NISM Series XII: Securities Market Foundation Mock Test (Set 3)

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1 / 50

An investor wanting to buy units of an ETF will carry out the transaction with _______.

a) AMC, account statement

b) Distributors; Account statement

c) Distributor, demat account

d) Brokers; demat account

2 / 50

__________ are closed-ended funds that invest in securities with a maturity matching the term of the scheme.

a) Infrastructure Debt Funds (IDF)

b) Active mutual funds

c) Fixed Maturity Plans (FMP)

d) Real estate mutual funds

3 / 50

_________ are derivatives traded on exchanges.

a) Futures

b) Swaps

c) Forwards

d) Options

4 / 50

Options that grant the holder the right to buy the underlying asset are known as ________ options.

a) Strike

b) Call

c) Exercise

d) Put

5 / 50

As per SEBI guidelines, ___________ are the investors who meet the eligibility criteria to invest in mutual funds in India.

a) Institutions and Trusts

b) Non Resident Indians (NRIs)

c) Persons of Indian Origin (PIOs)

d) All the above

6 / 50

If the investigations need it, _________ can punish people who break the rules in a stock exchange.

a) MCA

b) RBI

c) SEBI

d) DEA

7 / 50

___________ borrow money by issuing IOUs (debt securities) to cover their needs for both short-term and long-term financing when they have budget shortfalls.

a) State Government

b) Central Government

c) Local Government

d) Only 1 and 2

8 / 50

Exchanges provide _________ services to their members, and they charge a fee for these services.

a) Algorithmic Trading

b) High-Frequency Trading

c) Mobile Trading

d) Co-location

9 / 50

_________ trading refers to traders buying or selling a share during a trading day and then reversing that trade before the market closes on the same day.

a) Inter-day trading

b) Rolling settlement

c) Squaring off a trade

d) Trades for delivery

10 / 50

10.

Securities are issued according to specific rules that usually demand the _________ to receive sufficient information.

a) Investors

b) Underwriters

c) Issuers

d) Brokers

11 / 50

11.

___________ are paid a commission for their role depending upon their collection.

a) Registrar and Transfer Agents

b) Underwriters

c) Brokers to the Issue

d) Bankers to the issue

12 / 50

12.

The securities market can be divided into ___________.

a) Primary market

b) Secondary market

c) Currency market

d) Only 1 and 2

13 / 50

13.

The smallest amount you can order for a block deal is _________.

a) Rs.10 crore

b) Rs.14 crore

c) Rs.7 crore

d) Rs.8 crore

14 / 50

14. If a bond is issued at a face value of Rs. 100 with a 10 percent annual coupon, and market interest rates have gone up, the bond’s likely quoted value would be ________.

a) At a price that reflects its credit risk

b) At a price above face value

c) At the face value

d) At a price below face value

15 / 50

15.

What does it mean to create a portfolio of securities in a way that ensures a good balance across various sectors and individual securities?

a) Hybrid securities

b) Diversification

c) Loads

d) Marking To Market (MTM)

16 / 50

16.

India is one of the few markets in the world where __________ on individual stocks are traded.

a) Futures

b) Swaps

c) Forwards

d) Options

17 / 50

17.

The investor may have planned to stay invested until bond maturity, but the issuer may exercise the option to ___________ the security earlier.

a) Liquidity

b) Re-issue

c) Call

d) Reinvest

18 / 50

18.

The availability of futures and options on both Indian rupee pairs and cross-currency pairs is a characteristic of ___________.

a) Interest rate derivatives

b) Equity derivatives

c) Currency derivatives

d) Commodity derivatives

19 / 50

19.

A _________ contract minimizes the risk of an uncertain price for both the seller and the buyer.

a) Options

b) Futures

c) Forward

d) Backward

20 / 50

20.

Any remaining risk is financed by a distinct pool of funds referred to as the ___________.

a) Final Settlement Guarantee Fund

b) Core Settlement Guarantee Fund

c) Full Settlement Guarantee Fund

d) Partial Settlement Guarantee Fund

21 / 50

21.

A __________ interest payment means that the borrower’s actual obligation will depend on the Treasury bill rate on the settlement date.

a) Fixed rate

b) Commercial paper rate

c) Floating rate

d) Treasury bill rate

22 / 50

22. Security __________ allows borrowers to raise money at a reasonable cost.

a) Exchange

b) Issuance

c) Ownership

d) Allowance

23 / 50

23. Government agencies do not release ___________ securities.

a) Equity

b) Futures

c) Mutual Funds

d) Debt

24 / 50

24.

___________ refers to organizations that invest substantial amounts of money and utilize specialized knowledge and investment skills.

a) Individual investors

b) Investment companies

c) Retail investors

d) Institutional investors

25 / 50

25. ___________ are prevalent in interest rate and currency markets.

a) Futures

b) Forwards

c) Swaps

d) Options

26 / 50

26.

A _________ is a risk management tool commonly used in transactions where there is uncertainty about the future value.

a) Preference Share

b) Derivative

c) Debt

d) Equity

27 / 50

27.

