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QUESTION

Which of the following is (are) NOT true for Mutual funds? Consider a house purchased for Rs 7,00,000 and leased out at Rs 10,000 per month for 1 year.The house is sold after 1 year to fetch Rs 6,50,000.What would be the ROI(%) in this case.

ANS1 Direct investment in the equity,debt and derivatives market

ANS2

ANS3

ANS4 None of the above None of the above None of the above None of the above

ANS

Bears higher risk

Both 1 & 2

Which of the following is (are) TRUE about liquidity

10% Ensures that you are able to meet your obligations in time

20% Good sign of financial strength

30%

Both 1 & 2

Consider a sum of Rs 2,00,000 invested to earn a rate of 11% per anum for 5 years. The Future Value at the end of the 5th year would work out to be 337009.62 It is that rate of discounting in a project that makes its NPV Which of the following is(are) true for IRR zero

336011.63 337011.63 Projects having higher IRR are preferred to those having lower IRR Both 1 & 2 Does not involve fixed obligation for repayment of dividen Preference Capital has some features of equity and some attributes of debentures.

None of the above

Which of the following is(are) True about equity capital

Represents ownership capital

Only 1

Both 1 & 2

Debentures are instruments for raising Which of the statements are (True) long term debt capital. Clearing house determines the cumulative obligations of each member and electronically transfers Which of the following are True with reference to the clearing and settlement the data to clearing cycle. members referes to people and entities involved in buying and selling of debt and the quantity and prices Of those With reference to the debt market which of the following are True transactions over time.

ADR is a negotiable certificate issued by US bank.

All of the above

Settlement is deemed to be complete upon declaration and release of pay-out of funds and securities.

Both 1 & 2

None of the above.

There is no single location or exchange where debt market participants interact for common business. Both 1 & 2

None of the above

10

With reference to money market which of the statements are Not True. Which one among the undermentioned credit rating agencies is promoted by ICICI

Refers to the market for Maturity period is less long term requirement than one year.

Both 1 & 2

None of the above. Standard and Poor and Moody

11

CARE

ICRA

CRISIL

12 13 14

Which of the following holds True for an OTC market. Duration of call money is In India the main regulator for the money market is

15 16

Which of the following holds True for forward contract In India Derivative markets comes under the regulation of

If an investor wants to buy or sell a bond , he or she must call the bank that makes Trading occurs via a the market In that Very popular way of network of middlemen bond and asks for trading called dealers quotes. All of the above. None of the 2 days 14 days 1 day above SEBI SBI RBI NSE It is an over the counter obligation to buy or sell a financial None of the It is a type of derivatives instrument Both (1) and (2) above. RBI SEBI SBI ICICI Responsible for safekeeping of investments of the fund and monitors all benefits due to the fun The commission that an investor has to pay while purchasing units of a mutual fun Shareholders

4 3 3

3 2

17

Custodian is

18 19

Net Asset Value is Following are considered as stake holders of the company

Performs record keeping functions and investor servicing. The commission that is charged when the investor exits the scheme.

Marketing funds to the investors.

Regulatory body. 1

The market value of the assets minus its liabilities. All of the above All of the above

3 4

20

Which of the Following is(are) True

Creditors Suppliers Profit and Loss or income statement Balance sheet shows the shows the financial financial position of the performance of the company at a given point company over a period of time of time All of the above

None of the above

21 22

Cash and funds flow statement portrays the Which of the following are accounting concepts

reflects the financial Financial position of the performance of the company at any point of company over a period time of time Entity Money Measurement

flow of funds through the business during a given accounting period Both (1) and (2)

None of the above None of the above

3 3

23 24 25

Cost concept of accounting suggests that

Every transaction has 2 aspects

All Assets of the company are valued at their cost value . Credits Liability

All of the above

All Assets are necessarily Debits With reference to the balance sheet of a sole proprietorship concern Profit is treated as a Asset

