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NCFM Capital Market

(Dealers Module)

Question Bank

CONTENTS
Chapter 1:

An Overview of the Indian Securities Market

Chapter 2:

Trading Membership

Chapter 3:

Trading

22

Chapter 4:

Clearing and Settlement

44

Chapter 5:

Legal Framework

62

Chapter 6:

Fundamental valuation Concepts

71

Mock Test Paper

79

Chapters weights in examination


Chapter No.

Title

Weights(%)

Chapter 1:
Chapter 2:
Chapter 3:

An Overview of the Indian Securities Market


Trading Membership
Trading

10
20
30

Chapter 4:
Chapter 5:
Chapter 6:

Clearing and Settlement


Legal Framework
Fundamental Valuation Concepts

25
9
6

Chapter 1
An Overview of the Indian Securities Market

Q1:

_____________ has two interdependent and inseparable segments namely the primary and the
secondary market

(a)

Debt market

(b)

Auction market

(c)

Money market

(d)

Securities market

Q2:

_______________ describes trading that takes place off organised exchanges, usually over the
telephone.

(a)

Over the counter market

(b)

Over the exchange market

(c)

Money market

(d)

Securities market

Q3:

In terms of the Companies Act, 1956, an issue becomes public if it results in allotment to
______________.

(a)

More than 50 persons

(b)

More than 100 persons

(c)

More than 500 persons

(d)

More than 50000 persons

Q4:

The corporate entities issue mainly_________

(a)

Debt instruments

(b)

Equity instruments

(c)

Both of the above

(d)

None of the above

Q5: Volatility Index measures the market's expectations of volatility over__________.


(a)

Long term

(b)

Mid term

(c)

Sort term

(d)

Define term

Q6: Direct Market Access facility is available for _______________.


(a)

All clients

(b)

Institutional clients

(c)

Individual clients

(d)

International clients

Q7: Investor Education and Protection Fund is established by_______________.


(a)

RBI

(b)

NSE

(c)

SEBI

(d)

Central Government

Q8:

The secondary market enables participants who hold securities to adjust their holdings in
response to changes in their assessment of ____________.

(a)

Risk

(b)

Return

(c)

Risk and return

(d)

None of the above

Q9:

Trading in interest rate derivatives commenced on_____________.

(a)

June 2000

(b)

November 2001

(c)

June 2005

(d)

August 2009

Q10:

The securities market has essentially participants, namely ________

(a)

The issuers of securities

(b)

Investors in securities

(c)

The intermediaries

(d)

All of the above

Q11:

_______________are consumers (they subscribe for and trade in securities) of securities issued
by issuers.

(a)

The issuers

(b)

Investors

(c)

Intermediaries

(d)

All of the above

Q12:

____________ ensures a high standard of service from intermediaries and supply of quality
securities and non-manipulated demand for them in the market.

(a)

The regulator

(b)

The issuers and

(c)

Investors

(d)

Intermediaries

Q13:

__________ are required to disclose any material risk factors and give justification for pricing in
their prospectus.

(a)

The regulator

(b)

The issuers

(c)

Investors

(d)

Intermediaries

Q14:

The admission to a depository for dematerialisation of securities is a prerequisite for


___________

(a)

Making a public issue

(b)

Rights issue

(c)

An offer for sale

(d)

All of the above

Q15:

All new IPOs are compulsorily __________ in dematerialised form.

(a)

Allotted

(b)

made

(c)

Traded

(d)

None of the above

Q16:

Market Capitalisation defined as_____________.

(a)

Opening price of share X Number of outstanding shares

(b)

Closing price of share X Number of outstanding shares

(c)

Highest price of share X Number of outstanding shares

(d)

Lowest price of share X Number of outstanding shares

Q17:

Individual scrip-wise price bands of ________either way have been imposed for all securities
except those available for stock options.

(a)

10%

(b)

20%

(c)

30%

(d)

50%

Q18:

____________ are required to comply with Disclosure and Investor Protection guidelines and
then access the market.

(a)

Issuers

(b)

Investors

(c)

Intermediaries

(d)

Merchant banker

Q19:

The Disclosure and Investor Protection guidelines aim to secure full disclosure of relevant
information about the issuer and the nature of the securities to be issued so that _________ can
take an informed decision.

(a)

Intermediary

(b)

Investor

(c)

Merchant banker

(d)

Banks

Q20:

Merchant banker in consultation with _________ determines the issue price of shares.

(a)

Issuer

(b)

SEBI

(c)

Intermediary

(d)

NSE

Q21:

Shares of companies which have entered into a listing agreement with an exchange are called
______________.

(a)

Permitted shares

(b)

Admitted shares

(c)

Listed shares

(d)

Agreed shares

Q22:

Shares permitted for trading without entering into a listing agreement are called
_____________.

(a)

Permitted shares

(b)

Admitted shares

(c)

Listed shares

(d)

Agreed shares

Q23:

Which of the following is not an intermediary?

(a)

Lead Merchant Banker

(b)

Issuer

(c)

Stock Broker

(d)

Registrar to issue

Q24:

Which of the following is facilitate the investor to apply for IPOs without making a payment ?

(a)

Direct Market Access

(b)

ASBA

(c)

Stock Broker

(d)

Share Transfer Agent

Q25:

A new IPO should compulsorily issued in dematerialised form, if it valued Rs.__________

(a)

5 Crore or more

(b)

10 Crore or more

(c)

25 Crore or more

(d)

100 Crore or more

Q26:

NSE's Certification in Financial Markets does NOT allow flexibility in terms of ______.

(a)

Examination date

(b)

Candidates presence

(c)

Examination time

(d)

None of the above

Q27:

NSDL and CDSL are two ___________ in India.

(a)

Exchanges

(b)

Indices

(c)

Depositories

(d)

Regulators

Q28:

Trading in Future & Option segment commenced on_____________.

(a)

June 2003

(b)

November 2001

(c)

June 2001

(d)

June 2000

Chapter 1 Answers:
1 (d)

2 (a)

3 (a)

4 (c)

5 (c)

6 (b)

7 (d)

8 (c)

9 (d)

10 (d)

11 (b)

12 (a)

13 (b)

14 (d)

15 (c)

16 (b)

17 (b)

18 (a)

19 (b)

20 (b)

21 (c)

22 (a)

23 (b)

24 (b)

25 (b)

26 (b)

27 (c)

28 (d)

Chapter 2
Trading Membership

Q1:

What are the benefits to the trading membership of NSE?

(a)

Access to a nation-wide trading facility for equities, derivatives, debt and hybrid instruments /
products.

(b)

Ability to provide a fair, efficient and transparent securities market to the investors.

(c)

Dealing with an organization which follows strict standards for trading and settlement at par
with those available at the top international bourses.

(d)

All of the above

Q2:

To which authority a stockbroker make an application for registration?

(a)

SEBI through a stock exchange or stock exchanges

(b)

NSE

(c)

NSDL

(d)

NSCCL

Q3:

A stockbroker shall take adequate steps for redress of grievances of the investors within
_________ of the date of the receipt of the complaint.

(a)

One month

(b)

Two month

(c)

Three month

(d)

Six month

Q4:

A person can become a member of ______ recognised Stock Exchanges.

(a)

One

(b)

Two

(c)

Five

(d)

Any number of

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Capital Market (Dealers) Module


Why this book..........

This book is excellent Medium to complete the study in a short time.


This book covers all the chapters of Capital Market (Dealers) Module.
The book contains all the questions that can be asked in the examination of
Capital Market (Dealers) Module.
This book is useful to all those candidates who are going to appear for the
examination.
With this book the time of the study to ensure exam success.

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