- Final merged - Sem 4 Assignment

Post graduate program in Management (Institute of Management Technology,

Ghaziabad)

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631_MANAGEMENT OF FINANCIAL SERVICES_Prepaired by Ajay

S.No Question Ans Remarks
1 …...........are examples of financial intermediaries All of the above OK
2 Which agency regulates and supervises NBFCs? RBI OK
3 High risk is an outstanding feature of__________ Venture capital OK
the market for short term investments of maturity of less
4 Money Market OK
than one year is known as
Which is of the following instrument is not a negotiable
5 Crossed cheque OK
instrument
a high p/e multiple of a fund in comparison to average
6 Growth Fund OK
market multiple could be of
Mandatory registered in the name of
7 All Dematerialized securities are OK
depository
__________provided at a stage when product has been
8 launched in market but has not earned enough profits to Second round capital OK
meet future capital needs
the…..... basically covers the medical expenses of the
9 Health insurance OK
insured
The sale of a mortagage portfolio by setting up mortgage
10 Securitization OK
pass-through securities is an example of
11 bank owned mutual funds are supervised by RBI OK
mutual fund can benefit from economies of scale
12 large volumes trades OK
because of
13 Insurance is a_______ Agreement / contract OK
…..........is a financial intermediary who helps to mobilize
14 and transfer capital from those who possess it to those Venture capital OK
who need it
15 Merchant Banking is governed u/s 2e or SEBI Regulation 1992 OK
in simple terms the management of issues for raising
16 issue management. OK
funds through various types of instruments
A form of direct short term finance issued by large, credit
17 commercial papers OK
worthy companies is called a ______
18 Agents are compensated by mutual funds through commission OK
Primary market and secondary market are the types
19 Capital market OK
of__________?
…..........is a long term risk capital to finance high
20 technology projects which involve risk but at same time venture capital OK
has strong potenctial growth
Following are the features of venture capital
21 Less Risk OK
except__________
All insurance companies are required to obtained a
22 Certificate of Registration, to be renewed__________, In every 5 years OK
from IRDA
Which of the following is short-term financial
23 Treasury bill OK
instrument?
24 after uti the first mutual fund was started by public sector banks OK
25 Brokers are also acting as________ depository participant OK
26 which is not the type of the financial services Need based services OK
27 the components of a capital market is Government securities market OK
…............is the process of of taking illiquied assets and
through the process of finacilal reenigineering
28 Securitisation OK
transforming them into a new security which can be sold
in the finacial markets
a ____ is a plastic card with an embedded with computer
29 smart card OK
chip that stores and transacts data between users
if the due date is a public holiday, what will be the due
30 following day OK
date of the bill.

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which of the following is not a characteristic feature of funding just one or a small number of
31 OK
venture capital firm? firms
32 the market for short-term loan is known as______ Money market OK
financial intermediaries provide services on the basis of
33 fee based activity OK
non fund activities , also called___
34 functions of financial services excludes____________ Collection of tax OK
a direct lease, a sale and lease back , and a leveraged "off balancesheet" methods of
35 OK
lease are all examples of_______ financing
a_________is an agreement to exchange an asset, for
36 forward contract OK
cash, at a pre-determined future date specified today.
37 mutual funds are allowed to borrow only to meet redumption demands OK

38 _____is basically a savings and investment corporation UTI OK

39 an aggrieved unit-holder of a mutual fund can sue the trustees OK
seed capital, start-up, second round
40 early stage financing includes OK
financing
_______is needed for developing a product in the initial
41 seed capital OK
stages
under which circumstances drawer and payee is same when the drawer discounted the bill
42 OK
person. with banker
____scheme enable the society to enjoy the benefits of
43 social insurance OK
insurance at reduced cost.
it provides a way to indirectly
44 one advantage of a financial lease is that: OK
deprecciate land
________offers insurance cover on the life of the key
45 personnel in an organisation to protect it from the loss keyman insurance OK
arising out of his death, absence of exit.
______is a form of financing of receivables pertaining to
46 forfaiting OK
international trade.
the consideration which the lessee pays to the lessor for
47 lease rental OK
the lease transaction is the
discounting of bills of exchange is an
48 attractive______based financial services provided by the fund OK
finance companies.
49 the ______has to manage the post issue activities merchant bankers OK
50 Certificate of Deposits (CDs) are issued by corporate OK
____________is a financial intermediary who helps to
51 mobilize and transfer capital from those who possess it venture capital or merchant banker OK
to those who need it.
which of the following members would you not find in
52 underwriters OK
the secondary Market?
53 NBFC stands for Non-Banking Financial Company OK
54 Letter of credit is a__________ Non Fund based service OK
55 the…........... has to manage the post issue activities Lead manager OK
the most important reason for an investor to prefer a
56 OK
bank deposit to a mutual fund is The credit worthiness of the Bank.
57 premium of group insurance premium is Low OK
__________act as an intermediary to link up the sources
58 Venture capital OK
of ideas and the sources of fund
All of the above ( issue management,
A merchant bank is financial institution conducting
59 Underwriting and financial advice, OK
capital market activities of
Investment service)
60 ______is a method of renting assets Lease OK
61 Which of the following is traded in money market? Treasury bill OK
…...........refers to transaction in which two parties agree
62 re purchase OK
to sell and repurchase the same security

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…........ is needed for developing a product in initial

63 Seed Capital OK
stages
To dematerialise government securities, NSDL has to
64 RBI OK
take former approval of
Financial intermediaries provide services on the basis of
65 fee based activity OK
non fund activities , also called__________
a market in which different currencies are bought and
66 foreign exchange market OK
sold under regulated arrangement is
Determined by calculating the net
67 the net asset value of a mutual fund is OK
price of the assets owned by the fund
In the case of hire-purchase the total sum payable by the
68 hire purchaser as per terms in order to complete the Hire-Purchase Price OK
transaction is
69 The investors hold commercial papers generally from Issuance to maturity OK
under hire purchase system, if instalment is not paid the
70 repossession of goods OK
hire vendor has right to_____
_______is a long term risk capital to finance high
71 technology projects which involve risk but at same time venture capital OK
has strong potential for growth
______refers to transaction in which two parties agree
72 re purchase OK
to sell and repurchase the same security.
call money, commercial bills, treasury
73 the main instrument of organised money market are OK
bills, certificate of deposits
74 a drawer in the bill of exchange can also be a payee OK
75 when the bill are to be produced to notary public at the time of dishonour of the bill OK
76 under hire purchase system, who has the right of sell hire vendor OK
77 listing of shares at a stock exchange ensures high liquidity OK
_____scheme enable the society to enjoy the benefits of
78 social insurance OK
insurance at reduced cost.
a market in which different currencies are bought and
79 foreign exchange market OK
sold under regulated arrangement is
80 free period called grace period OK
81 ______is an investment in a start-up business venture capital OK
82 what is CRR cash reserve ratio4 OK
how many merchant banker required if company issue
83 one OK
lot size is <Rs. 50Cr.
____capital is needed for product development and
84 second round financing OK
initial marketing
the most important reason for an investor to prefer a
85 the creditworthiness of the bank OK
bank deposit to mutual fund is
a______is a plastic card embedded with the computer
86 smart card OK
chip that stores and transact data between users.
it is normally true that, the longer the time to maturity of
87 the lower the discount rate OK
a government treasury bill____
who is the apex body which control all financial
88 Reserve bank of India OK
institutions
tax shield, full security and high
89 In case of leasing, advantage to lessor are OK
profitability
a portfolio of stocks, bond and other
90 Mutual fund is not OK
securities
Which of the following statements regarding Investor has to pay stamp duty for
91 OK
dematerialization is false? dematerialisation of shares
Plastic card implanted with computer chip to the data is
92 Smart card OK
known as______
Initial public offer and further public
93 What is the full form of IPO and FPO OK
offer

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94 A gift fund is a special type of fund that invests in government securities only OK

95 In India, Venture capital firms are usually organized as limited partnerships OK

An investor open a depository account which is

96 Beneficiary a/c OK
called__________
97 Which is not the types of financial services Need based Services OK
__________is a financial intermediary who helps to
98 mobilize and transfer capital from those who possess it venture capital OK
to those who need it.
99 The component of a capital market is__________ Government securities market OK
Of the following fund types, the highest risk is associates
100 Equity Growth Funds OK
with
Following are the features of financial services
101 Constant OK
except__________?
__________capital is needed for product development
102 Seed Capital OK
and initial marketing.
How many merchant banker required if company issue
103 2 OK
size is <Rs. 50 CR
The private sector was granted premission to enter the
104 1993 OK
mutual fund industry in
Financial Intermediaries provide services on basis of non
105 Fee based activity OK
fund activities, also called__________
106 ‘A’ in credit rating signifies: Adequate safety OK
107 ‘AAA’ in credit rating denotes: Highest safety OK
108 ‘BBB’ in credit rating signifies Moderate safety OK
109 ‘D’ grade is: Negative OK
……… and ……… are the two depositories operating in
110 NSDL, CDSL OK
India.
……… refers to the activities that are associated with
111 Due diligence OK
evaluating an investment
……… was the first Indian commercial bank to set up a
112 State Bank of India OK
separate merchant
……………. is a financial capital which is provided to early-
113 All of the above OK
stage, high-growth
114 1287678 NBSXM5RU answers OK
A ……… is a mutual fund that invests solely in money
115 Money market fund OK
market instruments.
116 a close ended mutual fun has a fixed Fund Size OK
117 A commercial bank is always scheduled. FALSE OK
118 A gilt fund basically invests in government securities. TRUE OK
119 A lease agreement is between the ……… and ……… . Lessor, lessee OK
A lessee should classify a lease transaction as a capital
120 True OK
lease if it is no cancellable.
121 A mutual fund holder is: Unit-holder OK
Institute of Chartered Accountants of
122 Accounting Standard -19 on lease issued by OK
India (ICAI)
act as an intermediary to link up the sources of ideas and
123 Venture capital OK
the sources of fund
124 ADRs and GDRs are: Owned instruments OK
All insurance companies are required to obtain a
125 Certificate of Registration, to be renewed _____, from in every 5 years OK
IRDA.
All NBFCs-NDSI and D have to maintain minimum Tier 1
126 10%; OK
capital of:
127 allow tax benefits to the company. Debenture & Bond OK

128 An insurance policy acquires surrender value after ……… . 3 years OK

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129 Any time entry and any time exit mutual fund is ……… . ……… invests in real estate properties. OK

ARCs are created to manage and recover Non-

130 True OK
performing Assets acquired
131 Are example of financial intermediaries All of these OK
132 are non-standardized derivatives. Forwards OK
133 are pure risk plans. Term insurance OK
134 are tax saving funds. ELSS OK
135 are tax-deductible instruments. Debentures and Bonds OK
are where a bank promotes jointly a credit card with
136 Co-Branded Credit Cards OK
another non financial institution
Asset Finance Company is a financial institution whose
137 TRUE OK
principal business is
138 Asset Liability management system in banks is meant for: Risk management OK
139 Balanced fund is also called hybrid fund. TRUE OK
140 BanK assurance is a tie-up between: Bank and the insurance company OK
Banker’s acceptance is backed by a guarantee from the
141 Bank OK
……… .
142 Banking Ombudsman Scheme is meant for HNIs. FALSE OK
143 Banking Regulation Act got enacted in: 1949 OK
Banks have been allowed to offer leasing facilities since
144 1994 OK
……… .
145 Basel III guidelines got released in ……… 2010 OK
Bombay Stock Exchange is the oldest stock exchange in
146 True OK
India.
147 brokers are also acting as depository participants OK
148 buys the assets to be securitized from the originator. Special purpose vehicle OK
149 Call market is the most liquid market. TRUE OK
150 Call market is: Inter-bank market OK
Capital adequacy ratio is used for testing solvency of
151 True OK
banks.
capital is needed for product development and initial
152 second round financing OK
marketing
153 Capital market is long-term market in nature. True OK
154 Capital market is: External in nature OK

155 CASA stands for ……… Current account and Savings account OK
156 Cash credit and overdraft are different. True OK

157 Cash reserve ratio is a ratio of liquid reserves with banks. FALSE OK
158 Certificate of deposit is like a ……… . Promissory note OK
Certificate of deposits pay a higher rate of interest than T-
159 TRUE OK
bills.
160 Claim settlement is done by an actuary. False OK
161 Close-ended funds are for perpetuity. False OK
162 Commercial paper is a long-term equity instrument. False OK
163 Commercial paper is a short-term debt instrument. True OK
164 Commercial paper is: Short-term OK
Commission payable on selling of mutual funds is called
165 Exit load OK
……… .
166 Corporate governance rating is ……… Voluntary OK

167 CRAs’ role has received an additional boost from ……… Basel II OK

Credit rating has not been restricted to rating of debt

168 TRUE OK
only, rather it has been
Credit rating is a symbolic indicator of the opinion of the
169 TRUE OK
relative capability

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Credit rating is an assessment of the creditworthiness of

170 TRUE OK
individuals and
Credit rating’ is common for issuance of the following
171 All of the above OK
instruments
172 Debt is the safest instrument. True OK
173 Demand deposit is payable on Requirement OK
174 Derivatives are speculative in nature. True OK
175 Derivatives are: Futuristic OK
176 Derivatives market is based on the principal of ……… . Speculation OK
177 DFIs stand for: Development Financial Institutions OK
178 Discounted bills arise only in case of: Credit sales OK
179 Dividend sweep is a reinvestment plan. TRUE OK
180 Equity always has a risk of ……… . Non-payment of dividend OK
181 Equity rating is compulsory in India. False OK
182 Equity share is: Voting security OK
Every NBFC is required to make a provision for standard
183 0.004 OK
assets at ……… of
184 Financial evaluation of a leasing proposal is done by: All of the above OK
185 Financial markets are regulated by: SEBI & ERBI OK
186 Financial services are tangible in nature. False OK
Financial services offered financing risk project e.g. Risk
187 capital scheme of IFCI venture capital fund of IDFI etc. to Venture capital OK
provide ----------------.
Financial institutions, financial
188 Financial system comprises of ……… , ……… , and ……… . OK
markets and financial instruments
189 financing stage is setting the stage for IPO. Mezzanine OK
190 First-stage financing means: Sales are picking up OK
For the registration of merchant banker under SEBI
191 False OK
Regulations, 1992 the
form of loan financing carries lower interest rates
192 initially and, increases when the assisted venture units Conventional loan OK
become commercially operational
193 Free-look period is a period of: 15 days OK

