301 Unit Test Series
Foreign Exchange Management (Export of Goods and Services) Regulations, was passed in the year
2000
1995
2002
1991
Yes, the answer is correct.
Feedback:
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India".
Accepted Answers:
2000
Bank overdraft is a feature offered by which type of Account?
Recurring Deposit Account
Savings Account
Fixed Deposit Account
Current Account
Yes, the answer is correct.
Feedback:
A current account is a type of deposit account for those who need to make a substantial number of transactions on a regular basis.
Accepted Answers:
Current Account
A deposit kept for a period below one year is called a
Short Term Deposit.
Long Term Deposit
Recurring Deposit
Medium Term Deposit
Yes, the answer is correct.
Feedback:
A short-term bank fixed deposit is a method of investing money for a shorter period of time. The tenure for this type of fixed deposit can range between 7 days and up to 1 year.
Accepted Answers:
Short Term Deposit.
Which of the following is not a Plastic Money?
ATM
Debit card
Credit Card
Digital Money
Yes, the answer is correct.
Feedback:
Plastic money is a term used to represent the hard plastic cards used in day to day life in place of actual banknotes.
Accepted Answers:
Digital Money
This policy covers goods, freight and other interests against loss or damage to goods whilst being transported by rail, road, sea and/or air.
Indemnity Insurance
Motor Vehicle Insurance
Marine Cargo Policy
Hull Insurance
Yes, the answer is correct.
Feedback:
Marine cargo insurance is a class of property insurance that insures property while in transit against loss or damage arising from perils associated with the navigation of the sea or air and subsequent land and inland waterways.
Accepted Answers:
Marine Cargo Policy
Andhra Bank is a Private Sector bank.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The "private-sector banks" are banks where greater parts of stake or equity are held by the private shareholders and not by government. Banking in India has been dominated by public sector banks since the 1969 when all major banks were nationalised by the Indian government.
Accepted Answers:
FALSE
Under Capital gain Scheme, there is a lock in period of 7 years.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The government, in order to encourage reinvestment of the capital gains made on the sale of capital assets by the seller, has provided with relief from capital gains tax if such capital gain is re-invested in certain specified assets within a specified time limit.
Accepted Answers:
TRUE
Savings Bank Accounts are meant for businessman.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A savings account is an interest-bearing deposit account held at a bank or other financial institution.
Accepted Answers:
FALSE
Financial institutions offer _________ to customers.
Loans
Financial Services
Money
Advices
Yes, the answer is correct.
Feedback:
A financial institution is a company that focuses on dealing with financial transactions, such as investments, loans, and deposits.
Accepted Answers:
Financial Services
Insurance is a tool to manage the ______.
Risk
Uncertainity
Loss
Profit
Yes, the answer is correct.
Feedback:
Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.
Accepted Answers:
Risk
Objectives of SEBI are to protect interests of
Investors
Customers
Debtors
Government
Yes, the answer is correct.
Feedback:
SEBI has taken various measures such as screen based trading system, dematerialization of securities, T+2 rolling settlement, and framed various regulations to regulate intermediaries, issue and trading of securities, corporate restructuring, etc. to protect the interests of investors in securities.
Accepted Answers:
Investors
If any person who requires to furnish documents to SEBI. Fails to do so, there will be penalty per day an amount of
5 Lakhs
1.5 Lakhs
2 Lakhs
1 Lakhs
Yes, the answer is correct.
Feedback:
Section 15A (a) of Securities and Exchange Board of India Act, 1992 prescribes a penalty of Rs. one lakh for each day during which the failure to furnish any documents etc. to SEBI continues or Rs. one crore whichever is less.
Accepted Answers:
1 Lakhs
Penalty for Insider trading is
25 Crore Rupees
10 Crore Rupees
1 Lakh Rupees
5 Crore Rupees
Yes, the answer is correct.
Feedback:
The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.
Accepted Answers:
25 Crore Rupees
Which of the following is not a function of SEBI?
Prohibiting Fraudulent Practices
Promoting Investors Education and Training
Prohibiting Insider Trading
Discounting Bill
Yes, the answer is correct.
Feedback:
Securities and Exchange Board of India (SEBI) is a statutory regulatory body entrusted with the responsibility to regulate the Indian capital markets. It monitors and regulates the securities market and protects the interests of the investors by enforcing certain rules and regulations.
