Ncfm - Capital Market Dealer's Module Quiz

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Kaushal Mandalia
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  • 1/59 Questions

    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?

    • True
    • False
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About This Quiz

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 in 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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Ncfm - Capital Market Dealers Module Quiz - Quiz

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  • 2. 

    On Line Backup is a facility that the user can invoke to take a backup of all order and trade related information for the user. True or False.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    On Line Backup is a feature that allows users to create a backup of all their order and trade related information. This means that users can save their data in case of any system failures or data loss. The statement is true because On Line Backup provides users with the ability to protect their important information and ensure its availability even in the event of unexpected circumstances.

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  • 3. 

    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).

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 4. 

    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?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 5. 

    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.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 6. 

    Security wise User Order Quantity Limit (SUOQL) can be modified anytime during trading hours. True or False?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 7. 

    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?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 8. 

    A user can simultaneously view a regular inquiry (e.g. MBP) and the Snap Quote display on the trading screen. True or False?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 9. 

    Penalties are charged to members for _____________

    • Failure to fulfil their funds obligations

    • Failure to fulfil their securities deliverable obligations

    • Margin Shortages

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 10. 

    A trading member shall be deemed guilty of un-businesslike conduct for any of the following or similar acts or omissions namely:

    • If it transacts its own business or the business of its constituent in fictitious names

    • If it makes a fictitious transaction

    • Circulates or causes to be circulated, any rumours;

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    The correct answer is "all of the above." This means that a trading member can be considered guilty of un-businesslike conduct if they engage in any of the mentioned acts or omissions. These acts include transacting business in fictitious names, making fictitious transactions, and circulating rumors.

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  • 11. 

    The Message Window in the NEAT system allows a user to view messages broadcast by the Exchange such as, __________

    • Corporate actions

    • Market news

    • Auctions related information

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 12. 

    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?

    • Not more than Rs. 950 lakh

    • Zero

    • Unlimited

    • Rs. 250 lakh

    Correct Answer
    A. Rs. 250 lakh
    Explanation
    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.

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  • 13. 

    Auction Square Up Debit Statement: This report gives details of unauctioned deliveries that are squared-up by the Exchange. True or False?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    This statement is true. The Auction Square Up Debit Statement provides information about unauctioned deliveries that are squared-up by the Exchange. It is a report that gives details about these transactions, confirming that the statement is accurate.

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  • 14. 

    A client buys shares worth Rs. 1,00,000 and sells shares worth Rs. 1,00,000 through a stock broker.  If the brokerage percentage is 5%, then the maximum brokerage payable is _______.

    • Rs. 4,000

    • Rs. 5,000

    • Rs. 2,000

    • Rs. 6,000

    Correct Answer
    A. Rs. 5,000
    Explanation
    The maximum brokerage payable is Rs. 5,000 because the brokerage is usually charged as a percentage of the transaction value. In this case, the client is buying and selling shares worth Rs. 1,00,000, so the brokerage fee would be a percentage of this amount. If the brokerage percentage is 5%, then the brokerage payable would be Rs. 5,000 (5% of Rs. 1,00,000). Therefore, Rs. 5,000 is the maximum brokerage payable in this scenario.

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  • 15. 

    A trading member shall be deemed guilty of misconduct if he fails to _______

    • Submit its audited accounts to the Exchange

    • Pay its subscription, fees, arbitration charges or any other money which may be due to the exchange

    • To submit or makes any false or misleading statement in its clearing forms

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 16. 

    ___________ assumes the counter party risk of each member and guarantees financial settlement.

    • SEBI

    • Central Depository Services Ltd. (CDSL)

    • The National Depository Services Ltd. (NSDL)

    • The National Securities Clearing Corporation Ltd. (NSCCL)

    Correct Answer
    A. 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.

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  • 17. 

    The orders with ______ attribute disclose only a part of the total order quantity to the market.

