Capital MKT

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank

Question Information technology, communication and entertainment represent ________
stocks.
Correct Answer ICE
Your Answer ICE
True/False
Question The public cannot give their complaints or comments on the issuer company or others
connected with the issue to SEBI.
Correct Answer False
Your Answer True
Select The Blank

Question The right to buy is called ________.
Correct Answer Call option
Your Answer Call option
Multiple Choice Single Answer

Question What percentage of funds should be invested in unlisted companies?
Correct Answer 0.74
Your Answer 0.74

Question Who is responsible to get the securities listed on all the stock exchanges?
Correct Answer Merchant banker
Your Answer SEBI
Select The Blank

Question A mutual fund scheme shall not invest more than ________ of its NAV in unrated
debt by a single issuer.
Correct Answer 0.1
Your Answer 0.1

Question What is the amount invested by the FII's in the Indian Capital market?
Correct Answer US$14 bn
Your Answer US$14 bn
True/False
Question The depository can legally transfer beneficial ownership.
Correct Answer True
Your Answer True

Question Since when have the Indian Stock markets risen ?
Correct Answer 37775
Your Answer 38200
Multiple Choice Multiple Answer

Question Describe the regulatory aspects of mutual funds :-
Correct Answer The Asset management company shall not launch any scheme till approval of
trustees and offer document has been filed with the board , With each offer document pay filing
fees , Offer document to contain disclosures
By- al_unreal@yahoo.com & nish4u6474@yahoo.com

Your Answer The Asset management company shall not launch any scheme till approval of

Question Describe in brief the SEBI regulations for venture capital funds :-
Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry
out another activity
Your Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
True/False
Question Money market mutual funds are not permitted to invest in treasury bills and
commercial paper.
Your Answer True

Question When can the American style option exercised?
Correct Answer On or before the expiry date
Your Answer On or before the expiry date
True/False
Question A portfolio manager has to assure a guaranteed return to his client.
Your Answer False

Question What is the estimated figure of credit card defaults in India?
Correct Answer 800 crores
Your Answer 800 crores
True/False
Question Depositary facilitates transfers without having to handle money.
Your Answer False
Select The Blank

Question AA rated companies can raise ________ of its net worth.
Correct Answer 2.5 times
Your Answer 2 times

Question Describe E-trading :-
Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home or office
Your Answer Screen based trading in place of traditional ring , Communication through the net ,
Operate in stock market privately through home or office

Question What are the eligibility norms for an unlisted company for making a public issue?
Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net
worth

Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue net
worth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3
years
Select The Blank

Question Markets have moved away from Badla system to ________ .
Correct Answer Derivatives Trading
Your Answer Derivatives Trading

Question During the budget 2003 - 04, Finance Minister made some announcements which he
hopes will make investors think in terms of returning to stock market :-
Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver
Your Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver , Investors income tax on dividend
reduced to 12.5%

Question How many members are appointed by the central government?
Correct Answer 2
Your Answer 2

Question Which acts were amended to remove some of the hurdles to corporatisation and
demutualisation of stock exchanges?
Correct Answer SCRA , Depository Act
Your Answer SCRA , Depository Act
Match The Following

Question Correct Answer Your Answer
Shareholders Should effectively participate in general body meetings Should effectively participate
in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and
debenture holders Look into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,

mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process
Decision making

Question Which companies have eroded market capitalization by Rs20 000 crores?
Correct Answer Infosys , Satyam , Wipro
Your Answer Infosys , Satyam , Wipro

Question What does SEBI do with its power ?
Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
beneficiary owners , Investigate an acquirer
Your Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

True/False
Question Amendment to SCRA will facilitate derivatives trading in interest rate futures and
options if there is an underlying asset.
Correct Answer True
Your Answer True
True/False
Question In order to dematerialize the securities one has to fill DRF.
Correct Answer True
Your Answer True
Select The Blank

Question In case of an IPO of any security of issue size of Rs________ or more security shall
be issued only in demat form.

Question What are the obligations of a company in a share buy back?
Correct Answer The offer letter should contain true, factual and material information and should
not be misleading. , The company must pay the consideration only by the way of cash , The
company should not issue any fresh securities including bonus shares till the date of the closure
of the offer.
Your Answer The offer letter should contain true, factual and material information and should
of the offer.
Select The Blank

Question The DP opens investor account in the system and gives an account number also
known as ________.
Correct Answer BO ID
Your Answer BO ID

Question As per RBI regulation, bank borrowings should not exceed how many times of the net
owned funds?
Correct Answer 4 times
Your Answer 4 times

Question What are the factors that determine the value of a firm?
Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity
of the industry
Your Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
Match The Following

Portfolio Collection of assets Collection of assets
Factors influencing portfolio decisions Business and Market risks Business and Market risks

Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe high
standard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To make timely
decision regarding sale and purchase of securities

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

Question The refinance made available to any HFC is not to be more than :-
Correct Answer 60% of its outstanding housing loans
Your Answer 60% of its outstanding housing loans
True/False
Question RBI has permitted all commercial banks, financial institutions and large corporates to
issue certificate of deposits.
Your Answer False

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

Question What is dematerialization ?
Correct Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP
Your Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP , Selling shares
Select The Blank

Question ________ is in the form of a usance promissory note payable after 45 days from the
date of issue.
Correct Answer Certificate of Deposit
Your Answer Certificate of Deposit

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

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

Question What is the amount of net worth accompany should have for opting for an IPO ?
Correct Answer 1 Crore

Your Answer 1 Crore
Select The Blank

Question The process of securitisation involves transfer of assets to a person specially created
called as ________.
Correct Answer Special purpose vehicle
Your Answer Special purpose vehicle
True/False
Question A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of
open ended schemes.
Correct Answer True
Your Answer False

Question What is a put option?
Correct Answer Right to sell
Your Answer Right to sell
True/False
Question Venture capital finance is risk finance for entrepreneurial growth oriented companies.
Correct Answer True
Your Answer True


Question Who can change the composition of securities?
Correct Answer Fund manager
Your Answer Fund manager
True/False
Question Employee stock option scheme granted to the employee is transferable.
Your Answer False

Question The following are some of the regulations governing the NBFC's issued by RBI :-
Correct Answer Without the registration certificate no company can undertake activities of
NBFC , All companies must be liquid assets equal to 15% of deposits , All the NBFC's must
register with RBI
Your Answer All the NBFC's must register with RBI , Without the registration certificate no
company can undertake activities of NBFC , All companies must be liquid assets equal to 15% of
deposits
True/False
Question Transactions that involve substantial payment towards goodwill, brand equity or
intellectual property must be placed before the board of directors as per the recommendations of
the Kumarmangalam Birla report.
Correct Answer True
Your Answer True


Question Deposits can be accepted for a maximum period of :-
Correct Answer 5 years
Your Answer 10 years


Your Answer 37775

Question In the wake of boom of which sector the Indian mutual fund launched various sector
specific schemes?
Correct Answer Software
Your Answer Software
Select The Blank

Question In 2001 a case of rigging and short selling based insider trading was noticed in the
case of proposed merger of ________.
Correct Answer UTI Bank with GTB
Your Answer OBC with GTB
Select The Blank

Question ________ are a kind of portfolio schemes.
Correct Answer Mutual funds
Your Answer Mutual funds
Select The Blank


Question What is equipment leasing ?
Correct Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lessee
Your Answer Contractual agreement where the lessor of equipment transfers the right to use

of the industry
the industry
True/False
Question Mergers and amalgamations of companies are also covered under the SEBI
regulations 1997.
Your Answer False
Select The Blank

Question No mutual fund under all its schemes should own more than ________ of any
company's paid up capital carrying voting rights.
Correct Answer 0.1
Your Answer 0.3

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


Question If the unlisted company does not satisfy the criteria of net worth profitability and issue
size how can it come out with a public issue?

Correct Answer Through book building process
Your Answer Through book building process

Question Which is the favorite destination for venture funds?
Correct Answer BPO
Your Answer BPO

Question Who issues participatory notes?
Correct Answer Associates of India based foreign brokerages , Domestic institutional
brokerages
Your Answer Associates of India based foreign brokerages , Domestic institutional brokerages

Question For a VCF to be registered with SEBI what is the registration fee ?
Correct Answer 5 lacs
Your Answer 5 lacs
Match The Following

Ready forward transaction (Repo) Interbank sale and repurchase of securities Interbank sale and
repurchase of securities
Commercial paper Means of raising short term debt by companies Means of raising short term
debt by companies
STCI Operations in call money markets Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05
True/False
commercial paper.
Your Answer False

Question What are the norms for Approval of Housing finance companies by NHB?
Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
Your Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
True/False
Question SEBI has taken an action to ban on Badla.
Correct Answer True
Your Answer False



Question What is the limit for aggregate investment of FII's NRI's and OCB's?
Correct Answer 0.3
Your Answer 0.25
True/False
Question Acquisition finance, which provide funding for acquiring another company are often
closely held or fairly owned.
Correct Answer True
Your Answer True

Question As per the reports and the letter of intent filed with SEBI, what amount is expected to
be paid from the primary market during this year?
Select The Blank

Question The acquirer is required to make the PA within ________ working days of entering
into an agreement to acquire shares or deciding to acquire share's voting rights of target
company.
Correct Answer 4
Your Answer 4

Question What is the objective of public announcement?
Correct Answer Ensure that the shareholders of the target company are aware of the exit
opportunity available to them
Your Answer Ensure that the shareholders of the target company are aware of the exit
True/False
Your Answer False
True/False
Question If the credit rating is obtained from two different agencies in case of issue of debt
instruments, all the ratings need not be disclosed in the document.
Your Answer True

Question How does SEBI react to the Scams in participatory notes issuance?
Correct Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
controlled by Indians promoters
Your Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
Select The Blank

Question When one decides to have the shares in an electronic form one has to approach
________.

Correct Answer DP
Your Answer DP


True/False
Your Answer False

Correct Answer All the NBFC's must register with RBI , Without the registration certificate no
deposits
deposits
True/False
Correct Answer True
Your Answer True




Your Answer 37775

specific schemes?
Select The Blank

Select The Blank

Select The Blank



of the industry
the industry
True/False
regulations 1997.
Your Answer False
Select The Blank

known as ________.
Your Answer BO ID
True/False
Question Constant change would be one of the reasons for failure of corporate governance.
Correct Answer True
Your Answer False
Select The Blank

True/False
Question The company opting for an IPO should have net worth of at least Rs 1 crore in each
of the preceding two years.
Correct Answer True

Your Answer False

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

Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
investment strategy

Match The Following

Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores
MS Verma committee Dual Flotation Dual Flotation
Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores
VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores


Question When did the trading in foreign currency options start in India?
Your Answer 37829

Correct Answer Credited into investors account with his/ her DP , Physical certificates
converted into electronic from
Select The Blank

Correct Answer 0.1

Your Answer 0.3




Correct Answer BPO
Your Answer BPO

brokerages

Your Answer 5 lacs
Match The Following

debt by companies
True/False
commercial paper.
Your Answer False

auditors
auditors
True/False
Correct Answer True
Your Answer False


Correct Answer 0.3
Your Answer 0.25
True/False
Correct Answer True
Your Answer True

Select The Blank

company.
Correct Answer 4
Your Answer 4

True/False
Your Answer False

True/False
Your Answer True

Select The Blank

________.
Correct Answer DP
Your Answer DP

Select The Blank

stocks.
Correct Answer ICE
Your Answer ICE
True/False
Question The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank


of the offer.
of the offer.
Select The Blank

known as ________.
Your Answer BO ID

owned funds?
Your Answer 4 times

Correct Answer Degree of popularity of the industry , Overall economic condition , Demand
and supply capital
the industry
Match The Following


interest rate risk



Question What was the objective of setting up the Securities Trading
corporation of India Ltd?
Correct Answer To promote secondary market in government securities
Your Answer To strengthen the capital markets

Question What are the salient features of Hire Purchase ?
Correct Answer Finance company purchases the equipment supplier and lets it
on hire , During the contract hirer can opt for an early repayment
and purchase the asset , Hirer may be required to make down
payment
Your Answer During the contract hirer can opt for an early repayment and
purchase the asset , Hirer may be required to make down
payment , Finance company purchases the equipment supplier
and lets it on hire
True/False
Question A mutual fund shall not invest more than 10% of is NAV in equity
shares in cases of open ended schemes.
Correct Answer True
Your Answer True
Select The Blank


Question Who takes risk at the time of investment ?
Correct Answer Investor
Your Answer Investor
True/False
Question MIBOR is a security. Derivatives based on this interest rate have
legal recognition under SCRA.
Your Answer True

Select The Blank
Question It is the responsibility of the ________ to ensure the timely
refunds and allotments of the securities.
Correct Answer Lead managers
Your Answer Lead managers
True/False
Question A credit card is a payment mechanism which enables the holder
to buy goods and services on credit.
Correct Answer True
Your Answer True
Match The Following

Looses the rights to vote Non voting shares Non voting shares
Book building Bharati Televentures Bharati Televentures
Depository Bank of securities Bank of securities
First to introduce rolling NSE NSE

settlements in the country
Select The Blank

Question Final prospectus in the book building p________ess is to be filed
with the ROC.
Correct Answer ROC
Your Answer ROC
Select The Blank

Question A company with highly rated instrument has the opportunity to
________ by quoting less interest rates.
Correct Answer Reduce the cost of borrowing
Your Answer Reduce the cost of borrowing
True/False
Question Book building is a process whereby the price is determined on
the basis of actual demand as evident from the offers given by
the various institutional investors and underwriters.
Correct Answer True

Your Answer True

Question What are the norms for Approval of Housing finance companies
by NHB?
Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any
appointment of auditors
Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least
50% loans in long term nature

Question A portfolio manager could undertake the following on behalf of
his clients :-
Correct Answer Hedging and arbitrage transactions
Your Answer Hedging and arbitrage transactions

Question How is price determined in an open offer?
Correct Answer Negotiated price , Price paid by acquirer , Average weekly high
low of closing share of the target company
Your Answer Negotiated price , Price paid by acquirer , Average weekly high

Correct Answer Sound General knowledge , Analytical ability and marketing

skills , Experience
Your Answer Experience , Sound General knowledge , Analytical ability and
marketing skills

Question Renewal of portfolio fund on maturity shall be deemed as a fresh
placement for a minimum period of :-
Correct Answer 1 year
Your Answer 2 years
True/False
Correct Answer True
Your Answer True
Select The Blank

Question One of the process of book building is that the issuer appoints a
________ also known as the book runner.
Correct Answer Lead manager
Your Answer Lead manager
Select The Blank

Question The process of securitisation involves transfer of assets to a
person specially created called as ________.
Your Answer Trust
True/False
Question A custodian can transfer beneficial ownership legally.
Your Answer False

Question Apart from the portfolio management fees what percentage of
returns can the portfolio manager share from their client's
profits?
Correct Answer 0
Your Answer 0
True/False
Question The SEBI guidelines do not make it mandatory for the securities
purchased under the buy back arrangement to be extinguished
and physically destroyed.
Your Answer False
Select The Blank

Question BSE introduced an equity stock index known as ________.
Correct Answer SENSEX
Your Answer SENSEX

Question As per the recommendations of the Kumarmangalam Birla
committee report who are the key components of an audit
committee.

Correct Answer Board , Internal auditor , External auditor
Your Answer Board , Internal auditor , External auditor

Question Which companies have eroded market capitalization by Rs20
000 crores?

Correct Answer The offer letter should contain true, factual and material
information and should not be misleading. , The company must
pay the consideration only by the way of cash , The company
should not issue any fresh securities including bonus shares till
the date of the closure of the offer.
Your Answer The offer letter should contain true, factual and material

Question What are the different kinds of stock exchanges in India?
Correct Answer Voluntary non profit making organizations , Joint stock

companies limited by shares , Joint stock companies Limited by
guarantee
Your Answer Voluntary non profit making organizations , Joint stock
companies limited by shares , Private limited companies

Question Companies are not allowed to buy back securities :-
Correct Answer Through any/ own subsidiary company , Through any/group of

investment company , If default subsists in respect of
repayments of deposits, term loans to any financial institutions
and redemption of preference shares or debentures
Your Answer Through any/ own subsidiary company , Through any/group of
True/False
Correct Answer True

Your Answer True
Select The Blank

Question For issues upto Rs. 50 crores the number of lead managers will
not exceed ________.
Correct Answer 2
Your Answer 4
Match The Following

Ready forward transaction Interbank sale and Operations in call money

(Repo) repurchase of securities markets
Commercial paper Means of raising short Means of raising short term
term debt by companies debt by companies
STCI Operations in call money Launched in fiscal 2004-05
markets
Market stabilsation Bonds Launched in fiscal 2004- Interbank sale and
05 repurchase of securities
True/False
Question SEBI cannot investigate the affairs of mutual funds and their
trustees and asset management companies.
Your Answer False

Question What is the time frame to submit a report to SEBI for acquisition
transactions arising out of firm allotment in public issues right
issues etc?
Correct Answer 21 days
Your Answer 21 days
True/False
Question The acquirer is required to appoint a merchant banker before
making a PA.
Correct Answer True
Your Answer True
Select The Blank



Question Upto what percentage has the RBI permitted the banks to invest
in the capital market ?
Correct Answer 0.05
Your Answer 0.05

Question What was the turning point in the working of Indian capital
markets?
Your Answer Opening of Indian Capital Markets to FII's

Question What is the eligibility norm for an unlisted company for making
an public issue as regards to its net worth?
Correct Answer Net worth of the company should not be less than 1 crore
Your Answer Net worth of the company should not be less than 1 crore

Question Under section 11 B of SEBI act how many issuers were
debarred?
Correct Answer 1
Your Answer 3
Select The Blank

Question Among the closed schemes, 4 long term assurance schemes
were launched with a return ranging between ________.
Correct Answer 13 - 14%
Your Answer 15 - 16%

Correct Answer Investor characteristics , Liquidity needs and tax considerations ,

Investment and interest rate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations ,

Question What was the percentage of public offering under the IPOs
through the book building method ?
Correct Answer 0.1
Your Answer 0.25
Multiple Choice Multiple Answ er

Question What are the main features of commercial paper?
Correct Answer Short term financial instrument , Negotiable and transferable

instrument , Companies issue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferable
Select The Blank

Question A ________ can legally transfer beneficial ownership.
Correct Answer Depository
Your Answer Depository

Question The setting up of NSE consists of:-
Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started
operations in June 1994
Your Answer Equity paid up capital of Rs25 crores , Started operations in
June 1994 , There is a trading floor in this exchange

Question Which Act defines the term Stock Exchange?
Correct Answer Securities Contract Regulation Act
Your Answer Securities And Exchange Board of India

Question What was the objective of setting up the Securities Trading corporation of India Ltd?
Correct To promote secondary market in government securities

Answer

Correct Finance company purchases the equipment supplier and lets it on hire , During the
Answer contract hirer can opt for an early repayment and purchase the asset , Hirer may be
required to make down payment
Your Answer During the contract hirer can opt for an early repayment and purchase the asset , Hirer
may be required to make down payment , Finance company purchases the equipment
supplier and lets it on hire
True/False
Question A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of open
ended schemes.
Correct True
Answer
Your Answer True
Select The Blank

