Most Important Questions on Capital Market

By Trupti Thool|Updated : September 1st, 2021

While preparing for exams, revision is the key to success. So for the aspirants who are preparing for various state exams, here are the Most Important Questions on Capital Market. These questions can be fruitful in the last-minute revision of Capital Market. These questions will help students to fetch more marks in the exams.

Also, Sectional tests help understand the concept better. It is recommended that after you finish every topic or component of the syllabus do solve Questions that are either asked in the previous year papers or given in a mock. This article including only questions is aimed to make you understand and attempt a particular syllabus domain effectively.

Most Important Questions on Capital Market

1. The Capital Market is to regulate long-term debt and equity shares. What is the further division of the Capital Market?

(a) Primary Market and Secondary Market

(b) Secondary Market and Bull Market

(c) Bull Market and Bell Market

(d) Primary Market and Government Cash Bond Market

Answer A

2. What is not correct in regard to capital market reforms?

(a) Indian capital market was opened to Foreign Institutional Investors

(b) Indian corporates could raise capital through ADRs, GDRs

(c) Banks were not allowed to lend against the capital market securities

(d) The monopoly of UTI in mutual funds was abolished

Answer C

3. Which one of them is/are not Capital Market Instruments?

(a) Shares

(b) Debentures

(c) Bonds

(d) All of the above

Answer D

4. Future and Spot Market are components of which of the following categories of Capital Market?

(a) Primary Market

(b) Secondary Market

(c) Securities Market

(d) Money Market

Answer B

5. Capital Market Regulator is:

(a) NSE

(b) RBI

(c) SEBI

(d) IRDA

Answer C

6. The capital market deals with ___.

(a) Short term fund

(b) Long term fund

(c) Cash

(d) Both long and short term fund

Answer B

7. The objective of the Capital market operations is ______:

(a) To raise funds from the public with the aim to put the investor’s wealth to productive long-term use

(b) To raise the value of a country’s currency

(c) To search for the best price of capital goods

(d) All the above

Answer A

8. Corporate securities market, government securities market and long term loan market are the categories of

(a) Capital market

(b) Money market

(c) Financial market

(d) Credit market

Answer A

9. Which of the following is not a component of Indian capital market?

(a) Intermediaries

(b) Fund Providers

(c) Market Regulators

(d) All of the Above

Answer D

10. In which of the following modes of public issue do companies raise capital without diluting the stake of its existing shareholders?

(a) IPO

(b) FPO

(c) Rights issue

(d) Bonus issue

Answer C

11. ………………. provide liquidity for the global financial system and capital markets to make up the financial market.

(a) Capital Markets

(b) Derivative Markets

(c) Money Markets

(d) Share markets

Answer C

12. Which one of the following components of capital market deals with securities that are traded for immediate delivery and payment?

(a) Future Market

(b) Debenture Market

(c) Spot Market

(d) None of the above

Answer C

13. Indian Capital Market is not regulated and monitored by:

(a) Ministry of Finance

(b) The securities exchange board of India (SEBI)

(c) Reserve Bank of India (RBI)

(d) Ministry of Foreign Affairs

Answer D

14. Which of the following is NOT the function of a capital market?

(a) Mobilising savings into investment

(b) Channelising funds from less profitable to more profitable

(c) Mobilising funds from surplus units to deficit units

(d) Providing better returns to direct investors

Answer D

15. Which of the following Securities Laws does not govern the capital market?

(a) Securities Contracts (Regulations) Act, 1956

(b) Securities and Exchange Board of India (SEBI) Act, 1992

(c) Depositories Act, 1996

(d) Foreign Exchange Management Act (FEMA) 1999

Answer D

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