Constituency of Cabinet Ministers for UPSC, RBI Grade B 2021, SSC CGL, and RRB NTPC

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                    Are you appearing for RBI Grade B2021 exam? If yes then you need to prepare memorize Constituency of Cabinet Ministers. In RBI Grade B Phase 1 examination one mark can be easily scored in General Awareness Section. Every single marks is important. Since 2016 RBI has asked questions from this topic every year.

Constituency of Cabinet Ministers

• PM Narendra Modi - Varanasi (UP)

• Rajnath Singh - Lucknow (UP)

• Amit Shah - Gandhi Nagar (Gujarat)

• Nitin J. Gadkari - Nagpur (Maharashtra)

• DV Sadananda Gowda - Banglore North (Karnataka)

• Nirmala Sitharaman - Rajya Sabha (Karnataka)

• Piyush Goyal - Rajya Sabha (Maharashtra)

• Narendra S. Tomar - Morena (MP)

• Ravi Shankar Prasad - Patna Sahib (Bihar)

• Thaawar Chand Gehlot - Bathinda (Punjab)

• Dr. S. Jaishankar - (Gujarat)

• Ramesh P. Nishank - Haridwar (Uttarakhand)

• Arjun Munda - Khunti (Jharkhand)

• Smriti Irani - Amethi (UP)

• Dr. Harsh Vardhan - Chandni Chowk (New Delhi)

• Prakash Javadekar - (Maharashtra)

• Dharmendra Pradhan - Rajya Sabha (MP)

• Mukhtar Abbas Naqvi - Rajya Sabha (Jharkhand)

• Pralhad Joshi - Dharwad (Karnataka)

• Dr. Mahendra Nath P. - Chandauli (UP)

• Arvind G. Sawant - Mumbai South (Maharashtra)

• Giriraj Singh - Begusarai (Bihar)

• Gajendra S. Shekhawat - Jodhpur (Rajasthan)

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Important Finance & Banking Abbreviations for IBPS PO, SBI PO SEBI Grade A, RBI Grade B, SSC CGL, IRDAI.

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            Here we have provided you few Banking and Finance related abbreviations for exams like SEBI Grade A and RBI Grade B.  MOST IMPORTANT SEBI & RBI MCQs CLICK HERE

1. ESOP- Employee Stock Ownership Plan.

2. ICDR- Issue of Capital and Disclosure Requirements.

3. FEMA- The Foreign Exchange Management Act, 1999.

4. IPO- Initial Public Offering.

5. FPO- Further Public Offering.

6. QIP- Qualified Institutions Placement.

7. IPP- Institutional Placement Programme.

8. BRLM- Book Running Lead Manager.

9. RII- Retail Individual Investor (RIIs).

10. NII- Non-Institutional Investors (NIIs).

11. QIB- Qualified Institutional Buyers (QIBs).

12. ASBA- Applications Supported by Blocked Amount.

13. RTGS- Real Time Gross Settlement.

14. NEFT- National Electronic Funds Transfer.

15. ECS- Electronic Clearing Service.

16. DIP- Disclosures and Investor Protection.

17. IMPS- Immediate Payment Service.

18. VPA- Virtual Payment Address (UPI ID).

19. SCSB- Self-Certified Syndicate Bank.

20. UMN- Unique Mandate Number. (UPI)

21. DRR- Debenture Redemption Reserve.

22. AMC- Asset Management Company.

23. TER- Total Expense Ratio.

24. NAV- Net Asset Value.

25. OTC- Over-the-Counter.

26. FIMMDA- The Fixed Income Money Market and Derivatives Association of India.

27. MAPIN- Market Participant Identification Number.

28. UIN- Unique Identification Number.

29. STT- Securities Transaction Tax.

30. MTM- Mark to Market.

31. IPF-  Investor Protection Fund.

32. BOLT- BSE Online Trading.

33. DMA- Direct Market Access.

34. SPA- Share Purchase Agreement.

35. VWAP- Volume Weighted Average Price.

36. REIT- Real Estate Investment Trusts.

37. AIF- Alternative Investment Funds.

38. InvIT- Infrastructure Investment Trusts.

39. FPI- Foreign Portfolio Investment.

40. LODR- (Listing Obligations and Disclosure Requirements.

41. CRA- Credit Rating Agency.

42. ISIN- International Securities Identification Number.

43. RTA- Registrar and Transfer Agent.

44. BO- Beneficial Owner.

45. QFI- Qualified Foreign Investors.

46. SCORES- SEBI Complaint Redress System.

47. SCRA- Securities Contracts (Regulation) Act.

48. IEPF-  Investor Education and Protection Fund.

49. FRN- Floating Rate Note.

50. REER- Real Effective Exchange Rate.

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Securities Market and Company Act MCQs for SEBI Grade A / RBI Grade B 2020 Exam Part - 10

