Capital Markets
This comprehensive Capital Market MCQ Mega‑Set has been designed to provide students, aspirants, and professionals with a complete practice resource covering every major aspect of capital markets. With 300 carefully structured questions, divided into 12 thematic blocks, this set ensures balanced coverage of fundamentals, instruments, regulations, participants, indices, risks, mutual funds, corporate actions, global markets, and recent trends like algorithmic trading, ESG, and crypto integration.
Each question is accompanied by an answer and explanation, making this collection not just a test bank but also a learning guide. Whether you are preparing for competitive exams (UPSC, JEE, MBA, CFA, SAT) or seeking to strengthen your understanding of financial markets, this set offers clarity, depth, and exam‑style authenticity.
By practicing these MCQs, readers will:
- Gain conceptual clarity on capital market operations.
- Build exam confidence with structured, topic‑wise coverage.
- Stay updated with global and modern trends in finance.
This resource is crafted for modular deployment, allowing easy integration into educational platforms, SEO optimization, and global accessibility. It is your one‑stop solution for mastering capital market concepts through practice and explanation.
✅ A) Market for long-term funds and securities
B) Market for short-term loans only
C) Market for consumer goods
D) Capital market is irrelevant
Explanation: Capital markets deal with long-term investments.
Q2. Capital market includes:
✅ A) Primary and secondary markets
B) Only money market
C) Only foreign exchange market
D) Inclusion is irrelevant
Explanation: Capital market has two main segments.
Q3. Primary market deals with:
✅ A) New issue of securities
B) Trading of existing securities
C) Only foreign investments
D) Deal is irrelevant
Explanation: Primary market is for fresh capital raising.
Q4. Secondary market deals with:
✅ A) Trading of existing securities
B) Issuance of new securities
C) Only government bonds
D) Deal is irrelevant
Explanation: Secondary market enables liquidity.
Q5. Stock exchange is part of:
✅ A) Secondary capital market
B) Primary market only
C) Money market
D) Part is irrelevant
Explanation: Stock exchanges facilitate secondary trading.
Q6. Capital market instruments include:
✅ A) Equity, bonds, debentures
B) Only currency
C) Only commodities
D) Instruments are irrelevant
Explanation: These are core capital market instruments.
Q7. Equity represents:
✅ A) Ownership in a company
B) Debt obligation
C) Government subsidy
D) Representation is irrelevant
Explanation: Equity gives ownership rights.
Q8. Debt instruments represent:
✅ A) Borrowing obligation
B) Ownership rights
C) Government grants
D) Representation is irrelevant
Explanation: Debt instruments are repayable liabilities.
Q9. Capital market helps in:
✅ A) Mobilizing long-term funds
B) Short-term borrowing only
C) Consumer spending
D) Help is irrelevant
Explanation: Capital market channels savings to investment.
Q10. SEBI regulates:
✅ A) Indian capital markets
B) Only banking sector
C) Only insurance
D) Regulation is irrelevant
Explanation: SEBI ensures transparency and investor protection.
Q11. Capital market participants include:
✅ A) Investors, issuers, intermediaries
B) Only government
C) Only consumers
D) Inclusion is irrelevant
Explanation: These entities drive capital market operations.
Q12. Merchant bankers operate in:
✅ A) Primary market
B) Secondary market only
C) Commodity market
D) Operation is irrelevant
Explanation: Merchant bankers manage IPOs and fundraising.
Q13. Brokers operate in:
✅ A) Secondary market
B) Primary market only
C) Insurance market
D) Operation is irrelevant
Explanation: Brokers facilitate trading of listed securities.
Q14. Depositories hold:
✅ A) Securities in electronic form
B) Physical cash
C) Commodities
D) Holding is irrelevant
Explanation: Depositories ensure safe custody of securities.
Q15. NSDL and CDSL are:
✅ A) Indian depositories
B) Stock exchanges
C) Insurance firms
D) Entities are irrelevant
Explanation: NSDL and CDSL hold demat securities.
Q16. Demat account is used for:
✅ A) Holding securities electronically
B) Holding physical shares
C) Holding currency
D) Use is irrelevant
Explanation: Demat accounts store securities digitally.
Q17. Capital market improves:
✅ A) Resource allocation and economic growth
B) Only consumption
C) Only taxation
D) Improvement is irrelevant
Explanation: Capital markets support productive investment.
Q18. Capital market liquidity refers to:
✅ A) Ease of buying/selling securities
B) Ease of printing money
C) Ease of spending cash
D) Liquidity is irrelevant
Explanation: Liquidity ensures market efficiency.
Q19. Capital market depth refers to:
✅ A) Volume and variety of securities traded
B) Number of banks
C) Number of consumers
D) Depth is irrelevant
Explanation: Depth reflects market robustness.
Q20. Capital market transparency refers to:
✅ A) Availability of accurate information
B) Secrecy of transactions
C) Government control
D) Transparency is irrelevant
Explanation: Transparency builds investor trust.
Q21. Capital market efficiency means:
✅ A) Prices reflect all available information
B) Prices are always fixed
C) Prices are manipulated
D) Efficiency is irrelevant
Explanation: Efficient markets adjust quickly to news.
Q22. Capital market volatility refers to:
✅ A) Price fluctuations in securities
B) Stability of prices
C) Fixed returns
D) Volatility is irrelevant
Explanation: Volatility reflects risk and movement.
Q23. Capital market index tracks:
✅ A) Performance of selected securities
B) Only currency
C) Only commodities
D) Tracking is irrelevant
Explanation: Indices measure market trends.
Q24. Sensex and Nifty are:
✅ A) Indian capital market indices
B) Foreign exchange rates
C) Commodity prices
D) Entities are irrelevant
Explanation: These indices reflect Indian market performance.
Q25. Capital market development leads to:
✅ A) Economic growth and financial inclusion
B) Only inflation
C) Only taxation
D) Development is irrelevant
Explanation: Developed capital markets support growth.
Q26. Primary market is also known as:
✅ A) New issue market
B) Secondary market
C) Money market
D) Market is irrelevant
Explanation: Primary market issues new securities.
Q27. IPO stands for:
✅ A) Initial Public Offering
B) International Price Order
C) Internal Policy Option
D) IPO is irrelevant
Explanation: IPO is the first sale of shares to public.
Q28. Book building is:
✅ A) Process of price discovery in IPOs
B) Process of selling books
C) Process of fixing interest rates
D) Process is irrelevant
Explanation: Book building helps determine issue price.
Q29. Underwriting in primary market means:
✅ A) Guaranteeing subscription of securities
B) Selling insurance policies
C) Guaranteeing loans
D) Underwriting is irrelevant
Explanation: Underwriters assure full subscription.
Q30. Prospectus is issued by:
✅ A) Company offering securities
B) SEBI only
C) Stock exchange only
D) Issuance is irrelevant
Explanation: Prospectus informs investors about IPO.
Q31. Draft Red Herring Prospectus (DRHP) is:
✅ A) Preliminary document filed before IPO
B) Final prospectus
C) Insurance policy
D) Document is irrelevant
Explanation: DRHP contains IPO details before approval.
Q32. Rights issue refers to:
✅ A) Offering shares to existing shareholders
B) Offering shares to public only
C) Offering shares to government only
D) Issue is irrelevant
Explanation: Rights issue gives preference to existing holders.
Q33. Preferential allotment refers to:
✅ A) Issuing shares to select investors at special terms
B) Issuing shares to public only
C) Issuing shares to government only
D) Allotment is irrelevant
Explanation: Preferential allotment targets specific investors.
Q34. Qualified Institutional Buyers (QIBs) include:
✅ A) Banks, mutual funds, insurance companies
B) Retail investors only
C) Government only
D) Inclusion is irrelevant
Explanation: QIBs are large financial institutions.
Q35. Retail investors in IPOs are:
✅ A) Individual investors applying below threshold limit
B) Institutional investors
C) Government agencies
D) Investors are irrelevant
Explanation: Retail investors are small individual participants.
