Capital Market

Capital Market

1. What was the percentage of public offering under the IPOs through the book building method? 25%Match the following:

Objective of audit committee = looks into defaults to depositors, creditors shareholders and debenture holdersReasons of failure of corporate governance in spite of norms = superficial commitment to vision, mission and valuesFunctions of chief executive, ED, Managers = assisting the board in decision making processShare holders = lack of profitability2. Describe some of the various types of mutual funds schemes offered: pure income schemes; tax saving schemes; preference shares schemes3. The buy back of shares by Indian corporates has been very successful in India. True4. How many companies are there to do business of credit rating? 45. What is the information to be placed before the board of directors as per the Kumarmangalam report? Annual operating plans; capital budgets; quarterly results6. The process of share buy back must be completed within what period from the date of passing the resolution? 12 months7. The NSE nifty index comprises of 50 companies.

8. SEBI has to create a proper atmosphere for raising money. The atmosphere consists of rules regulations, trade practices, customs and relations. True9. SEBI creates an environment which would facilitate mobilization of adequate resources through the securities market and its efficient allocation. True10. Mergers and amalgamations of companies are also covered under the SEBI regulations, 1997. False11. What are the requirements regarding promoters contribution and lock in? in case of IPO, promoters have to necessarily offer at least 20% of the post issue capital; in case of listed companies promoters shall participate either to an extent of 20% of proposed or post issue; in case of any issue of capital the minimum contribution shall be locked in for a period of 3 years12. To open a DP account, following things are required: proof of identity; proof of address; photograph13. As per RBI regulation, bank borrowing should not exceed how many times of the net owned funds? 4 times14. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property must be placed before the board of directors as per the recommendations of the Kumarmangalam Birla report. False15. Since when have the Indian Stock markets risen? Jun-0316. For an approval of HFC one of the norms is that the promoters contribution has to be minimum 25% of paid up capital.

17. The IPO size can exceed five times the pre-issue net worth of the company. False18. Which act defines the term Stock Exchange? Securities and Exchange Board of India19. It is the responsibility of the SEBI to ensure the timely returns and allotments of the securities.

20. What do you understand by capital markets? Market for long term funds and investments in long term instruments21. What conditions are to be followed in case of rollover of debentures without the change in interest rates? Option to redeem debentures; consent of rollovers22. What is the objective of a public announcement? Ensure that the shareholders of the target company are aware of the exit opportunity available to them23. Who takes risk at the time of investment? Investor24. What is the procedure for action in case of default? Suspension of the certificate; mutual fund/AMC cease to exist; RBI to take over the mutual fund25. The certificate of deposit is/are in the form of an usance promissory note payable after 45 days from the date of issue.

26. Final prospectus in the book building process is to be filed with the SEBI.27. What are the facilities offered by NSDL? Enable surrender and withdrawal of securities to and from the depository; maintain the investors holdings in an electronic form; effect settlement of securities traded on exchanges.28. What is the main objective of the promoting Discount and Finance House of India (DFHI)? To control inflation by mopping up the liquidity in the money market29. While structuring the deal the entrepreneur seeks alternate finance.30. AA rated companies can raise 2.5 times of its net worth.

31. In case of an IPO of any security of issue size of 1 Crore or more, security shall be issued only in a Demat form. 32. What is an offer letter? Document addressed to shareholders; containing disclosures of the acquirer/PAC target company; offer letter is addressed to the acquirer33. In February 2004, UTI sought permission of SEBI to prematurely close 7, 10 schemes.34. Mutual funds have to register with: SEBI35. The price is determined in an open offer by: negotiated price, price paid by acquirer, average weekly high low of closing share of the target company36. The companies that have eroded market capitalization by Rs.20,000 crores: infosys, satyam, wipro37. The eligibility norms for a listed company for making a public issue are: if the issue size is less than five per issue net worth, if the issue size is more than or equal to five times per issue net worth than the listed company to take book building route, 60% of issue size to be allotted to QIBs38. Acquirer cannot make an offer for less than 20% of the shares. True39. The turning point in the working of Indian capital markets: establishment of NSE40. The limit for aggregate investment of FIIs NRIs and OCBs: 30%41. Certain type of acquisitions as stipulated under the regulation 3 of chapter 1 of the regulations are specifically exempted from the open offer process. True42. The public cannot give their complaints or comments on the issuer company or others connected with the issue of SEBI. False43. As per SEBI regulations, PMS must not be involved in any connected with securities market.

44. The lease agreement provides for a transfer of ownership to the lessee either at the end of the period or during the period of lease. False45. AA rated companies can raise 2.5 times of its net worth.

