SCDL - Capital Market

CAPITAL MARKET (Total SET 16)
Match
1)
Portfolio Collection of assets

Factors influencing portfolio decisions Business and Market risks
Code of conduct- Portfolio Manager Observe high standard of integrity and
fairness
SEBI Regulations Portfolio Manager must fulfill the
capital adequacy norms
2)
Shareholders; Should effectively Objective of Audit committee ;Look into
participate in general body meetings defaults to depositors creditors
shareholders and debenture holders
Reasons of failures of corporate Superficial commitment to vision,
governance in spite of norms; mission and values
Functions of Chief Executive, ED, ;Assisting the board in decision making
Managers process
3)
Ready forward transaction (Repo) Interbank sale and repurchase of
securities
Commercial paper Means of raising short term debt by
companies
STCI Operations in call money markets
Market stabilsation Bonds Launched in fiscal 2004-05
4)
Charge card form of plastic money
Warning Bulletin Authenticity test
Credit information company SBI, HDFC bank
Credit card issuing company Visa/Master Card
5)
Shareholders should effectively participate in general
body meetings
Objective of Audit committee Look into defaults to depositors
creditors shareholders and debenture
holders
Reasons of failures of corporate Superficial commitment to vision,
governance in spite of norms mission and values
Functions of Chief Executive, ED, Assisting the board in decision making
Managers process
6)
Castrol FY 2003 – 03 Dividend Rs145 crores
MS Verma committee Dual Flotation
Hero Honda FY 2003 – 03 Dividend Rs187 crores
VSNL FY 2003 - 03 Dividend Rs172 crores
7)
Looses the rights to vote shares Non voting

Book building Bharati Televentures
Depository Bank of securities
First to introduce rolling settlements in NSE
the country
8)
Share buy back is a way of returning surplus cash to the
shareholders
Dutch Auction Price of the Buy back is done by the shareholders
Open market purchases No minimum price stipulation
Companies holding more than 90% Can be delisted
equity
9)
10 HDFC foreign currency deal Global
investors pumping funds in India
Specific Funds
0.57 FII current free float sensex company
0.45 FII free float stock NIFTY companies
$ 476 mn Global investors pumping funds in
India Specific Funds
10)
ESPS Stock option method
Sweat equity Share issue for consideration other
than cash
Stock lending mechanism Introduced by SEBI in 1997
ESOP Recipe to make employees millionaires
1!)
0.1 Government decided to pay dividend
0.15 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
Rs. 8000 crores Current shortfall in UTI schemes
12)
1995 MS shoes scam
9/1/2001 SENSEX touched low of 2600
4/1/2001 Tata finance scam came to light
11/1/2001 Reliance sale of 10.5% stake in L&T to
grasim
13)
Rematerialisation RRF
NSE Settlement cycle T + 3
RBI Gilt securities mobilization
Non corporate benefit Bonus
ALL NUMBERS RELATED QUESTIONS
Q As per RBI regulation, bank borrowings should not exceed how many times of the net owned funds?
Correct Answer 4 times
Q The refinance made available to any HFC is not to be more than :-

Correct Answer 60% of its outstanding housing loans
Q What is the percentage of restriction on HFC's disbursement on project lending for refinance ?
Correct Answer 0.3
Q How many times Refinance cannot exceed net owned funds of Housing finance companies?
Q For an approval of HFC one of the norms is that the promoter's contribution has to be minimum
________ of paid up capital.
Correct Answer 0.3
Q What percentage of funds should be invested in unlisted companies?

Correct Answer 0.74
Q 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
Q 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 ________.
Correct Answer 1 year
Q A mutual fund scheme shall not invest more than ________ of its NAV in unrated debt by a single
issuer.
Correct Answer 0.1
Q 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
Q What is the amount invested by the FII's in the Indian Capital market?
Correct Answer US$14 bn
Q Since when have the Indian Stock markets risen ?

Correct Answer 37775 ===== 3 june 2003
Q What is the estimated figure of credit card defaults in India?

Correct Answer 800 crores
Q How many companies are there to do business of credit rating?

Correct Answer 4
Q How many members are appointed by the central government?

Correct Answer 2
Q How much should be the minimum post issue capital of the company?
Q What is the minimum number of days for which the bid should remain open in book building?
Correct Answer 5 days
Q What was the percentage of public offering under the IPOs through the book building method ?
Correct Answer 0.1
Q What is the amount of net worth accompany should have for opting for an IPO ?
Correct Answer 1 Crore
Q What is the amount of net tangible assets, company should have to make an IPO?
Q In case of an IPO of any security of issue size of Rs________ or more security shall be issued only
in demat form.
Q 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
Q Deposits can be accepted for a maximum period of :-

Correct Answer 5 years
Q How much should be the minimum net worth of an AMC?
Correct Answer Not less than 10 crores
Q For a VCF to be registered with SEBI what is the registration fee ?

