Unit:1 Indian Financial System

DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Financial Services Subject code: 406 B Class: SY BBA

Prof. P.S.Shinde www.dacc.edu.in

Unit:1

Indian Financial System

Q:1) Financial system consists of a variety of Institutions, markets and instruments related in a

systematic manner and provide the principal means by which

Sol:

A:) Savings are transformed into investments

B:)Increase Investment

C:)Increase Savings

D:)Both (b) and (c)

Correct: A

Q:2) Financial system is the system that allows the transfer of money between savers and borrowers

Sol:

A:)Between Different Investors

B:)Between Savers

C:) Savers and borrowers

D:) All of the Above

Correct: C

Q:3) Financial System is a set of complex & closely connected with financial institution, financial

Markets, financial instrument, & financial services etc.

Sol:

A:)True

B:)False

Correct: A

Q:4) The financial system is the process by which money flows from ……………………

Sol:

A:) Between Different Investors

B:) Savers to users.

C:)Users to Savers

D:)All of the above




Correct: B

Q:5) Indian financial system comprises of both ……..and……………….. sector.

Sol:

A:)Organised

B:)unorganised

C:)Both (a) and (b)

D:)None of the above

Correct: C

Q:6) Every financial market has the following characteristic:

Sol:

A:) It determines the level of interest rates

B:) It allows common stock to be traded

C:) It allows loans to be made

D:) It channels funds from lenders-savers to borrowers-spenders.

Correct: D

Q:7) Financial markets have the basic function of

Sol:

A:) Bringing together people with funds to lend and people who want to borrow funds.

B:) Assuring that the swings in the business cycle are less pronounced.

C:) Assuring that governments need never resort to printing money.

D:) both (B) and (C) of the above.

Correct: A

Q:8) Intermediaries who are agents of investors and match buyers with sellers of securities are called

Sol:

A:) Investment bankers

B:)Traders

C:)Brokers




D:)Dealers

Correct: C

Q:9) Intermediaries who link buyers and sellers by buying and selling securities at stated prices are

called

Sol:

A:) Investment bankers.

B:)Dealer

C:)Traders

D:) None of the above.

Correct: D

Q:10) Financial markets improve economic welfare because

Sol:

A:) They allow funds to move from those without productive investment opportunities to those who

have such opportunities.

B:) They allow consumers to time their purchases better.

C:) They weed out inefficient firms.

D:)Both (a) and(b)

Correct: D

Q:11) Which of the following are securities?

Sol:

A:) A certificate of deposit

B:) A share of Texaco common stock

C:) A Treasury bill

D:) All of the above

Correct:

Q:12)Which of the following is a financial assets

Sol:

A:)Gold

B:)Silver

C:)Land




D:)Shares

Correct: D

Q:13)Government Bond is……………..

Sol:

A:)Short term security

B:)Long term security

C:)Medium term security

D:)Both (A) and(B)

Correct: B

Q:14)Money market deals with ……………..instruments

Sol:

A:)Long term

B:)Short term

C:)Medium term


Correct: B

Q:15)Merchant banks in India started in ………….

Sol:

A:)1955

B:)1967

C:)1972

D:)1992

Correct: B

Q:16) Merchant Banking in India was started by the Grindlays Bank

Sol:

A:) Grindlays Bank

B:)Reserve bank

C:)SBI

D:)ICICI

Correct: A




Q:17) Financial institutions are also known as ______________.

Sol:

A:) Financial organization

B:) Financial intermediaries

C:) Financial system

D:) Any of the above

Correct: B

Q:18) Which of the following is the regulator of Money market?

Sol:

A:) Reserve Bank of India

B:) Government of India

C:) Telecom Regularity Authority

D:) Insurance Regularity Department

Correct: A

Q:19)……………. is regarded as a queen of Indian financial system.