Financial arrangements between two parties should be in the form of ___________ securities.

a) Transparent

b) Non-Transparent

c) Non-Transferable

d) Transferable

28 / 50

28.

_________ simply compares the bond’s coupon with its market price.

a) Yield to Maturity

b) Face value

c) Current yield

d) Interest

29 / 50

29.

_________ ETF is an exchange-traded fund (ETF) that follows the Nifty Bharat Bond Index.

a) Masala bonds

b) Corporate bonds

c) Capital gain bonds

d) Bharat Bond

30 / 50

30.

An open-ended debt scheme predominantly investing in floating rate instruments is known as __________.

a) Floater Fund

b) Gilt Fund

c) Dynamic Bond

d) Corporate Bond Fund

31 / 50

31.

____________ have to pay user charges and statutory charges to the exchange and the regulator, which they do not directly recover from the client.

a) Underwriters

b) Brokers

c) Lead managers

d) Portfolio managers

32 / 50

32.

___________ is an open-ended hybrid scheme investing predominantly in debt instruments.

a) Central government

b) Municipal bodies

c) State government

d) Municipal bodies

33 / 50

33. A __________ is an open-ended hybrid scheme that primarily invests in debt instruments.

a) Arbitrage Fund

b) Balanced Hybrid Fund

c) Aggressive Hybrid Fund

d) Conservative Hybrid Fund

34 / 50

34.

A ___________ is placed when an investor wants a trade to get executed only if the desired price becomes available in the market.

a) Limit Order

b) Market Order

c) Stop-loss Order

d) Immediate or Cancel (IOC) Order

35 / 50

35.

____________ help in reaching the services of brokers to a larger number of investors.

a) Merchant bankers

b) Authorized persons

c) Stock brokers

d) Underwriters

36 / 50

36.

___________ provides advantages for market participants engaged in cash-futures arbitrage.

a) Value at Risk (VaR) Margin

b) Extreme Loss Margin

c) Mark to Market Margin

d) Cross-Margining

37 / 50

37.

Mutual funds have to be registered with SEBI to be able to raise _________ capital from the public.

a) Debt

b) Venture

c) Unit

d) Share

38 / 50

38.

Which of the following types of shares are required to be listed on a stock exchange?

a) All shares issued through a public offer

b) All shares issued to non-promoters

c) All shares issued by a company

d) All shares depending upon the terms of the issue

39 / 50

39. The net economic value of all derivative positions should be ___________.

a) One

b) Three

c) Zero

d) Two

40 / 50

40.

In any public issue of debt securities, the base issue size shall be a minimum of _________.

a) Rs.150 crores

b) Rs.100 crores

c) Rs.90 crores

d) Rs.170 crores

41 / 50

41.

What is necessary for making a debt security available to the public?

a) The promoters must stand guarantee for the payment of principal and interest.

b) The debt instruments must be credit rated.

c) The instruments do not require minimum coupon specified.

d) The shares must be listed on the stock exchange.

42 / 50

42.

In a first-time stock sale, the promoters must contribute at least __________ of the company’s total shares after the sale.

a) 14 percent

b) 7 percent

c) 20 percent

d) 17 percent

43 / 50

43.

The rules and guidelines set by _________ determine how the prospectus should be written and organized.

a) Companies Act

b) SEBI

c) RBI

d) Only 1 and 2

44 / 50

44.

Everyone involved in the private placement process needs to promise the exchange that they will use the _________ facility.

a) R-WAP (Registrar – Web enabled Application Portal)

b) Qualified Institutions Placement (QIP)

c) Unified Payment Interface (UPI)

d) Electronic bidding

45 / 50

45.

The process of investing in stocks includes _________.

a) Sector and segment weighting

b) Security selection

c) Market timing

d) All the above

46 / 50

46.

Previously issued securities can be bought and sold on: ________.

a) Depositories where they are held

b) Follow on public offer of the issuer

c) Stock exchanges where they are listed

d) Office of the registrar and transfer agent

47 / 50

47.

A ___________ is a financial product whose value comes from another.

a) Preference Share

b) Equity

c) Derivative

d) Debt

48 / 50

48.

An 18 percent charge is applied to brokerage for ___________.

a) Securities Transaction Tax (STT)

b) Goods and Services Tax (GST)

c) SEBI’s Turnover Tax

d) Stamp Duty

49 / 50

49.

_____________ will be filed with SEBI and the stock exchange when a shelf prospectus is filed.

a) Information Memorandum

b) Red herring prospectus

c) Application Supported by Blocked Amount (ASBA)

d) Green Shoe Option (GSO)

50 / 50

50.

____________ are involved in the business of issue management by arranging the buying, selling, or subscribing to securities, or providing advice related to such issue management.

a) Authorized persons

b) Underwriters

c) Merchant bankers

d) Stock brokers

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NISM Series XII: Securities Market Foundation Mock Test (Set 3)