Correct Answer 5 lacs
Q What is the limit for aggregate investment of FII's NRI's and OCB's?
Correct Answer 0.3
Q 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?
Q 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
Q Under various SEBI regulations how many brokers suspended?

Correct Answer 8
Q 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
Q 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
Q Directors should not be member of more than________ committees.

Correct Answer 10
Q An acquirer who holds ________ shares or voting rights of a target company can acquire further
shares only after making PA to acquire at least additional 20% of target company from the shareholders
through an open offer.
Correct Answer 0.75
Q When is the security created from the date of issue of debenture?

Correct Answer Within 6 months
Q What is maximum percentage of regular expenses of the assets of a scheme?

Correct Answer 0.03
Q A rated company can raise deposit worth how many times its net worth?
Q AA rated companies can raise ________ of its net worth.

Correct Answer 2.5 times
Q What percentage of underwriting in the issues obligatory to the merchant bankers?

Correct Answer 0.05
Q Upto what percentage has the RBI permitted the banks to invest in the capital market ?
Correct Answer 0.05
Q How much percentage of company's revenue would be accounted for by the business with new
name?
Correct Answer 0.5
Q What is the minimum offer an acquirer can make ?

Correct Answer Min 20%
Q Renewal of portfolio fund on maturity shall be deemed as a fresh placement for a minimum period
of :-
Q For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
Correct Answer 2
Q 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?
Q Among the closed schemes, 4 long term assurance schemes were launched with a return ranging
between ________.
Correct Answer 13 - 14%
Q The process of share buy back must be completed within what period from the date of passing the
resolution?
Correct Answer 12 months
Q 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
Q Recently, SEBI has allowed buy back of shares upto ________% of the total shares without
requirement of a special resolution
Correct Answer 10
Q When did the trading in foreign currency options start in India?

Correct Answer 37809 \ 7 july 2003
Q In the L & T reliance case, Reliance was fined ________.

Correct Answer Rs. 5 lacs
Q Most of the deals struck on the fist day of foreign currency options were of ________ maturity.
Q The liability of the underwriters in the MS shoes case was estimated to be ________.
Correct Answer Rs. 500 crores
Q How many points the sensex went up in January 2000 during the ketan parekh scam?
Correct Answer 700 points
Q The capital Adequacy ratio for NBFC's has been fixed at :-

Correct Answer 0.12
Q A significant portion of the investment through the participatory notes is managed by ________
entities.
Correct Answer 114
Q 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?
Q When is the security created from the date of issue of debenture?

Q February UTI sought permission of SEBI to close 7 assured plans prematurely.

Correct Answer True
Q In February 2004, UTI sought permission of SEBI to prematurely close ________ schemes.
Correct Answer 7
Question Information technology, communication and entertainment represent ________ stocks.
Correct Answer ICE
Your Answer ICE
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
Question In order to dematerialize the securities one has to fill DRF.

Correct Answer True
Your Answer True
Question In case of an IPO of any security of issue size of Rs________ or more security shall be
issued only in demat form.
Your Answer 10 crores
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 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.
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?
Your Answer 4 times
Question What are the factors that determine the value of a firm?
Correct Answer Degree of popularity of the industry , Overall economic condition , Demand and
supply capital
Your Answer Overall economic condition , Demand and supply capital , Degree of popularity of the
industry
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 :-
Your Answer 60% of its outstanding housing loans
SET 2
Correct Answer ICE
Your Answer ICE
Your Answer True
Question The right to buy is called ________.

Correct Answer Call option
Your Answer Call option
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
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?
Your Answer US$14 bn
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 ]3 june 2003
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 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
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
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?

Question Depositary facilitates transfers without having to handle money.

Your Answer False
Question AA rated companies can raise ________ of its net worth.

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

Correct Answer True
Your Answer True

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.
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
owned funds?
Your Answer 4 times
Correct Answer Overall economic condition , Demand and supply capital , Degree of popularity of
the industry
industry

Correct Answer Investor characteristics, Liquidity needs and tax considerations, Investment and
interest rate risk
interest rate risk
Question The refinance made available to any HFC is not to be more than :-
Your Answer 60% of its outstanding housing loans
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
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 ?
Your Answer 1 Crore
Question The process of securitization involves transfer of assets to a person specially created
called as ________.
Correct Answer Special purpose vehicle
Your Answer Special purpose vehicle
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
Question What is a put option?

Correct Answer Right to sell
Question Venture capital finance is risk finance for entrepreneurial growth oriented companies.
Correct Answer True
SET 3
Question Who can change the composition of securities?

Correct Answer Fund manager
Your Answer Fund manager
Question Employee stock option scheme granted to the employee is transferable.