Q36. Anchor investors in IPOs are:
✅ A) Institutional investors who invest before IPO opens
B) Retail investors only
C) Government agencies
D) Investors are irrelevant
Explanation: Anchor investors stabilize IPO demand.
Q37. Oversubscription in IPO means:
✅ A) Demand exceeds number of shares offered
B) Demand equals supply
C) Demand is less than supply
D) Oversubscription is irrelevant
Explanation: Oversubscription shows high demand.
Q38. Green shoe option refers to:
✅ A) Option to sell additional shares in IPO
B) Option to buy shoes
C) Option to reduce shares
D) Option is irrelevant
Explanation: Green shoe stabilizes post‑IPO price.
Q39. Fixed price issue refers to:
✅ A) IPO where price is pre‑determined
B) IPO where price is discovered
C) IPO with no price
D) Issue is irrelevant
Explanation: Fixed price issue has set price.
Q40. Book building issue refers to:
✅ A) IPO where price is discovered through bids
B) IPO with fixed price
C) IPO with no price
D) Issue is irrelevant
Explanation: Book building discovers price via bidding.
Q41. Minimum subscription in IPO refers to:
✅ A) Minimum percentage of shares that must be subscribed
B) Maximum shares offered
C) No subscription required
D) Subscription is irrelevant
Explanation: Minimum subscription ensures viability.
Q42. SEBI requires IPOs to achieve:
✅ A) At least 90% subscription
B) 50% subscription
C) 10% subscription
D) Requirement is irrelevant
Explanation: IPOs must achieve 90% minimum subscription.
Q43. Listing of shares means:
✅ A) Admission of shares on stock exchange for trading
B) Admission in government records
C) Admission in company books only
D) Listing is irrelevant
Explanation: Listing enables secondary trading.
Q44. Prospectus must contain:
✅ A) Company details, risks, financials
B) Only company name
C) Only government approval
D) Content is irrelevant
Explanation: Prospectus informs investors fully.
Q45. Lead manager in IPO is:
✅ A) Merchant banker managing issue process
B) Broker trading shares
C) Government officer
D) Manager is irrelevant
Explanation: Lead manager coordinates IPO.
Q46. Registrar in IPO is:
✅ A) Entity handling applications and allotment
B) Broker trading shares
C) Government officer
D) Registrar is irrelevant
Explanation: Registrar manages investor records.
Q47. Syndicate members in IPO are:
✅ A) Brokers who collect applications
B) Government agencies
C) Retail investors
D) Members are irrelevant
Explanation: Syndicate members assist in IPO distribution.
Q48. Allotment of shares in oversubscribed IPO is:
✅ A) Done proportionately among applicants
B) Done randomly
C) Done to government only
D) Allotment is irrelevant
Explanation: Proportional allotment ensures fairness.
Q49. Refund in IPO occurs when:
✅ A) Investor not allotted shares receives money back
B) Investor always receives shares
C) Investor loses money automatically
D) Refund is irrelevant
Explanation: Refund protects investors.
Q50. Primary market importance lies in:
✅ A) Mobilizing savings into productive investment
B) Only trading existing securities
C) Only government borrowing
D) Importance is irrelevant
Explanation: Primary market channels savings to growth.
Q51. Secondary market is also known as:
✅ A) Stock market
B) Primary market
C) Money market
D) Market is irrelevant
Explanation: Secondary market trades existing securities.
Q52. Stock exchange refers to:
✅ A) Organized marketplace for buying and selling securities
B) Marketplace for consumer goods
C) Marketplace for loans only
D) Exchange is irrelevant
Explanation: Stock exchanges enable trading of listed securities.
Q53. NSE stands for:
✅ A) National Stock Exchange
B) New Securities Entity
C) National Savings Enterprise
D) NSE is irrelevant
Explanation: NSE is India’s leading stock exchange.
Q54. BSE stands for:
✅ A) Bombay Stock Exchange
B) Banking Securities Exchange
C) Bond Savings Entity
D) BSE is irrelevant
Explanation: BSE is Asia’s oldest stock exchange.
Q55. Secondary market provides:
✅ A) Liquidity to investors
B) Issuance of new securities
C) Government subsidies
D) Provision is irrelevant
Explanation: Liquidity allows investors to exit investments.
Q56. Trading mechanism in stock exchanges is:
✅ A) Electronic order matching system
B) Manual barter system
C) Government allocation
D) Mechanism is irrelevant
Explanation: Exchanges use electronic trading platforms.
Q57. Dematerialization refers to:
✅ A) Conversion of physical shares into electronic form
B) Conversion of cash into goods
C) Conversion of goods into services
D) Process is irrelevant
Explanation: Dematerialization enables electronic trading.
Q58. Rematerialization refers to:
✅ A) Conversion of electronic shares into physical form
B) Conversion of goods into cash
C) Conversion of services into goods
D) Process is irrelevant
Explanation: Rematerialization reverses demat process.
Q59. Clearing house in stock exchange ensures:
✅ A) Settlement of trades and risk management
B) Issuance of new securities
C) Government subsidies
D) Clearing is irrelevant
Explanation: Clearing houses guarantee settlement.
Q60. Settlement cycle in Indian stock exchanges is:
✅ A) T+1 (trade date plus one day)
B) T+7
C) T+30
D) Cycle is irrelevant
Explanation: India follows T+1 settlement cycle.
Q61. Circuit breakers in stock exchanges are:
✅ A) Mechanisms to halt trading during extreme volatility
B) Mechanisms to increase trading speed
C) Mechanisms to eliminate trading
D) Breakers are irrelevant
Explanation: Circuit breakers prevent panic selling.
Q62. Market order refers to:
✅ A) Order to buy/sell immediately at best price
B) Order at fixed future price
C) Order to eliminate trade
D) Order is irrelevant
Explanation: Market orders execute instantly.
Q63. Limit order refers to:
✅ A) Order to buy/sell at specified price or better
B) Order at any price
C) Order to eliminate trade
D) Order is irrelevant
Explanation: Limit orders control execution price.
Q64. Stop‑loss order refers to:
✅ A) Order to sell when price falls below set level
B) Order to buy at any price
C) Order to eliminate trade
D) Order is irrelevant
Explanation: Stop‑loss protects against losses.
Q65. Short selling refers to:
✅ A) Selling borrowed securities expecting price fall
B) Selling owned securities only
C) Selling goods in market
D) Selling is irrelevant
Explanation: Short selling profits from price decline.
Q66. Margin trading refers to:
✅ A) Buying securities using borrowed funds
B) Buying securities with full cash only
C) Buying goods in market
D) Trading is irrelevant
Explanation: Margin trading uses leverage.
Q67. Day trading refers to:
✅ A) Buying and selling securities within same day
B) Holding securities for years
C) Buying goods daily
D) Trading is irrelevant
Explanation: Day trading closes positions same day.
Q68. Intraday trading refers to:
✅ A) Trading securities within same trading session
B) Trading securities across months
C) Trading goods daily
D) Trading is irrelevant
Explanation: Intraday trading is short‑term.
Q69. Delivery trading refers to:
✅ A) Buying securities and holding beyond settlement
B) Selling securities same day
C) Buying goods for delivery
D) Trading is irrelevant
Explanation: Delivery trading involves long‑term holding.
Q70. Secondary market ensures:
✅ A) Price discovery of securities
B) Issuance of new securities
C) Government subsidies
D) Ensuring is irrelevant
Explanation: Prices are discovered through trading.
Q71. Liquidity in secondary market means:
✅ A) Ability to buy/sell securities quickly
B) Ability to print money
C) Ability to consume goods
D) Liquidity is irrelevant
Explanation: Liquidity ensures efficient trading.
Q72. Transparency in secondary market means:
✅ A) Availability of accurate trading information
B) Secrecy of trades
C) Government control only
D) Transparency is irrelevant
Explanation: Transparency builds investor confidence.
Q73. Volatility in secondary market refers to:
✅ A) Price fluctuations in traded securities
B) Stability of prices
C) Fixed returns
D) Volatility is irrelevant
Explanation: Volatility reflects risk.