46. The general obligations of mutual fund are: every AMC should maintain proper books of accounts, financial year for all schemes to end as on March 31 each year, every mutual fund shall have the annual statements audited by auditor47. The concept of corporate governance evolved: during the Watergate scandal48. Refinance cannot exceed net owned funds of Housing finance companies these many times. 5 times49. These HFCs are not eligible to draw further refinance: whose overdue of over 3 months exceed 5% of the aggregate demand of the year50. The process of securitization involve transfer of assets to a person specially created called as: special purpose vehicleMatch the following:

MS Verma Committee=Dual flotation

Hero Honda

=FY 2003 03 dividend Rs 187

VSNL


Castrol


51. Money market mutual funds are not permitted to invest in treasury bills and commercial paper. False52. The procedure for making an application to the takeover panel for seeking exemption is: acquirer to make an application in a standard format of SEBI53. The setting up of NSE consists of: Set up by SEBI, Equity paid up capital of Rs25 crores, started operations in June 199454. The limitations of refinance facility are: cannot exceed 5 times NOF, not to exceed 50% of total loan funds of HFCs, not to exceed 15% of NOF of NHB55. An offer letter is: document addressed to the shareholders, containing disclosures of the acquirer / PAC target company, offer price56. The system of rolling settlement followed in India is: transaction + 257. As per the recommendations of the Kumarmangalam Birla committee report the key components of an audit committee are: board, internal auditor, external auditor58. Takeover means: acquirer takes over the control of the target company59. No mutual fund shall invest more than 10% of its NAV in equity shares. False60. Credit rating is: An isolated function of credit risk evaluation61. The IPO size can exceed five times the pre-issue net worth of the company. False62. The eligibility norms for an unlisted company for making a public issue are: pre issue net worth not less than 1 crores in the last 3 years, track record of distributable profits for at least 3 years, issue size shall not exceed five times of its per issue net worth

63. The merchant bankers should act as Custodian of the investors money and put a lot of responsibility on them.

64. During the budget 2003-04, finance minister made some announcements which he hopes will make investors think in terms of returning to stock market: no capital gains tax on investment made in equity after 1/3/03 held for 1 year, removal of income tax on dividends in the hands of receiver65. Information technology, communication and entertainment represent ICE stocks.

66. An offer can be withdrawn when: statutory approvals refused, sole acquirer being person died, circumstances as in opinion of board67. RBI has permitted all commercial banks, financial institutions and large corporates to issue certificate of deposits. False68. Mortgage backed securitization is: securitization dealing with backing of assets69. Constant change would be one of the reasons for failure of corporate governance. True70. The person who change the composition of securities: fund manager71. The ESOPs are: one of the methods of giving part ownership of the company to the employees, employees can take part in the prosperity of the company, is a reward and linked with the increase in the prices of the shares

Match the following:

Objective of audit committee

=look into defaults to depositors

Reasons of failures of corporate governance in =superficial commitment to vision,

Spite of norms

Functions of chief executive, ED, Managers

=assisting the board in decision

Shareholders

=should effectively participate in

72. In case of a public issue by a listed company, participation by promoters in the proposed issues in excess of the required minimum percentage shall also be looked in for a period of 1 year.

73. The maximum percentage of regular expenses of the assets of a scheme is: 3%74. The person who is responsible to get the securities listed on all the stock exchanges: Merchant banker75. With the introduction of DEMAT accounts the complaints about allotments have surely gone down.

76. The most important objective for an investor is: Protection of the value of the investment77. The falling interest rates on bank deposits and bonds have forced many investors to look at stock market. True78. Of the net tangible assets the percentage of assets that should be held in monetary assets for a company to make an IPO is: 50%79. How are the stages in the process of book building broadly into? Syndicate formation, issue process, IPO80. Dematerialized shares have distinctive numbers. False81. What are the major factors influencing portfolio decisions? Investor characteristics, liquidity needs and tax considerations, investment and interest rate risk

82. Certain type of acquisitions as stipulated under the regulation 3 of chapter 1 of the regulations are specifically exempted from the open offer process. True83. When one decides to have the shares in an electronic form, one has to approach the DP.

84. What percentage of funds should be invested in unlisted companies? 74%85. What must be the quality of a good portfolio manager? Sound general knowledge, analytical ability and marketing skills, experienceMatch the following:

Dutch Auction

=Price of the buy back is done by

Open market purchases

=no minimum price stipulation

Companies holding more than 90% equity=can be delisted

Share buy back is a way of

=returning surplus cash to the

86. How many companies are there to do business of credit rating? 487. Final prospectus in the book building process is to be filed with the ROC.

88. An acquirer who holds 15% or more but less than 75% of voting rights can acquire such additional shares as would entitle him to exercise more than 5% of voting rights in an financial year.

89. When did the concept of corporate governance evolve? During the Watergate scandal90. What should be done if the address of an investor changes? Inform DP and update records, inform different companies91. Who suffered heavy losses during the bad times of the stock markets? Small investors92. Acquisition finance, which provide funding for acquiring another company are often closely held or fairly owned. True93. SEBI cannot investigate the affairs of mutual funds and their trustees and asset management companies. False94. SENSEX is calculated using market capitalization method.

95. What conditions are to be followed in case of rollover of debentures without the change in interest rates? Option to redeem debentures, consent of rollovers, fresh credit rating96. ISIN is an unique identification number for security. True97. An acquirer who holds 75% shares or voting rights of a target company can acquire further shares only after making PA to acquire at least additional 20% of the target company from the shareholders through an open offer.