Correct Mutual funds

Answer

Correct Investor
Answer
True/False
Question MIBOR is a security. Derivatives based on this interest rate have legal recognition under
SCRA.
Correct False
Answer
Your Answer True
Select The Blank

Question It is the responsibility of the ________ to ensure the timely refunds and allotments of the
securities.
Correct Lead managers
Answer

True/False
Question A credit card is a payment mechanism which enables the holder to buy goods and
services on credit.
Correct True
Answer
Your Answer True
Match The Following


Select The Blank

Question Final prospectus in the book building p________ess is to be filed with the ROC.
Correct ROC
Answer
Your Answer ROC
Select The Blank

Question A company with highly rated instrument has the opportunity to ________ by quoting less
interest rates.
Correct Reduce the cost of borrowing
Answer
True/False
Question Book building is a process whereby the price is determined on the basis of actual demand
as evident from the offers given by the various institutional investors and underwriters.
Correct True
Answer
Your Answer True

Correct Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors
Answer
Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least 50% loans in long term
nature

Question A portfolio manager could undertake the following on behalf of his clients :-

Correct Hedging and arbitrage transactions
Answer

Correct Negotiated price , Price paid by acquirer , Average weekly high low of closing share of the
Answer target company
Your Answer Negotiated price , Price paid by acquirer , Average weekly high low of closing share of the
target company

Correct Sound General knowledge , Analytical ability and marketing skills , Experience
Answer
Your Answer Experience , Sound General knowledge , Analytical ability and marketing skills

Question Renewal of portfolio fund on maturity shall be deemed as a fresh placement for a
minimum period of :-
Correct 1 year
Answer
Your Answer 2 years
True/False
Correct True
Answer
Your Answer True
Select The Blank

Question One of the process of book building is that the issuer appoints a ________ also known as
the book runner.
Correct Lead manager
Answer
Select The Blank

called as ________.
Correct Special purpose vehicle
Answer
Your Answer Trust
True/False
Correct False
Answer

Your Answer False

Question Apart from the portfolio management fees what percentage of returns can the portfolio
manager share from their client's profits?
Correct 0
Answer
Your Answer 0
True/False
Question The SEBI guidelines do not make it mandatory for the securities purchased under the buy
back arrangement to be extinguished and physically destroyed.
Correct False
Answer
Your Answer False
Select The Blank

Correct SENSEX
Answer
Your Answer SENSEX

Question As per the recommendations of the Kumarmangalam Birla committee report who are the
key components of an audit committee.
Correct Board , Internal auditor , External auditor
Answer

Correct Infosys , Satyam , Wipro

Answer

Correct The offer letter should contain true, factual and material information and should not be
Answer misleading. , The company must pay the consideration only by the way of cash , The
company should not issue any fresh securities including bonus shares till the date of the
closure of the offer.
Your Answer The offer letter should contain true, factual and material information and should not be
misleading. , The company must pay the consideration only by the way of cash , The
company should not issue any fresh securities including bonus shares till the date of the
closure of the offer.


Correct Voluntary non profit making organizations , Joint stock companies limited by shares ,
Answer Joint stock companies Limited by guarantee
Your Answer Voluntary non profit making organizations , Joint stock companies limited by shares ,
Private limited companies

Correct Through any/ own subsidiary company , Through any/group of investment company , If
Answer default subsists in respect of repayments of deposits, term loans to any financial
institutions and redemption of preference shares or debentures
Your Answer Through any/ own subsidiary company , Through any/group of investment company , If
default subsists in respect of repayments of deposits, term loans to any financial
institutions and redemption of preference shares or debentures
True/False
Correct True
Answer
Your Answer True
Select The Blank

Question For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
Correct 2
Answer
Your Answer 4
Match The Following

Ready forward transaction (Repo) Interbank sale and repurchase of Operations in call money markets
securities
Commercial paper Means of raising short term debt Means of raising short term debt
by companies by companies
STCI Operations in call money markets Launched in fiscal 2004-05
Market stabilsation Bonds Launched in fiscal 2004-05 Interbank sale and repurchase of
securities
True/False
Question SEBI cannot investigate the affairs of mutual funds and their trustees and asset
management companies.
Correct False
Answer
Your Answer False

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

Your Answer 21 days
True/False
Question The acquirer is required to appoint a merchant banker before making a PA.
Correct True
Answer
Your Answer True
Select The Blank

Correct Call option

Answer

Question Upto what percentage has the RBI permitted the banks to invest in the capital market ?
Correct 0.05
Answer
Your Answer 0.05

Correct Establishment of NSE

Answer

Question What is the eligibility norm for an unlisted company for making an public issue as regards
to its net worth?
Correct Net worth of the company should not be less than 1 crore
Answer

Question Under section 11 B of SEBI act how many issuers were debarred?
Correct 1
Answer
Your Answer 3
Select The Blank

Question Among the closed schemes, 4 long term assurance schemes were launched with a return
ranging between ________.
Correct 13 - 14%
Answer

Correct Investor characteristics , Liquidity needs and tax considerations , Investment and interest
Answer rate risk
Your Answer Investor characteristics , Liquidity needs and tax considerations , Investment and interest
rate risk

Question What was the percentage of public offering under the IPOs through the book building
method ?
Correct 0.1
Answer
Your Answer 0.25

Correct Short term financial instrument , Negotiable and transferable instrument , Companies
Answer issue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferable instrument , Companies
issue it for raising short term debt
Select The Blank

Correct Depository
Answer
Correct Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994
Answer
Your Answer Equity paid up capital of Rs25 crores , Started operations in June 1994 , There is a
trading floor in this exchange

Correct Securities Contract Regulation Act

Answer
Select The Blank

Question ________ is an internationa l credit rating company.
Correct Answer FITSCH
Your Answer Crisil
True/False

Correct Answer True
Your Answer True
Select The Blank

Question Hire Purchase transactions are liable to ________.
Correct Answer Sales tax
Your Answer Sales tax



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


Question As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid
from the primary market during this year?

Question The features of mutual Fund are :-
Correct Answer A trust that pools in savings and funds from large number of investors who have
common financial goal , Issue units to investor which represent right in assets , Investments in mutual
funds may be in the form of stock, bond, money market securities
Your Answer A trust that pools in savings and funds from large number of investors who have common
financial goal , Issue units to investor which represent right in assets , Investments in mutual funds may
be in the form of stock, bond, money market securities
True/False
Your Answer True
Select The Blank

Question As per SEBI regulations, PMS must not be involved in any litigation connected with ________.
Correct Answer Securities markets

Your Answer Clients

Question What qualities do the merchant bankers need to possess?
Correct Answer Knowledge and information about various aspects of capital markets , Ability to
evaluate and analyze , Update the knowledge
Your Answer Knowledge and information about various aspects of capital markets , Ability to evaluate
and analyze , Update the knowledge

Question Describe the stock lending mechanism:-
Correct Answer Involves two parties one who is willing to lend and other who wishes to borrow
securities at market related rates , Lender is assured of getting equivalent the relevant securities by
NSSCL on the settlement date , Lender gets benefit of reasonable return called lending fee
Your Answer Involves two parties one who is willing to lend and other who wishes to borrow securities
at market related rates , Lender gets benefit of reasonable return called lending fee

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

Question The process of share buy back must be completed within what period from the date of passing
the resolution?
Correct Answer 12 months
Your Answer 12 months
Match The Following

10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds
0.57 FII current free float sensex company FII free float stock NIFTY companies
0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal

Your Answer 37829

Question What is the main objective of credit appraisal ?
Correct Answer Assess the repayment capacity
Your Answer Assess the age of the person borrowing
True/False
Question SEBI cannot investigate the affairs of mutual funds and their trus tees and asset management
companies.
Your Answer False
Select The Blank

Question In the L & T reliance case, Reliance was fined ________.
Correct Answer Rs. 5 lacs
Your Answer Rs. 5 lacs
Select The Blank

Question Recently many banks have started issuing ________ which could also be used as a debit card.
Correct Answer ATM card
Your Answer ATM card
Select The Blank

Question A ________ means any persons connected with a compan y and who is reasonably having
access to unpublished price sensitive information.
Correct Answer Insider
Your Answer Insider
Select The Blank

Question SENSEX is calculated using ________ method.
Correct Answer Market capitalization
Your Answer Weighted
Match The Following

Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash to the
shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done by the
shareholders
Open market purchases No minimum price stipulation No minimum price stipulation
Companies holding more than 90% equity Can be delisted Can be delisted
True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Question A portfolio manager need not necessarily sell or purchase securities separately for each client.
Your Answer True
True/False
Question RBI has permitted all commercial banks, financial institutions and large corporates to issue
certificate of deposits.
Your Answer True
True/False
Question Book building is a process whereby the price is determined on the basis of actual demand as
evident from the offers given by the various institutional investors and underwriters.
10

Correct Answer True
Your Answer True

Question What is the system of rolling settlement prevalent in the USA ?
Correct Answer Transaction + 3
Your Answer Transaction + 3

Question What is the most important objective for an investor?
Correct Answer Protection of the value of the investment
Your Answer Profit maximization

Correct Answer All the NBFC's must register with RBI , Without the registration certificate no company
can undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits
Your Answer All the NBFC's must register with RBI , Without the registration certificate no company can
undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits

Question What do you mean by venture capital?
Correct Answer Providing seed, start up capital and first stage financing
Your Answer Providing seed, start up capital and first stage financing

Select The Blank

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

Question In case of a public issue by a listed company participation by promoters in the proposed
issues in excess of the required minimum percentage shall also be looked in for a period of ________.
Your Answer 3 years
True/False
Your Answer False

Correct Answer Screen based trading in place of traditional ring , Communication through the net ,
Your Answer Screen based trading in place of traditional ring , Communication through the ne t ,
Select The Blank

Question The Kumarmangalam Birla report stressed on the importance of ________ with respect to
AGM's.
Correct Answer Proxy voting / ballot systems
Your Answer Proxy voting / ballot systems
11

True/False
Question The SEBI guidelines do not make it mandatory for the securities purchased under the buy
back arrangement to be extinguished and physically destroyed.
Your Answer False

Question What are the SEBI guidelines for issue of debt instruments?
Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be created
Your Answer Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture
redemption reserve to be created


Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment
strategy
Your Answer VCF's must be registered , Cannot carry out another activity , Must disclose investment
strategy

Question What is the minimum number of days for which the bid should remain open in book building?
Your Answer 7 days

Question As per RBI regulation, bank borrowings should not exceed how many times of the net owned
funds?
Your Answer 4 times
Select The Blank

Question With the introduction of ________ accounts the complaints about allotment have surely gone
down.
Correct Answer DEMAT
Your Answer DEMAT
12

True/False
Question The buy back of shares by Indian corporates has been very successful in India.
Your Answer True

Correct Answer 0.74
Your Answer 0.76
Select The Blank

Question When one decides to have the shares in an electronic form one has to approach ________.
Correct Answer DP
Your Answer SEBI
True/False
Question The issue price for placement portion and net offer to public are not the same.
Your Answer True

Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity of the
industry
Your Answer Overall economic condition , Degree of popularity of the industry , High profitability is
one of the criteria


Your Answer Assess the repayment capacity
True/False
Question Mutual funds can do investments in any security issued by way of private placement by an
associate or group company of the sponsor.
Your Answer True

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

Question Briefly describe the SEBI guidelines for the merchant bankers :-
Correct Answer Should have an authorization from SEBI , Expertise good financial standing and high
degree of professional integrity , Company abides by the various requirements relating to disclosers, listing
of instruments etc
Your Answer Should have an authorization from SEBI , Expertise good financial standing and high
degree of professional integrity , Company abides by the various requirements relating to disclosers, listing
of instruments etc
Select The Blank

Question In 2001 a case of rigging and short selling based insider trading was noticed in the case of
proposed merger of ________.
Your Answer UTI Bank with GTB
True/False
Question The lease agreement provides for a transfer of ownership to the lessee either at the end of the
period or during the period of lease.
Your Answer True

Question What are the eligibility norms for a listed company for making a public issue?
Correct Answer If the issue size is less than five times pre issue net worth , If the issue size is more than
or equal to five times pre issue networth then the listed company to take book building route , 60% of issue
size to be allotted to QIB's
Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more than or
equal to five times pre issue networth then the listed company to take book building route , 60% of issue
size to be allotted to QIB's

Question Where is the difference in buying and selling dematerialized shares ?
Correct Answer Process of delivery , Receipt of securities , Pledging the shares
Your Answer Process of delivery , Receipt of securities , Pledging the shares , Sale of shares

Question When is the public announcement required to be made?
Correct Answer In case of indirect acquisition or change in control, the PA shall be made by acquirer
within 3 months of conummation of such acquisition , The offer prices in such case shall be determined
with reference to date of public announcement
Your Answer The offer prices in such case shall be determined with reference to date of public
announcement , PA shall be made by the target company , In case of indirect acquisition or change in
control, the PA shall be made by acquirer within 3 months of conummation of such acquisition

Correct Answer Short term financial instrument , Negotiable and transferable instrument , Companies
issue it for raising short term debt
Your Answer Short term financial instrument , Negotiable and transferable instrument , Companies issue
it for raising short term debt


Match The Following

Share buy back is a way of Returning surplus cash to the shareholders Siphoning of excess cash by the
promoters
Dutch Auction Price of the Buy back is done by the shareholders No minimum price stipulation
Open market purchases No minimum price stipulation Returning surplus cash to the shareholders
Companies holding more than 90% equity Can be delisted Have to consider buy back

Question The following are some of the procedures of converting physical holding into electronic form :-
Correct Answer Surrender certificates to DP , DP intimates request to depositary , DP submits the
certificates to registrar
Your Answer DP intimates request to depositary , DP submits the certificates to registrar , The pledgee
has to confirm the request through his her DP

Question As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid
from the primary market during this year?

Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994
Your Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started operations in June 1994

Question What is issued by mutual funds?
Correct Answer Units
Your Answer Units
Select The Blank

Your Answer 1.5 times
True/False
Correct Answer True
Your Answer True

Question Upto what percentage has the RBI permitted the banks to invest in the capital market ?
Correct Answer 0.05
Your Answer 0.05

Your Answer 5 lacs
Select The Blank

Select The Blank

Your Answer Mutual Funds Trading
True/False
Question Bidder cannot revise his bids.
Your Answer True
True/False
Your Answer False

Question When can an offer be withdrawn?
Correct Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in
opinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion
of board , Government regulations
Select The Blank

Question The service charge is levied for allowing subscribers for entry into or exit from mutual schemes
is called as ________.
Correct Answer Load
Your Answer AMC

Correct Answer The offer letter should contain true, factual and material information and should not be
misleading. , The company must pay the consideration only by the way of cash , The company should not
issue any fresh securities including bonus shares till the date of the closure of the offer.
Your Answer The offer letter should contain true, factual and material information and should not be
misleading. , The company must pay the consideration only by the way of cash

Question How much percentage of company's revenue would be accounted for by the business with new
name?
Correct Answer 0.5
Your Answer 0.3
Select The Blank

Question It is the responsibility of the ________ to ensure the timely refunds and allotments of the
securities.

Select The Blank

Question As per SEBI regulations, PMS must not be involved in any litigation connected with ________.
Your Answer Securities markets

Question Crisil's AAA rating stands for :-
Correct Answer Highest safety
Your Answer Highest safety
True/False
Question Amendment to SCRA will facilitate derivatives trading in interest rate futures and options if
there is an underlying asset.
Correct Answer True
Your Answer True

Question What is the main advantage of a rolling settlement?
Correct Answer Quicker payments
Your Answer Quicker payments

Question What is the minimum offer an acquirer can make ?
Correct Answer Min 20%
Your Answer Min 15 %

Question What is the eligibility norm for an unlisted company for making an public issue as regards to
its net worth?
Your Answer Net worth of the company should be more than 5 crores

Match The Following

Factors influencing portfolio decisions Business and Market risks To make timely decision regarding sale
and purchase of securities
Code of conduct- Portfolio Manager Observe high standard of integrity and fairness Observe high standard
of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms Portfolio Manager must fulfill
the capital adequacy norms

Question Who suffered heavy losses during bad times of stock markets?
Correct Answer Small investors
Your Answer Small investors
True/False
Correct Answer True
Your Answer True


Your Answer Securities Contract Regulation Act

Question What are the preconditions for trading on the net?
Correct Answer A net connection , A registered account with a broker and a demat account , Bank
payment gateway or online banking facility
Your Answer A registered account with a broker and a demat account , Bank payment gateway or online
banking facility , A net connection

True/False
Question Sweat equity shares are shares issued by company to employees or directors to discount.
Correct Answer True
Your Answer True
True/False
Question Money market mutual funds are not permitted to invest in treasury bills and commercial paper.
Your Answer False

Question Under various SEBI regulations how many brokers suspended?
Correct Answer 8
Your Answer 8

Correct Answer The Asset management company shall not launch any scheme till approval of trustees
and offer document has been filed with the board , With each offer document pay filing fees , Offer
document to contain disclosures
Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Match The Following

Charge card Form of plastic money Member establishment
Warning Bulletin Authenticity test Authenticity test
Credit information company SBI, HDFC bank SBI, HDFC bank
Credit card issuing company Visa/Master Card Visa/Master Card

Question Who forms the Asset management company (AMC)?
Correct Answer Group of trustees

Your Answer Group of trustees
Select The Blank

Question The portfolio manager has to place the funds of all their clients in a separate account to be
maintained by them with ________.
Correct Answer Scheduled Commercial Bank
Your Answer Scheduled Commercial Bank


Question Under which regulation is reporting mandatory in respect of acquisitions arising out of firm
allot meant in public issues and rights issues etc?
Correct Answer Regulation (3) 4
Your Answer Regulation (3) 4
True/False
Correct Answer True
Your Answer True

Question The Money market mutual funds (MMMFs) can invest the funds in which of these securities?
Correct Answer Call/notice money
Your Answer Call/notice money

Question What is the information to be placed before the board of directors as per the Kumarmangalam
report?
Correct Answer Annual operating plans , Capital budgets , Quarterly results
Your Answer Annual operating plans , Capital budgets , Quarterly results
True/False
Your Answer True

Question What are ESOP's ?
Correct Answer One of the methods of giving part ownership of the company to the employees ,
Employees can take part in the prosperity of the company , Is a reward and linked with the increase in the
prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the shares , One of the methods of
giving part ownership of the company to the employees , Employees can take part in the prosperity of the
company
Match The Following

Shareholders Should effectively participate in general body meetings Should effectively participate in
general body meetings

Objective of Audit committee Look into defaults to depositors creditors shareholders and debenture holders
Look into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision, mission
and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process Assisting the
board in decision making process

Your Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters
Select The Blank

Question While structuring the deal the entrepreneur seeks ________.
Correct Answer Voting control
Your Answer Goodwill
True/False
Question DRR is treated as part of general reserve for consideration of bonus issue of proposals.
Correct Answer True
Your Answer True