Accepted Answers:
Discounting Bill
The Securities Exchange Board of India Act was passed in
1991
1988
1992
1993
Yes, the answer is correct.
Feedback:
The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India. It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992.
Accepted Answers:
1992
Power to issue directions by SEBI are covered under Section 11B
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The power to issue directions was both Preventive and Remedial Powers. The SEBI has the power to issue directions under the provisions of the SEBI Act, SC(R) Act, and the Depositories Act. At the stage of investigation or inquiry, these directions can be issued.
Accepted Answers:
TRUE
Investigations by SEBI are covered under Sec 11B
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Investigations by SEBI are covered under Sec 11B
Accepted Answers:
FALSE
The Investigating Authority of SEBI may keep in its custody any books, registers, other documents and record produced for six months.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The capital market regulator Securities and Exchange Board of India (Sebi) today formally ordered investigation in the Satyam case and its team is visiting company’s office in Hyderabad tomorrow to inspect the books and records. The regulator has spoken to officials of the corporate affairs ministry to coordinate investigation.
Accepted Answers:
TRUE
________ deals with powers and functions of the Securities Exchange of India Board
Chapter V
Chapter IV
Chapter III
Chapter II
Yes, the answer is correct.
Feedback:
The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India.
Accepted Answers:
Chapter IV
Private Placement can be made to Qualified __________
Institutional Buyers
Financial Institutions
Brokers
Stock Exchanges
A Non-Banking Financial Company (NBFC) is a company registered under the
Companies Act, 1956
Banking Company's Act, 1949
Non Banking Financial Institutions Act, 1978
SEBI Act, 1992
Yes, the answer is correct.
Feedback:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business.
Accepted Answers:
Companies Act, 1956
Non Banking Finance Company means a company which carries on the business of receiving deposits financing. Definition give by
Banking Laws Act, 1993
Banking Commission of 1992
Company's Act, 1956
Reserve Bank Amendments Act, 1997
Yes, the answer is correct.
Feedback:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business.
Accepted Answers:
Reserve Bank Amendments Act, 1997
Housing Finance Companies are regulated by
National Housing Bank
SEBI
IRDA
Ministry of Company Affairs
Yes, the answer is correct.
Feedback:
A Housing Finance Company is a company registered under the Companies Act, 1956 (1 of 1956) which primarily transacts or has as one of its principal objects, the transacting of the business of providing finance for housing, whether directly or indirectly.
Accepted Answers:
National Housing Bank
The minimum net owned fund to be a registered NBFC should be
100 Lakhs
500 Lakhs
150 lakhs
200 Lakhs
Yes, the answer is correct.
Feedback:
The minimum net owned funds of the Company should be Rs. 2 Crore. 1/3rd of the Directors must possess finance experience.
Accepted Answers:
200 Lakhs
The NBFCs are allowed to accept/renew public deposits for a minimum period of
8 months
6 months
12 months
2 Years
Yes, the answer is correct.
Feedback:
The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand. NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time.
Accepted Answers:
12 months
NBFC cannot accept demand deposits
TRUE
FALSE
Yes, the answer is correct.
Feedback:
NBFC cannot accept demand deposits; NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
Accepted Answers:
TRUE
NBFC's issue Cheque Books
TRUE
FALSE
Yes, the answer is correct.
Feedback:
"NB” in NBFC is Non Banking, which means they are not expected to demand deposits and because of this it cannot issue cheque books.
Accepted Answers:
FALSE
Board for Financial Supervision (BFS) constituted by RBI
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The Board of Financial Supervision (BFS) was constituted in November 1994 as a committee of the Central Board of Directors. Its objective is to undertake consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies.
Accepted Answers:
TRUE
_________ is a cause of failure for NBFC
No banking Licence
Unprofessional Management
Limited time to accept public deposits
High amount of net owned fund
Yes, the answer is correct.
Feedback:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business.
Accepted Answers:
Unprofessional Management
Venture Capital Fund Company are regulated by ___________--
SEBI
Company's Act, 1956
Ministry of Company Affairs
Banking Regulations Act, 1949
Yes, the answer is correct.
Feedback:
"Venture capital fund” means a fund established in the form of a company or trust which raises monies through loans, donations, issue of securities or units as the case may be, and makes or proposes to make investments in accordance with these regulations
Accepted Answers:
SEBI
Venture capital is financed in the form of
Equity Participation
Loan
Debentures
Preference Shares
Yes, the answer is correct.
