Quiznetik

Advanced Financial Management 2 | Set 1

1. Capital Market deals with __________

Correct : B. Medium and Long Term Funds

2. In Secondary segment of Capital Market ____________

Correct : B. Trading of outstanding securities is done

3. Which of the following is a role of Capital Market?

Correct : D. All of the Above

4. Funds can be raised in Primary Market through

Correct : D. All of the Above

5. Primary Market is a market for :

Correct : A. New Issues

6. When an organization opts to convert private capital in to public capital, it is called _____________

Correct : D. Going Public

7. Bonus Shares enable the company to restructure its capital.

Correct : A. True

8. Which of the following enables issuers to reap benefits arising from price and demand discovery?

Correct : B. Book Building

9. Which one of the following is not a feature of a Stock Exchange?

Correct : C. Necessary to remain present physically for dealing

10. SENSEX is an Index of which Stock Exchange?.

Correct : D. None of the above

11. Inclusion of a security in the official list of a stock exchange is called _________ and for that the company has to apply with ___________.

Correct : A. Listing, Managing Committee of Stock Exchange

12. ____________ was set up, as a strong need was felt to protect the interest of investors and to have a systematic and organized working of the securities market in India.

Correct : D. Securities and Exchange Board of India

13. Collateral value of eligible Listed Securities is considered on ….

Correct : B. Marked to market basis

14. SBTS stands for

Correct : D. Screen Based Trading System

15. Which is a mean to reduce the floating equity stock in the market?

Correct : C. Buy Back

16. Which Stock Exchange of India was the first to grant permission to brokers for internet trading?

Correct : A. National Stock Exchange

17. Which Stock Exchange of India is based on the model of NASDAQ?

Correct : D. OTCEI

18. At present securities are issued in which form?

Correct : B. Dematerialized

19. One of the features of Capital Market is ‘Ready and Continuous market’ which provides _____________ to the investors.

Correct : C. Liquidity

20. In ____________ market fresh capital is raised.

Correct : A. Primary

21. Which is the market for financial assets that are close substitutes for money?

Correct : B. Money Market

22. Return on Treasury Bills is ___________

Correct : B. Difference between Issue Price and Par Value

23. Commercial Paper is generally issued by:

Correct : B. Reputed and highly rated Corporates

24. Which Money Market instrument is a time deposit of specific maturity and issued in bearer form?

Correct : C. Certificate of Deposit

25. In which Money Market instrument default risk is absent?

Correct : C. Treasury Bills

26. Which of the following is considered to be the key segment of Indian Money Market?

Correct : A. Call Money

27. Which of the following is an important tool to finance credit sales?

Correct : A. Commercial Bill

28. Credit Rating performs the function of credit risk evaluation reflecting the borrower’s expected capability to repay the debt as per terms of issue.

Correct : A. True

29. Credit Rating is beneficial to :

Correct : D. All of the above

30. First Credit Rating Agency of India is ____________.

Correct : A. CRISIL

31. CARE stands for :

Correct : C. Credit Analysis and Research Limited

32. Which of the following is not a part of rating methodology?

Correct : D. Subscriber Evaluation

33. ICRA was promoted by _____________ jointly with other leading investment institutions, commercial banks and financial service companies.

Correct : B. IFCI

34. CRISIL was set up in which year?

Correct : A. 1988

35. A statement demonstrating the movement of funds into and out of the business during the course of accounting period is known as ___________

Correct : B. Fund Flow Statement

36. Analysis of funds is rightly called an Analysis of __________

Correct : A. Working Capital

37. Which of the following rules stands true while preparation of Schedule of changes in working capital? 1) An increase in current assets increases working capital. 2) An increase in current assets decreases working capital. 3) An increase in current liabilities decreases working capital. 4) An increase in current liabilities increases working capital

Correct : A. 1 and 3

38. Among the following items, which represents the source of fund?

Correct : D. All of the above

39. Fund Flow Statement is also known as:

Correct : D. All of the above

40. Which of the following are sources of funds? 1.Issue of Bonus Shares 2.Issue of Shares against the purchase of Fixed Assets 3. Conversion of Debentures into Shares 4.Conversion of Loans into Shares

Correct : D. None of the above

41. Which of the following statements is true? 1. If the amount of good will increases during current year, the difference is treated as purchase of goodwill. 2. If the amount of good will decreases during current year, It will treated as written off.

Correct : C. Both 1 and 2

42. Which of the following are treated as long term investments?

Correct : D. All of the above

43. The balance of fixed assets of Breej Ltd. at the end of 2018 and 2019 were Rs 5,70,800 and Rs 6,15,300. During the year 2019 a machinery costing Rs 60,000 was sold. Determine the purchase of fixed assets.

Correct : A. Rs. 1,04,500

44. For Ram Industries, the balance of property has beenRs 20,000 and Rs 17,000 in 2018 and 2019 respectively. The profit on sale of property of Rs 2000 is credited to Capital Reserves Account. New property costing Rs 5000 bought in 2019. Determine sale proceeds forproperty.

Correct : B. Rs. 10,000

45. For Meghal Industries Ltd. opening balance for Provision for Taxation is Rs. 18,000 and closing balance is Rs. 15,000. During the year Taxed paid wereRs. 10,000. What is the current year’s Provision for Taxation made from the profit?

Correct : C. Rs. 7,000

46. Which of the following are Non-current Assets?

Correct : A. Land, Building and Plant

47. Which of the following are Current Liabilities?

Correct : D. All of the Above

48. When a part of the Fixed Assets is sold during the year, the Profit on sale is shown on the credit side of which Account?