Question What precautions are to be taken with respect to delivery instruction slip ?
Correct Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
Your Answer DIS numbers are pre printed , Account number to be stamped , Investor should fill in
target account id
True/False
Question Reliance group has added over 10000 crores in market capital.
Correct Answer True
Your Answer False
Select The Blank

Question An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such
additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.
Correct Answer 0.05
Your Answer 0.2
Select The Blank

Question ________ is an international credit rating company.
Your Answer FITSCH
Select The Blank

Question The appointment of a ________ is mandatory in a offer process.
Correct Answer Merchant Banker
Your Answer Merchant Banker

its net worth?
Select The Blank


Question To make a public announcement the acquirer has to appoint :-

Question What is a more contemporary definition of corporate governance?
Correct Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability
Your Answer Corporate Governance is all about promoting corporate fairness, transparency and
accountability

Question What information is required to be furnished to stock exchanges in compliance of SEBI
regulations 1997 ?
Correct Answer Details of proposed acquisition need to be filed with Stock exchanges at least 4 days
before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with
2 days , Annual disclosures
Your Answer Any person holding more than 15% but less than 75% voting rights shall be disclosed with
2 days

Select The Blank

Question The merger of GTB and UTI was called off due to intervention of ________
Correct Answer SEBI and RBI
Your Answer SEBI and RBI
Select The Blank

Question The Merchant banker will incorporate in the letter of offer the comments made by SEBI and
then send within ________ days from the date of PA to all shareholders whose names appear in the register
of the company.
Correct Answer 45
Your Answer 45


opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True

Question The benefits of availing depository services are :-
Correct Answer No stamp duty , Reduction in paperless work , Reduction in transaction cost
Your Answer Reduction in paperless work , Reduction in transaction cost , Holds funds in an account

Correct Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository , Maintain the
True/False
Your Answer True
Select The Blank

Question Directors should not be member of more than________ committees.
Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False




True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

Match The Following



Select The Blank



True/False
Correct Answer True
Your Answer True


report?
True/False
Your Answer True

company
Match The Following



Select The Blank

True/False
Correct Answer True
Your Answer True


target account id
target account id
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


its net worth?
Select The Blank



accountability
accountability

regulations 1997 ?
2 days

Select The Blank

Select The Blank

of the company.
Correct Answer 45
Your Answer 45


opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True


True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False




True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

Match The Following



Select The Blank



True/False
Correct Answer True
Your Answer True


report?
True/False
Your Answer True

company
Match The Following



Select The Blank

True/False
Correct Answer True
Your Answer True


target account id
target account id
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


its net worth?
Select The Blank



accountability
accountability

regulations 1997 ?
2 days

Select The Blank

Select The Blank

of the company.
Correct Answer 45
Your Answer 45


opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True


True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False




True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

Match The Following



Select The Blank



True/False
Correct Answer True
Your Answer True


report?
True/False
Your Answer True

company
Match The Following



Select The Blank

True/False
Correct Answer True
Your Answer True


target account id
target account id
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


its net worth?
Select The Blank



accountability
accountability

regulations 1997 ?
2 days

Select The Blank

Select The Blank

of the company.
Correct Answer 45
Your Answer 45


opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True


True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False

Select The Blank

stocks.
Correct Answer ICE
Your Answer ICE
True/False
Your Answer True
Select The Blank


Correct Answer 0.74
Your Answer 0.74

Question Who is responsible to get the securities listed on all the stock exchanges?
Your Answer SEBI
Select The Blank

Question A mutual fund scheme shall not invest more than ________ of its NAV in unrated
debt by a single issuer.
Correct Answer 0.1
Your Answer 0.1

True/False
Correct Answer True
Your Answer True

Your Answer 38200



Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry
out another activity
investment strategy
True/False
commercial paper.
Your Answer True

True/False
Your Answer False

True/False
Your Answer False
Select The Blank

Your Answer 2 times


Question What are the eligibility norms for an unlisted company for making a public issue?
Correct Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net
worth

Your Answer Issue size shall not exceed five times of its pre issue net worth , Pre issue net
worth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3
years
Select The Blank


Question During the budget 2003 - 04, Finance Minister made some announcements which he
hopes will make investors think in terms of returning to stock market :-
Correct Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver
Your Answer No capital gains tax on investment made in equity after 1/3/03 held for 1 year ,
Removal of income tax on dividends in the hands of receiver , Investors income tax on dividend
reduced to 12.5%

Correct Answer 2
Your Answer 2

Question Which acts were amended to remove some of the hurdles to corporatisation and
demutualisation of stock exchanges?
Match The Following

Shareholders Should effectively participate in general body meetings Should effectively participate
in general body meetings
Objective of Audit committee Look into defaults to depositors creditors shareholders and
debenture holders Look into defaults to depositors creditors shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial commitment to vision,

mission and values Superficial commitment to vision, mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision making process
Decision making


Correct Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or
Your Answer Cancel certificate issued to custodian , Inspect books of DP , issuers or

True/False
Question Amendment to SCRA will facilitate derivatives trading in interest rate futures and
options if there is an underlying asset.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank


of the offer.
of the offer.
Select The Blank

known as ________.
Your Answer BO ID

owned funds?
Your Answer 4 times

of the industry
the industry
Match The Following



interest rate risk

True/False
Question RBI has permitted all commercial banks, financial institutions and large corporates to
issue certificate of deposits.
Your Answer False


Correct Answer Physical certificates converted into electronic from , Credited into investors
account with his/ her DP , Selling shares
Select The Blank

Question ________ is in the form of a usance promissory note payable after 45 days from the
date of issue.



Question What is the amount of net worth accompany should have for opting for an IPO ?

Your Answer 1 Crore
Select The Blank

called as ________.
True/False
Question A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of
open ended schemes.
Correct Answer True
Your Answer False

True/False
Question Venture capital finance is risk finance for entrepreneurial growth oriented companies.
Correct Answer True
Your Answer True


True/False
Your Answer False

Correct Answer All the NBFC's must register with RBI , Without the registration certificate no
deposits
deposits
True/False
Correct Answer True
Your Answer True




Your Answer 37775

specific schemes?
Select The Blank

Select The Blank

Select The Blank



of the industry
the industry
True/False
regulations 1997.
Your Answer False
Select The Blank

known as ________.
Your Answer BO ID
True/False
Correct Answer True
Your Answer False
Select The Blank

True/False
Question The company opting for an IPO should have net worth of at least Rs 1 crore in each
of the preceding two years.
Correct Answer True

Your Answer False

Correct Answer Enable surrender and withdrawal of securities to and from the depository ,
exchanges
Your Answer Enable surrender and withdrawal of securities to and from the depository ,
exchanges

Correct Answer VCF's must be registered , Cannot carry out another activity , Must disclose
investment strategy
investment strategy

Match The Following

Castrol FY 2003 - 03 Dividend Rs145 crores FY 2003 - 03 Dividend Rs145 crores
Hero Honda FY 2003 - 03 Dividend Rs187 crores FY 2003 - 03 Dividend Rs187 crores
VSNL FY 2003 - 03 Dividend Rs172 crores FY 2003 - 03 Dividend Rs172 crores


Your Answer 37829

Correct Answer Credited into investors account with his/ her DP , Physical certificates
converted into electronic from
Select The Blank

Correct Answer 0.1

Your Answer 0.3




Correct Answer BPO
Your Answer BPO

brokerages

Your Answer 5 lacs
Match The Following

debt by companies
True/False
commercial paper.
Your Answer False

auditors
auditors
True/False
Correct Answer True
Your Answer False


Correct Answer 0.3
Your Answer 0.25
True/False
Correct Answer True
Your Answer True

Select The Blank

company.
Correct Answer 4
Your Answer 4

True/False
Your Answer False

True/False
Your Answer True

Select The Blank

________.
Correct Answer DP
Your Answer DP


True/False
Your Answer False

Correct Answer Without the registration certificate no company can undertake activities of
NBFC , All companies must be liquid assets equal to 15% of deposits , All the NBFC's must
register with RBI
deposits
True/False
Correct Answer True
Your Answer True




Your Answer 37775

specific schemes?
Select The Blank

Select The Blank

Select The Blank



of the industry
the industry
True/False
regulations 1997.
Your Answer False
Select The Blank

Correct Answer 0.1
Your Answer 0.3





Correct Answer BPO
Your Answer BPO

brokerages

Your Answer 5 lacs
Match The Following

debt by companies
True/False
commercial paper.
Your Answer False

auditors
auditors
True/False
Correct Answer True
Your Answer False



Correct Answer 0.3
Your Answer 0.25
True/False
Correct Answer True
Your Answer True

Select The Blank

company.
Correct Answer 4
Your Answer 4

True/False
Your Answer False
True/False
Your Answer True

Select The Blank

________.

Correct Answer DP
Your Answer DP

Select The Blank

Question The NSE Nifty index comprises of ________companies.
Correct Answer 50
Your Answer 50
Match The Following

0.1 Government decided to pay dividend Government decided to pay dividend
0.15 MF cannot invest as percentage of NAV in debt instrument issued by single

issuer MF cannot invest as percentage of NAV in debt instrument issued by single
issuer
Annual statement of accounts of MF To be audited by auditor To be audited by

auditor
Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTI
schemes
Select The Blank


markets?

Correct Answer Investor characteristics , Liquidity needs and tax
considerations , Investment and interest rate risk
Your Answer Investor characteristics , Liquidity needs and tax
Select The Blank

Question The portfolio manager has to place the funds of all their clients
in a separate account to be maintained by them with ________.
True/False
Question ISIN is a unique identification number for security.
Correct Answer True
Your Answer True

Correct Answer Market for long term funds and investments in long term
instruments

Your Answer Market for long term funds and investments in long te rm
instruments

Question As per the reports and the letter of intent filed with SEBI, what
amount is expected to be paid from the primary market during this year?

Question What is the amount invested by the FII's in the Indian Capital
market?

Correct Answer A trust that pools in savings and funds from large number of
investors who have common financial goal , Issue units to investor which
represent right in assets , Investments in mutual funds may be in the form of
stock, bond, money market securities
Your Answer A trust that pools in savings and funds from large number of

Question Companies are not allowed to buy back securities : -
investment company , If default subsists in respect of repayments of deposits,
term loans to any financial institutions and redemption of preference shares or
debentures
debentures

Question Briefly describe the SEBI guidelines for the merch ant bankers :-
Correct Answer Should have an authorization from SEBI , Expertise good
financial standing and high degree of professional integrity , Company abides by
the various requirements relating to disclosers, listing of instruments etc
Your Answer Should have an authorization from SEBI , Expertise good

Your Answer Units

Question During the budget 2003 - 04, Finance Minister made some
announcements which he hopes will make investors think in terms of returning to
stock market :-

Correct Answer No capital gains tax on investment made in equity after
1/3/03 held for 1 year , Removal of income tax on dividends in the hands of
receiver
Your Answer Removal of income tax on dividends in the hands of receiver ,
Investors income tax on dividend reduced to 12.5% , No capital gains tax on
investment made in equity after 1/3/03 held for 1 year
Select The Blank

Question The merchant bankers should act as ________ of the investor's money
and put a lot of responsibility on them.
Correct Answer Custodian
Your Answer Custodian
True/False
Correct Answer True
Your Answer True
Select The Blank

Your Answer SENSEX

Question Which company was responsible for spr eading the equity culture in
India ?

Question Which companies have eroded market capitalization by Rs20 000
crores?

Your Answer 37834

transactions arising out of firm allotment in public issues right issues etc?
Your Answer 21 days
Select The Blank


Question What is government's move towards Stock Exchanges ?
Correct Answer Demutulisation
Your Answer Dematerialization

Question As per the recommendations of the Kumarmangalam Birla committee
report who are the key components of an audit committee.
Correct Answer External auditor , Board , Internal auditor
True/False
Question SEBI can investigate and inspect books of accounts and records of
insiders.
Correct Answer True
Your Answer True

skills , Experience
Your Answer Sound General knowledge , Analytical ability and marketing
skills , Experience

Question What is the objective of a credit information comp any?
Correct Answer To ascertain the credit worthiness of
individuals/organizations and make the data available to all banks
Your Answer To ascertain the credit worthiness of individuals/organizations
and make the data available to all banks
True/False
Question Transactions that involve substantial payment towards goodwill,
brand equity or intellectual property must be placed before the board of
directors as per the recommendations of the Kumarmangalam Birla report.
Correct Answer True
Your Answer True

Question What is the amount of net worth accompany should have for opting
for an IPO ?
Your Answer 1 Crore
True/False
Question A credit card is a payment mechanism which enables the holder to
buy goods and services on credit.
Correct Answer True
Your Answer True

Question When are VCF's entitled to get its units listed on stock exchange?
Correct Answer After expiration of 3 years form date of issuance of units
Your Answer After expiration of 3 years form date of issuance of units
True/False
Question Book building is a process whereby the price is determi ned on the
basis of actual demand as evident from the offers given by the various
institutional investors and underwriters.
Correct Answer True
Your Answer True

Question A portfolio manager could undertake the following on behalf of his
clients :-

Question What are the SEBI guidelines for issue of de bt instruments?
Correct Answer Credit rating , Maturity more than 18 months appoint
debenture trustee , Debenture redemption reserve to be created
Your Answer Credit rating , Maturity more than 18 months appoint debenture
trustee , Debenture redemption reserve to be created
Select The Blank

Match The Following

Factors influencing portfolio decisions Business and Market risks Business and
Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and

fairness Observe high standard of integrity and fairness
SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms
Portfolio Manager must fulfill the capital adequacy norms

Question What information is required to be furnished to stock exchanges in
compliance of SEBI regulations 1997 ?
Correct Answer Details of proposed acquisition need to be filed with Stock
exchanges at least 4 days before the date , Any person holding more than 15% but
less than 75% voting rights shall be disclosed with 2 days , Annual disclosures
Your Answer Details of proposed acquisition need to be filed with Stock

Question What are the requirements regarding promoter's contribution and
lock in?
Correct Answer In case of IPO, promoters have to necessarily offer at least
20% of the post issue capital , In case of listed company promoters shall
participate either to extent of 20% of proposed or post issue , In case of any
issue of capital the minimum contribution shall be locked in for a period of 3
years
Your Answer In case of IPO, promoters have to necessarily offer at least 20%
of the post issue capital , In case of listed company promoters shall
years

True/False
Question Constant change would be one of the reasons for failure of
corporate governance.
Correct Answer True
Your Answer True
Select The Blank

Question Final prospec tus in the book building p________ess is to be filed
with the ROC.
Correct Answer ROC
Your Answer ROC

True/False
Question Employee stock option scheme granted to the employee is
transferable.
Your Answer False

Question How many companies are there to do business of credit rating?
Correct Answer 4
Your Answer 4

Question What are the general obligations of mutual fund ?
Correct Answer Every AMC should maintain proper books of accounts ,
Financial year for all schemes to end as on March 31 each year , Every mutual
fund shall have the annual statements audited by auditor
Your Answer Every AMC should maintain proper books of accounts , Financial
year for all schemes to end as on March 31 each year , Every mutual fund shall
have the annual statements audited by auditor
Select The Blank

Question Recently, SEBI has allowed buy back of shares upto ________% of the
total shares without requirement of a special resolution
Correct Answer 10
Your Answer 10
Select The Blank

Correct Answer 10
Your Answer 10

Select The Blank

Your Answer Crisil
True/False
Question The acquirer is required to appoint a merchant banker before making
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
Your Answer Market for long term funds and investments in long term
instruments

skills , Experience
skills , Experience

Correct Answer Client gives his money for investment to the portfolio
manager and leaves it to him to make all the investment decisions.
Your Answer Client gives his money for investment to the portfolio manager
and leaves it to him to make all the investment decisions.
True/False
Your Answer True

market?


True/False
Question If the credit rating is obtained from two different agencies in
case of issue of debt instruments, all the ratings need not be disclosed in the
document.
Your Answer True
Select The Blank

Question As per SEBI regulations, PMS must not be involved in any litigation
connected with ________.
Correct Answ er Securities markets
Your Answer Clients

Correct Answer Knowledge and information about various aspects of capital
markets , Ability to evaluate and analyze , Update the knowledge
Your Answer Knowledge and information about various aspects of capital

Question Describ e the stock lending mechanism:-
Correct Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender is assured of
getting equivalent the relevant securities by NSSCL on the settlement date ,
Lender gets benefit of reasonable return called lending fee
Your Answer Involves two parties one who is willing to lend and other who
wishes to borrow securities at market related rates , Lender gets benefit of
reasonable return called lending fee

Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan
funds of HFC's , Not to exceed 15 % of NOF of NHB
Your A nswer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan

Question The process of share buy back must be completed within what period
from the date of passing the resolution?
Match The Following


10 HDFC foreign currency deal Global investors pumping funds in India Specific
Funds
$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank

Question Recently many banks have started issuing ________ which could also
be used as a debit card.
Select The Blank

Question A ________ means any persons connected with a company and who is
reasonably having access to unpublished price sensitive information.
Your Answer Insider
Select The Blank

Match The Following

Share buy back is a way of Returning surplus cash to the shareholders Returning
surplus cash to the shareholders
Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy
back is done by the shareholders

True/False
Question The public cannot give their complaints or comments on the issuer
company or others connected with the issue to SEBI.
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Question A portfolio manager need not necessarily sell or purchase
securities separately for each client.
Your Answer True
True/False
Question RBI has permitted all commercial banks, financial institutions and
large corporates to issue certificate of deposits.
Your Answer True
True/False
Question Book building is a process whereby the price is determined on the
Correct Answer True
Your Answer True



Question The following are some of the regulations governing the NBFC's
issued by RBI :-
Correct Answer All the NBFC's must register with RBI , Without the
registration certificate no company can undertake activities of NBFC , All
companies must be liquid assets equal to 15% of deposits
Your Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All companies must be
liquid assets equal to 15% of deposits


markets?
Select The Blank

Question The continuing growth in ________ was one of the factors that
contributed to the growth of credit rating.
Correct Answer Informa tion technology
Select The Blank

Question In case of a public issue by a listed company participation by
promoters in the proposed issues in excess of the required minimum percentage
shall also be looked in for a period of ________.
Your Answer 3 years
True/False
Question A portfolio manager has to assure a guaranteed return to his
client.
Your Answer False

Correct Answer Screen based trading in place of traditional ring ,
Communication through the net , Operate in stock market privately through home
or office
Your Answer Screen based trading in place of traditional ring ,
or office
Select The Blank

Question The Kumarmangalam Birla report stressed on the importance of
________ with respect to AGM's.
True/False
purchased under the buy back arrangement to be extinguished and physically
destroyed.
Your Answer False


Question Which company was responsible for spreading the equity culture in
India ?