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                            Securities Market and Financial Awareness MCQs for the upcoming SEBI Grade A and RBI Grade B examination. It will be also helpful your your banking examination such as IBPS, SBI PO, IRDAI, etc. For All MCQs Archive CLICK HERE

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

Q1. What is the name of an online platform designed to help investors to lodge their complaints by SEBI?

A. Jano To Mano

B. SCORES

C. SEBICOM

D. e-Complaints

Explanation: (B) SCORES Stands for in SEBI Complaints Redress System ( SCORES).

• SCORES is an online platform designed to help investors to lodge their complaints, pertaining to securities market, online with SEBI against listed companies and SEBI registered intermediaries. All complaints received by SEBI against listed companies and SEBI registered intermediaries are dealt through SCORES.

• An investor may lodge a complaint on SCORES within three years from the date of cause of complaint, where;
• 
  

 Investor has approached the listed company or registered intermediary for redressal of the complaint and, The concerned listed company or registered intermediary rejected the complaint or,

The complainant does not receive any communication from the listed company or intermediary concerned or,

The complainant is not satisfied with the reply given to him or redressal

action taken by the listed company or an intermediary.

In case investor fails to lodge a complaint within the stipulated time, he

may directly take up the complaint with the entity concerned or may

approach appropriate court of law.

Q2. Upto what extent a company can buyback its shares without shareholders' resolution?

A. 15%

B. 10%

C. 50%

D. 25%

Explanation: (B) Upto 10%

A company may buyback its shares without shareholders’ resolution, to the extent of 10% of its paid up equity capital and reserves, based on both standalone and consolidated financial statements of the company. However, if a company intends to buyback its shares to the extent of more than 10% of its paid up capital and free reserves then the same has to be approved by shareholders by way of special resolution in term of the provisions of Companies Act, 2013.

Q3. The term company is defined under which sec of the Companies Act 2013?

A. Section 2 (5)

B. Section 2 (20) 

C. Section 3 (1) 

D. Section 1 (3)

Explanation: (B) Section 2(20) of the 2013 Act defines the term “company” to mean “a company incorporated under the Companies Act 2013 or any previous company law.” Accordingly, a company, which is incorporated under the relevant legislation of a foreign country, will not qualify as a “company” under the 2013 Act

• The provision to section 2(71) states that “a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act.” 

Q4. The company’s nationality is decided by its 

A. Registered office 

B. Shareholders

C. Place at books of accounts are kept 

D. Founder

Explanation: (A)  A company's nationality is decided by its registered office. 

• A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.

(2) The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.

Q5. What is the cut-off time for buying and selling Mutual Funds units in India?

A. 1 PM

B. 2 PM

C. 3 PM

D. 6 PM

Explanation: (C) Recently SEBI restores the cut-off time for buying and selling Mutual Funds units to 3 PM.

• Cut-off timings aren’t meant to restrict the purchase and sale of mutual fund units. The Securities and Exchange Board of India (SEBI) has prescribed cut off timings to determine which day’s net asset value will be applicable to your trade.

• If an order is placed before 1 pm, it will take into account the same day's NAV. If placed after 1 pm, the next day's NAV will be applicable. To get the same day's NAV for redemption, the cut-off timing for all mutual funds was advanced from 3 pm to 1 pm.

• Importance Cut-Off Timings 

Investors trading in large volumes of money depend on even marginal per unit gains. For long-term investors, cut-off timings do not play a very crucial role. Even in the case of individuals investing a small sum of money, cut-off timings do not largely influence the profitability of the investment.

The precision in setting cut-off timing makes sense only if there is a foolproof mechanism of capturing the time at which the sale and re-purchase applications are received. This is ensured through the time-stamping mechanism. Thus, understanding cut-off timings makes it easier for investors to make informed decisions.

