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Stock exchanges - class-XII

Description: stock exchanges
Number of Questions: 61
Created by:
Tags: business studies commerce stock exchange securities exchange board of india (sebi) financial markets financial management financial market
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NSE commenced futures trading in the year.

  1. $1999$

  2. $2000$

  3. $2001$

  4. $2002$


Correct Option: A
Explanation:

The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000.

The settlement cycle in NSE is?

  1. $T+5$

  2. $T+3$

  3. $T+2$

  4. $T+1$


Correct Option: A
Explanation:

In a rolling settlement , each trading day is considered as a trading period and trades executed during the day are settled based on net obligations for the day. In India, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day after a trade.

Clearing and settlement operations of NSC is carried out by.

  1. NSDL

  2. NSCCL

  3. SBI

  4. CDSL


Correct Option: A
Explanation:

The clearing and settlement operations of NSE are carried out by NSCCL. NSCCL (National Securities Clearing Corporation Ltd.) 

National Stock Exchange of India was recognised as stock exchange in the year.

  1. $1992$

  2. $1993$

  3. $1994$

  4. $1995$


Correct Option: A
Explanation:

1992

The National Stock Exchange of India Limited is the leading stock exchange of India, located in Mumbai. The NSE was established in 1992 as the first demutualized electronic exchange in the country.

To be listed on NSEI, the minimum capital requirements for a company.

  1. Rs. $5$ crores

  2. Rs. $3$ crores

  3. Rs. $6$ crores

  4. Rs. $1$ crores


Correct Option: A
Explanation:

To be listed on NSEI, the minimum capital requirements for a company is Rs. 3 crores.

Investors can sell their mutual funds whenever they want.

  1. True

  2. False


Correct Option: A
Explanation:

Investors can sell their mutual funds whenever they want- this is a true statement. If the investors wish to redeem mutual funds, they can redeem at any time. Mutual funds do not have a fixed maturity period. Mutual fund is a collective investment that pools together the money of a large number of investors to purchase a number of securities, like stocks, bonds, etc.

The fund manager always invests in more than one asset class (equities, debts, money market instruments etc.) to spread the risks. It is called ______.

  1. diversification

  2. liquidity

  3. expert management

  4. all of the above


Correct Option: A
Explanation:

The fund manager always invests in more than one asset class (equities, debts, money market instruments etc.) to spread the risks. It is called diversification. In terms of finance, diversification can be defined as a process of allocating capital in such a way that the exposure to any particular asset gets reduced. It helps to reduce risk and volatility by investing in variety of assets.

The OTCEI is a company incorporated under the Companies Act 1956.

  1. True

  2. False


Correct Option: A
Explanation:

The OTCEI is a company incorporated under the Companies Act 1956. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

The on-line trading system of BSE is known as _____.

  1. BOLT

  2. NEAT

  3. GUI

  4. None of the above


Correct Option: A
Explanation:

The on-line trading system of BSE is known as BOLT. BOLT is a screen-based automated trading platform. It can be referred as a centralized exchange-based trading system of BSE. It helps the investors to trade from anywhere in the world on BSE trading platform.

OTCEI is advantageous to the company because it _____.

  1. makes investment in stocks easier

  2. provides method of raising funds through capital market instruments which are priced fairly

  3. provides definite liquidity to investors

  4. all of the above


Correct Option: B

The identity of members is trading in NSE is withheld by the National stock exchange. Identify the advantage stated.

  1. Wide coverage

  2. Transparency of NSE

  3. Effective matching of order in NSE

  4. Confidential trading in NSE


Correct Option: D
Explanation:

The identity of members is trading in NSE is withheld by the National stock exchange. Advantage stated here is confidential trading in NSE. NSE or National Stock Exchange is the leading stock exchange of India. It is situated in Mumbai. NSE maintains the confidential information about trading in order to protect the interests of the investors and provides safety for the investment.

Which of the following is/are advantage(s) of OTC Market?

  1. Dealers can operate both in new issues and secondary market at their option.

  2. It is a transparent system of trading with no problem of bad or short deliveries.

  3. Family concerns and closely held companies can go public through OTC.

  4. All of the above.


Correct Option: D
Explanation:

OTCEI was set up to provide small and medium companies an access to the capital market for raising finance. The OTCEI is a company incorporated under the Companies Act 1956. Following are the advantages of OTC market: a) Dealers can operate both in new issues and secondary market at their option.b) It is a transparent system of trading with no problem of bad or short deliveries.

c) Family concerns and closely held companies can go public through OTC.

Which of the following is true about OTCEI?