    • Immediate or Cancel (IOC)

    • Stop Loss (SL)

    • Disclosed Quantity (DQ)

    • None of the above

    Correct Answer
    A. 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.

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  • 18. 

    The branch manager receives End of Day reports for _________.

    • His own orders only

    • All dealers under the trading member

    • All the dealers under that branch

    • Any authorized user

    Correct Answer
    A. All the dealers under that branch
    Explanation
    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.

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  • 19. 

    When the user invokes the order entry screen, the field(s) that are (is) taken as default are (is) __________.

    • Symbol

    • Series

    • Book Type

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 20. 

    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?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 21. 

    ______ is a volume related order condition.

    • An order with a limit price condition only

    • An order with a stop loss only

    • An order with a Disclosed Quantity (DQ)

    • None of the above

    Correct Answer
    A. 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.

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  • 22. 

    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?

    • Rs. 100 lakh

    • Any amount, as there is no restriction on User Order Value

    • Rs. 250 lakh

    • Rs. 150 lakh

    Correct Answer
    A. Rs. 250 lakh
    Explanation
    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.

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  • 23. 

    What does 'P' indicate as a status in the 'Auction Inquiry' screen in the NEAT system?

    • Auction is pending and yet to begin

    • Auction is deleted.

    • There is no such status indicator as 'P' in the Auction Inquiry screen.

    • Auction is over.

    Correct Answer
    A. Auction is pending and yet to begin
    Explanation
    The status 'P' in the 'Auction Inquiry' screen in the NEAT system indicates that the auction is pending and yet to begin.

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  • 24. 

    100 share of Reliance Ltd. are purchased on Monday. Provided there are no holidays in between, settlement should take place on ______ ?

    • Wednesday (T+2)

    • Tuesday (T+1)

    • Thursday (T+3)

    • 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).

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  • 25. 

    What does 'OM' indicate as an activity in the 'Activity Log' screen in the NEAT system?

    • Order Matched

    • Order Cancelled

    • Trade Modified

    • Order Modified

    Correct Answer
    A. Order Modified
    Explanation
    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.

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  • 26. 

    The stamp duty on transfer of demat securities has been waived. True or False?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    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.

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  • 27. 

    Securities Delivered Statement: This statement provides information on ______?

    • Delivering centre

    • Total number of shares to deliver for each security

    • Quantity delivered and quantity of shares delivered short

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    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.

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  • 28. 

    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 ___.

    • Rs. 25,000

    • Rs. 15,000

    • Rs. 10,500

    • Rs. 20,000

    Correct Answer
    A. Rs. 10,500
    Explanation
    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.

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  • 29. 

    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%)

    • Rs. 316.80

    • Rs. 390.65

    • Rs. 364

    • Rs. 394

    Correct Answer
    A. Rs. 316.80
    Explanation
    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.

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  • 30. 

    Which of the following do not issue securities in the primary market?

    • FIIs

    • State Goverments

    • Companies

    • None of the above

    Correct Answer
    A. FIIs
    Explanation
    FIIs, or Foreign Institutional Investors, do not issue securities in the primary market. The primary market is where new securities are issued and sold for the first time, typically through an initial public offering (IPO) by companies or government entities. While companies and state governments issue securities in the primary market to raise capital, FIIs are institutional investors from foreign countries who invest in securities already issued in the market. They do not directly participate in the issuance of new securities.

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  • 31. 

    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.

    • SEBI

    • Recognized stock exchange

    • Securities Appellate Tribunal (SAT)

    • High Court

    Correct Answer
    A. 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.

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  • 32. 

    In case the security has not been traded on a particular day, ________ at the NSE is to be considered as the closing price.?

    • The average closing price for the last one week

    • The theoretical closing price

    • The latest available closing price

    • None of the above

    Correct Answer
    A. The latest available closing price
    Explanation
    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.

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  • 33. 

    Surveillance and Control (SURCON) is that period after market close during which, the users have _______ only.

