Solved questions on Indian capital market

Transcription

1 Solved questions on Indian capital market 1. In private placement, issuance is done to. (2 marks) (a) more than 50 persons (b) less than 100 persons (c) less than 50 persons (d) less than 10 persons 2. Which entity provides novation :. (2 marks) (a) NSCCL (b) NSE (c) NSDL (d) CDSL 3. A company making a public issue of securities has to file a draft prospectus with. (a) RBI (b) SEBI (c) Ministry of Finance (d) None of the above 4. deals with issue, allotment and transfer of securities and various aspects relating to company management. (2 marks) (a) Companies Act, 1956 (b) Depositories Act, 1996 (c) Capital Issues (Control) Act, 1947 (d) None of the above 5. For public and rights issues of debt instruments, it is mandatory to obtain credit rating from a registered credit rating agency. True or False. 6. Promoters contribution in case of public issues by unlisted companies and promoters shareholding in case of offers for sale shall not be less than of post issue capital (2 marks) (a) 50% (b) 15% (c) 20% (d) 30%

2 7. The Companies Act, 1956 requires that every public listed company making an IPO of any security for or more shall issue the same only in dematerialized form. (2 marks) (a) Rs. 50 crores (b) Rs. 30 crores (c) Rs. 20 crores (d) Rs. 10 crores 8. Foreign Currency Convertible Bonds (FCCBs) are also known as. (2 marks) (a) Euro Issues (b) Dollar Issues (c) Convertible credit securities (d) Convertible credit bonds 9. Mutual Funds being Public Trusts are governed by the. (2 marks) (a) Indian Trustees Act, 1887 (b) Mutual Trust Act, 1880 (c) Public Trust Act, 1886 (d) Indian Trust Act, A company proposing to list on the NSE must have a minimum paid up equity capital of. (a) Rs. 50 crs. (b) Rs. 20 crs. (c) Rs. 10 crs. (d) Rs. 30 crs. 11. is a clearing member but not a trading member. (a) Clearing Banks (b) Self Clearing Member (c) Clearing Member (d) Custodian 12. A clearing member receives shares during. (a) pay-in (b) pay-out (c) auction (d) funds settlement 13. The arises if a party discharges his obligations but the counterparty defaults. (2 marks) (a) replacement cost risk (b) principal risk (c) systemic risk (d) unsystematic risk 14. The combines the features of cash as well as futures markets. (a) account period settlement (b) rolling settlement (c) T+2 settlement (d) T+1 settlement

3 15. Swaps are a type of derivatives. True or False. 16. Arbitrageurs are one of the participants in the derivatives markets. True or False. 17. Risk averse investors use derivatives for speculation. True or False. 18. are standardized, exchange traded contracts. (2 marks) (a) Swaps (b) Forwards (c) Futures (d) FRAs 19. An exporter would dollar forwards to lock in an exchange rate. (2 marks) (a) sell (b) buy (c) hold (d) exchange 20. An out of the money call option has an intrinsic value of zero. True or False. (3 marks) 21. If you are bullish about a stock, you would call options on the stock. (a) sell (b) buy (c) short (d) write 22. If you are bearish about a stock, you would put options on the stock. (a) sell (b) buy (c) short (d) write 23. is the total number of outstanding contracts that are held by market participants at the end of each day. (a) Outstanding position (b) Outstanding Interest (c) Open position (d) Open Interest

4 24. A company may purchase its own shares, out of. (2 marks) (a) it s promoters money (b) it s Equity Capital (c) Profits (d) Free Reserves 25. A seller of a call option has to pay securities transaction tax. True or False. 26. A buyer of a put option has to pay securities transaction tax. True or False. 27. deals with listing of securities on stock exchanges. (2 marks) (a) NSDL (b) RBI (c) SC(R)R, 1957 (d) SC(R)A, Security A gives a return of 12% with a dispersion of 4%, while security B gives return of 15% with a dispersion of 5%.Which security is more risky? (2 marks) a) Security B b) Both securities are equally risky c) Security A d) Neither of the securities is risky 29. For a security B, if price at the beginning of the year is Rs.50; dividend receivable at the end of the year is Rs.1.5; and the price at the end of the year is Rs.53 then what is the rate of return on the security? (2 marks) a) 0.05 b) 0.03 c) 0.02 d) Appeal against the orders Securities and Exchange Board of India can be made to. [2 Marks] (a) Central Government (b) Securities Appellate Tribunal (c) Registrar of Companies (d) High Court 31. The Capital Market Segment of NSE commenced operations in (a) Sep-96 (b) Nov-94 (c) Aug-96 (d) Nov-96

5 32. The first two characters in ISIN code for a security represents. (a) issuer type (b) security type (c) country code (d) company identity 33. Who provides counter party guarantee for all trades executed on NSEIL? (a) NSE Clearing House (b) NSEIL (c) NSDL (d) NSCCL 34. Clearing and settlement of trades and risk management are central functions of NSCCL. [2 Marks] (a) FALSE (b) TRUE 35. The FIIs can invest in a company upto % of the paid up capital of the company. This percentage can be increased upto the sectoral cap as applicable to the Indian Companies by passing a resolution of its board of directors. [2 Marks] (a) 32 (b) 26 (c) 28 (d) A stockbroker means a member of. (a) SEBI (b) any exchange (c) a recognised stock exchange (d) any stock exchange 37. All open positions in the index futures contracts are daily settled at the [3 Marks] (a) mark-to-market settlement price (b) net settlement price (c) opening price (d) closing price 38. An equity index comprises of. (a) basket of stocks (b) basket of bonds and stocks (c) basket of tradeable debentures 39. Which of the following is not a derivative transaction? (a) An investor buying index futures in the hope that the index will go up. (b) A copper fabricator entering into futures contracts to buy his annual requirements of copper. (c) A farmer selling his crop at a future date (d) An exporter selling dollars in the spot market 40. Prior to Financial Year , transaction in derivatives were considered as

6 speculative transactions for the purpose of determination of tax liability under the Income-tax Act (a) TRUE (b) FALSE 41. A January month Nifty Futures contract will expire on the last of January [2 Marks] (a) Monday (b) Thursday (c) Tuesday (d) Wednesday 42. The value of a call option with a decrease in the spot price. [2 Marks] (a) increases (b) does not change (c) decreases (d) increases or decreases 43. Mutual Funds in India follow a 3-tier structure [2 Marks ] (a) TRUE (b) FALSE 44. Equity Mutual fund investors have to bear Securities Transaction Tax (STT) [ 2 Marks ] (a) TRUE (b) FALSE 45. Which of the following can be the underlying for a commodity derivative contract? (a) Interest Rate (b) Euro-Indian Rupee (c) Gold (d) NIFTY 46. refers to issue of physical delivery against the credit in the demat account of the constituent. (a) Securitisation (b) De-materialisation (c) Re-materialisation (d) Liquidation 47. Exchange Traded Interest Rate Derivates has been introduced in Indian Financial Market by. (2 marks) (a) NSDL (b) RBI (c) SEBI (d) NSCCL 48. Interest payments of the following bonds are based on Wholesale Price Index / Consumer Price Index : (a) SBI Bonds (b) RBI Bonds (c) Zero Coupon bonds (d) Indexed bonds

7 49. Strike Price for a call option on a stock is Rs. 125 and the underlying stock price is Rs If the Premium is Rs.2, the option is. (2 marks) (a) In the money (b) Out of the money (c) At the money (d) Deep in the money 50. A security trades in the Spot market at Rs Money can be invested at 10% p.a. The fair value of a one month futures contract on the security is (2 marks) (a) Rs (b) Rs (c) Rs (d) Rs