Feedback:
The VCFs often purchase equity securities of the entities they invest. The VCFs take active participation in the companies they invest and thus helps the growth.
Accepted Answers:
Equity Participation
Venture capital plays a role in facilitating access to finance for
New Compaies
Large Companies
Cottage Industries
Small and Medium Enterprises (SMEs)
Yes, the answer is correct.
Feedback:
VCF is an investment fund that manages money from different investors seeking to provide capital in startup and small- and medium-size enterprises that have strong growth potential.
Accepted Answers:
Small and Medium Enterprises (SMEs)
Housing Finance Companies are regulated by
National Housing Bank
SEBI
IRDA
Ministry of Company Affairs
Yes, the answer is correct.
Feedback:
The Reserve Bank of India (RBI) regulates bank lending to housing and the National Housing Bank (NHB) regulates lending to housing by Housing Finance Companies or HFCs.
Accepted Answers:
National Housing Bank
Fourth Round of financing is also known as
Buy Out Finance
Seed Financing
Mezzanine Financing
Bridge Financing
Yes, the answer is correct.
Feedback:
Bridge funding, also known as bridge financing, is a form of temporary, intermediate funding intended to cover a business's short-term expenses until long-term funding is secured.
Accepted Answers:
Bridge Financing
The registration fees of VCF's with SEBI is
3.5 Lakhs
2 Lakhs
5 Lakhs
7 Lakhs
Yes, the answer is correct.
Feedback:
A venture capital fund is a type of investment fund that invests in early-stage startup companies that offer a high return potential but also come with a high degree of risk.
Accepted Answers:
5 Lakhs
Venture capitalist may also finance for sick units having potential of turn around.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.
Accepted Answers:
TRUE
The venture capitalists finance at the middle stage of product life cycle
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Venture capital generally comes from well-off investors, investment banks and any other financial institutions.
Accepted Answers:
FALSE
Venture capitalists are compensated through a combination of management fees and carried interest.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Venture capital firms raise capital from Limited Partners, such as pension funds, endowments, and family offices, and then invest in early-stage, high-growth-potential companies in exchange for equity (i.e., ownership in the companies).
Accepted Answers:
TRUE
VCFs cannot invest more than ________ of their corpus in one company
35%
25%
50%
25%
Yes, the answer is correct.
Feedback:
Venture capital funds are investment funds that manage the money of investors who seek private equity stakes in startup and small- to medium-sized enterprises with strong growth potential.
Accepted Answers:
25%
The progress in India in respect of Venture Capital Finance is _____.
Slow
Blooming
At Early Stage
Very Fast
Yes, the answer is correct.
Feedback:
According to SEBI, VCF is a fund established in the form of a trust/company including a body corporate and registered with SEBI.
Accepted Answers:
Slow
Bombay Stock Exchange was established in
1875
1926
1887
1947
Yes, the answer is correct.
Feedback:
The BSE, formerly known as the Bombay Stock Exchange Ltd. is an Indian stock exchange located at Dalal Street, Mumbai. Established in 1875, it is Asia's oldest stock exchange.
Accepted Answers:
1875
Gold ring is the
Capital Product
Asset
Precious gem
Derivative product
Yes, the answer is correct.
Feedback:
Derivatives is a growing marketplace and offer products to fit nearly any need or risk tolerance.
Accepted Answers:
Derivative product
D-materialization of securities in the physical form and holding them in electronic form.
Depositories
Derivatives
Mutual Fund
Debenture
Yes, the answer is correct.
Feedback:
Dematerialization is the process of converting your physical shares and securities into digital or electronic form.
Accepted Answers:aaa
Depositories
A stock exchange in India operates with due recognition from the government under the
Banking Regulations Act, 1949
Company's Act, 1956
Securities Exchange Board ofIndia Act, 1992
Securities and contracts (regulations) act, 1956
Yes, the answer is correct.
Feedback:
An Act to prevent undesirable transactions in securities by regulating the business.
Accepted Answers:
Securities and contracts (regulations) act, 1956
Who introduced the fully automated trading system in India for the first time?
OCTEI
BSE
NSE
Ministry of External Affairs
Yes, the answer is correct.
Feedback:
NSE operates on the 'National Exchange for Automated Trading' (NEAT) system, a fully automated screen based trading system, which adopts the principle of an order driven market.
Accepted Answers:
NSE
Demutualization would mean that the ownership and Management of the stock exchanges would be separated.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Demutualization is the process by which a customer-owned mutual organization (mutual) or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization.
