Review Questions

Review Questions 1
1. Which of the following best describes the term “Private Placement”?

(a) Issue made to all investors in the Indian securities market.
(b) Issue made to select group of people.
(c) Issue made to those investors who already hold shares of the company.
2. State which of these statements is true?

(a) Call Option gives the buyer the right but not the obligation to
buy the
underlying asset.
(b) Call Option gives the buyer the right but not the obligation to sell the underlying asset.
(c) Put Option gives the buyer the right but not the obligation to buy the underlying asset.
3. Interest rate futures trading is based on ______________________.

(a) Notional 12 year coupon bearing GOI security.
(b) Notional 10 year coupon bearing GOI security.
(c) Treasury Bills.
4. Derivative contracts expire on the ___________________.

(a) Last Friday of the month
(b) Last Thursday of the expiry month.
(c) Last trading day of the month.
Review Questions 2
1. American Depository Receipts (ADRs) are ______________________.

a) Negotiable instruments denominated in dollars and issued by US
depository Banks.
b) Bonds issued by Indian companies abroad.
c) Depository receipts issued abroad by authorized overseas corporate bodies against shares
of Indian companies held with nominated domestic custodian banks.
2. Which of the following statement is false?

a) Custodians are registered with SEBI as professional clearing members
b) Self‐clearing members can clear trades done by them only.
c) Trading cum clearing members can trade and clear trades done by him,
but cannot trade and clear trades done by others.
3. Stock brokers need to get registered as stock brokers with SEBI as per which regulation?
a) SEBI (Intermediaries) Regulations, 2008
b) SEBI (Stock Brokers and Sub‐Brokers) Regulations, 1992
c) SEBI Act, 1992
4. Securities Contracts (Regulation) Act, 1956 has regulatory jurisdiction over

(a) Listing of securities on Stock Exchanges
(b) Recognition of intermediaries in the Securities Market
(c) Investor Protection
Review Questions 3
1. Direct Market Access facility is introduced for __________________.

a. Retail Investors.
b. Institutional Clients only.
c. Specific International Broking Firms.
2. Which of the statement is false?

a. On receipt of the order at the Exchange system, an order confirmation is sent to the
broker.
b. Depending upon the order terms and conditions and the actual prevailing market
prices, the order may get executed immediately, partially or fully.
c. The order can be entered for buy or sell irrespective of whether the
client has
sufficient balance of funds or securities in his account.
3. A contract note is __________________________.

a. A legal document which is entered upon by the client with his broker before entering
into any transaction.
b. Confirmation of trade done during the particular day with all details of
which
securities have been bought or sold, at price etc.
c. A note which holds margin details.
Review Questions 4
1. Risk containment measures includes which of the following:

(a) Checking Margin requirements
(b) Checking networth of the client /investor
(c) Checking whether the order placed is genuine
2. SPAN method of calculating margin requirement is for trades done_________________.

(a) On the Equities Segment
(b) On the Futures and Options Segment
(c) On Government Securities
3. State which of the following is true.

(a) Failure to maintain and furnish documents as prescribed under
various rules and regulation may attract penalty upto Rs. 1 crore.
(b) The sauda book of the register of transactions needs to be maintained by the
broker for a period of 2 years.
(c) Members Contract books showing details of all contracts entered by the broker
needs to be maintained for 10 years as per the Rule 15 of SCRR
Review Questions 5
1. The process of original trade being cancelled and the clearing agency taking over as
counterparty to all trades is called ____________________
(a) Execution
(b) Novation
(c) Determination
(d) Guaranteeing
2. Clearing members need to take membership with the ___________________.

(a) Clearing Agencies
(b) Exchanges
(c) Brokers
(d) Depositories
3. What kind of accounts is used to receive shares from selling clients and to send shares
to buying clients?
(a) Delivery
(b) Pool
(c) Receipt
(d) Common
Review Questions 6
1. In case of sale of securities, what instruction should be given to the DP, upon
receipt of intimation of execution of trade from broker with whom he maintains
the demat account.
(a) Credit
(b) Debit
(c) Hold
(d) No action to be taken.
2. Corporate action adjustments are done on all _____________ positions.

(a) Open
(b) Closed
(c) Past
(d) Executed
3. What is the action taken when there is a failure on part of the broker to deliver the
securities?
(a) Sale
(b) Auction
(c) Trade Cancelled
Review Questions 7
1. Who is the backbone of the securities market?

(a) Stock Exchanges
(b) Trading Members
(c) Investors
(d) Regulators
2. Arbitration aims at ________ legal resolution for the disputes.

(a) Slower
(b) Quicker
(c) Routine
3. A client, who is a party to the arbitration for a claim/counter claim upto

_________, and files arbitration reference is exempted from filing the deposit.
(a) Rs. 10 lakh
(b) Rs. 15 lakh
(c) Rs. 5 lakh
(d) Rs. 20 lakh
Review Questions 8
1. ________ is a process by which a company offers shares for sale to public for the first time.
(a) FPO
(b) IPO
(c) Private Placement
(d) QIP
2. ASBA is the acronym for________________.

(a) Application Supported by Blocked Amount
(b) Applying Sponsoring Brokers Amounts
(c) Application Supports for Brokers Amount
3. The facility for modification of mutual fund order does not include_______________
(a) Scheme name
(b) Depository settlement
(c) Symbol and series
(d) All of the above

Review Questions

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Review Questions 1

1. Which of the following best describes the term “Private Placement”?

2. State which of these statements is true?

3. Interest rate futures trading is based on ______________________.

4. Derivative contracts expire on the ___________________.

1. American Depository Receipts (ADRs) are ______________________.

2. Which of the following statement is false?

4. Securities Contracts (Regulation) Act, 1956 has regulatory jurisdiction over

1. Direct Market Access facility is introduced for __________________.

2. Which of the statement is false?

3. A contract note is __________________________.

1. Risk containment measures includes which of the following:

2. SPAN method of calculating margin requirement is for trades done_________________.

3. State which of the following is true.

2. Clearing members need to take membership with the ___________________.

2. Corporate action adjustments are done on all _____________ positions.

1. Who is the backbone of the securities market?

2. Arbitration aims at ________ legal resolution for the disputes.

3. A client, who is a party to the arbitration for a claim/counter claim upto

2. ASBA is the acronym for________________.

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