FINANCIAL MARKETS AND SERVICES

Finance-Specialization
BCom-V Semester-2019 Admission onwards.
MULTIPLE CHOICE QUESTION BANK WITH ANSWER KEYS

1) ---------- is a set of complex or closely connected or intermixed institutions, agents,

practices, markets claims etc. In an economy.

A) Financial intermediary
B) Financial company
C) Financial system
D) None of these
2) Bonds, bearer debenture, government securities are the example for
A) Non marketable asset
B) Marketable asset
C) Primary asset
D) Secondary asset

3 Assets that can easily convert into cash__________

A) Cash asset

B) Stock asset
C) Debt asset
D) Primary asset
4 Market for short term funds usually for one year is called
A) Capital market
B) Money market
C) Primary market
D) Secondary market
5 -----------is a place where foreign moneys are bought and sold
A) Money market
B) Financial mortgage market
C) FOREX market
D) Capital market
6 Those persons who do not accept deposit form the public, but merely lend their own
funds
A) Bankers
B) Borrowers
C) Agents
D) Money lenders
7 FERA was passed by the Govt of India in
A) 1947
B) 1946
C) 1945
D) 1948
8 LAF ( liquidity adjustment facility) was introduced by RBI during
A) July 2000
B) April 1999
C) June 2001
D) July 2001
9 ------is the purchase of a security tied to an agreement to sell back later
A) Refinance
B) Reverse repo
C) Mortgage
C) Repo
D) LAF
10 Banking regulation act was passed in
A) 1939
B) 1949
C) 1945
D) 1935
11 To facilitate multiple rediscounting and reduce paper movements RBI introduce

A) DUPN
B) SUPN
C) CURN
D) DURN
12 ------is an amount borrowed or lent on demand for a very short period
A) Call money
B) Notice money
C) Both A&B
D) None of these
13 Short term debt instruments issued by the Government of India having 91 day, 182 day
and 364 day tenors are called.
A) Treasury bills
B) Government Bonds
C) Certificate of deposit
D) All of the above
14 Money market instruments consist of
A) CD’s
B) CP’s
C) MMMFS
D) All of these
15 In MMMFS stands for
A) Mutual Money Market Fund
B) Money Market Mutual Fund
C) Money Market Moving Fund
D) None of the above
16 The market for industrial securities is termed as
A) Long term loan market
B) Govt securities market
C) Money market
D) None of these
17 SEBI was established in
A) 4th April 1982
B) 4th April 1992
C) 4th June 1992
D) 4th June 1993

18 The markets which generally confined to the stock exchanges

A) Primary market
B) Secondary market
C) Tertiary market
C) All of these
19 Government securities also called
A) Industrial securities
B) Guilt edged securities
C) MM securities
D) Capital securities
20 Long term loan market includes
A) Term loan market
B) Mortgage market
C) Financial guarantee market
D) All of these
21 BSE’s online trading system is called
A) COLT
B) DOLT
C) BOLT
D) ROLT
22 ETF stands for
A) Exchange traded funds
B) Exchange traded facility
C) Exchange traded forms
D) Exchange traded finance.
 23 --------is an equity linked debt security
A) ADR
B) GDR
C) Euro issues
D) FCCB
24 Companies are permitted to issue a new class of shares named nonvoting shares as per

A) Sec 85 A
B) Sec 84 A
C) Sec 89 A
D) Sec 86 A
25 In 2001 SEBI guidelines mandated a minimum level of public holding at
----% for companies carrying out fresh IPO’s
A) 23%
B) 24%
C) 25%
D) 26%
26 --------pool resources from those who save and allocate them to various investment
opportunities

A) Mutual funds
B) LIC
C) Banks
D) RBI
27 A) a debenture is an acknowledgement of debt due by a company issued under a
common seal; B) bonus shares can be issued only out of free reserves built out of
revenue profit or share premium collected in cash

A) A is true B is false
B) A is false B is true
C) Both are true
D) Both are false
28 Process used by companies raising capital through IPO’s and FPO’s to aid price and
demand discovery
A) ESOP
B) Book building
C) Bonus issue
D) Euro issue
29 In the methods of marketing securities BOD stands for
A) Board of directors
B) Buy out deals
C) Bought out discount
D) Bought out deals
30 FDI stands for
A) Foreign Development Institution
B) Foreign Direct Investment
C) Financial Direct Investment
D) Foreign Development Investment
31 Indian companies are allowed to raise capital in the international market through the
issue of
A) ADR
B) GDR
C) ADR & GDR
D) None of these
32 ____bonds are denominated in a currency other than that of the country in which they
are issued

