Stock Market MCQ Exam!

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| By Sagnik Chatterjee
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Sagnik Chatterjee
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Quizzes Created: 1 | Total Attempts: 2,031
Questions: 20 | Attempts: 2,031

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Stock Market MCQ Exam! - Quiz

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Questions and Answers
  • 1. 

    Most commonly to buy/sell shares, you should have an __________ account.

    • A.

      CEMAT 

    • B.

      DEMAT

    • C.

      EEMAT

    • D.

      SMAT 

    Correct Answer
    B. DEMAT
    Explanation
    To buy/sell shares, you should have a DEMAT account. A DEMAT account is a type of account that allows investors to hold their securities in an electronic format, eliminating the need for physical share certificates. It provides a convenient and secure way to trade and settle shares electronically. This account is necessary as it facilitates easy and seamless transactions in the stock market, ensuring the safety and efficiency of the trading process.

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  • 2. 

    How many companies are included in the SENSEX?

    • A.

      30

    • B.

      25

    • C.

      35

    • D.

      20

    Correct Answer
    A. 30
    Explanation
    The SENSEX is a stock market index in India that represents the performance of the top 30 companies listed on the Bombay Stock Exchange (BSE). Therefore, the correct answer is 30, as it accurately reflects the number of companies included in the SENSEX.

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  • 3. 

    What do IPO and FPO mean?

    • A.

      Initial Public Offering , First Public Offer

    • B.

      Invest Public Offering , First Public Offer

    • C.

      Ideal Public Offering , First Public Offer

    • D.

      Initial Public Offering , Follow on Public Offer  

    Correct Answer
    D. Initial Public Offering , Follow on Public Offer  
    Explanation
    IPO stands for Initial Public Offering, which is the first sale of shares by a company to the public. FPO stands for Follow on Public Offer, which is the subsequent sale of shares by a company that has already had an IPO. Therefore, the correct answer is "Initial Public Offering , Follow on Public Offer".

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  • 4. 

    A growing stock market is referred to as a _____ market and a falling stock market is called a ____ market.

    • A.

      Bear , Bull 

    • B.

      Bull ,Bear 

    • C.

      Positive , Negative

    • D.

      Negative , Positive 

    Correct Answer
    B. Bull ,Bear 
    Explanation
    A growing stock market is referred to as a "bull" market because it symbolizes strength and upward movement, just like a bull charging forward. On the other hand, a falling stock market is called a "bear" market because it represents a downward trend, similar to a bear swiping its paws downward.

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  • 5. 

    ___________is the price at which bond is traded in the stock exchange.

    • A.

      Redemtion value 

    • B.

      Face value 

    • C.

      Market value 

    • D.

      Maturity value 

    Correct Answer
    C. Market value 
    Explanation
    The correct answer is Market value. Market value refers to the price at which a bond is traded in the stock exchange. It is determined by the supply and demand dynamics in the market and can fluctuate based on various factors such as interest rates, credit ratings, and market sentiment.

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  • 6. 

    Which of the following is responsible for the fluctuations in the SENSEX?

    • A.

      Rain

    • B.

      Monetary Policy 

    • C.

      Political instability 

    • D.

      All of the above 

    Correct Answer
    D. All of the above 
    Explanation
    All of the above options are responsible for the fluctuations in the SENSEX. Rain can affect the stock market as it can impact various industries such as agriculture, construction, and transportation. Monetary policy decisions made by the central bank can also have a significant impact on the stock market. Changes in interest rates, inflation, and liquidity can influence investor sentiment and market conditions. Political instability, such as changes in government or policy uncertainty, can create volatility in the stock market as it affects investor confidence and economic stability.

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  • 7. 

    How easily you can buy/sell a share without affecting the share price is called _________ 

    • A.

      Short selling 

    • B.

      Average down 

    • C.

      Liquidity 

    • D.