194 Functions of financial services exclude ----------------------. Collection of tax. OK

195 General Insurance Corporation is: Re-insurance company OK

196 Government Securities market is also known as ……… . Gilt-edged market OK

197 Growth fund is primarily: Equity fund OK
Guarantee to subscribe the unsubscribed amount in case
198 underwriting; OK
of issue of securities
199 GVC rating of CRISIL stands for ……… Governance and Value Creation OK
If the NPV of lease is positive, leasing is financially
200 True OK
advantageous.
In 1996, government announced guidelines to regulate SEBI (Venture Capital Fund)
201 OK
the VC industry in the Regulations, 1996
202 In a future contract, there is a reverse gear. False OK
203 In case of ……… , plant visit is made for credit rating. Manufacturing companies OK
In case of operating lease, all the risks are borne by the
204 False OK
lessee.
In hire purchase, the ownership is transferred on the
205 Last installment OK
payment of:
206 in india venture capital firms are usually organized as limited partnership OK
In India, ANZ Grindlays started merchant banking in
207 True OK
1967.
In India, only Qualified Institutional Buyers (QIBs) are
208 True OK
allowed to invest in PTCs.
209 In India, the concept of mutual fund started with: Unit Trust of India OK

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210 In loan syndication, there is: group of banks; OK

In November 1988, the GOI decided to institutionalize VC
211 True OK
Industry and
In simple terms, the management of issues for raising
212 Lead management OK
funds through various types of instruments is known as

213 Indemnification implies that the compensation would be Only the actual loss OK
214 Indemnity principle is not applicable to ……… . Life insurance OK
India has the third largest investor base in the world
215 True OK
after USA and Japan.
Indian Venture Capital Fund can exist outside SEBI
216 True OK
Regulations
217 Insurance companies are intermediary institutions. True OK
Insurance is a contractual arrangement between ………
218 Insurer, insured OK
and ……… .
Interest element included in the HP installments is
219 Revenue expenditure OK
treated as:
220 Interest income is the balance of ……… , over ……… Interest income, interest expenses OK
Investment banks with foreign direct investment are Foreign Exchange Management Act,
221 OK
governed by ……… . 1999
222 invests in real estate properties. Real estate fund OK
involves joint underwriting of an issue of securities by
223 syndicate underwriting OK
two or more
224 IPO implies exit of venture capital. True OK
225 IRDA was set up in ……… . 1999 OK
is a certificate that is given to an investor against certain
226 Pass-through-certificates (PTCs) OK
mortgaged backed
is a financial intermediary who helps to mobilize and
227 transfer capital from those who possess it to those who venture capital OK
need it.
is a form of financing of receivables pertaining to
228 forfaiting OK
international trade.
229 is a hybrid security. Preference share OK
230 is a investment in a start up business venture capital OK
is a long term risk capital to finance high technology
231 projects which involve risk but at same time has strong venture capital OK
potential for growth
232 is a measure of volatility of the stock. Beta OK
233 is a method of renting assets lease OK
234 is a Pension Plan. Annuity insurance OK
235 is a ratio of liquidity with banks. Statutory liquidity ratio OK
is a receipt issued by a securitization company or
236 Security receipt OK
reconstruction
237 is a short-term lease. Operating lease OK
is a statement of the proposed terms and conditions of a
238 Term sheet OK
proposed
239 is a subsidiary of Standard and Poor. CRISIL OK
240 is a zero interest account. Current account OK
241 is an alternative to long-term financing. Financial lease OK
242 is an investment in a start-up business venture capital OK
243 is basically a savings and investment corporation UTI OK
244 is example of financial intermediaries. All of the above OK

245 is needed for developing a product in the initial stages seed capital OK
246 is neither a life insurance nor a general insurance. Re-insurance OK
247 is non-cancellable. Capital lease OK
248 is responsible for financial sector reforms in India. RBI OK

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249 is speculative in nature. Derivatives market OK

is the most widely used discounted cash flow (DCF)
250 NPV method OK
method in all types
is the owner of the asset and sets up the basic structure
251 Originator OK
to execute the
lease is a long-term lease that is not cancelable and its
252 Financial OK
life often matches the useful life of the asset
253 Lease rentals paid by the lessee are treated as: Revenue expenditure OK
254 LIC is formed under: LIC Act, 1956 OK
Like conventional debt, securitization does inflate a
255 False OK
company’s liabilities.
256 Liquid funds are the least risky. TRUE OK
257 Magadh Stock Exchange is: Closed for ever OK
Merchant banking and investment banking are
258 False OK
functionally similar.
259 Merchant banking is governed u/s 2e of SEBI Regulations 1992 OK
260 Money market is meant for ……… . Short-term funds OK
Mortgage Guarantee Companies have been notified as
261 TRUE OK
Non-Banking Financial
262 Multi-commodity exchange is a: National stock exchange OK
Local and state government
263 Municipal lease is best for ……… . OK
organizations
Mutual fund can benefit from economics of scale
264 Large volume of trades OK
because of
265 Mutual funds are formed as ……… . Trust OK
266 Mutual funds are: Less risky than shares OK
267 n venture capital, ownership rights are given up. True OK
268 NAV is applicable in open-ended mutual funds. TRUE OK
NBFC includes any institution whose principal business is
269 False OK
agriculture activity
270 NBFC is a ……… institution financial OK
271 NBFC Stand for None of these OK
NBFC–Non-Operative Financial Holding Company is
272 TRUE OK
financial institution
273 NBFCs are regulated by: RBI and Others; OK
274 NBFCs stand for: Non-banking financial companies; OK
Non-Banking Financial Companies are entities that
275 TRUE OK
provide financial
276 Non-intermediaries are also called ……… . NBSFOs/DFIs OK

277 NPA is one which has a non-payment of interest for ……… 90 days OK

Of the following fund types, the highest risk is associated

278 Equity Growth Funds OK
with
offers insurance cover on the life of the key personnel in
279 an organisation to protect it from the loss arising out of keyman insurance OK
his death, absence of exit.
offers various guidelines with regard to the registration The Securities and Exchange Board of
280 OK
and functioning India (Credit Rating Agencies)
281 of the credit rating agencies in India. Regulations, 1999 OK
282 One cannot hold shares in physical form. False OK

283 Operating lease is a substitute for long-term financing. False OK

284 Operating lease provides off-balance sheet financing. True OK
285 Preference share is: No voting security OK
286 Primary Market is concerned with: First time issues OK
287 Primary market is IPO market. True OK
Principle of insurance interest is applicable to both life
288 TRUE OK
and general insurance.

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289 Product designing in insurance is done by: Actuary OK

Provided at a stages when product has been launched in
290 the market but has not earned enough profits to meet Second round financing OK
future capital needs.
Pure investment banks do not have presence in the
291 True OK
lending or banking business
292 QIBs are those who have: Both (i) and (ii) OK
refers to transaction in which two parties agree to sell
293 re purchase OK
and repurchase the same security.
Registration of Foreign Venture Capital Investors is not
294 True OK
mandatory under the
295 Repurchase agreements are ……… loans. Short-term OK

296 Repurchase agreements are always between the banks TRUE OK

297 Return in venture capital is earned at the time of ……… . Exit OK

298 Riders are additional benefits free of charge. False OK
299 RTGS is only valid in India. FALSE OK
300 Sale and lease back is: A type of finance lease OK
301 SARFAESI Act of securitization was passed in ……… . 2002 OK
302 Scheduled bank is one which is: None of the above OK
scheme enable the society to enjoy the benefits of
303 social insurance OK
insurance at reduced cost.
304 SEBI regulates credit rating agencies in India TRUE OK
305 SEBI regulates insurance industry in India. False OK
306 SEBI regulates the mutual fund industry in India. TRUE OK
307 SEBI was established in ……… . 1992 OK
308 Secondary market and stock market are different False OK
Secondary markets in treasury bills require involvement
309 Brokers, Dealers OK
of ________ and _______?
Securitization improves capital adequacy ratio of the
310 True OK
banks.
311 Securitization is a tool of financing. True OK
312 Securitization is the process in which assets are: All of the above OK
Securitization provides off-balance sheet financing to the
313 True OK
originator.
314 Securitization results in: Reduced cost of funds OK
315 Seed financing is in the later stage False OK
316 Sensex comprises of: 30 companies OK
Sharpe ratio is more appropriate for well diversified
317 TRUE OK
portfolios than Treynor.
318 SIP is meant for large investors. False OK
319 Skip lease is flexible in nature True OK
320 Specialised institutions are also called ……… NBSFOs/DFIs OK
SPV finances a portion of the assets with debt that does
321 True OK
not recourse to the
322 SPV stands for: Special-purpose vehicle OK
323 Start-up financing is at the business plan stage. True OK
State Industrial Development Corporations and State
324 True OK
Financial Corporations
325 Stock market is concerned with: Subsequent trading OK
Structure is responsible for bringing together the
326 True OK
partners to a securitisation
327 Sub-broker is a member of stock-exchange. False OK
328 Systematically important NBFCs are whose asset size is ` 500 cr or more OK
329 The _______ has to manage the post-issue activities. Lead manager OK
The additional finance provided by VCFs to overcome
330 Second round financing OK
fledging stage is called -----------------.

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The Board Committees required for NBFCs are: audit

331 risk management committee OK
committee, nomination
The Bower Herringer Williamson method is also used as
332 True OK
equivalent loan method.
The capital adequacy requirement for the registration of
333 net worth of ` 5 cr.; OK
merchant banker
334 The component of a capital market is_________ None of these OK
The consideration for lease is either premium or rent,
335 which is the price paid or promised in consideration of True OK
the property.
336 The credit enhancer can be a: Either of the above OK
337 The essential elements of a lease are All of the above OK
The fiasco of 2008 in US had securitization as the key
338 True OK
factor responsible for it.
339 The first leasing company set up in India was ……… . First Leasing Company of India Ltd. OK
The first mutual funds regulations were introduced in
340 1993 OK
India in:
341 The hybrid security issued by a company is ……… . Preference share OK
The initial registration fee for merchant banker as per
342 ` 20 lacs OK
SEBI Regulations is
343 the investors hold commercial paper generally from issuance to maturity OK
The issuer has an exit option in case of unacceptable
344 TRUE OK
rating.
345 The lease can be for perpetuity. True OK
The lessee pays a ……… to the lessor for the use of an
346 Lease rental OK
asset for a specified period.
347 The main characteristic of Income fund is ……… . Debt orientation OK

call money, commercial bills, Treasury

348 the main instruments of organised money market are OK
bills, certificate of deposite
the market for short term instruments of maturity of less
349 Treasury Bills market OK
than one year is known as
The mutual funds industry in India now functions under
350 TRUE OK
the SEBI (Mutual
351 The Nature of lease rent is Deferred revenue expenditure OK
The net present value method is the Discounted Cash
352 True OK
Flow (DCF) method.
The obligor is the ……… of the original loan or originator’s
353 Borrower OK
debtor
The one who collects the payment due from the
354 Administrator OK
obligor(s) and forwards the payment to the SPV is:
the period of which the lease agreement remains in
355 Lease term OK
operation is called
The present value of minimum lease payments between
356 False OK
the lessor and lessee
357 The primary function of the financial system is to All of the above OK
The private sector in India was granted permission to
358 1993 OK
enter the mutual fund industry in
the private sector was granted permission to enter the
359 1992 OK
mutual fund industry in
The requirement of minimum net owned fund for NBFC
360 200 lakh OK
is ……… .
the sale of a mortgage portfolio by setting up mortgage
361 Securitization OK
pass-through securities is an example of
The securities backed by a pool of retail loans are
362 Asset-backed securities (ABS) OK
referred to as ……… .
The securities created by securitization of a pool of
363 Mortgage-backed securities (MBS) OK
mortgage loans are referred

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364 The sub-prime mortgage crisis happened in ……… . 2008 OK

The type of lease that includes a third party, a lender, is
365 Leveraged lease OK
called
The VC method values the business on the basis of net
366 Last year OK
income projected in
There are ……… categories under which registration of
367 four OK
merchant bankers can
There is a reduction in available capital of the banks due
368 False OK
to securitization.
Those who invest money into the venture fund are
369 Limited OK
known as
370 Tier–I is the secondary capital. FALSE OK
Traditional funding is security-backed whereas venture
371 True OK
capital is not.
372 Treasury bills are issued by RBI. True OK
373 Treasury bills are issued by SEBI. False OK
374 Treasury bills are: All of the above OK
375 Treasury bills’s rating is mandato False OK
Private limited companies are outside the rating
376 TRUE OK
umbrella
377 ULIPS are: Market based OK
Under ………., a third party is involved besides the lessor
378 Leveraged leasing OK
and lessee.
Under direct leasing, a firm acquires the right to use an
379 True OK
asset from the
380 under hire purchase system depreciation is charged on cost price OK
381 Under hire purchase system who has the right of sell hire vendor OK
under hire purchase system, if installment is not paid the
382 repossession of goods OK
hire vendor has right to_____
Universal banks and NBFC investment banks are
383 RBI & SEBI OK
regulated by:
US insurance industry is state-based, whereas Indian
384 TRUE OK
insurance industry is centralised.
385 Venture capital is: Risk capital OK
Which of the following instrument is not a negotiable
386 Crossed cheque OK
instrument
which of the following is an short term financial
387 Treasury bills OK
instruments
388 Which of the following is traded in a money market? Terasury bills OK
Which of the following members would you not find in
389 underwriters OK
the secondary stock market?
Which scheme enable the society to enjoy benefits of
390 social insurance OK
insurance at reduced cost
391 Whole life insurance is a risk cover plan. TRUE OK
392 Zero coupon bonds are discounted instruments. True OK
Reduce the probability of cost
393 The contingency budget will be OK
overruns.
A project on software development and construction of
394 Project Management Process Groups. OK
a bridge are similar to each other in terms of:
395 Root Cause Analysis relates to Process analysis OK
A Project Managers main responsibility in a project
396 Ensuring it is high quality OK
meant to create a product is
A project manager has a problem with a team members
397 performance. What is best form of communication for Informal verbal communication. OK
addressing this problem?
398 A Pareto diagram can be best described as: Histogram OK

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Which of the following process would apply if you had to

communicate with the project team members to
399 Manage Stakeholder Engagement OK
understand their expectations from the outcome of their
project?
400 Process Analysis is a function of Process Improvement plan OK

401 At which stage, does a typical project has maximum cost Middle stage OK

Risk register documents the risks in

402 Which of the following statements is true about risks? OK
detail.
determining the amount of time the
403 the float of an activity is determined by activity can be delayed before it OK
delays the critical path.
Assuming that the ends of a range of estimates are +/- 3
Optimistic = 26 days, most likely = 30
404 sigma from the mean, which of the following range OK
days, pessimistic = 33 days
estimates involves the LEAST risk?
A planning phase for an engineering component
generated 80 engineering drawings. The QA team
405 Statistical sampling OK
randomly selected 8 drawings for inspection. This
exercise can best be described as example of
All of the following are the responsibility of a project Determine the legality of company
406 OK
manager except? procedures.
During a project team meeting, a team member suggests
an enhancement to the scope that is beyond the scope
407 of the project charter. The project manager points out scope management. OK
that the team needs to concentrate on completing all the
work and only the work required. This is an example of:
Regulatory, currency changes,
408 Which of the following fit the category of external risks? OK
taxation
409 which of these is not one of the constraints of a project Team OK