98. Mutual funds can do investments in any security by way of private placement by an associate or group company of the sponsor. False99. Sweat equity shares are shares issued by a company to employees or directors at a discount. True100. Switching of acceptance between different offers is not possible. FalseMatch the following:

Overall economic conditions=factor for obtaining value of a firm

Minimization of taxes

=investors ensures at the time of

Rs 25,200

=SEBI application fee

First stage financing

=provided to expand initial capital

101. What are the requirements regarding promoters contribution and lock in?: in case of IPO, promoters have to necessarily offer at least 20% of the post issue capital; in case of listed company promoters shall participate either to an extent of 20% of proposed or post issue; in case of an issue of capital the minimum contribution shall be locked in for a period of 3 years

102. What information is required to be furnished to stock exchanges in compliance of SEBI regulations 1997?: Details of proposed acquisition need to be filled with stock exchanges at least four days before the date; any person holding more than 15% but less than 75% voting rights shall be disclosed within two days; annual disclosures

103. What is the main advantage of a rolling settlement? Quicker payments104. If the unlisted company does not satisfy the criteria of net worth profitability and issue size how can it come out with a public issue? Through book building process105. No mutual fund under all its schemes should own more than 10% of any companys paid up capital carrying voting rights.

106. Among the closed schemes, four long term assurance schemes were launched with a return ranging between 13 - 14%.

107. Who is required to make a public announcement? Acquirer108. While structuring the deal the entrepreneur seeks voting control.

109. A trusted deed has to be executed for rollover of debentures without changing interest rates.

110. What are the different kinds of stock exchanges in India? Voluntary non profit making organizations, joint stock companies limited by shares, joint stock companies limited by a guarantee

111. In case of an IPO of any security of issue size of 10 crores or more, security shall be issued only in a demat form.

112. The Money Market Mutual Funds (MMMFs) can invest the funds in which of these securities? Call/notice money113. A manufacturing company whose issue and project have been appraised by a public financial institution or a bank and has also participated in its funding may get its shares listed on the stock exchange. True114. What are the SEBI guidelines for issue of debt instruments? Credit rating, maturity more than 18 months, appoint debenture trustee, debenture redemption reserve to be created

115. How much should be the minimum net worth of an AMC? Not less than 10 crores116. What are the factors that determine the value of a firm? Overall economic condition; demand and supply capital; degree of popularity of the industry

117. The main features of commercial paper are: short term financial instrument; negotiable and transferable instrument; companies issue it for raising short term debt

Match the following:

Factors influencing portfolio decisions=business and market risks

Code of conduct- portfolio manager=observe high standard of

SEBI regulations

=portfolio manager must fulfil the

Portfolio

=collection of assets

118. The capital adequacy ratio for NBFCs has been fixed at: 12%119. A Escrow account is created for the purpose of distributing receivables to the investors on the securitization deal.

120. BSE introduced an equity stock index known as SENSEX.

121. An option is: a contract which gives the buyer the right to buy, sell specified quantity of underlying assets at a specific price on or before the specified time.

122. The features of mutual fund are: a trust that pools in savings and funds from large number of investors who have common financial goal; issue units to investor which represent right in assets; investments in mutual funds many be in the form of stock, bond, money market securities

123. To make a public announcement the acquirer has to appoint: merchant banker124. A rolling settlement is one in which: trades outstanding at the end of the day have to be settled125. To open a DP account, following things are required: proof of identity; proof of address; photograph126. The main objective of credit appraisal is to: assess the repayment capacity; assess the borrowing capacity; assess the installment being paid

127. The right to buy is called call option.

128. The benefits of availing depository services are: no stamp duty; reduction in paperless work; reduction in transaction cost

129. In the book building process pricing is determined on the basis of investor feedback.

130. The refinance made available to any HFC is not to be more than: 60% of its outstanding housing loans131. A rated company can raise deposit worth these may times its net worth: 2 times132. The banks are flushed with funds due to less credit off take. True133. Under employee stock purchase scheme the share can be allotted without any waiting period. True134. Reporting is mandatory under regulation 3(4) in respect of acquisitions arising out of firm allotment in public misuses right issues inter-se transfer etc.: True135. The procedure for action in case of default is: suspension of the certificate; mutual fund / AMC cease to exist; subject to the directions of the board with regard to records

136. The percentage that RBI has permitted the banks to invest in the capital market. 5%137. The NSE Nifty Index comprises of 50 companies.

138. Sweat equity means: equity shares issued by the company to the employee; equity issued to directors at a discount; equity issued to students

139. The time frame to submit a report to SEBI for acquisition transactions arising out of firm allotment in public issues, right issues etc. 21 days140. Companies are not allowed to buy back securities: through any/ own subsidiary company; through any/ group of investment company; if default subsists in respect of repayments of deposits, term loans to any financial institutions and redemption of preference shares or debentures

141. SEBI has recently allowed book building upto an extent of: 100%142. A mutual fund shall not invest more than 10% of its NAV in equity shares in cases of open ended schemes. True143. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt by a single issuer.

144. As per RBI regulation, bank borrowings should not exceed these many times of the net owned funds. 5 times145. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property must be placed before the board of directors as per the recommendations of the Kumarmangalam Birla report. True146. An AMC fees has to be borne by: the individual schemes147. The individual investor can use the book building facility for making an application. True148. The mutual funds issue: Units149. The portfolio manager has to place the funds of all their clients in a separate account to be maintained by them with: Scheduled Commercial Bank.

