Sybms_equity & Debt Market ( Finance)_11th Sept 2018
Shri Chinai College of Commerce & Economics
Andheri (E)
Mumbai - 400 069
Questions and Answers
- 1.
Is called as new issue market
- A.
Primary market
- B.
Secondary market
- C.
Capital market
- D.
Money market
Correct Answer
A. Primary marketExplanation
The primary market is the correct answer because it is the market where new securities are issued and sold for the first time. It is also known as the new issue market because it is where companies raise capital by selling their stocks or bonds to investors. In contrast, the secondary market is where already issued securities are bought and sold among investors. The capital market is a broader term that encompasses both the primary and secondary markets, while the money market refers to short-term borrowing and lending of funds.Rate this question:
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- 2.
Has a maturity less than one year
- A.
Primary market
- B.
Secondary market
- C.
Capital market
- D.
Money market
Correct Answer
D. Money marketExplanation
The correct answer is money market. The money market refers to a segment of the financial market where short-term borrowing and lending of funds take place. It consists of various instruments such as Treasury bills, commercial papers, certificates of deposit, etc. These instruments have a maturity period of less than one year, making them highly liquid and low-risk investments. Participants in the money market include banks, financial institutions, corporations, and government entities. The money market plays a crucial role in facilitating short-term financing needs and managing liquidity in the economy.Rate this question:
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- 3.
Money market is controlled by
- A.
RBI
- B.
SEBI
- C.
IRDA
- D.
NSE
Correct Answer
A. RBIExplanation
The money market is a segment of the financial market where short-term borrowing and lending of funds take place. It includes various instruments like Treasury bills, commercial papers, certificates of deposit, etc. The Reserve Bank of India (RBI) is the central bank of the country and has the authority to regulate and control the money market. It formulates and implements monetary policies, sets interest rates, and manages liquidity in the market. Therefore, RBI is the correct answer as it plays a crucial role in controlling and overseeing the functioning of the money market.Rate this question:
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- 4.
Rate at which banks lends to RBI is known as
- A.
Reverse Repo rate
- B.
Repo rate
- C.
Reverse rate
- D.
CRR
Correct Answer
A. Reverse Repo rateExplanation
The correct answer is Reverse Repo rate. Reverse Repo rate refers to the rate at which banks lend money to the Reserve Bank of India (RBI) in exchange for government securities. It is a tool used by the RBI to control the money supply in the economy. By increasing the reverse repo rate, the RBI can reduce the liquidity in the banking system, thereby curbing inflation. Conversely, a decrease in the reverse repo rate encourages banks to lend more money, stimulating economic growth.Rate this question:
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- 5.
CRR stands for
- A.
Cash reference ratio
- B.
Cash reserve ratio
- C.
Credit reserve ratio
- D.
Credit reference ratio
Correct Answer
B. Cash reserve ratioExplanation
CRR stands for cash reserve ratio. This is the percentage of a bank's total deposits that it is required to keep with the central bank as a reserve. It is a tool used by the central bank to control the money supply in the economy. By increasing the CRR, the central bank can reduce the amount of money available for lending and vice versa. This helps in controlling inflation and maintaining financial stability.Rate this question:
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- 6.
SLR Stands for
- A.
Share lending rate
- B.
Statutory liquidity ratio
- C.
Share liquidity ratio
- D.
Share lending rate
Correct Answer
B. Statutory liquidity ratioExplanation
SLR stands for statutory liquidity ratio. This is a term used in banking and finance to refer to the percentage of a bank's net demand and time liabilities that it is required to maintain in the form of cash, gold, or government-approved securities. It is a regulatory requirement imposed by the central bank of a country to ensure the stability and liquidity of the banking system. The SLR helps in controlling the expansion of credit by banks and ensures that a certain portion of their assets is held in liquid form to meet any unforeseen liquidity needs.Rate this question:
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- 7.
Was the first mutual fund in india .
- A.
Reliance mutual funds
- B.
Kotak mutual funds
- C.
LIC
- D.
UTI
Correct Answer
D. UTIExplanation
UTI (Unit Trust of India) was the first mutual fund in India. It was established in 1963 by the Government of India and Reserve Bank of India. UTI played a crucial role in popularizing the concept of mutual funds in the country and paved the way for the growth of the mutual fund industry. It offered various investment schemes and became a trusted name among investors. Over the years, several other mutual funds have emerged in India, but UTI holds the distinction of being the first.Rate this question:
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- 8.