Approximately what percentage of the project managers

time is spent in some form of communicaiton such as
conferences meetings writing memos reading and
410 75-90% OK
preparing reports and talking with projec team
memebers upper management and all other stalk
holders?
The name for the tool used in Perform Quality Assurance
to represent decomposition hierarchies such as the WBS
411 (work breakdown structure), RBS (risk breakdown Tree Diagrams OK
structure), and OBS (organizational breakdown structure)
is:
A risk is defined as ____________ event or condition
412 that, if it occurs, has a positive or negative effect on one uncertain, objectives OK
or more project______________.
413 trend analysis is often performed using Run Chart OK
Other operations are ongoing
414 Which of the following is a project? OK
operations and not projects.
When checking the calendar of a team member to
schedule a meeting, you see she has scheduled a address the concern with the team
415 OK
meeting with a key stakeholder that you were not member.
informed of. The best approach would be to:
Calculating the cumulative sum of the
probability for each risk and
The total amount of risk that is calculated for a project is
416 multiplying this value times the OK
found by
consequence of occurrence of the risk
events

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A project manager is employed by a construction

company and is responsible for the furnishing of the
417 Project charter OK
completed building. One of the first things that the
project manager for this project should do is to write a
Omar a project manager in a construction company is
preparing for meeting with the stakeholders to update
them about the status of the project after the monitoring
Project management information
418 and controlling of the project work. For the information, OK
system
Omar will access automated tools such as performance
indicator databases financials or resourcing tools
through.
Establish the earned value
419 Project Cost Control excludes? OK
management techniques
420 Which of the following is not a stakeholder? Competitor OK
A schedule activity may begin 10 days before the
421 Finish-to-Start OK
predecessor activity finishes. This is an example of:
The tools and techniques used in the process of
422 Cost of Quality OK
Determine Budget includes all but
The process of developing an approximation of the
423 monetary resources needed to complete project Estimate Costs OK
activities is known as
A large, complex construction project in a foreign
country requires coordination to move the required
equipment through crowded city streets. To ensure the
424 equipment is transported successfully, your contact in Pay the fee. OK
that country informs you that you will have to pay the
local police a fee for coordinating traffic. What should
you do?
Risk register documents all the risks in
425 Which of the following statements is true about risks OK
detail.
The measure along the level of uncertainty or the level
of impact at which a stakeholder may have a specific
426 interest. Below that, the organization will accept the risk, Risk Threshold OK
and above this measure the organization will not accept
the risk. It is known as
During project executing, a team member comes to the
project manager because he is not sure of what work he
Work breakdown structure (WBS)
427 needs to accomplish on the project. Which of the OK
dictionary
following documents contain detailed descriptions of
work packages?
The project you are managing has nine stakeholders.
428 How many chanel of communicaiton are there between 36 OK
these stakeholders?
A major negotiation with a potential subcontractor is
scheduled for tomorrow when you discover there is a
429 Postpone the negotiations. OK
good chance the project will be cancelled. What should
you do?
To identify the risks involved, John sends a questionnaire
430 to gather inputs from experts. Which technique is John Delphi technique OK
using?
Which of the following does NOT generate changes to
431 Define Activities OK
the Project documents

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You are the project manager for a large project that is

completed on time and on budget. The customer and all
of the stakeholders are pleased with the results. As a
direct result of the successful completion of the project,
your manager approves a bonus of $25,000 to you. Ask the team members how they
432 OK
There are fifteen members of the project team. One of would divide the money.
the people on the project team has been a very low
contributor to the project the other fourteen have all
been good performers What should you do with the
money?
A team member notifies the project manager that the
activities comprising a work package are no longer
433 Monitoring and controlling OK
appropriate. It would be BEST for the project manager to
be in what part of the project management process?
You just found out that a major subcontractor for your
project consistently provides deliverables late. The
434 subcontractor approaches you and asks you to continue compromise OK
accepting late deliverables in exchange for a decrease in
project costs. This offer is an example of:
The Project Managers have maximum authority in which
435 Strong Matrix OK
type of organization?
A project is plagued by changes to the project charter.
436 Who has the primary responsibility to decide if these Sponsor OK
changes are necessary?
437 process analysis is a function of Process Improvement plan OK
One of the project documents available to Andrew lists
438 down all the risks in a hierarchical fashion. What is this Risk Breakdown Structure. OK
document called?
Project A has an internal rate of return (IRR) of 21
percent. Project B has an IRR of 7 percent. Project C has
439 Project C OK
an IRR of 31 percent. Project D has an IRR of ig percent.
Which of these would be the BEST project?
A project manager is faced with making a decision about
a risk that the team has identified. The risk involves the
design of a bicycle. It has been found that the neck of the
bicycle, where the steering bearing is located and the
two supporting bars of the frame come together, will
440 corrode in a high salt evironmen. If this takes plave the Risk avoidance OK
neck may fail and injure the rider. the project team
decides that the desingn of the bicylcle should be
modifified by using corrosion resistant materials in the
design of the neck. This will eliminate the risk from
consideration. This technique is called.
A project manager is using a cause and effect diagram
with the team to determine how various factors might
441 be linked to potential problems. In what part of the Plan Quality Management OK
quality management process is the project manager
involved?
most of the project manager's external communication
442 Written documents OK
comprises
The processes involving planning, estimating, budgeting,
financing, funding, managing, and controlling costs so
443 Project Cost Management OK
that the project can be completed within the approved
budget fall under

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The project manager is considering contracting some fo

the work of the project to service burean The service
bureau has been used in the past by this project manger
444 The manager has several choices of contracts that can be make or buy OK
used to subcontracts this work. which of the follwong is
not atype fo contract that the project manager might
choose?
445 Following are the features of financial services except Constant Book Question (Chapter-1)
446 Which of the following is a type of financial services? Securitization Book Question (Chapter-1)
Which of the following is not a fund based financial
447 both (a) and (b) Book Question (Chapter-1)
service?
“Aspecialized service provided by financial institutions in
which financial ins tu ons buys (through an
448 Factoring Book Question (Chapter-1)
agreement) receivables from the seller of services/goods
and manages seller’s receivables.” is known as
449 Loan syndication is an example of Non-fund based financial service Book Question (Chapter-1)
Which of the following are the parties involved in a
450 All off the above Book Question (Chapter-1)
forfaiting agreement
451 The banking system in a country is an example of Organized financial system Book Question (Chapter-2)
Which of the following is a component of un-organized
452 All of the above Book Question (Chapter-2)
financial system in India?
453 Financial instruments can be of following duration: All of these Book Question (Chapter-2)

454 Primary market and secondary market are the types of Capital Market Book Question (Chapter-2)

“No interest is payable for a specific period (called lock

in period) and on the com ple on of this period these Zero interest fully convertible
455 Book Question (Chapter-2)
debentures are automatically converted into the shares debentures
of that company.” Name the type of debenture.
Which of the following is not an instrument of money
456 Equity shares Book Question (Chapter-2)
market?
457 Which of the following is not related to capital market? Money market Book Question (Chapter-2)

Which of the following parties can issue commercial

458 Both (b) and (c) Book Question (Chapter-2)
papers?
459 Exchange trades and OTC markets are examples of Financial Markets Book Question (Chapter-2)
460 Forward, future, option and swaps are examples of Derivatives Book Question (Chapter-2)
procedure of converting physical
461 Dematerialization is said to be: Book Question (Chapter-3)
shares into electronic shares
462 CDSL was formed in which year 1999 Book Question (Chapter-3)
Which of the following is not a feature of the depository
463 None of the above Book Question (Chapter-3)
system in India
International Securities Identification
464 ISIN is abbreviated for Book Question (Chapter-3)
number
“Fungible” means, as shares would not have
Similar securities of a company are
465 distinguishing features such as distinc tive nos., Book Question (Chapter-3)
transposable
certificate nos., etc.:
As per SEBI requirements, a depository in India has to
466 All of the above Book Question (Chapter-3)
maintain a record of which of the following
Which of the following is a type of special service
467 Public issues Book Question (Chapter-3)
provided by depositories
Which of the following aspect is not covered in the
468 None of the above Book Question (Chapter-3)
Depositories Act, 1996.
Out of the following which organization provides for the
469 maintenance of the owner ship records of the securi es Depositories Book Question (Chapter-3)
in the book entry form?

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One of the following places does not have a stock National Securities Clearing
470 Book Question (Chapter-3)
exchange, name of that place is Corporation Limited (NSCCL)
471 Which was the first private mutual fund in India? Kothari Pioneer (1993) Book Question (Chapter-4)
Which was the first public sector mutual fund to be set
472 up after the Unit Trust of SBI Mutual Fund Book Question (Chapter-4)
India?
Mutual funds are regulated in India by which among the
473 SEBI Book Question (Chapter-4)
following?
474 Investment objective is closely linked to scheme Book Question (Chapter-4)
475 The assets of the mutual fund are held by custodian Book Question (Chapter-4)
476 Most investor service centers are offices of registrar Book Question (Chapter-4)
477 SEBI regulates All of the above Book Question (Chapter-4)
478 The difference between NAV and re-purchase price is exit load Book Question (Chapter-4)
479 The comparable for a liquid scheme is savings bank account Book Question (Chapter-4)
Which of the following aspects of portfolio would an
480 Weighted average maturity Book Question (Chapter-4)
investor in debt scheme give most importance to?
481 Match the following: (1-c,2-d,3-a,4-b) Book Question (Chapter-5)
482 CRISIL was formed in 1987 Book Question (Chapter-5)
In which of the following year Brickworks commenced it
483 2008 Book Question (Chapter-5)
operation in India
484 Which of the following is not rated by CRAs? Debtors Book Question (Chapter-5)
Only give suggestions to the investors
485 The CRA takes Book Question (Chapter-5)
to take decision
486 Which of the following is not registered with SEBI? 2 and 3 Book Question (Chapter-5)
487 Credit rating agencies provides Both (a) and (b) Book Question (Chapter-5)
488 The emergence of CRAs is associated with US railroad companies Book Question (Chapter-5)
489 Credit rating agencies provide ratings for Both (a) and (b) Book Question (Chapter-5)
During 1813, John Palmer & Co. was operating banking
490 activities from Calcutta and was popularly known as an Agency house Book Question (Chapter-6)
and was employing huge capital in
The merchant banking in India was formally introduced
by the Na onal and Grind lays Bank which was known
491 Grindlays Bank in 1967 Book Question (Chapter-6)
as and Reserve Bank of India issued a license of
merchant banking to .
“A merchant banker has been defined as any person who
is engaged in the business of issue management either
by making arrangements regarding selling, buying or
492 subscribing to securities or acting as managers SEBI (Merchant Bankers) Rules, 1992 Book Question (Chapter-6)
consultant, advisor or rendering cor porate advisory
services in relation to such issue management”. This
definition of merchant bankers is given by the

493 Following are the functions of merchant bankers except Economic level policy making Book Question (Chapter-6)

Following are the regulators of Merchant banking in

494 Company Act, 1946 Book Question (Chapter-6)
India except
Which one of the following is/are the major
495 objective/objectives of Securities and Exchange Board of All of the above Book Question (Chapter-6)
India (Merchant Bankers) Regulations, 1992?
Which of the following is not a role of a merchant
496 None of the above Book Question (Chapter-6)
banker.
497 Which of the following is a chapter of SEBI’s regulations. All of the above Book Question (Chapter-6)

For providing equity investment for

498 Venture capital market refers to the Book Question (Chapter-7)
startup firms

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In 2000 SEBI appointed one committee to investigate

about the obstacles in the way of venture capital in India
499 Chandrasekhar Committee Book Question (Chapter-7)
and suggest measures to improve the condition of
venture capital in India. Name of that committee is

From 25 January, 1995 SEBI is the regulating authority

Security and Exchange Board of India
for the venture capital in India and SEBI made some
500 (Venture Capital Funds) Regulations, Book Question (Chapter-7)
guidelines for the venture capital. Name of those
1996
guide lines is

Which one of the following does not come under the

501 Replacement capital Book Question (Chapter-7)
early stage financing by ven ture capital?
502 Following are the features of venture capital except Less risk Book Question (Chapter-7)

For businesses at all stages but

503 Private Equity Investors provide funds for Book Question (Chapter-7)
preferably at growth or maturity stage
504 The origin of venture capital fund was found in ULS. Book Question (Chapter-7)
Indian Private Equity and Venture Capital Association
505 1993 Book Question (Chapter-7)
(IVCA) was established in
Which of the following statement is not true with regard
506 None of the above Book Question (Chapter-8)
to the securitization?
They buy assets from the originator
507 Tick the correct definition of special purpose vehicle. Book Question (Chapter-8)
which are to be securitized.
Which of the following is not a participant of They buy assets from the originator
508 Book Question (Chapter-8)
securitization. which are to be securitized.
Which of the following is not regarded as a risk of
509 Neither (a) nor (b) Book Question (Chapter-8)
securitization
Which of the following is not a step of the securitization
510 None of the above Book Question (Chapter-8)
process
Q.1 Bancassurance originated in India in by a notification
511 2000 Book Question (Chapter-9)
issued by the

512 Which of the following is not a part of the growth of None of the above Book Question (Chapter-9)
insurance
513 Which of the following is a type of regulation All of the above Book Question (Chapter-9)
514 Which of the following is not an insurance risk None of the above Book Question (Chapter-9)
Which of the following is not a major player in the life
515 Pathway Insurance Union Book Question (Chapter-9)
insurance sector
516 Which of the following is form of plastic money? Both (a) and (c) Book Question (Chapter-10)

Providing banking services to

517 The retail banking refers to Book Question (Chapter-10)
individuals
Which of the following is known as a value-added
518 Cash management services Book Question (Chapter-10)
services under wholesale banking
519 Letter of credit is a Non-fund based service(b) Book Question (Chapter-10)

Non-banking financial companies may take different kind

of structural forms. These structures further can be
classified into companies accepting deposits and those
520 com panies which are not accep ng deposits. Registered and regulated by RBI Book Question (Chapter-10)
Investment Co., Loan Co., Hire Purchase finance Co.,
Equipment Leasing Co. and Residuary non-banking Co.
are under the heading of
…........means any company which is a financial
521 institution carrying on the ac quisition of securities as its Investment company Book Question (Chapter-10)
principal business.

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Nidhi companies (mutual benefit finance company),

Poten al Nidhi Company (Mu tual Benefit Company)
522 and Chit Funds (other non-banking company) are Not registered but regulated by RBI Book Question (Chapter-10)
companies
which are:
In December 2006, RBI gave re-classification of NBFCs.
Asset financing company, investment
523 As per this reclassification following is the new Book Question (Chapter-10)
company and loan company
classification for NBFCs.

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FINC631
Q. The market for short-term instruments of maturity of less than one year is known as __________

Call money market

Treasury bill market
Money market
acceptance market

Q. ____________________scheme enable the society to enjoy the benefits of insurance at reduced cost.

Professional insurance
Social insurance
Industrial insurance
Credit insurance

Q. Who is the nodal centre for all venture capital activity in the country?

Indian Venture Capital Association

Development finance institutions
Financial institution
Industrial Development bank of India

Q. Which is of the following instrument is not a negotiable instrument

crossed cheque
bearer cheque
promissory notes
bill of exchange

Q. __________is a method of renting assets.

hire pirchase
lease
hedge finance
credit rating

Q. ________________________ refers to transaction in which two parties agree to sell and repurchase the same
security.

Certificate of deposit
Re-purchase Option (REPO)
Commercial bills
Treasury bills
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Q. Which of the following members would you not find in the secondary stock market?