Correct Answer VCF's must be registered , Cannot carry out another activity
, Must disclose investment strategy
Your Answer VCF's must be registered , Cannot carry out another activity ,
Must disclose investment strategy

Question What is the minimum number of days for which the bid should remain
open in book building?
Your Answer 7 days

Question As per RBI regulation, bank borrowings should not exceed how many
times of the net owned funds?
Your Answer 4 times
Select The Blank

Question With the introduction of ________ accounts the complaints abo ut
allotment have surely gone down.
Your Answer DEMAT

Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience

True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients




Match The Following


Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank

Select The Blank

Your Answer Insider
Select The Blank

Match The Following


True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office
Select The Blank

True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Your Answer DEMAT

Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience

True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients




Match The Following


Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank

Select The Blank

Your Answer Insider
Select The Blank

Match The Following


True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office
Select The Blank

True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Your Answer DEMAT

Select The Blank

stocks.
Correct Answer ICE
Your Answer ICE
True/False
Question The public cannot give their complaints or comments on the issuer company or
others connected with the issue to SEBI.
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank


of the offer.
of the offer.
Select The Blank

known as ________.
Your Answer BO ID

owned funds?
Your Answer 4 times

Correct Answer Degree of popularity of the industry , Overall economic condition , Demand
and supply capital
the industry
Match The Following


interest rate risk


Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience

True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients




Match The Following


Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank

Select The Blank

Your Answer Insider
Select The Blank

Match The Following


True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office
Select The Blank

True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Your Answer DEMAT

Select The Blank

Correct Answer 50
Your Answer 50
Match The Following

0.1 Government decided to pay dividend Government decided to pay dividend
0.15 MF cannot invest as percentage of NAV in debt instrument issued by single

issuer MF cannot invest as percentage of NAV in debt instrument issued by single
issuer
Annual statement of accounts of MF To be audited by auditor To be audited by

auditor
Rs. 8000 crores Current shortfall in UTI schemes Current shortfall in UTI
schemes
Select The Blank


markets?

Select The Blank

True/False
Correct Answer True
Your Answer True

instruments

Your Answer Market for long term funds and investments in long te rm
instruments


market?


Question Companies are not allowed to buy back securities : -
debentures
debentures

Question Briefly describe the SEBI guidelines for the merch ant bankers :-

Your Answer Units

stock market :-

receiver
Your Answer Removal of income tax on dividends in the hands of receiver ,
Investors income tax on dividend reduced to 12.5% , No capital gains tax on
investment made in equity after 1/3/03 held for 1 year
Select The Blank

Question The merchant bankers should act as ________ of the investor's money
and put a lot of responsibility on them.
Correct Answer Custodian
Your Answer Custodian
True/False
Correct Answer True
Your Answer True
Select The Blank

Your Answer SENSEX

Question Which company was responsible for spr eading the equity culture in
India ?

crores?

Your Answer 37834

transactions arising out of firm allotment in public issues right issues etc?
Your Answer 21 days
Select The Blank


Question What is government's move towards Stock Exchanges ?
Correct Answer Demutulisation
Your Answer Dematerialization

Question As per the recommendations of the Kumarmangalam Birla committee
report who are the key components of an audit committee.
Correct Answer External auditor , Board , Internal auditor
True/False
Question SEBI can investigate and inspect books of accounts and records of
insiders.
Correct Answer True
Your Answer True

skills , Experience
skills , Experience

Question What is the objective of a credit information comp any?
Correct Answer To ascertain the credit worthiness of
individuals/organizations and make the data available to all banks
Your Answer To ascertain the credit worthiness of individuals/organizations
and make the data available to all banks
True/False
Correct Answer True
Your Answer True

for an IPO ?
Your Answer 1 Crore
True/False
Question A credit card is a payment mechanism which enables the holder to
buy goods and services on credit.
Correct Answer True
Your Answer True

Question When are VCF's entitled to get its units listed on stock exchange?
Correct Answer After expiration of 3 years form date of issuance of units
Your Answer After expiration of 3 years form date of issuance of units
True/False
Question Book building is a process whereby the price is determi ned on the
Correct Answer True
Your Answer True

Question A portfolio manager could undertake the following on behalf of his
clients :-

Select The Blank

Match The Following

Market risks



lock in?
Correct Answer In case of IPO, promoters have to necessarily offer at least
years
of the post issue capital , In case of listed company promoters shall
years

True/False
Question Constant change would be one of the reasons for failure of
corporate governance.
Correct Answer True
Your Answer True
Select The Blank

Question Final prospec tus in the book building p________ess is to be filed
with the ROC.
Correct Answer ROC
Your Answer ROC

True/False
transferable.
Your Answer False

Question How many companies are there to do business of credit rating?
Correct Answer 4
Your Answer 4

Correct Answer Every AMC should maintain proper books of accounts ,
Financial year for all schemes to end as on March 31 each year , Every mutual
fund shall have the annual statements audited by auditor
year for all schemes to end as on March 31 each year , Every mutual fund shall
have the annual statements audited by auditor
Select The Blank

Question Recently, SEBI has allowed buy back of shares upto ________% of the
total shares without requirement of a special resolution
Correct Answer 10
Your Answer 10
Select The Blank

Correct Answer 10
Your Answer 10

CAPITAL MARKET -AMITA



True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

Match The Following


Select The Blank



True/False
Correct Answer True
Your Answer True


report?
True/False
Your Answer True

company
Match The Following



Select The Blank

True/False
Correct Answer True
Your Answer True


target account id
target account id
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank


Your Answer FITSCH
Select The Blank


its net worth?
Select The Blank



accountability
accountability

regulations 1997 ?
2 days

Select The Blank

Select The Blank

of the company.
Correct Answer 45
Your Answer 45

opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True


True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False

CAPITAL MARKET ASSIGNMENTS
Select The Blank

Question Information technology, communication and entertainment represent
________ stocks.
Correct Answer ICE
Your Answer ICE
True/False
Your Answer True
Select The Blank


Correct Answer 0.74
Your Answer 0.74

Question Who is responsible to get the securities listed on all the stock
exchanges?
Your Answer SEBI
Select The Blank

Question A mutual fund scheme shall not invest more than ________ of its NAV
in unrated debt by a single issuer.
Correct Answer 0.1
Your Answer 0.1

market?
Correct Answ er US$14 bn
True/False
Correct Answer True
Your Answer True

Your Answer 38200

Question Describe the regulatory aspects of mutual funds : -

Correct Answer The Asset management company shall not launch any scheme till
approval of trustees and offer document has been filed with the board , With
each offer document pay filing fees , Offer document to contain disclosures
Your Answer The Asset management company shall not launch any scheme till

Question Describe in brief the SEBI regulations for venture capita l funds :-
Correct Answer Must disclose investment strategy , VCF's must be registered
, Cannot carry out another activity
True/False
Question Money market mutual funds are not permitted to invest in treasury
bills and commercial paper.
Your Answer True

True/False
client.
Your Answer False

True/False
Your Answer False
Select The Blank

Your Answer 2 times

or office
or office

Question What are the eligibility norms for an unlisted company for making a
public issue?
Correct Answer Pre issue net worth not less than 1 crores in the last 3
years , Track record of distributable profits for at least 3 years , Issue size
shall not exceed five times of its pre issue net worth
Your Answer Issue size shall not exceed five times of its pre issue net
worth , Pre issue net worth not less than 1 crores in the last 3 years , Track
record of distributable profits for at least 3 years
Select The Blank


stock market :-
receiver
Your Answer No capital gains tax on investment made in equity after 1/3/03
held for 1 year , Removal of income tax on dividends in the hands of receiver ,
Investors income tax on dividend reduced to 12.5%

Correct Answer 2
Your Answer 2

Question Which acts were amended to remove some of the hurdles to
corporatisation and demutualisation of stock exchanges?
Match The Following

Shareholders Should effectively participate in general body meetings Should

effectively participate in general body meetings
Objective of Audit committee Look into defaults to depositors creditors

shareholders and debenture holders Look into defaults to depositors creditors
shareholders and debenture holders
Reasons of failures of corporate governance in spite of norms Superficial

commitment to vision, mission and values Superficial commitment to vision,
mission and values
Functions of Chief Executive, ED, Managers Assisting the board in decision

making process Decision making

crores?


Correct Answer Cancel certificate issued to custodian , Inspect books of DP
, issuers or beneficiary owners , Investigate an acquirer
Your Answer Cancel certificate issued to custodian , Inspect books of DP ,
issuers or beneficiary owners , Investigate an acquirer
True/False
Question Amendment to SCRA will facilitate derivatives trading in interest
rate futures and options if there is an underlying asset.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank

Question In case of an IPO of any security of issue size of Rs________ or
more security shall be issued only in demat form.

information and should not be misleading. , The company must pay the
consideration only by the way of cash , The company should not issue any fresh
securities including bonus shares till the date of the closure of the offer.
Select The Blank

Question The DP opens investor account in the system and gives an account
number also known as ________.
Your Answer BO ID

Your Answer 4 times

Correct Answer Overall economic condition , Demand and supply capital ,
Degree of popularity of the industry
Your Answer Overall economic condition , Demand and supply capital , Degree
of popularity of the industry

Match The Following
Market risks

SEBI Regulations Portfolio Manager must fulfill the capital adequacy norms To
make timely decision regarding sale and purchase of securities


True/False
Your Answer False

instruments
Your Answer Market for long term funds an d investments in long term
instruments

Correct Answer Physical certificates converted into electronic from ,
Credited into investors account with his/ her DP
Your Answer Physical certificates converted into electronic from , Credited
into investors account with his/ her DP , Selling shares
Select The Blank

Question ________ is in the form of a usance promissory note payable after
45 days from the date of issue.

India ?


markets?

for an IPO ?
Your Answer 1 Crore
Select The Blank

True/False
Question A mutual fund shall not invest more than 10% of is NAV in equ ity
Correct Answer True
Your Answer False

True/False
Question Venture capital finance is risk finance for entrepreneurial growth
oriented companies.
Correct Answer True
Your Answer True
-----------------------------------------------

True/False
transferable.
Your Answer False

issued by RBI :-

Correct Answer Without the registration certificate no company can undertake
activities of NBFC , All companies must be liquid assets equal to 15% of
deposits , All the NBFC's must register with RBI
True/False
Correct Answer True
Your Answer True

markets?

Question Deposits can be accepted for a maximum period of : -

India ?

Your Answer 37775

Question In the wake of boom of which sector the Indian mutual fund launched
various sector specific schemes?
Correct Answ er Software
Select The Blank

Question In 2001 a case of rigging and short selling based insider trading
was noticed in the case of proposed merger of ________.
Select The Blank

Select The Blank

Correc t Answer Mutual funds

Correct Answer Contractual agreement where the lessor of equipment transfers
the right to use the equipment to the lessee
Your Answer Contractual agreement where the lessor of equipment transfers

True/False
Question Mergers and amalgamations of companies are also covered under the
SEBI regulations 1997.
Your Answer False
Select The Blank

Question No mutual fund under all its schemes should own more than ________
of any company's paid up capital carrying voting rights.
Correct Answer 0.1
Your Answer 0.3

skills , Experience
skills , Experience

or office
or office

Question If the unlisted company does not satisfy the criteria of net worth
profitability and issue size how can it come out with a public issue?

Correct Answer BPO
Your Answer BPO


Correct Answer Associates of India based foreign brokerages , Domestic
institutional brokerages
Your Answer Associates of India based foreign brokerages , Domestic

Your Answer 5 lacs
Match The Following

Ready forward transaction (Repo) Interbank sale and repurchase of securities

Interbank sale and repurchase of securities
Commercial paper Means of raising short term debt by companies Means of raising
short term debt by companies
True/False
Your Answer False

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


Question What is the limit for aggregate investment of FII's NRI's and
OCB's?
Correct Answer 0.3
Your Answer 0.25

True/False
Question Acquisition finance, which provide funding for acquiring another
company are often closely held or fairly owned.
Correct Answer True
Your Answer True

Select The Blank

Question The acquirer is required to make the PA within ________ working
days of entering into an agreement to acquire shares or deciding to acquire
share's voting rights of target company.
Correct Answer 4
Your Answer 4

Correct Answer Ensure that the shareholders of the target company are aware
of the exit opportunity available to them
Your Answer Ensure that the shareholders of the target company are aware of
the exit opportunity available to them
True/False
client.
Your Answer False
True/False
document.
Your Answer True

Question How does SEBI react to the Scams in participatory n otes issuance?
Correct Answer Tighten FII regulations , Ensure participatory notes not
misused by NRI , OCB controlled by Indians promoters
Your Answer Tighten FII regulations , Ensure participatory notes not misused
by NRI , OCB controlled by Indians promoters
Select The Blank

Question When one decides to have the shares in an electronic form one has
to approach ________.
Correct Answer DP
Your Answer DP
------------------------------------------------------------------

True/False
Questi on Employee stock option scheme granted to the employee is
transferable.
Your Answer False

issued by RBI :-
True/False
Correct Answer True
Your Answer True

markets?

Correc t Answer 5 years

India ?

Your Answer 37775

Select The Blank

Select The Blank

Select The Blank



True/False
Your Answer False
Select The Blank

Correct Answer 0.1
Your Answer 0.3

skills , Experience
skills , Experience

Questi on Describe E-trading :-
or office
Your Answer Screen based trading in place of traditional rin g ,
or office


Correct Answer BPO
Your Answer BPO


Your Answer 5 lacs
Match The Following


True/False
Question Money market mutual funds are no t permitted to invest in treasury
Your Answer False

NHB?
True/False
Correct Answer True
Your Answer False


OCB's?
Correct Answer 0.3
Your Answer 0.25
True/False
Correct Answer True
Your Answer True

Select The Blank

Correct Answer 4
Your Answer 4

True/False
client.
Your Answer False
True/False
document.
Your Answer True


Your Answer Tighten FII regulations , En sure participatory notes not misused
Select The Blank

Correct Answer DP
Your Answer DP
-----------------------------------------------------------------------

Question What is maximum percentage of regular expenses of the assets
of a scheme?
Correct Answer 0.03
Your Answer 0.1

Question How does SEBI react to the Scams in participatory notes
issuance?
Your Answer Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters , Tighten FII regulations

Question What are the requirements regarding promoter's contribution
and lock in?
Correct Answer In case of IPO, promoters have to necessarily offer at
least 20% of the post issue capital , In case of listed company promoters shall
years
Your Answer In case of IPO, promoters have to necessarily offer at least
years
True/False
Correct Answer True
Your Answer True

Correct Answer Short term financial instrument , Negotiable and
transferable instrument , Companies issue it for raising short term debt
True/False
Question At the inception of the hire purchases transaction the finance
company records the hire purchase installment receivable as current asset.

Correct Answer True
Your Answer True
True/False
Question The buy back of shares by Indian corporates has been very
successful in India.
Your Answer True
Select The Blank

Question Directors should not be member of more than________
committees.
Correct Answer 10
Your Answer 8

Question What are the stages in the process of book building broadly
divided into?
Correct Answer Syndicate formation , Issue process
Your Answer Syndicate formation , Issue process , IPO

Question What information is required to be furnished to stock
exchanges in compliance of SEBI regulations 1997 ?
Correct Answer Details of proposed acquisition need to be filed with
Stock exchanges at least 4 days before the date , Any person holding more than
15% but less than 75% voting rights shall be disclosed with 2 days , Annual
disclosures

Question What is an offer letter?
Correct Answer Document addressed to the shareholders , Containing
disclosures of the acquirer / PAC target company , Offer price
Your Answer Document addressed to the shareholders , Containing

Your Answer Assess the borrowing capacity
Select The Blank

Your Answer Ratio analysis

Question Which stock exchange was used by ketan parekh for buying
operations?
Correct Answer Kolkatta
Your Answer Kolkatta
Select The Blank

Your Answer Investors
Select The Blank

Question The VCs to flourish requires a well developed ________.
Correct Answer Capital market
Your Answer Capital market

issued by RBI :-
Your Answer All the NBFC's must register with RBI , Without the
True/False
Your Answer True

Question What was the objective of the Kumarmangalam Birla Committee on
Corporate Governance?
Correct Answer Enhancement of the long term shareholder's value at the
same time protecting the interests of the other shareholders
Your Answer Enhancement of the long term shareholder's value at the same
time protecting the interests of the other shareholders
Match The Following

Book building Bharati Televentures NSE
Depository Bank of securities Bonus shares
First to introduce rolling settlements in the country NSE BSE
True/False
Your Answer True
True/False
Your Answer True

Question A rated company can raise deposit worth how many times its net
worth?
Your Answer 2 times

Question What is the time frame stipulated by SEBI for members
intending to avail of the buy back offer?
Correct Answer Minimum 15 days and not exceeding 30 days
Your Answer 3 months from the date of the offer
Match The Following

Portfolio Collection of assets Observe high standard of integrity and

fairness
Factors influencing portfolio decisions Business and Market risks Business

and Market risks

fairness Collection of shares and stocks

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

returns can the portfolio manager share from their client's profits?
Correct Answer 0
Your Answer 0

Question What is the minimum number of days for which the bid should
remain open in book building?
Your Answer 5 days

Question What is the procedure for action in case of default?
Correct Answer Suspension of the certificate , Mutual fund / AMC cease
to exist , Subject to the directions of the board with regard to records
Your Answer Suspension of the certificate , Mutual fund / AMC cease to
exist , Subject to the directions of the board with regard to records
True/False
Correct Answer True
Your Answer True

Question What percentage of underwriting in the issues obligatory to
the merchant bankers?
Correct Answer 0.05
Your Answer 0.07
Select The Blank

Your Answer Interest tax
Select The Blank

Your Answer Share holder
Select The Blank

Question One of the process of book building is that the issuer
appoints a ________ also known as the book runner.
Your Answer Merchant banker
True/False
Correct Answer True
Your Answer True
Select The Blank

Question With the introduction of ________ accounts the complaints
about allotment have surely gone down.
Your Answer DEMAT

Correct Answer 0.1
Your Answer 0.25

Question Where is the difference in buying and selling dematerialized
shares ?
Correct Answer Process of delivery , Receipt of securities , Pledging
the shares
Your Answer Process of delivery , Receipt of securities , Pledging the
shares

Correct Answer Through any/ own subsidiary company , Through any/group
of investment company , If default subsists in respect of repayments of
deposits, term loans to any financial institutions and redemption of preference
shares or debentures

debentures
Select The Blank

Your Answer Chemical
Select The Blank

Your Answer INDEX
True/False
Question Transactions that involve substantial payment towards
goodwill, brand equity or intellectual property must be placed before the board
of directors as per the recommendations of the Kumarmangalam Birla report.
Correct Answer True
Your Answer False
True/False
Question DRR is treated as part of general reserve for consideration of
bonus issue of proposals.
Correct Answer True
Your Answer True

Select The Blank

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

Question Briefly describe the SEBI guidelines for the merchant bankers
:-

Question What is transposition cum demat form?
Correct Answer Helps in effect change in the order of names ,
Dematerialize the securities
Your Answer Helps in effect change in the order of names , Dematerialize
the securities , Pledging the shares
-------------------------------------------------------------

Select The Blank

________ stocks.
Correct Answer ICE
Your Answer ICE
True/False
Your Answer True
True/False
Question In order to demater ialize the securities one has to fill DRF.
Correct Answer True
Your Answer True
Select The Blank


Select The Blank

Your Answer BO ID

Your Answer 4 times

Correct Answer Degree of popularity of the industry , Overall economic
condition , Demand and supply capital
Match The Following

Market risks



------------------------------------------------------------------------


Correct Answer A net connection , A registered account with a broker and a
demat account , Bank payment gateway or online banking facility
Your Answer A registered account with a broker and a demat account , Bank
payment gateway or online banking facility , A net connection

instruments
instruments
True/False
Question Sweat equity shares are shares issued by company to employees or
directors to discount.
Correct Answer True
Your Answer True

True/False
Your Answer False

Correct Answer 8
Your Answer 8

Your Answer With each offer document pay filing fees , Offer document to
contain disclosures
Match The Following


Select The Blank


market?