Accepted Answers:
TRUE
The trading platform of a stock exchange is accessible to all.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A trading platform is software used for trading: opening, closing, and managing market positions through a financial intermediary such as an online broker.
Accepted Answers:
FALSE
Stock exchanges constitute a market for trading in the existing listed securities
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A stock exchange, securities exchange, or bourse is a facility where stockbrokers and traders can buy and sell securities, such as shares of stock and bonds and other financial instruments.
Accepted Answers:
TRUE
BSE SENSEX consists of _______ components of Stock
50
30
25
38
Yes, the answer is correct.
Feedback:
The BSE SENSEX (also known as the S&P Bombay Stock Exchange Sensitive Index or simply the SENSEX) is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on Bombay Stock Exchange.
Accepted Answers:
30
NSE trading terminals are present in around _____ cities and towns all over India.
400
200
300
500
Yes, the answer is correct.
Feedback:
The trader workstation is the terminal from which the member accesses the trading system. Each trader has a unique identification by way of Trading Member ID
Accepted Answers:
400
NIFTY comprises of how many stock components?
50
200
30
80
Yes, the answer is correct.
Feedback:
NIFTY 50 is NSE's diversified index comprising stocks from top 50 Indian companies across 14 sectors.
Accepted Answers:
50
Satyam Computers was a component of the
PNEX
OCTEI
NIFTY
BSE SENSEX.
Yes, the answer is correct.
Feedback:
Satyam scam was most talked about IT scam during 2009. It was a IT co. owned by Mr.Ramalinga Raju named as Satyam Computer Services.
Accepted Answers:
BSE SENSEX.
Who decides rate of interest charged by Banks?
Reserve Bank of India
StateBank of India
Minstry of Banking Affairs
World Bank
Yes, the answer is correct.
Feedback:
Bank rate is the rate charged by the central bank for lending funds to commercial banks. Description: Bank rates influence lending rates of commercial banks.
Accepted Answers:
Reserve Bank of India
The rate of interest charged on the balance in loan account payable by the borrower after taking into account the amount repaid.
Fluctuating Rate
Flat Rate
Floating Rate
Reducing Rate
Yes, the answer is correct.
Feedback:
A reducing rate (also known as a reducing balance rate), as the term suggests, is an interest rate that is calculated every month on the outstanding loan amount.
Accepted Answers:
Reducing Rate
Rate charged by RBI to other banks on the money lent by RBI
Contractual Rate
Reverse Repo Rate
Bank Rate
Repo Rate
Yes, the answer is correct.
Feedback:
The rate of interest charged by the central bank on the loans they have extended to commercial banks and other financial institutions.
Accepted Answers:
Bank Rate
Prime lending rate (PLR) is the rate of interest charged to prime/first class borrowers.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Prime lending rate is the interest rate at which banks lend to its most credit worthy customers.
Accepted Answers:
TRUE
TheStock market gives the information about the movement in the prices since the date of index.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Stock exchanges may also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividends.
Accepted Answers:
FALSE
A stock market index is a method of measuring a section of the stock market.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current price levels with past prices to calculate market performance.
Accepted Answers:
TRUE
BSE SENSEX consists of _______ components of Stock
50
30
25
38
Yes, the answer is correct.
Feedback:
The Bombay Stock Exchange (BSE), established in 1875, is the first and largest securities market in India.
Accepted Answers:
30
The __________ is the benchmark index with wide acceptance among individual investors
BSE SENSEX
NIFTY
FOREX
HENGSENG
Yes, the answer is correct.
Feedback:
In India, the BSE Sensex and the NSE Nifty are considered the benchmark indices. They are considered to represent the overall market performance.
Accepted Answers:
BSE SENSEX
Which is not a component of Capital Market?
Merchant Banker
Banking
Mutual Funds
Money Market
Yes, the answer is correct.
Feedback:
The financial instrument is the main component of the capital market. The products which are traded in the financial market are financial assets, securities or other types of financial instruments.
Accepted Answers:
Merchant Banker
Primary market ad Secondary market are components of
Insurance Market
Banking Market
Money Market
Capital Market
Yes, the answer is correct.
Feedback:
A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold.
Accepted Answers:
Capital Market
New Issues are also known as
Initial Public offering
Primary Market
FPO
Secondary Market
Yes, the answer is correct.