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

Correct Answer 5 years
Your Answer 10 years
Your Answer Reliance Industries

Correct Answer 37775
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
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
Question ________ are a kind of portfolio schemes.

Correct Answer Mutual funds
Your Answer Mutual funds

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 the
equipment to the lessee
the industry
industry
Question Mergers and amalgamations of companies are also covered under the SEBI regulations
1997.
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
Question What must be the quality of a good portfolio manager?

Correct 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
Question Which is the favorite destination for venture funds?

Correct 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 ?
paper.
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
Question SEBI has taken an action to ban on Badla.

Correct Answer True

Your Answer The Asset management company shall not launch any scheme till approval of
Question What is the limit for aggregate investment of FII's NRI's and OCB's?
Correct Answer 0.3
Question Acquisition finance, which provide funding for acquiring another company are often
closely held or fairly owned.
Correct 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 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
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 opportunity
available to them

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
Multiple Choice Multiple Answer

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
Question When one decides to have the shares in an electronic form one has to approach
________.
Correct Answer DP
SET 4
Question Which Act defines the term Stock Exchange?

Correct Answer Securities Contract Regulation Act
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

Question Sweat equity shares are shares issued by company to employees or directors to
discount.
Correct Answer True
paper.
Question Under various SEBI regulations how many brokers suspended?

Correct Answer 8
Your Answer 8

Your Answer With each offer document pay filing fees , Offer document to contain disclosures
Question Who forms the Asset management company (AMC)?

Correct Answer Group of trustees
Your Answer Group of trustees
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
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
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
Question The Money market mutual funds (MMMFs) can invest the funds in which of these
securities?
Correct 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
Question Bidder cannot revise his bids.
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
Your Answer Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB
Question While structuring the deal the entrepreneur seeks ________.

Correct Answer Voting control
Question DRR is treated as part of general reserve for consideration of bonus issue of proposals.
Correct Answer True

Your Answer Sound General knowledge , Analytical ability and marketing 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 , Investor should fill in
target account id
Question Reliance group has added over 10000 crores in market capital.
Correct Answer True
Your Answer False
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
Question ________ is an international credit rating company.

Correct Answer FITSCH
Question The appointment of a ________ is mandatory in a offer process.

Correct Answer Merchant Banker
Question What is the eligibility norm for an unlisted company for making an public issue as regards
to its net worth?
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
Question The merger of GTB and UTI was called off due to intervention of ________
Correct Answer SEBI and RBI
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
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
True/False

Correct 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
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 , Maintain
the investor's holdings in an electronic form , Effect settlement of securities traded on exchanges
Question Directors should not be member of more than________ committees.
Correct Answer 10
Question Under section 11 B of SEBI act how many issuers were debarred?
Correct Answer 1
Question A portfolio manager need not necessarily sell or purchase securities separately for each
client.
SET 5
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 Expertise good financial standing and high degree of professional integrity
Question Largest deal struck on Day 1 of foreign currency option got underway in India was of
________.
Correct Answer Standard Chartered Bank

Your Answer One of the methods of giving part ownership of the company to the employees ,
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
Question A ________ can legally transfer beneficial ownership.

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

client.
Question What is issued by mutual funds?

Correct Answer Units
Question Who prescribes the format of application for various reports or documents ?
Correct Answer SEBI
discount.
Correct Answer True
Question What is the objective of a credit information company?

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


Correct Answer True

Question An acquirer who holds ________ shares or voting rights of a target company can acquire
further shares only after making PA to acquire at least additional 20% of target company from the
shareholders through an open offer.
Correct Answer 0.75
Question What was the reason for not introducing rolling settlements earlier in India?
Correct Answer Lack of depositories
Your Answer Investors not having demat accounts
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
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.
Question As per SEBI regulations, PMS must not be involved in any litigation connected with
________.
Correct Answer Securities markets
Your Answer Banks
Correct Answer True
Question Amendment to SCRA will facilitate derivatives trading in interest rate futures and options if
there is an underlying asset.
Correct Answer True
Question ISIN is a unique identification number for security.

Correct Answer True
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 When is the share of the target company deemed to be frequently traded
Correct Answer If the turnover in the preceding 6 months prior to the month in which PA is made is
m ore than 5%
Your Answer If the turnover in the preceding 6 months prior to the month in which PA is made is m
ore than 5%

Question When is the security created from the date of issue of debenture?

Your Answer The company must pay the consideration only by the way of cash
________.
Correct Answer DP
Question Merchant bankers do not have to sign in the prospectus but they have to give a certificate
to which entity ?
Correct Answer SEBI
Question SENSEX is calculated using ________ method.

Correct Answer Market capitalization

Correct Answer ICE
Your Answer ICE
Your Answer SCRA , Depository Act

client.
Correct Answer True
paper.
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
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
SET 6
Question What is maximum percentage of regular expenses of the assets of a scheme?

