1.

“frequently traded shares” means shares of a target company, in which

the traded turnover on any stock exchange during the twelve calendar
months preceding the calendar month in which the public
announcement is made, is of the total number of shares of such class of
the target company

a. at least fifteen per cent

b. at least twenty per cent
c. at least ten per cent
d. at least five per cent

2. No acquirer, has acquired and holds in shares or voting rights in a target

company entitling them to exercise of the voting rights in the Target company
but less than the maximum permissible non public shareholding, shall acquire
within any financial year additional shares or voting rights in such target
company entitling them to exercise of the voting rights, unless the acquirer
makes a public announcement of an open offer for acquiring shares of such
target company in accordance with these regulations

a. Twenty-five per cent or more/more than five per cent

b. Twenty-five per cent or more/more than three per cent
c. Fifteen per cent or more/more than one per cent
d. Twenty per cent or more/more than two per cent

3. One of the common irregularities noted by the Securities and Exchange

Board of India during the inspection of a stock exchange was that it was
dealing with unregistered sub brokers. Identify the related function of
Securities and Exchange Board of India.

a. Regulatory function
b. Protective function
c. Developmental function
d. None of the above

4. What are the obligations on the part of the manager to the open offer prior to the
public announcement being made

a. To ensure that the acquirer have made firm arrangements for funds through verifiable
means to meet the payment obligations under the open offer
b. To ensure that the acquirer is able to implement the open offer
c. Both A and B
d. None of the above

5. The obligation to make a public announcement of an open offer for acquiring shares
shall be considered as

a. An indirect acquisition of shares of the target company

b. A cross acquisition of shares of the target company
c. A hostile takeover of shares of the target company
d. A direct acquisition of shares of the target company
6. “Acquirer” means any person who has

a. voting rights
b. control over a target company
c. acquires shares
d. all of the above

7. For acquisition or holding of shares or voting rights in a target company, the

acquirer have to make

a. To display his intention to acquire the shares of target company in social media.
b. A private announcement of such intention
c. A public announcement of an open offer
d. To send individual communication to the shareholders of the target company

8. An open offer is required to be kept open for how many days

a. Ten working days

b. Ten days
c. Five days
d. Five working days

9. The acquisition shall be regarded as a direct acquisition of the target

company, where

a. The proportionate sales turnover of the target company as a percentage of the

consolidated sales turnover of the entity or business being acquired
b. The proportionate market capitalisation of the target company as a percentage
of the enterprise value for the entity or business being acquired
c. The proportionate net asset value of the target company as a percentage of the
consolidated net asset value of the entity or business being acquired
d. All/Either of the options are correct

10. No acquirer shall acquire shares or voting rights in a target company which
taken together with shares or voting rights, if any, held by him and by persons
acting in concert with him in such target company, entitle them to exercise
______in such target company unless the acquirer makes a public
announcement of an open offer for acquiring shares of such target company in
accordance with these regulations

a. 20% or more of the voting rights

b. 25% or more of the voting rights
c. 10% or more of the voting rights
d. 15% or more of the voting rights

11. Who can be acquirer

a. It can be a corporate entity

b. It can any other legal entity
c. It can be a natural person
 d. All of the above
12. Maximum number of shares which can be held by promoters in a listed
company is

a. 75% of share capital

b. 70% of share capital
c. 60% of share capital
d. 50% of share capital

13. “volume weighted average market price” means

a. (No. of equity shares traded on a stock exchange * Price of each equity p &
share)/Total No. of equity shares traded '' on the stock exchange
b. (No. of equity shares traded on a stock exchange * Average Price of each equity
share)/Total No. of equity shares traded on the stock exchange
c. (No. of equity shares traded on a stock exchange * Price of each equity
share)/Total No. of equity shares issued by the Company
d. None of the above

14. Control means

a. Control the management

b. Policy decisions exercisable by a person or persons acting individually or in
concert
c. Right to appoint majority of the directors
d. All/any of the options

15. The market capitalisation of the target company shall be taken into account
on the basis of the of such shares on the stock exchange for a period of sixty
trading days preceding the earlier of, the date on which the primary acquisition
is contracted, and the date on which the intention or the decision to make the
primary acquisition is announced in the public domain.

a. Weighted average market price

b. Volume-weighted average market price
c. Average market price
d. None of the above