Feedback:
A new issue is a reference to a security that has been registered, issued, and is being sold on a market to the public for the first time.
Accepted Answers:
Initial Public offering
GOI bonds and state government bonds are handled and controlled by
Ministry of Company Affairs
FOREX
SEBI
RBI
Yes, the answer is correct.
Feedback:
The scheme, commonly known as RBI Bonds or GOI bonds, is popular among retail investors who looking for safety of principal and a regular income.
Accepted Answers:
RBI
Merchant Bank Managing the issue is called
Securities Manager
Merchant Banker
Lead Manager
Bank Manager
Yes, the answer is correct.
Feedback:
The decisions concerning size and timing of the public issue in the light of the market conditions are advised by the merchant bankers.
Accepted Answers:
Lead Manager
Depositories hold securities in account.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Depositories are institutions which hold your securities(Shares, bonds, debentures, Mutual Fund Units) in electronic form which is also known as dematerialization of shares or DEMAT account.
Accepted Answers:
TRUE
Capital market is controlled by Reserve Bank of India (RBI)
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The capital market is market of equity and debt securities is regulated by Securities and Exchange Board of India (SEBI). Securities and Exchange Board of India (SEBI) has full autonomy and authority to regulate and develop capital market.
Accepted Answers:
FALSE
Bankers to the issue, carries out all the activities of ensuring that the funds are collected and transferred to the Escrow accounts.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
“Banker to an issue” means a scheduled bank carrying on all or any of the following issue related activities namely:- ( i) acceptance of application and application monies; (ii) acceptance of allotment or call monies; (iii) refund of application monies; (iv) payment of dividend or interest warrants.
Accepted Answers:
TRUE
Capital market instruments are those instruments, which have a maturity period of more than _______ .
5 years
1 year
2 years
3 years
Yes, the answer is correct.
Feedback:
The main instruments traded in the capital market are – equity shares, debentures, bonds, preference shares etc.
Accepted Answers:
1 year
Capital raised as borrowing is called _________
Debt Capital
Equity Capital
Loan
Public Deposits
Yes, the answer is correct.
Feedback:
Debt capital is the capital that a business raises by taking out a loan. It is a loan made to a company, typically as growth capital, and is normally repaid at some future date.
Accepted Answers:
Debt Capital
Money is synonym of
Liquidity
Cash
Asset
Fund
Yes, the answer is correct.
Feedback:
A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.
Accepted Answers:
Liquidity
A tradable form of loan is usually termed as a
Equity tool
Preference tool
Debt tool
Loan tool
Yes, the answer is correct.
Feedback:
Trade loans are flexible, short-term borrowing facilities, linked to specific import or export transactions. They are available for firms regardless of the method they use to trade, whether open account, collections or documentary credit basis.
Accepted Answers:
Debt tool
The price at which an instrument is traded in money market.
Market Price
Book Price
Quoted Price
Customer Price
Yes, the answer is correct.
Feedback:
The market price is the current price at which an asset or service can be bought or sold.
Accepted Answers:
Market Price
Cash certificates, Fixed deposits, Recurring deposits, etc are components of
Demand Liabilities
Time Liabilities
Fixed Liabilities
Bank Liabilities
Yes, the answer is correct.
Feedback:
Liabilities are what the bank owes to others. Specifically, the bank owes any deposits made in the bank to those who have made them.
Accepted Answers:
Bank Liabilities
Buying and selling of securities by RBI in the Money market is also called as
Securities Transactions
SEBI operations
Trading activities of RBI
Open Market Operations of RBI.
Yes, the answer is correct.
Feedback:
Open market operations or OMOs are conducted by the Reserve Bank of India (RBI) by way of sale and purchase of G-Secs (government securities) to and from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.
Accepted Answers:
Open Market Operations of RBI.
Demand Liabilities include all liabilities which are payable on demand.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Demand Liabilities of a bank are liabilities which are payable on demand
Accepted Answers:
TRUE
Secondary Dealers can be referred to as mercantile Bankers to Government of India.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A security firm that facilitates exchanges or trades of financial assets by purchasing securities from another investor rather than an issuing corporation
Accepted Answers:
FALSE
Indian Repo Market is governed by Reserve Bank of India.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.
Accepted Answers:
TRUE
Notice Money" means deals in funds for_______ days.
One to Five
Two to Fourteen
Five to Ten
Three to Twelve
Yes, the answer is correct.