  1. It was set-up to provide small and medium companies an access to the capital market for raising finance.

  2. This segment provides a trading platform for a wide range of fixed income securities.

  3. It was incorporated in 1992.

  4. It launched the capital market segment in November 1994.


Correct Option: A
Explanation:

OTCEI was set up to provide small and medium companies an access to the capital market for raising finance- this is a true statement. The OTCEI is a company incorporated under the Companies Act 1956. OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

______ segment provides a trading platform for a wide range of fixed income securities that include central government securities.

  1. Capital Market

  2. Whole Sale Debt Market

  3. OTCEI

  4. Any of the above


Correct Option: B
Explanation:

Whole Sale Debt Market segment provides a trading platform for a wide range of fixed income securities that include central government securities. It gets regulated by the Ministry of Finance, Reserve Bank of India and Stock Exchange Board of India. It is a market where institutional investors participate in the trading of Government securities and Bonds.

NSE ensures equal access for investors all over the country with the help of appropriate communication network.

  1. True

  2. False


Correct Option: A
Explanation:

NSE ensures equal access for investors all over the country with the help of appropriate communication network- this is a true statement. The NSE was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.In NSE, the trading rights are with the trading members who offer their services to the investors. NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

NSE launched the capital market segment in _______.

  1. November 1993

  2. November 1991

  3. November 1992

  4. November 1994


Correct Option: D
Explanation:

NSE launched the capital market segment in November 1994. In NSE, the trading rights are with the trading members who offer their services to the investors. NSE is managed by professionals, who do not directly or indirectly trade on the exchange- this is a true statement. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSE was established by financial institutions, insurance companies and banks. NSE launched the futures and options segment in June 2000 for various derivative instruments.

In NSE, the trading rights are with the ______ who offer their services to the investors.

  1. trading members

  2. RBI

  3. SEBI

  4. all of the above


Correct Option: A
Explanation:

In NSE, the trading rights are with the trading members who offer their services to the investors. NSE is managed by professionals, who do not directly or indirectly trade on the exchange- this is a true statement. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSE was established by financial institutions, insurance companies and banks. NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

The NSEI was established by ______.

  1. financial institutions

  2. insurance companies

  3. banks

  4. all of the above


Correct Option: D
Explanation:

The NSEI was established by fiancial institutions, insurance companies and banks. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.In NSE, the trading rights are with the trading members who offer their services to the investors. NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

_______ segment of NSE provides an efficient and transparent platform for trading in equity.

  1. Whole Sale Debt Market

  2. Retail Sale Debt Market

  3. Capital Market

  4. Money Market


Correct Option: C
Explanation:

Capital market segment of NSE provides an efficient and transparent platform for trading in equity. The term capital market refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested. Capital market can be defined as a market for long and medium term funds. It refers to the organizations or institutions which provide funds for more than one year time period.

Meeting international benchmarks and standards is one of the objectives of NSE.

  1. True

  2. False


Correct Option: A
Explanation:

Meeting international benchmarks and standards is one of the objectives of NSE- this is a true statement. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSE was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange. In NSE, the trading rights are with the trading members who offer their services to the investors. NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

Expense ratio is the fee for managing fund.

  1. True

  2. False


Correct Option: A
Explanation:

Expense ratio is the fee for managing fund- this is a true statement. Expense ratio can be defined as a ratio which indicates how much the fund charges in terms of percentage annually  in order to manage the investor's total investment portfolio. Expanse ratio covers various types of cost and it is disclosed to investors once in a 6-months.

NSE is managed by professionals, who do not directly or indirectly trade on the exchange.

  1. True

  2. False


Correct Option: A
Explanation:

NSE is managed by professionals, who do not directly or indirectly trade on the exchange- this is a true statement. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSE was established by financial institutions, insurance companies and banks. In NSE, the trading rights are with the trading members who offer their services to the investors. NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

NSE launched the futures and options segment in ____ for various derivative instruments.

  1. June 2000

  2. June 2001

  3. June 2010

  4. June 2005


Correct Option: A
Explanation:

NSE launched the futures and options segment in June 2000 for various derivative instruments. In NSE, the trading rights are with the trading members who offer their services to the investors. NSE is managed by professionals, who do not directly or indirectly trade on the exchange- this is a true statement. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSE was established by financial institutions, insurance companies and banks. NSE launched the capital market segment in November 1994.

Participants of OTC include _____.

  1. Investors

  2. Companies which list their shares on OTCEI

  3. Settlement bank

  4. All of the above


Correct Option: D
Explanation:

Participants of OTC include: investors, companies which list their shares on OTCEI and settlement bank. OTC was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

OTC Exchange of India was incorporated in ____.