16. No person shall make a public announcement of an open offer for

acquiring shares

a. who is not a wilful defaulter

b. who is a defaulter
c. who is not a defaulter
d. who is a wilful defaulter

17. Whether a shareholder once tendered his shares in the open offer made by
the acquirer can withdraw his request

a. cannot withdraw
 b. Yes, he withdraw
c. He can withdraw, if the acquirer permits so
d. None of the above

18. In the event the acquirer makes a public announcement of an open offer
for acquiring shares of a target company in terms of regulations 3, 4 or 5, he
may delist the company in accordance with provisions of the

a. SEBI (SAST) Regulations, 2011

b. SEBI (Delisting of Equity Shares) Regulations, 2009
c. SEBI (LODR) Regulations, 2015
d. SEBI (ICDR) Regulations, 2009

19. An acquirer, who together with persons acting in concert with him, holds
shares or voting rights in a target company entitling them to exercise shall be
entitled to voluntarily make a public announcement of an open offer for
acquiring shares

a. 25% or more but less than the maximum permissible non-public shareholding
b. 15% or more but less than the maximum permissible non-public shareholding
c. 30% or more but less than the maximum permissible non-public shareholding
d. 20% or more but less than the maximum permissible non-public /shareholding

20. “wilful defaulter” means any person who is categorized as a wilful defaulter
by any bank or financial institution or consortium thereof, in accordance with
the guidelines on wilful defaulters issued by the____________ and includes
any person whose director, promoter or partner is categorized as such

a. Security Exchange Board of India

b. Ministry of Corporate Affairs
c. Institute of Chartered Accountants of India
d. Reserve Bank of India

21. In the event of the failure of the delisting offer made by the acquirer,
through the manager to the open offer, shall from the date of the
announcement under Regulation 5A(2), file with the Board, a draft of the letter
of offer

a. within ten working days

b. within twenty working days
c. within five working days
d. within fifteen working days.
22. “enterprise value” means

a. The value calculated as market capitalization of a company plus debt, minority

interest and preferred shares, minus total cash and cash equivalents
b. The book value of a company plus debt, minority interest and preferred shares,
minus total cash and cash equivalents
c. The intrinsic value of assets of a company plus debt, minority interest and
preferred shares, minus total cash and cash equivalents
d. The market value a company plus debt, minority interest and preferred shares,
minus total cash and cash equivalents

23. The short term financial instruments traded in money market is commonly
called

a. Call money
b. Certificate of deposits
c. Trade bills
d. Commercial Paper

24. Which of the following statements is not true with regard to money market?

a. It involves low market risk

b. It is situated at specific locations
c. Deals in unsecured and short-term debt instruments
d. The instruments traded are highly liquid

25. Which of the following statements is not true with regard to Treasury bills?

a. Are issued in the form of a promissory note

b. They are highly liquid and have assured yield
c. They carry high risk of default
d. They are available for a minimum amount of ₹25,000 and in multiples thereof

26. Which of the following statements is not true with regard to Commercial
paper?

a. Is a long-term unsecured promissory note with a fixed maturity period

b. It usually has a maturity period of 15 days to one year
c. It is sold at a discount and redeemed at par
d. Companies use this instrument for bridge financing
27. Which of the following statements is not true with regard to Call money?

a. It is short-term finance repayable on demand

b. Its maturity period ranges from one day to fifteen days
c. There is a direct relationship between call rates and other short-term money
market instruments
d. It is used for inter-bank transactions
28. Which of the following statements is not true with regard to capital market?

a. The funds are raised for a short period of time

b. Both debt and equity funds can be raised
c. It is classified into two types
d. All of the above

29. Which of the following statements is not true with regard to primary market?

a. Is also known as the old issues market

b. It facilitates the transfer of investible funds from savers to entrepreneurs
c. It deals with new securities being issued for the first time
d. It facilitates the transfer of investible funds from savers to entrepreneurs

30. Which of the following statements is not true with regard to stock exchange?

a. It provides a platform for buying and selling of new securities

b. It curbs the marketability of the securities
c. By providing a ready market, it extends liquidity to the securities
d. It provides a platform for buying and selling of old securities

31. Which of the following is not a protective function of stock exchange?

a. Prohibition of fraudulent and unfair trade practices

b. Controlling insider trading
c. Regulation of takeover bids by companies
d. Promotion of fair practices and code of conduct in securities market

32. Which of the following statements is true with regard to financial markets?

a. They link the households which save funds and business firms which invest
these funds
b. They work as an intermediary between the savers and the investors by
mobilising funds between them
c. They allocate funds available for investment into their most productive
investment opportunity.
d. All of the above

