Advanced Financial Management MCQ || Advanced Financial Management Questions and Answers

Answer.1. National Stock Exchange

Explanation:

NSE became the first exchange to grant approval to its members for providing Internet-based trading services. In line with SEBI directives, NSE has issued circulars detailing the operational guidelines and procedures to be complied with by members desirous of providing Internet-based trading and services in circular no. NSE/MSD/41332 dated June 17, 2019.

Answer.4. OTCEI

Explanation:

The Over-The-Counter Exchange of India (OTCEI) is an electronic stock exchange based in India that consists of small- and medium-sized firms aiming to gain access to overseas capital markets, including electronic exchanges in the U.S. such as the NASDAQ. OTCEI is based on the model of NASDAQ.

Answer.2. Dematerialized

Explanation:

At present securities are issued in dematerialized form. Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into the BO’s account with his DP.

Answer.3. Liquidity

Explanation:

One of the features of the Capital Market is the Ready and Continuous market which provides liquidity to the investors.

Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while tangible items are less liquid. The two main types of liquidity include market liquidity and accounting liquidity.

Answer.1. Primary

Explanation:

In the primary market, fresh capital is raised. In a primary market, securities are created for the first time for investors to purchase. New securities are issued in this market through a stock exchange, enabling the government as well as companies to raise capital.

Answer.2. Money Market

Explanation:

Money Market is the market for financial assets that are close substitutes for money.

The term ‘Money Market’, according to the Reserve Bank of India, is used to define a market where short-term financial assets are traded. These assets are a near substitute for money and they aid in the money exchange carried out in the primary and secondary markets.

Answer.2. Difference between Issue Price and Par Value

Explanation:

Return on Treasury Bills is the difference between Issue Price and Par Value or face value. Treasury bills are zero-coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity.

Answer.2. Reputed and highly rated Corporates

Explanation:

Commercial Paper is generally issued by reputed and highly rated Corporates. Commercial Paper (CP) may be issued to and held by individuals, banking companies, other corporate bodies registered or incorporated in India and unincorporated bodies, Non-Resident Indians (NRIs), and Foreign Institutional Investors (FIIs).

Answer.3. Certificate of Deposit

Explanation:

A time deposit or term deposit is also known as a certificate of deposit is a deposit in a financial institution with a specific maturity date or a period to maturity, commonly referred to as its “term”.

Answer.3. Treasury Bills

Explanation:

Treasury bonds or bills are considered risk-free assets, meaning there is no risk that the investor will lose their principal. In other words, investors that hold the bond until maturity are guaranteed their principal or initial investment.

Answer.1. Call Money

Explanation:

The call/notice money market forms an important segment of the Indian money market. Under the call money market, funds are transacted on an overnight basis, and under the notice money market, funds are transacted for a period between 2 days and 14 days.

Answer.1. Commercial Bill

Explanation:

A commercial bill is an important tool to finance credit sales. It may be a demand bill or a usance bill. A demand bill is payable on demand, that is immediately at sight or on a presentation by the drawee. A usance bill is payable after a specified time.

Answer.1. True

Explanation:

A credit rating can be the deciding factor on whether a borrower does or does not receive a loan. Good credit ratings allow people, companies, and governments to easily borrow from financial institutions or public debt markets.

Answer.4. All of the above

Explanation:

A credit rating can be the deciding factor on whether a borrower does or does not receive a loan. Good credit ratings allow people, companies, and governments to easily borrow from financial institutions or public debt markets.

Credit Rating is beneficial to

1. Subscribers
2. Regulators
3. Issuers

Answer.1. CRISIL

Explanation:

CRISIL, India’s first credit rating agency, is incorporated on the 29th day of the month, promoted by the erstwhile ICICI Ltd along with UTI and other financial institutions. Mr. N Vaghul and Mr. Pradip Shah are CRISIL’s first Chairman and Managing Director, respectively.