Correct : A. Adjusted Profit and Loss Account

49. The Funds Flow and Cash Flow statements fail to give a clear idea about profitability of the company.

Correct : A. True

50. Among the following items which item is shown on the debit side of Adjusted Profit and Loss Account?

Correct : D. All of the Above

51. Among the following items which does NOT represent the Application of Funds?

Correct : C. Issue of Share Capital

52. Until February 1973, which one of the following was prevalent in World Monetary System?

Correct : B. Adjustable Peg Exchange Rate System

53. Which one of the following is NOT referred to as ‘Major’ or ‘Hard’ Currency?

Correct : D. India Rupee

54. Rs. 75.17/USD is which type of quotation?

Correct : B. Direct Quote

55. In a two way foreign exchange quotation, the difference between ask and bid prices is called ____________.

Correct : C. Spread

56. Below data is available: Spot Exchange Rate 6 Month’s Forward Rate Rs./USD 75.17 Rs. 75.00 So, the forward rate is at ___________________

Correct : B. Discount

57. From the data given below which option is true? Spot 1 month’s Forward Rs./GBP 94.85 94.95

Correct : A. 1 month’s forward is at 1.27% premium

58. The rate of exchange of two currencies on the basis of exchange quotes of other pairs of currencies are derived when a quote of home currency (or desired currency) to any other currency is not available in the Foreign Exchange market is called ____________.

Correct : C. Cross Rate

59. Which of the below mentioned contract is a standardized contract?

Correct : A. Futures Contract

60. An Option which can be exercised only on the maturity date is known as __________.

Correct : C. European Option

61. There is a close link between the interest rates in two countries and the forward rate premium or discount. The theory about this is :

Correct : C. Covered Interest Arbitrage and interest Rate Parity

62. According to Fisher effect, the nominal rate is equal to the real interest rate plus an adjustment for ______________

Correct : C. Inflation

63. The acquisition of existing firms or plants as a means of FDI is called ___________.

Correct : D. Brown Field Investments

64. McDonald’s purchasing farms in India to grow potatoes is which type of FDI?

Correct : C. Vertical

65. When an American Company acquires a division or unit of Indian company, the US is said to be a ______________ Country.

Correct : A. Sending

66. An act of buying currency in one market at a lower price and selling it in another at higher price resulting in equilibrium in exchange rates of different currencies is called _________________.

Correct : D. Arbitrage

67. Which of these are considered as nerve centres of foreign exchange activity.

Correct : A. London, New York and Tokyo

68. Who are key participants of Foreign Exchange Market?

Correct : D. All of the above

69. When the exposed position in a foreign currency is covered through borrowing or lending in the money market, it is called ______________.

Correct : D. Money Market Hedge

70. An efficient Capital Market provides operational efficiency through…

Correct : D. All of the above

71. Full form of WDM segment is ………..

Correct : A. Wholesale Debt Market

72. A facility of carrying forward the transaction from one settlement to another in BSE was called _______

Correct : B. Badla

73. For Book Building Process a merchant banker is appointed as a __________

Correct : C. Book Runner

74. Which one of the below is NOT a category of participant in the Primary Capital Market?

Correct : C. Traders of securities

75. Which of the below financial product / instrument cab be traded in the secondary market?

Correct : D. All of the above

76. __________________ is a benchmark Indian Stock Market Index that represents the weighted average of 50 of the largest Indian Companies listed on the National Stock Exchange.

Correct : B. NIFTY

77. What is the full form of ECB?

Correct : A. External Commercial Borrowings

78. For listed companies the prices are publically arrived at on the basis of demand and supply and hence stock exchange quotations reflect the real value of the security.

Correct : A. True

79. SEBI started its actual functioning when…..

Correct : C. SEBI Act was passed in 1992

80. Full Form of NEAT is

Correct : A. National Exchange for Automated Trading

81. What is the full form of NSDL

Correct : C. National Securities Depository Ltd.

82. Market making is a unique concept of which stock exchange of India?

Correct : D. OTCEI

83. Capital Market in India plays a role in developing integration among:

Correct : D. All of the above

84. Sentence A – Through Rights issue fresh capital can be raised and Sentence B – Through a Bonus Issue Fresh capital can be raised.

Correct : A. Only Sentence A is true

85. Book Building is basically ____________ of shares.

Correct : A. An auction

86. In the process of Book Building if the public portion gets oversubscribed,…..

Correct : B. The allotment is made on a proportionate basis

87. Stock Futures, Stock Options, Index Futures and Index Options are ___________

Correct : C. Equity Derivatives

88. Which Stock Exchange of India was set up with an objective to meet the current international standards of securities market?

Correct : D. NSE

89. To provide a focal point for central bank (RBI) intervention for influencing liquidity and general level of interest rates in the economy is an important function of

Correct : B. Money Market

90. Indigenous bankers and money lenders are constituents of _____________

Correct : C. Unorganised Money Market

91. The purchase and sell of which of the following instrument is effected through Subsidiary General Ledger (SGL) account?

Correct : A. Treasury Bills

92. Minimum Subscription amount of a Certificate of Deposit is ___________.

Correct : C. Rs. 1,00,000

93. Which instrument was introduced in year 1990 with a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowings?

Correct : B. Commercial Paper

94. When money is lent for more than a day and up to 14 days it is called as __________

Correct : D. Notice Money

95. What type of relationship is there between call rates and short-term money market instruments such as CDs and CPs?

Correct : A. Inverse

96. _______________ is an important tool to finance credit sales?

Correct : A. Commercial Bill

97. Which instrument involves high risk and high returnsand helps corporates in solving temporary capital crisis without many formalities?

Correct : C. Inter-corporate Deposits

98. Which of the following are money market instruments?

Correct : D. All of the Above

99. What is the full form of CRISIL?

Correct : B. Credit Rating Information Services of India Limited

100. ICRA was incorporated in which year?

Correct : B. 1991