33. If a public issue is heavily over subscribed, then

a. The issue price will be lower

b. The number of shares allotted to each investor will be lower
c. The listing price ill be lower
d. The amount raised will be lower
34. The document that confirms a trade executed on the stock exchange is
called

a. Confirmation slip
b. Delivery note
c. Contract note
d. Delivery instruction slip

35. Which of the following is essential for the public issue of a debt security?

a. The shares must be listed on a stock exchange

b. The debt instruments must be credit rated
c. The promoters must stand guarantee for the payment of principal and interest
d. The instruments do not require minimum coupon specified

36. A trade that is squared off during the day

a. Doesn’t require the delivery of shares

b. Is not guaranteed by the exchange
c. Is cancelled by the exchange
d. Is not considered in trading volumes

37. The reserves of a company rightfully belong to

a. Equity shareholders
b. Institutional leaders
c. Promoters
d. Employees

38. Which of the following is the main function of primary markets?

a. Provide liquidity for the securities issued

b. Provide a platform for making public issues
c. Provide information about public companies
d. Enable investors to trade in stocks

39. The financial results of a company show that it has suffered losses due to
declining market share. The price of its equity share drops in the market. This
is an example of the role of the market as

a. Provider of liquidity
b. Orderly channel for transfer of funds from investors to issuers
c. Generator of productive investments
d. Information signalling through prices
40. The securities that are already issued are available for subsequent
purchases and sales at

a. Office of the registrar and transfer agent

b. Follow on public offer of the issuer
c. Stock exchanges here they are listed
d. Depositories where they are held
41. Which of the following categories of shares have to be mandatorily listed on
a stock exchange

a. All shares issued by a company

b. All shares issued to non-promoters
c. All shares depending on the terms of the issue
d. All shares issued in a public issue

42. The group of market participants that collectively facilitate interaction

between investors and issuers is known as

a. Regulators
b. Custodians
c. Bankers
d. Intermediaries

43. Analysts estimate that the intrinsic value of an equity share is Rs. 50. The
share is quoting for Rs. 35 in the market. Then we can say that the share is

a. Undervalued
b. Overvalued
c. Fairly priced
d. Limited downside

44. Which of the following is ranked last both in terms of profit sharing and
receiving liquidation proceeds

a. Lenders
b. Employees
c. Government creditors
d. Equity shareholders

45. In an offer for sale, the funds raised for the issue

a. Increases the share capital of the company

b. Are settled through stock markets
c. Are the sale proceeds for the original shareholder
d. Are a liability for the company
46. The asset allocation of an investor should ideally be aligned with

a. Their return requirement

b. Their risk preference
c. Their financial goals
d. All of the above

47. Which of the following is not an activity performed by bankers to an issue

a. Acceptance of application money

b. Collection of STT
c. Acceptance of call money
d. Payment of dividend or interest warrant

48. Under the code of conduct, SEBI prescribes bankers to an issue against their
participation in

a. Creation of false market

b. Price rigging or manipulation
c. Passing of unpublished, price sensitive information
d. All of the above

49. The documents, books of accounts and other records relating to its
underwriting activities should be preserved for a minimum period of __ years
by the underwriter

a. 3
b. 5
c. 7
d. 9

50. Fine in case of money laundering shall extend to Rs. _____ and rigorous
imprisonment

a. Rs. 10 Lakh
b. Rs. 5 lakh
c. Rs. 15 Lakh
d. Rs. 20 Lakh.
51. As per SEBI (ICDR) Regulations, the minimum subscription to be received in
an issue must be at least ___ of the offer through the document

a. 65%
b. 75%
c. 80%
d. 90%
52. The certificate of registration as underwriter is valid for a period of ___ years

a. 1
b. 2
c. 4
d. Till its suspension or cancellation by SEBI

53. Record of transactions to be maintained under PMLA includes cash

transactions of value more than

a. Rs. 20 Lakh
b. Rs. 30 Lakh
c. Rs. 10 Lakh
d. Rs. 1 Crore

54. When the IDRs are considered ____ it shall be the trigger event for
redemption.

a. Frequently traded
b. Infrequently traded
c. Constantly traded
d. None of the above

55. Issue of depository receipts is one of the ____ methods into India.

a. Foreign Institutional Investment

b. Foreign Direct Investment
c. Foreign Venture Capital
d. Foreign Portfolio Investment

