Practice Set 1 Practice Set 1 Welcome to AADVIKMS! Â 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. A mutual fund that collects money from investors and invests in the market is an example of a/an _______ Issuer Intermediary Regulator Institutional Investor None 2. The group of market participants that collectively facilitate interaction between investors and issuers is known as _______. Regulators Custodians Bankers Intermediaries None 3. The financial results of a company show it has suffered losses due to declining market share. The price of its equity share drops in the market. This is an example of the role of the market as: _______. Provider of liquidity Orderly channel for transfer of funds from investors to issuers Generator of productive investments Information Signaling through prices None 4. The securities that are already issued are available for subsequent purchases and sales at: _______. Office of the registrar and transfer agent Follow on public offer of the issuer Stock exchanges where they are listed Depositories where they are held None 5. The Reserve Bank of India regulates the money market and foreign exchange market segments. State whether True or False. True False None 6. Which of the following is considered a long-term financial market? Money Market Capital Market Debt Market Currency Market None 7. A platform where the issuance of securities is done for the first time is known as: Primary Market Secondary Market Debt Market Money Market None 8. Which type of security represents ownership in a company? Bonds Equity Shares Debentures Commercial Papers None 9. The main regulator of the securities market in India is: Reserve Bank of India (RBI) Securities and Exchange Board of India (SEBI) Ministry of Finance Stock Exchanges None 10. A measure that reflects the total market value of all shares listed on an exchange is called: Market Cap Market Liquidity Index Price Trading Volume None 11. Which entity primarily ensures that the securities market operates in a fair and transparent manner? Stock Exchange SEBI RBI Ministry of Finance None 12. What role does the secondary market serve in the context of capital raising? Provides liquidity and marketability Raises funds for companies Establishes investment funds Facilitates mergers and acquisitions None 13. A financial instrument that can be converted into a pre-defined number of equity shares is known as: Bond Convertible Security Debenture Treasury Bill None 14. What is the primary benefit of electronic trading in the securities market? Limited access Reduced transaction speed Enhanced transparency and efficiency Restricted market entry None 15. Which of the following best describes the purpose of a 'regulatory sandbox' in securities markets? To increase the number of securities listed To limit market access To enable testing of FinTech solutions under regulatory oversight To enforce stricter complianc None 16. Which of the following terms best describes the process of raising new capital for companies through securities markets? Secondary Market Capital Allocation Primary Market Money Market None 17. The Securities and Exchange Board of India (SEBI) primarily regulates which of the following markets? Money Market Commodity Market Securities Market Currency Market None 18. What is the primary function of stock exchanges? Fund allocation Trading of securities Determining interest rates Providing investment advice None 19. Which type of market provides liquidity and marketability to securities after their issuance? Primary Market Secondary Market Money Market Derivatives Market None 20. The process by which investors make decisions based on current and historical data to determine the value of securities is called: Capital Allocation Technical Analysis Valuation Market Making None 21. What is the primary purpose of securities markets? To provide capital to the government To enable efficient allocation of capital To regulate currency exchange rates To manage public funds None 22. Which of the following is NOT a function of secondary markets? Liquidity Price discovery Fundraising for new issues Investor exit None 23. Which term refers to the division of a financial portfolio among asset types like stocks and bonds? Market Analysis Fund Diversification Asset Allocation Portfolio Assessment None 24. The main regulator of securities markets in India is: Reserve Bank of India Ministry of Finance Stock Exchanges SEBl None 25. The securities that are issued for the first time are offered in which market? Secondary Market Primary Market Debt Market Commodity Market None 26. Which market allows investors to buy and sell securities that have already been issued? Debt Market Primary Market Secondary Market Derivatives Market None 27. Who benefits most from liquidity provided by secondary markets? Regulators Long-term bondholders Issuers of securities Investors seeking to buy or sell securities None 28. Securities markets primarily help with the _______ of capital. Preservation Allocation Collection Maintenance None 29. An investor who buys shares and holds them long-term is most interested in: Immediate returns Portfolio diversification Long-term appreciation Short-term gains None 30. The information signaling function of markets is illustrated when: Prices remain stable Investors focus only on dividends Stock prices reflect a company's financial performance All stocks are priced similarly None 31. Which of these is a form of ownership in a company? Debenture Bond Equity Commercial Paper None 32. The term "market capitalization" refers to: Total trading volume Total outstanding debt Total market value of shares Annual earnings of a company None 33. What type of marketable security represents a loan to the issuer? Equity Shares Preferred Stock Bonds Derivatives None 34. Primary markets are essential for: Establishing new market rules Providing liquidity to existing securities Raising new capital from investors Transferring ownership between investors None 35. Price discovery in markets involves: Setting uniform prices across exchanges Identifying fair prices based on supply and demand Regulatory control of price levels Standardizing prices in primary markets None 36. In a securities market, 'intermediaries' refer to: Buyers only Market regulators Entities that facilitate transactions between buyers and sellers Government agencies None 37. The primary function of a stock exchange is to: Generate funds for government projects Manage the economy Facilitate trading of securities Provide market analysis None 38. Who oversees the primary market activities in India? RBI Stock Exchanges - SEBI Ministry of Corporate Affairs None 39. A 'bull market' signifies: Decline in stock prices A period of inflation Rising stock prices Stability in the economy None 40. Secondary markets improve capital allocation by providing: Fixed returns on investments Immediate profits to all investors Liquidity and flexibility for investors to buy and sell Exclusive investment options 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!
