Q.

1 ___________ occurs when the rules governing the securities industry are changed,
giving rise to a potential loss.
Regulatory risk( Correct Answer)
Market risk
Credit risk
Operational risk
Explanation

Regulatory risk occurs when the rules governing the securities industry are changed, giving rise to a potential loss. For example, the
‘customer first’ policy makes it difficult to trade house accounts and therefore a broker may not be able to liquidate its own trade
position immediately, leading to potential or actual loss.

Q.2 ______________ are bonds issued by Indian companies and subscribed to be a non-
resident in foreign currency.
Foreign Currency Convertible Bonds( Correct Answer)
Global Depository Receipts
External Commercial Borrowings
None of the above
Explanation

Foreign Currency Convertible Bonds (FCCBs) mean a bond issued by an Indian company expressed in foreign currency, and the principal and
interest in respect of which is payable in foreign currency.

Q.3 _____________witness an abnormal price rise not commensurate with financial health
and fundamentals like Earnings, Book value, Fixed assets, Net Worth, P/E multiple etc.
Graded Surveillance Measure( Correct Answer)
Additional Surveillance Measure
Alternate Surveillance Measure
Premium Surveillance Measure
Explanation

To enhance market integrity and safeguard interest of investors, SEBI has introduced Graded Surveillance Measure (GSM) and Additional

Q.4
Surveillance Measure (ASM). Graded Surveillance Measure (GSM) witness an abnormal price rise not commensurate wi

__________is the process by which a company offers its shares to the public for sale for the
first time.
IPO( Correct Answer)
FPO
Bonus issue
Right issue
Explanation

An IPO is the process by which a company goes public i.e. offers its shares to the public for sale for the first time.
th financial health and fundamentals like Earnings, Book value, Fixed assets, Net Worth, P/E multiple etc

Q.5 A regional stock exchange can also have nationwide terminals. State True or False.
True
False
( Correct Answer)

Explanation

A regional stock exchange cannot have nationwide terminals.

All Index futures contracts are cash settled. State whether True or False?
True( Correct Answer)
False
Partially true
Partially false
Explanation

All Index future and option contracts are cash settled.

Q.7 At what periodic difference a broker has to settle the accounts of his clients at least once
in a year?
Quarterly
Monthly( Correct Answer)
Half-yearly
Yearly
Explanation

Accordingly, the actual settlement of funds shall be done by the member at least once within a gap of maximum 30 / 90 days between two settlements
of running account as per the preference of the client.

Q.8 Both the parties can also seek to settle the matter outside the purview of which of the
following? (i) The Exchange (ii) SEBI (iii) The Investor Grievance forum
Only (i)( Correct Answer)
Only (ii)
Only (iii)
Only (i) & (iii)
Explanation

Both the parties i.e. the complainant and the trading member, can also seek to settle the matter outside the purview of the Exchange and then report it
to the Exchange. The trading member has to take a satisfaction letter from the investor stating that the grievance has been redressed and submit the
same to the Exchange. The matter is then supposed to be closed.

Q.9 Collateral limits once set are applicable to the trading members/custodial participants for
that day, unless otherwise modified by clearing member.- State True or False ?
True( Correct Answer)
False
Partially true
Partially false
Q.10 Delivery of the underlying instrument or __________ occurs after Premature exercise
and expiration.
Cash settlement.( Correct Answer)
Opening of an account.
Securities revaluation
None of the above
Explanation

Delivery of the underlying instrument or cash settlement occurs after Premature exercise and expiration.

.11 Full form of OFCs is ______________.

Offshore Financial Centers( Correct Answer)
Offshore Financial Centrals
Offshore Finance Centers
Ofshore Financial Centers
Explanation

OFCs - Offshore Financial Centers. Financial Centre’s that cater to customers outside their own jurisdiction are referred to as
international(IFSCs) or Offshore Financial Centers (OFCs). All these centres are ‘international’ in the sense that they deal with the
flow of finance and financial products/services across borders.

Q.12 If the trader purchases or sells at the best price available then that order is called
______________. (i) Market Order (ii) Limit Order (iii) Stop Order
Only (i)( Correct Answer)
Only (ii)
Only (iii)
None of the above
Explanation

A market order is where a trader purchases or sells their security at the best market price available

Q.13 In an IPO application, when an application is made in ASBA mode, the application
money remains in the investor's account till finalization of basis of allotment in the issue.
State True or False.
True( Correct Answer)
False
Partially true
Partially false
Explanation

Application Supported by Blocked Amount (ASBA)

Q.14 In case of sale of securities, ______________ should be given to the DP, upon receipt
of intimation of execution of trade from broker with whom he maintains the demat account.
Debit instruction( Correct Answer)
Credit instruction
Hold instruction
No action to be taken
Explanation

In case of sale of securities, immediately on receipt of intimation of execution of trade from broker, the seller client should issue debit delivery
instructions slip to the DP with whom client maintains his demat account. Securities are transferred to the broker’s clearing pool account, as
advised by his broker. Clients can give Power of Attorney (POA) in favour of their stock brokers for transferring securities from their individual
demat account to broker’s pool account for the purpose of meeting their pay-in obligation.

