MII 002

Which of the following is a key focus of stock exchange inspections?

• Maximizing profits for brokers

• Preventing market manipulation and fraud

• Controlling interest rates

• Promoting high-frequency trading

Which regulatory body is responsible for overseeing the New York Stock Exchange (NYSE)?

• Securities and Exchange Commission (SEC)

• Federal Reserve System

• Securities and Exchange Board of India

• Reserve Bank of India

Which of the following is not typically a focus area during a stock broker inspection?

• Financial stability and solvency of the brokerage firm.

• Compliance with securities laws and regulations

• Effectiveness of the broker's advertising campaigns

• Customer fund protection and segregation.

Which system is commonly used for the settlement of government securities in India?

• Rolling Settlement

• T+2 Settlement

• Negotiated Dealing System (NDS)

• NSE Clearing Corporation

What is the primary purpose of the clearing and settlement process in the Indian stock market?

• To facilitate trading of securities

• To provide a platform for initial public offerings (IPOs)

• To ensure the timely and secure transfer of securities and funds

• To regulate stock market activities

What is a margin call in the stock market?

• A request for additional funds from a broker to cover potential losses

• A dividend payment to shareholders

• A government tax on stock transactions

• A stock market holiday

What is the primary purpose of margin trading in the stock market?

• To minimize investment risk

• To maximize potential profits

• To encourage long-term investing

• To promote market stability

What is the minimum equity required in a margin account to avoid a margin call if the Maintenance margin is 25% and the total position value is Rs. 12,000?

• Rs. 3000

• Rs. 6000

• Rs. 9000

• Rs. 18000

If an investor shorts 200 shares of a stock at Rs. 50 per share and the initial margin requirement is 15%,

how much collateral must the investor put up?

• Rs, 2000

• Rs. 1500

• Rs. 3000

• Rs. 2500

What is the maximum possible leverage for a trade with a 20% initial margin requirement?

• 2 : 1

• 5 : 1

• 4 : 1

• 20 : 1