Sol:

A:) SEBI

B:)RBI

C:) Finance Ministry

D:)BSE

Correct: B

Q:20)The Financial intermediaries that make loans available and accept long term and short term debts

for funding are considered as

Sol:

A:)Activity institution

B:)Investment companies

C:)Mortgage companies

D:)Finance Companies




Correct: D

Q:21) Financial intermediation is the process that the financial intermediaries connect

________________ and _____________ by transferring funds from one side to another.

Sol:

A:) Banks and account holders

B:) Borrowers and lenders

C:) Borrowers and securities firms

D:) Investors and lenders

Correct: B

Q:22) Which of the following are investment intermediaries?

Sol:

A:) Finance companies

B:) Mutual funds

C:) Pension funds

D:) Only (A) and (B) of the above

Correct: D

Q:23) Every financial market allows loans to be made

Sol:

A:)True

B:)False

Correct: B

Q:24) The process of financial intermediation is also known as direct finance

Sol:

A:)False

B:)True

Correct: A

Q:25) A mutual fund is not a depository institution

Sol:




A:)True

B:)False

Correct: A

Q:26) Financial intermediaries can substantially reduce transaction costs per dollar of transactions

because their large size allows them to take advantage of

Sol:

A:) Poorly informed consumers.

B:) Standardization

C:) Economies of scale.

D:) Their market power.

Correct: C

Q:27) Financial intermediaries………….

Sol:

A:) Exist because there are substantial information and transaction costs in the economy.

B:) Improve the lot of the small saver

C:) Are involved in the process of indirect finance.

D:) Do only (A) and (B) of the above.

Correct: D

Q:28) Which one of the following is not a role of the financial intermediaries?

Sol:

A:)Maturity Transformation

B:)Risk transformation

C:)Setting Exchange rates

D:)Brokerage

Correct: C

Q:29) The shortterm financial instruments traded in money market is commonly called

Sol:

A:)Bonds

B:)Shares




C:)Commercial Paper

D:)Notes

Correct: C

Q:30) Capital market consist of:

Sol:

A:)Primary market

B:)Secondary market

C:)Both of the above


Correct: C

Q:31)Primary market is also known as……………

Sol:

A:)New issue market

B:)Old securities market

C:)Money market

D:Long term market

Correct: A

Q:32)Old Securities market is also known as……………….

Sol:

A:)Primary market

B:)Secondary market

C:)Money market

D:)Long tern market

Correct: B

Q:33)Call money market, commercial bills , treasury bills are the parts of …………

Sol:

A:)Capital market

B:)Money market

C:)Primary market

D:)Old securities market




Correct: B

Q:34)Capital market intermediaries provide long term funds to ………………….

Sol:

A:)Individual and corporate customers

B:)Only Individual

C:)Only Corporates


Correct: A

Q:35)Money market intermediaries provide long term funds to ………………….

Sol:

A:)Individual and corporate customers

B:)Only Individual

C:)Only Corporates


Correct: A

Q:36) RBI stand for…………

Sol:

A:)Reserve bank of India

B:)Regulatary Authority of India

C:)Reserve Indian Bank

D:)Ruler Bank of India

Correct: A

Q:37)Full form of IPO

Sol:

A:)Intial Public offer

B:)Investment Public Offer

C:)Intail Private organisation

D:)Internal Private Organisation




Correct: A

Q:38) ………………….. are business organization that is mobilisers and depositors of savings and

providing financial services.

Sol:

A:) Financial Institutions

B:)Head office

C:)Branches


Correct: A

Q:39)…………………….. this market is dominated by government, banks, and financial

institutions.

Sol:

A:)Money market

B:)Capital market

C:)organised market

D:)unorganised market

Correct: A

Q:40) Services are offered by finance companies are called as

Sol:

A:)Fiancial services

B:)Social services

C:)Government Services

D:)Acceptance

Correct: A

Q:41)…………………………………… or liberalization aim at creating market oriented competitive financial

system.

Sol:

A:)Financial reform

B:)Intergation




C:)Fiancial repression

D:)None of these

Correct: A

Q:42) CDs stands for ………… and CPs stands for…………..