Investors
Stock exchanges
Stock brokers
Underwriters

Q. _____________________ offers insurance cover on the life of the key personnel in an organisation to protect it
from the loss arising out of his death, absence oe exit.

whole life insurance

Term life insurance
Key-man insurance
Non-life insurance

Q. Early stage financing includes

Sees capital, start-up, bridge

Seed capital, start-up, mezzanine capital
Seed capital, start-up, second-round financing
Seed capital, start-up, buyouts

Q. The additional finance provided by VCFs to overcome fledging stage is called_________.

seed capital
Start up capital
Second round capital
First round capital

Q. __________________ is an investment in a start-up business.

mutual fund
venture capital
working capital
factoring

Q. Agents are compensated by mutual funds

through commission
through salaries
through an annual fee
not in cash but in kind

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Q. Functions of financial services exclude __________.

Collection of tax.
Allocation of fund
Mobilization of savings
Specialized services

Q. Of the following fund types, the highest risk is associates with

Balance fund
Gilt funds
Equity growth fund
Debt funds

Q. In simple terms, the management of issues, for raising funds through various types of instruments, is known as:

Lead management
Merchant banking
Issue management
Underwriting

Q. Financial services which offers financing of risky projects e.g. Risk capital scheme of IFCI, venture capital fund of
IDFI etc. to provide______________

seed capital
venture capital
primary fund
secondry fund

Q. A market in which different currencies are bought and sold under regulated arrangement is

Foreign exchange market

Financial market
Money market
Capital market

Q. ___________ is a financial intermediary who helps to mobilize and transfer capital from those who possess it to
those who need it.

lease finance
Hire purchaser
merchant banker
venture capital

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Q. Certificates of Deposits (CDs) are issued by

Regional Rural bank

Corporates
Schedule commercial bank
Private banks

Q. Mutual fund is not

a portfolio of stocks, bond and other securities

a company that manages investment portfolios
a pool of fund used to purchase securities on behalf of investors
a collective investment vehicle

Q. Which of the following is traded in a money market?

preference shares
mortgages
terasury bills
common stock

Q. A form of direct short-term finance issued by large, credit worthycompanies is called a ____________________

commercial paper
all money
preference shares
corporate stock

Q. The consideration which the lessee pays to the lessor for the lease transaction is the

hire charges
lease rental
commission
lumsum payment only

Q. Plastic cards implanted with computer chip to the data is known as______________

credit card
ATM card
smart card
SME card

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Q. ______________act as an intermediary to link up the sources of ideas and the sources of fund.

venture capital
merchant banking
leasing
hire purchase

Q. Secondary markets in treasury bills require involvement of ________ and _______

Brokers, Dealers
Buyers, Sellers
Consumer, Producer
All of the above

Q. Which of the following is not a characteristic feature of venture capital firms?

Holding equity in the firms that are funded.

Having a long-term investment horizon.
Funding just one or a small number of firms.
Providing advice and assistance to the firms that are funded.

Q. Insurance is a____________

Instrument
Contract
Agreement
Rating

Q. In case of hire-pirchase the total sum payable by the hire purchaser as per terms in order to complete the
transactions is

net cash price

net hire-purchase price
hire-purchase price
cash price instalment

Q. ____________ is a long term risk capital to finance high technology projects which involve risk but at same time
has strong potential for growth.

hire purchaser
venture capital
hedge finance
merchant banker

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Q. Under hire purchase system, if installment is not paid the hire vendor has right to ____________________

repossession of goods
sell the gods
repair the goods
purchase of goods

Q. which is not the types of financial services

Fund based services

Insurance services
Need based services
Fee based services

Q. bank owned mutual funds are supervised by

SEBI
RBI
Jointly by SEBI & RBI
AMFI

Q. The nature of lease rent is

Capital expenditure
Revenu expenditure
Deferred revenue expenditure
None of these

Q. The component of a capital market is ___________

Treasury bill market

Government securities market
Commercial bill market
None of these

Q. Under hire purchase system, who has the right of sell

buyer
hirer
hire vendor
debtor

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Q. __________capital is needed for product development and initial marketing.

seed capital
Start up capital
Second round capital
Working capital

Q. Which of the following is a short-term financial instrument?

Shares of Limited company

Government bond with a maturity of 2 years
residential mortgage
Treasury bills

Q. A high P/E multiple of a fund in comparision to average market multiple could be of

value fund
balance fund
equity diversified fund
growth fund

Q. One advantage of a financial lease is that:

it has a shorter maturity than term loans

it never appears as a liability on the balance sheet
it eliminate the needs to make periodic payments
it provides a way to indirectly depreciate land

Q. Brokers are also acting as _________

Depository participants
Merchant Banker
Financer
Clearing member

Q. _________ are examples of financial intermediaries

commercial bank
insurance cpmpanies
investment companies
All of these

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Q. _________provided at a stage when product has been launched in the market but has not earned enough profits to
meet future capital needs.

seed capital
Start up capital
Second round capital
First round capital

Q. An aggrieved unit-holder of a mutual fund can sue

the AMC
the trustees
the sponsor if returns have been guaranteed by them
the brokers

Q. NBFC stands for.

Non banking finance companies

Non banking financial corporation
Non bulk finance companies
None of these

Q. __________ lease is a long-term lease that is not cancelable and its life often matches the useful life of the asset.

Financial
Operating
Sale or lease back
None of these

Q. The sale of a mortgage portfolio by setting up mortgage pass-through securities is an example of

credit enhancement
securitization
unbounding
derivatives

Q. The period for which the lease agreement remains in operation is called

Grace period
Lease term
Finance term
Operating period

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Q. Discounting of bills of exchange is an attractive__________ based financial service provided by the finance
companies.

fee
fund
opinion
capital

Q. It is normally true that, the longer the time to maturity of a Government Treasury bill _______

The lower the discount rate

The less liquid the asset
The lower the level of taxation on the Treasury bill
The lower the market risk in the Treasury bill

Q. Accounting standaed - 19 on lease issued by

Institute of cost accountant of India

Accounting statdard board
institute of chartered accountants of India
None of these

Q. _____________________ are where a bank promotes jointly a credit card with another non financial institution.

Cold card
Affinity card
Co-branded card
Add-on card

Q. Mutual funds are allowed to borrow

freely to meet their requirements

for investment purpose only
only to meet redemption demands
None of these

Q. The _______ has to manage the post-issue activities.

Merchant banker
Lead manager
Bank promoter
Bank manager

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FINE004-MANAGEMENT OF FINANCIAL SERVICES

Case Study
Q.1 • T+1
Q.2 • Fixed income securities
Q.3 • All of these
Q.4 • Commercial Papers

1.Following are the features of financial services except

Ans. Constant
2.Which of the following is type of financial services
Ans. Fund based & non-fund-based service

3.Which if the following is not a fund based financial service

Ans. Securitization

4.A specialized services provided by financial institutions in which financial institution buys
(through an agreement) receivables from the seller of services goods and manages sellers'
receivables is known as
Ans. Factoring

5.Loan syndication is an example of

Ans. NON fund based financial service
6.Which of the following are the parties involved in a forfaiting agreement
Ans. All of the above (Seller/ Exporter, buyer/importer, forfeiter.

7.The banking system in a country is an example of

Ans. Organized financial system
8. Which of the following is a component of un-organized financial system in India.
Ans. All of the above
9. Financial Instruments can be of following duration

Ans. All of these (Short, medium and long term)

10. Primary and secondary markets are type of
Ans. Capital Market

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11. NO interest is payable for a specific period (Called Lock in period) and on the completion of
this period these debentures are automatically converted int shares of the company. Name the
type of debentures.
Ans. Zero Interest Fully Convertible debenture.

12.Which of the following is not an instrument of money market?

Ans. Equity Shares
13. Which of the following is not is not related to capital Market
Ans. Money Market

14.Which of the following parties can issue commercial papers? Both corporate primary dealers
and financial Institution.
15. Exchange trade and OTC markets are example of
Ans. Financial markets

16. Forward, Future, option and swaps are example of

Ans. Derivatives.
17. Dematerialization is said to be
Ans. procedure of converting physical shares into electronic shares.

18. CDSL was formed in which year

Ans. 1999
19. which of the following is not a feature of depository system in India.
Ans. None of the above
20. ISIN is abbreviated for

Ans. International Securities Identification number

21. Fungible means, as shares would not have distinguishing features such as distinctive nos.
certificate no etc.

Ans. Similar securities of a company are transposable.

22.As per SEBI requirements, depository in India has to maintain a record of which of the
following

Ans. All of the above.

23. which of the following is a type of special service provided by depositories
Ans. Public Issue
24. Which of the following aspect is not covered in the Depositories act 1996

Ans. None of the above.

25. Out of the following which organization provides for the maintenance of the ownership
records of the securities in the book form?

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Ans. Depositories.
26. One of the following places does not have a stock exchange? Name of that place is
Ans. Cuttack.

27. Which was the first private mutual fund in India.

Ans. Kothari Pioneer (1993)
28. Which was the first public sector mutual fund to be setup after the Unit trust of India?
Ans. SBI Mutual Fund

29. Mutual Fund are regulated in India by which among the following.
Ans. SEBI
30. Investment Objective is closely linked to
Ans. Scheme
31. The assets of mutual fund are held by

Ans. Custodian
32. Most Investor service centers are offices of
Ans. Registrar
33. SEBI regulates

Ans. All of the above (Mutual fund, depositories and Registrar and transfer agents)
34. The difference between NAV and re-purchase price is
Ans. Exit load
35. The comparable for a liquid scheme is
Ans. Savings bank account

36. which of the following aspects of portfolio would an investor in debt scheme give
Ans. Weighted average maturity.
37. Match the following-
CRISIL – S&P Company

ICRA Moody’s
CARE - IDBI
Fitch India – Fitch
38. CRISIL is formed in
Ans. 1987

39. In which of the following year Brickworks commenced it operation in India.

Ans. 2008

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40. Which of the following is not rated by CRA’s.

Ans. Debtors

41. The CRA takes

Ans. Only give suggestions to the investors to take decision.
42. Which of the following is not registered with SEBI.
Ans. Both Moody’s and S&P

43. Credit rating agencies provide

Ans. Both Rating facilities and Research and Consultancy.
44. The emergence of CRA’s is associated with
Ans. US railroad companies
45. Credit rating agencies provide ratings for

Ans. Both short and long term

46. Which of the following is a chapter of SEBI’s regulation
Ans. All of the above
47. Which of the following is not a role of merchant banker

Ans. None of the above

48. Which of the following is/are a major objective/ objectives of Securities and Exchange board
of India (Merchant Bankers) Regulation 1992.

49. During 1813 John Palmer & Co was operating banking activities from Calcutta and was
popularly known as an --------- and was employing huge capital in trade and commerce.
Ans. Agency House.

50. The merchant banker in India was formally introduced by the National and Grindlays Bank
which was known as Reserve Bank of India issued a license of merchant banking to
Ans. Grindlays Bank in 1967.

51, A merchant Banker has been defined as any person who is engaged in the business of issue
management either by making arrangements regarding selling, buying or subscribing to
securities or acting as Manager consultant advisor or rendering corporate advisory services in
relation to such issue management. This definition of Merchant Banker is given by
Ans. SEBI (Merchant Bankers) Rules,1992

52. Following are the function of Merchant Bankers except.

Ans. Economic level policy making.
53. Following are the regulators of merchant banking in India except
Ans. Company Act, 1946.

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54. Venture capital market refers to the

Ans. For providing equity investments for startup firms.

55.In 2000 SEBI appointed on committee to investigate about obstacles in the way of venture
capital in India and suggest measures to improve the condition of venture capital. Name of that
committee Ans. Chandrasekhar committee.

56. From 25th January,1995 SEBI is the regulating authority for the venture capital in India and
SEBI made some guidelines for the venture capital. Name of that guidelines is

Ans. SEBI (Venture Capital Funds) Regulations,1996

57.Which of the following does not come under the early-stage financing by venture capital?
Ans. Replacement Capital
58.Following are the features of venture capital except.
Ans. Less Risk.

59.Private Equity Investors provide funds for

Ans. For businesses at all stages but preferably at growth or maturity stage.
67.The origin of venture capital fund was found in
Ans. U.S

68. Indian Private equity and Venture Capital Association (IVCA) was established in
Ans. 1993
69.Which of the following statement is not true with regards to the securitization
Ans. None of the above.
70.Tick the correct definition of special purpose vehicle.

Ans. They buy assets from originator which are to be securitized.

71.Which of the following is not a participant of securitization
Ans. All of the above
72. Which of the following is not regarded as risk of securitization.

Ans. Neither a & b.

73. Which of the following is not a step of securitization
Ans. None of the above

74. Bancassurance originated in India in ------ by a notification issued by the Reserve Bank of
India Which allowed Indian Banks to deal in Insurance Products.
Ans. 2000
75. Which of the following is not a part of growth of Insurance.
Ans. None of the above.

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76. Which of the following is a type of Regulation.

Ans. All of the above.
77. Which of the following is not an Insurance Risk

Ans. None of the above.

78. Which of the following is not a major player in the life insurance sector
Ans. Pathway Insurance Union.
79. Which of the following is a form of plastic money.

Ans. Both ATM & Gold Cards

80. Retail Banking refers to
Ans. Providing banking services to Individuals.

81.Which of the following is known as Value-added service under wholesale banking

Ans. Cash Management services.

82.Letter of Credit is a
Ans. non-fund based service.

83. In December 2006 RBI give re-classification of NBFC’s. As per this reclassification following
is the new classification of NBFC’s. - Asset financing company, Investment company and loan
company

84. Nidhi companies (mutual benefit finance company), potential Nidhi Company (Mutual
Benefit Company ) and chit funds (other non-banking company) are companies which are
Ans. Not registered but regulated by RBI.

85. Means any company which is financial institution carrying on the acquisition of securities as
its principal business
Ans. Investment Company.

86. which of the following is not part of primary market

Ans. Public
87. Second generation reforms in India were started in
Ans. 1991.

88. which of the following is not a financial intermediary

Ans. SBI
89. NSDL Stands for
Ans. National Securities depository Limited.
90.Which of the following is not a derivative

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Ans. Mutual Fund Scheme

91. Which company Started the Insurance Business in India.
Ans. Bombay Mutual Life Insurance Society.

92.National Stock Exchange was setup in the year

Ans. 1994.
93. In India, Merchant Banks is regulated by
Ans. SEBI

94. CDSL stands for

Ans. Central Depository Services Limited.
95.Is the provision of banking services by one bank to another bank
Ans. Correspondent banking

96. Finance Lease is also known as

Ans. Capital or Sales Lease.
97.Holders are residual claimants
Ans. Equity Shares.

