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SOURCES OF FINANCE
Financial markets,
security financing, debentures, loan financing, bridge finance, loan
syndication, book building, new financial institutions, venture capital
institutions, mutual funds, factoring institutions, new financial instruments,
commercial papers, securitization of debt, GDRs, derivatives: Options, forward,
future and swap, lease financing, concept of leasing, types of lease
agreements. Difference between hire purchase and lease financing.
Multiple
choice questions:
1. Deferred
shares can be issued by
a. Public
company
b. Private
company
c. Private
company which is deemed to be private company
d. All
of the above.
2. Bank
over draft is a good source of finance
a. Short
term
b. Medium
term
c. Long
term
d. Any
of the above
3. Under-writing
commission and brokerage cannot exceed
a. 2.5%
of shares.
b. 3.5%
of shares.
c. 5%
of shares.
d. 15%
of shares.
4. A
speculative activity, which is undertaken to make profit out of differences in
prices of a security in two markets is known as-
a. Option
dealing
b. Margin
dealing
c. Rigging
the market
d. Arbitrage.
5. When
the name of the transfers is not filled in the transfer deed, or when the
transfers signs the transfer deed without filling in the name of the
transferee, it is called-
a. Option
dealing
b. Forward
dealing
c. Blank
transfers
d. Carry
over
e.
6. Main
purpose of mutual fund is to provide diversified investment opportunities to –
a. Small
investors
b. Large
investors
c. Joint
stock companies
d. Public
sector undertakings.
7. In
which year SEBI was established?
a. 1968
b. 1978
c. 1988
d. 1992
8. Mutual
fund is not permitted to indulge in –
a. Purchase
and sale of equity shares
b. Purchase
and sale of equity debentures
c. Purchase
and sale of securities of public sector under takings.
d. Short
selling
9. The
nominal value of shares taken up by the public refers to the – capital
a. Issued
b. Paid
up
c. Called
up
d. Subscribed
10.
Identify which of the
following redeemable preference shares of Rs. 10 each would be eligible for
redemption ?
a. On
which application and allotment money of Rs. 5 per share and above has been
paid
b. On
which application money of Rs. 2 per share and above has been made.
c. On
which Rs. 10 has been paid
d. All
of the above
11.
In a common size balance
sheet each items is expected as a percentage of –
a. Equity
capital
b. Debt
capital
c. Fixed
assets
d. Total
assets
12.
EBIT/Total assets ratio
is
a. Liquidity
ratio b. Profitability ratio c.
Solvency ratio d. Turnover ratio
13.
The value of which one of
the following assets increases in the initial years of its life, remains
constant thereafter and finally begins to decline
a. Live
stock
b. Patents
c. Goodwill
d. Machinery
14.
Trading is a consumer
co-operative society store is-
a. On
cash basis only
b. On
cash basis for non-members and credit facilities for members
c. That
credit facilities are available for both members as well as non-members
d. None
of the above.
15.
The income statement
reports –
a. The
net effect of profit generating activities
b. The
financial position of the company
c. Both
a and b
d. None
of the above.
16.
A budget which is
prepared for use unaltered over a long period of time is known as :
a. Basic
budget
b. Current
budget
c. Long
term budget
d. Short
term budget
17.
Bills, bonds, equities
are arranged in descending order of liquidity. The correct order is:
a. Bonds,
bills, equities
b. Equities,
bonds, bills
c. Bonds,
equities, bill
d. Bills,
bonds, equities.
18.
Dividends must be paid
within…………….days of the date of declaration:
a. 30 b. 42
c. 45 d.60
19.
The minimum share
application money is
a. Rs.
2 Per share
b. 5%
of nominal value of shares
c. 50%
of nominal value of shares
d. 20%
of nominal value of shares
20.
Rights issue is made to
a. Directors
of the company
b. Employees
of the company
c. To
the existing shareholders
d. Public.
21.
Nominal share capital is
a. That
part of the authorized capital which is issued by the company
b. The
amount of capital which is actually applied for by the prospective shareholders
c. The
maximum amount of share capital which a company is authorized to issue
d. The
amount actually paid by the share holders.
22.
Issue of shares at a
discount of 10% or less must be
a. Authorized
by the central govt
b. Authorized
by the court.
c. Authorized
by the resolution passed by the company in general meeting
d. Authorized
by the resolution passed by the company in general meeting and sanctioned by
the court.
23.
Bonus shares can be
issued by a company
a. Out
of reserves created by revaluation of fixed assets
b. Out
of share premium not collected in cash
c. Without
any provision for it in the articles of association
d. Out
of free reserves built out of genuine profits
24.
Share warrants can be
issued by
a. Private
companies only
b. Public
companies only.
c. Both
private and public companies
d. Companies
limited by the guarantee.
25.
Which of the following
statements is true of bonus shares?
a. Bonus
shares are issued to promoters only.
b. Bonus
shares are issued to existing share holders only
c. Bonus
shares are issued to employees of the company
d. Bonus
shares are issued at par value.
26.
New issue market is an
integral part of
a. Stock
exchange
b. Capital
market
c. Both
a and b
27.
In case debentures,
underwriting commission and brokerage can not exceed
a. 2.5%
b. 3.5%
c. 5%
28.
Dealings in stock
exchanges can be done by public
a. Directly
b. Directly
or through brokers
c. Only
through brokers.
29.
Which of the following is
not a speculator of the stock exchange
a. Brokers
b. Bull
c. Bear
d. Stag
30.
Which of the
following speculators expect fall in the
prices of securities in the near future?
a. Bull
b. Bear
c. Lame
duck
d. stag
31.
when a right to sell a
security is acquired, it is known as
a. call
option
b. put
option
c. double
option
32.
blue chip means
a. shares
guaranteed by the govt
b. shares
listed in the stock exchange
c. shares
giving consistent high rate of return
Key
answers
1. (b)
Private company
2. (a)
Short term
3. (c)
5% of shares
4. (d)
Arbitrage
5. (c)
Blank transfers
6. (a)
Small investors
7. (c)
1988
8. (d)
short selling
9. (d)
Subscribed
10. (d)
all the above
11. (d)
Total assets
12. (b)
Profitability ratio
13. (a)
Live stock
14. (a)
On cash basis only
15. (a)
The net effect of profit generating activities
16. (a)
Basic budget
17. (d)
Bills, bonds, equities
18. (b)
42
19. (a)
Rs. 2 per share
20. (c)
to the existing share holders
21. (c)
The maximum amount of share capital which a company is authorized to issue
22. (d)
Authorized by the resolution passed by the company in general meeting and
sanctioned by the court.
23. (d)
Out of free reserves built out of genuine profits
24. (b)
Public companies only.
25. (b)
Bonus shares are issued to existing share holders only
26. (b)
Capital market
27. (a)
2.5%
28. (c)
Only through brokers
29. (a)
brokers
30. (c)
bear
31. (b)
put option
32. (c)
shares giving consistent high rate of return
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