MCE2DSCCOM100 INDIAN SECURITIES MARKET: STRUCTURE AND OPERAT

Which of the following is NOT a component of the financial system?

• Financial Institutions

• Financial Markets

• Financial Instruments

• Educational Institutions

What is the primary function of the financial system?

• To allocate resources efficiently

• To regulate international trade

• To promote industrial growth exclusively

• To provide tax collection services

Financial markets can broadly be categorized into which two types?

• Capital market and money market

• Stock market and commodity market

• Money market and derivatives market

• Primary market and real estate market

What role do financial markets play in risk management?

• They ensure stable government policies.

• They allow investors to diversify and manage risk.

• They allow investors to diversify and manage risk.

• They reduce the risk of business failure.

Which of the following entities regulates the Indian capital market?

• Bombay Stock Exchange (BSE)

• Reserve Bank of India (RBI)

• Securities and Exchange Board of India (SEBI)

• Ministry of Finance

What type of bond provides the option to convert into equity shares?

• Zero-coupon bonds

• Convertible bonds

• Floating rate bonds

• Perpetual bonds

Which of the following is a type of issue in the primary market?

• Foreign exchange contracts

• Futures and options

• Treasury bills

• Initial Public Offering (IPO)

What is the role of underwriting in the primary market?

• To ensure the success of new security issues by guaranteeing subscription

• To trade securities on behalf of investors

• To regulate market prices

• To provide liquidity for securities

What is a price band in the book-building process?

• The range of prices within which investors can bid

• The maximum price at which all shares are sold

• The average price of the stock in the secondary market

• A fixed price at which shares are sold

Which of the following is a benefit of listing securities?

• Reduced transparency requirements

• Increased liquidity for investors

• Higher trading fees for companies

• Guarantee of dividends for shareholders