Correct Answer 0.03
Your Answer 0.1
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 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
10 years
Correct Answer True
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 instrument ,
Question At the inception of the hire purchases transaction the finance company records the hire
purchase installment receivable as current asset.
Correct Answer True
Question The buy back of shares by Indian corporates has been very successful in India.

Correct Answer 10
Question What are the stages in the process of book building broadly divided into?
Correct Answer Syndicate formation , Issue process
regulations 1997 ?
Question What is an offer letter?

Correct Answer Document addressed to the shareholders , Containing disclosures of the acquirer
/ PAC target company , Offer price
Question What is the main objective of credit appraisal ?

Correct Answer Assess the repayment capacity

Question Which stock exchange was used by ketan parekh for buying operations?
Correct Answer Kolkatta
Question It is the responsibility of the ________ to ensure the timely refunds and allotments of the
securities.
Correct Answer Lead managers
Question The VCs to flourish requires a well developed ________.

Correct Answer Capital market
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
client.
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
Question SEBI cannot investigate the affairs of mutual funds and their trustees and asset
management companies.
client.
Question A rated company can raise deposit worth how many times its net worth?
Question What is the time frame stipulated by SEBI for members intending to avail of the buy
back offer?
Question An AMC fees :-

Correct Answer To be borne by the individual schemes
Question Apart from the portfolio management fees what percentage of returns can the portfolio
manager share from their client's profits?
Correct Answer 0
Question What is the minimum number of days for which the bid should remain open in book
building?
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

Correct Answer True
Question What percentage of underwriting in the issues obligatory to the merchant bankers?
Correct Answer 0.05
Question Hire Purchase transactions are liable to ________.

Correct Answer Sales tax

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

Correct Answer True
Question With the introduction of ________ accounts the complaints about allotment have surely
gone down.
Correct Answer DEMAT
Question What was the percentage of public offering under the IPOs through the book building
method ?
Correct Answer 0.1

Your Answer Process of delivery , Receipt of securities , Pledging the shares
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
Question The continuing growth in ________ was one of the factors that contributed to the growth
of credit rating.
Correct Answer Information technology
Question BSE introduced an equity stock index known as ________.

Correct Answer SENSEX
Correct Answer True
Correct Answer True
Question Crisil's AAA rating stands for :-

Correct Answer Highest safety
Question Securities offered in a pledge can change if a ________ agrees.

Correct Answer Pledgee
Your Answer Should have an authorization from SEBI , Expertise good financial standing and
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
SET 7

Correct Answer 0.74
Your Answer 0.76
________.
Correct Answer DP
Your Answer SEBI
Question The issue price for placement portion and net offer to public are not the same.
the industry


Question Mutual funds can do investments in any security issued by way of private placement by
an associate or group company of the sponsor.
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 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
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.

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

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

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

Question AA rated companies can raise ________ of its net worth.

Your Answer 1.5 times
Question Constant change would be one of the reasons for failure of corporate governance.
Correct Answer True
Question Upto what percentage has the RBI permitted the banks to invest in the capital market ?
Correct Answer 0.05


Your Answer Mutual Funds Trading



in opinion of board
Your Answer Statutory approvals refused , Sole acquirer being person died , Circumstances as in
opinion of board , Government regulations
Question The service charge is levied for allowing subscribers for entry into or exit from mutual
schemes is called as ________.
Correct Answer Load

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
securities.
________.
Question Crisil's AAA rating stands for :-

Correct Answer Highest safety
Question Amendment to SCRA will facilitate derivatives trading in interest rate futures and options
if there is an underlying asset.
Correct 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%
to its net worth?
Question Who suffered heavy losses during bad times of stock markets?
Correct Answer Small investors
Question The acquirer is required to appoint a merchant banker before making a PA.
Correct Answer True
SET 8
Question What was the objective of setting up the Securities Trading corporation of India Ltd?
Correct Answer To promote secondary market in government securities
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
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

Multiple Choice Single Answer

Question Who takes risk at the time of investment ?
Correct Answer Investor
Question MIBOR is a security. Derivatives based on this interest rate have legal recognition under
SCRA.
securities.
Question A credit card is a payment mechanism which enables the holder to buy goods and
services on credit.
Correct Answer True
Question Final prospectus in the book building p________ess is to be filed with the ROC.
Correct Answer ROC
Question A company with highly rated instrument has the opportunity to ________ by quoting less
interest rates.
Correct Answer Reduce the cost of borrowing
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
Correct Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
Question A portfolio manager could undertake the following on behalf of his clients :-
Correct 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

Question Renewal of portfolio fund on maturity shall be deemed as a fresh placement for a
minimum period of :-

Correct Answer True
as the book runner.
Question The process of securitisation involves transfer of assets to a person specially created
called as ________.
Correct Answer 0
Question The SEBI guidelines do not make it mandatory for the securities purchased under the
buy back arrangement to be extinguished and physically destroyed.