T-Bills are for
- A.
364 days
- B.
91days
- C.
181days
- D.
30 days
Correct Answer
A. 364 daysExplanation
T-Bills are short-term debt instruments issued by the government to finance its short-term cash needs. They are typically issued with maturities of 91 days, 181 days, or 364 days. In this case, the correct answer is 364 days, indicating that T-Bills have a maturity period of one year. This means that investors who purchase T-Bills will receive their principal investment back along with the interest earned after 364 days.Rate this question:
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- 9.
In India basically comprises PSU and private sector Bonds
- A.
Corporate debt market
- B.
Capital market
- C.
T-Bills
- D.
Money bill
Correct Answer
A. Corporate debt marketExplanation
The correct answer is corporate debt market. In India, the corporate debt market consists of bonds issued by both public sector undertakings (PSUs) and private sector companies. This market allows companies to raise funds by issuing debt instruments to investors. It plays a crucial role in the overall capital market by providing an avenue for companies to access long-term financing and investors to earn fixed income. T-Bills and Money bills are not related to the corporate debt market, as T-Bills are short-term government debt securities and Money bills refer to a type of legislation.Rate this question:
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- 10.
TCS satnds for
- A.
Tata consaltance services
- B.
Tata steel
- C.
Tata Power
- D.
Tata motors
Correct Answer
A. Tata consaltance servicesExplanation
TCS stands for Tata Consultancy Services, which is a multinational information technology service and consulting company. It is one of the largest IT service providers in the world and is a part of the Tata Group. Tata Steel, Tata Power, and Tata Motors are all separate entities under the Tata Group, but they do not represent the acronym TCS.Rate this question:
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- 11.
RIL stands for
- A.
Reliance mutual funds
- B.
Reliance Industries ltd.
- C.
Reliance power
- D.
Reliance infrastructure ltd.
Correct Answer
B. Reliance Industries ltd.Explanation
RIL stands for Reliance Industries Ltd., which is a conglomerate company based in India. It is one of the largest companies in India and operates in various sectors including petrochemicals, refining, oil and gas exploration, telecommunications, and retail. Reliance Industries Ltd. is known for its significant contributions to the Indian economy and its global presence.Rate this question:
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- 12.
Oldest equity stock exchange in India is
- A.
NSE
- B.
BSE
- C.
MCX
- D.
NCDEX
Correct Answer
B. BSEExplanation
The Bombay Stock Exchange (BSE) is considered the oldest equity stock exchange in India. It was established in 1875 and has a long history of facilitating the trading of stocks and other financial instruments. BSE is known for its significant role in shaping the Indian capital market and has played a crucial role in the growth and development of the country's economy. It is recognized for its extensive listing of companies and diverse range of financial products, making it a prominent platform for investors and traders in India.Rate this question:
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- 13.
Equity markets start trading at in India.
- A.
8.45am
- B.
9.30am
- C.
9.15am
- D.
9.45am
Correct Answer
C. 9.15amExplanation
Equity markets in India start trading at 9.15am. This is the correct answer because it is the time at which the trading session officially begins in the Indian equity markets. It is important for investors and traders to be aware of this time as it marks the opening of the market and the start of trading activities.Rate this question:
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- 14.
Equity markets end trading at in India.
- A.
3pm
- B.
3.15pm
- C.
3.30pm
- D.
3.45pm
Correct Answer
C. 3.30pmExplanation
Equity markets in India end trading at 3.30pm. This is the designated closing time for trading activities in the Indian equity market. The market operates from Monday to Friday, and trading concludes at 3.30pm, after which no further transactions can take place. This closing time allows market participants to reconcile their trades and settle any outstanding obligations before the end of the trading day.Rate this question:
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- 15.
Nifty comprises of shares
- A.
50
- B.
30
- C.
75
- D.
25
Correct Answer
A. 50Explanation
The correct answer is 50 because it is the number of shares that make up the Nifty.Rate this question:
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- 16.
Sensex comprises of shares
- A.
30
- B.
50
- C.
75
- D.
25
Correct Answer
A. 30Explanation
Sensex is an index of the Bombay Stock Exchange (BSE) and is used to measure the performance of the top 30 companies listed on the exchange. Therefore, the correct answer is 30, as Sensex comprises of 30 shares.Rate this question:
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- 17.
Commodity trading starts at in India
- A.
10am
- B.
10.15am
- C.
10.30am
- D.