Sol:

A:) certify deputy manager & commercial bills

B:) certificate of deposit & commercial paper

C:) clear deposit & contract papers

D:) contractual deposit & compact project

Correct: B

Q:43) SEBI stands for

Sol:

A:) security exchange board of India

B:) State Bank of India

C:) sate electronic board of India

D:) none of the above

Correct: A

Q:44) Secondary market represented an institutional mechanism was……………..

Sol:

A:)Inadequate

B:)Incorrect

C:)Aggregate

D:)Exact




Correct: A

Q:45) …………………. are encouraged, both in public and private sectors and they have been permitted to

invest overseas

Sol:

A:) Mutual fund

B:) Shares

C:) Capital

D:) Investment

Correct: A

Q:46) The factors which had adversely affected the profitability of the banking system were partly

internal is termed as

Sol:

A:) staffing and branch spread

B:) macro –policy environment

C:) promoting savings

D:) none of the above

Correct: A

Q:47) DFIs stands for…………………….

Sol:

A:) Development financial Institutes

B:) Deputy Factor Service

C:) Development of financial Industries

D:) Development of Banking institute

Correct: A

Q:48) ………………. appears to have an important role in the restructuring and liquidation of companies

that are in distress.

Sol:

A:) Financial Intermediary

B:) Financial Instruments




C:) Organised Market

D:) Firm’s Assets

Correct: A

Q:49) An outstanding development in this sphere was the conversion of the…………………….

Sol:

A:) Insurance Corporation

B:) Insurance Companies

C:) Non -banking financial Institutes

D:) Industrial Finance Corporation

Correct: D

Q:50) DFIs stands for ………………..

Sol:

A:) Development of Banking institute

B:) Development of financial Industries

C:) Development financial Institutes

D:) Deputy Factor Service

Correct: C




UNIT : 2

Fundamentals of Financial Markets

Q:1) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the market where the existing securities of companies are traded.

Sol:

A:) Primary market

B:) Secondary market

C:) Money market

D:) None of these

Correct: B

Q:2) ……………….. is the process of admitting securities for trading on a recognized stock exchange.

Sol:

A:) Issuing

B:) Investing

C:) Listing

D:) None of these

Correct: C

Q:3) Securities of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ companies are traded in secondary market.

Sol:

A:) Listed

B:) Relisted

C:) Unlisted

D:) None of these

Correct: A

Q:4) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ means eliminating the paper certificates and maintaining records in the form of

electronic entries only.

Sol:

A:) Dematerialization

B:) Depository




C:) Stock market index

D:) None of these

Correct: A

Q:5) The first stock exchange in India was started in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) 1875

B:) 1885

C:) 1895

D:) 1865

Correct: A

Q:6) OTCEI stands for Over the Counter ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of India.

Sol:

A:) Exchange

B:) Expand

C:) Extent

C:) None of these

Correct: A

Q:7) OTCEI was incorporated in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) 1990

B:) 1991

C:) 1992

D:) 1993

Correct: A

Q:8) Capital market is a market for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ capital.

Sol:

A:) Long term capital

B:) Short term capital

C:) Working capital




D:) Fixed capital

Correct: A

Q:9) National stock exchange of India situated at ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) Bangalore

B:) Hyderabad

C:) Bombay

D:) None of these

Correct: C

Q:10) All activities related to finance and organized into a system called ‐‐‐‐----‐‐‐‐‐‐‐‐.

Sol:

A:) Capital market

B:) Money market

C:) Financial system

D:) open market

Correct: C

Q:11) SEBI stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) Securities Exchange Board of India

B:) Stock Exchange Board of India

C:) Securities and Exchange Board of India

D:) Stock Earn Board of India

Correct: C

Q:12) IPO stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) Initial Public Offer

B:) Initial Public Offering

C:) Individual Public offer

D:) none of these

Correct: A




Q:13) SEBI was established in the year----------------.

