Test: Financial Market- Case Based Type Questions- 2 - Commerce MCQ
10 Questions MCQ Test - Test: Financial Market- Case Based Type Questions- 2
Direction: Read the following text and answer the questions given below:
ISQAA SOLAR Limited is searching for options to raise ₹ 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. to suggest options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of ₹ 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹ 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of ₹ 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise ₹ 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.
Q. Identify the method of floatation of new issues in the primary market, not taken up by ISQAA SOLAR LTD. :
Direction: Read the following text and answer the questions given below:
ISQAA SOLAR Limited is searching for options to raise ₹ 20,000 crores from the primary market for diversification and modernisation of existing projects. It hired the services of a renowned financial consultancy firm, DHAN LAXMI PVT. LTD. to suggest options for the same. DHAN LAXMI PVT. LTD. suggested a list of options to the Board of Directors of the company. It was decided that for the immediate requirement of ₹ 1,500 crores, the company will give a privilege to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹ 4,500 crores would be raised by allotment of securities to a consortium of financial institutions, instead of inviting subscription from the public by making a direct appeal to investors to raise capital. It was further decided to raise capital to the tune of ₹ 6,000 crores through an issuing house. All these options were accepted by the Board of Directors. The Board further decided to raise ₹ 8,000 crores through the online system of the stock exchange by entering into an agreement with the exchange.
Q. Identify the reason which has made the firm raise funds from the institutional investors :
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Direction: Read the following text and answer the questions given below:
“Usually, money market funds are recommended to investors with an investment horizon of 90- 365 days. These schemes can help you diversify your portfolio and help invest surplus cash while maintaining liquidity. It is a good option for retail investors with smaller investment amounts. Ensure that you invest according to your investment plan.”
After reading this article in a magazine, Ramesh who needs funds for his venture decided to buy a financial asset from the RBI. This financial asset is an instrument of short-term borrowing. He decided to buy it because he doesn’t want to take risk and wants an assured return. This instrument is a promissory note. It is highly liquid. This instrument is also known as Zero Coupon Bond. On this instrument is written T-91. Investment in this instrument started with just ₹ 25,000. For a higher value it is given in the multiples of ₹ 25,000.
Q. What is the minimum amount for which this instrument is available?
Direction: Read the following text and answer the questions given below:
“Usually, money market funds are recommended to investors with an investment horizon of 90- 365 days. These schemes can help you diversify your portfolio and help invest surplus cash while maintaining liquidity. It is a good option for retail investors with smaller investment amounts. Ensure that you invest according to your investment plan.”
After reading this article in a magazine, Ramesh who needs funds for his venture decided to buy a financial asset from the RBI. This financial asset is an instrument of short-term borrowing. He decided to buy it because he doesn’t want to take risk and wants an assured return. This instrument is a promissory note. It is highly liquid. This instrument is also known as Zero Coupon Bond. On this instrument is written T-91. Investment in this instrument started with just ₹ 25,000. For a higher value it is given in the multiples of ₹ 25,000.
Q. On whose behalf does the RBI issue this instrument?
Direction: Read the following text and answer the questions given below:
“Usually, money market funds are recommended to investors with an investment horizon of 90- 365 days. These schemes can help you diversify your portfolio and help invest surplus cash while maintaining liquidity. It is a good option for retail investors with smaller investment amounts. Ensure that you invest according to your investment plan.”
After reading this article in a magazine, Ramesh who needs funds for his venture decided to buy a financial asset from the RBI. This financial asset is an instrument of short-term borrowing. He decided to buy it because he doesn’t want to take risk and wants an assured return. This instrument is a promissory note. It is highly liquid. This instrument is also known as Zero Coupon Bond. On this instrument is written T-91. Investment in this instrument started with just ₹ 25,000. For a higher value it is given in the multiples of ₹ 25,000.
Q. Which financial asset is indicated in the above case?
Direction: Read the following text and answer the questions given below:
“Usually, money market funds are recommended to investors with an investment horizon of 90- 365 days. These schemes can help you diversify your portfolio and help invest surplus cash while maintaining liquidity. It is a good option for retail investors with smaller investment amounts. Ensure that you invest according to your investment plan.”
After reading this article in a magazine, Ramesh who needs funds for his venture decided to buy a financial asset from the RBI. This financial asset is an instrument of short-term borrowing. He decided to buy it because he doesn’t want to take risk and wants an assured return. This instrument is a promissory note. It is highly liquid. This instrument is also known as Zero Coupon Bond. On this instrument is written T-91. Investment in this instrument started with just ₹ 25,000. For a higher value it is given in the multiples of ₹ 25,000.
Q. What does T-91 denote here?
Direction: Read the following text and answer the questions given below:
Rajni Auto Manufacturers has been into business for the last 30 years and have decided to give a special privilege to their existing shareholders to subscribe to the new issue of shares where they will be given shares according to the proportion of shares held by them. The company always gives special treatment to its loyal stakeholders and also ensures that they remain associated with the organization for longer durations. Last year, the company was successfully dealing through the capital market where both the buying and selling of securities were taking place. The owner of the company is a man of ethical business. He often contributes to business magazines by writing articles and editorials. He recently wrote an article about the watchdog of stock market. The article gained a lot of popularity and now is part of the curriculum of MBA students.
Q. Identify regulatory functions of the organization identified above?
Direction: Read the following text and answer the questions given below:
Rajni Auto Manufacturers has been into business for the last 30 years and have decided to give a special privilege to their existing shareholders to subscribe to the new issue of shares where they will be given shares according to the proportion of shares held by them. The company always gives special treatment to its loyal stakeholders and also ensures that they remain associated with the organization for longer durations. Last year, the company was successfully dealing through the capital market where both the buying and selling of securities were taking place. The owner of the company is a man of ethical business. He often contributes to business magazines by writing articles and editorials. He recently wrote an article about the watchdog of stock market. The article gained a lot of popularity and now is part of the curriculum of MBA students.
Q. Which type of capital market was this company dealing in?
Direction: Read the following text and answer the questions given below:
Rajni Auto Manufacturers has been into business for the last 30 years and have decided to give a special privilege to their existing shareholders to subscribe to the new issue of shares where they will be given shares according to the proportion of shares held by them. The company always gives special treatment to its loyal stakeholders and also ensures that they remain associated with the organization for longer durations. Last year, the company was successfully dealing through the capital market where both the buying and selling of securities were taking place. The owner of the company is a man of ethical business. He often contributes to business magazines by writing articles and editorials. He recently wrote an article about the watchdog of stock market. The article gained a lot of popularity and now is part of the curriculum of MBA students.
Q. Which method of floatation was used by Rajni Auto Manufacturers?
Direction: Read the following text and answer the questions given below:
Rajni Auto Manufacturers has been into business for the last 30 years and have decided to give a special privilege to their existing shareholders to subscribe to the new issue of shares where they will be given shares according to the proportion of shares held by them. The company always gives special treatment to its loyal stakeholders and also ensures that they remain associated with the organization for longer durations. Last year, the company was successfully dealing through the capital market where both the buying and selling of securities were taking place. The owner of the company is a man of ethical business. He often contributes to business magazines by writing articles and editorials. He recently wrote an article about the watchdog of stock market. The article gained a lot of popularity and now is part of the curriculum of MBA students.
Q. Which watchdog of the capital market has been referred to in the above case?
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