Q.15 In the case a complaint is filed by an investor, the matter should be resolved at the
branch level or the firm level depending upon the nature of the complaint. State True or False
True( Correct Answer)
False
Partially true
Partially false
Explanation

All the trading firms have a designated person(s) for redressing investor grievances. When a complaint is filed by the investor, matter has to be
resolved at the branch level or the firm level depending upon the nature of the complaint. For this purpose, all registered brokers shall designate an
e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints by investors.

Q.16 Investors can place order using an internet trading terminal or mobile phones. State
True or False.
True( Correct Answer)
False
Partially true
Partially false
Q.17 MCX-SX Clearing Corporation Ltd.handles the Settlement on MSXI (formerly MCX)
- State True or False ?
True( Correct Answer)
False
Partially true
Partially false
Explanation

MCX-SX Clearing Corporation Ltd. (MCX-SXCCL) is the clearing corporation for all the trades executed on the Metropolitan Stock Exchange of
India Limited (MSXI) formerly known as MCX-SX Stock Exchange.

Q.18 On the basis of delivery out instructions, Securities are transferred from broker''s
account to whom?
Clearing agency( Correct Answer)
Clearing bank
Stock Exchange
Broker’s account.
Explanation

Movement of securities after the trade is executed : - After the trade is executed by the broker on the stock exchange, the seller gives delivery
instructions to his DP to move securities from his account to his broker''s account. - Securities are transferred from broker''s account to Clearing
Agency on the basis of a delivery out instruction. - On pay-out, securities are moved from Clearing Corporation to the buying broker''s account. -
Buying broker gives instructions and securities move to the buyer''s account
Q.19 Professional Clearing Members have the right only to clear trades. They do not have
any kind of trading rights.- State True or False?
True( Correct Answer)
False
Partially true
Partially false

Q.20 SPAN evaluates the risk of a clients derivative portfolio and assesses a margin
requirement. State True or False.
True( Correct Answer)
False
Partially true
Partially false
Explanation

The Chicago Mercantile Exchange in 1988, developed the tStandard Portfolio Analysis of Risk (SPAN) margining system for calculating margin
requirements. SPAN evaluates the risk of an entire account’s futures and options portfolio and assesses a margin requirement based on such
risk

Q.21 STT rate for sale of a futures in securities is _____________.

0.01%
( Correct Answer)
0.05%
0.13%
0.02%
Explanation

The revised STT for delivery-based equity trading is 0.1% on the turnover. For Futures, the tax has been reduced to 0.01% on the sell-side only. For
Equity Options, the STT has been reduced to 0.05% on the sell side of the premium amount.

Q.22 The Arbitration fee will be utilized to meet the fee payable to the arbitrators. State True
or False.
True( Correct Answer)
False
Partially true
Partially false

Q.23 The ''Client wise funding report'' (monthly) is to be submitted to the National stock
exchange_____________.
Within seven days from the end of the month( Correct Answer)
Within ten days from the end of the month
Within fifteen days from the end of the month
Within thirty days from the end of the month
Explanation
The stock exchanges have prescribed certain periodic reports to be submitted by the brokers in their compliance calendars. NSE has specified that
the ''Client wise Funding Report'' has to be submitted within seven days from the end of the month.

Q.24 The goal of a risk management system is to measure and manage a firm''s exposure to
various risks identified as central to its operations.- State True or False ?
True( Correct Answer)
False
Partially true
Partially false
Explanation

An efficient risk management system is integral to an efficient settlement system. The goal of a risk management system is to measure and manage a
firm''s exposure to various risks identified as central to its operations.

Q.25 The parties to arbitration must deposit an amount as prescribed by which of the
following at the time of making arbitration reference? (i) Stock Exchanges (ii) RBI (iii)
Brokers
Only (i)( Correct Answer)
Only (ii)
Only (iii)
None of the above
Explanation

The Stock Exchanges prescribe the provisions in respect of arbitration and the procedure therein has been prescribed in the Regulations. The parties
to arbitration must deposit an amount as prescribed by the Exchanges at the time of making arbitration reference.