Sol:

A:) 1992

B:) 1988

C:) 1990

D:) 1989

Correct: B

Q:14) SEBI Act was passed in ‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) 1988

B:) 1990

C:) 1991

D:) 1992

Correct: D

Q:15) The objectives of SEBI include -------------.

Sol:

A:) To protect interests of inventors

B:) To regulate securities market

C:) To promote the development of the market


Correct: D

Q:16) The regulatory body for the securities market in India is ------------.

Sol:

A:) RBI

B:) SEBI

C:) IRDA

D:) Stock exchanges

Correct: B

Q:17) Who appoints the chairman of SEBI?

Sol:




A:) Central government

B:) Stock exchanges

C:) Brokers

D:) Investors

Correct: A

Q:18) The administrative head office of SEBI is at ------------.

Sol:

A:) New Delhi

B:) Bombay

C:) Kolkata

D:) Chennai

Correct: B

Q:19) SENSEX is the index of --------------------.

Sol:

A:) Bombay stock exchange

B:) National stock exchange

C:) Cochin stock exchange

D:) None of these

Correct: A

Q:20) The base year of Nifty is -------------.

Sol:

A:) 1992

B:) 1978

C:) 1987

D:) 1995

Correct: D

Q:21) Listing is mandatory for ------------------.

Sol:

A:) Trading in stock market

B:) Marketing a new issue




C:) Trading in international markets

D:) Declaring dividend

Correct: C

Q:22) The base year of BSE Sensex is --------------.

Sol:

A:) 1978‐79

B:) 1979‐80

C:) 1977‐78

D:) None of these

Correct: A

Q:23) QIB stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Sol:

A:) Qualified Institutional Buyer

B:) Qualified Institutional Bonds

C:) Qualified Information for Buyers

D:) All of these

Correct: A

Q:24) Which of the following markets help RBI in implementing its monetary policies?

Sol:

A:) Money market

B:) Capital market

C:) Forex market

D:) Debt market

Correct: A

Q:25) Which of the following markets is sometimes organized as an over-the-counter market?

Sol:

A:) The stock market

B:) The bond market

C:) The foreign exchange market

D:) all of the above




Correct: D

Q:26) Which of the following instruments is not traded in a money market?

Sol:

A:) Banker’s acceptances

B:) U.S. Treasury Bills

C:) Commercial paper

D:) None of the above

Correct: D

Q:27) Which of the following instruments is not traded in a money market?

Sol:

A:) Banker’s acceptances

B:) U.S. Treasury Bills

C:) Eurodollars

D:) Residential mortgages

Correct: D

Q:28) Which of the following instruments are traded in a capital market?

Sol:

A:) U.S. government agency securities

B:) Negotiable bank CDs

C:) Repurchase agreements

D:) Eurodollars

Correct: A

Q:29) Which of the following instruments are traded in a capital market?

Sol:

A:) Corporate bonds

B:) U.S. Treasury bills

C:) Banker’s acceptances

D:) Repurchase agreements

Correct: A




Q:30) Bonds that are sold in a foreign country and are denominated in that country’s currency are

known as

Sol:

A:) foreign bonds.

B:) Eurobonds.

C:) Eurocurrencies.

D:) Eurodollars.

Correct: A

Q:31) Commercial paper is not traded in the capital market.

Sol:

A:) True

B:) False

Correct: B

Q:32) Eurodollars are traded in the money market.

Sol:

A:) True

B:) False

Correct: A

Q:33) Which of the following words does not belong to the stock exchange?

