Securities Market and General Awareness MCQs for SEBI Grade A 2020 Exam Part - 5

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                          MCQs on Securities Market and General Awareness for the upcoming SEBI Grade A/ RBI Grade B examination. It is very important to study relevant and well targeted study material to crack any exam. So Exam Together has provided you with a series of 5 MCQs on Securities Market and General Awareness Section with detailed explanation. For all MCQs Archive CLICK HERE

Securities Market and General Awareness for SEBI Grade A/ RBI Grade B

Q1. What is the maximum limit for investment for an individual in Sovereign Gold Bond?

A. 10 Kg

B. 5 Kg

C. 4 Kg

D. 1 Kg

Explanation: (C) Sovereign Gold Bond Scheme was launched by Government in November 2015.

  

• The minimum investment for an individual in SGB is one gram of gold and in multiples thereof, with a maximum limit of of 4 kg for individuals.

• SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. 

• Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.

• SGB comes with a assured fixed rate interest per annum on the initial investment, which is quite lucrative.

• The tenor of the bond will be a period of 8 years and bondholders can exit the bond at the end of 5th , 6th or 7th year.

Q2. What does 'D' stands for in FIMMDA?

A. Debt

B. Debenture

C. Dissolution

D. Derivatives

Explanation: (D) D stands for Derivatives.

• The Fixed Income Money Market and Derivatives Association of India (FIMMDA). 
• FIMMDA is a voluntary market body for the bond, money and derivatives markets.

• It is an association of Scheduled Commercial Banks, Public Financial Institutions, Primary Dealers and Insurance Companies incorporated as a company under section 25 of the Companies Act, 1956.

• FIMMDA founded on 4th May, 1998.

• FIMMDA main objective is to regulate the dealings in Fixed Income instruments, money market instruments and derivatives products, and to promote ethical code of conduct.

Q3. If a company issues fresh shares, and such shares are offered only to existing shareholders, then such issue is a ________?

A. Initial Public Offering.

B. Right Issue.

C. Private Placement.

D. Offer for Sale.

Explanation: (B) A rights issue is an invitation to existing shareholders to buy additional new shares in the company in proportion of their existing shareholding. This type of issue gives existing shareholders securities called rights.

• Concept of Right Issue of Shares comes under Companies Act, 2013. Section 62(1)(a) of Companies Act, 2013,  deals with the Right Issue. 

• The basic idea is to raise fresh capital and to ensure equitable allocation of shares.

• The existing shareholders are not obliged to subscribe to the right issue, they can also choose to ignore the issue.

• Recently The Securities and Exchange Board of India (SEBI) extended the regulatory approval validity for IPO, Rights Issue up to March 31, 2021.

Q4. 'Soch Kar, Samajh Kar, Invest Kar, is associated with which of the following stock exchange.

A. BSE

B. NSE

C. INX

D. MCX

Explanation: (B) "Soch kar, Samajh kar, Invest kar" is a Trademark of National Stock Exchange Of India Limited.

• This line basically talks about the way of investing to the general public. Think and Understand the investment instrument before investing.

• It is a NSE Investor Awareness Campaign to enable potential investor to make wise investment decisions.

Q5. Corporate Governance takes into account which aspect of the Management?

A. Profitability

B. Integrity

C. Efficiency

D. Business Decisions

Explanation:(B) Corporate Governance is a set of code of conducts, policy and procedures of a company's operations and its dealings with various stakeholders internal as well as external stakeholders i.e. corporate governance essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, etc.

Thus it becomes very important for a company to maintain the level of integrity to sustain the business activity.

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Read Also: MCQs Part 4

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