Practice Set 4 Practice Set 4 Welcome to AADVIKMS! Practice Set of Securities Markets Total Number of Questions: 40 Time: 40 Minutes All the best... Kind Regards CMA Madhuri Kashyap & CMA Sandeep Kumar - Founder - International Navodaya Chamber of Commerce Name Email Phone State 1. What is the primary function of secondary markets? Provide liquidity for securities issued Facilitate public issues Disclose company information Ensure economic growth None 2. What document confirms a trade executed on a stock exchange? Confirmation slip Contract note Delivery instruction slip Ledger statement None 3. What is used by exchanges to control risk in secondary market trades? a) Imposing margins Restricting trading hours Canceling high-value trades Limiting investors' access None 4. Which of the following factors impacts the market capitalization of a stock? Market index changes Stock price changes Trading volume Liquidity level None 5. In an efficient market, securities prices reflect: Current demand only All available information Historical trends Speculative trades None 6. Which entity guarantees trade settlement in the stock market? Clearing corporation Brokers SEBI Custodians None 7. What ensures liquidity in secondary markets? Transparency in trade Frequent price discovery Trading in listed securities Market surveillance systems None 8. Which system is used for G-Sec trading by institutional investors? NDS-OM NSE-Bond RFQ platform OTC platform None 9. The secondary market acts as a barometer for: Fiscal policy Economic activity Inflation rates Government borrowing None 10. Who facilitates secondary market trading for retail investors? Depositories Brokers Investment funds Clearing members None 11. What is the term for securities traded directly between buyers and sellers? OTC Market Exchange-Traded Market Regulated Market Mutual Fund None 12. Which participant is NOT part of the secondary market ecosystem? Clearing corporation Brokers Investment advisors IPO consultants None 13. What is the settlement cycle for equity markets in India? T+1 T+2 T+3 T+5 None 14. What document details the rights and obligations of trading members? SEBI Manual Rulebook of Exchanges Trade Contract Note Investor Charter None 15. Which tool is primarily used for price discovery in secondary markets? Order book Trading floor Demat account Clearing house None 16. What does a depository participant (DP) do? Executes trades on behalf of investors Holds securities in electronic form Guarantees settlement of trades Offers credit to investors None 17. Which is an essential feature of a well-functioning secondary market? Arbitrage opportunities Price volatility High liquidity Low transaction volume None 18. Who ensures timely delivery and settlement in a securities trade? Brokers Depositories Clearing members Registrars None 19. What is the main role of SEBI in secondary markets? Market making Regulating market participants Clearing trades Issuing securities None 20. Which type of order is executed at the prevailing market price? Market order Limit order Stop-loss order Conditional order None 21. What is the advantage of screen-based trading? Anonymous transactions Limited trading hours Higher margins Restricted access None 22. What is the minimum net worth requirement for brokers as per SEBI? ₹10 Lakhs ₹50 Lakhs ₹1 Crore ₹5 Crore None 23. Which of these participants directly interacts with retail investors in secondary markets? Custodians Brokers Clearing corporations SEBI None 24. What is the purpose of a stop-loss order? Maximize profits Limit potential losses Avoid regulatory penalties Manage margin requirements None 25. Which platform facilitates retail bond trading? BSE-Bond NSE-Finance NSDL-Market ICEX None 26. Which market participant provides liquidity to stock markets? Market makers SEBI Depositories Retail investors None 27. What is the role of a custodian in the secondary market? Facilitate retail investor trading Settle trades for institutional investors Monitor SEBI compliance Act as brokers for mutual funds None 28. In which segment of secondary markets are debt instruments primarily traded? Wholesale Debt Market Equity Trading Segment Commodities Market Mutual Fund Segment None 29. What is the primary role of the clearinghouse? Trade execution Settlement guarantee Risk evaluation Investment advising None 30. Which securities are not traded in secondary markets? Equity shares Government bonds IPO shares Debentures None 31. What is the primary objective of margin requirements in the secondary market? To increase trading volume To manage counterparty risk To boost market liquidity To ensure capital appreciation None 32. Which entity monitors compliance and fairness in trading activities? Clearinghouse Stock Exchange Depository Broker None 33. What is the key feature of a limit order? Executed at any price Executed at a specified price or better Restricted to a minimum quantity Requires prior SEBI approval None 34. What ensures transparency in stock market transactions? Anonymous trading Electronic trading platforms OTC trading Physical settlement of trades None 35. What is the penalty for failing to meet margin requirements? Fine by SEBI Imposition of additional margins Suspension of trading Trade annulment None 36. Which secondary market segment caters to government securities? NDS-OM BSE Equity Segment Currency Derivatives Segment Commodity Derivatives Segment None 37. What is the main purpose of circuit breakers in stock markets? To encourage higher trading To halt trading during extreme volatility To ensure low transaction costs To support speculative activities None 38. Which type of trading is NOT typically allowed on stock exchanges? Algorithmic trading Insider trading Arbitrage trading Day trading None 39. What is the purpose of ISIN in securities trading? To identify investors To uniquely identify securities To track market volatility To allocate investor portfolios None 40. Which participant typically executes proprietary trades? Brokers Custodians Market makers Clearing member None Thank you for participating in our test series! We hope it boosted your knowledge and prepared you well for finance job interviews. Keep leveraging what you've learned to build confidence and excel. Wishing you great success in your career journey! Time's upTime is Up!