10.45am
Correct Answer
A. 10amExplanation
Commodity trading in India starts at 10am.Rate this question:
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- 18.
Commodity trading ends at in India
- A.
11pm
- B.
11.15pm
- C.
11.30pm
- D.
11.45pm
Correct Answer
C. 11.30pmExplanation
Commodity trading in India ends at 11.30pm. This means that the trading of commodities, such as agricultural products, metals, and energy, concludes at this specific time in the Indian market. It is important for traders and investors to be aware of this closing time in order to make informed decisions and manage their positions effectively.Rate this question:
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- 19.
Stock markets in India are regulated by
- A.
SEBI
- B.
RBI
- C.
IRDA
- D.
Economic commission
Correct Answer
A. SEBIExplanation
SEBI, or the Securities and Exchange Board of India, is the correct answer because it is the regulatory body responsible for overseeing and regulating the stock markets in India. SEBI's main objective is to protect the interests of investors and promote the development and regulation of the securities market. It formulates rules and regulations, conducts inspections and audits, and takes actions against any fraudulent or unfair practices in the stock market. RBI (Reserve Bank of India) is India's central banking institution and is responsible for monetary policy, while IRDA (Insurance Regulatory and Development Authority) regulates the insurance sector. Economic commission is a vague term and does not specifically regulate stock markets in India.Rate this question:
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- 20.
Is not a derivative product
- A.
Futures
- B.
Call
- C.
Put
- D.
Equity share
Correct Answer
D. Equity shareExplanation
An equity share refers to a type of security that represents ownership in a company. It represents a share of the company's ownership and entitles the shareholder to a portion of the company's profits and assets. Unlike futures, call options, and put options, which are derivative products, an equity share is not derived from any other financial instrument. It is a direct ownership stake in the company.Rate this question:
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- 21.
Repo rate is the rate at which RBI lends rates to banks
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Repo rate is the rate at which RBI lends funds to commercial banks in exchange for government securities. This is done to control the money supply in the economy and manage inflation. By increasing the repo rate, RBI makes borrowing more expensive for banks, thereby reducing the amount of money available for lending to the public. Conversely, by decreasing the repo rate, RBI makes borrowing cheaper and encourages banks to lend more, stimulating economic growth. Therefore, the statement "Repo rate is the rate at which RBI lends rates to banks" is true.Rate this question:
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- 22.
Fund based and Fee based are two types of financial services
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because fund-based and fee-based are indeed two types of financial services. Fund-based services refer to activities that involve the management and transfer of funds, such as loans, deposits, and investments. On the other hand, fee-based services involve charging fees for providing financial advice, brokerage services, and other non-fund-based activities. Therefore, it can be concluded that both fund-based and fee-based services exist in the financial industry.Rate this question:
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- 23.
Stock exchanges are not visible in nature
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Stock exchanges are not physical entities that can be seen in nature. They are financial institutions or platforms where buyers and sellers trade stocks and other securities. Stock exchanges exist in the form of electronic platforms or physical locations where trading takes place. Therefore, the statement "Stock exchanges are not visible in nature" is true.Rate this question:
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- 24.
DRIPS are plans that are sponsered by most large companies
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
DRIPS, or Dividend Reinvestment Plans, are indeed plans that are sponsored by most large companies. These plans allow shareholders to reinvest their dividends back into purchasing additional shares of the company's stock, often at a discounted price. This is a popular option for investors looking to compound their returns over time and is commonly offered by large companies as a way to encourage long-term investment and loyalty among shareholders. Therefore, the statement is true.Rate this question:
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- 25.
Equity shares are part of sources of funds
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Equity shares are indeed a part of sources of funds. When a company issues equity shares, it raises capital from shareholders who become partial owners of the company. This capital can be used to finance the company's operations, investments, and growth. Therefore, equity shares are a way for companies to raise funds and are considered a source of capital.Rate this question:
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- 26.
Equity shares fall on asset side of balancesheet
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Equity shares do not fall on the asset side of the balance sheet. Equity shares represent ownership in a company and are classified as part of the owner's equity or shareholders' equity section of the balance sheet. This section represents the residual interest in the assets of the company after deducting liabilities. Therefore, the correct answer is false.Rate this question:
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- 27.