Question Under which regulation is reporting mandatory in respect of
acquisitions arising out of firm allot meant in public issues and rights issues
etc?
True/False

Correct Answer True
Your Answer True

Question The Money market mutual funds (MMMFs) can invest the funds in which
of these securities?

Question What is the information to be placed before the board of directors
as per the Kumarmangalam report?
True/False
Your Answer True

Correct Answer One of the methods of giving part ownership of the company to
the employees , Employees can take part in the prosperity of the company , Is a
reward and linked with the increase in the prices of the shares
Your Answer Is a reward and linked with the increase in the prices of the
shares , One of the methods of giving part ownership of the company to the
employees , Employees can take part in the prosperity of the company
Match The Following




mission and values

making process Assisting the board in decision making process


Select The Blank
True/False
Correct Answer True
Your Answer True

skills , Experience
skills , Experience

Question What precautions are to be taken with respect to delivery
instruction slip ?
Correct Answer DIS numbers are pre printed , Account number to be stamped ,
Investor should fill in target account id
Your Answer DIS numbers are pre printed , Account number to be stamped ,
True/False
Correct Answer True
Your Answer False
Select The Blank

Question An acquirer who holds 15% or more but less than 75% of voting'
rights can acquire such additional shares as would entitle him to exercise more
than ________ of voting rights in an financial year.
Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


Question What is the eligibility norm for an unlisted company for making an
public issue as regards to its net worth?
Correct Answer Net wor th of the company should not be less than 1 crore
Select The Blank




Correct Answer Corporate Governance is all about promoting corporate
fairness, transparency and accountability
Your Answer Corporate Governance is all about promoting corporate fairness,
transparency and accountability

Your Answer Any person holding more than 15% but less than 75% voting rights
shall be disclosed with 2 days

India ?
Select The Blank

Question The merger of GTB and UTI was called off due to intervention of
________
Select The Blank

Question The Merchant banker will incorporate in the letter of offer the
comments made by SEBI and then send within ________ days from the date of PA to
all shareholders whose names appear in the register of the company.
Correct Answer 45
Your Answer 45

Correct Answer Statutory approvals refused , Sole acquirer being person died
, Circumstances as in opinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died ,
Circumstances as in opinion of board
True/False
Your Answer False
True/False

Correct Answer True
Your Answer True

Question The benefits of availing depository services are : -
Correct Answer No stamp duty , Reduction in paperless work , Reduction in
transaction cost
Your Answer Reduction in paperless work , Reduction in transaction cost ,
Holds funds in an account

Correct Answer Enable surrender and withdrawal of securities to and from the
depository , Maintain the investor's holdings in an electronic form , Effect
settlement of securities traded on exchanges
Your Answer Enable surrender and withdrawal of securities to and from the
True/False
Your Answer True
Select The Blank

Question Directo rs should not be member of more than________ committees.
Correct Answer 10
Your Answer 10

markets?

Correct Answer 1
Your Answer 1
True/False
Your Answer False
----------------------------------------------------------------------

Question What should be done if the address of investor changes?
Correct Answer Inform DP and update records , Inform different companies
Your Answer Inform DP and update records , Inform different companies ,
Inform SEBI

Question What is the most common complaint of the investors?
Correct Answer Non receipt of refund orders and allotment advise
Your Answer No merchant bankers to the issue

Question Of the net tangible assets how much percentage of assets should be
held in monetary assets for a company to make an IPO?
Correct Answer 0.5
Your Answer 0.5

transaction cost
Your Answer No stamp duty , Reduction in transaction cost , Holds funds in
an account

operations?

Question Apart from the portfolio management fees what percentage of returns
can the portfolio manager share from their client's profits?
Correct Answer 0
Your Answer 0
True/False
Your Answer False

Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of t otal Loan
Your Answer Cannot exceed 5 times NOF , Not to exceed 50% of total Loan

Question What was the percentage of public offering under the IPOs through
the book building method ?
Correct Answer 0.1
Your Answer 0.25
Select The Blank

with the ROC.
Correct Answer ROC
Your Answer ROC

Question When is the security created from the date of issue of debenture?
Correct Answer Within 6 months
Your Answer Within 12 months
True/False
Question February UTI sought permission of SEBI to close 7 assured plans
prematurely.
Correct Answer True
Your Answer True
Select The Blank

Your Answer Trust
True/False
Correct Answer True
Your Answer True
Select The Blank

Your Answer Put option

Your Answer On the expiry date only

Your Answer One of the methods of giving part ownership of the company to
the employees , Employees can take part in the prosperity of the company ,
Company wants the employees to participate in the public issue due to under
subscription

Inform SEBI


Question Of the net tangible assets how much percentage of assets shoul d be

Correct Answer 0.5
Your Answer 0.5

transaction cost
an account

Question Which stock exchange was used by ketan parekh for buyin g
operations?

Correct Answer 0
Your Answer 0
True/False
Your Answer False


Correct Answer 0.1
Your Answer 0.25
Select The Blank

with the ROC.
Correct Answer ROC
Your Answer ROC

True/False
prematurely.
Correct Answer True
Your Answer True

Select The Blank
Your Answer Trust
True/False
Correct Answer True
Your Answer True
Select The Blank



subscription

Question Briefly describe the SEBI guidelines for the merchant bankers : -
Your Answer Expertise good financial standing and high degree of
professional integrity , Company abides by the various requirements relating to
disclosers, listing of instruments etc , Should have an authorization from SEBI
True/False
Your Answer True
Select The Blank

Question Securities offered in a pledge can change if a ________ agrees.
Your Answer Depositary
-----------------------------------------------------------------------



instruments
instruments
True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

contain disclosures
Match The Following



Select The Blank


market?

etc?
True/False
Correct Answer True
Your Answer True


Your Answer Annual operating plans , Capital budgets , Quarterly r esults
True/False
Your Answer True

Match The Following




mission and values


Select The Blank

True/False
Correct Answer True
Your Answer True

skills , Experience
skills , Experience

instruction slip ?
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


Question What is the eligibility n orm for an unlisted company for making an
Select The Blank





India ?
Select The Blank

________
Select The Blank

Correct Answer 45
Your Answer 45

True/False
Your Answer False
True/False
Correct Answer True
Your Answer True

transaction cost

Correct Answer Enable surren der and withdrawal of securities to and from the
True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10

markets?

Correct Answer 1
Your Answer 1
True/False
Your Answer False
-----------------------------------------------------------------------
Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience


True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients


Question Describe the stock lending mechanism: -



Match The Following

Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank


Select The Blank
Your Answer Insider
Select The Blank

Match The Following

True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



Question The following are some of the regulat ions governing the NBFC's
issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office

Select The Blank
True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Question With the introduction of ________ accounts the complaints about
Your Answer DEMAT
-------------------------------------------------------------------------



Correct Answer Finance company purchases the equipment supplier and lets it
on hire , During the contract hirer can opt for an early repayment
and purchase the asset , Hirer may be required to make down
payment
Your Answer During the contract hirer can opt for an early repayment and
purchase the asset , Hirer may be required to make down
payment , Finance company purchases the equipment supplier
and lets it on hire
True/False
Question A mutual fund shall not invest more than 10% of is NAV in equity
Correct Answer True
Your Answer True
Select The Blank


Correct Answer Investor
True/False

Your Answer True
Select The Blank

True/False
Correct Answer True
Your Answer True
Match The Following


Select The Blank

with the ROC.
Correct Answer ROC
Your Answer ROC
Select The Blank

Question A company with highly rated instrument has the opportunity to
________ by quoting less interest rates.
Correct Answer Reduce the cost of borrowing
True/False

Correct Answer True
Your Answer True

Question What are the norms for Approval of Housing finance companies
by NHB?
Your Answer Minimum paid up capital 1 crore , At least 2 directors , At least
50% loans in long term nature

Question A portfolio manager could undertake the following on behalf of
his clients :-

Correct Answer Negotiated price , Price paid by acquirer , Average weekly high
Your Answer Negotiated price , Price paid by acquirer , Average weekly high


skills , Experience
Your Answer Experience , Sound General knowledge , Analytical ability and
marketing skills

Question Renewal of portfolio fund on maturity shall be deemed as a fresh
placement for a minimum period of :-
Your Answer 2 years
True/False
Correct Answer True
Your Answer True

Select The Blank
Question One of the process of book building is that the issuer appoints a
________ also known as the book runner.
Select The Blank

Your Answer Trust
True/False
Your Answer False

returns can the portfolio manager share from their client's
profits?
Correct Answer 0
Your Answer 0
True/False
Your Answer False
Select The Blank

Your Answer SENSEX


committee.

000 crores?


Correct Answer Voluntary non profit making organizations , Joint stock

companies limited by shares , Joint stock companies Limited by
guarantee
Your Answer Voluntary non profit making organizations , Joint stock
companies limited by shares , Private limited companies


True/False

Correct Answer True
Your Answer True
Select The Blank

Question For issues upto Rs. 50 crores the number of lead managers will
not exceed ________.
Correct Answer 2
Your Answer 4
Match The Following

Ready forward transaction Interbank sale and Operations in call money

(Repo) repurchase of securities markets
Commercial paper Means of raising short Means of raising short term
term debt by companies debt by companies
STCI Operations in call money Launched in fiscal 2004-05
markets
Market stabilsation Bonds Launched in fiscal 2004- Interbank sale and
05 repurchase of securities
True/False
Your Answer False

transactions arising out of firm allotment in public issues right
issues etc?
Your Answer 21 days
True/False
making a PA.
Correct Answer True
Your Answer True
Select The Blank


Question Upto what percentage has the RBI permitted the banks to invest
in the capital market ?
Correct Answer 0.05
Your Answer 0.05

markets?

Question What is the eligibility norm for an unlisted company for making
an public issue as regards to its net worth?

debarred?
Correct Answer 1
Your Answer 3
Select The Blank





Correct Answer 0.1
Your Answer 0.25


Select The Blank


Correct Answer Set up by IDBI , Equity paid up capital of Rs25 crores , Started
operations in June 1994
Your Answer Equity paid up capital of Rs25 crores , Started operations in
June 1994 , There is a trading floor in this exchange


Capital Markets Gurpreet Kaur
Reg. No. 200331828
CAPITAL MARKETS
Q –1 Write a note on Indian Capital Markets
Ans: Capital markets mean the market for all the financial instruments, short term and long
term, as also commercial, industrial and government paper. The capital market is a market where
borrowing and lending of long term funds takes place. The government both central and state
raises money in the capital market, through the issue of government securities. Capital markets
refer to all the institutes and mechanisms of raising medium and long-term funds, through
various instruments available like shares, debentures, bonds etc. With the pace of economic
reforms followed in India, the importance of capital markets has grown in the last ten years. The
governments, through Reserve Bank of India, as well as financial institutions also raise a lot of
money from these markets. The capital market serves a very useful purpose by pooling the
savings of individuals and making them available to the business world. The Global and
American depository markets perform these functions for companies across the globe.
The important constituents of Capital Market are: -
 The Stock Exchanges

 Banks
 The investment trusts and companies
 Specialized financial institutions or development banks
 Mutual funds
 Post office savings banks
 Non-Banking financial institutions
 International financial investors and institutions
Since the liberalization of the Indian economy we have seen that foreign financial institutions
have come to Indian capital markets in large numbers. These institutions have invested close to
$14 billions in Indian markets. Till some years ago many Indians were uncomfortable with the
idea of investing their money in stock markets. Many young Indians now look to stock markets
as good place to make investments. Much credit for this transformation is rightly been given to
late Mr. Dhirubhai Ambani, of Reliance Industries Ltd. Along with these developments the
opening of mutual fund industry, first for banks and then for private players, has also helped in
the spread of equity culture there have been many other developments that have taken place in
the last few years. Some of these developments like scripless trading and establishment of
Securities and Exchange Board of India as the regulatory authority for these markets have taken
Indian markets to international standards. Many Indian companies have used the capital markets
have used the capital markets in the last decade to raise large sums of money for their projects. It
is expected that Rs 15000 crores are likely to be raised form primary markets alone. Another
factor that has helped the development of these markets is that, Government of India is slowly
disinvesting from the public sector companies. In the coming months two public sector
companies viz. Maruti Udyog Ltd. and BPCL’s shares will be offered to the public through initial
public offers.
Page 1 of 19

Reg. No. 200331828
Indian debt markets are also sought to be made more vibrant. Recently the reserve Bank of
India has allowed the participation of individuals in the government securities market, which till
now was dominated by the banks, financial institutions and mutual funds. The Indian stock
market has risen consistently since June 2003. The FII’s are putting more money in these
markets, as they believe the valuations are very attractive and are likely to give good returns in
short and medium term. The falling interest rates on bank deposits and bonds have probably
forced many investors to look at stock markets again, as no other investment is likely to give the
return that these markets can give. One interesting point to emerge is that the so-called old
economy stocks are getting back in the limelight. The companies of Tata, Birla and Ambani
groups have seen solid upward movement in their market capitalization. The Reliance group
which has five listed companies has added over Rs 10000 crores in market cap since Apr’03.
The current trend also shows that the three leading IT companies viz. Infosys, Satyam and
Wipro have eroded their market cap by a whopping Rs 20000 crores.
IN the financial year 2002-03 following Table you will find the figures of total dividend paid to
the promoters
HLL Rs 624 cr
Reliance Rs 325 cr
Hero Honda Rs 187 cr
VSNL Rs 172 cr
Castrol Rs 145 cr
Nestle Rs 102 cr
This is the list of companies whose promoters have received dividend in excess of Rs 100 crores.
The government has decided to amend two acts namely Securities Contracts (Regulation) Act,
and the Depository Act to remove some legal hurdles to the corporatisation and demutilisation
of the stock exchanges
The amendment to SCRA will facilitate the derivatives trading in the interest rate futures and
options. The proposed amendment to the act will remove this hurdle and derivative trading can
commence.
Recently the finance ministry and the banking and capital market regulators have cleared the
proposal to allow the banks to become members of stock exchanges and trade directly in interest
rate derivate
Another important step initiated by SEBI is that it is going allow Indian companies to issue
equity simultaneously in the domestic and international markets. Thus government is now in the
process of disinvesting from various companies in the first quarter of 2004. A slew of issues are
round the corner. The government has decided to off load equity in such companies like ONGC
for the first time. The government is also likely to disinvest equity in GAIL.
One of the most attractive proposals that has come from the government this round of
disinvestments is that the government has decided to issue the equity to the retail investors at a
discount to their market price.
The shinning India seems to be a big news overseas as well. Thus future of capital markets
seems bright.
Page 2 of 19

Reg. No. 200331828
Q –2 What are Mutual funds? What are the different types of Mutual funds?
Ans: One can define a Mutual fund as a trust that pools in the savings and funds from a large
number of investors who have a common financial goal. Mutual funds issue units to investors,
which represent equitable rights in the assets of the mutual fund. Mutual fund by its nature is
diversified i.e. its assets are invested in many different securities. Investments in the mutual
funds may be in the form of stocks, bonds or money market securities or combination of these.
There are a number of schemes of Mutual fund and all of them have different character and
objective
Types of Scheme offered by the Mutual funds:
Open-ended vs. Closed-ended Schemes:

An open-ended scheme is a scheme, in which an investor can buy and sell units on daily bases;
the scheme has a perpetual existence and a flexible, ever changing corpus. In these schemes the
investor can invest or disinvest any amount, any time after the initial lock period. These are not
listed in stock exchanges and can be only bought and sold to the mutual fund.
A closed-ended scheme is one in which, the subscription period for the mutual fund remains
open only for the specific period, called the subscription period. At the end of this period, the
entire corpus is disinvested and the proceeds distributes to the various unit holders. Thus after
final distribution, the scheme ceases to exist. They can be listed on the stock exchanges.
Pure Growth Schemes

A pure growth scheme aims at generating long-term capital appreciation for the investors. The
objective is achieved by investing a substantial portion of the corpus in high growth equity
shares to other equity-related instruments of corporate bodies. The dividend can be declared and
distributed as and when the boards of trustees approve it but the principal remains capital
appreciation.
Pure income schemes

Their aim is to generate and distribute regular income to the investors. This is done by investing
a substantial portion of the corpus on high-income yield/fixed income instruments, such as
debentures, bonds and so on.
Balanced Schemes
The aim of these schemes is both, to distribute regular income and also provide capital to
investors by balancing the investments of the corpus between the high growth equity shares and
the regular income earnings securities
Tax saving scheme

These schemes offer tax rebates to the investors under the income tax act, under sec 88(2),
which entitles an investor 20% rebate in income tax upto a maximum investment of Rs 10000
per annum
Page 3 of 19

Reg. No. 200331828
These are two types of mutual funds according to the investment target
Debt-Oriented Schemes
This type of schemes invest most of the funds in fixed income instruments like debentures of
the private sector companies, public sector bonds, Government securities and money market
instruments, the balance is invested in equity shares
Equity-oriented Schemes
These schemes invest the bulk of their funds in \equity shares and in fixed income avenues
Sector funds
Sector funds specialize in the stock of single industry or market sector. The fund’s portfolio is
invested among a handful of stocks in the same industry and thus these can be regarded as
aggressive funds. The diversification is lower in the case of these funds and hence the risk borne
by the investor is higher. These sector fund buyers are likely to be more sophisticated and look
for a balance between the diversification of a conventional fund and the narrow focus of buying
shares in an individual company
Money Market mutual funds

These are designed as a conduit through which the investors can earn market related yield on the
money market instruments
The mutual fund industry is going through existing times these days. Many public sector and
private sector banks who are active in mutual fund industry are restructuring their AMC’s. Many
Indian companies are already running their mutual fund schemes in partnerships with foreign
collaboration. HDFC and ICICI have both got such tie-ups. They are likely to introduce
innovative products for the investors.
Q – 3 Explain the role of Merchant Bankers in the Initial Public Offerings?
Ans: Merchant banks are a very important factor in the capital markets. They have a big role to
\lay especially, in placing equity in the primary markets, through the Initial Public Offerings
The merchant bankers help corporate to raise money from the markets through the issue of
shares, debentures, bonds etc. they usually render the following services:
 Drafting of prospectus and getting it approved from the stock exchanges

 Obtaining consent/ acknowledgement from SEBI
 Appointing bankers, underwriters, brokers, advertisers, printers etc
 Obtaining the consent of all the agencies involved in the public issue.
 Holding road shows, to sell the issue
 Deciding the pattern of advertising
 Deciding the branches where application money should be collected.
Page 4 of 19

