Financial Market –Test 

MM:25  Time :50 Mins 

1. Give one reason how Stock Exchange spread the equity cult in the country (1) 
2. What do you mean by financial market?(1) 
3. Name two depositary operating in India (1)  
4. Primary market promote capital formation directly but Secondary market does this work 
indirectly .How? (3) 
5. Zep group of Industries Ltd. Has not disclosed vital information to the shareholders. The 
shareholders therefore are planning to file a complaint against this company.(3)   
a. Name the institution with whom the shareholders can lodge the complaint? 
b. Who besides the above institution has failed in its duty to check this fraudulent 
practice? 
c. Give one reason why the above institution would take an action against this 
company. 
6. M/s Vasudeva Ltd. Is a large and credit worthy company, manufacturing cars for Indian 
market. Now it wants to export the cars to other Asian countries and therefore needs to 
expand its investment base by raising funds by issuing equity shares. The issue of equity 
shares however involves huge flotation costs for which the company would again need 
money.   
1. What option does this company have to arrange for funds to meet floatation expense? 
2. What do we call the funds required to meet expenses such as floatation cost. 
3. What is the name of the instrument which company can use.(3) 
 
7. Rajan had misplaced his number of share certificates while shifting his house. After a long 
time he was able to trace his shares certificates. Now he was facing problem in selling 
them off. He shared his problem with one of his relatives who told him that he would now 
have to get his shares converted into electronic form and put it in an account. 
1. Name the account which is required to be opened to deal in shares. 
2. With whom will he have to open this account? 
3. What are the problems associated with physical share certificates(3) 
 
8. In order to diversify its business Moonlight Limited is thinking of various ways to 
finance its new projects, preferably a public issue of shares. Advise the company about the 
different methods which it may adopt for the new public issue of shares.(5) 

9. Financial  market  is  divided  in  to  two  categories  on  basis  of  maturity  period  of  securities. 
Name them and differentiate between them.(5)