CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS

(PREPARED BY ARJUN IYER – STUDENT DPU)

1) Capital market is controlled by Securities Exchange Board of India (SEBI) through

(Answer in Page No. 27 – 2nd Para 1st Line)

A) Securities Contracts Regulations Act (SCRA)

B) Reserve Bank of India (RBI)
C) Central Bank of India
D) Ministry of Finance

2) Penalties and adjudication under SEBI are dealt by (Answer in Page No. 35 – 2.6)

A) Chapter VIB
B) Chapter VIA
C) Chapter VIC
D) Chapter VIC

3) Objectives of SEBI are to promote development of (Answer in Page No. 27 – 1st Para)

A) Exchange Market
B) Industrial Market
C) Securities Market
D) National Market

4) The securities and exchange board of India Act was passed in the year (Answer in
Page No. 27 – 2nd Para)

A) 1989
B) 1988
C) 1991
D) 1992

5) Under SEBI, the number of members belonging to the Union Finance Ministry of
India is? (Proof in extra attachment provided by DPU in Swayam)

A) Two B) Three C) Twenty D) Nine

6) How many members from Reserve Bank of India are under SEBI? (Proof in extra
attachment provided by DPU in Swayam)
A) Two B) One C) Three D) Four
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

The above refers to the Screenshot of the attachment for reference

7) A Non-Banking Financial Company (NBFC) is a company registered under the

(Answer in Page No. 46 – 3.2 – 1st Line)

A) Companies Act, 1956

B) Banking Regulation Act, 1949
C) Cooperative Societies Act, 1912
D) Securities Act of 1934

8) Non-bank financial companies were earlier called as non-bank financial (Answer in

Page No. 46 – 3.1 – Last Line)
A) Industries
B) Institutions
C) Organizations
D) Groups

9) The principal business of NBFC is (Answer in Page No. 46 – 3.2 – Last Line - Receiving
Deposits or accepting deposits)
A) Accepting Deposits
B) Giving Loans
C) Underwriting IPO
D) Providing suggestions on mergers & acquisitions
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

10) Venture Capital is money invested in businesses that are (Find Proof in TABLE (1)
A) Medium
B) Small
C) Very Big
D) Sick
TABLE (1)

11) Banks founded outside India having branches in India. (Answer in Page No.05 – A.
Foreign Bank)
A) International Bank
B) EXIM Bank
C) Foreign Banks
D) Industrial Bank
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

12) The people who invest Venture Capital money are called (Find Proof in TABLE (1)
A) Investors
B) Venture Capitalists
C) Industrialists
D) Financers

13) Services other than Deposits and Loans are called as (Answer in Page No.09 –
Ancillary Services)
A) Primary Functions
B) Utility Functions
C) General Functions
D) Ancillary Services

14) Low level financing needed to prove a new idea. (Answer in Page No.58 – Stages of
Company Development – Seed Money)
A) Seed Capital
B) Start-Up
C) Buy-Out
D) Turnaround Finance

15) Fourth round financing is also known as (Answer in Page No.59 – 1st line – Fourth-
Round)
A) Mezzanine Financing
B) Bridge Financing
C) Working Capital Financing
D) Seed Financing
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

16) Working capital for early-stage companies that are selling product, but not yet
turning a profit (Answer in Page No.58 – Stages of Company Development – Second-
Round)
A) Early-Stage financing
B) Fourth round financing
C) Third round financing
D) Second round financing

17) Which of the following is not a phase for venture capital funding process? (Answer in
Page No.58 – Venture Capital – Four stages are Idea Generation, Start-Up, Ramp Up & Exit)
A) Start-Up
B) Ramp-Up
C) Fixed-Up
D) Exit

18) VCFs can finance the industries in the form of (Answer in Page No.58 – 3rd Para – 1st
Line)
A) Equity Shares
B) Preference Shares
C) Bonds
D) Commercial Papers

19) Venture capital comes from institutional (Answer in Page No.55 – 1st Para – 2nd Last
Line)
A) Bankers
B) Investors
C) Merchant
D) Organizations
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

20) The venture capital investment is made when a venture capitalist buys _________ of
such a company and becomes a financial partner in the business. (Find Proof in TABLE
(1)
A) Shares
B) Debentures
C) Bonds
D) Currencies

21) SEBI is essentially a statutory body of the _______________ (Find Proof in TABLE (2)
A) Capital Market
B) Money Market
C) Commercial Banks
D) Indian Government
TABLE (2)
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