56. Due diligence process ill result in the critical analysis of the ____.

a. Control systems of the Company

b. Accounting systems of the Company
c. Reporting systems of the Company
d. All of the above

57. Shelf prospectus facility is available to ____.

a. NBFC
b. Private Banks
c. Public Sector Banks
d. None of the above
58. In case of stock split the total value of the shares remains the same
compared to pre-split because ____.

a. Stock split adds only real value

b. Stock split adds no dividend value
c. Stock split adds no real value
d. Stock split adds no nominal value

59. The Board of Directors of the company while approving the proposal for
delisting shall certify for which of the instances?

a. Delisting in the interest of all the directors

b. Delisting in the interest of the shareholders
c. Compliance with the applicable provisions of securities laws.
d. b and d

60. In case of voluntary delisting, bidding period shall be minimum of ___

working days.

a. 1
b. 2
c. 3
d. 4

61. The IPO grading process takes into account the prospects of the industry in
which the company operates.

a. True
b. False

62. Finalization of listing process is required to completed in conjunction with

the ___.

a. Promoters
b. Merchant bankers
c. Board of directors
d. Compliance officer

63. All entities falling under the promoter and promoter group shall separately
disclose the shareholding pattern.

a. True
b. False
64. In a merger, functions relating to __ and __ are taken care of by the merchant
banker.
i. Internal audit
ii. Legal counselling
iii. Preparation and circulation of Information memoranda
iv. Deal structuring and negotiations

a. (ii) and (iii)

b. (iii) and (iv)
c. (i) and (ii)
d. (ii) and (iv)

65. A rights issue shall be open to subscription for a maximum period of __

days.

a. 15
b. 30
c. 45
d. 60

66. Investors should be sent a Confirmatory Allotment Note (CAN) within __

days of the book built issue closing.

a. 7
b. 15
c. 10
d. 12

67. As per the Depositories Act, the principal function of the depository is to
provide a facility for investors to hold securities in demat form and transfer the
ownership of securities ___ by book entry.

a. Automatically
b. Electronically
c. Manually
d. Physically

68. The SLR and CRR rates are decided by which of the following regulatory
bodies.

a. SEBI
b. RBI
c. IRDA
d. PFRDA
69. As per SEBI ICDR regulation, allotment in a preferential issue, pursuant to
the special resolutions shall be completed within a period of _ days from the
date of passing such resolution.

a. 5
b. 10
c. 15
d. 20

70. M/s ABC has come out with a public issue and it gets oversubscribed on the
first day itself. Can it advertise this in newspapers before the issue closing date?

a. Yes
b. No

71. When a security ought to be delisted, it’s the responsibility of the promoter
alone to ensure compliance with the provisions stated by SEBI in its regulations.
A merchant banker as such has no role in this.

a. True
b. False

72. One of the basic eligibility condition of the company for making a public
issue is that the issuer company has a net worth of at least Rs. ___ in the
preceding 3 years.

a. 1 crore
b. 5 crore
c. 2.5 crore
d. 1.5 crore

73. In an institutional placement program, a minimum of __% of eligible

securities shall be allotted to MFs and Insurance companies.

a. 10
b. 20
c. 25
d. 15

74. In the case of a preferential issue, the alternate pursuant to the special
resolution shall be completed within 15 days passing such resolutions.

a. True
b. False
75. In the Open Offer Process, the acquirer shall file the draft letter of offer with
SEBI and send a copy of the draft letter of offer to __.

a. Target company
b. All stock exchanges here the target company shares are listed
c. (a) and (b)
d. None of the above

76. The registrar and Transfer agent of a company appoints printers ho are
engaged in bulk printing of the offer document and application forms.

a. True
b. False

77. The Banker to a issue is required to certify all the require SEBI guidelines
have been adhered with while framing the scheme of Employee stock options
by the company.

a. True
b. False

78. As per SEBI (ICDR) regulation, the aggregate reservation on competitive

basis for employees shall not exceed __ % of the post issue capital of the issuer.

a. 5
b. 10
c. 15
d. 20

79. In case of further public offer or a rights issue, the issuer shall obtain in-
principle approval from?

a. From all exchanges on hich the securities are proposed to be listed, in cases
where the specified securities are not listed on any RSE having nationwide
terminals.
b. NSE
c. BSE
d. SEBI.
80. As per SEBI-Bankers to issue regulations, which of the following activities
does a banker need to perform.