A) Drop lock bond

B) Euro bond
C) Straight debt bond
D) Convertible bond
33 -----is a dollar denominated form of equity ownership
A) ADR
B) GDR
C) SDR
D) USD
34 The apex authority of insurance industry
A) IBRD
B) IRDA
C) RBI
C) LIC
35 GIC has its registered office and head quarters in
A) Luck now
B) Mumbai
C) Chennai
D) Maharashtra
36 ------was founded in 1956 with the merger of 243 insurance companies and provident
societies

A) LIC
B) GIC
D) RBI
D) SBI
37 IRDA act was passed in
A) 1999
B) 2000
C) 2001
D) 2002
38 Identify public sector undertaking
A) United India insurance
C) HDFC life
D) ICICI prudential
D) Bharti Axa
39 General insurance include
A) Auto insurance
B) Life insurance
C) Both A& B
D) None of these
40 -----is a form of protection against possible risk
A) Banking
B) Factoring
C) Insurance
D) Investment
41 A) BSE was the first to offer screen based trading all over India B) NSE is the leading
and the oldest stock exchange in India as well as in Asia.

A) A is true B is false
B) B is true A is false
C) Both are true
D) Both are false
42 Stock exchange also referred as
A) Primary market
B) FOREX market
C) Secondary market
D) OTCEI
43 Identify one which is not the function of stock exchange
A) Safety of funds
B) Fair price determination
C) Provide ready market
D) None of the above
44 --------is a process through which any member-owned organisation becomes a
shareholder-owned company

A) Delisting
B) Demutualization
C) Recapitalization
D) Demembership
45 NSE indices includes
A) CNX MID CAP
B) CNX NIFTY JUNIOR
C) S&P CNX NIFTY
D) All of these
46 BSE index is also called
A) SENSEX
B) NIFTY
C) NASDAQ
D) None of these
47 ------is the first exchange for small companies
A) BSE
B) NSE
C) OTCEI
D) SEBI
48 Selling of a security that an investor does not own is called
A) Small selling
B) Short selling
C) Credit sale
D) None of these
49 RBI was established in
A) 1945
B) 1935
C) 1955
D) 1949
50 --------refers to a fixed number of units of the underlying asset that form part of a single
F&O contract

A) Forward
B) Lot size
C) Lottery
D) Future
51 At present India have two depositories namely
A) NDSL & CSDL
B) NSDL & CDSL
C) SDNL & SDCL
D) DLNS & SLCD
52 NASDAQ is
A) An American stock exchange
B) An Australian stock exchange
C) An Indian stock exchange
D) Not a stock exchange
53 Group of speculators buy the securities and they will buy and sell securities themselves
to push up the prices is termed as

A) Price rigging
B) Insider trading
C) Fair dealing
D) Price speculation
54 ---------- is a receipt for a deposit of money with a bank or a financial institution

A) CD’S
B) CP’S
C) TB’S
D) PC’S
55 ---- is a short term usance promissory note with fixed maturity.
A) CD’S
B) CP’S
C) TB’S
D) PC’S
56 -----are instrument of short term borrowing by the govt of India, issued as promissory
notes under discount

A) CD’S
B) CP’S
C) TB’S
D) PC’S
57 Debentures can be issued
A) at par
B) at premium
C) at discount
D) All of these
58 Failure of the opposite party to deliver the promised security
A) Interest rate risk
B) Default risk
C) Counter party risk
D) Price risk
59 Securities and exchange board of India issue and listing of debt securities amendment
regulations act was passed in

A) 2012
B) 2013
C) 2014
D) 2015
60 Percentage rate of return paid on a stock in the form of dividends is called

A) Profit
B) Yield
C) Reserve
D) Premium
61 Income tax act was enacted in
A) 1861
B) 1961
C) 1971
D) 1981
62 IBRD is also known as
A) Reserve bank
B) Scheduled bank
C) Central bank
D) World bank
63 Expand NABARD
A) National bank for agriculture and resource development
B) National bank for agriculture and reconstruction and development
C) National bank for agriculture and rural development
D) Nationalized bank for agriculture and rural development
64 Identify one which is not the segment in the debt market
A) Primary market
B) Capital market
C) Secondary debt market
D) Wholesale debt market segment.
65 ---------bond is bought at a price below face value
A) Coupon bond
B) Floating rate bond
C) Zero coupon bond
D) PSU bond
66 Term lending institution include
A) IDBI
B) NABARD
C) EXIM BANK
D) HUDCO
67 SFC is created under an act in the year
A) 1959
B) 1951
C) 1962
D) 1954
68 ------ is an apex banking institution in the field of long term industrial finance

