301 Assignment

Sr No Question 1
1 Chapter IV deals with powers and functions of the Board. True

SEBI doesn’t have the power to inspect any books or register of any public
2 company listed in Stock Exchange. True
SEBI doesn’t charge any Penalty for failure to enter into an agreement with
3 clients. True
4 Dividend distribution tax can be equivalent to Tax Deduction at Source. True
5 Long-term capital gains are exempted from Income Tax. True
A Non-Banking Financial Company (NBFC) is a company registered under the
6 _____________. Companies Act, 1956
Non-bank financial companies were earlier called as Non-bank financial
7 ________. Industries
8 Non banking Companies cannot accept _________ deposits. Recurring
9 Venture Capital Fund Company are regulated by _____________. Companys Act
10 NBFCs are required to submit statutory annual returns to ___________. Government
The NBFCs are allowed to accept/renew public deposits for a minimum period
11 of _________. 12 months
NBFCs registered with RBI have been reclassified as_______________,
12 Investment Company (IC) and Loan Company (LC) Securities Finance Company(SFC)
13 The maximum interest that NBFCs can pay on deposits is ____%. 9
14 NBFCs does not issue ___________. Cheque Books
15 The NBFCs are__________ in terms of their activities. Flexible
16 A company desirous of commencing business of non-banking financial i 250 lakhs
17 NBFCs were offering very ________ rate of interest on the deposits to atHigh
18 Credit Rating agencies are regulated by SEBI. 1
19 "BBB" stands for strong. 1
20 CRISIL is the first credit agency in India. 1
21 Non-bank financial companies were earlier called as Small Savings Finace Groups
22 Which of the following is not a service of NBFC? Accept deposits
23 The deposits with _______ are not insured. RBI
24 A Non-Banking Financial Company (NBFC) is a company registered underBanking Regulation Act, 1949
25 The principle business of NBFC is Accepting deposits
26 _____________ is not available for NBFC depositors unlike in case of ba Deposit insurance facility of DICGC
27 The NBFCs are allowed to accept/renew public deposits for a maximum 12
28 The repayment of deposits by NBFCs is not guaranteed by NBFC
29 NBFCs have to maintain ________% of their deposits in the form of liqu 17
30 NBFCs with Net Owned Fund less than _____ Lakhs cannot accept deposit 13 lakhs
The main equity market in Pakistan, The Karachi Stock Exchange (KSE), offers a set of
circumstances that qualifies it as a good case study. Founded in 1947, it is being referred to
as one of the oldest stock markets among the developing countries. There now dominates
with 80 percent of the total trading. KSE is also one of the first emerging markets to be
largely opened to international investors, with the lifting of the restrictions. Between 1960
to 1981, the State Bank of Pakistan’s Index of share prices increased at an annual
compound rate of 3.3 percent whereas between July 1981 and June 1992 it grew at an
annual compound rate of 19.74 percent. International Finance Corporation (IFC), the
monitoring body for emerging capital markets, around the same period ranked Pakistan
third after Argentina and Columbia in terms of one year performance. The development of
the capital markets is termed as necessary condition for the sustainable growth of the
economy. But this growth itself depends upon the legislative and fiscal framework of the
country, demand and supply patterns of the securities. The Pakistani government clearly
focused on the importance of the capital markets and moved more towards the market-
oriented scenario. Government role in the sanctioning and approval for investment was
quite eliminated but have still some room for reforms. The significant developments in the
country’s market are generally attributed to the government’s increasing liberalization
measures that provided for loosening of foreign exchange controls, foreign investment to
the market and easing of investment and banking sector regulation. These developments
were the start towards the better channeling of financial resources for productive
investments. The need was to control interest rates, which were and are conducive to the
savings and investments. Basically capital market refers to institution and individuals,
which helps in facilitating the societies saving into productive investments.
Basically capital market refers to institution and individuals, which helpsGrowing

in
What does IFC Stands for. International Fund Corporation
The development of the capital markets is termed as necessary conditionBusiness
5 In which year KSE is founded. 1945
6 The Pakistani government clearly focused on the importance of Share Markets
2 3 4
0
0
0
Banking Regulation Act, 1949 Cooperative Societies Act, 1912 Securities Act of 1934
Institutions Organizations Groups

