Objective Financial Management

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1.Multiple Choice Questions 1 Assets Management company is formed (a) To manage bank's assets,(b)) To manage mutual funds investments,(c)) To construct infrastructure projects (d) To run a stock exchange 2. Prime duty of a merchant banker is (a) Maintaining records of clients, (b) Giving loans to clients,(c) Working as a Capital Market Intermediary (d)None of the above 3. Basic objective of a money market mutual fund is (a) Guaranteed rate of return,(b) Investment in short-term securities,(c)Bot
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  1.Multiple Choice Questions 1 Assets Management company is formed(a) To manage bank's assets,(b)) To manage mutual fundsinvestments,(c)) To construct infrastructure projects(d) To run a stock exchange2. Prime duty of a merchant banker is(a) Maintaining records of clients, (b) Giving loans to clients,(c)Working as a Capital Market Intermediary(d)None of the above3. Basic objective of a money market mutual fund is(a) Guaranteed rate of return,(b) Investment in short-termsecurities,(c)Both (a) and (b),(d) None of (a) and (b)4. Short selling refers to(a) Buying shares and then selling them on the same day,(b)Selling shares without owning them,(c) Selling some shares outof a large holding,(d) Continuously selling shares in lots.5. Which of the following is not regulated by SEBI?(a) Foreign Institutional Investors,(b) Foreign Direct Investment,(c) Mutual Funds,(d) Depositories6. Which of the following is true for mutual funds in India?(a)Exit load is not allowed,(b)Entry load is allowed,(c)Entry loadis not allowed,(d)Exit load allowed is some cases7. Which of the following is not available in India?(a)Index Options,(b)Index Futures,(c)Commodity Options,(d)Commodity Futures8. Which of the following is the benefit of Depositories? a)Reduction in the share transfer time to the buyer,(b) Reduced Risk of stolen, fake, forged shares, (c) No Stampduty on transfer of shares in dematerialized form(d) All of the above9. Credit Rating of a debt security is (a)Guarantee of Repayment,(b)Merely opinion,(c)Positive suggestion ,(d)None of the above  10. The first computerised online stock exchange in India was(a)NSE,(b)OTCEI,(c)BSE,(d)MCX11. Which of the following is working as demutualized stockexchange since from beginning?(a)NSE,(b)BSE,(c)DSE,(d)All of the above12. Which of the following derivative is not traded on IndianStock Market?(a)Index Options,(b)Stock Futures,(c)Index Futures,(d)ForwardRate Agreements13. How many depositories are there in India? (a)2,(b)3,(c)0,(d)114. The amount in unpaid dividend accounts of companies shallbe transferred to the(a)Dividend Equalisation Reserve of the company,(b)InvestorEducation and Protection fund,(c) Investor Protection Fund,(d)General Revenue Account of the Central Government15. Secondary Market in India is regulated by(a)Reserve Bank of India,(b)Securities and Exchange Board of India,(c)Ministry of Finance,(d) Forward Market Commission16. …..funds do not have a fixed date of redemption.(a) Open ended funds,(b)Close ended funds,(c)Diversifiedfunds,(d) Both A and B.17. In India, NIFTY and SENSEX are calculated on the basis of (a) Market Capitalization, (b)Paid up Capital,(c) Free-floatCapitalization,(d) Authorized Share Capital [Answers 1. (b), 2. (c), 3. (b), 4. (b), 5. (b), 6. (d), 7. (c),8. (d), 9. (b), 10. (b), 11. (a), 12. (d), 13. (a), 14. (b), 15.(b), 16. (a), 17. (c)]2. State whether each of the following statement is True(T) or False (F) (i) SEBI has been constituted under the Securities (Contractsand Regulation) Act, 1956.  (ii) SEBI is constituted from amongst the directors of variousstock exchange.(iii) The purpose of issuing different types of Rules andRegulation by SEBI is to bring monetary gains to the investors.(iv) Government need not bother about the protection of theinvestors.(v) SEBI has issued various guidelines to educate investors.(vi) Mutual Fund is a pool of money belonging to variousinvestors.(vii) Money Market Mutual Funds are also traded at StockExchange.(viii) Every Mutual Fund has to calculate the NAV as per theprocedure given in the SEBI Guidelines.(ix) Options and Futures Contracts in India are settled oncalendar month basis.(x) In Green Shoe Option, the investors are allotted as manyshares as applied.(xi) Demutualisation refers to separation of trading andownership right of stock exchange.(xii) GSO is available only in case of issue of shares by bookbuilding process.(xiii) In Depository system, a shareholder is a beneficial owner.(xiv) Depository participant is an agent of an investor.(xv) In book-building process, the price of the security isannounced by the company.(xvi) Rolling Settlement is a system of settlement of accounts of brokers.  (xvii) Sensex is an index number of 50 shares.(xviii) NSE and BSE are the only stock exchanges in India.(xix) The oldest stock exchange in India is NSE.(xx) Futures and Options in shares are traded only at BSE andNSE. [Answer (i) F, (ii) F, (iii) F, (iv) F, (v) F, (vi) T, (vii) T,(viii) T, (ix) T, (x) F, (xi) T, (xii) T, (xiii)T, (xiv) F, (xv) F,(xvi) F, (xvii) F, (xviii) F, (xix) F, (xx) T]3. State whether each of the following statement is True(T) or s(F) (i) Capital market includes money market and foreign exchangemarket.(ii) Stock exchanges are a part of primary market segment.(iii) Securities are issued in the secondary market segment.(iv)SEBI is an association of stock exchanges in India.(v) Primary objectives of SEBI include Investors' Protection andRegulation of capital market in India.(vi) Badla system is prevailing in India.(vii) Book-building system cannot be used for issue of shares.(viii) Operations of stock exchanges are directly controlled byGovernment.(ix) National Stock Exchange has been established by SEBI.(x) OTCEI is a subsidiary of National Stock Exchange.(xi) At the Stock Exchange, Mumbai (BSE Ltd.) the trading inshares is made through out-cry system.
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