749 + Mcqs in Financial Markets Page 8 McqOptions

351.	. ..................... is the link between the depository and the owner
A.	Agent
B.	Depository participant
C.	Beneficiary
D.	Broker
Answer» C. Beneficiary

Discussion

352.	The NSDL established in
A.	August 1996
B.	August 1998
C.	January 1996
D.	January 1998
Answer» B. August 1998

Discussion

353.	Which of the following is not an institutional credit rating agency in Indian financialsystem?
A.	CRISIL
B.	CIBIL
C.	CARE
D.	ICRA
Answer» C. CARE

Discussion

354.	Right shares are offered to.....................
A.	Debenture holders
B.	Existing shareholders
C.	List 2 contributories
D.	Liquidators
Answer» C. List 2 contributories

Discussion

355.	Zero Coupon Bond is also known as
A.	Deep discount bond
B.	Irredeemable bond
C.	Bearer bond
D.	Zero Interest bond
Answer» B. Irredeemable bond

Discussion

356.	Clearing and settlement operations of NSE are carried out by:
A.	NSDL
B.	NSCCL
C.	SBI
D.	CDSL
Answer» C. SBI

Discussion

357.	Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case.
A.	Offer through prospectus
B.	Offer for sale
C.	Rights issue
D.	Private placement
Answer» D. Private placement

Discussion

358.	------------- is also known as Remisiers and Half-commission man
A.	Sub-broker
B.	Commission broker
C.	Authorised clerk
D.	Jobbers
Answer» B. Commission broker

Discussion

359.	Which of the following instruments is not traded in a money market?
A.	Banker’s acceptances
B.	U.S. Treasury Bills
C.	Eurodollars
D.	Residential mortgages
Answer» E.

Discussion

360.	--------- is the charges paid by a bull speculator to the other party for obtaining carry overfacility
A.	Backwardation
B.	Contango
C.	Spread
D.	Margin
Answer» C. Spread

Discussion

361.	_______ is a link between savers & borrowers, helps to establish a link between savers &investors
A.	Marketing
B.	Financial market
C.	Money market
D.	None of these
Answer» C. Money market

Discussion

362.	When the lender and the borrower have different amounts of information regarding a transaction,__________
A.	asymmetric information
B.	adverse selection
C.	moral hazard
D.	fraud
Answer» B. adverse selection

Discussion

363.	In Indian Capital market, ‘BOLT’ stands for
A.	Borrowing or Lending Trade
B.	Bombay Online Trading
C.	Bond or Loan Transaction
D.	None of these
Answer» C. Bond or Loan Transaction

Discussion

364.	Gold is -----------asset
A.	Financial asset
B.	Non financial asset
C.	Fictitious asset
D.	Intangible asset
Answer» C. Fictitious asset

Discussion

365.	Which among the following is correct regarding BPLR or bench mark prime lending rate?
A.	It is lowest interest rate below PLR charged by a bank from the best customer of the financial year
B.	It is highest interest rate above PLR charged by a bank from the any customer of the financial year
C.	Both (a) & (b)
D.	None of the above
Answer» B. It is highest interest rate above PLR charged by a bank from the any customer of the financial year

Discussion

366.	A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:
A.	wholesale CDs
B.	demand deposit
C.	repurchase agreement
D.	NOW account
Answer» B. demand deposit

Discussion

367.	If the public debt can be financed without adding to inflation or causing interest ratesto rise, it is said to be:
A.	only a burden on future generations.
B.	following the golden rule of the public finances.
C.	in primary balance.
D.	sustainable
Answer» E.

Discussion

368.	Bill Market Scheme in India was introduced in the year
A.	1972
B.	1952
C.	1969
D.	1982
Answer» C. 1969

Discussion

369.	-----------work at making profits by taking advantage of discrepancy between prices of thesame product across different markets.
A.	Arbitragers
B.	Speculators
C.	Exchange
D.	Hedgers
Answer» B. Speculators

Discussion

370.	Govt. bond is a
A.	short term security
B.	long term security
C.	medium term security
D.	Either a or b.
Answer» C. medium term security

Discussion

371.	In India, the company which actually deals with the corpus of the mutual fund is called
A.	sponsor company
B.	trustee company
C.	asset management company
D.	Mutual fund Company.
Answer» D. Mutual fund Company.