Q74. Secondary market importance lies in:
✅ A) Providing liquidity, transparency, and price discovery
B) Issuing new securities only
C) Government borrowing only
D) Importance is irrelevant
Explanation: Secondary market supports efficient capital allocation.
Q75. Stock exchanges contribute to:
✅ A) Economic growth by mobilizing savings into investment
B) Consumer spending only
C) Government subsidies only
D) Contribution is irrelevant
Explanation: Exchanges channel funds into productive use.
Q76. Equity shares represent:
✅ A) Ownership in a company
B) Debt obligation
C) Government subsidy
D) Representation is irrelevant
Explanation: Equity gives shareholders ownership rights.
Q77. Preference shares provide:
✅ A) Fixed dividend and priority over equity holders
B) No dividend at all
C) Ownership only
D) Provision is irrelevant
Explanation: Preference shares have fixed dividend priority.
Q78. Debentures are:
✅ A) Debt instruments acknowledging company borrowing
B) Equity instruments
C) Government subsidies
D) Instruments are irrelevant
Explanation: Debentures are long‑term debt securities.
Q79. Bonds are:
✅ A) Debt securities issued by governments or corporations
B) Equity shares
C) Commodities
D) Bonds are irrelevant
Explanation: Bonds represent borrowing with fixed interest.
Q80. Convertible debentures can be:
✅ A) Converted into equity shares
B) Converted into commodities
C) Converted into subsidies
D) Conversion is irrelevant
Explanation: Convertible debentures give option to equity.
Q81. Derivatives are:
✅ A) Financial instruments derived from underlying assets
B) Physical goods
C) Government subsidies
D) Instruments are irrelevant
Explanation: Derivatives derive value from assets.
Q82. Futures contracts are:
✅ A) Agreements to buy/sell asset at future date and price
B) Agreements to buy goods today
C) Agreements to eliminate trade
D) Contracts are irrelevant
Explanation: Futures lock in future trade terms.
Q83. Options contracts give:
✅ A) Right but not obligation to buy/sell asset
B) Obligation always
C) Right to subsidies
D) Contract is irrelevant
Explanation: Options provide flexibility.
Q84. Call option gives:
✅ A) Right to buy asset at strike price
B) Right to sell asset
C) Right to subsidy
D) Option is irrelevant
Explanation: Call option allows buying.
Q85. Put option gives:
✅ A) Right to sell asset at strike price
B) Right to buy asset
C) Right to subsidy
D) Option is irrelevant
Explanation: Put option allows selling.
Q86. Warrants are:
✅ A) Long‑term options issued by companies
B) Short‑term loans
C) Subsidies
D) Warrants are irrelevant
Explanation: Warrants give right to buy shares later.
Q87. Mutual funds pool:
✅ A) Money from investors to invest in securities
B) Government subsidies
C) Commodities only
D) Pooling is irrelevant
Explanation: Mutual funds diversify investments.
Q88. Exchange Traded Funds (ETFs) are:
✅ A) Funds traded like shares on stock exchanges
B) Funds traded only in banks
C) Funds traded in government offices
D) ETFs are irrelevant
Explanation: ETFs combine mutual fund and stock features.
Q89. Corporate bonds are issued by:
✅ A) Companies to raise long‑term funds
B) Governments only
C) Consumers
D) Issuance is irrelevant
Explanation: Corporate bonds finance company projects.
Q90. Government securities (G‑Secs) are:
✅ A) Bonds issued by government to borrow funds
B) Shares issued by companies
C) Commodities
D) Securities are irrelevant
Explanation: G‑Secs are sovereign debt instruments.
Q91. Treasury bills are:
✅ A) Short‑term government securities (less than 1 year)
B) Long‑term bonds
C) Equity shares
D) Bills are irrelevant
Explanation: T‑Bills are short‑term borrowing instruments.
Q92. Commercial papers are:
✅ A) Short‑term unsecured promissory notes by companies
B) Long‑term bonds
C) Equity shares
D) Papers are irrelevant
Explanation: CPs are short‑term corporate borrowings.
Q93. Certificates of deposit are:
✅ A) Short‑term deposit instruments issued by banks
B) Equity shares
C) Commodities
D) Certificates are irrelevant
Explanation: CDs are negotiable bank deposits.
Q94. Derivatives market helps in:
✅ A) Hedging, speculation, and arbitrage
B) Only issuing new shares
C) Only government borrowing
D) Help is irrelevant
Explanation: Derivatives manage risk and speculation.
Q95. Equity market provides:
✅ A) Ownership and dividend income
B) Fixed interest only
C) Subsidies
D) Provision is irrelevant
Explanation: Equity gives ownership and dividends.
Q96. Debt market provides:
✅ A) Fixed interest income and repayment
B) Ownership rights
C) Subsidies
D) Provision is irrelevant
Explanation: Debt market offers fixed returns.
Q97. Hybrid instruments combine:
✅ A) Features of equity and debt
B) Features of commodities only
C) Features of subsidies
D) Combination is irrelevant
Explanation: Hybrids mix debt and equity traits.
Q98. Derivatives are traded on:
✅ A) Exchanges like NSE, BSE, CME
B) Government offices
C) Banks only
D) Trading is irrelevant
Explanation: Derivatives trade on exchanges globally.
Q99. Equity investors gain from:
✅ A) Dividends and capital appreciation
B) Fixed interest only
C) Subsidies
D) Gain is irrelevant
Explanation: Equity returns come from dividends and price rise.
Q100. Capital market instruments overall provide:
✅ A) Variety of options for investment, risk, and return
B) Only one type of instrument
C) Only subsidies
D) Provision is irrelevant
Explanation: Instruments diversify investment opportunities.
Q101. SEBI stands for:
✅ A) Securities and Exchange Board of India
B) Securities and Exchange Bank of India
C) Savings and Equity Board of India
D) SEBI is irrelevant
Explanation: SEBI regulates Indian capital markets.
Q102. SEBI was established in:
✅ A) 1988, given statutory powers in 1992
B) 1970
C) 2000
D) Establishment is irrelevant
Explanation: SEBI became statutory in 1992.
Q103. SEBI’s primary role is:
✅ A) Protecting investors and regulating securities market
B) Issuing currency
C) Controlling inflation directly
D) Role is irrelevant
Explanation: SEBI ensures transparency and fairness.
Q104. SEBI regulates:
✅ A) Stock exchanges, brokers, merchant bankers
B) Banks only
C) Insurance companies only
D) Regulation is irrelevant
Explanation: SEBI oversees securities market participants.
Q105. SEBI guidelines ensure:
✅ A) Fair practices and investor protection
B) Arbitrary trading
C) Government subsidies
D) Guidelines are irrelevant
Explanation: Guidelines safeguard investors.
Q106. RBI stands for:
✅ A) Reserve Bank of India
B) Regional Bank of India
C) Rural Bank of India
D) RBI is irrelevant
Explanation: RBI is India’s central bank.
Q107. RBI regulates:
✅ A) Monetary policy, currency, banking system
B) Stock exchanges only
C) Insurance companies only
D) Regulation is irrelevant
Explanation: RBI manages money supply and stability.
Q108. RBI’s role in capital market includes:
✅ A) Regulating interest rates and liquidity
B) Issuing IPOs
C) Managing stock exchanges directly
D) Role is irrelevant
Explanation: RBI influences capital market via monetary policy.
Q109. IRDAI stands for:
✅ A) Insurance Regulatory and Development Authority of India
B) Indian Reserve Development Authority
C) International Regulatory Development Agency
D) IRDAI is irrelevant
Explanation: IRDAI regulates insurance sector.
Q110. IRDAI’s role in capital market is:
✅ A) Regulating insurance companies that invest in markets
B) Regulating banks only
C) Regulating stock exchanges directly
D) Role is irrelevant
Explanation: Insurance firms are major capital market investors.
Q111. Ministry of Finance oversees:
✅ A) Policy framework for capital markets
B) Only consumer goods
C) Only agriculture
D) Oversight is irrelevant
Explanation: Finance ministry sets capital market policies.