Fixed Savings Demand
RBI SEBI Cooperative Societies Act
RBI SEBI Ministry of Finance
6 months 2 years 1.5 years
Asset Finance Company (AFC) Capital Finance Company (CFC) Industrial Finance Company (IFC)
10 11 12
Demand Drafts Pass Book ATM cards
Heterogeneous Homogenous Rigid
300 lakhs 100 lakhs 200 lakhs
Low Medium No interest
0
0
0
Industrial Banks Non Bank Financial Groups Non-bank financial Institutions
Issuing Cheques Underwrite IPOs Supporting investments in propert
Depostory Banks NBFCs RRB
Cooperative Societies Act, 1912Securities Act of 1934 Companies Act, 1956
Giving Loans Underwriting IPOs Providing suggestions on mergers a
Interest Rates Locker Facility Loan
60 50 36
Government RBI Commercial Banks
25 9 12.5
12 lakhs 10 lakhs 5.25 lakhs
Maintaining Motivating facilitating
International Finance Corporat International Fax Corporation International Freight Corporation
Industry Economy Society
1946 1947 1948
Mutual Fund Markets Commodity Markets Capital Markets
Correct Answer
2
1
1
2
4
3
2
2
3
1
2
4
1
1
2
1
4
2
3
4
1
1
2
3
4
4
4
2
3
3
4
UNIT 1
Foreign Exchange Management (Export of Goods and Services) Regulations, was passed in the year
2000
1995
2002
1991
Yes, the answer is correct.
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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:
0
Under Capital gain Scheme, there is a lock in period of 7 years.

TRUE
FALSE
Score: 1
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:
1
Savings Bank Accounts are meant for businessman.
TRUE
FALSE
Score: 1
Feedback:
A savings account is an interest-bearing deposit account held at a bank or other financial institution.
Accepted Answers:
0
Financial institutions offer _________ to customers.

Loans
Financial Services
Money
Advices
Score: 1
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
Score: 1
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
UNIT 2
Objectives of SEBI are to protect interests of

Investors
Customers
Debtors
Government
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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:
1
Investigations by SEBI are covered under Sec 11B

TRUE
FALSE
Score: 1
Feedback:
Investigations by SEBI are covered under Sec 11B
Accepted Answers:
0
The Investigating Authority of SEBI may keep in its custody any books, registers, other documents and
record produced for six months.
TRUE
FALSE
Score: 1
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:
1
________ deals with powers and functions of the Securities Exchange of India Board
Chapter V
Chapter IV
Chapter III
Chapter II
Score: 1
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
Score: 1
Feedback:
A sale of stocks, bonds, or securities directly to a private investor, rather

than as part of a public offering.
Accepted Answers:
Institutional Buyers
UNIT 3

Companies Act, 1956
Banking Company's Act, 1949
Non Banking Financial Institutions Act, 1978
SEBI Act, 1992
Score: 1
Feedback:

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
Score: 1
Feedback:

business.
Accepted Answers:
Reserve Bank Amendments Act, 1997
Housing Finance Companies are regulated by

National Housing Bank
SEBI
IRDA
Ministry of Company Affairs
Score: 1
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:
The minimum net owned fund to be a registered NBFC should be

100 Lakhs
500 Lakhs
150 lakhs
200 Lakhs
Score: 1
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
Score: 1
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
Score: 1
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:
1
NBFC's issue Cheque Books

TRUE
FALSE
Score: 1
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:
0
Board for Financial Supervision (BFS) constituted by RBI

TRUE
FALSE
Score: 1
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:
1
_________ is a cause of failure for NBFC

No banking Licence
Unprofessional Management
Limited time to accept public deposits
High amount of net owned fund
Score: 1
Feedback:

business.
Accepted Answers:
Unprofessional Management
Venture Capital Fund Company are regulated by ___________--

SEBI
Company's Act, 1956
Banking Regulations Act, 1949
Score: 1
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
UNIT 4
Venture capital is financed in the form of

Equity Participation
Loan
Debentures
Preference Shares
Score: 1
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)
Score: 1
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

SEBI
IRDA
Score: 1
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:
Fourth Round of financing is also known as

Buy Out Finance
Seed Financing
Mezzanine Financing
Bridge Financing
Score: 1
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
Score: 1
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
Score: 1
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:
1
The venture capitalists finance at the middle stage of product life cycle
TRUE
FALSE
Score: 1
Feedback:
Venture capital generally comes from well-off investors, investment banks and any
other financial institutions.
Accepted Answers:
0
Venture capitalists are compensated through a combination of management fees and carried interest.
TRUE
FALSE
Score: 1
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:
1
VCFs cannot invest more than ________ of their corpus in one company
35%
25%
50%
25%
Score: 1
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
Score: 1
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
UNIT 5
Bombay Stock Exchange was established in

1875
1926
1887
1947
Score: 1
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
Score: 1
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
Score: 1
Feedback:
Dematerialization is the process of converting your physical shares and securities into
digital or electronic form.
Accepted Answers:
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
Score: 1
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
Score: 1
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
Score: 1
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:
1
The trading platform of a stock exchange is accessible to all.
TRUE
FALSE
Score: 1
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:
0
Stock exchanges constitute a market for trading in the existing listed securities
TRUE
FALSE
Score: 1
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:
1
BSE SENSEX consists of _______ components of Stock

50
30
25
38
Score: 1
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
Score: 1
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
UNIT 6
NIFTY comprises of how many stock components?