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

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
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


Correct Answer True
Question For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
Correct Answer 2
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 True

Question Upto what percentage has the RBI permitted the banks to invest in the capital market ?
Correct Answer 0.05
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 1
Question Among the closed schemes, 4 long term assurance schemes were launched with a
return ranging between ________.
Correct Answer 13 - 14%

interest rate risk
method ?
Correct Answer 0.1



1994
Question Which Act defines the term Stock Exchange?

Correct Answer Securities Contract Regulation Act
Your Answer Securities And Exchange Board of India
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Correct Answer True




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


________.
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
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
Question The process of share buy back must be completed within what period from the date of
passing the resolution?
Question When did the trading in foreign currency options start in India?

Your Answer False
Question In the L & T reliance case, Reliance was fined ________.

Your Answer Rs. 5 lacs
Question Recently many banks have started issuing ________ which could also be used as a
debit card.
Correct Answer ATM card
Question A ________ means any persons connected with a company and who is reasonably
having access to unpublished price sensitive information.
Correct Answer Insider

Correct Answer 1
client.
Correct Answer True
Question What is the system of rolling settlement prevalent in the USA ?

Correct Answer Transaction + 3
Question What is the most important objective for an investor?

Correct Answer Protection of the value of the investment
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
Question What do you mean by venture capital?

Correct Answer Providing seed, start up capital and first stage financing
of credit rating.
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 Screen based trading in place of traditional ring , Communication through the net ,
Question The Kumarmangalam Birla report stressed on the importance of ________ with respect to
AGM's.
Correct Answer Proxy voting / ballot systems
Question The SEBI guidelines do not make it mandatory for the securities purchased under the buy
back arrangement to be extinguished and physically destroyed.
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
Correct 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?
owned funds?
Question With the introduction of ________ accounts the complaints about allotment have surely
gone down.
Correct Answer DEMAT
SET 9

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
Correct Answer True
Question Most of the deals struck on the fist day of foreign currency options were of ________
maturity.
Question Explain the important achievements of SEBI :-

Correct Answer Takeover code formulated , Proper disclosure to investors through prospectus
mandatory , Guidelines for merchant banker
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

Correct Answer 10

Question What is the main objective of the promoting Discount and finance house of India
(DFHI) ?
Correct Answer Increasing transactions of money market assets
Question What is the amount of net tangible assets, company should have to make an IPO?
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
Question The process of share buy back must be completed within what period from the date of
passing the resolution?
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 ________.
Question What is the procedure to make a public announcement ?

Correct Answer Acquirer to appoint a Merchant Banker , PA to be made through Merchant
Banker , PA to be made within four working days of entering an agreement to acquire shares

Question What is the status of Stock exchanges today?

Correct Answer Joint stock companies

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
Correct Answer 0
Question What is the percentage of restriction on HFC's disbursement on project lending for
refinance ?
Correct Answer 0.3

SCRA.
Question What is government's move towards Stock Exchanges ?

Correct Answer Demutulisation
Question How much should be the minimum post issue capital of the company?
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
client.

Question What should be done if the address of investor changes?

Correct Answer Inform DP and update records , Inform different companies
Question When did the concept of corporate governance evolve?

Correct Answer During the watergate scandal
Question How many times Refinance cannot exceed net owned funds of Housing finance
companies?
paper.

make down payment
Question What is Sweat equity ?

Correct Answer Equity shares issued by the company to the employees , Issued to directors at a
discount , For consideration other than cash for providing now
Question February UTI sought permission of SEBI to close 7 assured plans prematurely.
Correct Answer True
Correct Answer Load

Question The NSE Nifty index comprises of ________companies.

Correct Answer 50
Question For an approval of HFC one of the norms is that the promoter's contribution has to be
minimum ________ of paid up capital.
Correct Answer 0.3
SET 10
Question The liability of the underwriters in the MS shoes case was estimated to be ________.
Correct Answer Rs. 500 crores
________.
Correct Answer True

form :-
of credit rating.
Correct Answer True
________.
Correct Answer DP

Correct Answer True


Question Who can buy or sell securities on containing the certificate of registration?
Correct Answer Underwriter , Merchant banker , Investment advisor
Correct Answer Must disclose investment strategy , VCF's must be registered , Cannot carry out
another activity
Correct Answer True
Question What is the underwriter paid ?
Correct Answer Commission
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.
called as ________.

