Ncfm - Capital Market Dealer's Module Quiz
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Embark on a journey into the intricate world of capital markets with our NCFM Capital Market Dealer's Module Quiz. Tailored for financial professionals and enthusiasts, this quiz delves into the essential knowledge required for mastering the Capital Market Dealer's Module.
Test your understanding of market operations, risk management, and regulatory compliance. Whether you're a seasoned financial expert or someone exploring the nuances of capital markets, this quiz offers an opportunity to assess your expertise. Navigate through questions that cover trading mechanisms, settlement processes, and the regulatory framework governing capital markets.
Take the quiz, challenge your comprehension, and enhance your proficiency Read morein dealing with the complexities of capital markets. Sharpen your skills, gain confidence, and elevate your expertise with this comprehensive quiz on the NCFM Capital Market Dealer's Module.
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Questions and Answers
- 1.
A trading member shall be deemed guilty of misconduct if he fails to _______
- A.
Submit its audited accounts to the Exchange
- B.
Pay its subscription, fees, arbitration charges or any other money which may be due to the exchange
- C.
To submit or makes any false or misleading statement in its clearing forms
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
A trading member can be deemed guilty of misconduct if they fail to submit their audited accounts to the Exchange, pay their subscription, fees, arbitration charges, or any other money due to the exchange, or if they submit false or misleading statements in their clearing forms. These actions or omissions go against the expected standards and responsibilities of a trading member and can be considered as misconduct.Rate this question:
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- 2.
The Message Window in the NEAT system allows a user to view messages broadcast by the Exchange such as, __________
- A.
Corporate actions
- B.
Market news
- C.
Auctions related information
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The Message Window in the NEAT system allows a user to view messages broadcast by the Exchange such as corporate actions, market news, and auctions related information. This means that all of the given options are correct and can be viewed in the Message Window.Rate this question:
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- 3.
100 share of Reliance Ltd. are purchased on Monday. Provided there are no holidays in between, settlement should take place on ______ ?
- A.
Wednesday (T+2)
- B.
Tuesday (T+1)
- C.
Thursday (T+3)
- D.
Friday (T+4)
Correct Answer
A. Wednesday (T+2)Explanation
Settlement for the purchase of shares typically takes place on T+2, which means two business days after the trade date. In this case, the shares were purchased on Monday (T), so the settlement would occur on Wednesday (T+2).Rate this question:
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- 4.
______ is a volume related order condition.
- A.
An order with a limit price condition only
- B.
An order with a stop loss only
- C.
An order with a Disclosed Quantity (DQ)
- D.
None of the above
Correct Answer
C. An order with a Disclosed Quantity (DQ)Explanation
An order with a Disclosed Quantity (DQ) is a volume related order condition. This means that when placing the order, the trader specifies the minimum quantity that should be displayed to the market. The remaining quantity is kept hidden. This allows the trader to disclose only a certain portion of the total order volume, while keeping the rest undisclosed.Rate this question:
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- 5.
The branch manager receives End of Day reports for _________.
- A.
His own orders only
- B.
All dealers under the trading member
- C.
All the dealers under that branch
- D.
Any authorized user
Correct Answer
C. All the dealers under that branchExplanation
The branch manager receives End of Day reports for all the dealers under that branch. This means that the reports include information from all the dealers who work under the same branch as the manager.Rate this question:
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- 6.
The following facility allows the user to have a drop down list of client codes at the account field:
- A.
Client List Master
- B.
Client Database Master
- C.
Client Code Master
- D.
Client Master Maintenance
Correct Answer
D. Client Master MaintenanceExplanation
Client Master Maintenance is the correct answer because it is the facility that allows the user to have a drop down list of client codes at the account field. The other options, such as Client List Master, Client Database Master, and Client Code Master, do not specify that they provide this specific functionality.Rate this question:
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- 7.
When the user invokes the order entry screen, the field(s) that are (is) taken as default are (is) __________.
- A.
Symbol
- B.
Series
- C.
Book Type
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
When the user invokes the order entry screen, all of the fields, including Symbol, Series, and Book Type, are taken as default values. This means that when the user opens the order entry screen, these fields will already have pre-filled values, which can be modified if needed.Rate this question:
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- 8.
In case the security has not been traded on a particular day, ________ at the NSE is to be considered as the closing price.?