50
200
30
80
Score: 1
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.
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
Feedback:
Prime lending rate is the interest rate at which banks lend to its most credit worthy
customers.
Accepted Answers:
1
TheStock market gives the information about the movement in the prices since the date of index.
TRUE
FALSE
Score: 1
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:
0
A stock market index is a method of measuring a section of the stock market.
TRUE
FALSE
Score: 1
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:
1
BSE SENSEX consists of _______ components of Stock

50
30
25
38
Score: 1
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
Score: 1
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
UNIT 7
Which is not a component of Capital Market?

Merchant Banker
Banking
Mutual Funds
Money Market
Score: 1
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
Score: 1
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
Score: 1
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
FOREX
SEBI
RBI
Score: 1
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
Score: 1
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
Score: 1
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:
1
Capital market is controlled by Reserve Bank of India (RBI)

TRUE
FALSE
Score: 1
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:
0
Bankers to the issue, carries out all the activities of ensuring that the funds are collected and transferred to
the Escrow accounts.
TRUE
FALSE
Score: 1
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:
1
Capital market instruments are those instruments, which have a maturity period of more than _______ .
5 years
1 year
2 years
3 years
Score: 1
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
Score: 1
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
UNIT 8
Money is synonym of
Liquidity
Cash
Asset
Fund
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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.
Score: 1
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
Score: 1
Feedback:
Demand Liabilities of a bank are liabilities which are payable on demand
Accepted Answers:
1
Secondary Dealers can be referred to as mercantile Bankers to Government of India.

TRUE
FALSE
Score: 1
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:
0
Indian Repo Market is governed by Reserve Bank of India.

TRUE
FALSE
Score: 1
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:
1
Notice Money" means deals in funds for_______ days.

One to Five
Two to Fourteen
Five to Ten
Three to Twelve
Score: 1
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
Score: 1
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
UNIT 9
The private equity activities of banking are also termed as

Merchant Bank
Private Banking
Mutual Fund
Internal Banking
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
Feedback:
There is no limit fixed for the number of co-managers.
Accepted Answers:
0
Issue management is not a service rendered by merchant bankers.

TRUE
FALSE
Score: 1
Feedback:
Issue managers in capital market parlance are known as Merchant Bankers or Lead Managers.
Accepted Answers:
0
Merchant banker controls the Primary market

TRUE
FALSE
Score: 1
Feedback:
The merchant bankers regulations which seek to regulate the raising of funds in the primary market.
Accepted Answers:
1
Underwriting is like_________against the failure of an issue.

Security
Insurance
Guarantee
Liability
Score: 1
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
Score: 1
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
UNIT 10
The mutual fund industry in India began with the setting up of the
UTI
LIC
SEBI
GIC
Score: 1
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
Score: 1
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
Score: 1
Feedback:
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
Score: 1
Feedback:
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
Score: 1
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
Score: 1
Feedback:
Hybrid schemes use asset allocation, market analysis and portfolio diversification to ensure maximum
returns at minimal risk.
Accepted Answers:
1
Transparency is not an advantage of mutual fund

TRUE
FALSE
Score: 1
Feedback:
Transparency is a strong indicator of future growth of any business and mutual fund is
no exception.
Accepted Answers:
0
Net asset value is the market value of the securities held by the scheme.
TRUE
FALSE
Score: 1
Feedback:
Net asset value, or NAV, is equal to a fund's or company's total assets less its
liabilities.
Accepted Answers:
1
__________ are the promoters of a company.

Shareholers
Owners
Sponsors
Debentureholders
Score: 1
Feedback:
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
Score: 1
Feedback:
Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio.
Accepted Answers:
Diversification
UNIT 11
Intraday trading is also called as

Margin Trading
Derivation Trading
Option Trading
Internal Trading
Score: 1
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
Score: 1
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
Score: 1
Feedback:
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
Score: 1
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
Score: 1
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
Score: 1
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:
1
Forward contracts are done through the Stock Exchange.

TRUE
FALSE
Score: 1
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:
0
A Call Option is an option to buy a stock at a specific price on or before a certain date.
TRUE
FALSE
Score: 1
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:
1
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
Score: 1
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
Score: 1
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
UNIT 12
Credit rating is usually done for a financial instrument such as a

Bond
Equity
Debenture
Deposits
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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
Score: 1
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:
1
"BBB" stands for strong.