  1. 1990

  2. 1991

  3. 1992

  4. 1993


Correct Option: A
Explanation:

OTC Exchange of India was incorporated in 1990. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

The OTC Exchange will not list and trade in companies listed on any other exchange.

  1. True

  2. False


Correct Option: A
Explanation:

The OTC Exchange will not list and trade in companies listed on any other exchange- this is a true statement. OTC Exchange of India was incorporated in 1990. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

A simple way to make a diversified investment is investing in _______.

  1. Stocks

  2. Shares

  3. Mutual Funds

  4. Derivatives


Correct Option: C
Explanation:

A simple way to make a diversified investment in investing in mutual funds. Mutual fund is a collective investment that pools together the money of a large number of investors to purchase a number of securities, like stocks, bonds, etc. Investors can sell their mutual funds whenever they want.

______ is a collective investment that pools together the money of a large number of investors to purchase a number of securities like stocks, bonds etc.

  1. Mutual Fund

  2. Portfolio

  3. Shares

  4. Stock


Correct Option: A
Explanation:

Mutual fund is a collective investment that pools together the money of a large number of investors to purchase a number of securities, like stocks, bonds, etc. Investors can sell their mutual funds whenever they want. A simple way to make a diversified investment in investing in mutual funds.

Which of the following is/are the demerits of OTCEI?

  1. Poor liquidity of Scrips

  2. Delay in Settlement

  3. Lack of Transparency

  4. All of the above


Correct Option: D
Explanation:

The OTCEI is a company incorporated under the Companies Act 1956. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly. Following are the demerits of OTCEI:A) Poor liquidity of ScripsB) Delay in Settlement

C) Lack of Transparency.

Identify the promoter(s) of OTCEI from the following.

  1. SBI Capital Markets Ltd.

  2. IFCI

  3. IDBI

  4. All of the above


Correct Option: D
Explanation:
Promoter of OTCEI are :-a) SBI Capital Markets Ltd.
b) IFCI
c) IDBI
The OTCEI is a company incorporated under the Companies Act 1956. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

BSE is the second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System (BOLT).

  1. True

  2. False


Correct Option: A
Explanation:

BSE is the second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its On-Line trading System(BOLT).-this is a true statement. The on-line trading system of BSE is known as BOLT. BOLT is a screen-based automated trading platform. It can be referred as a centralized exchange-based trading system of BSE. It helps the investors to trade from anywhere in the world on BSE trading platform.

OTCEI offers computerized screen-based trading ________________.

  1. True

  2. False


Correct Option: A
Explanation:

OTCEI offers computerized screen-based trading- this is a true statement. The OTCEI is a company incorporated under the Companies Act 1956. OTCEI was set up to provide small and medium companies an access to capital market for raising finance.  OCTCEI is advantageous to the company because it provides methods of raising funds through capital market instruments which are priced fairly.

Before BOLT was introduced in 1995, people used to trade standing in the trading ring.

  1. True

  2. False


Correct Option: A
Explanation:

Before BOLT was introduced in 1995, people used to trade standing in the trading ring- this is a true statement. BOLT is launched by Bombay Stock Exchange. It can be defined as the equity trading platform. Trading ring is the traditional practice of price discovery and trade standing.

Which of the following paved way to the establishment of SEBI?

  1. Unofficial private placements

  2. Rigging of prices

  3. Unofficial premium on new issues

  4. All of the above


Correct Option: D
Explanation:
Following paved way to the establishment of SEBI:
a) Unofficial private placements
b)Rigging of prices
c) Unofficial premium on new issues
The Securities and Exchange Board of India was established by the Government of India as an interim administrative body. SEBI is established in order to protect the interests of the investors and provide safety for investment. SEBI performs certain functions in order to promote and develop activities of stock exchange and increase the business in stock exchange. It also helps to regulate the business in stock exchange. It has framed certain rules and regulations to regulate the intermediaries.

BSE also provides depository services through its _______ arm.

  1. Central Depository Services Ltd. (CDSL)

  2. National Securities Depository Limited (NSDL)

  3. NSE

  4. SEBI


Correct Option: A
Explanation:

BSE also provides depository services through its Cenrtral Depository Services Limited(CDSL) arm. CDSL helps to hold securities either in the certificated or uncertificated form. CDSL enabled book entry transfer of securities. CDSL can be defined as the second Indian securities depository.

Which of the following is the basic function of stock exchange?

  1. Pricing of Securities

  2. Safety of Transaction

  3. Contributes to Economic Growth

  4. Providing Liquidity and Marketability to Existing Securities.


Correct Option: D
Explanation:
Basic function of stock exchange are providing Liquidity and Marketability to existing securities. Stock exchange can be defined as an association, organization or body of individuals whether incorporated or not established for the purpose of assisting, regulating and controlling of business in buying, selling and dealing in securities.