- A.
The average closing price for the last one week
- B.
The theoretical closing price
- C.
The latest available closing price
- D.
None of the above
Correct Answer
C. The latest available closing priceExplanation
If the security has not been traded on a particular day, the latest available closing price at the NSE is to be considered as the closing price. This means that if there is no trading activity for a security on a specific day, the closing price from the most recent day where trading occurred will be used as the closing price for that day. This ensures that there is still a closing price available for the security, even if there was no trading activity on a particular day.Rate this question:
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- 9.
Auction is held in PQR for 10,000 shares. The closing price of PQR on that day was Rs.259.00 The last traded price of PQR on that day was Rs.254.0 The close price of PQR last Friday was Rs.255.00 The previous day's close price of PQR was Rs.264.00 What is the maximum allowable price at which the member can put a sell order in the auction for PQR? (Assume Price Band applicable for Auction market is +/ - 20%)
- A.
Rs. 316.80
- B.
Rs. 390.65
- C.
Rs. 364
- D.
Rs. 394
Correct Answer
A. Rs. 316.80Explanation
The maximum allowable price at which the member can put a sell order in the auction for PQR is Rs. 316.80. This is calculated by applying the price band of +/- 20% to the previous day's close price of Rs. 264.00. Adding 20% to Rs. 264.00 gives Rs. 316.80, which is the maximum allowable price.Rate this question:
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- 10.
A trading member on the NSE, has a branch order value of Rs. 950 lakh for his Mumbai branch and Rs. 600 lakh for Delhi branch. Mumbai branch has two users 'X' and 'Y' with user order value limits of Rs. 300 lakh and Rs. 400 lakh respectively. Delhi branch has one user 'Z' with user order value limit of Rs. 550 lakh. The member applies for a new user at Mumbai. What is the maximum user order value that can be set for the new user?
- A.
Rs. 100 lakh
- B.
Any amount, as there is no restriction on User Order Value
- C.
Rs. 250 lakh
- D.
Rs. 150 lakh
Correct Answer
C. Rs. 250 lakhExplanation
The maximum user order value that can be set for the new user is Rs. 250 lakh. This is because the Mumbai branch has a total branch order value of Rs. 950 lakh, and the existing users 'X' and 'Y' have order value limits of Rs. 300 lakh and Rs. 400 lakh respectively. Therefore, the remaining order value that can be allocated to the new user is Rs. 250 lakh.Rate this question:
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- 11.
Securities and funds pay out takes place on ______ working days after the trade date
- A.
‘T+3’
- B.
‘T+2’
- C.
‘T+1’
- D.
Within 24 hours of sale
Correct Answer
C. ‘T+1’Explanation
The correct answer is 'T+1'. In securities and funds trading, the term 'T+1' refers to the settlement period, which is the number of working days after the trade date when the pay out takes place. In this case, the pay out occurs one working day after the trade date.Rate this question:
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- 12.
NSE has implemented ______________ in compulsory rolling settlement with effect from July 02, 2001.
- A.
Securities-based market-wide circuit breakers
- B.
Index-based market-wide circuit breakers
- C.
Market-wide based securities-wise circuit breakers
- D.
None of the above
Correct Answer
B. Index-based market-wide circuit breakersExplanation
The correct answer is "index-based market-wide circuit breakers". This means that the NSE (National Stock Exchange) has implemented circuit breakers that are triggered based on the movement of the overall market index. These circuit breakers are designed to temporarily halt trading in the event of significant market declines in order to prevent panic selling and provide time for investors to reassess their positions.Rate this question:
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- 13.
The c lients introduced by an authorised person to a trading member, would be required to deliver securities and make payments directly in the trade name of the trading member. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because when clients are introduced by an authorized person to a trading member, they are required to deliver securities and make payments directly in the trade name of the trading member. This means that the clients cannot make the transactions in their own name but must use the trading member's name.Rate this question:
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- 14.
Security wise User Order Quantity Limit (SUOQL) can be modified anytime during trading hours. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The given statement is true. Security wise User Order Quantity Limit (SUOQL) can be modified anytime during trading hours. This means that users have the flexibility to adjust their order quantity limit as per their requirements and market conditions. This allows them to effectively manage their trading activities and mitigate risks.Rate this question:
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- 15.