Feedback:
Notice Money refers to the borrowing and lending of funds for 2-14 days.
Accepted Answers:
Two to Fourteen
The factors that govern the interest rates are mostly economy related and are commonly referred to as ____________
Socio economic
Macroeconomic
Political
Geographic
Yes, the answer is correct.
Feedback:
The interest rate is the amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets
Accepted Answers:
Macroeconomic
The private equity activities of banking are also termed as
Merchant Bank
Private Banking
Mutual Fund
Internal Banking
Yes, the answer is correct.
Feedback:
Merchant banks are financial institutions and companies that deal with international finance for multinational corporations.
Accepted Answers:
Merchant Bank
Merchant banks were known as “accepting and issuing houses” in the
India
U.K.
U.S.A
Russia
Yes, the answer is correct.
Feedback:
Merchant banks lend their services to international finance, business loans for companies, and underwriting.
Accepted Answers:
India
Which is a service of Merchant Banker during the issue?
Canvassing for subscription to the issue
Obtaining consent from SEBI
Handling the complaints of the applicants
Deciding the pattern of advertising
Yes, the answer is correct.
Feedback:
Issue management: This service deals with issuing equity shares, preference shares, and debentures that acts as a partner for a high net-worth client by issuing shares and debentures to the general public
Accepted Answers:
Canvassing for subscription to the issue
The net worth of Category II merchant banker is
Rs. 20 Lakhs
Rs 1 Crore
Rs. 50 Lakhs
Rs. 35 Lakhs
Yes, the answer is correct.
Feedback:
Category-II can act as advisor, consultant, underwriter and portfolio manager.
Accepted Answers:
Rs. 50 Lakhs
The merchant bankers help corporations to raise money from the markets through the issue of shares, debentures, bonds etc know as
Loan
Equity issue
FPO's
IPOs
Yes, the answer is correct.
Feedback:
Merchant banks are financial institutions and companies that deal with international finance for multinational corporations.
Accepted Answers:
IPOs
There is a limit fixed for the number of co-managers.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
There is no limit fixed for the number of co-managers.
Accepted Answers:
FALSE
Issue management is not a service rendered by merchant bankers.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Issue managers in capital market parlance are known as Merchant Bankers or Lead Managers.
Accepted Answers:
FALSE
Merchant banker controls the Primary market
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The merchant bankers regulations which seek to regulate the raising of funds in the primary market.
Accepted Answers:
TRUE
Underwriting is like_________against the failure of an issue.
Security
Insurance
Guarantee
Liability
Yes, the answer is correct.
Feedback:
Underwriting is the process through which an individual or institution takes on financial risk for a fee.
Accepted Answers:
Insurance
Book should remain open for minimum of _______days in book building.
Five
Four
Ten
Six
Yes, the answer is correct.
Feedback:
Book building is the process by which an underwriter attempts to determine the price at which an initial public offering (IPO) will be offered.
Accepted Answers:
Five
The mutual fund industry in India began with the setting up of the
UTI
LIC
SEBI
GIC
Yes, the answer is correct.
Feedback:
A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.
Accepted Answers:
UTI
Which is not a benefit in investing in mutual fund?
Professional Management
Variety
External relations
Tax Benefits
Yes, the answer is correct.
Feedback:
Mutual Fund Is Great For Those Who Need To Invest Their Money For Future Requirements. Mutual Funds Are A Great Way To Build Wealth.
Accepted Answers:
Variety
Combined holding of many kinds of financial securities like shares, debentures and bonds.
Load
Corpus
Unit
Portfolio
Yes, the answer is correct.
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A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange-traded funds (ETFs).
Accepted Answers:
Portfolio
These represent debt from companies, financial institutions or govt. agencies
Debts
Stocks
Bonds
Commercial paper
Yes, the answer is correct.
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Bonds are units of corporate debt issued by companies and securitized as tradeable assets.
Accepted Answers:
Bonds
These schemes also commonly called growth schemes seek to invest a majority in equities and a small portion in liquid money market securities.
Sector schemes
Interval schemes
Debt based schemes
Equity based schemes
Yes, the answer is correct.
Feedback:
The equity scheme invests according to its investment mandate - meaning that "Large Cap" schemes will not invest in Small Cap companies, "thematic" equity schemes will invest in equities around a certain theme, etc
Accepted Answers:
Equity based schemes
Hybrid schemes are commonly called as the balanced funds.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Hybrid schemes use asset allocation, market analysis and portfolio diversification to ensure maximum returns at minimal risk.
