Financial market Quiz-2

The membership of a stock exchange is well-regulated and its dealings are well-defined according to the existing legal framework. This gives investors the advantage of:

• Liquidity of securities

• Determination of pricing of securities

• Safety of transaction

• None of these

Answer explanation

The membership of a stock exchange is well-regulated and its dealings are well-defined, ensuring the safety of transactions.

Primary and secondary markets __________ .

• Compete with each other

• Complement each other

• Function independently

• Control each other

Answer explanation

Primary and secondary markets complement each other by providing liquidity and facilitating the transfer of securities.

Which of the following is not a function of SEBI?

• Registration of brokers and sub-brokers

• Undertaking measures to develop finanical markets

• Prohibition of insider trading

• Holding securities in electronic form.

Answer explanation

SEBI does not hold securities in electronic form.

National Stock Exchange in India was recognized as stock exchange in the year.

• April 1992

• march 1993

• March 1994

• April 1993

Answer explanation

The National Stock Exchange in India was recognized as a stock exchange in April 1993. This is the correct choice.

Raj , a holder of 5000 shares of Narayan Ltd., is offered the proposal to buy one new share for every ten shares held by him. Which method of floatation new issue is discussed here?

• Offer through Prospectus

• Rights Issue

• Private Placement

• Offer for Sale

Answer explanation

The method of floatation new issue discussed here is Rights Issue, where Raj is offered one new share for every ten shares held by him.

Which of the following is an objective of SEBI?

• Training of intermediaries of securities market

• Protecting the rights and interest of investors

• Promotion of fair practices and code of conduct in securities market

• Levying fees/charges for carrying out the purpose of the Act

Answer explanation

SEBI's objective is to protect the rights and interests of investors by promoting fair practices and code of conduct in the securities market.

Which of the following is a method of floatation in primary market?

• Offer for sale

• Private placement

• Rights issue

• All of these

Answer explanation

All of these methods, including offer for sale, private placement, and rights issue, are used for flotation in the primary market.

Which of the following is a regulatory function of SEBI?

• Regulation of takeover bids by companies

• Controlling insider trading

• Taking steps for investors protection

• Conducting research and publishing information useful to all market participants

Answer explanation

SEBI regulates takeover bids by companies.

Which of the following is a function of Stock Exchange?

• Pricing of securities

• Providing scope for speculation

• Safety of transactions

• All of these

Answer explanation

Stock Exchange functions include pricing of securities, providing scope for speculation, and ensuring safety of transactions. All of these options are correct.

In which year was the SEBI established by the Government of India?

• 1980

• 1988

• 1992

• 1993

Answer explanation

SEBI was established by the Government of India in 1988 to regulate the securities market. This makes 1988 the correct choice.