______ can be traded in the Limited Physical Market?
- A.
Illiquid shares
- B.
Futures and Options
- C.
Odd lots
- D.
Government Securities
Correct Answer
C. Odd lotsExplanation
Odd lots can be traded in the Limited Physical Market. Odd lots refer to a number of shares that is less than the standard trading unit or board lot. These odd lots are usually considered less liquid and may have difficulty finding buyers or sellers in the regular market. Therefore, a separate market, known as the Limited Physical Market, allows for the trading of odd lots. In this market, investors can buy or sell odd lots of shares, which provides them with the opportunity to trade smaller quantities that may not be available in the regular market.Rate this question:
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- 16.
Securities Delivered Statement: This statement provides information on ______?
- A.
Delivering centre
- B.
Total number of shares to deliver for each security
- C.
Quantity delivered and quantity of shares delivered short
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The Securities Delivered Statement provides information on all of the above options, including the delivering centre, the total number of shares to deliver for each security, and the quantity delivered and quantity of shares delivered short. This statement is comprehensive and includes all relevant information regarding the delivery of securities.Rate this question:
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- 17.
If a client buys shares worth Rs. 5,25,000 and sells shares worth Rs. 4,75,000 , (Brokerage rate -2%) through a broker, then the maximum brokerage payable to broker is ___.
- A.
Rs. 25,000
- B.
Rs. 15,000
- C.
Rs. 10,500
- D.
Rs. 20,000
Correct Answer
C. Rs. 10,500Explanation
If a client buys shares worth Rs. 5,25,000 and sells shares worth Rs. 4,75,000 through a broker with a brokerage rate of 2%, the maximum brokerage payable is calculated based on the higher transaction value. In this case, the maximum brokerage would be 2% of the purchase transaction value, which amounts to Rs. 10,500. This is the highest amount the client would pay as brokerage for these transactions.Rate this question:
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- 18.
An advertisement released by a trading member can contain a recommendation regarding purchase or sale of any particular share or security of any company. True or False?
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
False. An advertisement released by a trading member cannot contain a recommendation regarding the purchase or sale of any particular share or security of any company.Rate this question:
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- 19.
No payment for transaction in which a Trading Member is taking position as a principal will be allowed to be made from the client’s account?
- A.
True, unless his clients approves the payment
- B.
True
- C.
True, only if his clients are making payments on time
- D.
False
Correct Answer
B. TrueExplanation
In order to ensure transparency and protect the interests of clients, a trading member cannot use the client's account to make payments for transactions in which they are taking a position as a principal. However, if the client approves the payment, then it is allowed. Therefore, the statement "No payment for transaction in which a Trading Member is taking position as a principal will be allowed to be made from the client's account" is true.Rate this question:
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- 20.
The Trading Members shall keep the dematerialised securities of Constituents in a separate beneficiary account distinct from the beneficiary account maintained for holding their own dematerialised securities. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because trading members are required to keep the dematerialised securities of constituents in a separate beneficiary account from their own dematerialised securities. This ensures that the securities of constituents are not mixed with the trading members' own securities and helps maintain transparency and accountability in the trading process.Rate this question:
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- 21.
___________ assumes the counter party risk of each member and guarantees financial settlement.
- A.
SEBI
- B.
Central Depository Services Ltd. (CDSL)
- C.
The National Depository Services Ltd. (NSDL)
- D.
The National Securities Clearing Corporation Ltd. (NSCCL)
Correct Answer
D. The National Securities Clearing Corporation Ltd. (NSCCL)Explanation
The National Securities Clearing Corporation Ltd. (NSCCL) assumes the counterparty risk of each member and guarantees financial settlement. This means that if a member fails to fulfill their financial obligations, NSCCL will step in and ensure that the settlement is completed. This provides a level of security and confidence to the members of the clearing corporation. SEBI is the Securities and Exchange Board of India, which is the regulatory body for the securities market in India. Central Depository Services Ltd. (CDSL) and The National Depository Services Ltd. (NSDL) are depository organizations that facilitate the holding and transfer of securities in electronic form.Rate this question:
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- 22.
What does 'OM' indicate as an activity in the 'Activity Log' screen in the NEAT system?
- A.
Order Matched
- B.
Order Cancelled
- C.
