Indian Financial System Set 13

Bachelor of Commerce (B Com),

Bachelor of Business Administration in Finance (BBA Finance),

Union Public Service Commission (UPSC)

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This set of Indian Financial System Multiple Choice Questions & Answers (MCQs) focuses on Indian Financial System Set 13

Q1 | ---------- refers to the process of creating an artificial condition in marketin order to push price of particular shares.
  • Cornering
  • Arbitrage
  • Option deal
  • Rigging
Answer: Rigging
Q2 | An attempt to gaining short term profit from the price difference ormovements of securities are called
  • Investment
  • Speculation
  • Hedging
  • All the above
Answer: Speculation
Q3 | Companies (Amendment) bill-1999 restricts buy back of shares upto........... of the paid up capital
  • 50%
  • 20%
  • 25%
  • 60%
Answer: 20%
Q4 | The conditions to be satisfied by a public company for issuing Rightshares are specified in --------------of Companies Act.1956
  • Sec.75
  • S
  • 79 c. Sec.81
  • Sec.91
Answer: 79 c. Sec.81
Q5 | As per SEBI guidelines, a new company which has not completed 12months commercial productions has to issue shares at -------
  • Discount
  • Premium
  • Par
  • any of the above
Answer: Par
Q6 | -------- are eligible to list in OTCEI
  • Small companies
  • Large companies
  • Medium size companies
  • Small and Medium size companies which are not listed in any other
Answer: Small and Medium size companies which are not listed in any other
Q7 | --------- group includes shares of companies which have failed to complywith listing requirements
  • A group
  • B group
  • T group
  • Z group
Answer: Z group
Q8 | Shares of well established and financially sound compnies,with very littleinvestment risk and good history of earnings is known as
  • Alpha shares
  • Blue chip shares
  • Star stock
  • Beta stock
Answer: Blue chip shares
Q9 | In a stock exchange where the ownership, management and trading areconcentrated in a single group, it is called
  • Mutual exchange
  • Recognised exchange
  • Dominant exchange
  • Un -recognised exchange
Answer: Mutual exchange
Q10 | The process in which illiquid assets are converted into marketablesecurities is known as
  • Mutualisation
  • Dematerialisation
  • Rematerialisation
  • Securitisation
Answer: Securitisation
Q11 | Securitisation and Reconstruction of Financial Assets and Enforcement ofSecurity Interest (SARFAESI) Act passed in the year
  • 1992
  • 2002
  • 2005
  • 2000
Answer: 2002
Q12 | ------ is the venture capital assistance at the stage where the projectstarted to fetch profit but not reached in its full efficiency
  • Start up capital
  • Mezzanine capital
  • Bridge capital
  • Seed capital
Answer: Mezzanine capital
Q13 | A merchant bank can claim a charge ------- % as the commission for thewhole issue
  • 5%
  • 2.5%
  • 0.5%
  • 0.25%
Answer: 0.5%
Q14 | ----------- is the process of converting security in electronic form intophysical form
  • Rematerialisation
  • Dematerialisation
  • Demutualisation
  • Mutualisation
Answer: Rematerialisation
Q15 | ----------- is dealing in securities done by those who having access to pricesensitive information.
  • Margin trading
  • Insider trading
  • Price rigging
  • Wash sales
Answer: Insider trading
Q16 | --------- is a calculated move with an expectation to reap huge profit frommarket fluctuations
  • Gambling
  • Speculation
  • Genuine investment
  • None of the above
Answer: Speculation
Q17 | The scheme in which company can allot shares not more than 15% of theissue size, to the public in addition to the shares already offered- is called
  • Right issue
  • ESOPs
  • Green shoe option
  • Bonus issue
Answer: Green shoe option
Q18 | -------- is an offer document is used in public issue made under bookbuilding method.
  • Red herring prospectus
  • Abridged prospectus
  • Statement in lieu of prospectus
  • Shelf prospectus
Answer: Red herring prospectus
Q19 | A system of security trade in which one is allowed to invest in excess ofhis financial capacity by borrowing funds
  • Margin trading
  • Cornering
  • Rigging
  • Arbitrage
Answer: Margin trading
Q20 | -------- means temporary halt of trade in stock exchanges whenever indexmoves upward or downward beyond the specified limits
  • Laddering
  • Cornering
  • Circuit breaking
  • Side by siding
Answer: Circuit breaking
Q21 | Non-voting shares were introduced by Companies (Amendment) bills inthe year
  • 1997
  • 1999
  • 2000
  • 2002
Answer: 1997
Q22 | in the case of -------- bonds, the value is inversely related to short terminterest rates.
  • Fixed rate bonds
  • Inverse float bonds
  • Perpetual bonds
  • Option bonds
Answer: Inverse float bonds
Q23 | Which of the following is /are example of primary or direct financialinstrument
  • Fixed deposit receipt
  • Insurance policies
  • Mutual fund Unit
  • Debentures
Answer: Debentures
Q24 | Which of the following is /are example of Secondary or indirect financialinstrument
  • Equity shares
  • Preference shares
  • Post office saving deposit
  • Bonds
Answer: Post office saving deposit
Q25 | The period at which a Fixed Price Public issue is required to kept open is
  • 3-7 Working days
  • 5-14 Working days
  • 3-10 Working days
  • 7-21 Working days
Answer: 3-10 Working days
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