150. ISIN is a unique identification number for security. True151. The reason for not introducing

152. SEBI has taken an action to ban on Badla. True

1. Which Act defines the term Stock Exchange?Securities Contract Regulation Act

2. What are the preconditions for trading on the net?A net connection , A registered account with a broker and a demat account , Bank payment gateway or online banking facility

3. What do you understand by capital markets ?Market for long term funds and investments in long term instruments

4. Sweat equity shares are shares issued by company to employees or directors to discount. True

5. Money market mutual funds are not permitted to invest in treasury bills and commercial paper. False

6. Under various SEBI regulations how many brokers suspended?8

7. Describe the regulatory aspects of mutual funds :-The Asset management company shall not launch any scheme till approval of trustees and offer document has been filed with the board , With each offer document pay filing fees , Offer document to contain disclosures

8. Who forms the Asset management company (AMC)?Group of trustees

9. The portfolio manager has to place the funds of all their clients in a separate account to be maintained by them with ________.Scheduled Commercial Bank

10. What is the amount invested by the FII's in the Indian Capital market?US$14 bn

11. Under which regulation is reporting mandatory in respect of acquisitions arising out of firm allot meant in public issues and rights issues etc?Regulation (3) 4

12. Book building is a process whereby the price is determined on the basis of actual demand as evident from the offers given by the various institutional investors and underwriters.True

13. The Money market mutual funds (MMMFs) can invest the funds in which of these securities?

14. Call/notice money

15. What is the information to be placed before the board of directors as per the Kumarmangalam report? Annual operating plans , Capital budgets , Quarterly results

16. Bidder cannot revise his bids.False

17. What are ESOP's ?One of the methods of giving part ownership of the company to the employees , Employees can take part in the prosperity of the company , Is a reward and linked with the increase in the prices of the shares

Match The Following

Shareholders

= Should effectively participate in general body meetings

Objective of Audit committee = Look into defaults to depositors creditors shareholders and debenture holders

Reasons of failures of corporate governance in spite of norms = Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers = Assisting the board in decision making process

1. How does SEBI react to the Scams in participatory notes issuance?Tighten FII regulations , Ensure participatory notes not misused by NRI , OCB controlled by Indians promoters

2. While structuring the deal the entrepreneur seeks ________.Voting control

3. DRR is treated as part of general reserve for consideration of bonus issue of proposals.True

4. What must be the quality of a good portfolio manager?Sound General knowledge , Analytical ability and marketing skills , Experience

5. What precautions are to be taken with respect to delivery instruction slip?

DIS numbers are pre printed , Account number to be stamped , Investor should fill in target account id

6. Reliance group has added over 10000 crores in market capital.True

7. An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such additional shares as would entitle him to exercise more than ________ of voting rights in an financial year.0.05

8. ________ is an international credit rating company.FITSCH

9. The appointment of a ________ is mandatory in a offer process.Merchant Banker

10. What is the eligibility norm for an unlisted company for making an public issue as regards to its net worth?Net worth of the company should not be less than 1 crore


12. To make a public announcement the acquirer has to appoint :-Merchant Banker

13. What is a more contemporary definition of corporate governance?Corporate Governance is all about promoting corporate fairness, transparency and accountability

14. What information is required to be furnished to stock exchanges in compliance of SEBI regulations 1997 ?Details of proposed acquisition need to be filed with Stock exchanges at least 4 days before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with 2 days , Annual disclosures

15. Which company was responsible for spreading the equity culture in India ?Reliance Industries

16. The merger of GTB and UTI was called off due to intervention of ________SEBI and RBI

17. The Merchant banker will incorporate in the letter of offer the comments made by SEBI and then send within ________ days from the date of PA to all shareholders whose names appear in the register of the company.45

18. When can an offer be withdrawn?Statutory approvals refused , Sole acquirer being person died , Circumstances as in opinion of board

19. The public cannot give their complaints or comments on the issuer company or others connected with the issue to SEBI.False

20. SEBI has taken an action to ban on Badla.True

21. The benefits of availing depository services are :-No stamp duty , Reduction in paperless work , Reduction in transaction cost

22. What are the facilities offered by NSDL?Enable surrender and withdrawal of securities to and from the depository , Maintain the investor's holdings in an electronic form , Effect settlement of securities traded on exchanges

23. RBI has permitted all commercial banks, financial institutions and large corporates to issue certificate of deposits.False

24. Directors should not be member of more than________ committees.10

25. What was the turning point in the working of Indian capital markets?Establishment of NSE

26. Under section 11 B of SEBI act how many issuers were debarred?1

27. A portfolio manager need not necessarily sell or purchase securities separately for each client.

28. False

29. A portfolio manager has to assure a guaranteed return to his client.False

30. What is a call option?Right to buy

31. For an approval of HFC one of the norms is that the promoter's contribution has to be minimum

32. ________ of paid up capital.0.3


34. What is the time frame stipulated by SEBI for members intending to avail of the buy back

35. offer?Minimum 15 days and not exceeding 30 days


37. What is government's move towards Stock Exchanges ?Demutulisation

38. What is the main objective of credit appraisal ?

Assess the repayment capacity

39. What are the norms for Approval of Housing finance companies by NHB?Minimum paid up capital 1 crore , At least 2 directors , Any appointment of auditors

40. A bidder can request for a transaction registration slip as the proof of his having entered the

41. bid.True

42. What are the major factors influencing portfolio decisions?Investment and interest rate risk , Investor characteristics , Liquidity needs and tax considerations

