SRINIVAS UNIVERSITY

COLLEGE OF MANAGEMENT AND COMMERCE

CERTIFICATE PROGRAMME ON ONLINE INVESTMENT/TRADING.

IV SEMESTER MBA

1) The following are participants in the securities markets ______.

(a) Underwriters
(b) Debenture Trustees
(c) Venture Capital Funds
(d) All of the above

2) The securities markets have the following category (ies) of participant (s)

_____

(a) Issuers of securities

(b) Investors in securities
(c) Intermediaries
(d) All of the above

3. In private placement, issuance is done to _____

(a) More than 50 persons

(b) Less than 100 persons
(c) Less than 50 persons
(d) Less than 10 persons

4.Which entity provides novation :_______

(a) NSCCL
(b) NSE
(c) NSDL
(d) CDSL
5.______ deals with issue, allotment and transfer of securities and various
aspects relating to company management.

(a) Companies Act, 1956

(b) Depositories Act, 1996
(c) Capital Issues (Control) Act, 1947
(d) None of the above

6. ______ envisages transfer of ownership of securities electronically by book

entry without making the securities move from person to person.

(a) Companies Act, 1956

(b) Depositories Act, 1996
(c) Capital Issues (Control) Act, 1947
(d) None of the above

7. A company making a public issue of securities has to file a draft prospectus

with ____

(a) RBI
(b) SEBI
(c) Ministry of Finance
(d) None of the above

8. Promoters’ contribution in case of public issues by unlisted companies and

promoters’ shareholding in case of ‘offers for sale’ shall not be less than ____ of post
issue capital

(a) 50%
(b) 15%
(c) 20%
(d) 30%

9. The Companies Act, 1956 requires that every public listed company making
an IPO of any security for ____ or more shall issue the same only in dematerialized
form.

(a) Rs. 50 crores

(b) Rs. 30 crores
(c) Rs. 20 crores
(d) Rs. 10 crores
10. Foreign Currency Convertible Bonds (FCCBs) are also known as _______.

(a) Euro Issues

(b) Dollar Issues
(c) Convertible credit securities
(d) Convertible credit bonds

11. Mutual Funds being Public Trusts are governed by the ______.

(a) Indian Trustees Act, 1887

(b) Mutual Trust Act, 1880
(c) Public Trust Act, 1886
(d) Indian Trust Act, 1882

12, A company proposing to list on the NSE must have a minimum paid up equity
capital of _____

(a) Rs. 50 crs.

(b) Rs. 20 crs.
(c) Rs. 10 crs.
(d) Rs. 30 crs.

13. During Auction, order matching takes place after the ____.

(a) Solicitor period

(b) Initiator period
(c) Competitor period
(d) Open period

14. For Auction market price bands of _____ are applicable.

(a) 50%
(b) 15%
(c) 20%
(d) 30%

15. ______ is a clearing member but not a trading member.

(a) Clearing Banks

(b) Self Clearing Member
(c) Clearing Member
(d) Custodian
16. If the Custodian rejects a trade, the obligation is assigned back to the _____.

(a) investor
(b) trading member
(c) clearing bank
(d) depository

17. A clearing member receives shares during ____ .

(a) pay-in
(b) pay-out
(c) auction
(d) funds settlement

18. The market for government securities comprises the securities issued by the
_________

(a) Central Govt.

(b) State Govt
(c) State sponsored entities
(d) All of the above

19. The _____ arises if a party discharges his obligations but the counterparty
defaults.

(a) replacement cost risk

(b) principal risk
(c) systemic risk
(d) unsystematic risk

20. The ______ combines the features of cash as well as futures markets.

(a) account period settlement

(b) rolling settlement
(c) T+2 settlement
(d) T+1 settlement

21. Under the T+2 rolling settlement at NSE, Auction takes place on ______.

(a) T+0
(b) T+1
(c) T+2
(d) T+3
22. Under the T+2 rolling settlement at NSE, Custodial Confirmation takes place
on ______.

(a) T+0
(b) T+1
(c) T+2
(d) T+3

23. NSCCL levies penalties on trading members for non-compliances and defaults
like : ____

(a) Funds Shortages

(b) Securities Shortages
(c) Margin Shortages
(d) All of the above

24. Interest payments of the following bonds are based on Wholesale Price Index
/ Consumer Price Index

(a) SBI Bonds

(b) RBI Bonds
(c) Zero Coupon bonds
(d) Indexed bonds

25. Security Type GS stands for ____ in the WDM Segment of NSE.

(a) GDR Securities

(b) Government Securities
(c) General Securities
(d) None of the above

26. _____ performs novation for transactions in Government Securities.