Discussion

372.	Indian Banks Association (IBA) has a common networking system for sharing the ATM facilities in Mumbai, which is known as
A.	ATM Network
B.	Shared Payment Network System
C.	Cash Network
D.	None of these
Answer» C. Cash Network

Discussion

373.	Centralized exchanges:
A.	are electronic systems that bring buyers and sellers together for electronic execution.
B.	are markets where claims based on an underlying asset are traded for payment at a later date.
C.	are markets where financial claims are bought and sold for immediate cash payment.
D.	are secondary markets where buyers and sellers meet in the same location.
Answer» E.

Discussion

374.	........................ assists mainly to industrial undertakings in the private sector
A.	IFCI
B.	IDBI
C.	ICICI
D.	SEBI
Answer» D. SEBI

Discussion

375.	Type of financial security which have linked payoff to another issued security is classified as
A.	linked security
B.	derivative security
C.	payable security
D.	non-issuing security
Answer» C. payable security

Discussion

376.	Adhoc T-bills are always issued in favour of--------
A.	State government
B.	Commercial banks
C.	Treasuries
D.	RBI
Answer» E.

Discussion

377.	----------is the actual process of exchanging money and goods.
A.	Transfer
B.	Settlement
C.	Netting
D.	Clearing
Answer» C. Netting

Discussion

378.	..................... of shares in the first step in the depository process
A.	Registration
B.	Listing
C.	Rematting
D.	immobilisation
Answer» E.

Discussion

379.	As a part of the capital adequacy requirement, the base minimum capital prescribed by SEBI:
A.	varies from exchange to exchange.
B.	is based on the recommendations of the Kaul committee.
C.	is based on the recommendations of the Justice Bhagwati Committee.
D.	is the same across members of all exchanges.
Answer» B. is based on the recommendations of the Kaul committee.

Discussion

380.	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
Answer» E.

Discussion

381.	Which of the following is a characteristic feature of venture capital firms?
A.	Developing a portfolio of companies.
B.	Holding debt in the firms that are funded.
C.	Allowing firms to use the funds as they see fit.
D.	Having a short-term investment horizon.
Answer» B. Holding debt in the firms that are funded.

Discussion

382.	Discount and Finance House of India was set up in .....................
A.	1982
B.	1988
C.	1992
D.	1969
Answer» C. 1992

Discussion

383.	The facility to carry forward a transaction from one settlement period to another is known as..................... transaction
A.	Badla
B.	arbitrage
C.	cornering
D.	trading inside
Answer» B. arbitrage

Discussion

384.	Which of the following sequences lists financial assets from lowest expected return tohighest expected return?
A.	Bonds, stocks, derivatives.
B.	Bonds, derivatives, stocks.
C.	Stocks, bonds, derivatives.
D.	Derivatives, stocks, bonds.
Answer» B. Bonds, derivatives, stocks.

Discussion

385.	In the loanable fund’s theory of interest determination, an increase in the productivity ofcapital equipment should lead to:
A.	A reduction in the amount of saving
B.	More employment
C.	Higher interest rates
D.	Higher prices
Answer» D. Higher prices

Discussion

386.	..................... are an important instrument of short term borrowing by the Govt.
A.	National saving certificate
B.	Bonds
C.	Treasury bill
D.	Any of the above
Answer» D. Any of the above

Discussion

387.	The commercial paper issued with low interest rate thus the commercial paper is categorized as
A.	payables rating
B.	commercial rating
C.	poor credit rating
D.	better credit rating
Answer» E.

Discussion

388.	It is a number assigned to each transaction by the stock exchange and is printed on thecontract note.
A.	PAN number
B.	Unique Order Code
C.	Contract Note
D.	None of the above
Answer» C. Contract Note

Discussion

389.	Every financial market has the following characteristic:
A.	It determines the level of interest rates.
B.	It allows common stock to be traded.
C.	It allows loans to be made.
D.	It channels funds from lenders-savers to borrowersspenders.
Answer» E.

Discussion

390.	The type of risk in which the value of liabilities and assets is affected by the exchange rate is classified a
A.	economic rates
B.	foreign exchange risk
C.	selling rate
D.	buying rates
Answer» C. selling rate

Discussion

391.	What is used to quote the rates on Eurodollar deposits?
A.	Discount rate.
B.	Federal funds rate.
C.	Repo rate.
D.	LIBOR.
Answer» E.

Discussion

392.	The largest depository institution at the end of 2001 was
A.	life insurance companies.
B.	pension funds.
C.	state retirement funds.
D.	none of the above.
Answer» E.

