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MCQ Questions Exam for SAPM

Total questions: 16

Worksheet time: 35mins

Name
Class
Date
1.

Which feature of an investment programme primarily protects an investor against erosion of real value due to rising prices?

a)

Liquidity

b)

Capital growth

c)

Safety

d)

Stability of purchasing power

2.

An investment decision based on comparison of intrinsic value with current market price is most closely associated with:

a)

Technical analysis

b)

Speculation

c)

Fundamental analysis

d)

Arbitrage trading

3.

Which of the following best differentiates investment from speculation?

a)

A. Time horizon

b)

B. Use of borrowed funds

c)

C. Level of market information

d)

D. Primary emphasis on safety of capital

4.

Indirect investing activities mainly differ from direct investing because:

a)

Investors bear no risk

b)

Investors invest only in government securities

c)

Investment decisions are taken by financial intermediaries

d)

Returns are fixed and guaranteed

5.

Which of the following is a titular investment?

a)

Gold jewellery

b)

Land and buildings

c)

Insurance policy

d)

Equity share certificate

6.

6. The capital market primarily deals with:

a)

short-term securities

b)

long-term securities

c)

consumer goods

d)

foreign exchange

7.

Which market provides liquidity and price discovery for already issued securities?

a)

Primary market

b)

New issue market

c)

Money market

d)

Secondary market

8.

Which of the following is not a function of the secondary market?

a)

Liquidity

b)

Investor protection

c)

Price determination

d)

Issue of new securities

9.

The method of floating new issues where shares are offered first to existing shareholders is called:

a)

Offer for sale

b)

Placement

c)

Public issue

d)

Rights issue

10.

Which problem in the new issue market directly affects investor confidence?

a)

Over-capitalization

b)

Functional gap

c)

Inordinate delay in allotment

d)

Risk aversion

11.

According to the Securities Contracts (Regulation) Act, 1956, a stock exchange is primarily an:

a)

A. Informal association of traders

b)

B. Private company

c)

C. Organized body regulating securities trading

d)

D. Government-owned institution

12.

Which body has the power to grant and withdraw recognition of stock exchanges in India?

a)

RBI

b)

SEBI alone

c)

Stock Exchange Governing Board

d)

Central Government

13.

Listing of securities mainly aims to:

a)

Increase speculation

b)

Reduce cost of capital

c)

Ensure liquidity and fair dealings

d)

Avoid corporate disclosure

14.

A jobber differs from a broker mainly because a jobber:

a)

Acts on behalf of clients

b)

Earns brokerage

c)

Trades on own account and earns price spread

d)

Cannot influence prices

15.

Which type of order instructs a broker to buy or sell a security at the best available price?

a)

Limit order

b)

Stop order

c)

Open order

d)

At-best order

16-25.

Case Study:

Prakash Tech Solutions Ltd.

Prakash Tech Solutions Ltd. is a mid-sized IT services company based in Bengaluru. The company plans to raise long-term funds for expansion into AI-based products. It decides to issue equity shares to the public and later get them listed on a recognized stock exchange. Ramesh, an individual investor with moderate risk appetite, wants stable income, capital appreciation, and liquidity while investing in Prakash Tech shares. He evaluates different investment alternatives and places orders through a registered broker.

16.

What is the primary reason Prakash Tech Solutions Ltd. plans to raise long-term funds?

a)

To expand into AI-based products

b)

To increase employee salaries

c)

To open new offices in Bengaluru

d)

To invest in blockchain technology

17.

How does Prakash Tech Solutions Ltd. plan to raise funds for expansion?

a)

By issuing equity shares to the public

b)

By taking a bank loan

c)

By issuing bonds

d)

By seeking venture capital

18.

What is Ramesh's investment goal while considering Prakash Tech shares?

a)

Stable income, capital appreciation, and liquidity

b)

High risk and high returns

c)

Short-term gains

d)

Tax benefits

19.

Who assists Ramesh in placing orders for Prakash Tech shares?

a)

A registered broker

b)

A financial advisor

c)

A stock exchange employee

d)

A bank representative

20.

Where is Prakash Tech Solutions Ltd. based?

a)

Bengaluru

b)

Mumbai

c)

Delhi

d)

Hyderabad

21.

Ramesh compares the current market price of Prakash Tech shares with the present value of future earnings. This approach helps him determine:

a)

Face Value

b)

Market Capitalization

c)

Intrinsic Value

d)

Book Value

22.

After the public issue, Prakash Tech shares are traded on NSE. The major benefit of this listing to investors is:

a)

Reduction in company risk

b)

Guaranteed dividends

c)

Liquidity and marketability of shares

d)

Elimination of speculation

23.

Ramesh places an order with his broker stating the maximum price he is willing to pay for the shares. This type of order is called:

a)

At Best Order

b)

Stop Order

c)

Open Order

d)

Limit Order

24.

The broker who executes Ramesh’s trade acts as an agent and earns commission, not by price differences. This broker is a:

a)

Jobber

b)

 Tarawaniwala

c)

Commission Broker

d)

Authorized Clerk

25.

Prakash Tech shares are admitted for trading only after fulfilling SEBI norms. This process is known as:

a)

Underwriting

b)

Public Issue

c)

Listing of Securities

d)

Dematerialization