NISM Series IX: Merchant Banking Certification Mock Test (Set 4)

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1 / 50

A Qualified Institutional Buyer (QIB) is _________.

a) SEBI registered FII and sub-account

b) Scheduled commercial bank

c) SEBI registered mutual fund, venture capital fund

d) All of the above

2 / 50

2. An announcement regarding the closure of the issue should be made only after the lead merchant banker is satisfied that at least ______ of the offer through the offer document has been subscribed, and a certificate regarding that has been obtained from the registrar to the issue.

a) 99%

b) 75%

c) 69%

d) 90%

3 / 50

The issuer and the merchant banker shall ensure that the security created to secure the debt securities is adequate to ensure ________ asset cover for the debt securities.

a) 95%

b) 100%

c) 75%

d) 80%

4 / 50

The primary aim of the __________ is to consolidate and amend the law related to foreign exchange with the objective of facilitating external trade and payments.

a) SCRA 1956

b) FEMA 1999

c) RBI Act 1934

d) SEBI Act 1992

5 / 50

5. The _______ is the market where existing securities are bought and sold among traders and investors.

a) Primary Market

b) Commodity Market

c) Repo Market

d) Secondary Market

6 / 50

True or False: During the due diligence process, the Lead Manager and the issuer are assisted by external parties such as legal counsels, statutory auditors, and specialized industry experts.

a) True

b) False

7 / 50

The SEBI (Merchant Bankers) Regulations, 1992 stipulate that an application for registration as a Merchant Banker made under this regulation shall be accompanied by a non-refundable application fee of ________ and can be made only for Category I Merchant Banker.

a) Rs 25,000

b) Rs 10,000

c) Rs 1,00,000

d) Rs 50,000

8 / 50

8. A company needs to have a minimum paid up capital of Rs 10 crore to list on BSE and Rs 20 crore to list on NSE – State whether True or False ?

a) False

b) True

9 / 50

Who has been granted statutory exclusivity in managing public offers by SEBI?

a) Merchant bankers

b) Custodians

c) Registrar and Transfer agents

d) Underwriters

10 / 50

10.

After a public issue, ______ is required to oversee and monitor the resolution of investor grievances.

a) Registrar and Transfer Agent

b) Stock Exchange

c) Lead Merchant Banker

d) SEBI

11 / 50

11. A rights issue is when a company offers its existing shareholders a chance to buy a specific number of new shares at a set date.

a) Bonus date

b) Book Closure date

c) Ex-Dividend date

d) Record date

12 / 50

12. Is it true or false that disinvestment transactions can take the form of the Government of India offering shares through a prospectus?

a) False

b) True

13 / 50

13.

Is it true or false that, according to SEBI (Buyback of Equity Shares) Regulations, 1998, the merchant banker is required to submit a final report to SEBI in the specified form within 21 days from the closing date of the buyback offer?

a) False

b) True

14 / 50

14. The Offer Document is called ______ in case of a rights issue

a) Prospectus

b) Letter of Offer

c) Intent of offer

d) Rights Form

15 / 50

15. When submitting a draft offer document to the recognized stock exchange for the proposed listing of specified securities, the issuer is required to provide the ________ of its promoters to the stock exchange.

a) Permanent Account Number (PAN)

b) Passport number

c) Bank account number

d) All of the above

16 / 50

16. When acquiring, what method(s) can be used to pay the offer price?

a) By issue, exchange or transfer of listed shares in the equity share capital of the acquirer or of any person acting in concert

b) By issue, exchange or transfer of convertible debt securities entitling the holder thereof to acquire listed share in the equity share capital of the acquirer or of any person acting in concert

c) By issue, exchange or transfer of listed secured debt instruments issued by the acquirer or any person acting in concert with a rating not inferior to investment grade as rated by a SEBI registered credit rating agency

d) All of the above

17 / 50

17.

When an issue is not a book-building issue, the issuer company is required to appoint ________ at all mandatory collection centers.

a) Collection agents

b) Syndicate members

c) Bankers to issue

d) Stock brokers

18 / 50

18.