Accepted Answers:
TRUE
Transparency is not an advantage of mutual fund
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Transparency is a strong indicator of future growth of any business and mutual fund is no exception.
Accepted Answers:
FALSE
Net asset value is the market value of the securities held by the scheme.
TRUE
FALSE
Yes, the answer is correct.
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Net asset value, or NAV, is equal to a fund's or company's total assets less its liabilities.
Accepted Answers:
TRUE
__________ are the promoters of a company.
Shareholers
Owners
Sponsors
Debentureholders
Yes, the answer is correct.
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A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.
Accepted Answers:
Sponsors
___________ means not putting all your eggs in one basket.
Diversification
Integration
Expansion
Resurrection
Yes, the answer is correct.
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Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio.
Accepted Answers:
Diversification
Intraday trading is also called as
Margin Trading
Derivation Trading
Option Trading
Internal Trading
Yes, the answer is correct.
Feedback:
Margin trading involves buying and selling of securities in one single session.
Accepted Answers:
Margin Trading
An option to buy a stock at a specific price on or before a certain date.
Put Option
Call Option
Swap Option
Forward Option
Yes, the answer is correct.
Feedback:
Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period.
Accepted Answers:
Call Option
If the strike price is greater than the market price of the stock, the call option is called
Of-the-money
In-the-money
Out-of-the-money
At-the-money
Yes, the answer is correct.
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An OTM call option will have a strike price that is higher than the market price of the underlying asset.
Accepted Answers:
Out-of-the-money
The intrinsic value of an option must be
A whole number
Negative
Positive
Unity
Yes, the answer is correct.
Feedback:
The intrinsic value is the amount by which the strike price of an option is profitable or in-the-money as compared to the stock's price in the market.
Accepted Answers:
Positive
Which of the following is used as risk management tools?
Put Option
Swap
Forward
Options
Yes, the answer is correct.
Feedback:
Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.
Accepted Answers:
Options
Futures & Options Trading carries risk and therefore may not suit every investor.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A future option trading contract (also called option on futures) awards the buyer or seller of the option the right to buy or sell the underlying futures contract at a pre-determined price on the day the contract expires.
Accepted Answers:
TRUE
Forward contracts are done through the Stock Exchange.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A forward contract is a customizeable derivative contract between two parties to buy or sell an asset at a specified price on a future date. Forward contracts can be tailored to a specific commodity, amount and delivery date.
Accepted Answers:
FALSE
A Call Option is an option to buy a stock at a specific price on or before a certain date.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
A call option, often simply labeled a "call", is a contract, between the buyer and the seller of the call option, to exchange a security at a set price.
Accepted Answers:
TRUE
If buying and selling of a share is completed on the same working day, it is called
External Trading
Internal Trading
Forward Trading
Intraday Trading
Yes, the answer is correct.
Feedback:
Intraday trading, also called day trading, is the buying and selling of stocks and other financial instruments within the same day.
Accepted Answers:
Intraday Trading
The strike price is also called
Exercise Price
Market Price
Option Price
Book Price
Yes, the answer is correct.
Feedback:
The price fixed by the seller of a security after receiving bids in a tender offer, typically for a sale of gilt-edged securities or a new stock market issue.
Accepted Answers:
Exercise Price
Credit rating is usually done for a financial instrument such as a
Bond
Equity
Debenture
Deposits
Yes, the answer is correct.
Feedback:
A bond rating is a letter-based credit scoring scheme used to judge the quality and creditworthiness of a bond.
Accepted Answers:
Bond
Credit Ratings are
Middle Looking
Not essential
Forward Looking
Backward Looking
Yes, the answer is correct.
Feedback:
A credit rating is an opinion of a particular credit agency regarding the ability and willingness an entity (government, business, or individual) to fulfill its financial obligations.
Accepted Answers:
Forward Looking
The Aaa and Aa bonds experienced _______ default rates
Very high
Very Low
High
Low
Yes, the answer is correct.
Feedback:
AA Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations.
Accepted Answers:
Very Low
The quantitative analysis is mainly
Environmental analysis
Marketing analysis
Financial analysis
Physical analysis
Yes, the answer is correct.
Feedback:
Analysis of a situation or event, especially a financial market, by means of complex mathematical and statistical modelling.
Accepted Answers:
Financial analysis
Which is not a parameter considered for rating process?