43. Acquisition finance, which provide funding for acquiring another company are often closely held or fairly owned.True

44. As per SEBI regulations, PMS must not be involved in any litigation connected with ________. Securities markets

45. In February 2004, UTI sought permission of SEBI to prematurely close ________ schemes.7

46. At the inception of the hire purchases transaction the finance company records the hire purchase installment receivable as current asset.True

47. The company intending to buy back their shares must open a ________ account as per SEBI

48. regulations.Escrow

Match The Following

Correct Answer Your Answer

Rs. 8000 crores= Current shortfall in UTI schemes

0.1 = Government decided to pay dividend

0.15 = MF cannot invest as percentage of NAV in debt instrument issued by single issuer

Annual statement of accounts of MF = To be audited by auditor

1. The right to buy is called ________.Call option

2. The buy back of shares by Indian corporates has been very successful in India.False

3. In order to dematerialize the securities one has to fill DRF.True

4. What are the SEBI guidelines for issue of debt instruments?Credit rating , Maturity more than 18 months appoint debenture trustee , Debenture redemption reserve to be created

5. Since when have the Indian Stock markets risen ?37775


7. The VCs to flourish requires a well developed ________.Capital market

Match The Following

Rematerialisation RRF

NSE Settlement cycle T + 3 Settlement

RBI

Gilt securities mobilization

Non corporate benefit Bonus

1. In 2001 a case of rigging and short selling based insider trading was noticed in the case of proposed merger of ________.UTI Bank with GTB

2. The benefits of availing depository services are :-Reduction in paperless work , Reduction in transaction cost , No stamp duty

3. For issues upto Rs. 50 crores the number of lead managers will not exceed ________.2

4. How is a share buy back a useful mechanism in preventing hostile takeovers?Share buyback reduces the floating stock in the market thereby reducing the scope for araider to acquire enough stock to gain management control.

5. To open a DP account, following things are required :-Proof of identity , Proof of address , Photograph

6. What is the objective of a credit information company?To ascertain the credit worthiness of individuals/organizations and make the data available to all banks


8. Mutual funds can do investments in any security issued by way of private placement by an associate or group company of the sponsor.False

9. Which company was responsible for spreading the equity culture in India ?Reliance Industries10. What information is required to be furnished to stock exchanges in compliance of SEBI regulations 1997 ?Details of proposed acquisition need to be filed with Stock exchanges at least 4 days before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with 2 days , Annual disclosures


12. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property must be placed before the board of directors as per the recommendations of the Kumarmangalam Birla report. True


14. Which acts were amended to remove some of the hurdles to corporatisation and demutualisation of stock exchanges?SCRA , Depository Act

15. What are the stages in the process of book building broadly divided into?Syndicate formation , Issue process

16. What are the eligibility norms for an unlisted company for making a public issue?Pre issue net worth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worth

17. What is the most common complaint of the investors?Non receipt of refund orders and allotment advise


19. What are the eligibility norms for a listed company for making a public issue?If the issue size is less than five times pre issue net worth , If the issue size is more than or equal to five times pre issue networth then the listed company to take book building route , 60% of issue size to be allotted to QIB's



22. What is the underwriter paid ?Commission


24. The acquirer is required to appoint a merchant banker before making a PA.True

25. Hire Purchase transactions are liable to ________.Sales tax



28. What is Discretionary Portfolio management service ?Client gives his money for investment to the portfolio manager and leaves it to him to make all the investment decisions.

29. Depositary facilitates transfers without having to handle money.

False


31. As per the reports and the letter of intent filed with SEBI, what amount is expected to be paid from the primary market during this year?15000 crores

32. The features of mutual Fund are :-A trust that pools in savings and funds from large number of investors who have common financial goal , Issue units to investor which represent right in assets , Investments in mutual funds may be in the form of stock, bond, money market securities

33. If the credit rating is obtained from two different agencies in case of issue of debt instruments, all the ratings need not be disclosed in the document.False

34. As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Securities markets

35. What qualities do the merchant bankers need to possess?Knowledge and information about various aspects of capital markets , Ability to evaluate and analyze , Update the knowledge

36. Describe the stock lending mechanism:-Involves two parties one who is willing to lend and other who wishes to borrow securities at market related rates , Lender is assured of getting equivalent the relevant securities by NSSCL on the settlement date , Lender gets benefit of reasonable return called lending fee

37. What are the limitations of refinance facility?Cannot exceed 5 times NOF , Not to exceed 50% of total Loan funds of HFC's , Not to exceed 15 % of NOF of NHB

38. The process of share buy back must be completed within what period from the date of passing the resolution?12 months

Match The Following

10 HDFC foreign currency deal Global investors pumping funds in India Specific Funds

0.57 FII current free float sensex company FII free float stock NIFTY companies

0.45 FII free float stock NIFTY companies FII's total free float sex and NIFTY

$ 476 mn Global investors pumping funds in India Specific Funds HDFC foreign currency deal

1. When did the trading in foreign currency options start in India?37809

2. What is the main objective of credit appraisal ?

Assess the repayment capacity

3. SEBI cannot investigate the affairs of mutual funds and their trustees and assetmanagement companies.False

4. In the L & T reliance case, Reliance was fined ________.Rs. 5 lacs

5. Recently many banks have started issuing ________ which could also be used as a debit card. ATM card

6. A ________ means any persons connected with a company and who is reasonably having access to unpublished price sensitive information.Insider

