Tag: business organisation

Questions Related to business organisation

Primary procedure in trading on a Stock Exchange is _______.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. opening 'Demat' Account with Depository

  2. placing the Order

  3. selection of a registered broker

  4. executing the Order

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Correct Option: C
Explanation:

Primary procedure in trading on a Stock Exchange is selection of a registered broker. The buying and selling of securities can only be done through SEBI registered brokers who are members of the stock exchange . The broker can be individual, partnership firms or corporate bodies.

_____ means actual transfer of securities.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. Executing the Order

  2. Placing the Order

  3. Opening 'Demat' Account with Depository

  4. Settlement

Show answer
Correct Option: D
Explanation:

Settlement means actual transfer of securities. This is the last stage in the trading of securities done by the broker on behalf of their clients. Settlement can be done in two ways, namely, on-spot settlement and forward settlement.

A stock market index is a barometer of market behavior.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. True

  2. False

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Correct Option: A
Explanation:

A stock market index is a barometer of market behavior. Stock market index can be defined as a measure or indicator which shows how the market mechanism works for securities. It is computed from the prices of selected stocks from the market.

The shares of companies are dealt in.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. Stock market

  2. Foreign exchange market

  3. Bullion market

  4. Commodity market

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Correct Option: A

Long-term borrowing is undertaken in.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. Money market

  2. Capital market

  3. Bullion market

  4. Foreign exchange market

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Correct Option: B

The number of approved stock exchanges in India in 2018 is________.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. 14

  2. 21

  3. 18

  4. 15

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Correct Option: A

According to traditional approach the average cost of capital ________________________________.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. Remains constant up to a degree of leverage and rise sharply thereafter with even increase in leverage

  2. Rises constantly with increase in leverage

  3. Decreases up to a certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point

  4. Decreases at an increasing rate with increase in leverage

  5. Increase up to certain point remains constant for moderate decrease in leverage and decreases beyond a certain point.

Show answer
Correct Option: C
Explanation:

According to the traditional approach the average cost of capital K$ _0$ as a consequence of a behaviour of K$ _e$ and K$ _d$, decreases up to a certain point remains more or less unchanged for moderate increases in leverage thereafter and rises beyond a certain point.

Money market arranges for ____________ and capital market provides for ____________ funds. 

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. long-term, short-term

  2. long-term, short to medium-term

  3. short-term, medium to long-term

  4. medium-term, short to long-term

Show answer
Correct Option: C
Explanation:

The financial market is a platform where investors deal in financial instruments. Money market and capital market are part of the financial market.

In the money market, extremely liquid financial instruments are traded, i.e. monetary instruments of short expiry are dealt with.
On the the other hand, the capital market is for medium to long term finance.

The __________ market is also known as the new issues market, which deals with new securities being issued for the first time.

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. capital

  2. money

  3. primary

  4. secondary

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Correct Option: C
Explanation:

The primary market is also known as the new issues market, which deals with new securities being issued for the first time.  Primary market directly contributes in capital formation because in primary market company goes directly to investors and utilize the funds for investment purpose. Primary market does not include finance in the form of loan from financial institutions.

Which of the following is/are a method of flotation in the primary market?

business organisation stock exchange meaning and functions of capital market capital markets listing of securities, stock market players

  1. Offer through prospectus

  2. Offer for sale

  3. Private placement

  4. All of the above

Show answer
Correct Option: D
Explanation:

There are various methods of floating new issues in the primary market. They are:

  • Offer through Prospectus involves inviting subscription from the public through issue of prospectus.
  • Offer for Sale: Under this method securities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers.
  • Private Placement: Private placement is the allotment of securities by a company to institutional investors and some selected individuals.