    • Order entry access

    • Trade cancellation access

    • Trade modification access

    • Inquiry access

    Correct Answer
    A. Inquiry access
    Explanation
    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.

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  • 34. 

    For liquid securities, the VaR margins are based on the ________ of the Security.

    • Volatility

    • Returns

    • Liquidity

    • Exposure limit

    Correct Answer
    A. Volatility
    Explanation
    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.

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  • 35. 

    Security sigma means the _______ of the security computed as at the end of the previous trading day.

    • Mean

    • Volatility

    • Impact cost

    • None of the above

    Correct Answer
    A. Volatility
    Explanation
    Security sigma refers to the volatility of a security. Volatility measures the degree of variation in the price of a security over time. It indicates the level of risk associated with the security, with higher volatility indicating higher risk. Therefore, the correct answer is "volatility" as it aligns with the definition and meaning of security sigma.

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  • 36. 

    ______ can be traded in the Limited Physical Market?

    • Illiquid shares

    • Futures and Options

    • Odd lots

    • Government Securities

    Correct Answer
    A. Odd lots
    Explanation
    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.

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  • 37. 

    The pre-set Market price protection percentage is by default set to _____ of the LTP

    • 10%

    • 2%

    • 3%

    • 5%

    Correct Answer
    A. 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.

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  • 38. 

    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.

    • Grossed

    • Aggregated

    • Netted

    • Offset

    Correct Answer
    A. Netted
    Explanation
    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.

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  • 39. 

    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.

    • Order no. 1.

    • Order no. 2

    • Both will have equal priority

    • 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.

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  • 40. 

    Upfront margin rates applicable for all securities in Trade for Trade - segment (TT) is ______.

    • 50%

    • 100%

    • 200%

    • 150%

    Correct Answer
    A. 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.

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  • 41. 

    In NSCCL, a _______ is a clearing member but not a trading member.

    • Self clearing member

    • Participant

    • Broker

    • Custodian

    Correct Answer
    A. Custodian
    Explanation
    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.

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  • 42. 

    Fixed Deposit Receipts (FDRs) issued by approved banks can be submitted as a(n) ___________ to NSCCL by trading members.

    • Surety.

    • Indemnity

    • Warranty

    • Additional base capital

    Correct Answer
    A. Additional base capital
    Explanation
    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.

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  • 43. 

    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.

    • Order no. 1.

    • Order no. 2

    • Both will have equal priority

    • 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.

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  • 44. 

    NSE has implemented ______________ in compulsory rolling settlement with effect from July 02, 2001.

    • Securities-based market-wide circuit breakers

    • Index-based market-wide circuit breakers

    • Market-wide based securities-wise circuit breakers

    • None of the above

    Correct Answer
    A. Index-based market-wide circuit breakers
    Explanation
    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.

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  • 45. 

    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?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    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.

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  • 46. 

    Institutional transactions are identified by the use of the ________ at the time of order entry.

    • User code

    • User id

    • Participant code

    • Client id

    Correct Answer
    A. Participant code
    Explanation
    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.

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  • 47. 

    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.

    • Order no. 1.

    • Order no. 2

    • Both will have equal priority

    • None

    Correct Answer
    A. Order no. 2
    Explanation
    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.

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  • 48. 

    What does ‘AUI’ indicate as a message code in 'Full Message window' in the NEAT system?

    • Auction Initiation Messages

    • Auction User Interface messages

    • All messages related to user interface

    • All messages related to Auctions

    Correct Answer
    A. Auction Initiation Messages
    Explanation
    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.

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  • 49. 

    NSCCL becomes the legal counterparty to the net settlement obligations of every member. This principle is called ______.

    • ‘notation’

    • ‘settlement fullfillment’

    • ‘novation

    • ‘obligation guarantee’

    Correct Answer
    A. ‘novation
    Explanation
    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.

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Quiz Review Timeline (Updated): Jan 31, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jan 31, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 09, 2011
    Quiz Created by
    Kaushal Mandalia

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