Trade Modified
- D.
Order Modified
Correct Answer
D. Order ModifiedExplanation
In the 'Activity Log' screen in the NEAT system, 'OM' indicates an activity of 'Order Modified'. This means that there has been a change or modification made to an existing order in the system. It could be a change in the quantity, price, or any other parameter of the order. This activity log helps in tracking and monitoring the changes made to orders for better transparency and record-keeping.Rate this question:
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- 23.
One of the requirements for admission to membership on the NSE is to pass an on-line examination under NSE’s Certification in Financial Markets (NCFM).
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The given statement is true because it states that passing an online examination under NSE's Certification in Financial Markets (NCFM) is one of the requirements for admission to membership on the NSE. This implies that individuals who want to become members of the NSE need to successfully complete the NCFM certification exam.Rate this question:
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- 24.
Where a recognised stock exchange acting in pursuance of any power given to it by its bye-laws, refuses to list the securities of any company, the company shall be entitled to be furnished with reasons for such refusal and the company may appeal to the _________ against such refusal.
- A.
SEBI
- B.
Recognized stock exchange
- C.
Securities Appellate Tribunal (SAT)
- D.
High Court
Correct Answer
C. Securities Appellate Tribunal (SAT)Explanation
When a recognized stock exchange refuses to list the securities of a company, the company has the right to know the reasons for the refusal. In such cases, the company can appeal to the Securities Appellate Tribunal (SAT) against the stock exchange's decision. SAT is an appellate body that hears and resolves appeals related to securities market regulations. Therefore, SAT is the appropriate authority for the company to approach and challenge the stock exchange's refusal to list their securities.Rate this question:
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- 25.
Surveillance and Control (SURCON) is that period after market close during which, the users have _______ only.
- A.
Order entry access
- B.
Trade cancellation access
- C.
Trade modification access
- D.
Inquiry access
Correct Answer
D. Inquiry accessExplanation
During the period of Surveillance and Control (SURCON) after market close, users are only allowed to have inquiry access. This means that they can view and gather information about the market and their own trades, but they do not have the ability to enter new orders, cancel trades, or modify existing trades. This restriction is put in place to ensure that the market remains stable and secure during this time when trading is not actively taking place.Rate this question:
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- 26.
A stock-broker shall not encourage sales or purchases of securities with the sole object of generating brokerage or commission. Is the above statement True or False, under the Code of Conduct Guidelines prescribed under SEBI (Stock Brokers & Sub-brokers) Regulations, 1992.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true under the Code of Conduct Guidelines prescribed under SEBI (Stock Brokers & Sub-brokers) Regulations, 1992. According to these guidelines, a stock-broker is prohibited from encouraging sales or purchases of securities solely for the purpose of generating brokerage or commission. This ensures that stock-brokers prioritize the best interests of their clients rather than their own financial gain.Rate this question:
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- 27.
At the end of the trade cycle, the trades are _______ to determine the obligations of the trading members to deliver securities/funds as per settlement schedule.
- A.
Grossed
- B.
Aggregated
- C.
Netted
- D.
Offset
Correct Answer
C. NettedExplanation
At the end of the trade cycle, the trades are "netted" to determine the obligations of the trading members to deliver securities/funds as per the settlement schedule. Netting refers to the process of offsetting the buy and sell transactions of the trading members to determine the net position, which reduces the overall number of transactions and simplifies the settlement process.Rate this question:
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- 28.
The NSCCL interposes itself as a central counterparty between the counterparties to trades and nets the positions so that a member has security wise net obligation to receive or deliver a security and has to either pay or receive funds. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The explanation for the correct answer "True" is that the NSCCL (National Securities Clearing Corporation Limited) acts as a central counterparty between the counterparties involved in trades. It helps to streamline the process by netting the positions, meaning that it calculates the overall position of each member and determines their net obligation to either receive or deliver a security. Additionally, it ensures that the necessary funds are either paid or received by the member. Therefore, the statement is true.Rate this question:
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- 29.
For liquid securities, the VaR margins are based on the ________ of the Security.
- A.
Volatility
- B.
Returns
- C.
Liquidity
- D.