a. Acceptance of application and application money

b. Acceptance of allotment or call money
c. Refund of application money
d. All of the above
81. An applicant seeking application as merchant banker shall comply with
which of the following requirements?

a. Registration fees
b. Capital adequacy requirements
c. Criteria for fit and proper person
d. All of the above

82. Offer document is called prospectus in case of an offer for sale.

a. True
b. False

83. Which of the following documents have to be submitted by the Registrar and
Transfer agents to the stock exchange once the public issue is over?

a. List of applications rejected on technical grounds

b. Basis of allotment
c. Top 100 applications
d. All of the above

84. Which of the following activities a merchant banker has to perform in the
process of issue management?

a. Event manager
b. Handles the investors interest in fiduciary capacity
c. Handles the statutory compliance requirements
d. All of the above

85. Depository receipts offer

a. Opportunity to invest in local companies trading foreign exchanges

b. Right to dividend but not capital appreciation in the underlying shares
c. Opportunity to invest in international stocks through domestic exchanges
d. None of the above

86. Select the true options regarding SEBI guidelines on IDR issues.

a. Limit on the money raised by a company in India

b. 2 year lock in on convertibility of IDRs to shares
c. The availability of IDRs to only Indian investors
d. None of the above.
87. Investor may hold the bond till maturity or may exit earlier by selling on the
secondary market.

a. True
b. False

88. Preference share holders

a. Receive dividend
b. Have right over residual assets
c. Receive repayment of capital
d. (a) and (c)

89. The intrinsic value is less than the market value. Then a scrip is

a. Overvalued
b. Undervalued
c. Devalued
d. Fairly priced

90. Select the option not being a parameter for business analysis

a. Intrinsic value
b. PV Ratio
c. PE Ratio
d. Demand and supply of securities in the market

91. In _____ of depository receipts, the existing shareholders offer their shares
at an agreed price for conversion to DRs.

a. Sponsored issue
b. Agreed issue
c. Convertible issue
d. Perpetual issue

92. Which of the following provides 100% Capital protection with provision to
participate in security markets?

a. Convertible debenture
b. Preference shares
c. Mortgage backed security
d. Partly convertible bond
93. Increased FDI can result in

a. Increased GDP
b. Increased interest rates
c. Increased corporate tax revenue
d. (a) and (c)

94. The company can issue bonus shares out of its

a. Free reserves from profits

b. Free reserves from revaluation reserves
c. Long term debt
d. Equity share capital

95. Type of preference share in which unpaid dividend doesn’t accumulate, but
lapse.

a. Cumulative preference share

b. Convertible preference share
c. Non-cumulative preference share
d. Dividend lapsing preference share

96. It is used as an alternative to bank borrowing for large and creditworthy

companies

a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above

97. It is a method by which banks borrow from each other to be able to maintain
the cash reserve ratio.

a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above

98. A rise in call money rates makes other sources of finance such as
commercial paper and certificates of deposit

a. Expensive in comparison with banks who raise funds from these sources
b. Cheaper in comparison with banks who raise funds from these sources
c. Creates no effect on other sources
d. None of the above
99. It is a short-term, negotiable, self-liquidating instrument which is used to
finance the credit sales of firms.

a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above

100. A company can raise capital through the primary market in the form of
a. Equity shares
b. Preference shares
c. Debentures
d. All of the above

SOLUTIONS
1 c 21 c 41 d 61 a 81 d
2 a 22 a 42 d 62 b 82 a
3 a 23 d 43 a 63 a 83 d
4 c 24 b 44 d 64 b 84 d
5 a 25 c 45 c 65 b 85 c
6 d 26 a 46 d 66 d 86 d
7 c 27 c 47 b 67 b 87 a
8 a 28 a 48 d 68 b 88 d
9 d 29 a 49 b 69 b 89 a
10 b 30 b 50 b 70 b 90 d
11 d 31 c 51 d 71 b 91 a
12 a 32 d 52 c 72 a 92 c
13 a 33 b 53 c 73 c 93 d
14 d 34 c 54 b 74 a 94 a
15 b 35 b 55 b 75 c 95 c
16 d 36 a 56 d 76 b 96 c
17 a 37 a 57 c 77 b 97 b
18 b 38 a 58 c 78 a 98 d
19 a 39 d 59 d 79 a 99 a
20 d 40 c 60 c 80 d 100 d