Financial Markets Test

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Financial Markets Test - 15

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Weekly Quiz Competition

Question 1
1 / -0

_________ is the process by which electronic shares of an investor are converted to physical certificates in the investor's account.

A
Rematerialization

B
Dematerialization

C
Materialization

D
None of above

Solution

Rematerialization is the process by which electronic shares of an investor are converted to physical certificates in the investor's account. Rematerialization can be defined as a process by which a client can get his electronic holdings converted into physical certificates.
Question 2
1 / -0

Which of the following is not an objective of SEBI?

A
To protect the rights and interests of investors, particularly individual investors and to guide and educate them.

B
To regulate stock exchanges and the securities industry to promote their orderly functioning.

C
Establishing a nationwide trading facility for all types of securities.

D
To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation.

Solution

Establishing a nationwide trading facility for all types of securities- it is not an objective of SEBI. The overall objectives of SEBI are to protect the interest of investors and to promote the development of stock exchange and to regulate the activities of stock market.
Question 3
1 / -0

Money market mutual funds ________.

A
enable individuals and small businesses to invest indirectly in money-market instruments

B
are available only to high net-worth individuals

C
are used in acquiring and placing mortgages

D
are mostly tradable on stock exchange

Solution

Money market mutual funds are used in acquiring and placing mortgages. Money market deals with short term securities having maximum tenure of 1 year. Money market mutual funds can be defined as short term liquid investments which invest in high quality money market instruments.
Question 4
1 / -0

Which of the following is example of consumer's co-operative society?

A
Haryana handloom

B
Gujarat co-operative milk marketing federation

C
Apna bazar

D
Urban Cooperative banks

Solution

Apna bazar is an example of consumer's co-operative society. A consumer cooperative can be defined as a cooperative business owned by its customers for their mutual benefit. This type of cooperative business is service oriented rather than pecuniary profit.
Question 5
1 / -0

The money market is a market for __________ funds which deals in monetary assets whose period of maturity is upto one year.

A
short-term

B
long-term

C
medium-term

D
nano-term

Solution

The money market is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. Generally money market is the source of finance for working capital. Transactions of money market include lending and borrowing of cash for a short period of time and also sale and purchase of securities having one year time.
Question 6
1 / -0

A _________ is basically an instrument of short-term borrowing by the Government of India maturing in less than one year.

A
call money

B
treasury bill

C
commercial paper

D
certificate of deposit

Solution

A treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. Treasury bills enable government to get short term borrowings as these bills are sold to banks and general public. Maturity of Treasury bills varies from 14 to 364 days.
Question 7
1 / -0

Delhi is often described as a 'cosmopolitan' city. This means that it ____________

A
is the principal city

B
is a city of great wealth

C
is a city with a global reputation

D
is a city with an ethnically diverse population

Solution

A cosmopolitan city is a city that has a high diversity of population with the high number of population with a better life style than a village which suggests that it is a city of great wealth too.
Question 8
1 / -0

A __________ is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.

A
money market

B
treasury bill

C
certificate of deposit

D
commercial bill

Solution

A commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. Commercial bills are known as trade bills or accommodation bills. These are common instruments used in credit purchase and sale. These have short term maturity period generally 90 days and can be discounted with bank even before the maturity period.
Question 9
1 / -0

Which of the following is/are a method of flotation in the primary market?

A
Offer through prospectus

B
Offer for sale

C
Private placement

D
All of the above
Solution
There are various methods of floating new issues in the primary market. They are:
Offer through Prospectus involves inviting subscription from the public through issue of prospectus.
Offer for Sale: Under this method securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers.
Private Placement: Private placement is the allotment of securities by a company to institutional investors and some selected individuals.
Question 10
1 / -0

Money market mutual funds ____________________________.

A
Enable individuals and small business to invest indirectly in money-market instruments

B
Are available only to high net-worth individuals

C
Highly liquid and short term investment vehicle

D
Are mostly tradable on stock exchange

Solution

Money market mutual funds can be referred to short-run liquid investments which invest in high quality money market instruments. It helps to provide investors with a reasonable return over a period up to 1 year.

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Financial Markets Test - 15

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Financial Markets Test - 15

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SHARING IS CARING

Question 1

Rematerialization

Dematerialization

Materialization

None of above

Solution

Question 2

To protect the rights and interests of investors, particularly individual investors and to guide and educate them.

To regulate stock exchanges and the securities industry to promote their orderly functioning.

Establishing a nationwide trading facility for all types of securities.

To prevent trading malpractices and achieve a balance between self regulation by the securities industry and its statutory regulation.

Solution

Question 3

enable individuals and small businesses to invest indirectly in money-market instruments

are available only to high net-worth individuals

are used in acquiring and placing mortgages

are mostly tradable on stock exchange

Solution

Question 4

Haryana handloom

Gujarat co-operative milk marketing federation

Apna bazar

Urban Cooperative banks

Solution

Question 5

short-term

long-term

medium-term

nano-term

Solution

Question 6

call money

treasury bill

commercial paper

certificate of deposit

Solution

Question 7

is the principal city

is a city of great wealth

is a city with a global reputation

is a city with an ethnically diverse population

Solution

Question 8

money market

treasury bill

certificate of deposit

commercial bill

Solution

Question 9

Offer through prospectus

Offer for sale

Private placement

All of the above

Solution

Question 10

Enable individuals and small business to invest indirectly in money-market instruments

Are available only to high net-worth individuals

Highly liquid and short term investment vehicle

Are mostly tradable on stock exchange

Solution

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