A) NABARD
B) IDBI
C) IFCI
D) SIDBI
69 IDBI was converted in to banking company in
A) 1995
B) 2005
C) 2002
D) 2004
70 IDBI subsidiaries does not include
A) ICMS
B) IAML
C) IMTCL
D) IFCI
71 IFCI stands for
A) Industrial finance corporation of India
B) Industrial financial company of India
C) Investment finance corporation of India
D) Investment financial company of India
72 The authorised share capital of IFCI is Rs
A) 500 crore
B) 400 crore
C) 300 crore
D) 250 crore
73 A) NABARD is an apex development bank for agriculture and rural development B)
NABARD has to perform dual function, the function of rbi and the function of ARDC

A) Both are true

B) Both are false
C) A is true B is false
D) A is false B is true
74 For digitalization of SHG (self help groups) NABARD introduce
A) E SEVA
B) E SHAKTI
C) E GOVERN
D) E KISAN
75 Kisan credit card is issued by
A) RBI
B) IDBI
C) NABARD
D) SIDBI
76 ------ is the subsidiary of IDBI was setup under a separate act of parliament on 2nd April
1990
A) IFCI
B) SIDBI
C) HUDCO
D) HDFC
77 MUDRA bank was announced in the year
A) 2014
B) 2015
C) 2018
D) 2017
78 MUDRA ltd has been set up as a subsidiary of
A) IDBI
B) IFCI
C) SIDBI
D) NABARD
79 A bank that offers service to general public and to companies is called
A. Reserve Bank
B. Commercial bank
C. Savings bank
D. All of these
80 The board of directors of EXIM bank includes
A) ECGC
B) Public sector banks
C) RBI
D) All of these
81 The main purpose of ----------was to prevent and cure the problems of industrial
sickness

A) IDBI
B) IRBI
C) IRCI
D) IIBI
82 NHB (national housing bank) established under the recommendation of the committee
headed by

A) Dr. Raguram rajan

B) Dr. Narasimha rao
C) Dr. Rangarajan
D) D. Subbarao
83 In factoring, business sells its accounts receivable to a third party at a
A) Discount
B) Profit
C) Premium
D) None of these
84 All SFC’S is depends upon the rules and regulations of
A) State Govt
B) WTO
C) IDBI
D) Central Govt
85 The first SFC was established in
A) Gujarat
B) Punjab
C) Haryana
D) Uttar pradesh
86 ---------Is financing that investors provide to startup companies that are believed to have
long term growth potential
A) Debentures
B) Venture capital
C) Equity share capital
D) Preference share capital
87 -------was incorporated under SFC act 1951
A) KFC
B) SFC
C) IDFC
D) UTI
88 The head quarters of KFC is situated at
A) Malappuram
B) Calicut
C) Thiruvanathapuram
D) Ernakulum
89 The UTI was setup under an act of parliament in
A) 1962
B) 1961
C) 1963
D) 1965
90 Advantages of mutual funds include
A) Liquidity
B) Safety
C) The diversification penalty
D) A & B
91 -----is one that is available for subscription all through the year
A) Open ended funds
B) Close ended funds
C) Stock fund
D) Bond fund
92 --------- invest in shorter securities such as treasury bills
A) Bond fund
B) Money market funds
C) Stock fund
D) Equity funds
93 Commercial paper does not includes
A) Direct papers
B) Medium term note
C) Master note
D) Participation certificate
94 The main source of guarantee in India are
A) Personal guarantee
B) Govt guarantee
C) Institutional guarantee
D) All of these
95 Features of money market does not include
A) Security price formation
B) Presence of bills market
C) Ample supply of funds
D) Existence of central bank
96 An individual or private firm receiving deposits and dealing in Hundies or lending
money is called

A) Money lenders
B) Indigenous bankers
C) Organized bankers
D) All of these
97 ---------is the bankers’ bank in India
A) Commercial bank
B) RBI
C) World bank
D) IMF
98 Every scheduled bank is required to maintain a fixed percent of their time and demand
deposit as
A) SLR
B) Bank rate
C) CRR
D) REPO
99 If a company issues additional securities, first it is offered to existing share holders, it
is known as

A) Preferential right
B) Right issue
C) Private placement
D) Underwriting
100 Methods of floating capital from the primary markets are
A) IPO
B) Public issue
C) New fund offer
D) All the above
 ANSWER KEY

1C 26A 51B 76B

2B 27C 52A 77B

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