      Volatility 

    Correct Answer
    C. Liquidity 
    Explanation
    Liquidity refers to how easily a share can be bought or sold without causing a significant impact on its price. It indicates the ability to convert an investment into cash quickly and at a fair price. A highly liquid market allows for efficient trading with minimal price disruption, while a less liquid market may result in higher transaction costs and price volatility. Therefore, liquidity is the most appropriate term to describe the ease of buying or selling a share without affecting its price.

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  • 8. 

    A company with a share price of Rs 4000 is much bigger than another company with a share price of Rs 120.

    • A.

      Yes 

    • B.

      No 

    • C.

      Can't say

    Correct Answer
    C. Can't say
    Explanation
    The share price of a company alone does not determine its size or value. The size of a company is determined by various factors such as market capitalization, revenue, assets, and market share. Therefore, without considering these additional factors, it is not possible to determine whether a company with a share price of Rs 4000 is much bigger than another company with a share price of Rs 120.

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  • 9. 

    A low PE stock is always better than a high PE stock . 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A low PE (Price to Earnings) stock is considered better than a high PE stock because it indicates that the stock is relatively undervalued compared to its earnings. A low PE ratio suggests that the stock is priced lower in relation to its earnings, making it potentially a good investment opportunity. On the other hand, a high PE ratio implies that the stock is priced higher relative to its earnings, which may indicate that it is overvalued and potentially a riskier investment. Thus, it is generally preferred to invest in low PE stocks.

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  • 10. 

    Blue chips stock are the .....

    • A.

      Stocks of those companies which give highest dividends.

    • B.

      Stocks which are undervalued and trading below their intrinsic value .

    • C.

      Stocks which are growing at a very fast rate compared to its competitors and industry.

    • D.

      Stocks of nationally recognized , well established and financially sound companies.

    Correct Answer
    D. Stocks of nationally recognized , well established and financially sound companies.
    Explanation
    Blue chip stocks are considered to be stocks of nationally recognized, well-established, and financially sound companies. These companies have a proven track record of stability, reliability, and consistent growth. Blue chip stocks are typically less volatile compared to other stocks and are often seen as a safe investment option. Investors are attracted to blue chip stocks because they offer stability, long-term growth potential, and are less likely to be affected by market fluctuations.

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  • 11. 

    Penny Stocks are?

    • A.

      Stock value under 1 $

    • B.

      Volatile stocks 

    • C.

      Stocks listed in US stock market 

    • D.

      Stocks of new IPO companies 

    Correct Answer
    A. Stock value under 1 $
    Explanation
    Penny stocks are stocks that have a value of under $1. These stocks are often considered to be highly speculative and risky investments due to their low price and lack of liquidity. They are typically associated with small companies and startups that have not yet established themselves in the market. Investors who are willing to take on higher levels of risk may choose to invest in penny stocks in the hopes of making significant profits, but it is important to note that these stocks can also result in substantial losses.

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  • 12. 

    An asset is having Beta value 2, which means 

    • A.

      Stock is safe to invest 

    • B.

      The stock is risky 

    • C.

      Stock is of blue chip company 

    • D.

      Stock price will double

    Correct Answer
    B. The stock is risky 
    Explanation
    The correct answer is "The stock is risky". A beta value of 2 indicates that the stock's price is expected to be twice as volatile as the overall market. This means that the stock is considered to be risky as it is more likely to experience larger price fluctuations compared to the market.

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  • 13. 

    Select the correct statement.

    • A.

      NSE is older than BSE 

    • B.

      NIFTY consist of top 30 companies 

    • C.

      SENSEX is the index for BSE

    • D.

      Base year for NIFTY is 1992 

    Correct Answer
    C. SENSEX is the index for BSE
    Explanation
    The given statement is correct because SENSEX is indeed the index for BSE (Bombay Stock Exchange). SENSEX is a stock market index that represents the performance of the top 30 companies listed on the BSE. It is widely used as a benchmark for the Indian stock market and is considered to be one of the most important stock market indices in India.

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  • 14. 

    Which of the following is not a type of order?

    • A.

      Market order 

    • B.

      Stop loss order 

    • C.

      Limit order

    • D.