7. SENSEX is calculated using ________ method.Market capitalization

8. Match The Following

9. Correct Answer Your Answer

10. Share buy back is a way of Returning surplus cash to the shareholders Returning surplus cash to

11. the shareholders

12. Dutch Auction Price of the Buy back is done by the shareholders Price of the Buy back is done by

13. the shareholders

14. Open market purchases No minimum price stipulation No minimum price stipulation

15. Companies holding more than 90% equity Can be delisted Can be delisted



18. A portfolio manager need not necessarily sell or purchase securities separately for each client. False



21. What is the system of rolling settlement prevalent in the USA ?

+ 3

22. What is the most important objective for an investor?Protection of the value of the investment

23. The following are some of the regulations governing the NBFC's issued by RBI :-All the NBFC's must register with RBI , Without the registration certificate no company can undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits

24. What do you mean by venture capital?

Providing seed, start up capital and first stage financing


26. The continuing growth in ________ was one of the factors that contributed to the growth of credit rating. Information technology

27. In case of a public issue by a listed company participation by promoters in the proposed issues in excess of the required minimum percentage shall also be looked in for a period of ________.1 year


29. Describe E-trading :-Screen based trading in place of traditional ring , Communication through the net , Operate in stock market privately through home or office

30. The Kumarmangalam Birla report stressed on the importance of ________ with respect to AGM's. Proxy voting / ballot systems

31. The SEBI guidelines do not make it mandatory for the securities purchased under the buy back arrangement to be extinguished and physically destroyed.False



34. Describe in brief the SEBI regulations for venture capital funds :-VCF's must be registered , Cannot carry out another activity , Must disclose investment strategy

35. What is the minimum number of days for which the bid should remain open in book building?5 days

36. As per RBI regulation, bank borrowings should not exceed how many times of the net owned funds? 4 times

37. With the introduction of ________ accounts the complaints about allotment have surely gone down. DEMAT

38. Information technology, communication and entertainment represent ________ stocks.ICE



41. In case of an IPO of any security of issue size of Rs________ or more security shall be issued only in demat form.10 crores

42. What are the obligations of a company in a share buy back?The offer letter should contain true, factual and material information and should not be misleading. , The company must pay the consideration only by the way of cash , The company should not issue any fresh securities including bonus shares till the date of the closure of the offer.

43. The DP opens investor account in the system and gives an account number also known as ________. BO ID


45. What are the factors that determine the value of a firm?

Degree of popularity of the industry , Overall economic condition , Demand and supply capital

Match The Following

Portfolio

= Collection of assets

Factors influencing portfolio decisions = Business and Market risks

Code of conduct- Portfolio Manager = Observe high standard of integrity and fairness

SEBI Regulations

= Portfolio Manager must fulfill the capital adequacy norms

1. What are the major factors influencing portfolio decisions?Investor characteristics , Liquidity needs and tax considerations , Investment and interest rate risk

2. The refinance made available to any HFC is not to be more than :-60% of its outstanding housing loans

3. Information technology, communication and entertainment represent ________ stocks.ICE


5. The right to buy is called ________.Call option

6. What percentage of funds should be invested in unlisted companies?0.74

7. Who is responsible to get the securities listed on all the stock exchanges?Merchant banker

8. A mutual fund scheme shall not invest more than ________ of its NAV in unrated debt by a single issuer. 0.1


10. The depository can legally transfer beneficial ownership.True



13. Describe in brief the SEBI regulations for venture capital funds :-Must disclose investment strategy , VCF's must be registered , Cannot carry out another activity


15. When can the American style option exercised?On or before the expiry date


17. What is the estimated figure of credit card defaults in India?800 crores

18. Depositary facilitates transfers without having to handle money.False

19. AA rated companies can raise ________ of its net worth.2.5 times


21. What are the eligibility norms for an unlisted company for making a public issue?

22. Pre issue net worth not less than 1 crores in the last 3 years , Track record of distributable profits for at least 3 years , Issue size shall not exceed five times of its pre issue net worth

23. Markets have moved away from Badla system to ________ .Derivatives Trading

24. During the budget 2003 - 04, Finance Minister made some announcements which he hopes will make investors think in terms of returning to stock market :-No capital gains tax on investment made in equity after 1/3/03 held for 1 year , Removal of income tax on dividends in the hands of receiver

25. How many members are appointed by the central government?

2

26. Which acts were amended to remove some of the hurdles to corporatisation and demutualisation of stock exchanges?SCRA , Depository Act

Match The Following

Shareholders =Should effectively participate in general body meetings

Objective of Audit committee = Look into defaults to depositors creditors shareholders and debenture holders

Reasons of failures of corporate governance in spite of norms = Superficial commitment to vision, mission and values

Functions of Chief Executive, ED, Managers Assisting the board in decision making process = Decision making

1. Which companies have eroded market capitalization by Rs20 000 crores?Infosys , Satyam , Wipro

2. What does SEBI do with its power?Cancel certificate issued to custodian , Inspect books of DP , issuers or beneficiary owners , Investigate an acquirer

3. Amendment to SCRA will facilitate derivatives trading in interest rate futures and options if there is an underlying asset.True


5. What are the obligations of a company in a share buy back?The offer letter should contain true, factual and material information and should not be misleading. , The company must pay the consideration only by the way of cash, The Company should not issue any fresh securities including bonus shares till the date of the closure of the offer.