Reg. No. 200331828
 Deciding the dates of opening and closing of the issue

 Obtaining the daily report of application money collected at various branches
 Obtaining subscription to the issue.
 After the close of the issue, obtaining consent of stock exchanges for deciding basis of
allotment etc.
The merchant bankers help the companies to determine their capital structure
 The merchant banker offer following services during the public issues:
 Preparing an action plan and budget for the total expenses for the issue
 Preparation of application to SEBI and assistance in obtaining the consent from SEBI
 Drafting of the prospectus
 Selection of underwriters, brokers etc.
 Selection of bankers to the issue
 Selection of advertising agency for publicity
Obtaining approval of the institutional underwriters and stock exchanges for publication of the
prospectus.
The responsibilities of merchant bankers in management of public issue are many. We have seen
that many unscrupulous promoters have raised money from the market. It is therefore necessary
that merchant bankers are satisfied with the viability of the project, which merchant bankers can
then see to the investors with confidence. It is therefore important for the reputation of
merchant bankers, to only associate themselves with good issues. The merchant bankers should
act as the custodians of the investor’s money and this puts a lot of responsibility on them. They
have to give a certificate to that effect to SEBI. It is responsibility of the merchant bankers to
get the securities listed on all the stock exchanges mentioned in the prospectus. Non-receipt of
refund orders and allotment advice within the stipulated period is a most common complaint of
the investors. It is the responsibility of the lead managers/merchant bankers to ensure timely
refunds and allotment of securities to the investors. The merchant bankers have to certify that
they have verified everything and that they believe it to be true. This would ensure that all the
fake companies, whose intention is to defraud the investors, do not have access to the market
Merchant Bankers need to posses following qualities
 They must have knowledge and information about the various aspects of the capital
markets trends prevailing in the markets and the psychology of the investors
 They must have the ability to evaluate and analyze various aspects concerning, the
formation of an industrial project
 Integrity and maintenance of high professional standards
 They must be more involved with the clients and must update the knowledge
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Reg. No. 200331828
Q – 4 Write Notes on:
A) Book Building
B) Depositories
C) Rolling Settlements
D) Non-Voting shares
Ans:
A) Book Building - Companies generally raise capital through the public issue. In this system
the issuer is not able to ascertain the price that the market may be willing to pay for the shares,
before launching the issue. This is where book building can come to their aid. This is a
mechanism whereby the price is determined on the basis of actual demand as evident from the
offers given by the various institutional investors and the underwriters. The book building
process broadly involves two stages
1. Syndicate Formation
2. Issue process
The main steps in this process are:
 The issuer company appoints a Lead manager to the issue known as the Book
Runners. The book runner forms a syndicate to procure subscriptions to the issue
 The syndicate members take steps for demand creation and for feedback. Orders are
procured from investors
 BR builds the book. Based on the orders received from various bidders through the
syndicate members, the BR determines the size and the price of the issue.
 BR to close the book in consultation with the Issuer and finalizes the allocation to the
syndicate members who in turn enter into procurement agreement.
 Final prospectus is to be filled with Registrar of Companies along with procurement
agreements.
 The placement portion is to close one day before the opening of the public creation.
B) Depository – A depository is an organization, which holds securities of investor in electric

form at the request of the investor through a registered Depository Participant. It can be
compared with a bank, which holds the funds for depositors. A Bank-Depository analogy is
given below
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Reg. No. 200331828
BANK DEPOSITORY – AN ANOLOGY

BANK DEPOSITORY
 Holds funds in an account  Hold securities in an account
 Transfers funds between accounts  Transfers securities between accounts

on the instruction of the account on the instruction of the account
holder holder
 Facilitates transfers without having  Facilitates transfers of ownership

to handle money without having to handle securities
 Facilitates safekeeping of money  Facilitates safekeeping of shares
At present two Depositories viz. National Securities Depository Limited and Central
Depository Services (I) Limited are registered with SEBI
A Depository Participant (DP) is an agent of the depository through which it interfaces with the
investor. A DP can offer depository services only after it gets proper registration from SEBI.
The minimum net worth stipulated by SEBI for a depository is Rs 100 crore.
Benefits of availing depository services
 A safe, convenient way to hold securities

 Immediate transfer of securities
 No stamp duty on transfer of securities
 Reduction in paperwork
 Reduction in transaction cost
 Nomination facility
 Transmission of securities is done by DP eliminating correspondence with companies
 Automatic credit into demat account of shares
C) Rolling Settlements – A rolling settlement is one in which trades outstanding at the end of
the day have to be settled (payments made for purchases or deliveries in the case of sale of
securities) ate the end of the settlement period. In a T + 5 rolling settlement, a transaction
entered into Monday has to be settled on the fifth working day, which will be the subsequent
Monday, when either pay in or pay out takes place. Most developed countries follow the rolling
settlement system. UK and US follow a rolling settlement (T + 3) system. In India we are
presently following the settlement cycle of T + 3.
In rolling settlements, payments are quicker than in the weekly settlements, thus investors
benefit from increasing liquidity. Rolling settlements necessarily require electronic transfer of
funds and demat facilities in respect of securities being traded. This is because handling large
volumes of paper on a daily basis is extremely difficult for the clearinghouses of stock
exchanges.
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D) Non-Voting Shares – Shareholders have two right a) dividend and b) voting rights. In case
of non-voting shares one right gets excluded i.e. the shareholder looses the right to vote, even
though he is the member of the company. NVS therefore have to be more attractive than those
that carry full voting rights are. This can be done in two ways a) by giving discount on the issue
price and b) by giving higher dividend on these shares.
Industry needs resources for modernization, expansion and new projects. But raising
funds by way of equity share has an inherent danger of loosing control to others. The ability to
raise debt has its own limitations. NVS can provide a way out to companies to garner of the
promoters’ stake and control.
There can always be investors who would prefer a higher return, rather than the right
to vote. It is evident that very few shareholders actually turn up for the annual general meetings
of the companies. They are not really interested in the affairs of the company or wish to
participate in the affairs of the company.
Q – 5 Write a note on Money Markets. What is the wholesale Debt Market of NSE?
Ans: The money market is a market for overnight to short-term funds, and for short-term
money a financial asset that are close substitutes for money. The major participants in this
market are the commercial banks, the other financial intermediaries, large corporate and the
Reserve Bank of India. The objectives of these market are to provide:
 A mechanism for evening out short-term surpluses and deficiencies
 A focal point of central bank intervention for influencing liquidity in the economy
 A reasonable access to the users of short-term funds to meet their requirements at
realistic cost.
In the money market the operations are for short d\duration, this is wholesale market. The
volumes here are very large and therefore there is need for professionals to operate in these
markets.
Wholesale Debt Market

WDM or money market is a market where pure debt instruments such as government securities,
treasury bills, public sector bonds, corporate debentures, commercial paper, certificate of
deposits etc. are traded
 A few large usually institutional investors an a very high volume of trade dominate his
segment
 The exchange authorities closely monitor the settlements.
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Reg. No. 200331828
 Trades on this market are settled on the basis of trade for trade i.e. each transaction is
settled individually. Each trade has a settlement date specified upfront at the time of
order entry and is used as a matching parameter.
 Gift securities are immobilized with the RBI and they maintain a book entry of
holders.
Money Market Instruments

1. “T” Bills
2. Commercial Paper (CP)
3. Certificates of Deposits (CDs)
4. Money Market Mutual Funds
5. Repos and Reserve repos Market
“T” Bill - “T” bills were introduces to stabilize the money market. They are sold on the basis of
fortnightly auction, but the amount, however is not specified in advance.
Commercial Paper Market - A CP is a short-term negotiable instrument, consisting of usance

primary notes with a fixed maturity, indicating the short-term obligation of an issuer. Companies
as a means of raising short-term debt, issue it. It is issued at a discount to face value basis but
can also be issued in interest bearing form. A CP has several advantages to the issuer. It involves
very little documentation. It is flexible in terms of maturity. It is unsecured. They are negotiable
and transferable instruments and are highly liquid.
Certificate of Deposits – A CD is a document title to a time deposit and can be distinguished

from the conventional time deposit in respect of its free negotiability and hence marketable.
CD's are a marketable receipt of funds deposited in a bank for a fixed period at a specified rate
of interest. The CD can be issued only by scheduled commercial banks at a discount rate from
the face value. The CD can be issued to individuals, companies, corporate, trust funds,
association and so on. They are freely transferable by endorsement and delivery payable at a
fixed date without any grace period
Money Market Mutual funds – It is a conduit through which they can earn market related
yield. MMMFs invest the funds collected from the investors in instruments like, a) Treasury bills
and government securities, b) Call/Notice Money, c) commercial bills, d) commercial paper, e)
Certificate of Deposit
Repos and Reverse Repos – Repo/ ready forward /purchase (buy-back) transactions/deal is
an agreement between a seller and buyer stipulating the sale and later repurchase of securities at
a particular price and a date. It is essentially a short-term loan to the seller with securities issued
as collateral. Similarly, the buyer purchases securities with an agreement to sell the same to the
seller on agreed date in future at a prefixed price.
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Q – 7 What is meant by buyback of shares? What are the legal provisions for buyback in
India?
Ans: A company can buy-back their own shares or other specified securities including
employees’ stock option from out of
1) Its free reserves
2) The securities premium account
3) The proceeds of an earlier issue other than fresh issue of shares made specifically for buy-
back purpose. The share buy-back falls under section 77 of companies act
Following condition have to met in the process of buy-back
 The buy-back has to be completed within 12 months of passing the special resolution
 Buy-back cannot exceed 25% of the total paid capital plus free reserves of the company.
 Post buy-back the debt equity ration shall not exceed 2:1.
 Shares that are eligible for buy-back have to be fully paid
 Before making purchases under this scheme companies have to file with Registrar of
Companies and SEBI a declaration of solvency.
 The securities purchased under the buy-back arrangement should be extinguished and
physically destroyed within seven days of the last date of the completion of the buy-back.
 A company which buys-back its securities is prohibited from further issue of securities
within a period of two years, except bonus issues
 Companies are not allowed to buyback securities. A) Through any/ own subsidiary
company, B) through any/ group of investment company
 The explanatory statement annexed to the notice should contain following additional
disclosures – the minimum prices at which the buyback of securities would be made, the
quantum of securities proposed to be tendered and the details of their transactions and
their holdings for the last six months prior to the passing of the special resolution for the
buyback including the information of the number of shares acquired, the price and the
date of acquisition
 The company must open an escrow account and deposit the amount as required by the
SEBI regulations
 The company has to appoint a merchant banker for the purpose of the buy-back.
 The offer should remain open to the members for period not less than fifteen days and
not exceeding thirty days
Obligations of the company in share buy-back - The company has to ensure
 The letter of offer, the public announcement should contain true, factual and material
information
 The company should not issue any securities including by way of bonus shares till the
date of closure of the offer made under these regulations
 The company must pay the consideration only by way of cash
 The company should not withdraw the offer after the draft letter of offer is filled with
SEBI or the public announcement in this regard is made.
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Reg. No. 200331828
 The promoter or the person in control should not deal in the securities of the
company in the stock exchange during the period when the buy-back offer is open.
The effects of buyback
 It is way of returning surplus cash to shareholders

 Increase the underlying share value. The decrease in share capital will increase the
earnings per share
 It helps to support the prices during a period of temporary weakness
 It helps the company to maintain target capital structure
 This is a method used for down sizing, especially during declining sales
 Share buy-back leads to erosion of the net worth of the company. This has negative
effect on the creditors of the company.
 If the shares are not extinguished then the company becomes its own shareholder.
Recently SEBI has allowed buy-back of shares upto 10% of total shares, without the
requirement of the special resolution. The only requirement is the board resolution passed to
this effect. The company cannot issue fresh equity shares for 12 month after such a buy-back.
The Indian experience of buy-back has displayed some curious results so far. The companies
who went for buy-back immediately after it was allowed, seem to have paid a very high price for
the buy-back. Due to this the market prices post buy-back did not rise. This trend has been
visible even today.
Another trend that is visible these days is that many MNCs are buying back their shares
from the domestic market with the express purpose of delisting, these shares form the Indian
stock markets. As per the company law if promoters hold more than 90% equity, then the
company can be delisted. Many MNCs like Philips, Atlas Capco, and Cadbury are doing this.
Q – 8 Write a note on Portfolio Management.
Ans: A portfolio is collection of assets. In portfolio management these assets are financial in
nature. The portfolio manager invests the money in divers s\assets with the aim of maximizing
return and minimizing the risk
Functions of Portfolio Management
 To frame investment strategy

 To provide a balanced portfolio, which will hedge against inflation and also optimize
returns.
 ]to make timely decisions regarding sale and purchase of securities.
 To maximize after tax returns by investing part of the portfolio in tax savings
investments.
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Advantages of portfolio management for individuals
 Capital markets over a long period has always given a better return than any other
investment
 The investment in stock markets by individuals is a complicated business. It is better that
a professional handles this.
Steps in portfolio Management
 This is an ongoing process and following steps are taken:

 Specification and qualification of investor objectives, constraints and preferences in the
form of policy statement
 Determination and quantification of capital market expectations for the economy, market
sectors, industries and individual securities.
 Allocation of assets and selection of individual securities
 Performance measurement and evaluation of the portfolio to ensure that investor’s
objectives are attained
 Monitoring the performance
 Rebalancing the portfolio whenever necessary
Factors that influence portfolio decisions:
 Investor’s characteristics - Characteristics such as age, health condition, personal

habits, business or professional situation affect the risk taking ability of an investor. A
young person for example may put emphasis on growth and lesser on liquidity.
 Liquidity needs - Liquidity needs vary considerable among investors.
 Tax considerations – different individuals have different incomes and have different
tax liabilities. Tax treatment from income from investment can be different for
different securities. High tax bracket investors are interested in investments that are
designed to postpone a tax, or to reduce tax or avoid paying taxes. They will also be
interested in investing in Tax-free instruments.
 Safety of principal – the investor is expected to invest in such securities, which

would increase in value proportionate to the inflation to protect from the purchasing
power loss of the money.
 Assurance of Income – Investors have different current income needs. If an

investment income needed for current consumption, then this will become the prime
objective
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 Investment Risk – All investors want maximum possible return from their
investments, but are not always willing to take the necessary risk for such returns.
 Interest rate risk – interest rate risk is the risk of loss of principal brought about the
changes in the interest rate paid on new securities currently being issued. Increase or
decrease in interest rate will have an effect on the market prices of such securities.
SEBI regulations governing Portfolio Management activities:
 A portfolio manager must register himself with SEBI

 The applicant needs to have necessary infrastructure.
 He must have in his employment at least two persons who are experienced in the
business of portfolio management
 The applicant must fulfill the capital adequacy norms
 The applicant must not be involved in any litigation
 He must have the professional qualifications from a recognized institution in finance,
law, accountancy or business management
 The applicant has to pay registration fees as are in force.
 The portfolio manager shall place the funds of all the clients in a separate account
 The portfolio manager shall charge an agreed fee from the client for rendering
portfolio management services without guaranteeing or assuring , either directly or
indirectly any such return and such fee shall be independent of the return to the client.
 The portfolio manager shall purchase or sell securities separately for each client.
Q – 9 Explain in brief the Derivative trading on stock exchanges.
Ans: The Securities & Exchange Board of India (SEBI) has recently taken a decision to
expand trading in derivatives to options on stock markets indices and on individual stocks.
Derivatives allow investors to trade in instruments derived from the cash market where typically
buyers take delivery on payment of cash. Such instruments – futures and options - allow
investors to hedge their risk or even take speculative positions.
 How can you Hedge using these instruments? – If you feel the market is going to fall
and the value of your portfolio is going to diminish you take position on the futures
market. If it rises , even though there is a loss on the futures position, the underlying cash
portfolio rises and this helps risk minimization. It is for the reason that indices, which
mirror closely\, a very wide basket of stocks, prove successful in index futures trading.
 What is futures contract? – A futures contract is an agreement between buyer and a

seller for the purchase and sale of a particular asset at a specific future date. In a futures
contract, the price at which the assert would change hands in futures is agreed upon at
the time of entering into the contract
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 What is the period for which a futures position could be taken? – Currently, both
the stock exchanges have come out only with three contract: one month, two month and
three months contracts each of which expires on the last Friday of the respective month.
 What are the options? – Options are contract which go on a step further that futures
contracts in the sense that they provide the buyer of the option the right, without the
obligation, to buy or sell a specified asset at an agreed price on or up to a particular date.
For acquiring this right, the buyer has to pay a premium to the seller. The seller on the
other hand, has the obligation to buy or sell that specified asset at that agreed price. This
makes options more of an insurance product where the downside risk is covered for the
payment of a certain fixed premium.
 For e.g. An investor buys a call option to purchase equity shares of BSES ltd at the end of
3-0 days at a price of Rs 200 at premium of rs 10. If the market price of the share on the
day of expiry is say Rs 230, the investor will exercise the option and buy the share at Rs
200 and earn Rs 20 per share ( Rs 230 – Rs 200 – Rs 10). On the other hand, if the
market price falls to say Rs 170, then the investor will not exercise the option, and the
maximum loss to him will be only Rs 10 being the option premium paid. Thus the losses
are limited while the profits are unlimited.
 What is a call or put option? – the right to buy is called a call option while the right to
sell is called a put option. The buyer of the call option can call upon the seller of the
option and buy for him, the underlying instrument at any point of time on or before the
expiry date by exercising his option at the agreed price.
Stocks to be eligible for options trading should meet the following criteria:
1) The Market capitalization during the preceding six months and average free
float market capitalization (non-promoter holding in the stock) should not be
less than Rs 750 crore.
2) The stock should appear in the list of top 200 scrips based on the average daily
volume during the preceding six months.
3) The stocks should be traded at least 90% of the trading days during the
preceding six months
4) Non promoter holding in the company should be at least 30%
Q – 12 Write a note on Credit and Debit Cards. Comment on future of plastic money in
India
Ans: Today’s world is known as the world of plastic money, in the form of Credit Cards, Debit
cards and Charged Cards. As these cards are very convenient they have become very popular
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Reg. No. 200331828
over the last few years in India. Today we find that most banks are offering these cards to their
customers.
Parties to the Transaction

The issuers are mainly Banks. The banks charge upto 3% from the member establishment. They
charge an annual fee from their customers. The credit period made available to the customers is
about 30 to 45 days but this comes with a very high cost of around 2.5% per month.
Card Holders
The cardholders include both the individuals and the business organizations.
Member Establishments (MEs)

These are the establishments enlisted by the card issuers, who accept payment through cards for
goods sold or services rendered. Mes are enlisted after taking into consideration their reputation,
integrity, standing and popularity. Normally, the transactions against an individual credit card
should not exceed the floor limit. They have to pay to the issuer a certain percentage of discount
on the purchases made against the cards.
Clearing Agencies
A card issuer affiliates itself with Master card International or Visa International the two leading
international card issuers, which act as clearing agencies. These companies also allow the issuing
banks to use their logo on their cards. A credit card is a payment mechanism, which enables the
holder to buy goods and services on credit. This credit is given by the issuing bank to the
cardholder.
Concept of Debit Card