(a) Clearing Corporation of India Ltd. (CCIL)

(b) National Securities Clearing Corporation Ltd. (NSCCL)
(c) National Stock Exchange (NSE)
(d) National Depository Services Ltd. (NSDL)
27. An exporter would _____ dollar forwards to lock in an exchange rate.

(a) sell
(b) buy
(c) hold
(d) exchange

28. Strike Price for a call option on a stock is Rs. 125 and the underlying stock
price is Rs. 120. If the Premium is Rs.2, the option is _____.

(a) In the money

(b) Out of the money
(c) At the money
(d) Deep in the money

29. A security trades in the Spot market at Rs. 1319. Money can be invested at
10% p.a. The fair value of a one month futures contract on the security is ___

(a) Rs. 1341.10

(b) Rs. 1333.20
(c) Rs. 1328.30
(d) Rs. 1330.05

30. A security trades in the Spot market at Rs. 1423. Money can be invested at
10% p.a. The fair value of a one month futures contract on the security is ___

(a) Rs. 1441.90

(b) Rs. 1434.40
(c) Rs. 1426.70
(d) Rs. 1434.90

31. If you are bullish about a stock, you would ____ call options on the stock.

(a) sell
(b) buy
(c) short
(d) write
32. If you are bearish about a stock, you would ____ put options on the stock.

(a) sell
(b) buy
(c) short
(d) write

33. ______ is the total number of outstanding contracts that are held by market
Participants at the end of each day.

(a) Outstanding position

(b) Outstanding Interest
(c) Open position
(d) Open Interest

34. _____ means a depository whose name is entered as such in the register of
the issuer.

(a) Beneficiary owner

(b) Registered owner
(c) Investment Banker
(d) R&T Agent

35. A company may purchase its own shares, out of _____

(a) it’s promoters money

(b) it’s Equity Capital
(c) Profits
(d) Free Reserves

36. A security trades in the Spot market at Rs. 1600. Money can be invested at
10% p.a. The fair value of a one month futures contract on the security is ___

(a) Rs. 1651.90

(b) Rs. 1634.40
(c) Rs. 1666.40
(d) Rs. 1613.40
37. What is 9the present value of Rs. 1000 payable 3 years hence, if the interest
rate is 8% per annum?

(a) Rs. 779.42

(b) Rs. 788.23
(c) Rs. 793.83
(d) Rs. 785.54

38. What is the present value of Rs. 1000 payable 5 years hence, if the interest
rate is 10% per annum?

(a) Rs. 680.64

(b) Rs. 656.56
(c) Rs. 620.92
(d) Rs. 690.76

39. Calculate the value 5 years hence of a deposit of Rs. 1000 made today if the
Interest rate is 9%.

(a) Rs. 1543.65

(b) Rs. 1538.62
(c) Rs. 1546.23
(d) Rs. 1570.54

40. _____ is the discount rate which makes its net present value equal to zero.

(a) Accrued Interest rate

(b) Compounding
(c) Discounting
(d) Internal Rate of Return (IRR)

41. Security A gives a return of 10% with a dispersion of 4%, while security B
gives return of 18% with a dispersion of 6%.Which security is more risky?

a) Security A
b) Neither of the securities is risky
c) Security B
d) Both securities are equally risky
42. Security A gives a return of 12% with a dispersion of 4%, while security B gives
return of 15% with a dispersion of 5%.Which security is more risky?

a) Security B
b) Both securities are equally risky
c) Security A
d) Neither of the securities is risky

43. For a security B, if price at the beginning of the year is Rs.50; dividend
receivable at the end of the year is Rs.1.5; and the price at the end of the year is
Rs.53 then what is the rate of return on the security?

a) 0.05
b) 0.03
c) 0.02
d) 0.09

44.Gross Profit Ratio is given by __________

a) Gross Profit/Net Sales

b) Net Profit/ Cost of Sales
c) Net Profit/Sales
d) Gross Profit/Cost of Sales

45.Fixed Assets Turnover Ratio is given by __________.

a) Net Sales/Average Net Fixed Assets

b) Net Sales/Gross Fixed Assets
c) Cost of Sales/Average Net Fixed Assets
d) Cost of Sales /Gross Fixed Assets

46.At 10% annual inflation rate, an item costing Rs. 100 today, would cost Rs.
_______ after two year.

