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Sunday, February 25, 2018

Business Studies Objective Type Questions

CHAPTER – 10: FINANCIAL MARKETS
1. Which is the oldest stock exchange in India?
Ans: Bombay stock exchange

2. With which stock exchanges the Benchmark ‘Sensex’ and ‘nifty’ are associated?
Ans: Bombay stock exchange – Sensex, National Stock exchange - nifty

3. Mention the statutory body for regulation of stock exchanges in India.
Ans: SEBI

4. When was SEBI established?
Ans: It was established in 1988 but was given statutory status in 1992.

5. In which year NSEI and BSE were established?             
Ans: NSEI – In 1991 and BSE – In 1875. But, NSEI was recognized in 1992.

6. How many stock exchanges are there in India?
Ans: There are 24 recognised stock exchanges in India. Whereas at national level there are two major stock exchange. These are: a) NSEI and b) BSE.

7. What are various types of operators in stock exchange?

Ans: Brokers, jobbers, bulls, bears and stag.

8. What types of instruments are traded in the money market?
Ans: Treasury bill, Commercial Paper, Call money, Certificate of deposit.

9. Mention two methods of floating securities by a company.
Ans: Initial Public offer, Books building method

10. What is the full name of SEBI?
Ans: Securities and Exchange Board of India

11. What are the components of capital market?
Ans: Primary market or New issue market and Secondary Market and Stock exchange.

12. Name the market where new securities are issued for the first time.
Ans: Primary Market or new issue market

13. Name the market which facilitates purchases and sale of old or existing securities.
Ans: Secondary Market or stock exchange

14. What is disinvestment?
Ans: Disinvestment means government selling its profit or loss making venture's stack to public as an IPO and an or to private company on auction basis. 

15. In which year NSEI, BSE and OTCEI were established?                           
Ans: NSEI – In 1991 and BSE – In 1875. But, NSEI was recognized in 1992. 62. OTCEI was established in 1990.

16. Write the full form of NSEI, BSE and OTCEI.
Ans: NSEI – National stock exchange of India (Nifty), BSE – Bombay Stock Exchange (Sensex), OTCEI – Over the Counter Exchange of India.

17. Name the system where there is electronic book entry form of holding and transferring the securities.
Ans: Dematerialisation.

18. Name the Benchmark index of BSE and NSE.    
Ans: SENSEX (BSE) and NIFTY (NSE)

19. Money market is a market for short terms funds  i.e. for one year and capital market is a market for long term funds  i.e. for more than one year.

20. Mention some specific features of Treasury bills.
Ans: Treasury bill: It is also known as zero coupon bond as no interest is paid.

21. Name two buyers of Commercial paper.
Ans: a) Banks b) Insurance companies.
22. What are financial assets?
Ans: It refers to the financial instruments or securities. For e.g. shares, debentures, treasury bills, commercial paper etc.
23. What is floatation cost?
Ans: The expenditure incurred in issuing the securities is called floatation cost.
24. What is meant by “Near Money?”
Ans: All very short term securities are called near money for e.g. marketable securities.
25. Name the instruments that are traded in capital market.
Ans: Stocks, Shares, Debentures, Bonds, GDR (Global Depository receipts)
26. Name the institutions operating in the money market.
Ans: Central Bank, Commercial banks, Non-bank financial institutions.
27. Name the institutions operating in the capital market.
Ans: IDBI, IFCI, ICICI, Stock exchanges.
28. Name two advisory committees set up by SEBI.
Ans: a) Primary market Advisory committee. b) Secondary market advisory committee.
29. What is price rigging?

Ans: It refers to the manipulation of prices of the securities by agents/company for their own profits.

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