98.Government Securities market is a component of

99. LIC was established in the year
Ans. 1st Sep 1956

100. It is that form of capital raising where the organizational and Institutional Investors are to
subscribe the capital share of the company what it is called?
Ans. Equity Finance
101. Hire Purchase in India is regulated by
Ans. Hire purchase Act 1972.

102. Which of following still remain the primary focus area of commercial bank -

Primary functions include accepting deposits, granting loans, advances, cash, credit, overdraft
and discounting of bills.- Secondary functions include issuing letter of credit, undertaking safe
custody of valuables, providing consumer finance, educational loans, etc.
103. Debt Market is also known
Ans. As bond market

104. corporate debt instruments are traded through

Ans. OTC contracts or through the brokers on a stock exchange like BSE or CM or WDM
segments of NSE.

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105.NSDL and CDSL are

Ans. Depositors

106. Which of the following committee was set up for suggesting Banking Sector reforms
Narasimham committee
107. Which of the following is not an innovative debt Instrument.
108. Leveraged Lease has ----- party

Ans. 3 party.
109. Which of the following is not a part of working capital finance
110. Which of the following is the apex body controlling all financial Institutions in India.
Ans. Central Bank, RBI

111. Is the process of converting physical shares into electronic shares

Ans. dematerialization (Demat)

112.In case of mutual fund ELSS stands for

Ans. Equity Linked Savings Schemes

113.In Case of mutual fund investment profits or losses are shared by Investors.
Ans. in proportion to their investments.

114. Credit Capital, venture fund, 20th Century Venture Fund, India Investment fund, these are
some of the examples of different agencies promoted by.
Ans. Private sector
115.Stock Exchanges are part of
Ans. free-market economy / global securities market

116. Qualified Institutional placement is a type of

Ans. private
117. ULIP Stands for:
Ans. Unit Linked Insurance Plan.
118. In case of IPO, the underwriter is a – intermediary's/Depository

119.Which of the following policy is not a commercial policy

Ans. Bankers Indemnity Policy

120.For registration as merchant banker, concerned person has to deposit a non-refundable fee
of
Ans. Rs 10 Lakh
121. Oriental Insurance company deals in

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Ans. General Insurance.

122. Which of the following policy is not a personal policy
Ans. Mediclaim Policy

123. Goldman smith has designated many economic units in three categories. Which of the
following is not one of them.
Ans. Investment Units.

125.Which of the following is not a derivative

Ans. Mutual Fund scheme

126.Capital adequacy requirements for merchant bankers as per the clause of regulations 6 is
that net worth should not be less than
Ans. 5 Crore.

127. This type of venture capital financing has high risk and is for long duration (3-5 years).
Here control of some sick business( which require special treatment to make it viable) is taken
over to make it profitable business. This control may require rescheduling of term loan or
change in management or change in ownership. -
128. National insurance company Ltd deals in
Ans. All areas of Life Insurance and some area of
129.Majority of the corpus of a growth fund will be invested in

Ans. Money Market Instruments.

130. Balanced Fund has a portfolio consisting of
Ans. Equity as well as debt share

131. The expert companies in particular fields that are contracted by Insurance companies
perform claims handline services for a group or category of clients are known as
Ans. Third party administrators.
132. Which has not been a major capital market reform in India. -

133. From the following list select the credit rating activities of the CRA’s. 1 corporate Rating
2.Fund Rating 3. Economic Research 4. Insurance Rating 5. Sovereign Rating 6. Fund /Portfolio
Research 7. Risk Consultancy –
Ans. 1,2,4,5 .
134. Financial Intermediaries provide a link between
Ans. RBI and SEBI

135. Which of the following activity is not a part of process of capital formation.
Ans. Accounting
136. Which of the following has not been a major money market reform in India.
Ans. Abolishment of commercial paper

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137.Operating lease is also known as

Ans. service lease.
138. Which of the following still remains the primary focus area of commercial bank

Ans. Working Capital Financing.

139. Which of the following stock exchange introduced screen-based trading system in India.
Ans. NSE

140. The carry two preferences in comparison to equity or ordinary shares. One in terms of
payment of dividend and the other one is in repayment of capital at the time of winding up the
company

Ans. Preference Shares

141. who gets the right to use the asset in a hire purchase contract.
Ans. Hirer.

142. Which of the following is not a stock exchange

Ans. AMFI
143.Which of the following is a fund-based service
Ans. Leasing and hire purchase.
144.First generation financial sector reforms were started in the year

Ans. 1991
145. Depository is a type of
146. Which of the following is a fee-based services
Ans. Bill Discounting

147.Can locked in securities be dematerialized

Ans. Yes, always irrespective

148. The process of credit rating has different steps in it. Tell the right sequence of the following
steps 1. Receipt of Request 2.Assignment to analytical team 3. Presentation of findings 4.
Meeting the rating committee 5. Visits to Plant and meeting with management team of client
company6.Obtaining information 7. Communicating the decision. – 1,2,6,5,3,4,7.
149.Which of the following is not type of clearing member in India
Ans. Trading Member cum clearing member.

150.Which of the following does not have the responsibility of regulating financial markets in
India.
Ans. Department of External affairs.
151. Headquarters of New India Assurance Co. Ltd is situated in

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Ans. Mumbai
152. In case of mutual fund SIP stands for
Ans. Systematic Investment Plan

153. Depository Participants act as agent of

Ans. stock brokers.
154.Which of the following is not a NBFC
Ans. Commercial Bank

155.Which of the following is a private sector Insurance company.

Ans. IFFCO Tokiyo.
156. Which of the following services are provided by an investment banker
Ans. All of these
157. Assets of mutual fund are managed by

Ans. AMC
158. From riskiest to safest, the four classes of mutual funds are
Ans. Equity funds, money market funds, bonds fund and hybrid funds

159. Goldsmith has designated various economic units in three categories. Which of the
followings not one of them.
Ans. Investment unit.
160. Which is the oldest stock exchange in India

Ans. BSE
161. Act as depository participant
Ans. Stock brokers.
162.In case of an IPO, the banker to issue has to be
Ans. Merchant Bank

163. Preferential issue is a type of

Ans. private placement
164.Which of the following factor is an indicator of strength of an economy
Ans. High interest rate

165. Venture capital fund by AIG, NIKKON, Securities tie up with Walden and San Francis
company, these are the example of different agencies promoted by
Ans. Overseas venture capital funds.

166. Oriental insurance company that deals in

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Ans: General insurance

167. which has not been a major capital market reform in india:
Ans. established of SEBI

168. which of the following is not a part of primary market.

Ans: public sector
169. which of the following is not a financial intermediary?
Ans: SEBI

170. NSDL stands for

Ans: national securities depository limited
171. Which of the following is not a derivative.
Ans: mutual fund scheme
172. which company started the insurance business in India

Ans: Bombay mutual life assurance society

173. National stock exchange (NSE) was set up in the year
Ans: 1994
174. In India Merchant bankers are regulated by

Ans: SEBI
175. Finance lease is also known as
Ans: sale and lease back
176. CDSL stands for
Ans: Central depository services limte

177. holder are residual claimants.

Ans: Equity shares
178. LIC was established in the year
Ans: 1956

179. “It is that form of capital raising where the organizational or institutional investors are
approached to subscribe the capital share of the company” what is it called?
Ans: Equity finance

180. Hire purchase transaction in india are regularized by which of the following act
Ans: hire purchase act 1972
181. which of the following still remains the primary focus area of commercial banks
Ans: working capital financing

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182. Which of the following statement about financial services is true

Ans: none of these
183. NSDL and CDSL are

Ans: Depositories
184. Which of the following is not an innovative debt instrument.
Ans: zero coupon convertible notes
185. Leveraged lease has _________ parties.

Ans: three parties

186. is the process of converting physical shares into electronic shares
Ans: Dematerialization

187. Is a means by which an insurance company can protect itself against (4) the risk of losses
by transferring their risks to other entities.
Ans: Reinsurance
188. In the context of mutual funds, ELLS stands for
Ans: Equity Linked Savings Schemes

189. In case of mutual fund investment the profits or losses are shared by investors
Ans: (B)
190. Stock exchanges are part of
Ans: Capital market

191. ULIP stands for

Ans: Unit link Insurance plan

192. Goldsmith has designated various economic units in three categories. Which of the
following is not of them.
Ans: investment unit
193. Which of the following policy is not a personal policy
Ans: Mediclaim policy
194. Which of the following policy is not a commercial policy

Ans: Bankers Indemnity Policy

195. Capital adequacy requirements for merchant bankers as per the clause of regulations (0) 6
is that net worth should not be less than

Ans: 5 Cr.

196. This type of venture capital financing has high risk and is for long duration (3-5 years).
Here control of some sick business (which requires special treatment to make it viable) is taken

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over to make it profitable business. This control may require rescheduling of term loan or
change in management or change in ownership.
Ans. Turnarounds
197. Majority of the corpus of a growth fund will be invested in
Ans: Money Market Instruments
198. National insurance company Ltd deals in

Ans: life as well as general insurance

199. Which of the following provides for inter connectivity among various depositories in the
scenario of multiple depositories?

Ans: SEBI
200. Balanced fund has a portfolio consisting of
Ans: Equity as well as debt share

201. The expert companies in particular field that are contracted by insurance companies to
perform claims handling services for a group or category of clients are known as
Ans: third party administrators
202. Which of the following activity is not a part of process of capital formation

Ans: Accounting
203. Operating lease is also known as
Ans: Service lease
204. Operating lease is also known as
Ans: Service lease

205. One mortgage pool is connected by combining all of the individual mortgage and this is
held as collateral for a _________ by the trust
Ans: MBS

206. Which of the following stock exchange introduced screen-based trading system in India
Ans: NSE

207. The ______ carry two preferences in comparison to equity or ordinary shares. One in terms
of payment of dividend and the other one is in repayment of capital at the time of winding up
the company
Ans: Preference Shares

208. The services required by corporate clients during any kind of issue viz right issue, IPO, QIP
issue and services of escrow account etc. are known as ______
Ans: Capital market services
209. Who gets the right to use the asset in a hire purchase contract
Ans: Hirer

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210. Which of the following is not a stock exchange

Ans: AMFI
211. Which of the following is a fund-based service

Ans: Leasing and hire purchase

212. Depository is a type of
Ans: NBFC
213. Which of the following is a fee-based service

Ans: Bill discounting

214. Can locked in securities be dematerialized
Ans: Yes , always irrespective

215. When financial assets are converted into SPVs/SPEs then these new converted SPVs/SPEs
are financed through issue of Issuer cannot modify or reform cash associated with the assets.
Here PTCs stands for
Ans: pass through certificate
216 Which of the following is not type of clearing member in India
Ans: Qualified clearing member

217. The purpose of ________ is to provide specific support to _____________ to fulfill their financial
requirements.
Ans: corporate banking, corporate clients
218. Call option gives the option

Ans: holder a right to buy

219. of the mutual fund holds its property for the benefit of investors.
Ans: Board of trustees
220. Majority of the corpus of an income fund will be invested in

Ans: Debt securities

221. Which of the following issue converts a private limited company into a public limited
company

Ans: IPO

222. Geographical analysis is one of the parameters of the rating which includes the analysis of
the following except

Ans: Cash flow analysis

223. Match the following: 1. Equity shares 2. Preference shares 3. Debentures
Ans: 1-> III, 2-> II and 3-> I

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224. The following are the features of a financial services.

Ans: Credit rating
225. Which of the following is not a component of mutual fund

Ans: Depository
226. Lead manager in an IPO should be a
Ans: which of the following is an example of hybrid security
227. UTI is a

Ans: Mutual Fund

228. Which of the following is not an advantage of lease to lessor
Ans: eliminates risk of obsolescence

229. The registrar to an issue is an intermediary in

Ans: primary market
230. Which of the following securities are referred to as gilt edged securities.
Ans. Government securities

231. which of the following factor is not considered by borrowers before borrowing funds.
Ans: transaction cost
232. Which of the following mutual fund scheme has a lock in period
Ans: ELSS
233. Securities issued by a mutual fund to the investors are known as

Ans: Units
234. Which of the following is true about treasury bills in India
Ans: they don’t carry default risk
235. IPOs and FPOs are part of

Ans: Primary market

236. Cards are issued by banks and linked to a particular group of people or organization.
Ans: Affinity card
237. Mezzanine financing is related to
Ans. Debt and equity financing

238. The cash management services, capital market services, and trade finance services (0) are
broadly categorized as

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Ans: Transaction banking services

239. funds are the simplest type of investment funds to manage.
Ans: Index

240. Is a payment system based on smart card technology which offers an alternative to paying
cash for goods and services
Ans: Smart card

241. Which of the following is not true about commercial paper in India
Ans: they have a max maturity of three years
242. Which of the following is not true about debentures.
Ans: they have a maturity of less than one-year

243. Agents are sometimes referred to as

Ans: Insurance advisor

244. Government securities market is a component

Ans: Debt market

245. Which of the following policy will have lowest premium if all other parameters are same
Ans: term policy

246. In India commercial banks

Ans: Can carry out leasing as well a
247. Which of the following is not a stock broker
Ans: MCX

248. Which of the following is not a NBFC

Ans: Commercial banks
249. The headquarter of new India assurance co ltd is situated in
Ans: Mumbai
250. Which of the following is private sector insurance company

Ans: IFFCO TOKYO

251. In the context of mutual funds SIP stands for Ans:
Ans. Systematic Investment Plan
252. Depository participants act as agents of

Ans: Depositories

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253. Which of the following services are provided by an investment banker?

Ans: All of these
254. From riskiest to safety the four class of mutual funds are

Ans: equity fund, money market funds, bond funds, hybrid funds
255. Which is the oldest stock exchange in India?
Ans BSE
256. Is also act as depository participant.

Ans: Stock exchange

257. Preferential issue is a type of
Ans: Private placement

258. is the risk of nonpayment by the underlying obligors who are further dependent on the
underlying obligor's ability and willingness to pay dues which are further dependent on the
adequacy and stability of the income of obligor.

Ans: credit risk

259. which of the following factor is an indicator of strength of economy
Ans: High rate of industrial growth

260. Venture capital fund by AIG, NIKKON, Securities tie up with Walden and San Francis
company, these are the example of different agencies promoted by
Ans: Overseas venture capital funds

261. Is a credit card that is jointly protected by a bank with some other non-financial institution.
Ans: Co-branded card
262. which of the following is not a capital market securities
Ans: Treasury bill
263. Is the source of long-term finance for industry.

Ans: Capital market

264. Which of the following is not traded on stock exchanges
Ans: Corporate bonds

265. Under this option funds are provided to an outside group of managers to enable them to
buy some existing company. In such type of dealing three parties are involved, ie venture capital
institution, management team and target existing company. What is the name of this option?