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Securities Market and Public Issuance MCQs for SEBI Grade A / RBI Grade B 2020 Exam Part - 9

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                            Securities Market and Financial Awareness MCQs for the upcoming SEBI Grade A and RBI Grade B examination. It will be also helpful your your banking examination such as IBPS, SBI PO, IRDAI, etc. For all MCQs Archive CLICK HERE 

Q1. Market Capitalization aka m-cap of a stock fluctuate by

A. Volume of shares

B. Changes in price of the stock

C. Changes in the market index

D. Liquidity in the market

Explanation: (B) Market Capitalization or market cap of a company is the number of shares outstanding multiplied by the market price per share.

• Market cap—or market capitalization—refers to the total value of all a company's shares of stock.

• For example: Dixon Technologies Ltd current share price Rs. 8,815 * 11,570,141 shares outstanding, then M-Cap is Rs. 10,199 Cr. So, any change in the stock price will impact the market capitalization of the  company.

Q2. What is  the process known as when a company makes either a fresh issue of shares for the first time to the public?

A. FPO

B. IPO

C. Right Issues

D. None of the above

Explanation: (B) IPO Stands for Initial Public Offerings. 

• Initial public offering is the process by which a private company can go public by sale of its stocks to general public. It could be a new, young company or an old company which decides to be listed on an exchange and hence goes public.

•  Initial public offer (IPO): When an unlisted company makes either a fresh issue of shares or convertible securities or offers its existing shares or convertible securities for sale or both for the first time to the public, it is called an IPO. This paves way for listing and trading of the issuer’s shares or convertible securities on the Stock Exchanges. 

• For Example: Recently Likhitha Infrastructure IPO launched with 5,100,000 Eq Shares of ₹10(aggregating up to ₹61.20 Cr) at a price band of Rs. 116 to Rs. 120 per equity share.

Q3. What does I stands for in QIP?

A. Individual

B. Investor

C. Institutional

D. Increase

Explanation: (C) QIP stands for Qualified Institutions Placement.

• Qualified institutions placement (QIP): When a listed issuer issues equity shares or non-convertible debt instruments along with warrants and convertible securities other than warrants to Qualified Institutions Buyers only, in terms of  Page 4 of 32 provisions of Chapter VIII of SEBI (ICDR) Regulations, 2009, it is called a QIP. 

• Here, ICDR stands for Issue of Capital and Disclosure Requirements.

Q4. Retail individual investor is an investor who applies or bids for securities of or for a value of not more than Rs. ________?

A. Rs. 2.5 Lakh

B. Rs. 5 Lakh

C. Rs. 2 Lakh

D. Rs. 2.75 Lakh

Explanation: (C)  “Retail individual investor” means an investor who applies or bids for securities for a value of not more than Rs. 2,00,000. 

• Sebi law defines retail individual investor as an investor who applies or bids for securities of or for a value of not more than Rs 2,00,000 in an IPO and buys or holds shares worth less than Rs 2,00,000 in a stock. There is no such limit in commodities to define a retail investor.

• In October 2010 Securities and Exchange Board of India (SEBI) today doubled the investment limit for retail investors in an initial share sale offer to Rs2 lakh. Way back in 2005, the limit for retail investors was raised from Rs50,000 to Rs1,00,000 in public issues.

Q5. What does B stands for in ASBA?

A. Bank

B. Blocked

C. Bond

D. Band

Explanation: (B) ASBA stands for APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (ASBA).

• ASBA (Applications Supported by Blocked Amount) is a process developed by India's Stock Market Regulator SEBI for applying to IPOs, Rights issue, FPS etc. In ASBA, an IPO applicant's bank account doesn't get debited until shares are allotted to them. ASBA means “Applications Supported by Blocked Amount”.

• As an investor, if you apply through ASBA, your money gets debited from your bank account only if your application is selected for allotment. It is refunded to your bank account if you do not get the IPO issue or the issue has been withdrawn. From 2016 onwards, the SEBI has directed that it is mandatory to fill an ASBA form if you wish to invest in IPO.

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Securities Market and Financial Awareness MCQs for SEBI Grade A / RBI Grade B 2020 Exam Part - 8

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                            Securities Market and Financial Awareness MCQs for the upcoming SEBI Grade A and RBI Grade B examination. It will be also helpful your your banking examination such as IBPS, SBI PO, IRDAI, etc. For all MCQs Archive CLICK HERE

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

Q1.  Derivatives is a risk management tool that drives its value from underlying ______?

