| Q 1. | If a security is traded on ex-basis, this means that the buyer will not receive any benefits of the corporate action - State True or False ?
True
False
 CORRECT ANSWER  WRONG ANSWER
CORRECT ANSWER:True Explanation:
When a security is traded on cum basis, it means that it incorporates the benefit of the corporate action in its price. Once it goes ex-basis, the buyer no longer has the benefit of the corporate action.
For eg. If secutity ABC is traded on an Ex-Bonus basis from 1 December, than the buyers of this security from 1 December onwards will not receive the bonus shares. |
| Q 2. | ______ the open interest as a percentage of traded volume, the greater is the liquidity in the market
Larger
Lower
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:Larger Explanation:
Open interest is compared with the volume of trading in the derivatives market.The larger the open
interest as a percentage of traded volume, the greater is the liquidity in the market. An increase
in open interest is seen as an indicator of liquidity as it means fresh money is flowing into those
contracts. |
| Q 3. | Calculate the current yield of a bond whose face value is Rs. 100 and it pays 8% coupon. The current market price is Rs. 111.
7.2%
8.6%
11%
0.09%
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:7.2% Explanation:
Current yield simply compares the coupon of a bond with its market price.
Current yield = Coupon rate/ Market price
As per the given data -
Current yield = 8 / 111
= 0.072 (x 100 ) = 7.2 % |
| Q 4. | ________ regulates the money market segment in India and also is the manager of the Government's borrowings program.
Securities and Exchange Board of India (SEBI)
Reserve Bank of India (RBI)
State Bank of India (SBI)
Central Bank of India (CBI)
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:Reserve Bank of India (RBI) Explanation:
The Reserve Bank of India regulates the money market segment. As the manager of the government’s borrowing program, RBI is the issue manager for the government. It controls and regulates the government securities market. |
| Q 5. | Banks, Non-banking Finance Companies and Financial Institutions can issue which type of securities to raise capital ?
Securitized paper
Convertible bonds
Commercial paper
All of the above
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:All of the above Explanation:
Banks, Non-banking Finance Companies and Financial Institutions can issue Equity shares, Preference shares, Bonds, Convertible bonds, Securitized paper, Commercial paper and Certificates of deposit to raise capital. |
| Q 6. | SEBI regulations says that units should be allotted within ____ of the closing date of the Mutual Fund NFO (New Fund Offer) ?
5
7
10
14
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:5 Explanation:
As per SEBI regulations - Units should be allotted within 5 business days of the closing date of the NFO and on the transaction date for on-going funds, subject to rules regarding realisation of payments made by investors.
|
| Q 7. | The Net Asset Value (NAV) of a mutual fund scheme is Rs. 18 and the exit load is 2%. What will be the redemption price per unit ?
Rs. 17.64
Rs. 18.36
Rs. 18
Rs. 19.12
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:Rs. 17.64 Explanation:
Mutual funds may impose a charge on the investors at the time of exiting from a fund called the
exit load. It is calculated as a percentage of the NAV and reduced from the NAV to arrive at the price that the investor will get on exiting from the investment.
Redemption Price = NAV less Exit load
In the above question, NAV is Rs. 18 and the exit load is 2%.
2% of Rs. 18 is 0.36
So the Redemption Price is 18 - 0.36 = Rs. 17.64 |
| Q 8. | An investor who has a short-term financial need may choose to invest primarily in ______ .
Property for higher value
Gold for better appreciation
Equities for better return
Bonds for steady return
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:Bonds for steady return Explanation:
Bonds give regular returns in the form of interest.
Returns from Gold, Equity and Property are uncertain and investment in these is generally for long term. |
| Q 9. | In an initial public offer, the promoter’s contribution shall be not less than 15% of the post-issue capital of the company - State True or False ?
True
False
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:False Explanation:
Promoters must contribute at least 20% of the post-issue paid up capital of a company making a public issue and this is locked in for a period of 3 years. |
| Q 10. | People seek the services of financial planner for various reasons. Which of the below is/are such reason(s) ?
The investment products are complex and difficult to understand
There is lack of social security in India and life span has also increased
Plenty of investments and insurance products available
All of the above
CORRECT ANSWER WRONG ANSWER CORRECT ANSWER:All of the above Explanation:
Financial planning is done because there is need for retirement planning, difficult to understand investment products etc. |