Q112. Global capital markets are regulated by:
✅ A) SEC (USA), FCA (UK), etc.
B) Local municipalities only
C) Consumers
D) Regulation is irrelevant
Explanation: Each country has its own regulator.
Q113. SEC stands for:
✅ A) Securities and Exchange Commission (USA)
B) Securities and Equity Council
C) Savings and Exchange Corporation
D) SEC is irrelevant
Explanation: SEC regulates US securities market.
Q114. FCA stands for:
✅ A) Financial Conduct Authority (UK)
B) Federal Capital Authority
C) Financial Credit Agency
D) FCA is irrelevant
Explanation: FCA regulates UK financial markets.
Q115. IOSCO stands for:
✅ A) International Organization of Securities Commissions
B) Indian Organization of Securities Companies
C) International Office of Stock Corporations
D) IOSCO is irrelevant
Explanation: IOSCO coordinates global securities regulation.
Q116. IOSCO’s role is:
✅ A) Promoting cooperation among securities regulators
B) Issuing currency globally
C) Managing stock exchanges directly
D) Role is irrelevant
Explanation: IOSCO harmonizes global regulation.
Q117. BIS stands for:
✅ A) Bank for International Settlements
B) Banking Insurance Society
C) Bond Investment Syndicate
D) BIS is irrelevant
Explanation: BIS supports central banks globally.
Q118. BIS role in capital markets is:
✅ A) Promoting monetary and financial stability
B) Issuing IPOs
C) Managing stock exchanges directly
D) Role is irrelevant
Explanation: BIS coordinates central banks.
Q119. IMF role in capital markets is:
✅ A) Providing financial assistance and stability
B) Issuing equity shares
C) Managing stock exchanges directly
D) Role is irrelevant
Explanation: IMF supports global financial stability.
Q120. World Bank role in capital markets is:
✅ A) Funding development projects and reforms
B) Issuing IPOs
C) Managing stock exchanges directly
D) Role is irrelevant
Explanation: World Bank supports capital market development.
Q121. SEBI regulates mutual funds by:
✅ A) Ensuring transparency and investor protection
B) Ignoring mutual funds
C) Eliminating funds completely
D) Regulation is irrelevant
Explanation: SEBI sets rules for mutual funds.
Q122. SEBI regulates insider trading by:
✅ A) Prohibiting unfair use of non‑public information
B) Allowing insider trading freely
C) Ignoring insider trading
D) Regulation is irrelevant
Explanation: SEBI prevents insider trading.
Q123. SEBI regulates takeover bids by:
✅ A) Ensuring fairness and disclosure in acquisitions
B) Ignoring takeovers
C) Eliminating acquisitions completely
D) Regulation is irrelevant
Explanation: SEBI sets takeover code.
Q124. SEBI regulates corporate governance by:
✅ A) Mandating disclosures and board structures
B) Ignoring governance
C) Eliminating boards completely
D) Regulation is irrelevant
Explanation: SEBI enforces governance standards.
Q125. Regulatory bodies overall ensure:
✅ A) Transparency, fairness, and stability in capital markets
B) Arbitrary trading
C) Government subsidies only
D) Ensuring is irrelevant
Explanation: Regulators protect investors and markets.
Q126. Market participants in capital markets include:
✅ A) Investors, issuers, intermediaries
B) Only government
C) Only consumers
D) Inclusion is irrelevant
Explanation: These groups drive capital market activity.
Q127. Retail investors are:
✅ A) Individual investors with small investments
B) Institutional investors only
C) Government agencies
D) Investors are irrelevant
Explanation: Retail investors are small participants.
Q128. Institutional investors include:
✅ A) Banks, mutual funds, insurance companies
B) Only retail investors
C) Only government
D) Inclusion is irrelevant
Explanation: Institutions invest large funds.
Q129. Foreign Institutional Investors (FIIs) are:
✅ A) Overseas institutions investing in domestic markets
B) Domestic retail investors
C) Government agencies only
D) FIIs are irrelevant
Explanation: FIIs bring foreign capital.
Q130. Domestic Institutional Investors (DIIs) are:
✅ A) Local institutions investing in domestic markets
B) Foreign institutions only
C) Retail investors only
D) DIIs are irrelevant
Explanation: DIIs include Indian banks, funds, insurers.
Q131. Brokers act as:
✅ A) Intermediaries between investors and exchanges
B) Issuers of securities
C) Regulators
D) Brokers are irrelevant
Explanation: Brokers facilitate trades.
Q132. Sub‑brokers are:
✅ A) Agents working under main brokers
B) Regulators
C) Issuers
D) Sub‑brokers are irrelevant
Explanation: Sub‑brokers assist brokers.
Q133. Portfolio managers are:
✅ A) Professionals managing client investments
B) Regulators only
C) Issuers only
D) Managers are irrelevant
Explanation: Portfolio managers optimize returns.
Q134. Investment bankers are:
✅ A) Specialists in raising capital and IPOs
B) Regulators only
C) Brokers only
D) Bankers are irrelevant
Explanation: Investment bankers manage fundraising.
Q135. Custodians are:
✅ A) Entities holding securities safely for clients
B) Regulators only
C) Brokers only
D) Custodians are irrelevant
Explanation: Custodians ensure safekeeping.
Q136. Depositories are:
✅ A) Institutions holding securities electronically
B) Banks only
C) Regulators only
D) Depositories are irrelevant
Explanation: Depositories manage demat securities.
Q137. Clearing members are:
✅ A) Entities ensuring settlement of trades
B) Regulators only
C) Brokers only
D) Members are irrelevant
Explanation: Clearing members guarantee settlement.
Q138. Market makers are:
✅ A) Entities providing liquidity by quoting buy/sell prices
B) Regulators only
C) Issuers only
D) Makers are irrelevant
Explanation: Market makers stabilize trading.
Q139. Arbitrageurs are:
✅ A) Participants profiting from price differences across markets
B) Regulators only
C) Issuers only
D) Arbitrageurs are irrelevant
Explanation: Arbitrageurs exploit price gaps.
Q140. Speculators are:
✅ A) Participants taking risk for profit from price movements
B) Regulators only
C) Issuers only
D) Speculators are irrelevant
Explanation: Speculators assume risk for gain.
Q141. Hedgers are:
✅ A) Participants reducing risk using derivatives
B) Speculators only
C) Regulators only
D) Hedgers are irrelevant
Explanation: Hedgers protect against price risk.
Q142. Issuers in capital markets are:
✅ A) Companies or governments raising funds
B) Brokers only
C) Regulators only
D) Issuers are irrelevant
Explanation: Issuers supply securities.
Q143. Investors in capital markets are:
✅ A) Individuals or institutions providing funds
B) Regulators only
C) Brokers only
D) Investors are irrelevant
Explanation: Investors demand securities.
Q144. Intermediaries in capital markets are:
✅ A) Brokers, bankers, custodians, depositories
B) Regulators only
C) Issuers only
D) Intermediaries are irrelevant
Explanation: Intermediaries connect issuers and investors.
Q145. Regulators in capital markets are:
✅ A) SEBI, RBI, IRDAI, etc.
B) Brokers only
C) Issuers only
D) Regulators are irrelevant
Explanation: Regulators ensure fairness.
Q146. Institutional investors influence markets by:
✅ A) Large trades affecting prices and liquidity
B) Small trades only
C) Ignoring markets
D) Influence is irrelevant
Explanation: Institutions move markets significantly.
Q147. Retail investors influence markets by:
✅ A) Providing breadth and diversity in participation
B) Controlling markets completely
C) Ignoring markets
D) Influence is irrelevant
Explanation: Retail adds diversity.
Q148. FIIs influence domestic markets by:
✅ A) Bringing foreign capital and volatility
B) Ignoring markets
C) Eliminating markets
D) Influence is irrelevant
Explanation: FIIs add liquidity but volatility.
Q149. DIIs influence domestic markets by:
✅ A) Stabilizing markets with long‑term investments
B) Ignoring markets
C) Eliminating markets
D) Influence is irrelevant
Explanation: DIIs provide stability.