Correct Answer Screen based trading in place of traditional ring , Communication through the
net , Operate in stock market privately through home 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 Through book building process
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 What is equipment leasing ?
Correct Answer Contractual agreement where the lessor of equipment transfers the right to use
the equipment to the lessee
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

in opinion of board
Question How many points the sensex went up in January 2000 during the ketan parekh scam?
Correct Answer 700 points

Correct Answer Employees can take part in the prosperity of the company , 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
SET 11


Correct Answer True
Question In the L & T reliance case, Reliance was fined ________.

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

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

Question Who suffered heavy losses during bad times of stock markets?
Correct Answer Small investors
Question The capital Adequacy ratio for NBFC's has been fixed at :-
Correct Answer 0.12
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
Question A significant portion of the investment through the participatory notes is managed by
________ entities.
Correct Answer 114
Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be created

Question What are the features of a Certificate of deposit?

Correct Answer It is a document title to a time deposit , Freely negotiable and marketable , Can
be issued only by commercial banks
Question ________ is in the form of a usance promissory note payable after 45 days from the
date of issue.
Correct Answer Certificate of Deposit

Question Who was the first to introduce rolling settlement in India?
Correct Answer NSE
Question In the wake of boom of which sector the Indian mutual fund launched various sector
specific schemes?
Correct Answer Software
Question What is the most important objective for an investor?

Correct Answer Protection of the value of the investment
Set 12
Question The NSE Nifty index comprises of ________companies.

Correct Answer 50

interest rate risk
interest rate risk

Correct Answer True



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
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

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


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?

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
Question SEBI can investigate and inspect books of accounts and records of insiders.
Correct Answer True


Correct Answer True
Question A credit card is a payment mechanism which enables the holder to buy goods and
services on credit.
Correct 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
Correct Answer True
Question A portfolio manager could undertake the following on behalf of his clients :-
Correct Answer Hedging and arbitrage transactions


regulations 1997 ?
Your 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
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
3 years
Correct Answer True
Correct Answer ROC


Question How many companies are there to do business of credit rating?

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

Correct Answer 10
SET 13
Correct Answer True

1994
Question Who was the first to introduce rolling settlement in India?

Correct Answer NSE
________.
Correct Answer True
Question What is an offer letter?

Correct Answer Document addressed to the shareholders , Containing disclosures of the acquirer
/ PAC target company , Offer price

Correct Answer ICE

Correct Answer Any appointment of auditors , Minimum paid up capital 1 crore , At least 2
directors
Your Answer Minimum paid up capital 1 crore , At least 2 directors , Any appointment of
auditors
Question Describe some of the various types of mutual funds schemes offered?
Correct Answer Open ended vs. closed ended , Pure income schemes , Tax saving schemes
discount.
Correct Answer True



Correct Answer True
paper.
Correct Answer True
as the book runner.
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 , RBI to take over
the mutual fund
Question What is a call option?

Correct Answer Right to buy



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 0.25
Question How much should be the minimum net worth of an AMC?

Correct Answer Not less than 10 crores
Your Answer Not less than 10 crores
client.
Your Answer False

make down payment
Your Answer Finance company purchases the equipment supplier and lets it on hire , During
make down payment


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

Correct Answer 10
of credit rating.


Your Answer Knowledge and information about various aspects of capital markets , Ability to
Select The Blank

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

Question What is mortgage backed securitisation?

Correct Answer Securitisation dealing with mortgages

SET 14

Question What is the most common complaint of the investors?

Correct Answer Non receipt of refund orders and allotment advise
Correct Answer 0.5

Correct Answer 0
client.

method ?
Correct Answer 0.1
Correct Answer ROC
Correct Answer True
called as ________.
Correct Answer True


Your Answer On the expiry date only



Correct Answer 0.5

Your Answer No stamp duty , Reduction in transaction cost , Holds funds in an account
Correct Answer 0
client.

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
method ?
Correct Answer 0.1
Your Answer 0.25
Correct Answer ROC
Correct Answer True
called as ________.
Correct Answer True


Your Answer On the expiry date only

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

Correct Answer Pledgee
Your Answer Depositary
SET 15
Question Mutual funds have to register with :-

Correct Answer SEBI
Question What are the features of a Certificate of deposit?

Correct Answer It is a document title to a time deposit , Freely negotiable and marketable , Can
be issued only by commercial banks
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.
of credit rating.
Correct Answer Credit rating , Maturity more than 18 months appoint debenture trustee ,
Debenture redemption reserve to be created

Correct Answer Load
SCRA.
Question The appointment of a ________ is mandatory in a offer process.



Question Describe some of the various types of mutual funds schemes offered?
Correct Answer Open ended vs. closed ended , Pure income schemes , Tax saving schemes
form :-

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


Question A ________account is created for the purpose of distributing receivables to the

investors on the securitisation deal.
Correct Answer Escrow
Question A bidder can request for a transaction registration slip as the proof of his having entered
the bid.
Correct Answer True

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

________.
Question Most of the deals struck on the fist day of foreign currency options were of ________
maturity.


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

Question What is the system of rolling settlement prevalent in the USA ?