(a) Rs. 141

(b) Rs. 121
(c) Rs. 142
(d) Rs. 122
47. Which short-term (up to one year) instrument is issued by government as a means
of financing it's cash requirements?

(a)ADRs
(b)Treasury bills
(c)Equity
(d)GDRs

48. The future value of a Rs.10,000 investment done today, which gives an annual rate of
return of 10% per annum, after two years would grow to ________.

(a)Rs. 12,100
(b)Rs. 12,200
(c)Rs. 12,500
(d)Rs. 12,600

49. The benchmark stock market index of India is ________.

(a)S&P 500
(b)Nikkei 225
(c)Dow Jones
(d)the NSE Nifty 50

50. Which of the following is the most suitable option for an investor with low risk appetite?

(a)Junk Bonds
(b)Equities
(c)Fixed Deposits
(d)Derivatives

51.Which securities amongst these have proved to be a better bet against inflation?

(a)Debentures
(b)Bank Deposit
(c)Fixed Deposit
(d)Equity
52. Which of the following is not a Leverage/Capital structure ratios?

(a)Interest Coverage
(b)Current Ratio
(c)Debt-Asset
(d)Debt-Equity

53. Money market mutual funds can invest in _______.

(a) Treasury bills

(b) Certificate of deposits
(c) Commercial paper
(d) All of the above

54. The holders of which instrument are members of the company and have voting rights?

(a)Commercial Paper
(b)Treasury Bill
(c)Debenture
(d)Equity

55. How can an investor acquire equity shares?

(a)Secondary Market only

(b)Through the Primary Market or Secondary Market
(c)Money Market
(d)Primary Market only

56. What is the function of the securities market?

(a)A place where buyers and sellers of securities meet to enter into a transaction.
(b)A place where entrepreneurs can raise resources for their businesses.
(c)A place where various financial products such as shares, debentures, bonds, etc. are
available for buying and selling.
(d)All of the above
57. Calculate the value 4 years hence of a deposit of Rs. 1,000 made today if the interest rate
is 8% (compounded annually).

(a)Rs.1,320
(b)Rs.1,040
(c)Rs.1,000
(d)Rs.1,360

58. _________ is the process by which physical certificates of an investor are converted to an
equivalent number of securities in electronic form.

(a)Materialisation
(b)Rematerialisation
(c)Conversion
(d)Dematerialization

59. Who among the following can invest in the Debt market?

(a)Financial Institutions
(b)Retail Investors
(c)Mutual Funds
(d)All of the above

60. NCDEX is _________.

(a)National Commodities and Derivatives Exchange

(b)National Currency and Derivatives Exchange
(c)New York Commodity & Derivatives Exchange
(d)None of the above

61. Buying and selling of shares can be done through a ________.

(a)Depository
(b)Bank
(c)Stock Exchange
(d)Finance company
62. In the balance sheet of a company, amounts due to the suppliers of goods and services
brought on credit, will reflect under the head ____________.

(a)Loans and Advances

(b)Current Liabilities and Provisions
(c)Miscellaneous expenditure
(d)Contingent Liabilities

63. Equity shares have mostly __________ all other forms of investments in the long term

(a) remained neutral when compared to

(b) Outperformed
(c) Underperformed
(d) Given negative returns when compared to

64. 'Ask' means the ________.

(a)Traded Price
(b)Market price
(c)Seller's price
(d)Buyer's price

65. What is an Index?

(a)A basket of shares

(b)An indicator of market movement.
(c)An indicator of the economic conditions of the country.
(d)All of the above

66. Nifty index is used in _________.

(a)Derivatives
(b)Index Funds
(c)Exchange Traded Funds (ETFs)
(d)All of the above

67. The price band in book building is decided by ___________.

(a)The market regulator

(b)The Stock Exchange
(c) the issuing company in consultancy with Merchant Bankers
(d)Controller of Capital Issue
67. What factor/s affects the interest rate?

(a)Government borrowings
(b)Supply of money
(c)Inflation rate
(d)All of the above

68. Which of the following is true about mutual fund?

(a)Mutual funds are risk-free investments.

(b)Mutual Funds assure fixed returns.
(c)In mutual funds the target investors are the High Net worth investors.
(d)None of the above

69. T+2 settlement cycle in a stock exchange means, the trade is settled ______ days after the
trade

(a) 1 day
(b)Same day as the trade
(c) 2 days
(d )3 days

70. Who are the participants in the Securities Market?

(a)Investor
(b)Intermediaries, such as merchant bankers, brokers etc.
(c)Issuers, i.e. companies who issue shares
(d)All of the above

71. The safer the debt instrument, the ___________ is the rate of interest.

(a)Lower
(b)Higher
(c)Safety of debt instrument will not have any impact on the interest rate
(d)None of the above

72, Stock Split leads to ________.