Q150. Market participants overall ensure:
✅ A) Functioning, liquidity, and efficiency of capital markets
B) Arbitrary trading only
C) Ignoring markets
D) Ensuring is irrelevant
Explanation: Participants drive capital market ecosystem.
Q151. Stock market indices measure:
✅ A) Performance of selected group of securities
B) Government subsidies
C) Consumer goods prices
D) Measurement is irrelevant
Explanation: Indices track market trends.
Q152. Sensex is:
✅ A) Benchmark index of BSE with 30 companies
B) Benchmark index of NSE
C) Commodity index
D) Sensex is irrelevant
Explanation: Sensex tracks 30 large BSE companies.
Q153. Nifty 50 is:
✅ A) Benchmark index of NSE with 50 companies
B) Benchmark index of BSE
C) Commodity index
D) Nifty is irrelevant
Explanation: Nifty tracks 50 large NSE companies.
Q154. Indices help in:
✅ A) Benchmarking portfolio performance
B) Issuing new securities
C) Government borrowing
D) Help is irrelevant
Explanation: Indices serve as performance benchmarks.
Q155. Sectoral indices track:
✅ A) Performance of specific industry sectors
B) Performance of entire economy only
C) Government subsidies
D) Tracking is irrelevant
Explanation: Sectoral indices show sector trends.
Q156. Mid‑cap index tracks:
✅ A) Medium‑sized companies
B) Large companies only
C) Small companies only
D) Tracking is irrelevant
Explanation: Mid‑cap indices measure medium firms.
Q157. Small‑cap index tracks:
✅ A) Small companies with lower market capitalization
B) Large companies only
C) Government agencies
D) Tracking is irrelevant
Explanation: Small‑cap indices measure small firms.
Q158. Global indices include:
✅ A) Dow Jones, S&P 500, FTSE, Nikkei
B) Only Indian indices
C) Only commodities
D) Inclusion is irrelevant
Explanation: Global indices track world markets.
Q159. Dow Jones Industrial Average (DJIA) tracks:
✅ A) 30 major US companies
B) 50 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: DJIA is a US benchmark index.
Q160. S&P 500 tracks:
✅ A) 500 large US companies
B) 50 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: S&P 500 is a broad US index.
Q161. FTSE 100 tracks:
✅ A) 100 major UK companies
B) 100 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: FTSE 100 is UK benchmark.
Q162. Nikkei 225 tracks:
✅ A) 225 major Japanese companies
B) 225 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: Nikkei is Japan’s benchmark index.
Q163. Hang Seng index tracks:
✅ A) Major Hong Kong companies
B) Indian companies only
C) Commodities only
D) Tracking is irrelevant
Explanation: Hang Seng reflects Hong Kong market.
Q164. DAX index tracks:
✅ A) 40 major German companies
B) 40 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: DAX is Germany’s benchmark.
Q165. CAC 40 index tracks:
✅ A) 40 major French companies
B) 40 Indian companies
C) Commodities only
D) Tracking is irrelevant
Explanation: CAC 40 is France’s benchmark.
Q166. MSCI World Index tracks:
✅ A) Global equity markets across countries
B) Only Indian markets
C) Commodities only
D) Tracking is irrelevant
Explanation: MSCI World measures global equities.
Q167. Emerging market indices track:
✅ A) Performance of developing economies
B) Performance of developed economies only
C) Commodities only
D) Tracking is irrelevant
Explanation: Emerging indices show developing markets.
Q168. Benchmark indices are used for:
✅ A) Comparing mutual fund and portfolio performance
B) Issuing new securities
C) Government borrowing
D) Use is irrelevant
Explanation: Benchmarks measure relative performance.
Q169. Index funds replicate:
✅ A) Performance of a specific index
B) Performance of commodities only
C) Government subsidies
D) Replication is irrelevant
Explanation: Index funds mirror indices.
Q170. ETFs replicate:
✅ A) Index performance and trade like shares
B) Government subsidies
C) Commodities only
D) Replication is irrelevant
Explanation: ETFs combine index and stock features.
Q171. Indices provide:
✅ A) Market sentiment and trend indicators
B) Government subsidies only
C) Commodity prices only
D) Provision is irrelevant
Explanation: Indices reflect investor sentiment.
Q172. Free‑float market capitalization method:
✅ A) Considers only shares available for trading
B) Considers all shares issued
C) Considers government subsidies
D) Method is irrelevant
Explanation: Free‑float excludes promoter holdings.
Q173. Price‑weighted index method:
✅ A) Weights companies based on share price
B) Weights based on market cap
C) Weights based on subsidies
D) Method is irrelevant
Explanation: DJIA uses price‑weighted method.
Q174. Market‑cap weighted index method:
✅ A) Weights companies based on market capitalization
B) Weights based on share price only
C) Weights based on subsidies
D) Method is irrelevant
Explanation: S&P 500 uses market‑cap weighting.
Q175. Indices overall provide:
✅ A) Benchmarks, sentiment, and performance measurement
B) Only government subsidies
C) Only commodity prices
D) Provision is irrelevant
Explanation: Indices are vital for capital markets.
Q176. Risk in capital markets refers to:
✅ A) Possibility of loss due to price fluctuations
B) Guaranteed profit
C) Government subsidy
D) Risk is irrelevant
Explanation: Risk is inherent in investments.
Q177. Return in capital markets refers to:
✅ A) Gain from dividends, interest, or capital appreciation
B) Guaranteed subsidy
C) Government taxes
D) Return is irrelevant
Explanation: Return is the reward for investment.
Q178. Systematic risk is:
✅ A) Market-wide risk affecting all securities
B) Risk specific to one company
C) Risk eliminated by diversification
D) Risk is irrelevant
Explanation: Systematic risk cannot be diversified away.
Q179. Unsystematic risk is:
✅ A) Company-specific risk that can be diversified
B) Market-wide risk
C) Risk eliminated by government
D) Risk is irrelevant
Explanation: Diversification reduces unsystematic risk.
Q180. Beta measures:
✅ A) Sensitivity of a stock to market movements
B) Company profits only
C) Government subsidies
D) Measurement is irrelevant
Explanation: Beta shows volatility relative to market.
Q181. A beta of 1 means:
✅ A) Stock moves in line with market
B) Stock is risk-free
C) Stock never moves
D) Meaning is irrelevant
Explanation: Beta 1 = same volatility as market.
Q182. A beta greater than 1 means:
✅ A) Stock is more volatile than market
B) Stock is less volatile
C) Stock is risk-free
D) Meaning is irrelevant
Explanation: Higher beta = higher risk.
Q183. A beta less than 1 means:
✅ A) Stock is less volatile than market
B) Stock is more volatile
C) Stock is risk-free
D) Meaning is irrelevant
Explanation: Lower beta = defensive stock.
Q184. Volatility refers to:
✅ A) Degree of variation in security prices
B) Fixed returns
C) Government subsidies
D) Volatility is irrelevant
Explanation: Volatility measures risk.
Q185. Standard deviation measures:
✅ A) Dispersion of returns around mean
B) Fixed returns
C) Government subsidies
D) Measurement is irrelevant
Explanation: Standard deviation quantifies volatility.
Q186. Sharpe ratio measures:
✅ A) Risk-adjusted return of portfolio
B) Absolute return only
C) Government subsidy
D) Measurement is irrelevant
Explanation: Sharpe ratio compares excess return to risk.
Q187. Higher Sharpe ratio indicates:
✅ A) Better risk-adjusted performance
B) Worse performance
C) Government subsidy
D) Indication is irrelevant
Explanation: Higher ratio = efficient portfolio.
Q188. Treynor ratio measures:
✅ A) Return per unit of systematic risk (beta)
B) Return per unit of total risk
C) Government subsidy
D) Measurement is irrelevant
Explanation: Treynor uses beta as risk measure.
Q189. Jensen’s alpha measures:
✅ A) Portfolio’s excess return over expected CAPM return
B) Government subsidy
C) Absolute return only
D) Measurement is irrelevant
Explanation: Alpha shows manager skill.