Sol:

A:) KPO

B:) NAV

C:) NSE

D:) IPO

Correct: A

Q:34) The first computerized online stock exchange in India was

Sol:

A:) NSE

B:) OTCEI

C:) BSE




D:) MCX

Correct: A

Q:35) The type of market in which securities with less than one year maturity are traded, is classified as

Sol:

A:) money market

B:) capital market

C:) transaction market

D:) global market

Correct: A

Q:36) The markets in which transactions are done through computers and telephone without any

specific location are classified as

Sol:

A:) past counter market

B:) future counter market

C:) over the counter markets

D:) capital counter market

Correct: C

Q:37) In capital markets, the major suppliers of trading instruments are

Sol:

A:) government and corporations

B:) liquid corporations

C:) instrumental corporations

D:) manufacturing corporations

Correct: A

Q:38) The markets in which new securities are issued by the corporations to raise funds are called

Sol:

A:) primary markets

B:) secondary markets

C:) Gross markets

D:) proceeds markets




Correct: A

Q:39) SEBI has constituted a committee under TK Viswanathan for ________.

Sol:

A:) Fair market conduct

B:) Manufacturing market conduct

C:) Partial market conduct

D:) Both a and c.

Correct: A

Q:40) The administrative head office of SEBI is at Kolkata

Sol:

A:) True

B:) False

Correct: B

Q:41) The number of scrip’s included in nifty junior is --------------.

Sol:

A:) 40

B:) 50

C:) 30

D:) 100

Correct: B

Q:42) The present rolling settlements cycle T+2 is introduced in ---------------.

Sol:

A:) 2003

B:) 2001

C:) 2000

D:) 2008

Correct: A




Q:43) Permanent removal of securities of a company from the stock exchange.

Sol:

A:) De-listing

B:) Re‐ listing

C:) Listing

D:) None of these

Correct: A

Q:44) . The numbers of recognized stock exchanges in India is ----------.

Sol:

A:) 20

B:) 21

C:) 22

D:) 23

Correct: B

Q:45) SEBI has ------------ regional offices.

Sol:

A:) 3

B:) 4

C:) 5

D:) 7

Correct: B

Q:46) Bulls and bears are -------------.

Sol:

A:) Ordinary investors

B:) Government agencies

C:) Speculators

D:) Money lenders

Correct: C

Q:47) Speculators who neither buy nor sell securities in the market but still trade on them are called

‐‐‐‐‐‐‐‐‐‐‐‐‐‐




Sol:

A:) Wolves

B:) Stags

C:) Bears

D:) None of these

Correct: B

Q:48) ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a number which measures the change in a set of values over a period of time.

Sol:

A:) Index

B:) Sample

C:) Weightage

D:) None of these

Correct: A

Q:49) Bull and ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ are speculators.

Sol:

A:) Bear

B:) Cow

C:) Lion

D:) None of these

Correct: A

Q:50) Members of OTCEI are ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ only.

Sol:

A:) Corporate

B:) Derivatives

C:) Speculators

D:) None of these.

Correct: A




UNIT 3

Financial Services in India

Q:1) The First player of the Mutual fund industry was______________.

Sol:

A:) ICICI MF

B:) UTI MF

C:) SBI MF

D:) LIC MF

Correct: B

Q:2) UTI mutual fund was set up in the Year _______________.

Sol:

A:) 1963

B:) 1986

C:) 1956

D:) 1947

Correct: A

Q:3) Who establishes the Mutual Fund in India?

Sol:

A:) Securities Exchange Board of India

B:) Asset Management Company

C:) Sponsor

D:) Shareholders

Correct: C

Q:4) In India, AMC must be registered with____________.

Sol:

A:) Company’s Act, 2013

B:) No registration required

C:) Securities Exchange Board of India




D:) Reserve Bank of India

Correct: C

Q:5)…………………… is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other

securities.

Sol:

A:) Government Securities

B:) Mutual Funds

C:) Derivatives

D:) Shares

Correct: B

Q:6) The value of one unit of investment in Mutual fund is called the _______________.

Sol:

A:) Net Asset Value

B:) Issue value

C:) Market value

D:) Gross Asset value

Correct: A

Q:7) ……………….. regulates the Mutual fund industry in India.

Sol:

A:) Reserve Bank of India

B:) Association of Mutual Funds of India

C:) Securities Exchange Board of India

D:) State Bank of India

Correct: C

Q:8) What is the full form of NAV?