SEBI was to function under the overall administrative control of the _______ of the Government of India.

  1. Ministry of Finance

  2. Ministry of Commerce

  3. Ministry of Company Affairs

  4. Ministry of Economy


Correct Option: A
Explanation:

SEBI was to function under the overall administrative control of the Ministry of Finance of the Government of India. SEBI was established to regulate the activities of stock exchange and to protect the interest of investor and provide safety of investment. SEBI also helps to develop activities of stock exchange.

The Securities and Exchange Board of India was established by the Government of India _____.

  1. as a cooperative society

  2. as a banking authority

  3. as an interim administrative body

  4. none of the above


Correct Option: C
Explanation:

The Securities and Exchange Board of India was established by the Government of India as an interim administrative body. SEBI is established in order to protect the interests of the investors and provide safety for investment. SEBI performs certain functions in order to promote and develop activities of stock exchange and increase the business in stock exchange. It also helps to regulate the business in stock exchange. It has framed certain rules and regulations to regulate the intermediaries.

Identify the development function of SEBI.

  1. Investor education.

  2. Promotion of fair practices and code of conduct of all SROs.

  3. Training of intermediaries

  4. All of the above


Correct Option: D
Explanation:
Development functions are performed by the SEBI to promote and develop activities in stock exchange and increase the business of stock exchange. Development functions of SEBI include:
a) Investor education.
b) Promotion of fair practices and code of conduct of all SROs.
c) Training of intermediaries.

BSE provides a host of services to capital market participants including ________.

  1. risk management

  2. clearing

  3. settlement

  4. all of the above


Correct Option: D
Explanation:
BSE provides a host of services to capital market participants including:
a) risk management
b) clearing
c) settlementBSE helps to promote industrial development in the country through efficient resource mobilization by way of investment in corporate securities. It helps to maintain well regulated markets on securities.

The strategic objective of Bombay stock exchange are __________.

  1. To promote, develop and maintain a well-regulated market for dealings in securities.

  2. To safeguard the interest of members and the investing public having dealings on the exchange.

  3. To promote industrial development in the country through efficient resource mobilization by way of investment in corporate securities.

  4. All of the above


Correct Option: D
Explanation:

BSE stands for Bombay Stock Exchange. BSE provides a host of services to capital market participants including risk management, clearing and settlement. It can be defined as a free-float market weighted stock exchange platform. The strategic objective of Bombay stock exchanges are:a) To promote, develop and maintain a well-regulated market for dealings in securities.
b) To safeguard the interest of members and the investing public having dealings on the exchange.
c) To promote industrial development in the country through efficient resource mobilization by way of investment in corporate securities.

BSE also has a platform for trading in equities of small-and-medium enterprises (SME).

  1. True

  2. False


Correct Option: A
Explanation:

BSE also has a platform for trading in equities of small-and-medium enterprises (SME)- this is a true statement. SME Exchange functions within the BSE stock exchange. SME exchange can be defined as a trading platform for Small and Medium Enterprises.

The fully automated screen based trading system that it runs is called _______.

  1. National Exchange for Automated Trading

  2. State Exchange for Automated Trading

  3. District Exchange for Automated Trading

  4. None of the above


Correct Option: A
Explanation:

The fully automated screen based trading system that it runs is called National Exchange for Automated Trading. It is the first exchange in the world to use satellite communication technology for trading. It is a state of the art client server based application.

NSE employs a _______ mechanism where each trading day is considered as a trading period.

  1. trading settlement

  2. rolling settlement

  3. settlement

  4. none of the above


Correct Option: B
Explanation:

NSE employs a rolling settlement mechanism where each trading day is considered as a trading period. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.

Which of the following is/are true about NSE?

  1. The transactions and orders are entered only through code numbers.

  2. There is no need for any stock exchange floor to transact.

  3. It has its access throughout the country.

  4. All of the above


Correct Option: D
Explanation:
Following are true about NSE:
a) The transactions and orders are entered only through code numbers.
b) There is no need for any stock exchange floor to transact.
c) It has its access throughout the country.
Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.In NSE, the trading rights are with the trading members who offer their services to the investorsNSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

The settlement cycle at NSE has been reduced from T+3 to T+2.

  1. True

  2. False


Correct Option: A
Explanation:

The settlement cycle at NSE has been reduced from T+3 to T+2- this is a true statement.Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.

Identify the function(s) of NSE from the following.