Company structure
Management Quality
Macroeconomic analysis
Production analysis
Yes, the answer is correct.
Feedback:
At the time of calculating the rating, credit rating agencies take into consideration several factors like the financial statements, level and type of debt, lending and borrowing history, ability to repay the debt, and past debts of the entity before rating them.
Accepted Answers:
Production analysis
Credit Rating agencies are regulated by SEBI.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 empower SEBI to regulate credit rating agencies operating in India.
Accepted Answers:
TRUE
"BBB" stands for strong.
TRUE
FALSE
Yes, the answer is correct.
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"AAA" and "AA" (high credit quality) and "A" and "BBB" (medium credit quality) are considered investment grade.
Accepted Answers:
FALSE
CRISIL is the first credit agency in India.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function better.
Accepted Answers:
TRUE
The company’s_______ is the main participant in the rating process.
Chairman
Managing Director
Chartered Accountant
Chief Financial Officer
Yes, the answer is correct.
Feedback:
A chief financial officer (CFO) is the senior executive responsible for managing the financial actions of a company.
Accepted Answers:
Chief Financial Officer
A simple ________ symbol is normally used to convey a credit rating.
Roman numbers
Alphanumeric
Numbers
Diagrammatic
Yes, the answer is correct.
Feedback:
A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation.
Accepted Answers:
Alphanumeric
When an investor makes profit, it is his
Loss
Income
Share
Interest
Yes, the answer is correct.
Feedback:
An investor is a person that allocates capital with the expectation of a future financial return or to gain an advantage.
Accepted Answers:
Income
If the holding period of the stock is not more than 12 months, then it is called as
Medium-term capital gains
Long-term capital gains
Short-term capital gains.
Very long-term capital gains
Yes, the answer is correct.
Feedback:
A short-term capital gain results from an asset owned for one year or less before it is disposed of.
Accepted Answers:
Short-term capital gains.
Short-term capital losses can be carried forward to set off against the future
Medium-term capital gains
Long-term capital gains
Short-term capital gains.
Very long-term capital gains
Yes, the answer is correct.
Feedback:
Short term capital losses are allowed to be set off against both long and short term gains.
Accepted Answers:
Short-term capital gains.
Interest on Bank FD is taxable whereas return on ELSS is
Tax free
Taxable
Less taxable
Very highly taxable
Yes, the answer is correct.
Feedback:
ELSS due to their equity exposure is risky but has delivered historically good returns.
Accepted Answers:
Tax free
Equity Linked Saving Scheme is an open-ended equity growth scheme that is offered by
OCTEI
BSE
NSE
Mutual funds
Yes, the answer is correct.
Feedback:
An ELSS is an Equity Linked Savings Scheme, that allows an individual or HUF a deduction from total income of up to Rs. 1.5 lacs under Sec 80C of Income Tax Act 1961.
Accepted Answers:
Mutual funds
Dividend distribution tax can be equivalent to Tax Deduction at Source.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
The Dividend Distribution Tax is a tax levied on dividends that a company pays to its shareholders out of its profits. The Dividend Distribution Tax, or DDT, is taxable at source, and is deducted at the time of the company distributing dividends.
Accepted Answers:
TRUE
Long-term capital gains are exempted from Income Tax.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Generally, long-term capital gains are charged to tax @ 20% (plus surcharge and cess as applicable), but in certain special cases, the gain may be (at the option of the taxpayer) charged to tax @ 10% (plus surcharge and cess as applicable).
Accepted Answers:
TRUE
Service Tax is payable on the brokerage paid to the share brokers at the rate of 17%.
TRUE
FALSE
Yes, the answer is correct.
Feedback:
Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994.
Accepted Answers:
FALSE
STT was first introduced by Finance Minister P. Chidambaram in ________
January, 2001
March, 2003
August, 2006
July, 2004
Yes, the answer is correct.
Feedback:
STT is an indirect tax and is imposed on a broker rather than the investor/trader directly. Agencies STT is currently imposed on equity and derivative transactions.
Accepted Answers:
July, 2004
Mutual funds have to pay dividend distribution tax ________ of Income Tax Act
u/s 115R
u/s 115-O
u/s 115A
u/s 115-P
Yes, the answer is correct.
Feedback:
Dividends paid by equity mutual funds are tax free in the hands of the investor but the AMC pays dividend distribution tax (DDT) at the rate of 11.648%.
Accepted Answers:
u/s 115R
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