Who or what is/are considered as institutional investors?

a) Foreign Financial Institutions (FIIs)

b) Domestic financial institution

c) Mutual fund

d) All of the above

19 / 50

19.

A company can repurchase its shares or other specified securities using which of the following method(s)?

a) From the open market through book-building process or stock exchange (Your answer is incorrect)

b) From the existing security-holders on a proportionate basis through the tender offer

c) From odd-lot holders

d) All of the above

20 / 50

20.

Is it true or false that investment banking includes not only merchant banking but also other related capital market activities such as stock trading, market making, underwriting, stock broking, and asset management?

a) True

b) False

21 / 50

21.

Shares allocated to the Anchor Investor in a public issue have a lock-in period of ______ from the date of allotment.

a) 30 days

b) 60 days

c) 15 days

d) 45 days

22 / 50

22.

If the shares are not allotted to the investor, the Merchant Banker has to refund the application money within how many days from the date of closure of the issue?

a) 30 days

b) 21 days

c) 7 days

d) 15 days

23 / 50

23.

How much is the fee to be paid to SEBI for a public issue that is more than Rs 10 crore but less than or equal to Rs 5000 crore?

a) 10 percent of the issue size

b) 0.1 percent of the issue size

c) 0.01 percent of the issue size

d) 1 percent of the issue size

24 / 50

24.

Is it true or false that promoters and members of the promoter group can make an offer for sale of fully paid-up equity shares through a qualified institutions placement to achieve the minimum public shareholding, as per the Securities Contracts (Regulation) Rules, 1957?

a) True

b) False

25 / 50

25. What is the term for a mutual decision of two companies to combine and become one entity, and what term describes a situation where the selling company may be unwilling to negotiate with a prospective buyer and is considered hostile?

a) Merger , Acquisition

b) Acquisition , Takeove

c) Merger , Takeover

d) Takeover , Merger

26 / 50

26.

The Green Shoe Option is a price-stabilizing mechanism in which shares are issued in excess of the issue size, by a maximum of ____.

a) 20%

b) 27.50%

c) 15%

d) 25%

27 / 50

27.

The term for a market that deals with short-term funds is _________.

a) Currency Market

b) Money Market

c) Stock market

d) All of the above

28 / 50

28.

For a public issue to be considered successful, the minimum subscription to be received should not be less than ________ of the offer as stated in the offer document.

a) 90%

b) 85%

c) 99%

d) 95%

29 / 50

29.

Every merchant banker is required to submit complete details of any transaction for acquiring securities of a Body Corporate whose issue is being managed by that merchant banker to SEBI within ______ from the date of entering into such a transaction.

a) 30 days

b) 20 days

c) 15 days

d) 25 days

30 / 50

30.

According to SEBI ICDR Regulations, an issuer company making a public issue or a rights issue, where the aggregate value of the specified securities offered is Rupees ______ or more, can proceed only after the draft offer document, along with fees, has been filed through the lead merchant banker with SEBI.

a) 75 lakh

b) 50 lakh

c) 25 lakh

d) 75 lakh

31 / 50

31.

Regulation _____ of the SEBI ICDR Regulations provides the details of the documents that are required to be submitted to SEBI before the opening of the issue.

a) 5

b) 8

c) 6

d) 7

32 / 50

32.

__________ means an arrangement provided by the issuer under which a person offers to purchase specified securities from the original resident retail individual allottees at the issue price.

a) Soft Underwriting

b) Safety net arrangement

c) ASBA

d) Green Shoe Option

33 / 50

33.

Which act provides cases that are exempt from the obligation to make an open offer?

a) SEBI (Substantial Acquisition of Shares and Takeovers – SAST) Regulations, 2011

b) The SEBI (Merchant Bankers) Regulations, 1992

c) Companies Act 2013

d) Depositories Act, 1996

34 / 50

34.

In India, the Government securities are issued by the _________.

a) Central government

b) Semi-government authorities

c) State government

d) All of the above

35 / 50

35.

