B. COM. - SEMESTER-II- MCQs On Stock Exchange
B. COM. - SEMESTER-II- MCQs On Stock Exchange
Stock Exchange is a place where securities are traded (bought and sold) according to specific rules and regulations. These rules are formulated by regulatory bodies which oversee the trading activities in stock exchanges. The securities traded in stock markets are shares, debentures and corporate bonds. Public companies and government bodies issue these securities to investors through stock exchanges. The regulatory body in India for stock exchanges is known as the Securities Exchange Board of India (SEBI).
Following is a list of multiple-choice questions and answers on the stock exchange to help students understand this topic:
1-Which of these is a function of the stock exchange?
a-Role of an economic barometer
b-Valuation of securities
c-Encouraging investments and savings
d-All of the above
Answer: d
2-Which of these is the regulatory body for the capital markets in India?
a. National Bank for Agriculture and Rural Development (NABARD)
b. Securities and Exchange Board of India (SEBI)
c. Insurance Regulatory and Development Authority (IRDA)
d. Reserve Bank of India (RBI)
Answer: b
3-How many companies are a part of Sensex (Stock Exchange Sensitive Index)?
a. 20
b. 30
c. 50
d. 100
Answer: b
4-Which of the following terms is not related to a stock exchange?
a. Knowledge Process Outsourcing (KPO)
b. Net Asset Value (NAV)
c. Initial Public Offering (IPO)
d. National Stock Exchange (NSE)
Answer: a
5-When was NIFTY (National Stock Exchange Fifty) established?
a. 1992
b. 1998
c. 1996
d. 1994
Answer: c
6-A contract between a buyer and a seller, entered on a particular date, regarding a transaction that they will fulfil at a later date, is known as ______.
a. Forward Contract
b. Future Contract
c. Fixed Contract
d. Derivative Contract
Answer: b
7-The first computerised stock exchange in India was ________.
a. Bombay Stock Exchange (BSE)
b. Multi Commodity Exchange (MCX)
c. National Stock Exchange (NSE)
d. Over-the-Counter Exchange of India (OCTEI)
Answer: c
8-NIFTY and SENSEX are calculated based on ____________.
a. Free-Float capitalisation
b. Market capitalisation
c. Authorised share capital
d. Paid-up capital
Answer: a
9-Which of these derivatives does not get traded in the Indian Stock Exchanges?
a. Forward rate agreements
b. Index options
c. Stock futures
d. Index futures
Answer: a
10-Which of the following options is not available in India?
a. Commodity futures
b. Index options
c. Index futures
d. Commodity options
Answer: d
11-Which of the following statements is valid for mutual funds in India?
a. Entry load is allowed
b. Exit load is not allowed
c. Exit load is allowed in some cases
d. Entry load is not allowed
Answer: c
12-The spot exchange rate is the exchange rate between two currencies for _______.
a. For future delivery
b. For delivery at a particular spot in future
c. For immediate delivery
d. None of the above
Answer: c
13-Which of these markets allows trading of securities with less than one year of maturity?
a. Global market
b. Money market
c. Capital market
d. Transaction market
Answer: b
14-The leading suppliers of trading instruments in capital markets are ______.
a. Private corporations
b. Government corporations
c. Manufacturing corporations
d. None of the above
Answer: b
15-The markets where the transactions are done through computers, and telephones, without any specific location, are known as ________.
a. Over the counter markets
b. Capital counter markets
c. Past counter markets
d. Future counter markets
Answer: a
16-The Securities and Exchange Board of India (SEBI) is not responsible for _________.
a. Ensuring fair practices by companies
b. Investor protection
c. Improving the earnings of shareholders
d. Promoting efficient services by brokers
Answer: c
17-Which term is apt to describe the payout made to shareholders representing their share in the company’s profits?
a. Dividend
b. Coupon
c. Interest
d. None of the above
Answer: a
18-In primary markets, the property of shares that make it easy to sell newly issued security is called __________.
a. Large funds
b. Increased liquidity
c. Decreased liquidity
d. Money flow
Answer: b
19-The markets where securities instruments are traded directly between buyer and seller are known as ______.
a. Secondary markets
b. Primary markets
c. Tertiary markets
d. None of the above
Answer: b
20-In which year did the Sensex cross the 5000 point mark for the first time?
a. 1991
b. 2002
c. 1999
d. 1996
Answer: c
21-The headquarters of the National Stock Exchange is situated in __________.
a. Mumbai
b. Kolkata
c. Chennai
d. Delhi
Answer: a
22-The promoter of the National Stock Exchange is __________.
a. State Bank of India (SBI)
b. Life Insurance Company (LIC) and General c. Insurance Company (GIC)
c. Industrial Development Bank of India (IDBI)
d. All of the above
Answer: d
23-Which of these trading individuals have a license from the Securities Exchange Board of India (SEBI) to operate in commodity derivative and equity markets?
a. Brokers
b. Clearing members
c. Non Banking Financial Company (NBFC)
d. Both a and b
Answer: d
24-The financial body that has asked intermediaries and companies to make regulatory payments in digital mode is _________.
a. Reserve Bank of India (RBI)
b. Securities Exchange Board of India (SEBI)
c. Bombay Stock Exchange (BSE)
d. National Stock Exchange (NSE)
Answer: b
25-In which market can entities under probe for a severe violation, seek settlement, if they compensate investors for their losses as per the Securities Exchange Board of India (SEBI) guidelines?
a. Capital market
b. Share market
c. Money market
d. None of the above
Answer: a
26-Which of the following statements is incorrect about the Securities Exchange Board of India (SEBI)?
a. It is a statutory body
b. It was given statutory powers by an ordinance in 1992
c. It is a non-statutory body
d. None of the above
Answer: c
27-Which of the following might be a reason for a stock market to lose value suddenly?
a. A terrorist attack
b. The bankruptcy of a big company
c. Fear of a global recession
d. All of the above
Answer: d
28-Which of the following is responsible for fluctuations in the Sensex?
a. Monetary policy
b. Fiscal policy
c. Political instability
d. All of the above
Answer: d
29-Over the life of a derivative contract, the value of the derivative _________.
a. Increases
b. Decreases
c. fluctuates with the price of the so-called “underlying” value of the contract
d. None of the above
Answer: c
30-The forward exchange rate is the rate of exchange between two currencies that is __________.
a. Prevailing today for immediate delivery
b. Would prevail at a future date
c. Prevailing today for future delivery
d. None of the above
Answer: c
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