A. Stocks

B. Currency

C. Commodities

D. Any one of the above

Explanation: (D)  In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, forex, stocks, commodities or interest rate, and is often simply called the "underlying".

• A derivative is a financial contract that derives its value from an underlying asset. The buyer agrees to purchase the asset on a specific date at a specific price. 

• A derivative is a security, that forms a contract between two or more parties. These types of contracts are often based on asset classes like commodities (eg. Oil or Silver) and for currencies (like the USD/INR). They are used for company stocks and even for interest rates.

Q2. Recently Mutual Fund Advisory Committee of SEBI issued guidelines  for product labeling in mutual funds. Which among the following category of risk has been added?

A. Very High

B. High

C. Low

D. Moderate

Explanation: (A) Very High Risk category has been added in Risk-o-Meter.

• Risk Level of a scheme will be depicted by “Risk-o-meter”, as shown below:

                                                                    PC: SEBI Website.

• Risk-o-meter shall  have following  six levels of  risk  for mutual  fund schemes:

i. Low Risk

ii. Low to Moderate Risk

iii. Moderate Risk

iv. Moderately High Risk

v. High Risk

vi.Very High Risk

Q3. What is the limit has been decided for Government under WMA for the second half of the Financial Year 2020-21?

A. 1.45 Lakh Crore

B. 1.50 Lakh Crore

C. 1.25 Lakh Crore

D. 1.05 Lakh Crore

Explanation: (C)  It has been decided, in consultation with the Government of India, that the limits for Ways and Means Advances (WMA) for the second half of the financial year 2020-21 (October 2020 to March 2021) will be ₹1,25,000 crore.

• The Reserve Bank may trigger fresh floatation of market loans when the Government of India utilizes 75 per cent of the WMA limit.

• The Reserve Bank retains the flexibility to revise the limit at any time, in consultation with the Government of India, taking into consideration the prevailing circumstances.

• The interest rate on WMA/overdraft will be:

WMA: Repo Rate

Overdraft: Two percent above the Repo Rate

Q4. Which of the following options can be exercised at the expiration date of the option?

A. American Option

B. European Option

C. Bermudan Option

D. None of the Above

Explanation: (B) In finance, the style of an option is the class into which the option falls, usually defined by the dates on which the option may be exercised. The vast majority of options are either European or American options, and Bermudan etc.

• Exercise Option is an option which gives buyer or seller a chance to exercise the contract only at the maturity date. European options specify that a trader can only choose to exercise (or not) his option on the date of expiration.

• An American option on the other hand may be exercised at any time before the expiration date.

• A Bermudan option may be exercised on any of several specified exercise dates.

Q5. Under Basel III Framework what does F stands for in NSFR?

A. Functional

B. Framework

C. Fund

D. None of the above

Explanation: (C) NSFR stands for Net Stable Funding Ratio (NSFR) under Basel III Framework on Liquidity Standards. The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding.

• The net stable funding ratio  (NSFR) is a liquidity standard requiring banks to hold enough stable funding to cover the duration of their long-term assets.

• The NSFR will require banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities.

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Securities Market and General Awareness MCQs for SEBI Grade A / RBI Grade B 2020 Exam Part - 7

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                     Securities Market and Financial Awareness MCQs for upcoming SEBI Grade A and RBI Grade B examination.  For all MCQs Archive CLICK HERE

Q1. Call risk exists in which of the following securities?

A. Stocks

B. Options

C. Puttable Bonds

D. Callable Debt Securities

Explanation: (D) Call risk exists in callable debt securities. The investor may have planned to stay invested until bond maturity, but the issuer may exercise the option to call the security earlier. Usually securities are called back when interest rates decline because issuers want to retire high-cost debt and re-issue fresh debt at lower rates. As a result, investors are forced to reinvest at lower rates.

• Call risk is the risk that a bond issuer will redeem its bonds before they mature.

Q2. A bond is said to be issued at premium when

A. When Coupon rate is greater than Required returns

B. When Coupon rate is equal to Required returns

C. When Coupan rate is less than Required returns

D. None of the above

Explanation: (A) A bond that is trading above its par value in the secondary market is a premium bond. A bond will trade at a premium when it offers a coupon (interest) rate that is higher than the current prevailing interest rates (required returns) being offered for new bonds. This is because investors want a higher yield and will pay for it.

