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FINANCIAL SERVICES AND DERIVATIVES - 691U1
GRD COLLEGE OF SCIENCE
SCHOOL OF COMMERCE AND INTERNATIONAL BUSINESS
BCOM ACCOUNTING AND FINANCE
MCQ EXAMINATTIONS March 2024
DATE :
TIME :
MARKS : 50
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SEBI regulates the ________ in the securities market
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Listing of Securities
Commercial banking Activities
listing requirements
a &c
Name
*
Your answer
A ___________with a rating below BB is considered to be a speculative grade or a junk bond, which means it is more likely to default on loans.
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• debt instrument
• equity instrument
• short term loans
• private equity
The term ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐refers financial investment in a highly risky and growth oriented venture with the objective of earning a high rate of return
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factoring
MerchantBanking
Leasing
Venture capital
In mutual funds each shareholder participates ______in the gains or losses of the fund.
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• Proportionally
• Equally
• No sharing
• All
Financial Innovation __________
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UPI
Cheque
Stocks and bonds
FDI and RD
Mutual funds invests money in securities such as _____
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• stocks,
• bonds,
• short term debts
• All
A merchant bank is a financial institution conducting money market activities and which of the following?
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underwriting
investment service
loan service to corporates
All
Which of the following is not a fee‐based financial service?
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corporate counselling
profit management
issue management
Lease financing
Rating of banks are done by _____ and _____ .
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• CRISIL AND ICRA
• CRISIL AND CARE
• CARE AND ICRA
• ONICRA AND CRISIL
List out the factors to be considered while selecting a mutual fund scheme
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performance against bench mark
fund managers experience
performance consistency
All the above
CRISIL rating C means _______
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• Moderate safety
• Very high risk
• High risk
• Adequate safety
The forward contract is an agreement between a buyer and seller to trade an asset at a
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future date
current date
spot price
none of the above
Class
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Your answer
What is the full form of IPO?
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stock register
bin card
sales invoice
initial public offer
An option allowing the owner to sell an asset at a future date is a ……………
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Put option
Call option
Forward option
Swap
Fund based services
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• Venture capital
• Hire purchase
• Dealing in secondary market activities
• All
Financial regulations are applicable to
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• Banks and insurance companies
Financial intermediaries
• Stock brokers and Trading platforms
• All
Register Number
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Your answer
Financial regulators _______
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• SEBI
• RBI
• IRDA
• All
____________are laws and rules that govern the workings of financial institutions
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• Financial regulations
• Financial intermediation
• Financial institutions
• Financial credits
Non-fund based Services
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• Securitisation
• Merchant banking
• Credit rating
• All
The debt instruments rated by Credit rating agencies include
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• government bonds,
• corporate bonds,
• municipal bonds,
• All
Financial derivatives include
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futures
stock
bonds
none
CRISIL rating BBB means _______
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• Moderate safety
• Adequate safety
• High risk
• Very high risk
In India the company which actually deals with the corpus of the mutual fund is called_____.
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Sponser company
Trustee company
Asset management company
Mutual fund company
features of mutual funds______
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• Diversification
• Affordability
• Liquidity
• All
A forward contract is a derivative of a _____________.
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SPOT contract
financial contract
particular time contract
none of these
Futures contracts are more successful than interest rate forward contracts because they :
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are less liquid
have greater default risk
are more liquid
have an interest rate tied to the discount rate
Benefits of credit rating to the company___________
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• Ease in borrowings
• Borrowing at cheaper rates
• Adds to the goodwill of the rated company
• All
features of financial services
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Intangible
customer oriented
Perishable
All
Features of open end funds in mutual funds are
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• Investors are free to buy and sell
• Not traded in stock exchanges
• Units can be sold at any time
• All
Benefits of credit rating to investors_________
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• Assessment of risk.
• Information at low cost.
• Provides the investors a choice of Investment.
• All
Mutual funds give ______access to diversified, professionally managed portfolios at a low price.
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• small or individual investors
• high net worth investors
• institutional investors
• financial investors
The amount paid for an option is the
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Strike price
Discount
Premium
Yield
Over-the-counter (OTC) refers to the process of
*
how securities are traded via a broker-dealer network as opposed to on a centralized exchange.
economic liberalization
financial institutions
financial industry
A ______can be assigned to any entity that seeks to borrow money.
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• Credit rating
• Fund rating
• Securities funds
• Lending functions
Benefits of credit rating__________
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• Benefits to investors.
• Benefits to the rated company.
• Benefits to intermediaries. And Benefits to the business world.
• All
The important goal of the financial service industry is to mobilise and allocate _________.
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saving
sales
purchase
none of the above
Functions of credit rating ________
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• unbiased opinion to investors
• Provide quality and dependable information.
• Helps investors in taking investment decisions.
• All
Which of the following are functions of financial services?
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mobilisation of savings
allocation of funds
specialised services
all the above
Required
The financial services can be broadly classified into two:
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• Fund based services and non-fund services (or fee-based services)
• Fund based services and Production based services
• Non-fund services (or fee-based services) and production based services
• Non-fund services (or fee-based services) and Export orient services
Factors considered in credit rating _________
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• Issuer’s ability to service its debt
• Market position of the company
• Industry risks
• All
Credit rating is an analysis of the ________associated with a financial instrument or a financial entity.
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• Credit risks
• Economical risks
• Managerial risks
• Inflation risk
Characteristics of credit rating
*
Expressed in symbols
Done by an expert
Assessment of repayment of debts
All
____________ have high risk than money market funds because they typically aim to produce higher returns
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• Bond funds
• Money market funds
• Stock funds
• Equity funds
The payoffs for financial derivatives linked to
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Securities that will be issued in the future
The volatality of interest rates
previously issued securities
none of the above.
Types of financial derivative
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Forwards and Futures
Swaps
Option
All
Credit rating can be assigned to
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• an individual
• corporation
• state or provincial authority
• All
Challenges faced by the financial service sector
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• Lack of qualified personnel in the financial service sector.
• Lack of investor awareness about the various financial services
• Lack of efficient risk management system in the financial service sector.
• All
Money market funds have relatively _____
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• low risks
• high risk
• moderate risk
• no risk
Merchant banks deal with funds raised through ____________ and capital market.
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financial market
primary market
secondary market
money market
A _____is a company that pools money from many investors and invests the money in securities
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• Mutual fund
• Public deposits
• Fixed funds
• Securities
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