Unlike a credit card that is a pay later product, a Debit card is a pay now product where the
customers account with the issuer is immediately debited to the extent of the value of the
transaction.
The debit card program needs terminal, known as the Point of sale Terminal. For making the
payment the card is inserted in the machine. The machine places an automatic call, checks the
balance in the account and reduces the balance to the extent of the invoice. As far as the banks
are concerned this mechanism is least risky, as the bank extend no credit to the customer
In both type of cards when a cardholder makes a purchase he hands over the card to the ME.
ME checks the number on the card against the Hot List or Warning Bulletin provided to him by
the issuer. This is the authenticity test, which proves whether the cardholder is genuine owner of
the card or not. The cardholder is also required to sign the voucher, and this signature has to
tally with the one on the credit card.
Collection
After the purchase is transacted the ME approaches the issuing bank or its clearing
representative and claims the amount through the copy of the sales voucher. The bank in turn
discounts this and makes payment to the establishment.
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IN India the credit card business has been growing very fast, with the advent of
new private sector banks, pushing this business very aggressively. Many Indians are now willing
to use the credit cards regularly especially in the urban areas. Banks are offering various facilities
like free accident insurance cover, low yearly fees, rewards points, loans on credit cards etc.
We must also look at the problems associates with the business of credit cards. It
has been reported that in India the bad debts on account of credit cards are already amounting
to the staggering Rs 800 creores and increasing day by day. It is important that the banks offer
credit cards to individuals and organizations who have good reputation and good credit history.
Credit appraisal of the customers must be done strictly. People who own more than one card are
able to defraud many banks. Efforts are now on to gather credit information from different
sources and make this data available to all banks.
Q – 14 Write Notes On:

A) Eligibility for refinance by NHB
B) Differentiate between lease and HP
C) SEBI regulations for Portfolio Management
D) Corporate governance
Ans:
A) Eligibility for refinance by NHB – These days Housing finance is in the limelight.
Housing finance is offered by many specialized Housing Finance Companies approved by the
regulator National Housing Banks (NHB), a subsidiary of reserve Bank of India. Annual limits
are fixed for the HFCs on various parameters such as average refinance drawn during the
pervious years, repayment of refinance earlier availed from it and the overall borrowing limit
prescribed under the refinance policy. The refinance made available to any HFC is not to be
more than 60% of its outstanding housing loans at any point of time. The HFCs, whose
overdues of over three months exceed five percent of the aggregate demand for the year, are
ineligible to draw further refinance.
The Limits of Refinance

 Cannot exceed 5 times of Net Owner Funds of HFC
 Not to exceed 50% of total loan funds of HFCs
 Not to exceed 15% of Net owner funds of NHB, 25% if HFC is sponsored by scheduled
banks
 Demand overdue for more than 3 months, not to exceed 5% of aggregate demand
 Restricted to 30% of HFCs disbursement on project handling
Regulatory guidelines of NHB

 Capital adequacy norms – By ensuring a minimum capital adequacy ration, the
regulations are assured that sufficient capital is existent so as to withstand the abnormal
shocks in the financial system,
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Reg. No. 200331828
 NHB has specified that of the total receivables of the housing finance company, at least
95% of the total money should be recovered.
 NHB does not specify any norms as far as determination of money.
 Reporting norms
All HFC’s are mandatory required to file annual return with NHB, with a copy to RBU stating
 Particulars of Deposits
 Particulars of exempted borrowings not counted as deposits
 Statement showing net owned funds, statement showing outstanding loans and advances
 Statement of investments
 Statement relating to deposits and maintenance of liquid assets.
B) Differentiate between lease and HP –
Lease
An equipment lease can be defined as a contractual arrangement where the Lessor of equipment
transfers the right to use the equipment to the lessee for an agreed period of time in return for
rental. At the end of the period the asset reverts back to the lessor, unless there is a provision
Advantages of Lease
 Flexibility
 Tax benefits
 Less paperwork
 Convenience
 100% financing
 Better utilization of own funds
The lessee is now expected to capitalize the leased assets in his book and claim depreciation on
these assets as far as book profits are concerned. The lessee however is allowed to claim lease
rentals as tax-deductible expense as far as Income Tax Act is concerned. The lease agreement
does not provide for a transfer of ownership to the lessee either at the ender of the lease period.
The lease rentals are so structured as to recover the entire investment cost during the primary
period. Typically the lease rentals are payable in equated monthly installments at the beginning
of every month. As per the existing provisions of income tax act, the lease income is taxed in the
hands of the lessor as business income and the lessor claims the tax relevant depreciation on the
equipment leased as a tax-deductible expense. Service tax has been imposed on the interest
portion of the lease rental; this tax has been increased in this year’s budget from 5% to 8%.
Some states also impose sales tax on lease transactions, following the 46th constitutional
amendment. In a financial lease, lessee is under obligation to pay lease rental regardless of its
financial condition
Hire Purchase
A H.P can be defined as a contractual arrangement under which the owner lets his goods on hire
to the hirer and offers an option to the hirer for purchasing the goods in accordance with the
terms of contract.
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Reg. No. 200331828
Features
 The finance company purchases the equipment from the equipment supplier and lets
it on hire to the hirer
 The hirer may be required to make a down payment and the balance can be repaid in
maximum 60 months
 The interest is calculated on the basis of flat rate of interest.
 During the currency of the contract the hirer can opt for an early repayment and
purchase the asset. The hirer, exercising this option, is required to pay the remaining
amount of hire purchase installments less an interest rebate.
Tax and Accounting Aspects
Hire purchase transactions are liable to sales tax. The cash purchase price of the asset is
capitalized and the capital content of the hire purchase installments is recorded as a liability.
Depreciation is charged on the cash purchase price of the asset in line. The hire purchase price
less the installments received is shown as a receivable (stock on hire) and the finance income
component of these installments is shown as a current liability.
C) SEBI regulations for Portfolio Management –

 A portfolio manager must register himself with SEBI
 The applicant needs to have necessary infrastructure.
 He must have in his employment at least two persons who are experienced in the
business of portfolio management
 The applicant must fulfill the capital adequacy norms
 The applicant must not be involved in any litigation
 He must have the professional qualifications from a recognized institution in finance, law,
accountancy or business management
 The applicant has to pay registration fees as are in force.
 The portfolio manager shall place the funds of all the clients in a separate account
 The portfolio manager shall charge an agreed fee from the client for rendering portfolio
management services without guaranteeing or assuring, either directly or indirectly any
such return and such fee shall be independent of the return to the client.
 The portfolio manager shall purchase or sell securities separately for each client.
D) Corporate governance – As stated by Nobel Laureate Milton Friedman “Corporate

Governance is to conduct business in accordance with shareholders’ desire while confirming to
local laws and customs”. Corporate Governance is all about promoting Corporate Fairness,
Transparency and Accountability. For implementing Corporate Governance, Cadbury
Committee was set up. The report submitted by Sir Cadbury proved to be a landmark in the
field of Corporate Governance. The objective of the committee was “enhancement of the long
term shareholders’ value, while at the same time protecting the interest of other stakeholders
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The key recommendations of the report were

 Board of Directors – The board has 5 Basic Responsibilities
1. Overseeing Strategic Development and Planning
2. Management selection
3. Maintenance if Good Member Relations
4. Protecting and optimizing the organizations Assets
5. Fulfilling Legal requirements
 Composition of the Board of Directors – lay emphasis on the caliber of the non-
exclusive directors
 Audit Committee – Acc to this the key components are the Board, the internal auditor
and the outside auditors
 Disclosure of Remuneration Package
 Board Meetings – should be held at least four times in a year
 Functions of Management – Chief executive, executive-directors and the key managers

1. Assisting the Board in its decision making process
2. Implementing the policies
3. Ensuring compliance
4. Providing timely, accurate, substantive and material information.
 Shareholders
1. Have certain rights and responsibilities
2. Effectively participate in General Body Meetings
3. Should demand complete information
Information to be placed before Board of Directors
 Annual Operating plans

 Capital Budgets
 Quarterly results
 Minutes of meetings of audit committee and other committees of the board
 The information on recruitment and remuneration of senior officers
 Fatal or serious accidents, dangerous occurrences
 Any issue, which involves possible public or product liability claims of substantial nature
 Details of any joint venture
 Transactions that involve substantial payment towards Goodwill
 Significant labour problems and their proposed solutions
 Sale of material nature of investments, subsidiaries, assets, which is not in normal course
of business
Page 19 of 19

CAPITAL MARKET ASSIGNMENTS
Select The Blank

________ stocks.
Correct Answer ICE
Your Answer ICE
True/False
Your Answer True
Select The Blank


Correct Answer 0.74
Your Answer 0.74

Question Who is responsible to get the securities listed on all the stock
exchanges?
Your Answer SEBI
Select The Blank

Question A mutual fund scheme shall not invest more than ________ of its NAV
in unrated debt by a single issuer.
Correct Answer 0.1
Your Answer 0.1

market?
Correct Answ er US$14 bn
True/False
Correct Answer True
Your Answer True

Your Answer 38200



Question Describe in brief the SEBI regulations for venture capita l funds :-
Correct Answer Must disclose investment strategy , VCF's must be registered
, Cannot carry out another activity
True/False
Your Answer True

True/False
client.
Your Answer False

True/False
Your Answer False
Select The Blank

Your Answer 2 times

or office
or office

Question What are the eligibility norms for an unlisted company for making a
public issue?
Correct Answer Pre issue net worth not less than 1 crores in the last 3
years , Track record of distributable profits for at least 3 years , Issue size
shall not exceed five times of its pre issue net worth
Your Answer Issue size shall not exceed five times of its pre issue net
worth , Pre issue net worth not less than 1 crores in the last 3 years , Track
record of distributable profits for at least 3 years
Select The Blank


stock market :-
receiver
held for 1 year , Removal of income tax on dividends in the hands of receiver ,
Investors income tax on dividend reduced to 12.5%

Correct Answer 2
Your Answer 2

Question Which acts were amended to remove some of the hurdles to
corporatisation and demutualisation of stock exchanges?
Match The Following




mission and values

making process Decision making

crores?


Correct Answer Cancel certificate issued to custodian , Inspect books of DP
, issuers or beneficiary owners , Investigate an acquirer
Your Answer Cancel certificate issued to custodian , Inspect books of DP ,
issuers or beneficiary owners , Investigate an acquirer
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank


Select The Blank

Your Answer BO ID

Your Answer 4 times


Match The Following
Market risks



True/False
Your Answer False

instruments
Your Answer Market for long term funds an d investments in long term
instruments

Correct Answer Physical certificates converted into electronic from ,
Credited into investors account with his/ her DP
Your Answer Physical certificates converted into electronic from , Credited
into investors account with his/ her DP , Selling shares
Select The Blank

Question ________ is in the form of a usance promissory note payable after
45 days from the date of issue.

India ?


markets?

for an IPO ?
Your Answer 1 Crore
Select The Blank

True/False
Question A mutual fund shall not invest more than 10% of is NAV in equ ity
Correct Answer True
Your Answer False

True/False
Question Venture capital finance is risk finance for entrepreneurial growth
oriented companies.
Correct Answer True
Your Answer True
-----------------------------------------------

True/False
transferable.
Your Answer False

issued by RBI :-

True/False
Correct Answer True
Your Answer True

markets?


India ?

Your Answer 37775

Correct Answ er Software
Select The Blank

Select The Blank

Select The Blank

Correc t Answer Mutual funds


True/False
Your Answer False
Select The Blank

Correct Answer 0.1
Your Answer 0.3

skills , Experience
skills , Experience

or office
or office


Correct Answer BPO
Your Answer BPO



Your Answer 5 lacs
Match The Following


True/False
Your Answer False

NHB?
True/False
Correct Answer True
Your Answer False


OCB's?
Correct Answer 0.3
Your Answer 0.25

True/False
Correct Answer True
Your Answer True

Select The Blank

Correct Answer 4
Your Answer 4

True/False
client.
Your Answer False
True/False
document.
Your Answer True

Question How does SEBI react to the Scams in participatory n otes issuance?
Select The Blank

Correct Answer DP
Your Answer DP
------------------------------------------------------------------

True/False
Questi on Employee stock option scheme granted to the employee is
transferable.
Your Answer False

issued by RBI :-
True/False
Correct Answer True
Your Answer True

markets?

Correc t Answer 5 years

India ?

Your Answer 37775

Select The Blank

Select The Blank

Select The Blank



True/False
Your Answer False
Select The Blank

Correct Answer 0.1
Your Answer 0.3

skills , Experience
skills , Experience

Questi on Describe E-trading :-
or office
Your Answer Screen based trading in place of traditional rin g ,
or office


Correct Answer BPO
Your Answer BPO


Your Answer 5 lacs
Match The Following


True/False
Question Money market mutual funds are no t permitted to invest in treasury
Your Answer False

NHB?
True/False
Correct Answer True
Your Answer False


OCB's?
Correct Answer 0.3
Your Answer 0.25
True/False
Correct Answer True
Your Answer True

Select The Blank

Correct Answer 4
Your Answer 4

True/False
client.
Your Answer False
True/False
document.
Your Answer True


Your Answer Tighten FII regulations , En sure participatory notes not misused
Select The Blank

Correct Answer DP
Your Answer DP
-----------------------------------------------------------------------

of a scheme?
Correct Answer 0.03
Your Answer 0.1

issuance?
Your Answer Ensure participatory notes not misused by NRI , OCB controlled
by Indians promoters , Tighten FII regulations

Question What are the requirements regarding promoter's contribution
and lock in?
Correct Answer In case of IPO, promoters have to necessarily offer at
least 20% of the post issue capital , In case of listed company promoters shall
years
Your Answer In case of IPO, promoters have to necessarily offer at least
years
True/False
Correct Answer True
Your Answer True

Correct Answer Short term financial instrument , Negotiable and
transferable instrument , Companies issue it for raising short term debt
True/False
company records the hire purchase installment receivable as current asset.

Correct Answer True
Your Answer True
True/False
Question The buy back of shares by Indian corporates has been very
successful in India.
Your Answer True
Select The Blank

Question Directors should not be member of more than________
committees.
Correct Answer 10
Your Answer 8

Question What are the stages in the process of book building broadly
divided into?
Correct Answer Syndicate formation , Issue process
Your Answer Syndicate formation , Issue process , IPO

Question What information is required to be furnished to stock
exchanges in compliance of SEBI regulations 1997 ?
Correct Answer Details of proposed acquisition need to be filed with
Stock exchanges at least 4 days before the date , Any person holding more than
15% but less than 75% voting rights shall be disclosed with 2 days , Annual
disclosures


Your Answer Assess the borrowing capacity
Select The Blank

Your Answer Ratio analysis

operations?
Select The Blank

Your Answer Investors
Select The Blank

Question The VCs to flourish requires a well developed ________.
Correct Answer Capital market
Your Answer Capital market

issued by RBI :-
Your Answer All the NBFC's must register with RBI , Without the
True/False
Your Answer True

Question What was the objective of the Kumarmangalam Birla Committee on
Corporate Governance?
Correct Answer Enhancement of the long term shareholder's value at the
same time protecting the interests of the other shareholders
Match The Following

Book building Bharati Televentures NSE
Depository Bank of securities Bonus shares
First to introduce rolling settlements in the country NSE BSE
True/False
Your Answer True
True/False
Your Answer True

worth?
Your Answer 2 times

Question What is the time frame stipulated by SEBI for members
intending to avail of the buy back offer?
Correct Answer Minimum 15 days and not exceeding 30 days
Your Answer 3 months from the date of the offer
Match The Following

Portfolio Collection of assets Observe high standard of integrity and

fairness
Factors influencing portfolio decisions Business and Market risks Business

and Market risks

fairness Collection of shares and stocks

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

returns can the portfolio manager share from their client's profits?
Correct Answer 0
Your Answer 0

Question What is the minimum number of days for which the bid should
remain open in book building?
Your Answer 5 days

Question What is the procedure for action in case of default?
Correct Answer Suspension of the certificate , Mutual fund / AMC cease
to exist , Subject to the directions of the board with regard to records
Your Answer Suspension of the certificate , Mutual fund / AMC cease to
exist , Subject to the directions of the board with regard to records
True/False
Correct Answer True
Your Answer True

Question What percentage of underwriting in the issues obligatory to
the merchant bankers?
Correct Answer 0.05
Your Answer 0.07
Select The Blank

Your Answer Interest tax
Select The Blank

Your Answer Share holder
Select The Blank

Question One of the process of book building is that the issuer
appoints a ________ also known as the book runner.
Your Answer Merchant banker
True/False
Correct Answer True
Your Answer True
Select The Blank

Question With the introduction of ________ accounts the complaints
about allotment have surely gone down.
Your Answer DEMAT

Correct Answer 0.1
Your Answer 0.25

Question Where is the difference in buying and selling dematerialized
shares ?
Correct Answer Process of delivery , Receipt of securities , Pledging
the shares
Your Answer Process of delivery , Receipt of securities , Pledging the
shares

Correct Answer Through any/ own subsidiary company , Through any/group
of investment company , If default subsists in respect of repayments of
deposits, term loans to any financial institutions and redemption of preference
shares or debentures

debentures
Select The Blank

Your Answer Chemical
Select The Blank

Your Answer INDEX
True/False
Question Transactions that involve substantial payment towards
goodwill, brand equity or intellectual property must be placed before the board
of directors as per the recommendations of the Kumarmangalam Birla report.
Correct Answer True
Your Answer False
True/False
Correct Answer True
Your Answer True

Select The Blank

Question Securities offered in a pledge can change if a ________
agrees.
Your Answer DP

Question Briefly describe the SEBI guidelines for the merchant bankers
:-

Question What is transposition cum demat form?
Correct Answer Helps in effect change in the order of names ,
Dematerialize the securities
Your Answer Helps in effect change in the order of names , Dematerialize
the securities , Pledging the shares
-------------------------------------------------------------

Select The Blank

________ stocks.
Correct Answer ICE
Your Answer ICE
True/False
Your Answer True
True/False
Question In order to demater ialize the securities one has to fill DRF.
Correct Answer True
Your Answer True
Select The Blank


Select The Blank

Your Answer BO ID

Your Answer 4 times

Correct Answer Degree of popularity of the industry , Overall economic
condition , Demand and supply capital
Match The Following

Market risks



------------------------------------------------------------------------



instruments
instruments
True/False
Correct Answer True
Your Answer True

True/False
Your Answer False

Correct Answer 8
Your Answer 8

contain disclosures
Match The Following


Select The Blank


market?

etc?
True/False

Correct Answer True
Your Answer True


True/False
Your Answer True

Match The Following




mission and values



Select The Blank
True/False
Correct Answer True
Your Answer True

skills , Experience
skills , Experience

instruction slip ?
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


Question What is the eligibility norm for an unlisted company for making an
Correct Answer Net wor th of the company should not be less than 1 crore
Select The Blank






India ?
Select The Blank

________
Select The Blank

Correct Answer 45
Your Answer 45

True/False
Your Answer False
True/False

Correct Answer True
Your Answer True

transaction cost

Correct Answer Enable surrender and withdrawal of securities to and from the
True/False
Your Answer True
Select The Blank

Question Directo rs should not be member of more than________ committees.
Correct Answer 10
Your Answer 10

markets?