8. What are the factors that determine the value of a firm? Overall economic condition , Demand and supply capital , Degree of popularity of the industry

1. What are the major factors influencing portfolio decisions?Investor characteristics , Liquidity needs and tax considerations , Investment and interest rate risk

2. The refinance made available to any HFC is not to be more than :-60% of its outstanding housing loans



5. What is dematerialization ?Physical certificates converted into electronic from , Credited into investors account with his/ her DP

6. ________ is in the form of a usance promissory note payable after 45 days from the date of issue. Certificate of Deposit

7. Which company was responsible for spreading the equity culture in India?Reliance Industries


9. What is the amount of net worth accompany should have for opting for an IPO ?

1 Crore

10. The process of securitisation involves transfer of assets to a person specially created called as ________.Special purpose vehicle

11. A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of open ended schemes.True

12. What is a put option?Right to sell

13. Venture capital finance is risk finance for entrepreneurial growth oriented companies.True

14. Who can change the composition of securities?Fund manager

15. Employee stock option scheme granted to the employee is transferable.False

16. The following are some of the regulations governing the NBFC's issued by RBI :-Without the registration certificate no company can undertake activities of NBFC , All companies must be liquid assets equal to 15% of deposits , All the NBFC's must register with RBI



19. Deposits can be accepted for a maximum period of :-5 years



22. In the wake of boom of which sector the Indian mutual fund launched various sector specific schemes?Software


24. ________ are a kind of portfolio schemes.Mutual funds

25. What is equipment leasing ?Contractual agreement where the lessor of equipment transfers the right to use the equipment to the lessee

26. What are the factors that determine the value of a firm?

Overall economic condition , Demand and supply capital , Degree of popularity of the industry

27. Mergers and amalgamations of companies are also covered under the SEBI regulations 1997. False

28. No mutual fund under all its schemes should own more than ________ of any company's paid up capital carrying voting rights.0.1


30. Describe E-trading :-Screen based trading in place of traditional ring ,

31. Communication through the net , Operate in stock market privately through home or office

32. If the unlisted company does not satisfy the criteria of net worth profitability and issue size how can it come out with a public issue?Through book building process

33. Which is the favorite destination for venture funds?BPO

34. Who issues participatory notes?Associates of India based foreign brokerages , Domestic institutional brokerages

35. For a VCF to be registered with SEBI what is the registration fee ?5 lacs

Match The Following

Correct Answer Your Answer

Ready forward transaction (Repo) = Interbank sale and repurchase of securities

Commercial paper

= Means of raising short term debt by companies

STCI

= Operations in call money markets

Market stabilsation

= Bonds Launched in fiscal 2004-05




4. What is the limit for aggregate investment of FII's NRI's and OCB's?0.3



7. The acquirer is required to make the PA within ________ working days of entering into an agreement to acquire shares or deciding to acquire share's voting rights of target company.4

8. What is the objective of public announcement?

Ensure that the shareholders of the target company are aware of the exit opportunity available to them



11. Who can change the composition of securities?Fund manager

12. Employee stock option scheme granted to the employee is transferable.False




16. Deposits can be accepted for a maximum period of :-5 years



19. In the wake of boom of which sector the Indian mutual fund launched various sector specific schemes?Software



22. What is equipment leasing ?Contractual agreement where the lessor of equipment transfers the right to use the equipment to the lessee

23. What are the factors that determine the value of a firm?Overall economic condition , Demand and supply capital , Degree of popularity of the industry

24. Mergers and amalgamations of companies are also covered under the SEBI regulations 1997.

25. Correct Answer False


27. Constant change would be one of the reasons for failure of corporate governance.True

28. In case of an IPO of any security of issue size of Rs________ or more security shall be issued only in demat form.10 crores

29. The company opting for an IPO should have net worth of at least Rs. 1 crore in each of the preceding two years.True






35. What is dematerialization?Credited into investors account with his/ her DP , Physical certificates converted into electronic from

36. No mutual fund under all its schemes should own more than ________ of any company's paid up capital carrying voting rights.0.1



39. If the unlisted company does not satisfy the criteria of net worth profitability and issue size how can it come out with a public issue?Through book building process

40. Which is the favorite destination for venture funds?BPO

41. Who issues participatory notes?Associates of India based foreign brokerages , Domestic institutional brokerages

42. For a VCF to be registered with SEBI what is the registration fee ?5 lacs

43. Match The Following

44. Correct Answer Your Answer

45. Ready forward transaction (Repo) Interbank sale and repurchase of securities

46. Interbank sale and repurchase of securities

47. Commercial paper Means of raising short term debt by companies Means of

48. raising short term debt by companies

49. STCI Operations in call money markets Operations in call money markets

50. Market stabilsation Bonds Launched in fiscal 2004-05 Launched in fiscal 2004-05





55. What is the limit for aggregate investment of FII's NRI's and OCB's?0.3



58. The acquirer is required to make the PA within ________ working days of entering into an agreement to acquire shares or deciding to acquire share's voting rights of target company.4

59. What is the objective of public announcement?

Ensure that the shareholders of the target company are aware of the exit opportunity available to them