• For example, if a bond with a par value of Rs. 10,000 is selling at a premium when it can be bought for more than Rs. 10,000 and is selling at a discount when it can be bought for less than Rs. 10,000.

• Bonds can be sold for more and less than their par values because of fluctuating interest rates in an economy.

Q3. What does 'D' stands for in CDS?

A. Discount

B. Demand

C. Decline

D. Default

Explanation: (D) CDS Stands for Credit Default Swap.

• Credit Default Swaps (CDS) are a type of insurance against default risk by a particular company. The company is called the reference entity and the default is called credit event. It is a contract between two parties, called protection buyer and protection seller. Under the contract, the protection buyer is compensated for any loss emanating from a credit event in a reference instrument. In return, the protection buyer makes periodic payments to the protection seller.

• In brief, A credit Default Swap (CDS) is a contract between two parties in which one party purchases protection from another party against losses from the default of a borrower for a defined period of time.

Q4. Which section of Companies Act 2013 is related to issue of Red Herring Prospectus (RHP)?

A. Section 31

B. Section 27

C. Section 25

D. Section 32

Explanation:  (D) The Section 32 of Companies Act, 2013 states that a company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus.

• A red herring prospectus, as a first or preliminary prospectus, is a document submitted by a company as part of a public offering of securities.

• In India, A Red Herring Prospectus (RHP) is a preliminary registration document that is filed with SEBI in the case of book building issue which does not have details of either price or number of shares being offered or the amount of issue.

Q5. AT-1 bonds are a type of _________?

A. Secured Bonds

B. Perpetual Bonds

C. Pay less interest rates as compared to other bonds

D. None of the above

Explanation: (B) Perpetual bonds, known as Additional Tier – I in market parlance do not have any fixed maturity but offer call option after a stipulated period of time, which acts as an exit route for investors.

• AT-1, short for Additional Tier-1 bonds, are a type of unsecured, perpetual bonds that banks issue to shore up their core capital base to meet the Basel-III norms. 

• Recently SEBI released a circular mentioning, AT-1 bonds will be less accessible to retail investors because now only institutional buyers can invest in AT-1 bonds.

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Securities Market and Financial Awareness MCQs for SEBI Grade A / RBI Grade B 2020 Exam Part - 6

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                           SEBI Grade A/ RBI Grade B Securities Market and Financial Awareness MCQs. If you want to crack SEBI Grade A / RBI Grade B examination, you need to read the relevant material. READ and REVISE it Multiple times because if you can't replicate whatever you have studied then it is of no use. For All MCQs Archive CLICK HERE

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

Q1. Calling feature in bonds is most prevalent when_______?

A. When it favours the investors

B. When interest rates are expected to fall

C. When interest rates are expected to rise.

D. When interest rates remain stable

Explanation: (B) A callable bond gives the borrower (issuer) the right to pay back obligation (borrowed amount) to the lender (bondholder) before the stated maturity date.

• There is a call option embedded in callable bonds. So when the interest rates fall the issuer of bond has the option to call back bonds (to pay back the borrowed amount to the lender or bondholders).

• For Example-- Exam Together Limited, issues a callable bond with a maturity period of 10 years at a 6% premium. However, 7 years down the line, the interest rates in the economy falls to 5%. So, the issuer (Exam Together) can exercise call option and will redeem the bonds at a premium of 5%. This helps the issuer to save major chunk of money that goes to the bondholders as interest payments.

• The callable bonds are known to deliver a higher interest or coupon rate to the investors, the companies issuing the same can look forward to benefitting from the same.

Q2. What does 'I' stands for in CHIPS? 

A. Interest

B. Interbank

C. Immediate

D. Indian

Explanation: (B) CHIPS Stands for The Clearing House Interbank Payments System. It is the primary clearing house in the U.S. for large banking transactions.

Founded : 1970

Q3. When interest rates fall in the economy 

A. Bond prices rise

B. Bond prices remain same

C. Bond Prices fall

D. There is no correlation between interest rates and bond prices.

Explanation: (A) The bond price depends on the interest rates prevalent in the market on which it can either sold at premium or discounted rate. There is a inverse relationship between interest rates and bond prices.

• When interest rates fall, bond prices rise.

• When interest rates rise, bond prices fall.