      High end order

    Correct Answer
    D. High end order
    Explanation
    A high end order is not a recognized type of order in financial markets. Market order, stop loss order, and limit order are all commonly used types of orders in trading. A market order is an order to buy or sell a security at the current market price. A stop loss order is an order to sell a security when it reaches a specified price, to limit potential losses. A limit order is an order to buy or sell a security at a specified price or better. However, a high end order is not a term commonly used in financial markets and does not represent a recognized type of order.

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  • 15. 

    Full form of SEBI?

    • A.

      Security and Exchange board of India

    • B.

      Stock exchange board of India

    • C.

      Share exchange board of India

    • D.

      Security for exchange band in India

    Correct Answer
    A. Security and Exchange board of India
    Explanation
    SEBI stands for Security and Exchange Board of India. It is the regulatory body in India that oversees the securities market and protects the interests of investors. SEBI plays a crucial role in regulating and supervising the activities of stock exchanges, brokers, and other market intermediaries. It ensures fair practices and transparency in the securities market, promotes investor education and awareness, and enforces rules and regulations to prevent fraud and manipulation.

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  • 16. 

    For a company listed in the stock market- Number of share's X value of one share =

    • A.

      Market cap

    • B.

      Number of shareholder's

    • C.

      Revenue 

    • D.

      Profit 

    Correct Answer
    A. Market cap
    Explanation
    The market cap of a company listed in the stock market is calculated by multiplying the number of shares of the company by the value of one share. This represents the total market value of the company's outstanding shares. It is a measure of the company's size and is used by investors to evaluate the company's worth and compare it to other companies in the market.

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  • 17. 

    Which of these is not a type of mutual fund?

    • A.

      Equity fund 

    • B.

      Index fund 

    • C.

      Fixed income fund 

    • D.

      Beta fund 

    Correct Answer
    D. Beta fund 
    Explanation
    Beta fund is not a type of mutual fund. Equity fund, index fund, and fixed income fund are all common types of mutual funds that investors can choose from. However, beta fund is not a recognized category of mutual funds. Beta is a measure of an investment's sensitivity to market movements, but it is not a standalone type of mutual fund.

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  • 18. 

    Zerodha is a?

    • A.

      A brokerage company 

    • B.

      Stock market in India 

    • C.

      Stock market in Pakistan 

    • D.

      Company listed by NSE

    Correct Answer
    A. A brokerage company 
    Explanation
    Zerodha is a brokerage company. A brokerage company acts as an intermediary between buyers and sellers in financial markets, facilitating the buying and selling of securities such as stocks, bonds, and commodities. Zerodha is a prominent brokerage company in India, offering online trading services and investment options to retail and institutional investors. They provide a platform for individuals to trade in various financial instruments on stock exchanges like NSE and BSE.

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  • 19. 

    Stock market performance of India can be influenced by:

    • A.

      US stock market performance

    • B.

      Indian government policies on FDI 

    • C.

      India's GDP growth rate 

    • D.

      All of the above 

    Correct Answer
    D. All of the above 
    Explanation
    The stock market performance of India can be influenced by various factors, including the performance of the US stock market, as there is often a correlation between the two markets. Additionally, Indian government policies on foreign direct investment (FDI) can have an impact on the stock market, as they can affect investor sentiment and confidence. Furthermore, India's GDP growth rate is another important factor that can influence stock market performance, as a higher GDP growth rate indicates a stronger economy and can attract more investment. Therefore, all of the above factors can have an influence on the stock market performance of India.

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  • 20. 

    Who is the current Managing Director and Chief Executive Officer of NSE?

    • A.

      Ashish Chauhan 

    • B.

      Subrato Das 

    • C.

      Vikram Limaye

    • D.

      Dr. Bhaskar Banerjee

    Correct Answer
    C. Vikram Limaye
    Explanation
    Vikram Limaye is the current Managing Director and Chief Executive Officer of NSE.

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

  • Current Version
  • Nov 16, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 16, 2019
    Quiz Created by
    Sagnik Chatterjee
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