Sol:

A:) Net Assessment Value

B:) National Asset Value

C:) Net Asset Value

D:) National Asset variation




Correct: C

Q:9) ………… schemes not exposed to sudden and large movements of funds.

Sol:

A:) Fixed maturity plan

B:) Open-Ended Funds

C:) Close-Ended Funds

D:) Interval fund

Correct: C

Q:10) The feature of a mutual fund, where it spreads the investment in varied stocks and sectors by

pooling the funds of various investors, is called as ______________.

Sol:

A:) Professional Management

B:) Affordability

C:) Diversification

D:) Profit

Correct: C

Q:11) Dividend income received from mutual in the hands of unit holders

Sol:

A:) Fully Taxable

B:) Fully Exempt

C:) Partly Exempt

D:) Partly Taxable

Correct: B

Q:12) Which of the following is not a limitation of mutual funds?

Sol:

A:) No guarantee of return

B:) Fees and Expenses

C:) Poor Performance

D:) Professional Management

Correct: D




Q:13) The Mutual fund industry follows which of the following regulation?

Sol:

A:) SEBI (Mutual fund) regulations 1996

B:) Mutual fund regulation 2004

C:) Mutual fund regulation 2003

D:) RBI

Correct: A

Q:14) A _________________ is a trust that pools the savings of a number of investors who share

common financial goals.

Sol:

A:) Shares

B:) Mutual Funds

C:) Government Securities

D:) Derivatives

Correct: B

Q:15) ………..are also known as the protectors of the fund and are employed by the fund sponsor.

Sol:

A:) Sponsor

B:) Trustees

C:) Asset Management Company

D:) Custodian

Correct: B

Q:16) The funds in which units can be purchased only during the initial offer period are called

Sol:

A:) Open-Ended Funds

B:) Close-Ended Funds

C:) Interval Funds

D:) Fixed maturity plan

Correct: B




Q:17) ………………. are considered high-risk funds but also tend to provide high returns.

Sol:

A:) Equity Funds

B:) Money Market Funds

C:) Balanced or Hybrid Funds

D:) Debt Funds

Correct: A

Q:18) ………………are funds that invest in company debentures, government bonds and other fixed-

income assets.

Sol:

A:) Equity Funds

B:) Money Market Funds

C:) Balanced or Hybrid Funds

D:) Debt Funds

Correct: D

Q:19) Which type of fund is more volatile?

Sol:

A:) Large-cap funds

B:) Mid-cap funds

C:) Small-cap funds

D:) Hybrid Funds

Correct: A

Q:20) SIP is a _______________.

Sol:

A:) Method of regular investment

B:) Name of a mutual fund

C:) Brand of a tea stock

D:) Method of one time investment

Correct: A




Q:21) Finance is not available in the following factories service _________

Sol:

A:) Without Recourse factoring

B:) With recourse factoring

C:) Maturity factoring

Correct: C

Q:22) Sales Ledger Administration is available in the following factoring services_____

Sol:



C:) Invoice discounting

Correct: C

Q:23) Credit Protection is available in ______

Sol:



C:) None of the above

Correct: A

Q:24) Full service factoring is often_________

Sol:

A:) Recourse factoring

B:) Non-recourse factoring

C:) Agency factoring

Correct: A

Q:25) The process of selling trade debts of a client to a financial intermediary is called______

Sol:

A:) Factoring

B:) Securitisation

C:) Materialisation

Correct: A




Q:26) ………………services are mainly provided to foreign investors.

Sol:

A:) Custodial Services

B:) Financial Services

C:) Factoring Services

Correct: A

Q:27) The Idea of providing factoring services was first thought of in India by_____.

Sol:

A:) Tandem committee

B:) Malhotra committee

C:) Vaghul committee

Correct: C

Q:28) A………………is a specialized firm that finances young , start up companies.