• When interest rates rise, the market value of bonds falls. If you have a bond with a coupon of 6% and the interest rates rise from 6% to 7%, Then the coupon rate on the bond will now seem less attractive to investors so they'll be willing to pay less for it.

PM SVANidhi Scheme Explained for UPSC

Q4. As per SCRA 1956, the term securities include which of the following?

A. Bonds

B. Derivatives.

C. Shares, scrips or bonds

D. All of the above.

Explanation: (D) The term "securities" has been defined in section 2(h) of Securities Contracts (Regulation) Act, 1956

•  Shares, scrips, stocks, bonds, debentures,
•  Derivatives,
•  Government securities,
•  Rights or interest in securities etc.

Q5. What is the Statutory Liquidity Ratio at present? (September 2020)

A. 19%

B. 18%

C. 20.5%

D. 18.5%

  

Explanation: (B)   Statutory Liquidity Ratio (SLR): The share of NDTL or Net Demand and Time Liabilities that a bank is required to maintain in safe and liquid assets, such as, unencumbered government securities, cash and gold. Changes in SLR often influence the availability of resources in the banking system for lending to the private sector.

• The SLR percentage is of the percentage of the total bank deposits available as far as the particular bank is concerned and it keeps changing as per the RBI monetary policy.

• SLR is used to increase or decrease the flow of bank credit.

• The money invested under the SLR window earn some interests for banks. But they can’t access this fund for lending purposes.

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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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Securities Market and General Awareness MCQs for SEBI Grade A 2020 Exam Part - 4

 Hello Readers,

 SEBI Grade A  – exam is going to be conducted very soon. To prepare better and to the point, aspirants need to study relevant and valuable material. The below post gives the detailed questions answers for SEBI Grade A Securities Market and General Awareness. Read all MCQs Archive CLICK HERE

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

Q1. Which bond gives its issuer the right to redeem or pay the bonds before its maturity date?

A. Zero Coupon Bond

B. Puttable Bond

C. Debentures

D. Callable Bonds

E. None of the Above

Explanation: (D) A callable bond allows the issuing company to pay off their debt early. 

• A business may choose to call their bond if market interest rates move in its favour. Means the prevailing  interest rates are low as compared to the interest the company is paying to the bondholders.

• Callable bonds are akin to call options, where the issuer has the right to call the bond before maturity.

• A callable bond is also called as redeemable bond.

• Issuers (any business entity) entice investors to buy callable bonds by paying higher interest rates on callable bonds than on noncallable bonds.

• A callable bond also gives the borrower (issuer) the right to pay back the obligation to the lender (bondholder) before the stated maturity date. 

Q2. Which debt financial securities pay off in the short term, usually within one year.

A. Bond Market

B. Money Market

C. Primary Market

D. Secondary Market

E. None of the above.

Explanation: (B) Money Market refers to a financial market securities where these instruments with high liquidity and short-term maturities are traded. 

• Basically money market instruments are pay off within a very short period generally one year.

• Money market financial instruments consists of negotiable instruments such as:

          A. Commercial Papers.

          B. Treasury Bills

                      Following are the types of T-bills in India:

                     1. 14-day Treasury bill

                     2. 91-day Treasury bill

                     3. 182-day Treasury bill

                    4. 364-day Treasury bill

        C. Certificates of Deposit.

• The Money Market instruments are usually traded over-the-counter (OTC), and therefore, it has to be done through a financial intermediary especially a broker dealing in money market financial instruments or money market mutual fund.

• The investment period in money market financial instruments is very short, ranging from three months up to a year.

Q3. What does E stands for in ECBs?

A. External

B. Extreme

C. Easy

D. Economy

E. None of the above

Explanation: (A) ECB stands for External Commercial Borrowings.

• External commercial borrowing are loans in India made by non-resident lenders in foreign currency to Indian borrowers. In simple terms ECBs allows Indian firms to raise money outside the country in foreign currency.

• The cost of funds is usually cheaper from external sources if borrowed from economies with a lower rate of interest because that helps the Indian businesses to raise funds cheaply.

Q4. Temporary overdrafts facility by Reserve Bank of India to the Government is known as?

A. Ways and Means Advances

B. Primary Money

C. Overdraft Finance

D. Lending Operation

E. None of the above

Explanation: (A) Ways and Means Advances. 

• The WMA scheme was introduced on April 1, 1997.

• Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy to provide to States, banking with it, to help them tide over temporary mismatches in the cash flow of their receipts and payments.

• In basic terms, it is the facility for the GoI and states government to borrow money from the Reserve Bank of 

• India. This facility is done as per the provisions laid down in Section 17(5) of the RBI Act, 1934.

• Its limits are mutually decided by the Government and RBI.

Q5. An RBI monetary policy instrument which involves buying and selling of government securities to the public or other financial institutions is known as?

A. Interest Rate Operation

B. Open Market Operation

C. Green Shoe Option

D. Fiscal Rate Operation.

E. None of the above.

Explanation: (B) Open Market Operation

• An open market operation (OMO) is an activity by a central bank to give (or take) liquidity in its currency to (or from) a bank or a group of banks.

• When the RBI wants to increase the money supply in the economy, it purchases the government securities from the market and it sells government securities to suck out liquidity from the system.

• RBI uses this operation to maintain money supply or to deal with liquidity problems in the economy.

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Securities Market and General Awareness MCQs for SEBI Grade A 2020 Exam Part - 3

Hello Readers,

 SEBI Grade A 2020 – exam is going to be conducted very soon. To prepare better and to the point, aspirants need to study relevant and valuable material. The below post gives the detailed questions answers for SEBI Grade A Securities Market and General Awareness. For all MCQs Archive CLICK HERE

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

Q1. Open-ended mutual fund scheme units  can be bought  from?

A. AMFI

B. Fund House

C. Stock Exchange

D. Stock Broker

E. None of the above

Explanation: (B) An open-end fund scheme is a mutual fund that can issue unlimited new shares, priced daily on their net asset value.

• Open-ended schemes are available for subscription and repurchase on a continuous basis.

• An investor will generally purchase shares in the fund directly from the fund itself, rather than from the existing shareholders or stock exchanges.

• An investor can purchase or sell units of an open-ended mutual fund at any time after the closure of New Fund Offer (NFO).

Q2. How frequently the NAV of each scheme should be updated on AMC/AMFI’s website?

A. Every Hour

B. Every Month

C. Once in a Quarter

D. Every Day

E.  None of These

Explanation: (D) NAV stands for Net Asset Value.

•  It is mandatory, as per SEBI guidelines, the NAV per unit of all mutual fund schemes have to be updated on AMFI's website and the Mutual Funds' website by 9 p.m.

• AMFI Stands for Association of Mutual Funds in India. 

• Founded: 2015

• CEO: C.V.R. Rajendran

Q3. In which state Dudhwa National Park is situated?

A. Gujarat

B. Uttar Pradesh

C. Bihar

D. Karnataka

E. Assam

Explanation: (B) The Dudhwa National Park is a national park in the Terai belt of marshy grasslands of northern Uttar Pradesh, India.

• Dudhwa became a tiger reserve in 1879. The area was established in 1958 as a wildlife sanctuary for swamp deer. Thanks to the efforts of Billy Arjan Singh the area was notified as a national park in January 1977.

• "The Dudhwa National Park in Lakhimpur Kheri district is located in the Terai-Bhabhar region bordering Nepal, about 230 km from Lucknow.".

Q4. What does P stands for in P - Notes?

A. Portfolio

B. Positional

C. Payment

D. Participatory

E. Plan

Explanation: (D) Participatory Notes started in 2000 by SEBI.

• A participatory note, commonly known as a P-note or PN, is an instrument issued by a registered foreign institutional investor (FII) to an overseas investor who wishes to invest in Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI).

• Participatory notes are not used within the country. They are used outside India for making investments in shares listed in the Indian stock market.

• Investing through P-Notes is very simple and hence very popular amongst FIIs. Overseas investors who are not registered with SEBI have to go through a lot of scrutiny, such as know-your-customer norms, before investing in Indian shares. To avoid these hurdles, foreign investors take P-Notes route.

Q5. At which rate banks lend  to their prime customers is called_____?

A. Interest Rate

B. Greenwich Rate

C. Real Lending Rate

D. Prime Lending  Rate

E. None of the Above

Explanation: (D)   Prime Lending Rate (PLR) 

• The prime lending rate is the primary determiner of most of the interest rates charged by the lending institution; it is a component of the rate charged to the customer.

• Before 2010, there was Benchmark Prime Lending Rate (BPLR) system, RBI introduced the Base Rate system with effect from July 1, 2010.

 

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