Capital Market

Multiple and single Choice question-Answer
Question: As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid from the primary market during this year?
Correct Answer: 15000 crores

Question: Salient features of Hire Purchase are -
Correct Answer: The finance company purchases the equipment from the equipment supplier and lets it on hire to the hirer, The hire may required to make a down payment and the balance can be repaid in maximum 60 months, The interest is calculated on the basis of flat rate of interest, During the currency of the contract the hirer can opt for an early repayment and purchase the asset.

Question: MMMFs invest the funds collected from the investors in instrument like
Correct Answers: Treasury bills and Goverment securities, Call/Notice Money, Commercial bills, Commercial papers and Certificates of deposits.

Question: What do you understand by capital markets ?
Correct Answer: Market for long term funds and investments in long term instruments

Question: What is Sweat equity ?
Correct Answer: Equity shares issued by the company to the employees , Issued to directors at a discount , For consideration other than cash for providing now

Question: When can an offer be withdrawn?
Correct Answer: Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion of board

Question: What is the amount invested by the FII's in the Indian Capital market?
Correct Answer: US$14 bn

Question: What are the major factors influencing portfolio decisions?
Correct Answer: Investor characteristics , Liquidity needs and tax considerations , Investment and interest rate risk

Question: What is the main objective of the promoting Discount and finance house of India (DFHI) ?
Correct Answer: Increasing transactions of money market assets

Question: What was the reason for not introducing rolling settlements earlier in India?
Correct Answer: Lack of depositories

Question: What are the norms for Approval of Housing finance companies by NHB?
Correct Answer: Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors

Question: What are the limitations of refinance facility?
Correct Answer: Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to exceed 15 % of NOF of NHB

Question: What must be the quality of a good portfolio manager?
Correct Answer: Sound General knowledge , Analytical ability and marketing skills , Experience

Question: What is a Point of sale terminal?
Correct Answer: Mechanism for collecting debit card payments

Question: What are the facilities offered by NSDL?
Correct Answer: Enable surrender and withdrawal of securities to and from the depository , Maintain the investor's holdings in an electronic form , Effect settlement of securities traded on exchanges

Question: When is the share of the target company deemed to be frequently traded
Correct Answer: If the turnover in the preceding 6 months prior to the month in which PA is made is m ore than 5%

Question: Who can buy or sell securities on containing the certificate of registration?
Correct Answer: Underwriter , Merchant banker , Investment advisor

Question: Which company was responsible for spreading the equity culture in India ?
Correct Answer: Reliance Industries

Question: What are participatory notes?
Correct Answer: Instruments used by foreign funds , Instruments used but investors not register with SEBI , Investors interested in taking exposure in Indian securities

Question: What was the turning point in the working of Indian capital markets?
Correct Answer: Establishment of NSE

Question: What is Discretionary Portfolio management service ?
Correct Answer: Client gives his money for investment to the portfolio manager and leaves it to him to make all the investment decisions.

Question: Who is required to make a public announcement ?
Correct Answer: Acquirer

Question: What is the time frame to submit a report to SEBI for acquisition transactions arising out of firm allotment in public issues right issues etc?
Correct Answer: 21 days

Question: What are the objectives of NHB?
Correct Answer: To promote, establish, aid in promotion and support of housing finance institutions , To make loans advances or render any other form of financial assistance to focusing finance institutions , To guarantee financial obligations

Question: An AMC fees :-
Correct Answer: To be borne by the individual schemes

True/False
Question: SEBI has taken an action to ban on Badla.
Correct Answer: True

Question: SEBI can investigate and inspect books of accounts and records of insiders.
Correct Answer: True

Question: The depository can legally transfer beneficial ownership.
Correct Answer: True

Question: The issue price for placement portion and net offer to public are not the same.
Correct Answer: False

Question: The buy back of shares by Indian corporates has been very successful in India.
Correct Answer: False

Question: A portfolio manager need not necessarily sell or purchase securities separately for each client.
Correct Answer: False

Question: MIBOR is a security. Derivatives based on this interest rate have legal recognition under SCRA.
Correct Answer: False

Question: SEBI cannot investigate the affairs of mutual funds and their trustees and asset management companies.
Correct Answer: False

Question:A bidder can request for a transaction registration slip as the proof of his having entered the bid.
Correct Answer: True

Fill in the Blanks:
Question: A mutual fund scheme shall not invest more than ________ of its NAV in unrated debt by a single issuer.

Question: In case of a public issue by a listed company participation by promoters in the proposed issues in excess of the required minimum percentage shall also be looked in for a period of ________.
Correct Answer: 1 year
Correct Answer: 0.1

Question: The NSE Nifty index comprises of ________companies.
Correct Answer: 50

Question: In February 2004, UTI sought permission of SEBI to prematurely close ________ schemes.
Correct Answer: 7

Question: For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
Correct Answer: 2

Question: The continuing growth in ________ was one of the factors that contributed to the growth of credit rating.
Correct Answer: Information technology

Question: Securities offered in a pledge can change if a ________ agrees.
Correct Answer: Pledgee

Question: SENSEX is calculated using ________ method.
Correct Answer: Market capitalization

Question: AA rated companies can raise ________ of its net worth.
Correct Answer: 2.5 times

Question: AAA rated companies can raise ________ of its net worth.
Correct Answer: 4 times

Question: In the book building process pricing is determined on the basis of ________.
Correct Answer: Investor feedback