FINANCIAL MARKETS –BEGINNER MODULE QUESTIONS
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Q1
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Capital Employed is equal to
_________. [ 2 Marks ]
(a) Fixed Assets + Current Assets +Current Liabilities (b) Fixed Assets + Current Assets - Current Liabilities (c) Fixed Assets - Current Assets + Current Liabilities (d) Fixed Assets - Current Assets - Current Liabilities (e) I am not attempting the question |
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Q2
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If a client buys shares worth Rs.
2,55,000 and sells shares worth Rs. 3,45,000 through a broker, then the
maximum brokerage payable to the broker is _____________. [
2 Marks ]
(a) Rs. 20000 (b) Rs. 15000 (c) Rs. 25000 (d) Rs. 10000 (e) I am not attempting the question |
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Q3
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Return on Total Asset is equal to
__________. [ 2 Marks ]
(a) Gross Income/Average Total Asset (b) Average total asset/Gross Income (c) Return on Equity/Average total Asset (d) Net income /Average Total Asset (e) I am not attempting the question |
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Q4
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Which of the following is a
benefit of participation in a depository? [ 1 Mark ]
(a) No stamp duty on transfer of securities. (b) Elimination of risks associated with physical certificates such as bad delivery, fake securities,etc. (c) Nomination facility. (d) All of the above (e) I am not attempting the question |
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Q5
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The benchmark stock market index
of India is ________. [ 1 Mark ]
(a) Dow Jones (b) Nikkei 225 (c) S&P 500 (d) the Nifty (e) I am not attempting the question |
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Q6
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Which of the following is not true
about offer of shares through normal public issue? [ 2
Marks ]
(a) In normal Public issue, investors bid for shares at the floor price or above and after the closure of the process the price is determined for allotment of shares. (b) In case of the normal public issue the demand for an issue is known at the close of the issue. (c) In case of offer of shares through normal public issue price at which securities will be allotted is known to an investor in advance . (d) None of the above (e) I am not attempting the question |
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Q7
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At 8% annual inflation rate, an
item costing Rs. 100 today, would cost Rs. _______ after one
year. [ 3 Marks ]
(a) Rs. 108 (b) Rs. 118 (c) Rs. 208 (d) Rs. 98 (e) I am not attempting the question |
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Q8
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At 6% annual inflation rate, an
item costing Rs. 100 today, would cost Rs. _______ after two years.
[ 3 Marks ]
(a) Rs. 224 (b) Rs. 112.36 (c) Rs. 122.46 (d) Rs. 124.30 (e) I am not attempting the question |
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Q9
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The Margin which takes care that
all daily losses must be met by the investor by depositing of further
collateral by the close of business, the following day is known as _________.
[ 1 Mark ]
(a) Mark to Market Margin (b) Minimum Margin (c) Cross Margin (d) Initial Margin (e) I am not attempting the question |
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Q10
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What is the present value of Rs.
6000 receivable after two years at a discount rate of 5% under continuous
discounting? [ 2 Marks ]
(a) Rs. 5429.02 (b) Rs. 6000 (c) Rs. 5700 (d) Rs. 6300 (e) I am not attempting the question |
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Q11
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What is the dividend yield of ABC
Co Share having a face value of Rs 100, market value of 360 and an annual
dividend of Rs 10? [ 1 Mark ]
(a) 1% (b) 2.77% (c) 10% (d) 4% (e) I am not attempting the question |
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Q12
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Earnings Per Share (EPS) is
calculated by _________. [ 2 Marks ]
(a) Gross Profit / No. of equity shareholders (b) Net Profit / No. of equity shareholders (c) Gross Profit / No. of Ordinary shares outstanding (d) Net Profit / No. of Ordinary shares outstanding (e) I am not attempting the question |
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Q13
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Which amongst these is not a Debt
market instrument? [ 1 Mark ]
(a) Public Sector Units bonds (b) Corporate Securities (c) FIIs (d) Government Securities (e) I am not attempting the question |
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Q14
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Which rate of return accounts for
intra-year compounding? [ 2 Marks ]
(a) Effective (b) Stated (c) Both of the above (d) None of the above (e) I am not attempting the question |
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Q15
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___________ is a good indicator of
the stock market behaviour. [ 1 Mark ]
(a) Reliance (b) TISCO (c) Infosys (d) Nifty index (e) I am not attempting the question |
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Q16
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Market Capitalisation is
_____________. [ 2 Marks ]
(a) Value of shares of the company held by Foreign Investors (b) No. of shares issued by a company multiplied by it's market price (c) Value of shares held by promoters of the company (d) Value of shares in the company held by the public (e) I am not attempting the question |
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Q17
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What is the present value of Rs
10000 receivable after 1 year discounted at 10% p.a.? [ 2
Marks ]
(a) 11000 (b) 10000 (c) 9000 (d) 9090.9 (e) I am not attempting the question |
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Q18
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What factor/s affect the interest
rate? [ 3 Marks ]
(a) Government borrowings (b) Supply of money (c) Inflation rate (d) All of the above (e) I am not attempting the question |