T-Bills are issued at discount and redeemed at face vlaue on maturity
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
T-Bills, also known as Treasury Bills, are short-term debt instruments issued by the government to raise funds. They are typically issued at a discount, which means that investors purchase them for a price lower than their face value. On maturity, T-Bills are redeemed at their full face value, allowing investors to earn the difference between the discounted purchase price and the face value as their return. Therefore, the statement that T-Bills are issued at a discount and redeemed at face value on maturity is true.Rate this question:
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- 28.
Last Thursday of the month is generally the F&O Expire for derivatives .
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because the last Thursday of the month is commonly known as the F&O (Futures and Options) expiry day for derivatives. This means that any open positions in futures and options contracts must be settled on this day. It is an important date for traders and investors as it often leads to increased volatility and trading activity in the market.Rate this question:
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- 29.
Only buyers in stock creates upper circuit.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
When there are only buyers in the stock market, it means that there is high demand for the stock and no sellers are willing to sell at the current price. This creates an imbalance in supply and demand, causing the stock price to rise rapidly. As a result, the stock hits the upper circuit, which is the maximum limit set by the exchange for price movements in a single trading session. Therefore, the statement "only buyers in stock creates upper circuit" is true.Rate this question:
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- 30.
Only sellers in stock creates lower circuit.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
When there are only sellers in the stock market, it means that there are no buyers interested in purchasing the stock. This situation leads to a decrease in demand and an increase in supply, causing the stock's price to fall rapidly. As a result, the stock hits the lower circuit, which is a predetermined limit set by the exchange to prevent excessive price declines. Therefore, the statement "only sellers in stock creates lower circuit" is true as it accurately describes the market condition that triggers the lower circuit.Rate this question:
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- 31.
Demat Account is also known as DP account.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The given statement is true because a Demat Account, short for Dematerialized Account, is indeed also known as a DP account. This type of account is used to hold securities and shares in an electronic format, eliminating the need for physical share certificates. It allows investors to buy, sell, and hold securities in a convenient and secure manner.Rate this question:
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- 32.
IPO comes with a price range
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because when a company goes public through an initial public offering (IPO), it typically sets a price range for its shares. This price range represents the minimum and maximum price at which the company is willing to sell its shares to investors. The final offering price is determined based on investor demand and market conditions. Therefore, IPOs do come with a price range.Rate this question:
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- 33.
Lost physical shares can also be claimed
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Lost physical shares can be claimed because even if the physical certificates are lost, the ownership of the shares can still be proven through other means. The shareholder can contact the company's transfer agent and provide necessary documentation to prove their ownership, such as copies of old statements or dividend checks. The transfer agent can then issue replacement certificates or update the shareholder's electronic holdings accordingly. This process ensures that the shareholder's rights and ownership of the shares are protected, even in the event of physical loss.Rate this question:
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- 34.
Electronic trading provides easy entry and exit in securities
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Electronic trading platforms allow investors to easily buy and sell securities, providing them with quick entry and exit options. Unlike traditional trading methods that often involve physical exchanges or paperwork, electronic trading enables investors to trade securities electronically, using online platforms or computer networks. This convenience and accessibility make it easier for investors to enter and exit the market, contributing to the statement being true.Rate this question:
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- 35.
Good quality companies qualify under "A" group stocks
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because "A" group stocks typically represent companies that have a strong financial position, good track record, and high market capitalization. These companies are considered to be of good quality and have a lower risk compared to other stocks. Therefore, it can be inferred that good quality companies qualify under "A" group stocks.Rate this question:
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- 36.
Bad quality companies qualify under "Z"group stocks
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement suggests that companies with poor quality or low performance are included in the "Z" group stocks. Therefore, the answer is true, indicating that bad quality companies do qualify under the "Z" group stocks.Rate this question:
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- 37.
High market capitalization companies are also called blue chip companies
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
High market capitalization companies are referred to as blue chip companies because they are considered to be stable and reliable investments. These companies are well-established, have a strong track record of performance, and are often leaders in their respective industries. Blue chip companies tend to have a large market capitalization, which is the total value of a company's outstanding shares. Investors often view blue chip companies as safe investments because they are less likely to experience significant fluctuations in value compared to smaller or riskier companies.Rate this question:
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- 38.
Highly volatile stocks are also termed as operator stocks.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Highly volatile stocks are often referred to as operator stocks because they experience significant price fluctuations and are commonly targeted by market operators who seek to profit from these price movements. These stocks can be more risky and unpredictable compared to stable stocks, as their prices can change rapidly in response to market conditions and investor sentiment. Therefore, the statement that highly volatile stocks are also termed as operator stocks is true.Rate this question:
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