Q190. Risk-return tradeoff means:
✅ A) Higher risk is associated with higher potential return
B) Higher risk always means loss
C) Risk and return are unrelated
D) Tradeoff is irrelevant
Explanation: Investors balance risk and reward.
Q191. Diversification reduces:
✅ A) Unsystematic risk
B) Systematic risk
C) Government subsidy
D) Reduction is irrelevant
Explanation: Diversification spreads company-specific risk.
Q192. Portfolio risk depends on:
✅ A) Correlation among securities
B) Government subsidy
C) Absolute returns only
D) Dependence is irrelevant
Explanation: Correlation affects diversification.
Q193. Risk-free rate refers to:
✅ A) Return on government securities
B) Return on equity shares
C) Return on commodities
D) Rate is irrelevant
Explanation: Risk-free rate is benchmark return.
Q194. Capital Asset Pricing Model (CAPM) calculates:
✅ A) Expected return based on risk-free rate, beta, and market return
B) Government subsidy
C) Absolute return only
D) Calculation is irrelevant
Explanation: CAPM links risk and return.
Q195. Security Market Line (SML) shows:
✅ A) Relationship between expected return and beta
B) Relationship between return and subsidies
C) Relationship between return and taxes
D) Line is irrelevant
Explanation: SML is graphical CAPM representation.
Q196. Efficient frontier represents:
✅ A) Optimal portfolios offering highest return for given risk
B) Government subsidy
C) Arbitrary portfolios
D) Representation is irrelevant
Explanation: Efficient frontier shows best risk-return tradeoff.
Q197. Risk-adjusted performance measures include:
✅ A) Sharpe, Treynor, Jensen’s alpha
B) Government subsidy
C) Absolute return only
D) Measures are irrelevant
Explanation: These ratios evaluate portfolio efficiency.
Q198. Value at Risk (VaR) estimates:
✅ A) Maximum potential loss at given confidence level
B) Guaranteed profit
C) Government subsidy
D) Estimation is irrelevant
Explanation: VaR quantifies downside risk.
Q199. Higher volatility implies:
✅ A) Greater uncertainty and risk in returns
B) Guaranteed profit
C) Government subsidy
D) Implication is irrelevant
Explanation: Volatility increases investment risk.
Q200. Risk & return analysis overall ensures:
✅ A) Balanced investment decisions and portfolio optimization
B) Guaranteed profit only
C) Government subsidy
D) Ensuring is irrelevant
Explanation: Risk-return analysis guides rational investing.
Q201. Mutual funds are:
✅ A) Investment vehicles pooling money from investors
B) Government subsidies
C) Commodity exchanges
D) Funds are irrelevant
Explanation: Mutual funds invest pooled money in securities.
Q202. Mutual funds provide:
✅ A) Diversification and professional management
B) Guaranteed subsidies
C) Fixed government returns only
D) Provision is irrelevant
Explanation: Funds reduce risk via diversification.
Q203. Open‑ended mutual funds allow:
✅ A) Investors to buy/sell units anytime
B) Investors only at IPO stage
C) Investors only at maturity
D) Allowance is irrelevant
Explanation: Open‑ended funds offer liquidity.
Q204. Close‑ended mutual funds allow:
✅ A) Investors to buy units only during NFO period
B) Investors anytime
C) Investors only at maturity
D) Allowance is irrelevant
Explanation: Close‑ended funds are locked till maturity.
Q205. NAV stands for:
✅ A) Net Asset Value
B) Net Annual Value
C) New Asset Venture
D) NAV is irrelevant
Explanation: NAV is per‑unit value of fund assets.
Q206. NAV is calculated as:
✅ A) (Total assets – liabilities) ÷ number of units
B) Total assets only
C) Government subsidy
D) Calculation is irrelevant
Explanation: NAV reflects per‑unit worth.
Q207. Equity mutual funds invest in:
✅ A) Shares of companies
B) Government subsidies
C) Commodities only
D) Investment is irrelevant
Explanation: Equity funds target stock market.
Q208. Debt mutual funds invest in:
✅ A) Bonds, debentures, G‑Secs
B) Equity shares only
C) Commodities only
D) Investment is irrelevant
Explanation: Debt funds provide fixed income.
Q209. Balanced mutual funds invest in:
✅ A) Mix of equity and debt instruments
B) Equity only
C) Debt only
D) Investment is irrelevant
Explanation: Balanced funds diversify across asset classes.
Q210. Index funds replicate:
✅ A) Performance of a specific market index
B) Commodities only
C) Government subsidies
D) Replication is irrelevant
Explanation: Index funds mirror indices.
Q211. ETFs stand for:
✅ A) Exchange Traded Funds
B) Equity Transfer Funds
C) Exchange Tax Funds
D) ETFs are irrelevant
Explanation: ETFs trade like shares on exchanges.
Q212. ETFs combine:
✅ A) Features of mutual funds and stocks
B) Features of commodities only
C) Features of subsidies
D) Combination is irrelevant
Explanation: ETFs are hybrid instruments.
Q213. ETFs are traded:
✅ A) On stock exchanges like shares
B) Only in banks
C) Only in government offices
D) Trading is irrelevant
Explanation: ETFs provide liquidity and transparency.
Q214. Sectoral mutual funds invest in:
✅ A) Specific industry sectors
B) All industries equally
C) Commodities only
D) Investment is irrelevant
Explanation: Sectoral funds target particular sectors.
Q215. Thematic mutual funds invest in:
✅ A) Specific themes like ESG, technology
B) All industries equally
C) Commodities only
D) Investment is irrelevant
Explanation: Thematic funds follow investment themes.
Q216. SIP stands for:
✅ A) Systematic Investment Plan
B) Securities Investment Policy
C) Subsidy Investment Plan
D) SIP is irrelevant
Explanation: SIP allows regular small investments.
Q217. SIP benefits include:
✅ A) Rupee cost averaging and disciplined investing
B) Guaranteed subsidies
C) Arbitrary returns
D) Benefits are irrelevant
Explanation: SIP reduces timing risk.
Q218. Mutual funds are regulated by:
✅ A) SEBI in India
B) RBI only
C) Government subsidies
D) Regulation is irrelevant
Explanation: SEBI sets rules for mutual funds.
Q219. ETF advantages include:
✅ A) Liquidity, transparency, low cost
B) Guaranteed subsidies
C) Arbitrary returns
D) Advantages are irrelevant
Explanation: ETFs are cost‑effective and liquid.
Q220. Mutual fund disadvantages include:
✅ A) Management fees and market risk
B) Guaranteed subsidies
C) No risk at all
D) Disadvantages are irrelevant
Explanation: Funds involve costs and risks.
Q221. ETF disadvantages include:
✅ A) Brokerage costs and tracking error
B) Guaranteed subsidies
C) No risk at all
D) Disadvantages are irrelevant
Explanation: ETFs may deviate from index.
Q222. Mutual funds provide income via:
✅ A) Dividends and capital gains distribution
B) Government subsidies
C) Commodity trading only
D) Provision is irrelevant
Explanation: Funds distribute returns to investors.
Q223. ETFs provide income via:
✅ A) Dividends from underlying securities
B) Government subsidies
C) Commodity trading only
D) Provision is irrelevant
Explanation: ETFs pass dividends to holders.
Q224. Mutual funds overall provide:
✅ A) Diversification, professional management, and accessibility
B) Guaranteed subsidies
C) No risk at all
D) Provision is irrelevant
Explanation: Funds democratize investing.
Q225. ETFs overall provide:
✅ A) Liquidity, transparency, and index replication
B) Guaranteed subsidies
C) No risk at all
D) Provision is irrelevant
Explanation: ETFs combine fund and stock features.
Q226. Corporate actions are:
✅ A) Events initiated by companies affecting shareholders
B) Government subsidies
C) Consumer goods sales
D) Actions are irrelevant
Explanation: Corporate actions impact securities and investors.
Q227. Dividend is:
✅ A) Distribution of profits to shareholders
B) Distribution of subsidies
C) Distribution of taxes
D) Dividend is irrelevant
Explanation: Dividends reward shareholders.
