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Financial market Quiz-1

Total questions: 20

Worksheet time: 21mins

Name
Class
Date
1.

One of the common irregularities noted by the Securities and Exchange Board of India during the inspection of a stock exchange was that it was dealing with unregistered sub-brokers. Identify the related function of Securities and Exchange Board of India.

a)

development function

b)

regulatory function

c)

protective function

d)

none of the above

2.

Identify the correct sequence of steps to be followed in the trading procedure at the Stock Exchange.

a)

Opening a trading account and Demat account, Placing an order, Settlement of order, Execution of order

b)

Settlement of order, Opening a trading account and Demat account, Placing an order, Execution of order

c)

Opening a trading account and Demat account, Placing an order, Execution of order, Settlement of order

d)

Placing an order, Opening a trading account and Demat account, Execution of order, Settlement of order

3.

It serves as an intermediary between the investor and the depository who is authorised to maintain the accounts of dematerialised shares.

a)

Depository participant

b)

Depository

c)

Stock exchange

d)

None of the above

4.

Stock exchanges provide an opportunity for investors to disinvest and invest. Identify the related function of the stock exchange.

a)

Providing scope for speculation

b)

Providing liquidity and marketability to existing securities

c)

Pricing of security

d)

Spreading of the equity culture

5.

Stock Exchange works as a mechanism for the valuation of securities through the forces of demand and supply. Identify the related function performed by the stock exchanges.

a)

Providing scope for speculation

b)

Providing liquidity and marketability to existing securities

c)

Pricing of security

d)

Spreading of the equity culture

6.

Under this method of floatation in the primary market, a subscription is invited from the general public to invest in the securities of a company through the issue of advertisement.

a)

Private placement

b)

Offer through a prospectus

c)

Offer for sale

d)

All of the above

7.

A company can raise capital through the primary market in the form of _____.

a)

Equity shares

b)

Preference shares

c)

Debentures

d)

All of the above

8.

Who issues a treasury bill?

a)

Any nationalised bank

b)

Any private sector bank

c)

Reserve Bank of India

d)

All of the above

9.

Which one of the following is not a function of financial market?

a)

Mobilisation of savings

b)

Price determination of securities

c)

Floating of companies

d)

Lowering transaction cost

10.

Primary and secondary markets develop simultaneously because they

a)

complement each other.

b)

complement with each other

c)

control each other.

d)

function independently.

11.

Secondary market is in the form of

a)

stock exchange.

b)

money market

c)

new issue market.

d)

commercial exchange

12.

___ is the market which helps existing investors to sell their securities.

a)

Primary market

b)

Secondary market

c)

Capital market

d)

Commodity market

13.

___ is the institution which provides a platform for trading of existing securities having long-term maturity.

a)

SEBI

b)

WTO

c)

Stock exchange

d)

RBI

14.

After the trade has been executed, the broker issues a Contract Note to the investor within

a)

52 hours

b)

24 hours

c)

48 hours

d)

12 hours

15.

The mandatory detail that an investor has to provide to the broker at the time of opening a demat account is

a)

Date of birth and address

b)

PAN number

c)

Residential status (Indian/NRI)

d)

Bank account details.

16.

It acts like a bank and keeps securities in electronic form on behalf of the investor

a)

Depository Participant

b)

Depository

c)

Stock exchange

d)

None of the above

17.

The process of holding shares in electronic form is known as

a)

Demutualisation

b)

Dematerialisation

c)

Speculation

d)

None of the above

18.

PK Enterprises Limited has sold an entire lot of 5,00,000 equity shares @ ₹9 each to Prosperous Bank Private Limited. The bank in return will offer the shares to general public for subscription @ ₹11 per share. Identify the method of floatation being described in the given lines.

a)

Private placement

b)

Offer through prospectus

c)

Offer for sale

d)

Rights issue

19.

When securities are allotted to institutional investors & some selected individuals is referred to as _________.

a)

Initial public offer

b)

Offer through prospectus

c)

Private placement

d)

Offer for sale

20.

SEBI was established in

a)

1988

b)

1992

c)

1998

d)

none of the above