TRUE
FALSE
Score: 1
Feedback:
"AAA" and "AA" (high credit quality) and "A" and "BBB" (medium credit quality) are considered investment
grade.
Accepted Answers:
0
CRISIL is the first credit agency in India.

TRUE
FALSE
Score: 1
Feedback:
CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function
better.
Accepted Answers:
1
The company’s_______ is the main participant in the rating process.

Chairman
Managing Director
Chartered Accountant
Chief Financial Officer
Score: 1
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
Score: 1
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
UNIT 13
When an investor makes profit, it is his

Loss
Income
Share
Interest
Score: 1
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
Score: 1
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 losses can be carried forward to set off against the future
Medium-term capital gains
Long-term capital gains
Very long-term capital gains
Score: 1
Feedback:
Short term capital losses are allowed to be set off against both long and short
term gains.
Accepted Answers:
Interest on Bank FD is taxable whereas return on ELSS is

Tax free
Taxable
Less taxable
Very highly taxable
Score: 1
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
Score: 1
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
Score: 1
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:
1
Long-term capital gains are exempted from Income Tax.

TRUE
FALSE
Score: 1
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:
1
Service Tax is payable on the brokerage paid to the share brokers at the rate of 17%.
TRUE
FALSE
Score: 1
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:
0
STT was first introduced by Finance Minister P. Chidambaram in ________

January, 2001
March, 2003
August, 2006
July, 2004
Score: 1
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
Score: 1
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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Sr No Question 1

1 Chapter IV deals with powers and functions of the Board. True

Basically capital market refers to institution and individuals, which helpsGrowing

Institutions Organizations Groups

6 months 2 years 1.5 years

Bank overdraft is a feature offered by which type of Account?

A deposit kept for a period below one year is called a

A short-term bank fixed deposit is a method of investing money for a shorter period of

Which of the following is not a Plastic Money?

Andhra Bank is a Private Sector bank.

Under Capital gain Scheme, there is a lock in period of 7 years.

The government, in order to encourage reinvestment of the capital gains made on the

Financial institutions offer _________ to customers.

Insurance is a tool to manage the ______.

Objectives of SEBI are to protect interests of

Penalty for Insider trading is

The illegal practice of trading on the stock exchange to one's own

Which of the following is not a function of SEBI?

Power to issue directions by SEBI are covered under Section 11B

The power to issue directions was both Preventive and Remedial Powers.

Investigations by SEBI are covered under Sec 11B

Private Placement can be made to Qualified __________

A sale of stocks, bonds, or securities directly to a private investor, rather

A Non-Banking Financial Company (NBFC) is a company registered under the

A Non-Banking Financial Company (NBFC) is a company registered under the

A Non-Banking Financial Company (NBFC) is a company registered under the

Housing Finance Companies are regulated by

A Housing Finance Company is a company registered under the Companies Act,

The minimum net owned fund to be a registered NBFC should be

The NBFCs are allowed to accept/renew public deposits for a minimum period of 12

NBFC cannot accept demand deposits

NBFC cannot accept demand deposits; NBFCs do not form part of the payment and

NBFC's issue Cheque Books

Board for Financial Supervision (BFS) constituted by RBI

The Board of Financial Supervision (BFS) was constituted in November 1994 as a

_________ is a cause of failure for NBFC

A Non-Banking Financial Company (NBFC) is a company registered under the

Venture Capital Fund Company are regulated by ___________--

"Venture capital fund” means a fund established in the form of a company or trust

Venture capital is financed in the form of

Venture capital plays a role in facilitating access to finance for

Housing Finance Companies are regulated by

Fourth Round of financing is also known as

Bridge funding, also known as bridge financing, is a form of temporary,

The registration fees of VCF's with SEBI is

A venture capital fund is a type of investment fund that invests in early-stage

Venture capital firms raise capital from Limited Partners, such as pension

The progress in India in respect of Venture Capital Finance is _____.

Bombay Stock Exchange was established in

Gold ring is the

Demutualization is the process by which a customer-owned mutual organization

A trading platform is software used for trading: opening, closing, and

A stock exchange, securities exchange, or bourse is a facility where stockbrokers and

BSE SENSEX consists of _______ components of Stock

NIFTY comprises of how many stock components?

Satyam Computers was a component of the

Who decides rate of interest charged by Banks?

Bank rate is the rate charged by the central bank for lending funds to

A reducing rate (also known as a reducing balance rate), as the term suggests, is an

Rate charged by RBI to other banks on the money lent by RBI