63. When one decides to have the shares in an electronic form one has to approach ________.DP


65. When one decides to have the shares in an electronic form one has to approach ________.DP




69. Sweat equity shares are shares issued by company to employees or directors to discount. True70. Money market mutual funds are not permitted to invest in treasury bills and commercial paper. False



Match The Following

Charge card

= Form of plastic money

Warning Bulletin = Authenticity test

Credit information company = SBI, HDFC bank

Credit card issuing company = Visa/Master Card




4. Under which regulation is reporting mandatory in respect of acquisitions arising out of firm allot meant in public issues and rights issues etc? (3) 4


6. The Money market mutual funds (MMMFs) can invest the funds in which of these securities? Call/notice money

7. What is the information to be placed before the board of directors as per the Kumarmangalam report? Annual operating plans , Capital budgets , Quarterly results


9. What are ESOPs?One of the methods of giving part ownership of the company to the employees , Employees can take part in the prosperity of the company , Is a reward and linked with the increase in the prices of the shares



3. DRR is treated as part of general reserve for consideration of bonus issue of proposals.True


5. What precautions are to be taken with respect to delivery instruction slip ?DIS numbers are pre printed , Account number to be stamped , Investor should fill in target account id


7. An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such additional shares as would entitle him to exercise more than ________ of voting rights in an financial year. 0.05







14. What information is required to be furnished to stock exchanges in compliance of SEBI regulations 1997? Details of proposed acquisition need to be filed with Stock exchanges at least 4 days before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with 2 days , Annual disclosures

















31. Sweat equity shares are shares issued by company to employees or directors to discount. True



34. Describe the regulatory aspects of mutual funds :- Answer The Asset management company shall not launch any scheme till approval of trustees and offer document has been filed with the board , With each offer document pay filing fees , Offer document to contain disclosures




4. Under which regulation is reporting mandatory in respect of acquisitions arising out of firm allot meant in public issues and rights issues etc?Regulation (3) 4


6. The Money market mutual funds (MMMFs) can invest the funds in which of these securities? Call/notice money


8. What are ESOPs? One of the methods of giving part ownership of the company to the employees , Employees can take part in the prosperity of the company , Is a reward and linked with the increase in the prices of the shares



3. DRR is treated as part of general reserve for consideration of bonus issue of proposals. True


5. What precautions are to be taken with respect to delivery instruction slip ?DIS numbers are pre printed , Account number to be stamped , Investor should fill in target account id


7. An acquirer who holds 15% or more but less than 75% of voting' rights can acquire such additional shares as would entitle him to exercise more than ________ of voting rights in an financial year. 0.05







14. What information is required to be furnished to stock exchanges in compliance of SEBI regulations 1997 ?

Details of proposed acquisition need to be filed with Stock exchanges at least 4 days before the date , Any person holding more than 15% but less than 75% voting rights shall be disclosed with 2 days , Annual disclosures













27. A portfolio manager need not necessarily sell or purchase securities separately for each client.

28. False








False





40. As per SEBI regulations, PMS must not be involved in any litigation connected with ________.Securities markets






46. What is the main objective of credit appraisal ?Assess the repayment capacity

47. SEBI cannot investigate the affairs of mutual funds and their trustees and asset management companies. False

48. In the L & T reliance case, Reliance was fined ________.Rs. 5 lacs

49. Recently many banks have started issuing ________ which could also be used as a debit card. ATM card

50. A ________ means any persons connected with a company and who is reasonably having access to unpublished price sensitive information.Insider

51. SENSEX is calculated using ________ method.Market capitalization






6. What is the system of rolling settlement prevalent in the USA ?Transaction + 3

7. What is the most important objective for an investor?Protection of the value of the investment


9. What do you mean by venture capital?

Providing seed, start up capital and first stage financing


11. The continuing growth in ________ was one of the factors that contributed to the growth of credit rating. Information technology

12. In case of a public issue by a listed company participation by promoters in the proposed issues in excess of the required minimum percentage shall also be looked in for a period of ________.1 year



15. The Kumarmangalam Birla report stressed on the importance of ________ with respect to AGM's. Proxy voting / ballot systems

16. The SEBI guidelines do not make it mandatory for the securities purchased under the buy back arrangement to be extinguished and physically destroyed.False




20. What is the minimum number of days for which the bid should remain open in book building?5 days


22. With the introduction of ________ accounts the complaints about allotment have surely gone down. DEMAT








False





34. As per SEBI regulations, PMS must not be involved in any litigation connected with ________. Securities markets





39. What was the objective of setting up the Securities Trading corporation of India Ltd?To promote secondary market in government securities

40. What are the salient features of Hire Purchase ?Finance company purchases the equipment supplier and lets it on hire , During the contract hirer can opt for an early repayment and purchase the asset , Hirer may be required to make down payment

41. A mutual fund shall not invest more than 10% of is NAV in equity shares in cases of open ended schemes.True


43. Who takes risk at the time of investment ?Investor

44. MIBOR is a security. Derivatives based on this interest rate have legal recognition under SCRA. False

45. It is the responsibility of the ________ to ensure the timely refunds and allotments of the securities. Lead managers

46. A credit card is a payment mechanism which enables the holder to buy goods and services on credit. True

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Capital Market