Q228. Interim dividend is:
✅ A) Dividend declared before year-end accounts are finalized
B) Dividend declared after year-end only
C) Dividend declared by government
D) Dividend is irrelevant
Explanation: Interim dividends are paid mid-year.
Q229. Final dividend is:
✅ A) Dividend declared after year-end accounts are finalized
B) Dividend declared mid-year
C) Dividend declared by government
D) Dividend is irrelevant
Explanation: Final dividend is declared at year-end.
Q230. Bonus shares are:
✅ A) Additional shares issued free to shareholders
B) Shares issued at premium only
C) Shares issued to government only
D) Bonus is irrelevant
Explanation: Bonus shares capitalize reserves.
Q231. Stock split refers to:
✅ A) Division of existing shares into smaller units
B) Division of company into subsidiaries
C) Division of profits only
D) Split is irrelevant
Explanation: Stock splits increase liquidity.
Q232. Reverse stock split refers to:
✅ A) Combining shares into larger units
B) Dividing shares into smaller units
C) Issuing bonus shares
D) Split is irrelevant
Explanation: Reverse split reduces number of shares.
Q233. Share buyback refers to:
✅ A) Company repurchasing its own shares from market
B) Company issuing new shares
C) Government buying shares
D) Buyback is irrelevant
Explanation: Buybacks reduce outstanding shares.
Q234. Dividend yield is:
✅ A) Dividend per share ÷ market price × 100
B) Dividend per share ÷ book value
C) Dividend per share ÷ subsidies
D) Yield is irrelevant
Explanation: Yield measures return from dividends.
Q235. Record date in dividend refers to:
✅ A) Date on which shareholders must be on company records to receive dividend
B) Date of dividend payment
C) Date of government subsidy
D) Date is irrelevant
Explanation: Record date determines eligibility.
Q236. Ex‑dividend date is:
✅ A) Date after which new buyers are not entitled to dividend
B) Date of dividend payment
C) Date of government subsidy
D) Date is irrelevant
Explanation: Ex‑dividend date sets entitlement.
Q237. Dividend payout ratio is:
✅ A) Dividend ÷ net profit × 100
B) Dividend ÷ subsidies
C) Dividend ÷ taxes
D) Ratio is irrelevant
Explanation: Payout ratio shows profit distribution.
Q238. Corporate actions affect:
✅ A) Share price, investor wealth, and market perception
B) Government subsidies only
C) Consumer goods only
D) Effect is irrelevant
Explanation: Corporate actions influence valuation.
Q239. Rights issue is:
✅ A) Offering shares to existing shareholders at discount
B) Offering shares to public only
C) Offering shares to government only
D) Issue is irrelevant
Explanation: Rights issue gives preferential access.
Q240. Stock dividend refers to:
✅ A) Dividend paid in form of shares instead of cash
B) Dividend paid in cash only
C) Dividend paid in subsidies
D) Dividend is irrelevant
Explanation: Stock dividend issues shares.
Q241. Cash dividend refers to:
✅ A) Dividend paid in cash to shareholders
B) Dividend paid in shares
C) Dividend paid in subsidies
D) Dividend is irrelevant
Explanation: Cash dividend is direct payment.
Q242. Share consolidation refers to:
✅ A) Combining smaller shares into larger units
B) Splitting shares into smaller units
C) Issuing bonus shares
D) Consolidation is irrelevant
Explanation: Consolidation reduces number of shares.
Q243. Corporate buybacks improve:
✅ A) Earnings per share by reducing outstanding shares
B) Dividend payout only
C) Subsidies
D) Improvement is irrelevant
Explanation: Buybacks increase EPS.
Q244. Dividend declaration requires:
✅ A) Board approval
B) Government approval only
C) Shareholder approval only
D) Requirement is irrelevant
Explanation: Board declares dividends.
Q245. Corporate actions are announced through:
✅ A) Stock exchange filings and company notices
B) Government subsidies
C) Consumer goods ads
D) Announcement is irrelevant
Explanation: Announcements ensure transparency.
Q246. Corporate actions may be:
✅ A) Mandatory or voluntary
B) Always mandatory
C) Always voluntary
D) Classification is irrelevant
Explanation: Some actions are compulsory, others optional.
Q247. Mandatory corporate actions include:
✅ A) Stock splits, bonus issues
B) Share buybacks
C) Rights issues only
D) Actions are irrelevant
Explanation: Mandatory actions apply to all shareholders.
Q248. Voluntary corporate actions include:
✅ A) Buybacks, rights issues
B) Stock splits only
C) Bonus issues only
D) Actions are irrelevant
Explanation: Voluntary actions require shareholder choice.
Q249. Corporate actions overall aim to:
✅ A) Reward shareholders, restructure capital, and signal confidence
B) Provide subsidies only
C) Provide taxes only
D) Aim is irrelevant
Explanation: Corporate actions strengthen investor trust.
Q250. Corporate actions impact:
✅ A) Market price, liquidity, and investor sentiment
B) Government subsidies only
C) Consumer goods only
D) Impact is irrelevant
Explanation: Corporate actions influence market dynamics.
Q251. NYSE stands for:
✅ A) New York Stock Exchange
B) National Yield Stock Exchange
C) New Year Securities Exchange
D) NYSE is irrelevant
Explanation: NYSE is the largest US stock exchange.
Q252. NASDAQ stands for:
✅ A) National Association of Securities Dealers Automated Quotations
B) National Automated Securities Database
C) New Age Securities Division
D) NASDAQ is irrelevant
Explanation: NASDAQ is a US electronic stock market.
Q253. London Stock Exchange (LSE) is:
✅ A) Major global exchange based in UK
B) Exchange in US only
C) Exchange in India only
D) LSE is irrelevant
Explanation: LSE is one of the oldest global exchanges.
Q254. Tokyo Stock Exchange (TSE) is:
✅ A) Largest exchange in Japan
B) Exchange in US only
C) Exchange in India only
D) TSE is irrelevant
Explanation: TSE is Japan’s primary exchange.
Q255. Shanghai Stock Exchange (SSE) is:
✅ A) Major exchange in China
B) Exchange in US only
C) Exchange in UK only
D) SSE is irrelevant
Explanation: SSE is one of China’s largest exchanges.
Q256. Hong Kong Stock Exchange (HKEX) is:
✅ A) Leading exchange in Asia
B) Exchange in US only
C) Exchange in India only
D) HKEX is irrelevant
Explanation: HKEX is a global financial hub.
Q257. Euronext is:
✅ A) Pan-European stock exchange
B) US exchange only
C) Indian exchange only
D) Euronext is irrelevant
Explanation: Euronext operates across Europe.
Q258. Deutsche Börse is:
✅ A) German stock exchange operator
B) French exchange only
C) Indian exchange only
D) Deutsche Börse is irrelevant
Explanation: Deutsche Börse runs Frankfurt Stock Exchange.
Q259. Toronto Stock Exchange (TSX) is:
✅ A) Largest exchange in Canada
B) Exchange in US only
C) Exchange in UK only
D) TSX is irrelevant
Explanation: TSX is Canada’s primary exchange.
Q260. Australian Securities Exchange (ASX) is:
✅ A) Largest exchange in Australia
B) Exchange in US only
C) Exchange in India only
D) ASX is irrelevant
Explanation: ASX is Australia’s main exchange.
Q261. Global capital markets facilitate:
✅ A) Cross-border investment and capital flow
B) Only domestic trade
C) Government subsidies only
D) Facilitation is irrelevant
Explanation: Global markets integrate economies.
Q262. ADR stands for:
✅ A) American Depositary Receipt
B) Annual Dividend Report
C) Automated Debt Record
D) ADR is irrelevant
Explanation: ADR allows foreign companies to list in US.
Q263. GDR stands for:
✅ A) Global Depositary Receipt
B) Government Debt Receipt
C) General Dividend Report
D) GDR is irrelevant
Explanation: GDR allows companies to raise funds globally.