Exposure limit
Correct Answer
A. VolatilityExplanation
The VaR (Value at Risk) margins for liquid securities are based on the volatility of the security. Volatility refers to the degree of variation or fluctuation in the price or value of a security over time. Higher volatility indicates greater potential for price swings, which increases the risk associated with the security. Therefore, using volatility as a basis for VaR margins helps to account for the potential losses that may occur due to price fluctuations in liquid securities.Rate this question:
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- 30.
The stamp duty on transfer of demat securities has been waived. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true. The stamp duty on transfer of demat securities has been waived, meaning that there is no longer a fee or tax imposed on the transfer of securities held in dematerialized form. This is a beneficial development for investors as it reduces the cost associated with transferring securities and encourages more trading activity in the market.Rate this question:
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- 31.
No person shall be admitted as trading member of a recognized stock exc hange if he has been adjudged bankrupt or a receiver order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
According to the given statement, a person cannot be admitted as a trading member of a recognized stock exchange if they have been adjudged bankrupt or a receiver order in bankruptcy has been made against them, or if they have been proved to be insolvent even if they have obtained their final discharge. This implies that the statement is true, as it states a condition that must be met for someone to be admitted as a trading member.Rate this question:
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- 32.
The stop loss orders are prioritised in the stop loss book with the __________________
- A.
Most likely order to trigger first and the least likely to trigger last.
- B.
Least likely order to trigger first and the most likely to trigger last.
- C.
Time-price priority algorithm
- D.
None of the above
Correct Answer
A. Most likely order to trigger first and the least likely to trigger last.Explanation
The correct answer is "most likely order to trigger first and the least likely to trigger last." This means that the stop loss orders are organized in a way where the orders that are most likely to be triggered are given priority and will be executed first, while the orders that are less likely to be triggered are placed lower in the priority and will be executed last.Rate this question:
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- 33.
The orders with ______ attribute disclose only a part of the total order quantity to the market.
- A.
Immediate or Cancel (IOC)
- B.
Stop Loss (SL)
- C.
Disclosed Quantity (DQ)
- D.
None of the above
Correct Answer
C. Disclosed Quantity (DQ)Explanation
The correct answer is Disclosed Quantity (DQ). When an order has the Disclosed Quantity attribute, it means that only a portion of the total order quantity is revealed to the market. The remaining quantity is kept hidden. This allows traders to disclose a specific quantity to the market while keeping the rest of their order size confidential. By using the DQ attribute, traders can control the amount of information they reveal to the market, which can be useful in certain trading strategies.Rate this question:
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- 34.
Two buy orders enter into the system and are unmatched : 1) 200 shares @ Rs. 72.75 at time 10:30 a.m. 2) 300 shares @ Rs. 72.75 at time 10:31 a.m. Which order will get a priority for getting executed.
- A.
Order no. 1.
- B.
Order no. 2
- C.
Both will have equal priority
- D.
None
Correct Answer
A. Order no. 1.Explanation
Order no. 1 will get a priority for getting executed because it entered into the system first, at 10:30 a.m., while Order no. 2 entered at 10:31 a.m. Since both orders have the same price, the order that enters the system first is given priority.Rate this question:
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- 35.
Statement 1 : An active buy order matches with the best passive sell order if the price of the passive sell order is less than or equal to the price of the active buy order. Statement 2 : An passive buy order matches with the best active sell order if the price of the passive buy order is less than or equal to the price of the active sell order. Which of the above statements is True?
- A.
Statement 2
- B.
Statement 1
- C.
Both Statement are true
- D.
Both Statement are False
Correct Answer
B. Statement 1Explanation
Statement 1 is true because it states that an active buy order will match with the best passive sell order if the price of the passive sell order is less than or equal to the price of the active buy order. This means that the buyer is willing to pay the same or a higher price than the seller is offering, resulting in a successful match.Rate this question:
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- 36.
The pre-set Market price protection percentage is by default set to _____ of the LTP
- A.
10%
- B.
2%
- C.
3%
- D.
5%
Correct Answer
D. 5%Explanation
The pre-set Market price protection percentage is set to 5% of the Last Traded Price (LTP). This means that if the LTP of a stock is $100, the market price protection will ensure that the stock cannot be traded at a price lower than $95 (5% lower than the LTP). This protection mechanism helps prevent sudden and drastic price drops, providing a certain level of stability and security for investors.Rate this question:
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- 37.