(a)No change in market capitalization

(b)Increase in the number of outstanding shares
(c)Decrease in the face value of the share of the company
(d)All of the above
73. At 6% annual inflation rate, an item costing Rs. 100 today, would cost Rs. _______ after
two years.

(a)Rs. 124.30
(b)Rs. 122.46
(c)Rs. 224
(d)Rs. 112.36

74. Calculate the value 5 years hence of a deposit of Rs. 1,000 made today if the interest rate
is 8% (compounded annually).

(a)Rs.1,040
(b)Rs.1,400
(c)Rs.1,000
(d)Rs.1,469

75. The value of Rs.10, 000 received today is ________ than the value of Rs. 10,000 received
after one year.

(a) Can’t say

(b) The same
(c) more
(d) less

76. The safer the debt instrument, the ___________ is the rate of interest.

(a)Lower
(b)Higher
(c)Safety of debt instrument will not have any impact on the interest rate
(d)None of the above

77. At 6% annual inflation rate, an item costing Rs. 100 today, would cost Rs. _______ after two
years.

(a)Rs. 124.30
(b)Rs. 122.46
(c)Rs. 224
(d)Rs. 112.36

78. Stock Split leads to ________.

(a)No change in market capitalization

(b)Increase in the number of outstanding shares
(c)Decrease in the face value of the share of the company
(d)All of the above
79. Calculate the value 5 years hence of a deposit of Rs. 1,000 made today if the interest rate is
8% (compounded annually).

(a)Rs.1,040
(b)Rs.1,400
(c)Rs.1,000
(d)Rs.1,469

80. What will be the future value of Rs.12,000 invested today with an annual rate of return of
20% per annum after one year?

(a)Rs. 14,000
(b)Rs, 14,250
(c)Rs. 14,400
(d)Rs. 14,500

81. Money market mutual funds can invest in _______.

(a) Treasury bills

(b) Certificate of deposits
(c) Commercial paper
(d)All of the above

82. ________________ is maintained by an Exchange 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.

(a)Investor Protection Fund (IPF)

(b)Investor Reimbursement Fund (IRF)
(c)Investor Education and Reimbursement Fund (IERF)
(d)Investor Education and Protection Fund (IEPF)

83. How can an investor acquire equity shares?

(a)Secondary Market only

(b)Through the Primary Market or Secondary Market
(c)Money Market
(d)Primary Market only

84. Which of the following is not true about ADR?

(a)An ADR is a U.S. dollar denominated form of equity ownership in a non-U.S. company.
(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)ADR represents the foreign shares of the company held on deposit by a custodian bank in
the company's home country.
85. Book Building exercise through the NSE's on-line system offers the following benefits:

(a)A fair, efficient & transparent method for collecting bids using latest electronic systems.
(b)Costs involved in the issue are far less than those in a normal IPO.
(c)The system reduces the time taken for completion of the issue process.
(d)All of the above

86.If a client buys shares worth Rs. 2,25,000 and sells shares worth Rs. 5,75,000 through a
broker, then the maximum brokerage payable to the broker is _____________.

(a)Rs. 21000
(b)Rs. 25000
(c)Rs. 20000.
(d)Rs. 22000

87. Which of the following is not true of Demat account?

(a)One is not restricted to having account with only one DP.

(b)One does not need to keep any minimum balance of securities in a Demat account with a
DP.
(c)One cannot open more than one account with the same DP.
(d)One can dematerialise and hold investments such as debt instruments, mutual fund units,
government securities etc. in a single demat account.

88. Which of the following is not true about Exchange Traded Funds (ETF)?

(a)An ETF is like a Bank deposit.

(b)An ETF represents a basket of stocks that reflect an index such as the Nifty.
(c)An ETF's price changes throughout the day, fluctuating with supply and demand.
(d)By owning an ETF, you get the diversification of an index fund plus the flexibility of a stock.

89. Who among the following can invest in the Debt market?

(a)Financial Institutions
(b)Retail Investors
(c)Mutual Funds
(d)All of the above

90. NCDEX is _________.

(a)National Commodities and Derivatives Exchange

(b)National Currency and Derivatives Exchange
(c)New York Commodity & Derivatives Exchange
(d)None of the above