22) In a venture capital fund, the general partners receive an annual __________ equal to
up to 2% of the committed capital. (Answer in Page No.56 – Last Para)
A) Dividend
B) Profit
C) Management fee
D) Salary

23) The company’s_______ is the main participant in the rating process. (Answer in Page
No.193 – Rating Process - 2nd Para – Last Line)
A) Chairman
B) Managing Director
C) Chartered Accountant
D) Chief Financial Officer

24) A simple ________ symbol is normally used to convey a credit rating. (Answer in Page
No.191 – Need for Credit Rating – 1st Para – Last Line)
A) Roman Numbers
B) Alphanumeric
C) Numbers
D) Diagrammatic

25) Non-bank financial companies (NBFCs) are Financial Institutions that provide
banking services. (Answer in Page No.46 – 3.1 Introduction –1st Line)
A) True
B) False

26) NBFC cannot accept demand deposits. (Answer in Page No.47 – Diff between Banks
& NBFC –1st Point)
A) True
B) False
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

27) NBFCs can offer gifts/incentives or any other additional benefit to the depositors.
(Answer in Page No.48 – Acceptance of Deposits by NBFC – Point No.5)
A) True
B) False

28) The deposits with NBFCs are not insured. (Answer in Page No.48 – Acceptance of
Deposits by NBFC – Point No.7)
A) True
B) False

29) Nidhi Companies are regulated by the State Governments. (Answer in Page No.49 –
3.3 Role of Different Non-Banking Financial Companies – 3rd Para – Last Line)
A) True
B) False

30) Companies engaged in the business of stock-broking/sub-broking, Venture Capital

Fund Companies, Nidhi Companies, Insurance companies and Chit Fund Companies are
NBFCs. (Answer in Page No.49 – 3.3 Role of Different Non-Banking Financial Companies –
2nd Para – 1st Line)
A) True
B) False
 CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

DISCLAIMER:
CASE BASED ASSIGNMENT ANSWERS ARE MARKED AS PER MY UNDERSTANDING. SO
KINDLY SOLVE THE ANSWERS FROM YOUR END & MARK. CHANCES OF HAVING
DIFFERENT ANSWERS IS POSSIBLE.

1) Insurance is a tool to manage the risk. Risk means uncertainty. It means what
you get may be different from what you expect. Risk means the possibility of loss
or damage to the asset. Insurance does not prevent loss. It compensates the
loss. People who are exposed to risk come together and contribute certain sums
called premium which is used to compensate the losses suffered by any of them.
The risk is spread among the community. The likely big loss for any one is
reduced to manageable small losses for all. Insurance is considered as a social
security tool. Insurance is defined as an economic device whereby the individual
substitutes a small certain cost (the premium) for a large uncertain financial loss
(the contingency insured against) which would exist if it were not for the
insurance contract. It is an economic device for reducing and eliminating risk
through the process of combining a sufficient number of homogeneous
exposures into a group in order to make the losses predictable for the group as a
whole. Insurable interest means the possibility of a financial loss to an individual
which can be protected against through insurance. Insurance Company is an
organization chartered to operate as an insurer. Any corporation primarily
engaged in the business of furnishing insurance protection to the public is called
Insurance Company.

ANSWERS:
2) Insurance is a tool to manage (REFER PARA 1ST AND 2ND LINE – MANAGE RISK & RISK
MEANS UNCERTAINTY)

a) Risk
b) Uncertainty
c) Office
d) Home

3) Risk means the possibility of (REFER PARA 4TH LINE)

a) Loss of Asset
b) Profit to the Asset
c) Damage to the Asset
d) Balance-sheet the Asset
CAPITAL & FINANCIAL MARKETS – FINANCIAL MANAGEMENT ASSIGNMENT ANSWERS
(PREPARED BY ARJUN IYER – STUDENT DPU)

4) Insurance is also Called as: (REFER PARA 10TH LINE)

a) Business
b) Industry
c) Social Tool
d) Security Tool

5) It is an economic device for: (REFER PARA 12TH LINE)

a) Increase
b) Reducing Risk
c) Eliminating Risk
d) Hide

6) Any corporation primarily engaged in the business of furnishing insurance

protection to the public is called as: (REFER PARA LAST LINE)

a) Bank
b) Non-Banking Financial Institution’
c) Insurance Company
d) Insurance Agency

THANKING-YOU

CREATED BY ARJUN IYER:

TO SUPPORT ALL DPU MBA FINANCE STUDENTS.