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Q19
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Which of the following needs to be
considered by an investor, while investing? [ 3 Marks ]
(a) Assess risk-return profile of the investment. (b) Know the liquidity and safety aspects of the investment. (c) Obtain written documents explaining the investment. (d) All of the above (e) I am not attempting the question |
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Q20
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Money market mutual funds can
invest in _______. [ 3 Marks ]
(a) treasury bills (b) certificate of deposits (c) commercial paper (d) All of the above (e) I am not attempting the question |
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Q21
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Which of the following is not true
about a debt instrument? [ 1 Mark ]
(a) It signifies a ownership right in the company. (b) It carries interest paying obligation. (c) It has a fixed maturity. (d) None of the above (e) I am not attempting the question |
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Q22
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Which type of corporate action
splits the existing shares of a particular face value into smaller
denominations? [ 1 Mark ]
(a) Stock Split (b) Bonus Issue (c) Buy Back (d) Right Issue (e) I am not attempting the question |
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Q23
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How many securities are there in
Nifty index? [ 1 Mark ]
(a) 30 (b) 100 (c) 500 (d) 50 (e) I am not attempting the question |
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Q24
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Which of the following is TRUE
about Primary Markets? [ 2 Marks ]
(a) Primary Markets are markets where commodities are sold. (b) Primary Market is the place where public can buy and sell securities from one another. (c) Primary Markets refer to the mobilization of funds from the public by corporates through the issue of shares / debentures. (d) Primary Markets are places where only short term instruments are traded. (e) I am not attempting the question |
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Q25
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The future value of a Rs.10,000
investment done today, which gives an annual rate of return of 20% per annum,
after one year should be ____________. [ 3 Marks ]
(a) Rs. 12,200 (b) Rs. 12,500 (c) Rs. 12,000 (d) Rs. 12,640 (e) I am not attempting the question |
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Q26
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Which of the following problems
have been eliminated by Depositories? [ 1 Mark ]
(a) Reduction in the share transfer time to the buyer. (b) Risk of stolen, fake, forged shares. (c) Stamp duty on transfer of shares in dematerialized form. (d) All of the above (e) I am not attempting the question |
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Q27
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Which of the following is not a
benefit of investing in mutual funds? [ 2 Marks ]
(a) Investment in Mutual funds leads to diversification of holdings. (b) Mutual funds are managed by professional fund managers. (c) Mutual Funds regularly provide investors with information on the value of their investments. (d) None of the above (e) I am not attempting the question |
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Q28
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Funds which invest only in the
stocks comprising an index and aim to give returns commensurate with the
index returns are called _________. [ 2 Marks ]
(a) Index Funds (b) Active Funds (c) Dormant Funds (d) None of the above (e) I am not attempting the question |
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Q29
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Depositories are like banks for
securities. [ 1 Mark ]
(a) TRUE (b) FALSE (c) Dormant Funds (d) None of the above (e) I am not attempting the question |
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Q30
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At 12% annual inflation rate, an
item costing Rs. 100 today, would cost Rs. _______ after one year.
[ 3 Marks ]
(a) Rs. 114 (b) Rs. 112 (c) Rs. 102 (d) Rs. 113 (e) I am not attempting the question |
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Q31
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The future value of a Rs.10,000
investment, which gives an annual rate of return of 20% per annum, after two
years would grow to _________ (assume discrete
compounding) [ 3 Marks ]
(a) Rs. 14,400 (b) Rs. 14,000 (c) Rs, 14,250 (d) Rs. 14,500 (e) I am not attempting the question |
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Q32
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An investment should provide an
after-tax return which is ________. [ 3 Marks ]
(a) at least higher than the rate of inflation (b) less than the rate of inflation (c) equal to the rate of inflation (d) None of the above (e) I am not attempting the question |
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Q33
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Which of the following is not true
about ADR? [ 1 Mark ]
(a) ADR represents the foreign shares of the company held on deposit by a custodian bank in the company's home country. (b) ADRs may be used in public or private markets inside or outside US. (c) ADRs do not eliminate the currency risk associated with an investment in a non-U.S. company. (d) An ADR is a U.S. dollar denominated form of equity ownership in a non-U.S. company. (e) I am not attempting the question |
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Q34
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What are the segments of
Securities Market? [ 1 Mark ]
(a) Primary market and Secondary market (b) New issues market (c) Primary market (d) Secondary market (e) I am not attempting the question |
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Q35
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Which instrument among these is
considered the most challenging and rewarding investment option, when
compared to other investment options? [ 3 Marks ]
(a) Equity (b) Fixed Deposit (c) Bonds (d) Treasury Bill (e) I am not attempting the question |
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Q36
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'Bid' means the _____________.