Correct Answer 1
Your Answer 1
True/False
Your Answer False
----------------------------------------------------------------------

Inform SEBI


Question Of the net tangible assets how much percentage of assets should be
Correct Answer 0.5
Your Answer 0.5

transaction cost
an account

operations?

Correct Answer 0
Your Answer 0
True/False
Your Answer False

Correct Answer Cannot exceed 5 times NOF , Not to exceed 50% of t otal Loan

Correct Answer 0.1
Your Answer 0.25
Select The Blank

with the ROC.
Correct Answer ROC
Your Answer ROC

True/False
prematurely.
Correct Answer True
Your Answer True
Select The Blank

Your Answer Trust
True/False
Correct Answer True
Your Answer True
Select The Blank



subscription

Inform SEBI


Question Of the net tangible assets how much percentage of assets shoul d be

Correct Answer 0.5
Your Answer 0.5

transaction cost
an account

Question Which stock exchange was used by ketan parekh for buyin g
operations?

Correct Answer 0
Your Answer 0
True/False
Your Answer False


Correct Answer 0.1
Your Answer 0.25
Select The Blank

with the ROC.
Correct Answer ROC
Your Answer ROC

True/False
prematurely.
Correct Answer True
Your Answer True

Select The Blank
Your Answer Trust
True/False
Correct Answer True
Your Answer True
Select The Blank



subscription

Question Briefly describe the SEBI guidelines for the merchant bankers : -
Your Answer Expertise good financial standing and high degree of
professional integrity , Company abides by the various requirements relating to
disclosers, listing of instruments etc , Should have an authorization from SEBI
True/False
Your Answer True
Select The Blank

Question Securities offered in a pledge can change if a ________ agrees.
Your Answer Depositary
-----------------------------------------------------------------------



instruments
instruments
True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

contain disclosures
Match The Following



Select The Blank


market?

etc?
True/False
Correct Answer True
Your Answer True


Your Answer Annual operating plans , Capital budgets , Quarterly r esults
True/False
Your Answer True

Match The Following




mission and values


Select The Blank

True/False
Correct Answer True
Your Answer True

skills , Experience
skills , Experience

instruction slip ?
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


Question What is the eligibility n orm for an unlisted company for making an
Select The Blank





India ?
Select The Blank

________
Select The Blank

Correct Answer 45
Your Answer 45

True/False
Your Answer False
True/False
Correct Answer True
Your Answer True

transaction cost

Correct Answer Enable surren der and withdrawal of securities to and from the
True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10

markets?

Correct Answer 1
Your Answer 1
True/False
Your Answer False
-----------------------------------------------------------------------
Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience


True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients


Question Describe the stock lending mechanism: -



Match The Following

Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank


Select The Blank
Your Answer Insider
Select The Blank

Match The Following

True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



Question The following are some of the regulat ions governing the NBFC's
issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office

Select The Blank
True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Question With the introduction of ________ accounts the complaints about
Your Answer DEMAT
-------------------------------------------------------------------------

Select The Blank

Your Answer Crisil
True/False
a PA.
Correct Answer True
Your Answer True
Select The Blank


instruments
instruments

skills , Experience
skills , Experience

True/False
Your Answer True

market?


True/False
document.
Your Answer True
Select The Blank

Your Answer Clients




Match The Following


Funds
currency deal

Your Answer 37829

True/False
Your Answer False
Select The Blank

Select The Blank

Select The Blank

Your Answer Insider
Select The Blank

Match The Following


True/False
Your Answer False

Correct Answer 1
Your Answer 1
True/False
Your Answer True
True/False
Your Answer True
True/False
Correct Answer True
Your Answer True



issued by RBI :-


markets?
Select The Blank

Select The Blank

Your Answer 3 years
True/False
client.
Your Answer False

or office
or office
Select The Blank

True/False
destroyed.
Your Answer False


India ?


Your Answer 7 days

Your Answer 4 times
Select The Blank

Your Answer DEMAT




True/False
Correct Answer True
Your Answer True
True/False
Your Answer False

Correct Answer 8
Your Answer 8

Match The Following



Select The Blank



True/False
Correct Answer True
Your Answer True


report?
True/False
Your Answer True

company
Match The Following



Select The Blank

True/False
Correct Answer True
Your Answer True


target account id
target account id
True/False
Correct Answer True
Your Answer False
Select The Blank

Correct Answer 0.05
Your Answer 0.2
Select The Blank

Your Answer FITSCH
Select The Blank


its net worth?
Select The Blank



accountability
accountability

regulations 1997 ?
2 days

Select The Blank

Select The Blank

of the company.
Correct Answer 45
Your Answer 45


opinion of board
of board
True/False
Your Answer False
True/False
Correct Answer True
Your Answer True


True/False
Your Answer True
Select The Blank

Correct Answer 10
Your Answer 10


Correct Answer 1
Your Answer 1
True/False
Your Answer False


Question What are participatory notes?
Correct Answer Instruments used by foreign funds , Instruments used but

investors not register with SEBI , Investors interested in taking
Your Answer Instruments used by foreign funds , Instruments used but
investors not register with SEBI , Investors interested in taking

Correct Answer VCF's must be registered , Cannot carry out another activity ,
Select The Blank

Question A ________account is created for the purpose of distributing
receivables to the investors on the securitisation deal.
Correct Answer Escrow
Your Answer Escrow
True/False
Your Answer False


Question What is the procedure for making an application to the takeover
panel for seeking exemption?
Correct Answer Acquirer to make an application in a standard format of SEBI
Your Answer Acquirer to make an application in a standard format of SEBI

Select The Blank
Question The DP opens investor account in the system and gives an
account number also known as ________.
Your Answer BO ID
True/False
Correct Answer True
Your Answer True

lock in?
Correct Answer In case of IPO, promoters have to necessarily offer at least 20%
of the post issue capital , In case of listed company promoters
shall participate either to extent of 20% of proposed or post issue
, In case of any issue of capital the minimum contribution shall
be locked in for a period of 3 years
of the post issue capital , In case of listed company promoters
shall participate either to extent of 20% of proposed or post issue
, In case of any issue of capital the minimum contribution shall
be locked in for a period of 3 years


Select The Blank

Your Answer FITSCH
Select The Blank

Your Answer SENSEX
Select The Blank

promoters in the proposed issues in excess of the required
minimum percentage shall also be looked in for a period of
________.
Your Answer 3 years
True/False
Correct Answer True
Your Answer True


skills , Experience
skills , Experience
Select The Blank

Question Criminal proceedings under section 24 regarding insider trading
saw ________ cases.
Correct Answer 28
Your Answer 28
True/False
brand equity or intellectual property must be placed before the
board of directors as per the recommendations of the
Kumarmangalam Birla report.
Correct Answer True
Your Answer True
True/False

company records the hire purchase installment receivable as
current asset.
Correct Answer True
Your Answer True
Select The Blank

Question Most of the deals struck on the fist day of foreign currency
options were of ________ maturity.
True/False
Correct Answer True
Your Answer False
Match The Following

Share buy back is a way Returning surplus cash to No minimum price

of the shareholders stipulation
Dutch Auction Price of the Buy back is Price of the Buy back is
done by the shareholders done by the shareholders
Open market purchases No minimum price Returning surplus cash to
stipulation the shareholders
Companies holding more Can be delisted Can be delisted
than 90% equity
Select The Blank

Question The acquirer is required to make the PA within ________
working days of entering into an agreement to acquire shares or
deciding to acquire share's voting rights of target company.
Correct Answer 4
Your Answer 4
True/False
Correct Answer True

Your Answer True
True/False
Your Answer True

Question What are the likely costs incurred by a credit card issuing bank?
Correct Answer Membership fees to visa/MasterCard , Marketing cost ,

Administrative cost and cost of bad debts
Your Answer Membership fees to visa/MasterCard , Marketing cost ,
Select The Blank

Question In February 2004, UTI sought permission of SEBI to prematurely
close ________ schemes.
Correct Answer 7
Your Answer 7
True/False
transferable.
Your Answer False

Question What is a more contemporary definition of corporate
governance?
Correct Answer Corporate Governance is all about promoting corporate fairness,
Your Answer To conduct business in accordance with the shareholders
interest while conforming to the local laws and customs

Your Answer To promote secondary market in government securities

Question Under Sections 11 B how many promoters were debarred?
Correct Answer 2
Your Answer 2

Question What information is required to be furnished to stock exchanges
in compliance of SEBI regulations 1997 ?
exchanges at least 4 days before the date , Any person holding
more than 15% but less than 75% voting rights shall be
disclosed with 2 days , Annual disclosures
exchanges at least 4 days before the date , Any person holding
more than 15% but less than 75% voting rights shall be
disclosed with 2 days , Bank statements


Inform SEBI

Question What are the objectives of NHB?
Correct Answer To promote, establish, aid in promotion and support of housing

finance institutions , To make loans advances or render any
other form of financial assistance to focusing finance institutions
, To guarantee financial obligations
Your Answer To promote, establish, aid in promotion and support of housing
finance institutions , To make loans advances or render any
other form of financial assistance to focusing finance institutions



Question What has hurt the functioning of stock markets both primary and
secondary?
Correct Answer Unscrupulous promoters
Your Answer Non receipt of refund orders and allotment advise

Question What is the amount of net tangible assets, company should have
to make an IPO?

worth?
Your Answer 3 times

Question What was the objective of the Kumarmangalam Birla Committee
on Corporate Governance?
Correct Answer Enhancement of the long term shareholder's value at the same
True/False
Your Answer True
Select The Blank

Your Answer SEBI
Match The Following

10 HDFC foreign currency HDFC foreign currency

deal deal
0.57 FII current free float FII current free float
sensex company sensex company
0.45 FII free float stock NIFTY FII free float stock NIFTY
companies companies

$ 476 mn Global investors pumping Global investors pumping
funds in India Specific funds in India Specific
Funds Funds

investors who have common financial goal , Issue units to
investor which represent right in assets , Investments in mutual
funds may be in the form of stock, bond, money market
securities
investors who have common financial goal , Issue units to
investor which represent right in assets , Investments in mutual
funds may be in the form of stock, bond, money market
securities

Your Answer Assess the repayment capacity
Select The Blank

Question A mutual fund scheme shall not invest more than ________ of its
NAV in unrated debt by a single issuer.
Correct Answer 0.1
Your Answer 0.1

amount is expected to be paid from the primary market during
this year?

Question The process of share buy back must be completed within what
period from the date of passing the resolution?



Select The Blank

Correct Answer 50
Your Answer 50
Select The Blank

Select The Blank


Question How is a share buy back a useful mechanism in preventing
hostile takeovers?
Correct Answer Share buyback reduces the floating stock in the market thereby
reducing the scope for a raider to acquire enough stock to gain
management control.
Your Answer Share buyback reduces the floating stock in the market thereby
reducing the scope for a raider to acquire enough stock to gain
management control.
True/False
Question Money market mutual funds are not permitted to invest in
treasury bills and commercial paper.
Your Answer False


skills , Experience
skills , Experience

Select The Blank

Correct Answer Screen based trading in place of traditional ring , Communication

through the net , Operate in stock market privately through home
or office
Your Answer Screen based trading in place of traditional ring , Communication
through the net , Operate in stock market privately through home
or office

amount is expected to be paid from the primary market during
this year?
True/False
Correct Answer True
Your Answer True
True/False
client.
Your Answer False

Your Answer 37775


Your Answer Overall economic condition , Demand and supply capital ,

Question Who was the first to introduce rolling settlement in India?
Correct Answer NSE
Your Answer NSE
Select The Blank


issued by RBI :-
Correct Answer All the NBFC's must register with RBI , Without the registration
certificate no company can undertake activities of NBFC , All
certificate no company can undertake activities of NBFC , All
True/False
Question The company opting for an IPO should have net worth of at least
Rs 1 crore in each of the preceding two years.
Correct Answer True
Your Answer True
Match The Following

Castrol FY 2003 - 03 Dividend FY 2003 - 03 Dividend

Rs145 crores Rs145 crores
Hero Honda FY 2003 - 03 Dividend FY 2003 - 03 Dividend

VSNL FY 2003 - 03 Dividend FY 2003 - 03 Dividend

market?
True/False
Correct Answer True
Your Answer True

Your Answer 37809

instruments
instruments
True/False
Correct Answer True
Your Answer True

000 crores?
Select The Blank



Question How many registration of issues were cancelled in the recent
past?
Correct Answer 1
Your Answer 1
True/False
Question The lease agreement provides for a transfer of ownership to the
lessee either at the end of the period or during the period of
lease.
Your Answer False


Your Answer A net connection , A registered account with a broker and a

instruction slip ?

debarred?
Correct Answer 1
Your Answer 1

acquisitions arising out of firm allot meant in public issues and
rights issues etc?

True/False
Correct Answer True
Your Answer True


Question Which company was responsible for spreading the equity culture
in India ?

Correct Answer VCF's must be registered , Cannot carry out another activity ,
Match The Following

ISIN Unique identification Unique identification

number for security number for security
WDM Market for pure debt Market for pure debt
instruments instruments
NSE SET up by IDBI and other SET up by IDBI and other
financial institutions financial institutions
custodian Helps register and Helps register and
safeguard the securities of safeguard the securities of
its clients its clients

Correct Answer Client gives his money for investment to the portfolio manager

Question How much percentage of company's revenue would be
accounted for by the business with new name?
Correct Answer 0.5
Your Answer 0.5
True/False
Your Answer False


markets?
Select The Blank

comments made by SEBI and then send within ________ days
from the date of PA to all shareholders whose names appear in
the register of the company.
Correct Answer 45
Your Answer 45

Correct Answer The Asset management company shall not launch any scheme
till approval of trustees and offer document has been filed with
the board , With each offer document pay filing fees , Offer
Your Answer The Asset management company shall not launch any scheme
till approval of trustees and offer document has been filed with
the board , With each offer document pay filing fees , Offer

Select The Blank
Question In the book building process pricing is determined on the basis of
________.
Correct Answer Investor feedback
Your Answer Investor feedback

Correct Answer Credit rating , Maturity more than 18 months appoint debenture
Select The Blank

Question Recently many banks have started issuing ________ which
could also be used as a debit card.
Select The Blank

Your Answer 2.5 times

True/False
Question Sweat equity shares are shares issued by company to
employees or directors to discount.
Correct Answer True
Your Answer True

Your Answer Protection of the value of the investment
Select The Blank

Your Answer SENSEX
True/False
client.
Your Answer False

Correct Answer Client gives his money for investment to the portfolio manager



Select The Blank

Question In February 2004, UTI sought permission of SEBI to prematurely
close ________ schemes.
Correct Answer 7
Your Answer 7
True/False
Question The company opting for an IPO should have net worth of at least
Rs 1 crore in each of the preceding two years.
Correct Answer True
Your Answer True
Select The Blank

Match The Following

Insurance In favor of lessor and Sources of funds for

lessor's lenders in lease finance companies
agreement
Inter corporate deposit Sources of funds for Service tax imposed on
finance companies interest
Leasing Service tax imposed on In favor of lessor and
interest lessor's lenders in lease
agreement
Stock on hire Hire purchase price less Liquid asset
the installments received

Question What are the likely costs incurred by a credit card issuing bank?
Correct Answer Membership fees to visa/MasterCard , Marketing cost ,

Your Answer Membership fees to visa/MasterCard , Marketing cost ,
True/False

making a PA.
Correct Answer True
Your Answer True

announcements which he hopes will make investors think in
terms of returning to stock market :-
Correct Answer No capital gains tax on investment made in equity after 1/3/03
held for 1 year , Removal of income tax on dividends in the
hands of receiver
held for 1 year , Removal of income tax on dividends in the
hands of receiver

True/False
Question If the credit rating is obtained from two different agencies in case
of issue of debt instruments, all the ratings need not be disclosed
in the document.
Your Answer False
Select The Blank

Your Answer Market capitalization

Question The refinance made available to any HFC is not to be more than
:-
Match The Following

No limit Number of co managers Bankers
Cat 1 merchant banker Min net worth of Rs1 core Min net worth of Rs1 core
Cat 2 merchant bankers Net worth Rs. 50 lacs Net worth Rs. 50 lacs
Issues above Rs 50 and Max number of lead Min net worth of Rs. 100
Rs100 crores managers will be 3 cores
Select The Blank

Question Recently many banks have started issuing ________ which
could also be used as a debit card.

Question Who maintains an Escrow account in the process of
securitisation ?
Correct Answer Trustee
Your Answer Trustee

Question What is the amount of net worth accompany should have for
opting for an IPO ?
Your Answer 1 Crore



Correct Answer Every AMC should maintain proper books of accounts , Financial
year for all schemes to end as on March 31 each year , Every
mutual fund shall have the annual statements audited by auditor
year for all schemes to end as on March 31 each year , Every

mutual fund shall have the annual statements audited by auditor
Select The Blank

Question Cash Corporate benefit such as dividend / interest received is
credited through ________ facility.
Correct Answer ECS
Your Answer ECS


transaction cost
Your Answer No stamp duty , Reduction in paperless work , Reduction in
transaction cost

the employees , Employees can take part in the prosperity of the
company , Is a reward and linked with the increase in the prices
of the shares
the employees , Employees can take part in the prosperity of the
company , Is a reward and linked with the increase in the prices
of the shares
True/False
Your Answer False

committee.

issuance?
Correct Answer Tighten FII regulations , Ensure participatory notes not misused


Question What is mortgage backed securitisation?
Correct Answer Securitisation dealing with mortgages
Your Answer Securitisation dealing with backing of assets
True/False
Question A bidder can request for a transaction registration slip as the
proof of his having entered the bid.
Correct Answer True
Your Answer True

of a scheme?
Correct Answer 0.03
Your Answer 0.05
Select The Blank

Question Largest deal struck on Day 1 of foreign currency option got
underway in India was of ________.
Correct Answer Standard Chartered Bank
Your Answer Standard Chartered Bank


Correct Answer 2
Your Answer 2
Select The Blank

Select The Blank



Your Answer Overall economic condition , Demand and supply capital ,

Question To open a DP account, following things are required :-
Correct Answer Proof of identity , Proof of address , Photograph
Your Answer Proof of identity , Proof of address , Photograph
True/False
client.
Your Answer False
True/False
Your Answer True

Question When is a debenture redemption reserve created?
Correct Answer In case the maturity period of debentures in more than 18

months
Your Answer In case the maturity period is less than 6 months

Select The Blank
Question The DP opens investor account in the system and gives an
account number also known as ________.
Your Answer BO ID
Select The Blank




Question What is the main advantage of a rolling settlement?
Correct Answer Quicker payments
Your Answer Quicker payments
True/False
Correct Answer True
Your Answer True

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