Correct Answer Transaction + 3
Question An acquirer who holds ________ shares or voting rights of a target company can
acquire further shares only after making PA to acquire at least additional 20% of target company from
the shareholders through an open offer.
Correct Answer 0.75
client.
Correct Answer 0.74
Question What is the percentage of restriction on HFC's disbursement on project lending for
refinance ?
Correct Answer 0.3
Question How many members are appointed by the central government?

Correct Answer 2
Question The SEBI guidelines do not make it mandatory for the securities purchased under the
buy back arrangement to be extinguished and physically destroyed.

SET 16

Question What is a call option?

Correct Answer Right to buy
Question For an approval of HFC one of the norms is that the promoter's contribution has to be
minimum ________ of paid up capital.
Correct Answer 0.3
Question What is the time frame stipulated by SEBI for members intending to avail of the buy back
offer?
Your Answer Ensure participatory notes not misused by NRI , OCB controlled by Indians promoters
, Issue participatory notes by FII to non regulated entities

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
Question A bidder can request for a transaction registration slip as the proof of his having entered
the bid.
Correct Answer True

Correct Answer Investment and interest rate risk , Investor characteristics , Liquidity needs and tax
considerations
Correct Answer True
________.
Question In February 2004, UTI sought permission of SEBI to prematurely close ________
schemes.
Correct Answer 7
Your Answer 8
Correct Answer True
Question The company intending to buy back their shares must open a ________ account as per
SEBI regulations.
Correct Answer Escrow


Correct Answer True
Your Answer 38200

Correct Answer True


Correct Answer Reduction in paperless work , Reduction in transaction cost , No stamp duty
Your Answer No stamp duty , Reduction in paperless work , Reduction in transaction cost
Question For issues upto Rs. 50 crores the number of lead managers will not exceed ________.
Correct Answer 2
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.
Question To open a DP account, following things are required :-

Correct Answer Proof of identity , Proof of address , Photograph



regulations 1997 ?
Your 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
Correct Answer True
Correct Answer True
Your Answer Scheduled Commercial Bank
Your Answer SCRA
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
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
worth
Your Answer Pre issue net worth not less than 1 crores in the last 3 years , Track record of
worth

Your Answer Non receipt of refund orders and allotment advise
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 To conduct business in accordance with the shareholders interest while conforming to
the local laws and customs
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
Your Answer If the issue size is less than five times pre issue net worth , If the issue size is more
to its net worth?
Your Answer Net worth of the company should not be less than 1 crore


Question
When is the share of the target company deemed to be frequently traded
Correct Answer
If the turnover in the preceding 6 months prior to the month in which PA is made is m ore than 5%
Your Answer
If the turnover in the preceding 6 months prior to the month in which PA is made is m ore than 5%
Question
When did the trading in foreign currency options start in India?
Correct Answer
37809
Your Answer
37809
Question
How many times Refinance cannot exceed net owned funds of Housing finance companies?
Correct Answer
5 times
Your Answer
5 times
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
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
What is the estimated figure of credit card defaults in India?
Correct Answer
800 crores
Your Answer
800 crores
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.
Correct Answer
False
Your Answer
False
Match The Following
Question
Correct Answer
Your Answer
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 settlements in the country

