SEBI Grade A Previous Year Questions Paper -2 (Question Asked)

May 17, 2020

1. A call money market is generally used for ----------hours (1) 24
(2) 48
(3) 96
(4) 12
(5) 72
Answer key: 1 Solution:

2. Which of the following was the chief regulator of commodity markets before its merger with the
capital market regulator SEBI?
(1) Commodity markets Commission
(2) Multi commodity exchange (MCX)
(3) National commodity and derivatives exchange Ltd (NCDEX)
(4) Forward Markets Commission
(5) Agricultural produce and markets commission
Answer key: 4

3. In order to broaden the market, the minimum size of commercial papers has been relaxed gradually
from ------- to Rs. 5. Lakhs.
(1) 20 lakhs
(2) 50 lakhs
(3) 1 crore
(4) 10 crores
(5) 100 crores
Answer key: 3 Solution

4. Money market instruments are generally used for Liquidity adjustments, considering this statement
to be true. Who are the users mostly?
(1) Government
(2) Corporates
(3) Venture capitalists
(4) Dealers
(5) Banks
Answer key: 5 Solution

5. Which of the following comprises the domestic debt market in India?
I. Government Securities
II. Private corporate debt
III. PSU bonds
IV. DFIs bonds
(1) I and III
(2) I, II and III
(3) III and IV
(4) I, II, III and IV
(5) Only I
Answer key: 4 Solution

6. Who among the following are the main participants in the securities market?
I. Issuer of securities
II. Investors in securities
III. Intermediaries
IV. The state governments
(1) Only IV
(2) Both I and II
(3) I, II and III
(4) I, II, III and IV
(5) II and III only
Answer key: 3 Solution

7. Which of the following is the clearing agency for G-secs in India?
(1) RBI
(2) SEBI
(3) Ministry of Finance
(4) FEMA
(5) CCIL
Answer key: 5 Solution

8. There are 2 types of derivatives, futures and options. Which of the following is correct about
Futures contracts?
(1) Futures contracts grant buyers rights and no obligations
(2) In Futures contracts both parties face a lot of risk
(3) It permits the buyer an option to buy call or put
(4) Both 1 and 2
(5) All 1, 2 and 3
Answer key: 2 Solution

9. Commercial Paper is a note in evidence of the _ of the issuer.
(1) Equity obligation
(2) Debt Obligation
(3) Market Obligation
(4) Working capital obligation
(5) None of the above
Answer key: 2 Solution

10. Treasury Bills are short-term (up to one year) borrowing instruments issued by
(1) State Government
(2) President
(3) Governor
(4) Union Government
(5) Council of Ministers
Answer key: 4 Solution
11. Which of the following is a power of SEBI?
(1) Regulating the business in stock exchanges only
(2) Regulating the business in other securities markets
(3) Regulating the flow of funds to the various organisations registered with SEBI
(4) Both 1 and 2
(5) Both 1 and 3
Answer key: 4 Solution

12. SEBI has recently approved (August 2018) new KYC norms for Foreign portfolio Investments to
trade in
(1) Exchange Currency markets
(2) Primary Markets
(3) Secondary Markets
(4) Commodity Markets
(5) Government Securities
Answer key: 4:

13. What is the name of the screen based electronic order matching system for secondary market
trading in government securities owned by RBI?
(1) GDS-OM
(2) NDS-OM
(3) G-Secs module
(4) e-Kuber
(5) e-biz
Answer key: 2 Solution

14. The minimum net worth stipulated by SEBI for a depository is _
(1) Rs. 100 crores
(2) Rs. 1000 crore
(3) Rs. 500 crores
(4) Rs. 50 crores
(5) None of the above
Answer key: 1 Solution

15. How is the price of a bond calculated?
(1) Sum of present values of all future cashflows
(2) Sum of future values of all future cashflows
(3) Sum of future values of all present cashflows
(4) Sum of all the values of the cashflows now.
(5) None of the above
Answer key: 1 Solution

16. What can be said about the relationship between the yield and price of a bond?
(1) If the market interest rate levels rise, the price of a bond falls.
(2) If the market interest rate levels fall, the price of a bond rises.
(3) The yield of a bond is inversely related to its price
(4) All the above
(5) None of the above
Answer key: 4 Solution

17. Which of the following is referred to as “Duration” of a bond?
(1) The time taken to recover the initial investment in present value terms
(2) The time taken to recover the initial investment in terms of future values.
(3) The payback period of a bond to breakeven
(4) Either (1) or (2)
(5) Either (1) or (3)
Answer key: 5 Solution

18. What does ‘STRIPS’ stand for?
(1) Stock trading and registering interest and payment of stocks.
(2) Securities transaction related information portal system.
(3) Separate trading of registered interest and principal of securities.
(4) Securities trading of registered interest and principal of securities.
(5) Stock market related information of payment and negotiation systems.
Answer key: 3 Solution

19. What do you mean by Dematerialization?
(1) Conversion of physical shares into electronic form only.
(2) Conversion of shares of electronic form into physical form only.
(3) Conversion of shares of electronic form into physical form and crediting it to the investor’s
account with his depository participant (DP).
(4) Conversion of physical shares into electronic form and crediting it to the investor’s account
with his depository participant (DP).
(5) Making payment of the stocks sold on the secondary market.
Answer key: 4 Solution

20. What is the name of the market that provides a channel for the sale of new securities?
(1) Primary market
(2) Secondary market
(3) Tertiary Market
(4) Either of the above
(5) None of the above
Answer key: 1 Solution:

21. What is ‘book building’ in an IPO?
(1) A process used to differentiate securities in the market.
(2) A process for efficient lot delivery to the concerned investors.
(3) A process used for efficient price discovery.
(4) A process used to differentiate competitors from the organisation
(5) A process used to record the number of securities applied.

Answer key: 3 Solution:

22. What is a “Prospectus” in terms of a company that is going public in the securities market?
(1) Companies future prospects as prescribed by SEBI
(2) Companies disclosing the reason for raising the money, the way it is spent and the return on it.
(3) Company declaring future payment of dividends.
(4) Company showcasing their current products to market themselves
(5) None of the above
Answer key: 2 Solution

23. Which of the following are the sources through which the companies in India can raise foreign
currency resources?
I. Issuing foreign currency convertible bonds
II. Issuing ordinary shares through Global depository receipts
III. Issuing ordinary shares through American depository receipts
(1) I and II
(2) I and III
(3) I, II and III
(4) II and III
(5) None of the above
Solution: 3

24. Which of the following are clearly segregated when we compare demutualised exchange from a
mutualised exchange?
I. Ownership
II. Management
III. Source of funds
(1) I, II and III
(2) II and III
(3) III and I
(4) I and II
(5) None of the above
Solution:

25. What is ‘ICDR’ in the ICDR regulations as prescribed by SEBI?
(1) Issue of current equity and debt requirements
(2) Issue of capital and disclosure requirements
(3) Issue of convertible debentures raised through equity
(4) Issue of currency derivatives resource
(5) Investing capital directly in the regulated markets.
Solution: Answer key: 2

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