Understanding the Stock Market - Module 1

What is the primary objective of SEBI?

• To increase corporate profits.

• To manage government debt.

• To protect investors and regulate the securities market.

• To promote international trade.

List two functions of SEBI.

• Setting interest rates

• Conducting monetary policy

• 1. Regulating stock exchanges 2. Protecting investor interests

• Issuing government bonds

What powers does SEBI have in regulating the stock market?

• SEBI is responsible for issuing currency notes.

• SEBI has the authority to regulate international trade.

• SEBI can set interest rates for loans.

• To regulate stock exchanges, oversee market intermediaries, enforce compliance, conduct investigations, and impose penalties.

Define the capital market.

• The capital market is a financial market for buying and selling long-term securities.

• A platform for buying and selling real estate.

• A market for trading short-term loans.

• A venue for exchanging commodities and goods.

What is the role of the primary market?

• The primary market facilitates the issuance of new securities to raise capital for companies.

• The primary market is where existing securities are traded.

• The primary market is used for buying and selling commodities.

• The primary market is focused on providing loans to individuals.

Explain the significance of the secondary market.

• The secondary market eliminates all investment risks.

• The secondary market is primarily for new stock issuances.

• The secondary market is only for government bonds.

• The secondary market facilitates liquidity, price discovery, and risk management for investors.

Which of the following entities acts as a custodian of securities in the dematerialized form?

• Registrar

• Depository

• Merchant Banker

• Stock Broker

MCX primarily facilitates trading in which of the following

• Equity Shares

• Government Bonds

• Commodities like Gold, Silver, and Crude Oil

• Foreign Exchange

What does BSE stand for?

• Boston Stock Exchange

• Bombay Stock Exchange

• Bangladesh Stock Exchange

• Bangalore Stock Exchange

What does NSE stand for?

• National Stock Entity

• National Stock Exchange

• National Savings Exchange

• National Securities Exchange