[ 3 Marks ]
(a) Seller's price (b) Traded Price (c) Market price (d) Buyer's price (e) I am not attempting the question |
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Q37
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Profit and Loss account of a
company shows _______. [ 2 Marks ]
(a) The revenues and expenses during particular period of time. (b) The revenues and expenses of the company at a particular point of time. (c) The financial position of the company at a particular point of time. (d) None of the above (e) I am not attempting the question |
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Q38
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Which instrument among these have
historically shown to give the highest returns when invested over long
periods? [ 3 Marks ]
(a) Debentures (b) Equity (c) Fixed Deposit (d) Bank Deposit (e) I am not attempting the question |
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Q39
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The lenders use ______________
ratio to assess debt servicing capacity of a firm. [ 2
Marks ]
(a) Interest Coverage ratio (b) Debt-Asset Ratio (c) Acid-test Ratio (d) Current Ratio (e) I am not attempting the question |
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Q40
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_______ funds do not have a fixed
date of redemption. [ 2 Marks ]
(a) Open ended funds (b) Close ended funds (c) Diversified funds (d) Both A and B (e) I am not attempting the question |
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Q41
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'Ask' means the ________.
[ 3 Marks ]
(a) Buyer's price (b) Seller's price (c) Market price (d) Traded Price (e) I am not attempting the question |
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Q42
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________________ is maintained by
NSE to make good investor claims, which may arise out of non-settlement of
obligations by the trading member, who has been declared defaulter, in
respect of trades executed on the Exchange. [ 1 Mark ]
(a) Investor Education and Reimbursement Fund (IERF) (b) Investor Reimbursement Fund (IRF) (c) Investor Education and Protection Fund (IEPF) (d) Investor Protection Fund (IPF) (e) I am not attempting the question |
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Q43
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At 10% annual inflation rate, an
item costing Rs. 100 today, would cost Rs. _______ after one year.
[ 3 Marks ]
(a) Rs.101 (b) Rs. 110 (c) Rs.115 (d) Rs. 109 (e) I am not attempting the question |
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Q44
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What is the present value of Rs.
3000 receivable after two years at a discount rate of 5% under continuous
discounting? [ 2 Marks ]
(a) Rs. 3150 (b) Rs. 2714.51 (c) Rs. 2850 (d) Rs. 2970 (e) I am not attempting the question |
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Q45
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The future value of a Rs.12,000
investment made today, which gives an annual rate of return of 10% per annum,
after one year should be _________. [ 3 Marks ]
(a) Rs. 12,200 (b) Rs. 12,500 (c) Rs. 13,200 (d) Rs. 13,100 (e) I am not attempting the question |
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Q46
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Nifty index is used in _________.
[ 1 Mark ]
(a) Derivatives (b) Index Funds (c) Exchange Traded Funds (ETFs) (d) All of the above (e) I am not attempting the question |
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Q47
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Demutualisation of stock exchanges
refer to _________. [ 3 Marks ]
(a) the legal structure of an exchange whereby the ownership, the management and the trading rights at the exchange are segregated from one another (b) the legal structure of an exchange whereby the ownership and the management at the exchange are segregated from one another (c) the legal structure of an exchange whereby the ownership, the management and the trading rights at the exchange vests in one person (d) None of the above (e) I am not attempting the question |
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Q48
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Which securities can an investor
invest in? [ 1 Mark ]
(a) Shares (b) Debentures (c) Mutual Funds (d) All of the above (e) I am not attempting the question |
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Q49
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_____________ gives the buyer the
right, but not the obligation to sell a given quantity of underlying asset at
a given price on or before a given future date. [ 1 Mark ]
(a) Put Option (b) Forward (c) Future (d) Call Option (e) I am not attempting the question |
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Q50
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The holders of which instrument
are members of the company and have voting rights? [ 3
Marks ]
(a) Treasury Bill (b) Commercial Paper (c) Debenture (d) Equity (e) I am not attempting the question |
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Good collection
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