NSE
NSE
True/False
Question
DRR is treated as part of general reserve for consideration of bonus issue of proposals.
Correct Answer
True
Your Answer
True
True/False
Question
February UTI sought permission of SEBI to close 7 assured plans prematurely.
Correct Answer
True
Your Answer
True
Question
Deposits can be accepted for a maximum period of :-
Correct Answer
5 years
Your Answer
5 years
Match The Following
Question
Correct Answer
Your Answer
ISIN
Unique identification number for security
Unique identification number for security
WDM
Market for pure debt instruments
Market for pure debt instruments
NSE
SET up by IDBI and other financial institutions
SET up by IDBI and other financial institutions
custodian
Helps register and safeguard the securities of its clients
Helps register and safeguard the securities of its clients
True/False
Question
SEBI cannot investigate the affairs of mutual funds and their trustees and asset management
companies.
Correct Answer
False
Your Answer
False
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
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
Circumstances as in opinion of board , Statutory approvals refused , Sole acquirer being person died
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.
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
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
Select The Blank
Question
Information technology, communication and entertainment represent ________ stocks.
Correct Answer
ICE
Your Answer
ICE
Select The Blank
Question
The appointment of a ________ is mandatory in a offer process.
Correct Answer
Merchant Banker
Your Answer
Merchant Banker
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
Question
The benefits of availing depository services are :-
Correct Answer
No stamp duty , Reduction in paperless work , Reduction in transaction cost
Your Answer
No stamp duty , Reduction in paperless work , Reduction in transaction cost
True/False
Question
The depository can legally transfer beneficial ownership.
Correct Answer
True
Your Answer
True
True/False
Question
ISIN is a unique identification number for security.
Correct Answer
True
Your Answer
True
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
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
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
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
Question
When is the security created from the date of issue of debenture?
Correct Answer
Within 6 months
Your Answer
Within 6 months
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
Question
What is mortgage backed securitisation?
Correct Answer
Securitisation dealing with mortgages
Your Answer
Securitisation dealing with mortgages
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 , Maintain the investor's
holdings in an electronic form , Effect settlement of securities traded on exchanges
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
13 - 14%
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
The liability of the underwriters in the MS shoes case was estimated to be ________.
Correct Answer
Rs. 500 crores
Your Answer
Rs. 500 crores
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
0.05
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 controlled by Indians
promoters
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 disclosures of the acquirer / PAC target
company , Offer price
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 the equipment to the
lessee
True/False
Question
Sweat equity shares are shares issued by company to employees or directors to discount.
Correct Answer
True
Your Answer
True
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
Mutual funds can do investments in any security issued by way of private placement by an associate or
group company of the sponsor.
Correct Answer
False
Your Answer
False
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
1 year
Select The Blank
Question
SENSEX is calculated using ________ method.
Correct Answer
Market capitalization
Your Answer
Market capitalization
True/False
Question
Mergers and amalgamations of companies are also covered under the SEBI regulations 1997.
Correct Answer
False
Your Answer
False
Select The Blank
Question
Not more than ________ of funds may be invested by way of subscription to IPO of the company who's
share are proposed to be listed.
Correct Answer
0.25
Your Answer
0.2
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
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

SCDL - Capital Market

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CAPITAL MARKET (Total SET 16)

Portfolio Collection of assets

Looses the rights to vote shares Non voting

ALL NUMBERS RELATED QUESTIONS

Q The refinance made available to any HFC is not to be more than :-

Q What percentage of funds should be invested in unlisted companies?

Q Since when have the Indian Stock markets risen ?

Q What is the estimated figure of credit card defaults in India?

Q How many companies are there to do business of credit rating?

Q How many members are appointed by the central government?

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

Q For a VCF to be registered with SEBI what is the registration fee ?

Q Under various SEBI regulations how many brokers suspended?

Q Directors should not be member of more than________ committees.

Q When is the security created from the date of issue of debenture?

Q What is maximum percentage of regular expenses of the assets of a scheme?

Q AA rated companies can raise ________ of its net worth.

Q What percentage of underwriting in the issues obligatory to the merchant bankers?

Q What is the minimum offer an acquirer can make ?

Q When did the trading in foreign currency options start in India?

Q In the L & T reliance case, Reliance was fined ________.

Q The capital Adequacy ratio for NBFC's has been fixed at :-

Q When is the security created from the date of issue of debenture?

Q February UTI sought permission of SEBI to close 7 assured plans prematurely.

Question In order to dematerialize the securities one has to fill DRF.

Question What are the obligations of a company in a share buy back?

Question What are the major factors influencing portfolio decisions?

Question The right to buy is called ________.

Question What percentage of funds should be invested in unlisted companies?

Question The depository can legally transfer beneficial ownership.

Question Since when have the Indian Stock markets risen ?

Question Describe the regulatory aspects of mutual funds :-

Question When can the American style option exercised?

Question A portfolio manager has to assure a guaranteed return to his client.

Question What is the estimated figure of credit card defaults in India?

Question Depositary facilitates transfers without having to handle money.

Question AA rated companies can raise ________ of its net worth.

Question Describe E-trading :-

Question Markets have moved away from Badla system to ________ .

Question How many members are appointed by the central government?

Question In order to dematerialize the securities one has to fill DRF.

Question What are the obligations of a company in a share buy back?

Question What are the major factors influencing portfolio decisions?

Question What do you understand by capital markets ?

Question What is dematerialization ?

Question What is a put option?

Question Who can change the composition of securities?

Question Employee stock option scheme granted to the employee is transferable.

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

Question Since when have the Indian Stock markets risen ?

Question ________ are a kind of portfolio schemes.

Question ________ are a kind of portfolio schemes.

Question What is equipment leasing ?

Question What must be the quality of a good portfolio manager?

Question Describe E-trading :-

Question Which is the favorite destination for venture funds?

Question Who issues participatory notes?

Question SEBI has taken an action to ban on Badla.

Question Describe the regulatory aspects of mutual funds :-

Question What is the objective of public announcement?

Question A portfolio manager has to assure a guaranteed return to his client.

Multiple Choice Multiple Answer

Question Which Act defines the term Stock Exchange?

Question What are the preconditions for trading on the net?