Sol:

A:) Venture Capital Firm

B:) Finance companies

C:) Small business companies

D:) Capital creation

Correct: A

Q:29) What is the full form of CRISIL

Sol:

A:) Credit rate and information service of India

B:) Credit rating and information services of India limited

C:) Credit rate and Indian service of Information Limited

D:) Credit rank and information service of India

Correct: B

Q:30) Which of the following are credit rating agencies of India

Sol:

A:) CRISIL

B:) CIBIL




C:) Both of the above


Correct: C

Q:31) Investment information and credit agency is a was set up in 1992

Sol:

A:) True

B:) False

Correct: B

Q:32) Which company is the majority shareholder in CRISIL?

Sol:

A:) Moody’s

B:) Standard and Poors’

C:) Dun and Bradstreet


Correct: B

Q:33) An institution that allocates the credit ratings of a borrower is known as the …………….

Sol:

A:) Credit rating agency.

B:) Credit rank companies

C:) Card rate agencies

D:) Credit rank allocation

Correct: A

Q:34) ……….. is the first time subscription offer for a new scheme launched by the Asset Management

Company.

Sol:

A:) FFO

B:) CFO

C:) IPO

D:) NFO

Correct: C




Q:35) A mutual fund is a ……………intermediary (like a trust) regulated in India by the SEBI.

Sol:

A:) financial

B:) professional

C:) physical

D:) Mental

Correct: A

Q:36) Transaction cost is ………… with investment in Mutual Funds.

Sol:

A:) high

B:)low

C:) very high

D:) Nil

Correct: B

Q:37) If opening units 25,000 Units subscribe 7000, Units redeem 2000 then Closing units?

Sol:

A:) 30,000 units

B:) 25,000 units

C:) 32,000 units

D:) 44,000 units

Correct: C

Q:38) In calculation the net assets value (NAV) which of the following is true?

Sol:

A:)Dividends are subtracted and expenses added

B:)Interest is subtracted and expenses are added

C:)dividends are added and expenses are subtracted

D:)Interest and other expenses are not included

Correct: A




Q:39) AMC is required to be approved by …………….

Sol:

A:) RBI

B:) IBDI

C:) SEBI

D:) IRDA

Correct: C

Q:40)……………. helps in financial transactions of a mutual fund

Sol:

A:) custodian

B:) banker

C:) distributor

D:) sponsor

Correct: B

Q:41) UTI mutual fund was set up in 1963

Sol:

A:) True

B:) False

Correct: A

Q:42) Transaction cost is low with investment in Mutual Funds.

Sol:

A:) True

B:) False

Correct: A

Q:43) What are the reasons for economies of scale to the benefit of Mutual funds?

Sol:

A:) Large volumes of trade

B:) Portfolio diversification

C:) Risk reduction

D:) Loss




Correct: A

Q:44) what is the full form of STT

Sol:

A:) Security transaction tax

B:) Secured toll tax

C:) Security Transfer tax

D:) Secured Transfer tax

Correct: A

Q:45) Standard and Poors’ are having majority shareholding in CRISIL

Sol:

A:) True

B:) False

Correct: A

Q:46) AMC doesn’t required any registration

Sol:

A:) True

B:) False

Correct: B

Q:47) A Venture Capital Firm is a specialized firm that finances young ,start-up companies.

Sol:

A:) True

B:) False

Correct: A

Q:48) Dematerialization is a process by which _________________.

Sol:

A:) Investors holding of investment in physical form are converted into electronic format.

B:) Investors holding of investment in electronic form is converted into a physical format.

C:) Mutual fund units are held through the power of attorney

D:) Mutual fund units are offered as security for the loan

Correct: A




Q:49) Mutual fund is constituted under …………..

Sol:

A:) Partnership Act, 1932

B:) Companies Act, 1956

C:) Indian Trust Act, 1882

D:) Contract Act 1872

Correct: C

Q:50) The _________ is the market value of the securities that mutual funds have purchased minus any

liabilities per unit.

Sol:

A:) Net asset value

B:) Book value

C:) Gross asset value

D:) Net worth value

Correct: A

Date post:	12-Dec-2021
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Unit:1 Indian Financial System

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