Ans: Management Buy-In

266. Which of the following is not true about money market in India.
Ans: BSE and NSE are important components of this market
267. Following are conditions of the registration as a merchant banker , except

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Ans: which type of risk analysis includes the analysis of industry risk legal position market
position of the firm size of the business and operating efficiency
Ans: Business risk analysis
268. Primary market is also known as
Ans: New issue market
267. GDR stands for

Ans: Global depository receipt

268. In India a mutual fund is set up in the form of a
Ans: trust
269. Call money market is basically

Ans. A customer-to-customer market

270. Startup capital is provided
Ans. When commercial manufacturing has to commence
271. Which of the following statement is true in the context of lease
Ans: owner of the asset is known as lessor

272. It is that form of capital raising where the organizational and Institutional Investors are to
subscribe the capital share of the company what it is called?
Ans: private placements

273. IRDA stands for

Ans: Insurance Regulatory and Development Authority

274. Select the benefits of credit rating to the investors 1. Low cost of borrowing 2.credibility of
issue 3. Large number of borrowers 4. Protection against bankruptcy 5. Saving of resources
Ans: All of these
275. Which of the following is not a function of merchant banks in India
Ans: Accepting deposits

276. Capital appreciation funds select stocks of _________ and tend to be ___________ risky than total
return funds.
Ans: companies expected to grow rapidly; more

277. Sensex is an index of

Ans: BSE

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FINE004- Management of Financial Services:

1. Which of the following committee was set up for suggesting banking sector reforms:
Ans-
2. Following are conditions of the registration as a Merchant banker, except:
Ans- (c) It shall take adequate steps for redressal of grievances of the investors within 1 month
from the date of the receipt of the complaint and keep the Board informed about the number,
nature, and other particulars of the complaints received.
3. Which of the following is not a part of primary market:
Ans- (a) Public
4. Second generation reforms in India were started in:
Ans- (a) 1991
5. Which of the following is not a financial intermediary:
Ans- (c) NBFC (d) SEBI
6. NSDL stands for:
Ans- National Securities Depository Limited
7. Which of the following is not a derivative:
Ans- (d) Mutual fund scheme
8. Which company started the Insurance Business in India:
Ans-(b) Bombay Mutual Life Assurance Society
9. National Stock Exchange (NSE) was set up in the year
Ans- (a) 1994
10. In India, Merchant Banks are regulated by
Ans- (c) SEBI
11. Finance lease is also known as
Ans- Capital or Sales lease
12. CDSL stands for
Ans- Central Depository Services Limited
13. _______ is the provision of banking services by one bank to another bank.
Ans- (a) Correspondent Banking
14. _______ holders are residual claiments
Ans- (c) Equity Share
15. LIC was established in the year
Ans- (b) 1956
16. Government securities market is a component of
Ans- (b) Debt market
17. “It is that form of capital raising where the organizational or institutional investors are
approached to subscribe the capital share of the company.” What is it called?
Ans- 56- (a) Right / (d) All of these
18. The process of credit rating has different steps in it.
Tell the right sequence of the following steps: 1. Receipt of request 2. Assignment to analytical
team 3. Presentation of findings 4. Meeting the rating committee 5. Visits to Plant and meeting

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with management team of client company 6. Obtaining information 7. Communicating the

decision
Ans- 58
19. Hire purchase transaction in India are regularized by which of the following act.
Ans- 59- (a) Hire purchase act 1972
20. Which of the following still remains the primary focus area of commercial banks.
Ans- 61
21. Which of the following statement about financial services is true:
Ans- 2
22. NSDL and CDSL are
Ans- (a) Depositories

FROM EXAMS:
23. Which of the following is not type of clearing member in India:
Ans- (d) Qualified clearing member
24. Seed capital is provided:
Ans- (a) In applied research phase / (b) When commercial manufacturing has to commence
25. Depository participants act as agents of:
Ans- (a)Depositories / (b) Stock brokers (not sure)
26. Which of the following committee is related to functioning of money market:
Ans- (a) Narasimham committee
27. In a mutual fund, _____ manages the fund by making investments in various types of securities.
Ans- (b) AMC
28. If a DP goes bankrupt. What happens to the dematerialized holdings of investors with the DP?
Ans- (d) The investor can opt for dematerialization or open his account with another DP and
transfer his holdings
29. To carry on business, mutual funds must be registered with _____.
Ans- (a) SEBI
30. NIFTY 50 is an index of:
Ans- (a) NSE
31. Repo market is a component of:
Ans- (b) Money market
32. Government securities market is a component of:
Ans- (b) Debt market
33. Which of the following is not a benefit of plastic money?
Ans- (a) Higher rate of interest
34. Which of the following Mutual Fund scheme helps in tax saving under section 80c
Ans- (c) ELSS
35. Liquid fund has a portfolio primarily consisting of:
Ans- (d) Money market instruments
36. Which of the following is an example of hybrid security

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Ans- (d) Preference share

37. Which of the following is not a component of financial system
Ans- (a) Financial intermediaries/ (d)None of these
38. Which of the following is not a credit rating agency:
Ans- (a) CRISIL
39. Provision of cash collateral, case of over collateralization, guarantee by third party and
originates accepts resource agreement of securitization through the issue of SPE are done for
_____ in securitization.
Ans- (b) Credit enhancement
40. Which of the following policy will have lowest premium if all the other parameters are same:
Ans- (a) Term Policy
41. _____ allows the customers to deposit a portion of total payment on the spot and rest of the
money is allowed to be paid on monthly basis. It includes the amount of interest on the delayed
payment.
Ans- (c) Hire Purchase
42. There are different stages of venture capital process.
Arrange the following steps as per VC financing process. 1.Examine the business plan
2.Valuation of Investment in proposed business 3.Drafting the structure of the deal 4.Create or
forma deal flow 5.Due Deligence 6.Screeing and follow up 7.Criteria of taking a decision of
investment 8.Exit route
Ans- (b) 14572368
43. _____ is the source of working capital finance for industry.
Ans- (a) Capital market
44. Which of the following mutual fund scheme has highest risk:
Ans- (a) Growth fund
45. Which of the following is not true about equity shares:
Ans- (d) Equity shareholders get interest on equity shares (this option was blur)
46. Select the parameters of the rating from the following list. 1.Fundamental analysis 2.Financial
analysis 3.Regulatory and competitive environment 4.Regulatory framework analysis 5.Name of
the owner and staff 6.Contact details of the management
Ans- (a) 1,2,3,4
47. In India, merchant banking covers activities like management of public issue, loan syndication.
______ 1.Securities and exchange 2.Project management 3.Investment counselling 4.Activities
related to mergers and amalgamation.
Ans- 1,3,4
48. Case Study Answers:
(i)T+1 basis (ii)Fixed income securities (iii)All of these (iv)Commercial paper

49. Financial service companies exclude

Ans- (d) None of these
50. Liquid fund has a portfolio primarily consisting of :
Ans- (b) Bond and debentures/ (d) Money market instruments

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51. Agents are sometimes referred to as _______

Ans- (d) Insurance advisors
52. Which has not been a major capital market reform in India:
Ans- (d) Abolishment of book…………. (option blur)
53. Losses to ones material possessions such as, buildings, household articles, factories,
merchandise, material in transit, vehicles, ships, airplanes, etc. can be understood as
Ans- (a) Property losses (b) Personal losses (c) Consequential losses (d) All of these
54. Which is the following is not a party to a hire purchase contract:
Ans- (d) Factor
55. Most mutual funds are structured in two ways. The most common structure is a(n) _____ fund,
from which units can be redeemed at any time at a price that is tied to the asset value of the
fund. A(n) ______ fund has a fixed number of nonredeemable units that are traded on the
exchanhge.
Ans- (b) open-end; closed-end
56. Which of the following is not a characteristic of financial intermediation:
Ans- (b) Risk spreading
57. Derivative is an instrument whose value is derived from the value of ______.
Ans- (d) Underlying asset
58. Which of the following policy is not a personal policy:
Ans- (b)/ (c) Suhana safar policy

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1.Following are the features of Financial services except – Constant

2.Which of the following is type of Financial services - Fund based & Non fund based
service
3.Which if the following is not a fund based financial service – Securitization
4.A specialized services provided by financial institutions in which financial institution buys
(through an agreement) receivables from the seller of services goods and manages sellers
receivables is known as – Factoring
5.Loan syndication is an example of – NON fund based financial service
6.Which of the following are the parties involved in a forfaiting agreement – All of the above
(Seller/ Exporter, buyer/importer, forfeiter.
7.The banking system in a country is an example of - Organised financial system
8. Which of the following is a component of un-organised financial system in India. – All of
the above( local land lord, local money lender, indigenious banker.
9. Financial Instruments can be of following duration – All of these (Short, medium and long
term)
10, Primary and secondary markets are type of – Capital Market
11.NO interest is payable for a specific period (Called Lock in period)and on the completion
of this period these debentures are automatically converted int shares of the company . Name
the type of debentures. – Zero Interest Fully Convertible debenture.
12.Which of the following is not an instrument of money market? - Equity Shares
13. Which of the following is not is not related to capital Market – Money Market
14.Which of the following parties can issue commercial papers? Both corporate primary
dealers and financial Institution.
15.Exchange trade and OTC markets are example of - Financial markets
16. Forward, Future, option and swaps are example of – Derivatives.
17.Dematerialization is said to be – procedure of converting physical shares into electronic
shares.
18. CDSL was formed in which year – 1999
19.which of the following is not a feature of depository system in India.- None of the above
20.ISIN is abbreviated for – International Securities Identification number
21. Fungible means, as shares would not have distinguishing features such as distinctive nos.
certificate nos. etc - Similar securities of a company are transposable.
22.As per SEBI requirements, depository in India has to maintain a record of which of the
following - All of the above.(Approval Details, Rematerialized security details and
transactions related to transfer of securities.

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23. which of the following is a type of special service provided by depositories - Public Issue
24. Which of the following aspect is not covered in the Depositories act 1996, - None of the
above.
25. Out of the following which organization provides for the maintenance of the ownership
records of the securities in the book form? Depositories.
26. One of the following places does not have a stock exchange? Name of that place is -
Cuttack.
27.Which was the first private mutual fund in India.- Kothari Pioneer(1993)
28. Which was the first public sector mutual fund to be setup after the Unit trust of India?
SBI Mutual Fund
29. Mutual Fund are regulated in India by which among the following. - SEBI
30. Investment Objective is closely linked to – Scheme
31. The assets of mutual fund are held by - Custodian
32. Most Investor service centers are offices of – Registrar
33. SEBI regulates – All of the above ( Mutual fund, depositories and Registrar and transfer
agents)
34. The difference between NAV and re-purchase price is – exit load
35. The comparable for a liquid scheme is - savings bank account
36. which of the following aspects of portfolio would an investor in debt scheme give –
Weighted average maturity.
37. Match the following-
CRISIL – S&P Company
ICRA- Moody’s
CARE - IDBI
Fitch India – Fitch
38. CRISIL is formed in – 1987
39 In which of the following year Brickworks commenced it operation in India. – 2008
40. Which of the following is not rated by CRA’s. – Debtors
41 The CRA takes – Only give suggestions to the investors to take decision.
42. Which of the following is not registered with SEBI. – Both Moody’s and S&P
43. Credit rating agencies provide – Both Rating facilities and Research and Consultancy.
44. The emergence of CRA’s is associated with – US railroad companies

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45. Credit rating agencies provide ratings for – Both short and Long term
46. Which of the following is a chapter of SEBI’s regulation – All of the above
47. Which of the following is not a role of merchant banker- None of the above
48 Which of the following is/are a major objective/objectives of Securities and Exchange
board of India(Merchant Bankers )Regulation 1992.
49. During 1813 , John Palmer & Co was operating banking activities from Calcutta and was
popularly know as an --------- and was employing huge capital in trade and commerce. –
Agency House.
50. The merchant banker in India was formally introduced by the National and Grindlays
Bank which was known as ---- Reserve Bank of India issued a license of merchant banking
to – Grindlays Bank in 1967.
51, A merchant Banker has been defined as any person who is engaged in the business of
issue management either by making arrangements regarding selling, buying or subscribing to
securities or acting as Manager consultant advisor or rendering corporate advisory services in
relation to such issue management. This definition of Merchant Banker is given by – SEBI
(Merchant Bankers) Rules,1992
52. Following are the function of Merchant Bankers except. Economic level policy making.
53. Following are the regulators of merchant banking in India except – Company Act, 1946 .
54. Venture capital market refers to the – For providing equity investments for startup firms.
55.In 2000 SEBI appointed on committee to investigate about obstacles in the way of venture
capital in India and suggest measures to improve the condition of venture capital. Name of
that committee is - Chandrasekhar committee.
56. From 25th January,1995 SEBI is the regulating authority for the venture capital in India
and SEBI made some guidelines for the venture capital. Name of that guidelines is – SEBI
(Venture Capital Funds ) Regulations,1996
57.Which of the following does not come under the early stage financing by venture capital?
Replacement Capital
58.Following are the features of venture capital except.- Less Risk.
59.Private Equity Investors provide funds for – For businesses at all stages but preferably at
growth or maturity stage.
67.The origin of venture capital fund was found in – U.S
68. Indian Private equity and Venture Capital Association (IVCA) was established in – 1993
69.Which of the following statement is not true with regards to the securitization - None of
the above.
70.Tick the correct definition of special purpose vehicle. – They buy assets from originator
which are to be securitized.