A user can simultaneously view a regular inquiry (e.g. MBP) and the Snap Quote display on the trading screen. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A user can simultaneously view a regular inquiry (e.g. MBP) and the Snap Quote display on the trading screen. This means that the user can have both the regular inquiry and the Snap Quote display open at the same time, allowing them to view both pieces of information simultaneously.Rate this question:
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- 38.
Fixed Deposit Receipts (FDRs) issued by approved banks can be submitted as a(n) ___________ to NSCCL by trading members.
- A.
Surety.
- B.
Indemnity
- C.
Warranty
- D.
Additional base capital
Correct Answer
D. Additional base capitalExplanation
Trading members can submit Fixed Deposit Receipts (FDRs) issued by approved banks as additional base capital to NSCCL. This means that FDRs can be used as a form of collateral or security to increase the capital base of trading members.Rate this question:
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- 39.
A trading member on the NSE, has set the branch order value unlimited for his Chennai branch and Rs. 800 lakh for Kolkata branch. Chennai branch has two users 'X' and 'Y' with user order limits of Rs. 550 lakh and Rs. 500 lakh respectively. Kolkata branch has one user 'Z' with user order value limit of Rs. 550 lakh. The member applies for a new user at Kolkata. What is the maximum user order value that can be set for the new user?
- A.
Not more than Rs. 950 lakh
- B.
Zero
- C.
Unlimited
- D.
Rs. 250 lakh
Correct Answer
D. Rs. 250 lakhExplanation
The maximum user order value that can be set for the new user is Rs. 250 lakh. This is because the trading member has set the branch order value for Kolkata branch to be Rs. 800 lakh, and there is already one user 'Z' with a user order value limit of Rs. 550 lakh. Since the branch order value is not unlimited for Kolkata branch, the new user cannot have a user order value limit higher than the remaining branch order value, which is Rs. 250 lakh.Rate this question:
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- 40.
Upfront margin rates applicable for all securities in Trade for Trade - segment (TT) is ______.
- A.
50%
- B.
100%
- C.
200%
- D.
150%
Correct Answer
B. 100%Explanation
The upfront margin rate applicable for all securities in the Trade for Trade (TT) segment is 100%. This means that traders are required to deposit 100% of the value of the securities they wish to trade as margin before placing the trade. This ensures that there is sufficient collateral to cover any potential losses in the trade.Rate this question:
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- 41.
Penalties are charged to members for _____________
- A.
Failure to fulfil their funds obligations
- B.
Failure to fulfil their securities deliverable obligations
- C.
Margin Shortages
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
Penalties are charged to members for all of the above reasons. This means that members can be penalized for failing to fulfill their funds obligations, failing to fulfill their securities deliverable obligations, and for margin shortages. In other words, any failure to meet their financial and contractual obligations can result in penalties being imposed on members.Rate this question:
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- 42.
Rahul is supposed to receive Rs. 1,00,000 from Chandra after 3 years. If the interest rate is 8%, what is the present value of the amount due from Chandra?
- A.
71,686.34
- B.
79,383.22
- C.
81,232.25
- D.
91,444.9
Correct Answer
B. 79,383.22Explanation
The present value of the amount due from Chandra can be calculated using the formula for present value of a future amount. The formula is: Present Value = Future Value / (1 + Interest Rate)^n, where n is the number of years. In this case, the future value is Rs. 1,00,000, the interest rate is 8%, and the number of years is 3. Plugging in these values into the formula, the present value is calculated to be Rs. 79,383.22.Rate this question:
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- 43.
Institutional transactions are identified by the use of the ________ at the time of order entry.
- A.
User code
- B.
User id
- C.
Participant code
- D.
Client id
Correct Answer
C. Participant codeExplanation
Institutional transactions are identified by the use of the participant code at the time of order entry. This code helps to distinguish and track transactions made by different participants within an institution. It is used to ensure accurate and efficient processing of orders and to maintain a record of the transactions made by each participant.Rate this question:
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- 44.
Two sell orders enter into the system and are unmatched : 1) 200 shares @ Rs. 72.75 at time 10:30 a.m. 2) 300 shares @ Rs. 72.70 at time 10:31 a.m. Which order will get a priority for getting executed.
- A.
Order no. 1.
- B.
Order no. 2
- C.
Both will have equal priority
- D.
