Tag: meaning and functions of capital market

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Questions Related to meaning and functions of capital market

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

Stock exchange leads to _________ as prices of securities with a variable return continue to increase over long term.

  1. pricing of securities

  2. liquidity

  3. spreading of equity cult

  4. capital formation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Stock exchange leads to capital formation as prices of securities with a variable return continue to increase over long term. Stock exchange has a provision to list the securities for trading. This is a service given to corporate sector. Stock exchange provides services like, wide dissemination of prices of securities.

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

Sale of securities after the trading hours of the stock exchange is known as _______________.

  1. Short selling

  2. Stop loss

  3. Kerb dealing

  4. Profit taking
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sale of securities after the trading hours of the stock exchange is known as Kerb dealing. Kerb dealing or Kerb trading occurs outside of the general market operations, commonly through the use of computers or telephones after the official exchanges have closed.

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

Stock exchange deals with the _________________.

  1. Second-hand securities

  2. Issue of equity shares

  3. Issue of preference shares

  4. Issue of debentures
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stock exchange deals with the second hand securities. Stock exchange works through a network of exchanges. Companies list their stock on an exchange in order to raise money to expand their business and investors purchase those shares.

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

Which of the following are secondary market intermediaries for corporate securities in India?
I. Investors
II. Jobbers
III. Brokers and sub-brokers
IV. Portfolio consultants

  1. I, II and III only

  2. II, III and IV only

  3. II and III only

  4. III and IV only
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Secondary market intermediaries include jobbers (market makers), brokers, sub-brokers, and portfolio consultants who facilitate the trading of existing securities. Investors are the participants, not intermediaries.

Multiple choice business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

Match the items of List-I with the items of List-II and select the correct answer:

List-I List-II
(i) Private ownership and Free Enterprise (a) Secondary Market
(ii) Government ownership and Central Authority (b) Capitalism
(iii) The market for the sale and purchase of previously issued securities (c) Primary Market
(iv) The market for new long term capital (d) Socialism
  1. $(i) - (b), (ii) - (d), (iii) - (a), (iv) - (c)$
  2. $(i) - (a), (ii) - (b), (iii) - (c), (iv) - (d)$
  3. $(i) - (b), (ii) - (d), (iii) - (c), (iv) - (a)$
  4. $(i) - (a), (ii) - (c), (iii) - (b), (iv) - (d)$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Private ownership corresponds to Capitalism (b), Government ownership to Socialism (d), the market for previously issued securities is the Secondary Market (a), and the market for new capital is the Primary Market (c).