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71.Which of the following is not a participant of securitization – All of the above

72. Which of the following is not regarded as risk of securitization. – Neither a & b.
73. . Which of the following is not a step of securitization - None of the above
74. Bancassurance originated in India in ------ by a notification issued by the Reserve Bank of
India Which allowed Indian Banks to deal in Insurance Products. – 2000
75. . Which of the following is not a part of growth of Insurance.- None of the above.
76. Which of the following is a type of Regulation. – All of the above.
77. Which of the following is not an Insurance Risk – None of the above.
78. . Which of the following is not a major player in the life insurance sector – Pathway
Insurance Union.
79. Which of the following is a form of plastic money. – Both ATM & Gold Cards
80. Retail Banking refers to – Providing banking services to Individuals.
81.Which of the following is know as Value-added service under wholesale banking – Cash
Management services.
82.Letter of Credit is a – Non-fund based service.
83. In December 2006 RBI give re-classification of NBFC’s. As per this reclassification
following is the new classification of NBFC’s.- Asset financing company, Investment
company and loan company
84. Nidhi companies (mutual benefit finance company ), potential Nidhi Company (Mutual
Benefit Company ) and chit funds (other non banking company).are companies which are –
Not registered but regulated by RBI.
85. ----- means any company which is financial institution carrying on the acquisition of
securities as its principal business – Investment Company.
86. which of the following is not part of primary market – public (Right issue)
87. Second generation reforms in India where started in – 1991 (Late 1990s)
88. which of the following is not a financial intermediary – SBI
89. NSDL Stands for – National Securities depository Limited.
91. Which company Started the Insurance Business in India. – Bombay Mutual Life
Insurance Society.
92.National Stock Exchange was setup in the year – 1994.
93. In India, Merchant Banks are regulated by – SEBI
94. CDSL stands for – Central Depository Services Limited.
95.--- is the provision of banking services by one bank to another bank - Correspondent
banking

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96. Finance Lease is also known as - Capital or Sales Lease (Full payout lease)
97. ---- holders are residual claimants – Equity Shares.
98. Government Securities market is a component of Debt Market
99. LIC was established in the year - 1st Sep 1956
100. It is that form of capital raising where the organizational and Institutional Investors are
to subscribe the capital share of the company what it is called? Equity Finance
101. Hire Purchase in India is regulated by : Hire purchase Act 1972.
102. Which of following still remain the primary focus area of commercial bank -
Primary functions include accepting deposits, granting loans, advances, cash, credit,
overdraft and discounting of bills. - Secondary functions include issuing letter of credit,
undertaking safe custody of valuables, providing consumer finance, educational loans, etc.
103. Debt Market is also known - as bond market
104. corporate debt instruments are traded through – OTC contracts or through the brokers
on a stock exchange like BSE or CM or WDM segments of NSE.
105.NSDL and CDSL are – Depositors
106. Which of the following committee was set up for suggesting Banking Sector reforms -
Narasimham committee
107. Which of the following is not an innovative debt Instrument. –
108. Leveraged Lease has ----- party - 3 party.
109. Which of the following is not a part of working capital finance –
110. Which of the following is the apex body controlling all financial Institutions in India. –
Central Bank, RBI
111. ----- is the process of converting physical shares into electronic shares -
dematerialization (Demat)
112.In case of mutual fund ELSS stands for - Equity Linked Savings Schemes
113.In Case of mutual fund investment profits or losses are shared by Investors. - in
proportion to their investments.
114. Credit Capital, venture fund, 20th Century Venture Fund, India Investment fund, these
are some of the example of different agencies promoted by. Private sector
115.Stock Exchanges are part of - free-market economy / global securities market
116. Qualified Institutional placement is a type of - private
117. ULIP Stands for : Unit Linked Insurance Plan.
118. In case of IPO, the underwriter is a – intermediarys/Depository

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119.Which of the following policy is not a commercial policy – Bankers Indemnity Policy
(Bhavishya Arogya Policy)
121. or registration as merchant banker,concerned person has to deposit a non-refundable fee
of Rs 10 Lakh (20 lakhs)
122. Oriental Insurance company deals in – General Insurance (Life as well as general
insurance)
123. Which of the following policy is not a personal policy – Mediclaim Policy
124 Goldman smith has designated many economic units in three categories. Which of the
following is not one of them . – Investment Units.
125.Which of the following is not a derivative - Mutual Fund scheme
126.Capital adequacy requirements for merchant bankers as per the clause of regulations 6 is
that net worth should not be less than – 5 crore.
127. This type of venture capital financing has high risk and is for long duration(3-5 years).
Here control of some sick business( which require special treatment to make it viable)is taken
over to make it profitable business. This control may require rescheduling of term loan or
change in management or change in ownership.- Buyouts
128. National insurance company Ltd deals in – All areas of Life Insurance and some area
of general insurance
129.Majority of the corpus of a growth fund will be invested in – Money Market Instruments
(Equity Shares)
130. Balanced Fund has a portfolio consisting of - Equity as well as debt share
131. The expert companies in particular fields that are contracted by Insurance companies
perform claims handline services for a group or category of clients are known as – third
party administrators.
132. Which has not been a major capital market reform in India. -
133. From the following list select the credit rating activities of the CRA’s. 1 corporate
Rating 2.Fund Rating 3.Economic Research 4. Insurance Rating 5. Sovereign Rating 6. Fund
/Portfolio Research 7. Risk Consultancy – 1,2,4,5 .
134. Financial Intermediaries provide a link between – RBI and SEBI (Borrowers and
Savers)
135. Which of the following activity is not a part of process of capital formation. –
Accounting
136. Which of the following has not been a major money market reform in India.
Abolishment of commercial paper .
137.Operating lease is also known as – service lease.

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138. Which of the following still remains the primary focus area of commercial bank –
Working Capital Financing.
139. Which of the following stock exchange introduced screen based trading system in India.
NSE
140. The ----- carry two preferences in comparison to equity or ordinary shares. One in terms
of payment of dividend and the other one is in repayment of capital at the time of winding up
the company – Preference Shares
141. who gets the right to use the asset in a hire purchase contract. – Hirer.
142. Which of the following is not a stock exchange – AMFI
143.Which of the following is a fund based service – Leasing and hire purchase.
144.First generation financial sector reforms were started in the year – 1991
145. Depository is a type of –

146. Which of the following is a fee based services – Bill Discounting (Credit Rating)
147.Can locked in securities be dematerialized – Yes, always irrespective of lock in reason
148. The process of credit rating has different steps in it. Tell the right sequence of the
following steps 1.Receipt of Request2.Assignment to analytical team 3. Presentation of
findings 4.Meeting the rating committee 5. Visits to Plant and meeting with management
team of client company6.Obtaining information 7. Communicating the decision. –
1,2,6,5,3,4,7.
149.Which of the following is not type of clearing member in India – Trading Member cum
clearing member (Qualified clearing member)
150.Which of the following does not have the responsibility of regulating financial markets in
India . – Department of External affairs.
151. Headquarters of New India Assurance co. Ltd is situated in - Mumbai
152. In case of mutual fund SIP stands for - Systematic Investment Plan
153. Depository Participants act as agent of - stock brokers (Depositories)
154.Which of the following is not an nbfc – Commercial Bank
155.Which of the following is a private sector Insurance company. – IFFCO Tokiyo.
156. Which of the following services are provided by an investment banker – All of these
157. Assets of mutual fund are managed by – AMC
158. From riskiest to safest, the four classes of mutual funds are – Equity funds, money
market funds, bonds fund and hybrid funds (Equity funds, hybrid funds, bonds fund and
money market funds)
160. Which is the oldest stock exchange in India – BSE

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161. --- act as depository participant – Stock brokers.

162.In case of an ipo, the banker to issue has to be – Merchant Bank
163. Preferential issue is a type of – private placement
164.Which of the following factor is an indicator of strength of an economy - High interest
rate (High rate of industrial growth)
165. Venture capita fund by AIG, NIKKON, Securities tie up with walden and san Francis
company, these are the example of different agencies promoted by - Overseas venture capital
funds.
166. The services required by corporate clients during any kind of issue, viz, right issue, IPO,
QIP issue, and services of escrow account, etc. are known as Capital Market Services
167. "which of the following is not a distinctiveness of financial services - Simplicity
168. 38. When financial assets are converted into SPVs/SPEs, then these new converted
SPVs/SPEs are financed through issues of securities like PTCs and debt securities to the
investor. PTC stands for Pass Through Certificate
169. Select the parameters of the rating from the following list. 1. Fundamental Analysis
2.Financial Analysis 3.Regulatory and Competitive environment 4.Regulatory framework
analysis 5.Name of the owner and staff 6.Contact details of the management Answer
1,2,3,4

170. Which of the following is not traded on stock exchange Forward contracts
171. ____ is the sources of long term finance for industry. Capital Market
172. Which of the following is not a capital market security Treasury Bill
173. “Under this option, fund are provided to an outside group of managers to enable them to
buy some existing company. In such types of dealing, three parties are involved….
Management buyouts
174. Which of the following is not true about money market in India
BSE and NSE are important components of market
175. Which of the following factor is not considered by borrowers before borrowing funds
Default Risk
176. In India commercial banks
Can carry out leasing business but not hire purchase business
177. Which of the following is not true about commercial papers in India
They have maximum maturity of three years
179. ___ holders are primary claimants

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Preference Shares
180. Which of the following provides inter-connectivity amongst various depositories in the
scenario of multiple depositories
SEBI (Depositories and participants) regulations 1996
181. 66. In India, merchant banking covers activities like management of public issue, loan
syndication, _ I.Securities and exchange 2.Project Management 3.Investment Counselling
4.Activities related to mergers and amalgmation.
Answer 1,3, 4
182. The purpose of ____ is to provide specific support to _____ to fulfill their financial
requirements.
Corporate banking, Corporate clients
183. Call option gives the option
Holder a right to buy
184. _____ of the mutual fund holds its property for the benefit of investors.
Board of trustees
185. Majority of the corpus of an income fund will be invested in –
Debt Securities
186. Match the following. 1. Equity shares 2.Preference Shares 3.Debentures
I. It is a certificate which shows the indebtness of a company and certifies that the particular
persons have lent certain amount to the company at some specified rate of return. II. These
carry preferences in comparison to equity or ordinary shares. One in terms of payment of
dividend and other one is in repayment of capital at the time of winding up of the company.
III. These shares represent the owner of the company also have 'voting right' in the decision
making of the company
Answer: 1-(III), 2-(II), 3-(I)
187. Stock Exchanges are part of
Capital Market
188. The following are the features of a financial service does not give any guarantee of price
volatility……
Credit rating
189. Which of the following is not a component of Mutual Fund:
Sponsor
190. Lead manager in an IPO should be
Merchant Banker

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191. Which of the following is an example of hybrid security

Preference Shares
192. There are different stages of venture capital process. Arrange the following steps as per
VC financing process. 1. Examine the business plan 2. Valuation of investment in proposed
business 3. Drafting the structure of deal 4. Create or form a deal flow 5. Due Diligence 6.
Screening and follow up 7. Criteria of taking a decision of investment 8. Exit Route
1,4,5,7,2,3,6,8
193. ____ is a means by which an insurance company can protect itself against the risk of
losses by transferring their risks to other entities
Reinsurance
194. Which of the following issue converts a private limited company into public limited
company IPO
195. One mortgage pool is created by combining all of the individual mortgages and this pool
is held as collateral for a _ by the trust.
MBS
196. Geographical analysis is one of the parameters of the rating. Which includes the analysis
of the following except
Cash Flow analysis

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Exam Questions-FINE004(Sept-2022)
Case Study:
• T+1
• Fixed income securities
• All of these
• Commercial Papers

Normal Questions
1.Following are the features of Financial services except – Constant
2.Which of the following is type of Financial services - Fund based & Non fund based
service
3.Which if the following is not a fund based financial service – Securitization
4.A specialized services provided by financial institutions in which financial institution buys
(through an agreement) receivables from the seller of services goods and manages sellers
receivables is known as – Factoring
5.Loan syndication is an example of – NON fund based financial service
6.Which of the following are the parties involved in a forfaiting agreement – All of the above
(Seller/ Exporter, buyer/importer, forfeiter.
7.The banking system in a country is an example of - Organised financial system
8. Which of the following is a component of un-organised financial system in India. – All of
the above( local land lord, local money lender, indigenious banker.
9. Financial Instruments can be of following duration – All of these (Short, medium and long
term)
10, Primary and secondary markets are type of – Capital Market
11.NO interest is payable for a specific period (Called Lock in period)and on the completion
of this period these debentures are automatically converted int shares of the company . Name
the type of debentures. – Zero Interest Fully Convertible debenture.
12.Which of the following is not an instrument of money market? - Equity Shares
13. Which of the following is not is not related to capital Market – Money Market
14.Which of the following parties can issue commercial papers? Both corporate primary
dealers and financial Institution.
15.Exchange trade and OTC markets are example of - Financial markets
16. Forward, Future, option and swaps are example of – Derivatives.

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17.Dematerialization is said to be – procedure of converting physical shares into electronic

shares.
18. CDSL was formed in which year – 1999
19.which of the following is not a feature of depository system in India.- None of the above
20.ISIN is abbreviated for – International Securities Identification number
21. Fungible means, as shares would not have distinguishing features such as distinctive nos.
certificate nos. etc - Similar securities of a company are transposable.
22.As per SEBI requirements, depository in India has to maintain a record of which of the
following - All of the above.(Approval Details, Rematerialized security details and
transactions related to transfer of securities.
23. which of the following is a type of special service provided by depositories - Public Issue
24. Which of the following aspect is not covered in the Depositories act 1996, - None of the
above.
25. Out of the following which organization provides for the maintenance of the ownership
records of the securities in the book form? Depositories.
26. One of the following places does not have a stock exchange? Name of that place is -
Cuttack.
27.Which was the first private mutual fund in India.- Kothari Pioneer(1993)
28. Which was the first public sector mutual fund to be setup after the Unit trust of India?
SBI Mutual Fund
29. Mutual Fund are regulated in India by which among the following. - SEBI
30. Investment Objective is closely linked to – Scheme
31. The assets of mutual fund are held by - Custodian
32. Most Investor service centers are offices of – Registrar
33. SEBI regulates – All of the above ( Mutual fund, depositories and Registrar and transfer
agents)
34. The difference between NAV and re-purchase price is – exit load
35. The comparable for a liquid scheme is - savings bank account
36. which of the following aspects of portfolio would an investor in debt scheme give –
Weighted average maturity.
37. Match the following-
CRISIL – S&P Company
ICRA- Moody’s
CARE - IDBI

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Fitch India – Fitch

38. CRISIL is formed in – 1987
39 In which of the following year Brickworks commenced it operation in India. – 2008
40. Which of the following is not rated by CRA’s. – Debtors
41 The CRA takes – Only give suggestions to the investors to take decision.
42. Which of the following is not registered with SEBI. – Both Moody’s and S&P
43. Credit rating agencies provide – Both Rating facilities and Research and Consultancy.
44. The emergence of CRA’s is associated with – US railroad companies
45. Credit rating agencies provide ratings for – Both short and Long term
46. Which of the following is a chapter of SEBI’s regulation – All of the above
47. Which of the following is not a role of merchant banker- None of the above
48 Which of the following is/are a major objective/objectives of Securities and Exchange
board of India(Merchant Bankers )Regulation 1992.
49. During 1813 , John Palmer & Co was operating banking activities from Calcutta and was
popularly know as an --------- and was employing huge capital in trade and commerce. –
Agency House.
50. The merchant banker in India was formally introduced by the National and Grindlays
Bank which was known as ---- Reserve Bank of India issued a license of merchant banking
to – Grindlays Bank in 1967.
51, A merchant Banker has been defined as any person who is engaged in the business of
issue management either by making arrangements regarding selling, buying or subscribing to
securities or acting as Manager consultant advisor or rendering corporate advisory services in
relation to such issue management. This definition of Merchant Banker is given by – SEBI
(Merchant Bankers) Rules,1992
52. Following are the function of Merchant Bankers except. Economic level policy making.
53. Following are the regulators of merchant banking in India except – Company Act, 1946 .
54. Venture capital market refers to the – For providing equity investments for startup firms.
55.In 2000 SEBI appointed on committee to investigate about obstacles in the way of venture
capital in India and suggest measures to improve the condition of venture capital. Name of
that committee is - Chandrasekhar committee.
56. From 25th January,1995 SEBI is the regulating authority for the venture capital in India
and SEBI made some guidelines for the venture capital. Name of that guidelines is – SEBI
(Venture Capital Funds ) Regulations,1996
57.Which of the following does not come under the early stage financing by venture capital?
Replacement Capital

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58.Following are the features of venture capital except.- Less Risk.