None
Correct Answer
B. Order no. 2Explanation
Order no. 2 will get a priority for getting executed because it was entered into the system later than order no. 1. In a first-come-first-serve system, the order that is entered first has a higher priority for execution. Therefore, since order no. 2 was entered at 10:31 a.m., after order no. 1 was entered at 10:30 a.m., it will have a higher priority and will be executed first.Rate this question:
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- 45.
In NSCCL, a _______ is a clearing member but not a trading member.
- A.
Self clearing member
- B.
Participant
- C.
Broker
- D.
Custodian
Correct Answer
D. CustodianExplanation
A custodian in NSCCL is a clearing member but not a trading member. A custodian is responsible for holding and safeguarding assets on behalf of clients. They do not engage in trading activities but instead focus on the safekeeping and administration of securities. Custodians play a crucial role in the clearing and settlement process by ensuring the smooth transfer of securities between trading members and maintaining accurate records of ownership.Rate this question:
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- 46.
What does ‘AUI’ indicate as a message code in 'Full Message window' in the NEAT system?
- A.
Auction Initiation Messages
- B.
Auction User Interface messages
- C.
All messages related to user interface
- D.
All messages related to Auctions
Correct Answer
A. Auction Initiation MessagesExplanation
AUI in the Full Message window in the NEAT system indicates Auction Initiation Messages. This means that the messages displayed in the Full Message window are specifically related to initiating auctions.Rate this question:
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- 47.
Two buy orders enter into the system and are unmatched : 1) 200 shares @ Rs. 72.75 at time 10:30 a.m. 2) 300 shares @ Rs. 72.80 at time 10:31 a.m. Which order will get a priority for getting executed.
- A.
Order no. 1.
- B.
Order no. 2
- C.
Both will have equal priority
- D.
None
Correct Answer
A. Order no. 1.Explanation
In a stock exchange, the priority for order execution is typically determined by the time of entry into the system. The order that arrives first has higher priority.
In the given scenario:
1. The first buy order is for 200 shares at Rs. 72.75, entered at 10:30 a.m.
2. The second buy order is for 300 shares at Rs. 72.80, entered at 10:31 a.m.
Since the first order was entered into the system at an earlier time (10:30 a.m.), it will have a higher priority for execution compared to the second order entered at a later time (10:31 a.m.).
Therefore, the order with 200 shares at Rs. 72.75, entered at 10:30 a.m., will get priority for execution over the order for 300 shares at Rs. 72.80, entered at 10:31 a.m.Rate this question:
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- 48.
NSCCL becomes the legal counterparty to the net settlement obligations of every member. This principle is called ______.
- A.
‘notation’
- B.
‘settlement fullfillment’
- C.
‘novation
- D.
‘obligation guarantee’
Correct Answer
C. ‘novationExplanation
The principle described in the question is called "novation." Novation refers to the substitution of a new party or obligation for an existing one. In this case, NSCCL becomes the legal counterparty to the net settlement obligations of every member, replacing the original parties involved.Rate this question:
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- 49.
The trading members can participate in the Exchange initiated auctions by entering orders as a ______.
- A.
Participant
- B.
Initiator
- C.
Solicitor
- D.
None of the above
Correct Answer
C. SolicitorExplanation
In the context of the question, a solicitor is someone who actively participates in the Exchange initiated auctions by entering orders. The other options, participant and initiator, do not accurately describe the role of the trading members in these auctions. Therefore, the correct answer is solicitor.Rate this question:
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- 50.
One of the Custodial Trade Reports is the ___________
- A.
Client Obligation Report
- B.
Custodial Trade Pending Confirmation
- C.
Clearing Member Report
- D.
None of the above
Correct Answer
B. Custodial Trade Pending ConfirmationExplanation
The correct answer is "Custodial Trade Pending Confirmation". This report is one of the Custodial Trade Reports that provides information about trades that are awaiting confirmation from the custodian. It helps in tracking and managing trades that are in the confirmation process, ensuring timely settlement and reducing the risk of trade errors or discrepancies. The report is important for custodial institutions and investment managers to monitor and reconcile their trade activities.Rate this question:
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Current Version
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Jan 31, 2024Quiz Edited by
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Dec 09, 2011Quiz Created by
Kaushal Mandalia
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