  1. Providing a fair, efficient and transparent securities market to investors using electronic trading systems

  2. Enabling shorter settlement cycles and book entry settlements systems

  3. Meeting the current international standards of securities markets

  4. All of the above


Correct Option: D
Explanation:
Functions of NSE are:
a) Providing a fair, efficient and transparent securities market to investors using electronic trading systems
b) Enabling shorter settlement cycles and book entry settlements systems
c) Meeting the current international standards of securities markets
Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.

NSE provides trading across sectors viz ______.

  1. Equities

  2. Derivatives

  3. Debt

  4. All of the above


Correct Option: D
Explanation:

NSE provids trading across sectors viz, equities, derivatives and debt. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. 

The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.In NSE, the trading rights are with the trading members who offer their services to the investors. 
NSE launched the capital market segment in November 1994. NSE launched the futures and options segment in June 2000 for various derivative instruments.

The International Securities Consultancy (ISC) of Hong Kong has helped in setting up of the NSE.

  1. True

  2. False


Correct Option: A
Explanation:

The International Securities Consultancy(ISC) of Hong Kong has helped in setting up of the NSE. Meeting international benchmarks and standards is one of the objectives of NSE. NSE ensures equal access for investors all over the country with the help of appropriate communication network. The NSEI was established by financial institutions, insurance companies and banks. NSE is managed by professionals, who do not directly or indirectly trade on the exchange.

 The SEBI was given a statutory status in the year _______.

  1. 1990

  2. 1991

  3. 1992

  4. 1993


Correct Option: C
Explanation:

The SEBI was given a statutory status in the year 1992.  It was set up to regulate the functions of securities market. SEBI is a body corporate having a separate legal existence and perpetual succession. SEBI promotes orderly and healthy development in the stock exchange market.

SEBI has stopped the practice of making a preferential allotment of shares unrelated to market prices.

  1. True

  2. False


Correct Option: A
Explanation:

SEBI has stopped the practice of making a preferential allotment of shares unrelated to market prices- this is a true statement.  It is done in order to protect the interests of the investors. SEBI regulates the business in stock exchange. It helps to provide the safety of the investment.

Which of the following is/are the development function(s) of SEBI?

  1. Registration of brokers and sub-brokers.

  2. Registration of collective investment schemes and Mutual Funds.

  3. Investor education.

  4. Training of intermediaries


Correct Option: C,D
Explanation:
The development functions are performed by SEBI in order to promote and develop activities in stock exchange and increase the business in stock exchange. Following are the development functions of SEBI:
a) Investor education
b) Training of intermediaries.

The powers of controller of capital issues of India is now shifted to _______.

  1. ministry of finance

  2. SEBI

  3. AMFI

  4. ministry of corporate affairs


Correct Option: B

The Securities and Exchange Board of India is not entrusted with which of the following functions?

  1. Investor Protection

  2. Ensuring fair practices by companies

  3. Promotion of efficient service by brokers

  4. Improving the earnings of equity holders


Correct Option: D

Securities Exchange Board of India (SEBI) was established in __________.

  1. $1956$

  2. $2001$

  3. $1988$

  4. $1984$


Correct Option: C
Explanation:

The Securities and Exchange Board of India is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992.

The ________ market is also known as the stock market or stock exchange, which is the market for the purchase and sale of existing securities.

  1. primary

  2. capital

  3. money

  4. secondary


Correct Option: D
Explanation:

The secondary market is also known as the stock market or stock exchange, which is the market for the purchase and sale of existing securities. In secondary market, securities are not directly issued by the company to investors. The securities are sold by existing investors to other investors.

Which of the following objectives states the key role of SEBI in economic development of the country?

  1. Prevention of trading malpractices

  2. Regulation of capital market

  3. Enforcement of corporate governance on companies

  4. Promoting and developing capital market


Correct Option: D
Explanation:

Promoting and developing capital market - it is the following objective that states the key role of SEBI in economic development of the country. The development functions are performed by SEBI in order to promote and develop activities in stock exchange and increase the business in stock exchange.

Which of the following is a regulatory function of SEBI?

  1. Prohibition of fraudulent and unfair trading

  2. Regulation of takeover bids by companies

  3. Undertaking measures to develop capital market

  4. Conducting research


Correct Option: B
Explanation:

Regulation of takeover bids by companies is a regulatory function of SEBI. Regulatory functions are performed by SEBI in order to regulate the business in stock exchange. SEBI has framed rules and regulations and code of conduct to regulate the intermediaries. It also regulates the takeover of companies.

Appointment of independent directors is the part of Corporate Governance as per the ________.

  1. SEBI

  2. Indian companies act

  3. Government of India

  4. RBI


Correct Option: A
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