59.Private Equity Investors provide funds for – For businesses at all stages but preferably at
growth or maturity stage.
67.The origin of venture capital fund was found in – U.S
68. Indian Private equity and Venture Capital Association (IVCA) was established in – 1993
69.Which of the following statement is not true with regards to the securitization - None of
the above.
70.Tick the correct definition of special purpose vehicle. – They buy assets from originator
which are to be securitized.
71.Which of the following is not a participant of securitization – All of the above
72. Which of the following is not regarded as risk of securitization. – Neither a & b.
73. . Which of the following is not a step of securitization - None of the above
74. Bancassurance originated in India in ------ by a notification issued by the Reserve Bank of
India Which allowed Indian Banks to deal in Insurance Products. – 2000
75. . Which of the following is not a part of growth of Insurance.- None of the above.
76. Which of the following is a type of Regulation. – All of the above.
77. Which of the following is not an Insurance Risk – None of the above.
78. . Which of the following is not a major player in the life insurance sector – Pathway
Insurance Union.
79. Which of the following is a form of plastic money. – Both ATM & Gold Cards
80. Retail Banking refers to – Providing banking services to Individuals.
81.Which of the following is know as Value-added service under wholesale banking – Cash
Management services.
82.Letter of Credit is a – Non-fund based service.
83. In December 2006 RBI give re-classification of NBFC’s. As per this reclassification
following is the new classification of NBFC’s.- Asset financing company, Investment
company and loan company
84. Nidhi companies (mutual benefit finance company ), potential Nidhi Company (Mutual
Benefit Company ) and chit funds (other non banking company).are companies which are –
Not registered but regulated by RBI.
85. ----- means any company which is financial institution carrying on the acquisition of
securities as its principal business – Investment Company.
86. which of the following is not part of primary market – Right issue
87. Second generation reforms in India where started in – Late 1990s

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88. which of the following is not a financial intermediary – SBI

89. NSDL Stands for – National Securities depository Limited.
91. Which company Started the Insurance Business in India. – Bombay Mutual Life
Insurance Society.
92.National Stock Exchange was setup in the year – 1994.
93. In India, Merchant Banks are regulated by – SEBI
94. CDSL stands for – Central Depository Services Limited.
95.--- is the provision of banking services by one bank to another bank - Correspondent
banking
96. Finance Lease is also known as - Full payout lease
97. ---- holders are residual claimants – Equity Shares.
98. Government Securities market is a component of Debt Market
99. LIC was established in the year - 1st Sep 1956
100. It is that form of capital raising where the organizational and Institutional Investors are
to subscribe the capital share of the company what it is called? Equity Finance
101. Hire Purchase in India is regulated by : Hire purchase Act 1972.
102. Which of following still remain the primary focus area of commercial bank -
Primary functions include accepting deposits, granting loans, advances, cash, credit,
overdraft and discounting of bills. - Secondary functions include issuing letter of credit,
undertaking safe custody of valuables, providing consumer finance, educational loans, etc.
103. Debt Market is also known - as bond market
104. corporate debt instruments are traded through – OTC contracts or through the brokers
on a stock exchange like BSE or CM or WDM segments of NSE.
105.NSDL and CDSL are – Depositors
106. Which of the following committee was set up for suggesting Banking Sector reforms -
Narasimham committee
107. Which of the following is not an innovative debt Instrument. – Cumulative convertible
preference share
108. Leveraged Lease has ----- party - 3 party.
109. Which of the following is not a part of working capital finance –
110. Which of the following is the apex body controlling all financial Institutions in India. –
Central Bank, RBI
111. ----- is the process of converting physical shares into electronic shares -
dematerialization (Demat)

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112.In case of mutual fund ELSS stands for - Equity Linked Savings Schemes
113.In Case of mutual fund investment profits or losses are shared by Investors. - in
proportion to their investments.
114. Credit Capital, venture fund, 20th Century Venture Fund, India Investment fund, these
are some of the example of different agencies promoted by. Private sector
115.Stock Exchanges are part of - free-market economy / global securities market
116. Qualified Institutional placement is a type of - private
117. ULIP Stands for : Unit Linked Insurance Plan.
118. In case of IPO, the underwriter is a – intermediarys/Depository
119.Which of the following policy is not a commercial policy – Bhavishya Arogya Policy
121. or registration as merchant banker,concerned person has to deposit a non-refundable fee
of Rs 20 lakhs
122. Oriental Insurance company deals in – Life as well as general insurance
123. Which of the following policy is not a personal policy – Mediclaim Policy
124 Goldman smith has designated many economic units in three categories. Which of the
following is not one of them . – Investment Units.
125.Which of the following is not a derivative - Mutual Fund scheme
126.Capital adequacy requirements for merchant bankers as per the clause of regulations 6 is
that net worth should not be less than – 5 crore.
127. This type of venture capital financing has high risk and is for long duration(3-5 years).
Here control of some sick business( which require special treatment to make it viable)is taken
over to make it profitable business. This control may require rescheduling of term loan or
change in management or change in ownership.- Turnaround
128. National insurance company Ltd deals in – All areas of Life Insurance and some area
of general insurance
129.Majority of the corpus of a growth fund will be invested in – Equity Shares
130. Balanced Fund has a portfolio consisting of - Equity as well as debt share
131. The expert companies in particular fields that are contracted by Insurance companies
perform claims handline services for a group or category of clients are known as – third
party administrators.
132. Which has not been a major capital market reform in India. - Abolishment of book
building mechanism
133. From the following list select the credit rating activities of the CRA’s. 1 corporate
Rating 2.Fund Rating 3.Economic Research 4. Insurance Rating 5. Sovereign Rating 6. Fund
/Portfolio Research 7. Risk Consultancy – 1,2,4,5 .

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134. Financial Intermediaries provide a link between – Borrowers and Savers

135. Which of the following activity is not a part of process of capital formation. –
Accounting
136. Which of the following has not been a major money market reform in India.
Abolishment of commercial paper .
137.Operating lease is also known as – service lease.
138. Which of the following still remains the primary focus area of commercial bank –
Working Capital Financing.
139. Which of the following stock exchange introduced screen based trading system in India.
NSE
140. The ----- carry two preferences in comparison to equity or ordinary shares. One in terms
of payment of dividend and the other one is in repayment of capital at the time of winding up
the company – Preference Shares
141. who gets the right to use the asset in a hire purchase contract. – Hirer.
142. Which of the following is not a stock exchange – AMFI
143.Which of the following is a fund based service – Leasing and hire purchase.
144.First generation financial sector reforms were started in the year – 1991
145. Depository is a type of –
146. Which of the following is a fee based services – Credit Rating
147.Can locked in securities be dematerialized – Yes, always irrespective of lock in reason
148. The process of credit rating has different steps in it. Tell the right sequence of the
following steps 1.Receipt of Request2.Assignment to analytical team 3. Presentation of
findings 4.Meeting the rating committee 5. Visits to Plant and meeting with management
team of client company6.Obtaining information 7. Communicating the decision. –
1,2,6,5,3,4,7.
149.Which of the following is not type of clearing member in India – Qualified clearing
member
150.Which of the following does not have the responsibility of regulating financial markets in
India . – Department of External affairs.
151. Headquarters of New India Assurance co. Ltd is situated in - Mumbai
152. In case of mutual fund SIP stands for - Systematic Investment Plan
153. Depository Participants act as agent of - Depositories
154.Which of the following is not an nbfc – Commercial Bank
155.Which of the following is a private sector Insurance company. – IFFCO Tokiyo.

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156. Which of the following services are provided by an investment banker – All of these
157. Assets of mutual fund are managed by – AMC
158. From riskiest to safest, the four classes of mutual funds are –Equity funds, hybrid
funds, bonds fund and money market funds
160. Which is the oldest stock exchange in India – BSE
161. --- act as depository participant – Stock brokers.
162.In case of an ipo, the banker to issue has to be – Merchant Bank
163. Preferential issue is a type of – private placement
164.Which of the following factor is an indicator of strength of an economy -- High rate of
industrial growth
165. Venture capita fund by AIG, NIKKON, Securities tie up with walden and san Francis
company, these are the example of different agencies promoted by - Overseas venture capital
funds.
166. The services required by corporate clients during any kind of issue, viz, right issue, IPO,
QIP issue, and services of escrow account, etc. are known as Capital Market Services
167. "which of the following is not a distinctiveness of financial services - Simplicity
168. When financial assets are converted into SPVs/SPEs, then these new converted
SPVs/SPEs are financed through issues of securities like PTCs and debt securities to the
investor. PTC stands for Pass Through Certificate
169. Select the parameters of the rating from the following list. 1. Fundamental Analysis
2.Financial Analysis 3.Regulatory and Competitive environment 4.Regulatory framework
analysis 5.Name of the owner and staff 6.Contact details of the management
Answer: 1,2,3,4
170. Which of the following is not traded on stock exchange Forward contracts
171. ____ is the sources of long term finance for industry. Capital Market
172. Which of the following is not a capital market security Treasury Bill
173. “Under this option, fund are provided to an outside group of managers to enable them to
buy some existing company. In such types of dealing, three parties are involved….
Management buyouts
174. Which of the following is not true about money market in India
BSE and NSE are important components of market
175. Which of the following factor is not considered by borrowers before borrowing funds
Default Risk
176. In India commercial banks

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Can carry out leasing business but not hire purchase business
177. Which of the following is not true about commercial papers in India
They have maximum maturity of three years
179. ___ holders are primary claimants
Preference Shares
180. Which of the following provides inter-connectivity amongst various depositories in the
scenario of multiple depositories
SEBI (Depositories and participants) regulations 1996
181. In India, merchant banking covers activities like management of public issue, loan
syndication, _ I.Securities and exchange 2.Project Management 3.Investment Counselling
4.Activities related to mergers and amalgmation.
Answer 1,3, 4
182. The purpose of ____ is to provide specific support to _____ to fulfill their financial
requirements.
Corporate banking, Corporate clients
183. Call option gives the option
Holder a right to buy
184. _____ of the mutual fund holds its property for the benefit of investors.
Board of trustees
185. Majority of the corpus of an income fund will be invested in –
Debt Securities
186. Match the following. 1. Equity shares 2.Preference Shares 3.Debentures
I. It is a certificate which shows the indebtness of a company and certifies that the particular
persons have lent certain amount to the company at some specified rate of return. II. These
carry preferences in comparison to equity or ordinary shares. One in terms of payment of
dividend and other one is in repayment of capital at the time of winding up of the company.
III. These shares represent the owner of the company also have 'voting right' in the decision
making of the company
Answer: 1-(III), 2-(II), 3-(I)
187. Stock Exchanges are part of
Capital Market
188. The following are the features of a financial service does not give any guarantee of price
volatility……
Credit rating

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189. Which of the following is not a component of Mutual Fund:

Sponsor
190. Lead manager in an IPO should be
Merchant Banker
191. Which of the following is an example of hybrid security
Preference Shares
192. There are different stages of venture capital process. Arrange the following steps as per
VC financing process. 1. Examine the business plan 2. Valuation of investment in proposed
business 3. Drafting the structure of deal 4. Create or form a deal flow 5. Due Diligence 6.
Screening and follow up 7. Criteria of taking a decision of investment 8. Exit Route
1,4,5,7,2,3,6,8
193. ____ is a means by which an insurance company can protect itself against the risk of
losses by transferring their risks to other entities
Reinsurance
194. Which of the following issue converts a private limited company into public limited
company IPO
195. One mortgage pool is created by combining all of the individual mortgages and this pool
is held as collateral for a _ by the trust.
MBS
196. Geographical analysis is one of the parameters of the rating. Which includes the analysis
of the following except
Cash Flow analysis
197. ___ is a credit card that is jointly promoted by a bank with some other non-financial
institution.
Co-branded card
198. ____ is the risk of non-payment by the underlying obligators who are further dependent
on the underlying obligator's ability and willingness to pay dues which are further dependent
on the adequacy and stability of the income of obligor. Credit Risk
199. ___ also act as depository participant Stock Broker
200. UTI is a Mutual Fund
201. Which of the following is not an advantage of lease to lessee Trading on equity
202. Which of the following mutual fund has a lock in period ELSS
203. Without having a DEMAT account if an investor request for the demat securities then _
Issuer/R&T Agent/DP will open an account on behalf of investor

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204. Which of the following securities are referred to as gilt edged securities
Government Securities
205. The registrar to an issue is an intermediary in: Primary Market
206. Which of the following is true about treasury bills in India They don't carry
default risk
207. Securities issued by a mutual fund to the investors are known as Units
208. Which of the following is the apex regulatory body for securities market in India
SEBI
209. ____ is the focal point of RBI intervention for influencing liquidity in the economy
Money market
210. Mezzanine financing is related to financing of established
business
211. ____ Cards are issued by banks and linked to a particular group of people or
organization:
A. Affinity
212. IPOs and FPOs are part of Primary market
213. Which of the following is not true about debentures
They have a maturity of less than one year
214. ___ payment system, based on smart card technology, which offers an alternative to
paying cash for goods and services
Smart Card
215 . ____ funds are the simplest type of investment funds to manage Index
216. The cash management services, capital market services and trade finance services are
broadly
categorized as Transaction banking services
217. Agents are sometimes referred to as _____. A. Brokers
218. Which of the following policy will have lowest premium if all the other parameters are
same Term Policy
219. Which of the following is not a stock broker MCX
220. Which type of risk analysis includes the analysis of industry risk, legal position, market
position of the firm, size of the business and operating efficiency…
Business risk analysis
221. Which of the following is not a function of merchant banks in INDIA
Accepting Deposits

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222. Financial service companies exclude None of these

223. Primary Market is also known as New Issue Market
224. In India, a Mutual fund is set up in the form of a Trust
225. Call money market is basically An inter-bank market
226. Start-up capital is provided When commercial manufacturing has
to commence
227. Which of the following statement is true in the context of lease:
Owner of the asset is known as lessor
228. Which of the following statement about financial services is true:
Financial Service act as a link between investors and borrowers
229. Select the benefits of credit rating to the investors: 1. Low Cost of borrowing 2.
Credibility of Issue 3. Large number of borrowers 4. Protection against bankruptcy 5. Saving
of resources
Answer. 2,4,5
230. IRDA stands for Insurance Regulatory and Development Authority
231. "It is that form of capital raising where the organizational or institutional investors are
approached to subscribe the capital share of the company". What is It called?
Private Placements
232. GDR Stands for Global Depository Receipts
233. Capital appreciation funds select stocks of _ and tend to be _ risky than total return
funds
Answer: Companies expected to grow rapidly; More
234. Sensex is an index of
BSE
235. A merchant banker is financial institution that conducts money market activities and
All of these
236. ____ is the process of segregating ownership, management and trading wings of stock
exchanges.
Answer: Demutualization
237. Which of the following is true about certificates of deposit in India
Answer: They are negotiable instruments
238. If a DP goes bankrupt. What happens to the dematerialized holdings of investors with
the DP

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Answer: The investor can opt to rematerization or opt with another DP and transfer his
holdings
239. Most mutual funds are structured in two ways. The most common structure…..
Answer: Open-end, Close-end
240. Losses to ones material possessions such as, buildings, household articles, factories,
merchandise, material in transit, vehicle, ships, airlines etc. can be understood as
Answer: Property Losses

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