Discussion

393.	When is a trade confirmation slip issued to the investor?
A.	On placing an order
B.	On execution of the order
C.	On settlement of the order
D.	None of the above
Answer» C. On settlement of the order

Discussion

394.	The internal rate of return is:
A.	the interest rate at which money is borrowed for investment.
B.	the interest that allows a profit.
C.	profit divided by investment amount.
D.	the interest rate that equates the present value of an investment with its cost.
Answer» E.

Discussion

395.	Who issues a treasury bill?
A.	Any nationalised bank
B.	Any private sector bank
C.	Reserve Bank of India
D.	All of the above
Answer» B. Any private sector bank

Discussion

396.	Merchant banks in India started in
A.	1955
B.	1969
C.	1972
D.	1992
Answer» C. 1972

Discussion

397.	The real interest rate:
A.	is the nominal interest rate + inflation.
B.	greater than the nominal interest rate when inflation is greater than0.
C.	is the interest rate expressed in current dollar terms.
D.	is the inflation adjusted interest rate.
Answer» E.

Discussion

398.	Unit of trading for Wheat at NCDEX is---------
A.	1 MT
B.	3 MT
C.	1 kg
D.	10 MT
Answer» E.

Discussion

399.	The allocated function is performed by
A.	Financial market
B.	Capital market
C.	Money market
D.	All of the above
Answer» E.

Discussion

400.	Suppose an investor purchases a 91 days Treasury bill with a face value of ₹2,00,000 for ₹1,92,000. By holding the bill until the maturity date, the investor receives ₹2,00,000. What is the amount of interest received by him?
A.	₹8,000
B.	₹80,000
C.	₹3,92,000
D.	₹2,00,000
Answer» C. ₹3,92,000

Discussion

Explore topic-wise MCQs in Master of Arts in Economics (M.A. Economics).

. ..................... is the link between the depository and the owner

The NSDL established in

Which of the following is not an institutional credit rating agency in Indian financialsystem?

Right shares are offered to.....................

Zero Coupon Bond is also known as

Clearing and settlement operations of NSE are carried out by:

Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case.

------------- is also known as Remisiers and Half-commission man

Which of the following instruments is not traded in a money market?

--------- is the charges paid by a bull speculator to the other party for obtaining carry overfacility

_______ is a link between savers & borrowers, helps to establish a link between savers &investors

When the lender and the borrower have different amounts of information regarding a transaction,__________

In Indian Capital market, ‘BOLT’ stands for

Gold is -----------asset

Which among the following is correct regarding BPLR or bench mark prime lending rate?

A type of bank account designed to compete with money market mutual funds, and having limited check-writing services, is known as:

If the public debt can be financed without adding to inflation or causing interest ratesto rise, it is said to be:

Bill Market Scheme in India was introduced in the year

-----------work at making profits by taking advantage of discrepancy between prices of thesame product across different markets.

Govt. bond is a

In India, the company which actually deals with the corpus of the mutual fund is called

Indian Banks Association (IBA) has a common networking system for sharing the ATM facilities in Mumbai, which is known as

Centralized exchanges:

........................ assists mainly to industrial undertakings in the private sector

Type of financial security which have linked payoff to another issued security is classified as

Adhoc T-bills are always issued in favour of--------

----------is the actual process of exchanging money and goods.

..................... of shares in the first step in the depository process

As a part of the capital adequacy requirement, the base minimum capital prescribed by SEBI:

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

Which of the following is a characteristic feature of venture capital firms?

Discount and Finance House of India was set up in .....................

The facility to carry forward a transaction from one settlement period to another is known as..................... transaction

Which of the following sequences lists financial assets from lowest expected return tohighest expected return?

In the loanable fund’s theory of interest determination, an increase in the productivity ofcapital equipment should lead to:

..................... are an important instrument of short term borrowing by the Govt.

The commercial paper issued with low interest rate thus the commercial paper is categorized as

It is a number assigned to each transaction by the stock exchange and is printed on thecontract note.

Every financial market has the following characteristic:

The type of risk in which the value of liabilities and assets is affected by the exchange rate is classified a

What is used to quote the rates on Eurodollar deposits?

The largest depository institution at the end of 2001 was

When is a trade confirmation slip issued to the investor?

The internal rate of return is:

Who issues a treasury bill?

Merchant banks in India started in

The real interest rate:

Unit of trading for Wheat at NCDEX is---------

The allocated function is performed by

Suppose an investor purchases a 91 days Treasury bill with a face value of ₹2,00,000 for ₹1,92,000. By holding the bill until the maturity date, the investor receives ₹2,00,000. What is the amount of interest received by him?