What is the primary historical origin of merchant banking?

It originated in the 19th century during the industrial revolution.

It has roots in 13th-century family-owned firms involved in banking and commodity trade.

It was established by the East India Company in the 19th century.

It evolved from the managing agency system in the 20th century.

What is the primary difference between merchant banking and commercial banking?

Merchant banks accept deposits from the public, while commercial banks do not.

Commercial banks are involved in international trade, while merchant banks are not.

Merchant banks primarily offer financial services for a fee, while commercial banks grant loans.

Commercial banks are involved in secondary market trading, while merchant banks deal with new issues.

Which financial institution in India took the lead in introducing merchant banking activities in 1969?

Industrial Finance Corporation of India (IFCI)

Industrial Credit and Investment Corporation of India (ICICI)

What significant amendments in Indian laws during the post-World War II period facilitated the growth of the capital market?

Amendments in the Companies Act, 1956

Formation of managing agency houses

Establishment of State Financial Corporations

Introduction of the managing agency system

What functions do merchant banking organizations typically perform?

Retail banking and accepting deposits.

International trade and secondary market trading.

Portfolio management, raising funds, and promotional activities.

Real estate investment and project finance.

What is the primary focus of merchant banks when it comes to securities trading?

They buy securities for long-term investment.

They act as intermediaries, buying securities for resale to investors.

They specialize in trading government securities.

They focus on real estate investments.

What is the key role of merchant bankers in the process of raising funds for clients?

They invest their own funds in the client's projects.

They directly provide loans to clients.

They assist clients in raising funds from the market by issuing securities.

They act as stockbrokers in secondary market trading.

What is the significance of portfolio management services offered by merchant banks?

They focus on managing physical commodities.

They specialize in managing real estate investments.

They help institutional investors make investment decisions.

They primarily deal with foreign currency trading.

What role does merchant banking play in coordinating the operations of intermediaries in the securities market?

Merchant banks oversee the operations of commercial banks.

They ensure compliance with environmental regulations.

They coordinate activities of various market intermediaries in the issuance of securities.

They primarily deal with international trade coordination.

What role did managing agency houses play in the evolution of merchant banking in India?

They were responsible for eliminating the need for merchant banking.

They acted as intermediaries for investment, promoting new enterprises, and providing financial assistance.

They focused on stock broking and trading in securities.

They specialized in underwriting capital issues.

Merchant Banking Free MCQ Practice Test with Solutions

	Financial Markets and Institutions 52 docs\|13 tests

	Financial Markets and Institutions 52 docs\|13 tests

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