Financial Markets quiz

Treasury Bills are issued by:

The maturity period of call money is:

Commercial Paper is an:

SEBI was given statutory status in:

The secondary market is also known as:

Which of the following is a money market instrument?

The oldest stock exchange in Asia is:

Issue of shares to existing shareholders in proportion to their holdings is called:

Which of the following is a protective function of SEBI?

A financial market that helps in price discovery means that it:

How does a financial market provide liquidity? (2 marks)

What is a Certificate of Deposit? Who issues it? (2 marks)

What is a commercial bill? How is it discounted? (2 marks)

State two benefits of dematerialisation. (2 marks)

What is an e-IPO? (2 marks)

State two development functions of SEBI. (2 marks)

Why is the money market considered safe? (2 marks)

What is offer for sale? (2 marks)

Why is private placement cheaper than a public issue? (2 marks)

State two functions of a depository participant. (2 marks)

A 364-day Treasury Bill of face value Rs 1,00,000 is purchased at Rs 93,000. Calculate the discount and the yield as a percentage of the purchase price. (3 marks)

A bank borrows Rs 5 crore in the call money market for 7 days at a call rate of 6.5% per annum. Calculate the interest payable (take 365 days). (3 marks)

A company announced a rights issue in the ratio 2:5 at Rs 150 per share. An investor holds 500 shares. Calculate the rights shares and the amount payable. (3 marks)

A company plans to raise Rs 60 crore through an IPO at Rs 300 per share. Calculate the number of shares to be issued. If the issue is oversubscribed 4 times, calculate the total value of applications. (3 marks)

An investor bought 100 shares at Rs 800 and received a dividend of Rs 15 per share. He sold the shares at Rs 880. Calculate the total return and the percentage return on investment (ignore brokerage). (3 marks)

Read the passage and answer the questions. A large company with an excellent credit rating needs Rs 100 crore for three months to finance seasonal inventory. It issues unsecured promissory notes at a discount to mutual funds and banks. (i) Identify the instrument. (ii) State two features of it. (iii) Which market does it belong to? (5 marks)

Read the passage and answer the questions. An investor wants to buy shares of a listed company. He opens a demat account and a trading account with a broker, places an order online, and the shares are credited to his demat account after the settlement period. (i) Identify the market involved. (ii) Describe the trading procedure. (iii) Name the depositories in India. (5 marks)

Read the passage and answer the questions. SEBI barred a company's promoters from the market for using unpublished price-sensitive information to trade in the company's shares. It also prohibited misleading statements in prospectuses. (i) Identify the malpractice. (ii) Which function of SEBI is illustrated? (iii) State two other functions under this head. (5 marks)

Read the passage and answer the questions. A start-up issued shares worth Rs 50 crore to a few venture capital funds and institutional investors without approaching the public. It saved on underwriting and advertising costs. (i) Identify the method of floatation. (ii) State two advantages of this method. (iii) State one limitation. (5 marks)

Read the passage and answer the questions. A retired teacher wants a safe, short-term investment for six months. Her bank suggests a negotiable time deposit, while her friend suggests government securities issued at a discount. (i) Name the two instruments. (ii) Which one is issued by banks? (iii) Which is more liquid and safe? Explain. (5 marks)

Explain the instruments of the money market with their features. Draw a chart comparing them on maturity and issuer. (6 marks)

Explain the methods of floatation in the primary market. Draw a flowchart of the public issue process through a prospectus. (6 marks)

Explain the functions of a stock exchange and the trading procedure. Draw a flowchart of trading and settlement. (6 marks)

Explain the objectives and functions of SEBI. Draw a chart showing its regulatory, development and protective functions. (6 marks)

Distinguish between the capital market and the money market on six bases, and draw a chart classifying the financial markets. (6 marks)