No advertisement shall be issued giving any impression that the issue has been fully subscribed or oversubscribed during the period the issue is open for subscription. Is this statement true or false?

a) False

b) True

36 / 50

36. Can semi-government authorities issue Government securities ? – State Yes or No

a) No

b) Yes

37 / 50

37. Offer Document is called _________ in case of a public issue or offer for sale

a) Prospectus

b) Company Information Document

c) Letter of Intent

d) None of the above

38 / 50

38. A company has changed its name and now wants to make an Initial Public Offer What are the SEBI regulations with respect to the minimum percentage of revenue it should have earned in the preceding one year from the activity indicated in the new name?

a) At least 75% of the revenue for the preceding one full year should have been earned by it from the activity indicated by its new name

b) At least 30% of the revenue for the preceding one full year should have been earned by it from the activity indicated by its new name

c) At least 60% of the revenue for the preceding one full year should have been earned by it from the activity indicated by its new name

d) At least 50% of the revenue for the preceding one full year should have been earned by it from the activity indicated by its new name

39 / 50

39. Which of these activities require an appointment of a merchant banker for managing the offer?

a) Merger of two companies

b) Acquisition of a listed company

c) Incorporation of a new company

d) Amalgamation of two companies

40 / 50

40. The Registrar and Transfer agent (RT agent) of a company appoints the printers who are engaged in bulk printing of the offer document and application forms – State True or False ?

a) True

b) False

41 / 50

41. As per SEBI (Bankers to Issue) Regulations, which of the following activities does a banker to an issue need to perform

a) Acceptance of application and application monies

b) Refund of application monies

c) Acceptance of allotment or call monies

d) All of the above

42 / 50

42. __________ entitle an investor to buy equity shares after a specified time period at a given price

a) Treasury Bonds

b) Warrants

c) Mutual Funds

d) Debentures

43 / 50

43. In Offer For Sale through Stock Exchange Mechanism, what does Floor price mean ?

a) It is the price at which the shares are allocated to the successful bidders in a proportionate basis methodology.

b) Indicative Price is the volume weighted average price of all the valid bids

c) It is the minimum price at which the seller intends to sell the shares

d) None of the above

44 / 50

44. If a broker fails to maintain books of account or records as per the listing agreements, conditions or bye-laws of the stock exchange, he shall be liable to a penalty of ______ for each day during which such failure continues or______ , whichever is less

a) Rs.1 lakh , Rs.1 crore

b) Rs.10 lakh , Rs.1 crore

c) Rs.2 lakh , Rs.1 crore

d) Rs.5 lakh , Rs.1 crore

45 / 50

45. In __________ , the underwriter agrees to buy his commitment at a later stage only when the price of shares is known, pursuant to book building

a) Soft underwriting

b) Application Supported Blocked Amount (ASBA)

c) Hard underwriting

d) Both 1 and 2

46 / 50

46. A minimum of ____ persons who are experienced to conduct the business of a Merchant Banker should be employed by an applicant of Merchant Bankers licence

a) 5

b) 3

c) 2

d) 7

47 / 50

47.

As per the SEBI (Merchant Bankers) Regulations, 1992, a merchant banker can perform the following activities:

i) Underwriting the public issue

ii) Managing the public issue of securities

iii) Safekeeping of issued securities

iv) Managing the register of issued securities

a) i and ii

b) ii and iii

c) i and iv

d) iii and iv

48 / 50

48.

During an issue, __________ serves as an intermediary between the issuer company and SEBI.

a) Depository Partcipants

b) Underwriters

c) Bankers to the issue

d) Merchant Bankers

49 / 50

49.

Which of the following offerings opens the door for the listing and trading of the issuer’s securities?

a) Rights Issue

b) Initial Public Offer (IPO)

c) Further Public Offer (FPO)

d) All of the above

50 / 50

50. In the buyback process, is it true or false that a company has the option to repurchase its shares from Odd Lot holders?

a) True

b) False

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NISM Series IX: Merchant Banking Certification Mock Test (Set 4)