Q264. ADRs are traded on:
✅ A) US stock exchanges
B) Indian exchanges only
C) UK exchanges only
D) Trading is irrelevant
Explanation: ADRs list foreign firms in US.
Q265. GDRs are traded on:
✅ A) International exchanges outside US
B) US exchanges only
C) Indian exchanges only
D) Trading is irrelevant
Explanation: GDRs list firms globally.
Q266. Cross-listing refers to:
✅ A) Company listing shares on multiple exchanges
B) Company listing shares on one exchange only
C) Company issuing subsidies
D) Listing is irrelevant
Explanation: Cross-listing expands investor base.
Q267. Dual listing refers to:
✅ A) Company listed simultaneously on two exchanges
B) Company listed on one exchange only
C) Company issuing subsidies
D) Listing is irrelevant
Explanation: Dual listing increases liquidity.
Q268. Global indices track:
✅ A) Performance of international markets
B) Domestic markets only
C) Commodities only
D) Tracking is irrelevant
Explanation: Global indices measure worldwide trends.
Q269. MSCI Emerging Markets Index tracks:
✅ A) Performance of developing economies
B) Developed economies only
C) Commodities only
D) Tracking is irrelevant
Explanation: MSCI EM measures emerging markets.
Q270. Cross-border capital flows include:
✅ A) FDI, FII, remittances
B) Domestic savings only
C) Government subsidies only
D) Flows are irrelevant
Explanation: Capital flows integrate economies.
Q271. Global exchanges provide:
✅ A) Liquidity, transparency, and international access
B) Government subsidies only
C) Domestic trade only
D) Provision is irrelevant
Explanation: Exchanges connect global investors.
Q272. International investors benefit from:
✅ A) Diversification and access to global opportunities
B) Domestic markets only
C) Subsidies only
D) Benefit is irrelevant
Explanation: Global investing spreads risk.
Q273. Global capital markets face risks like:
✅ A) Currency risk, political risk, regulatory risk
B) No risk at all
C) Subsidies only
D) Risks are irrelevant
Explanation: Global investing involves multiple risks.
Q274. Global exchanges compete by:
✅ A) Offering technology, liquidity, and innovation
B) Offering subsidies only
C) Offering domestic trade only
D) Competition is irrelevant
Explanation: Exchanges innovate to attract investors.
Q275. Global capital markets overall ensure:
✅ A) Integration, diversification, and efficient capital allocation
B) Domestic trade only
C) Subsidies only
D) Ensuring is irrelevant
Explanation: Global markets connect economies worldwide.
Q276. Algorithmic trading refers to:
✅ A) Automated trading using computer programs
B) Manual trading only
C) Government subsidies
D) Trading is irrelevant
Explanation: Algo trading executes trades via algorithms.
Q277. High‑frequency trading (HFT) is:
✅ A) Trading using powerful computers at very high speed
B) Trading once a year
C) Trading commodities only
D) HFT is irrelevant
Explanation: HFT exploits micro‑second opportunities.
Q278. Blockchain technology in capital markets ensures:
✅ A) Transparency and immutability of transactions
B) Government subsidies
C) Manual record keeping only
D) Technology is irrelevant
Explanation: Blockchain secures transaction records.
Q279. Cryptocurrency represents:
✅ A) Digital asset based on blockchain
B) Physical currency only
C) Government subsidy
D) Representation is irrelevant
Explanation: Cryptos are decentralized digital assets.
Q280. Bitcoin is:
✅ A) First decentralized cryptocurrency
B) Government bond
C) Equity share
D) Bitcoin is irrelevant
Explanation: Bitcoin pioneered blockchain currency.
Q281. Ethereum is:
✅ A) Blockchain platform supporting smart contracts
B) Government bond
C) Equity share
D) Ethereum is irrelevant
Explanation: Ethereum enables decentralized applications.
Q282. Stablecoins are:
✅ A) Cryptocurrencies pegged to stable assets like USD
B) Cryptocurrencies with volatile value
C) Government subsidies
D) Stablecoins are irrelevant
Explanation: Stablecoins reduce volatility.
Q283. Central Bank Digital Currency (CBDC) is:
✅ A) Digital currency issued by central banks
B) Cryptocurrency mined privately
C) Government subsidy
D) CBDC is irrelevant
Explanation: CBDCs are sovereign digital money.
Q284. ESG investing refers to:
✅ A) Investing based on Environmental, Social, Governance factors
B) Investing based on subsidies
C) Investing based on taxes only
D) ESG is irrelevant
Explanation: ESG integrates sustainability into investing.
Q285. Green bonds finance:
✅ A) Environmentally sustainable projects
B) Government subsidies
C) Consumer goods
D) Bonds are irrelevant
Explanation: Green bonds support eco‑friendly initiatives.
Q286. Social bonds finance:
✅ A) Projects with social impact like healthcare, education
B) Government subsidies
C) Consumer goods
D) Bonds are irrelevant
Explanation: Social bonds target social development.
Q287. Governance in ESG refers to:
✅ A) Corporate ethics, transparency, board structure
B) Government subsidies
C) Consumer goods
D) Governance is irrelevant
Explanation: Governance ensures accountability.
Q288. Robo‑advisors are:
✅ A) Automated platforms providing investment advice
B) Human advisors only
C) Government subsidies
D) Advisors are irrelevant
Explanation: Robo‑advisors use algorithms for portfolios.
Q289. Fintech in capital markets refers to:
✅ A) Technology innovations in financial services
B) Manual trading only
C) Government subsidies
D) Fintech is irrelevant
Explanation: Fintech modernizes capital markets.
Q290. Crowdfunding platforms allow:
✅ A) Raising capital from large number of small investors
B) Raising capital from government only
C) Raising subsidies only
D) Platforms are irrelevant
Explanation: Crowdfunding democratizes fundraising.
Q291. Peer‑to‑peer lending platforms provide:
✅ A) Loans directly between individuals without banks
B) Loans only via banks
C) Government subsidies
D) Lending is irrelevant
Explanation: P2P lending bypasses intermediaries.
Q292. Artificial intelligence in capital markets is used for:
✅ A) Predictive analytics, fraud detection, trading strategies
B) Government subsidies
C) Manual record keeping only
D) AI is irrelevant
Explanation: AI enhances efficiency and risk management.
Q293. Big data in capital markets helps:
✅ A) Analyzing large datasets for insights
B) Government subsidies
C) Manual record keeping only
D) Data is irrelevant
Explanation: Big data improves decision‑making.
Q294. Cloud computing in capital markets enables:
✅ A) Scalable storage and computing for trading systems
B) Manual record keeping only
C) Government subsidies
D) Computing is irrelevant
Explanation: Cloud supports flexible infrastructure.
Q295. Cybersecurity in capital markets ensures:
✅ A) Protection of trading systems and investor data
B) Government subsidies
C) Manual record keeping only
D) Security is irrelevant
Explanation: Cybersecurity prevents fraud and breaches.
Q296. Tokenization in capital markets refers to:
✅ A) Converting assets into digital tokens on blockchain
B) Issuing subsidies
C) Manual record keeping only
D) Tokenization is irrelevant
Explanation: Tokenization enables fractional ownership.
Q297. Decentralized finance (DeFi) refers to:
✅ A) Financial services built on blockchain without intermediaries
B) Government subsidies
C) Manual banking only
D) DeFi is irrelevant
Explanation: DeFi decentralizes financial services.
Q298. Smart contracts are:
✅ A) Self‑executing contracts coded on blockchain
B) Manual agreements only
C) Government subsidies
D) Contracts are irrelevant
Explanation: Smart contracts automate transactions.
Q299. Recent trends in capital markets emphasize:
✅ A) Technology, sustainability, and global integration
B) Government subsidies only
C) Manual trading only
D) Trends are irrelevant
Explanation: Modern markets focus on innovation.
Q300. Capital markets of the future will:
✅ A) Integrate AI, blockchain, ESG, and global access
B) Depend only on subsidies
C) Ignore technology
D) Future is irrelevant
Explanation: Future markets will be tech‑driven and sustainable.
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