None of the above None of the Any of the above above. Income Expenditure

2 1 2

26 27

28 29 30 31 32 33

Revenue reserves represent Unsecured Loans PrimeSourcing''s virtual university to enable continuous learning is known as Prime University You buy bonds worth Rs. 500,000/- on which you get a return of Rs. 90,000/for the year. At the end of the year you sell the bonds for 4,80,000/- What is your ROI 14% You purchased gold at Rs. 10,000/- per 10 grams and sold it after a year at an ROI of 12%. The selling price of gold per gram is Rs. 1000 The present value of an annuity of Rs. 1000 paid yearly for 5 years earning 6% is Rs. 5637.09 The NPV of the following cashflow stream at a cost of capital of 11% is: 100000, 50000, 50000, 40000. Assume yearly cashflows. 12974.4 If a party A makes a periodic payment at LIBOR to party B and Party B pays a fixed 3% to Party A, the transaction is called Interest rate swap If an asset is being depreciated at a constant amount every year, the Reducing balance method is called: method

Secured Loans i-flex university

accumulated retained earnings from the profits of normal business. Flexcube university

None of the above. None of the above

3 1

13.9% Rs. 1120 Rs. 4212.33 12973.76 Basis Swap Deferred charges method

14.1% Rs. 1115 Rs. 5637.90 14873.82

14.2% None of the above Rs. 4211.56

1 2 2 3 1 3

14500 Repo Total Swap Transaction None of the Straight line method above Repair, Assess, Sustain

34

The term RAS refers to:

Ratio Analysis System

Reliability, Reference Association Availability, system serviceability

35

Dividend yield is

The rate of dividend

The amount received as dividend

The amount of dividend/ Market Price

The rate of dividend/ market price

36 37 38 39 40 41

ORTOS is a solution for: Basel II Compliance The compliance solutions of I-Flex are in the areas of: A) Clause 49, B)AML, C)SOX All of the above The owner of the company introduces Rs 6,000 as cash and Rs 4,000 in the form of machinery.The liability of the company would be Rs 6,000 All Assets are necessarily All liabilities are necessarily The difference of Assets and Liabilities is Debits Debits Reserves Borrowings of the company against which no security has been provide

Operational Risk Management 1&2 Rs 4,000 Credits Credits Secured Loans

Credit Card Solution 1&3

Offshore development framework of IFlex Solutions Ltd 2 4 3 1 2 3

2&3 None of the Rs 10,000 above. None of the Any of the above above. None of the Any of the above above None of the Owners Equity above.

42

Reserves in accounting terms refers to

Money kept aside Profits which to meet future have been retained contingencies. in the firm.

None of the above

43

Revenue reserves represent

44

Capital reserves represents

Unsecured Loans Balanxce in the profit and Loss account which has not been appropriated to any particular reserve account.

Secured Loans Reserves that arise out of non operational gains such as premium on issue of shares.

accumulated retained earnings from the profits of normal business.

None of the above.

None of the Any of the above above. Part of Centers of Excellence

45

PrimeSourcing is the

Services Services Outsourcing Division of Outsourcing Division of Part of Product i-flex solutions lt i-flex consulting Offering

46 47 48

Credit or default risk is highest for

Government Bonds

Government Bonds

State or Municipal Corporation Bonds Operational Risk Lead Manager

Junk bonds All of the above Registrar

4 4 3

Basel II aims to cover the following risk exposures of a bank Credit Risk Market Risk The most vital role amongst all intermediaries during a public issue is played by Bankers to the Issue Underwriter

49

Amortisation refers to

It is excess of It is an asset but not purchase price over physical in nature the fair market value

Paying off of debt in regular installments over a period of time

List of the settled trades

50

Goodwill refers to

It is an asset but not physical in nature

It is excess of purchase price over the fair market value

Paying off of debt in regular installments List of the settled over a period of time trades sum of costs incurred for manufacturing the goods sold during the accounting period

51

Cost of goods sold refers to

Revenue generated from the sale of all the companys products or Non operating services deficit Sum of operating A measure of profit and non-operating profit which is not surplus- non-operating influenced by interest deficit. and tax factors.

None of the above

52

PBIT refers to

All of the above

None of the above

53 54

Analysis of Balance sheet is important as it The Balance sheet can be valued by using which valuation method

Identifies potential liquidity problems Historical Cost

May signify the companys inability to meet financial obligations Current Market Value

helps an investor to spot the degree to which a company is All of the leveraged or indebte above Net realizable All of the Value Method above

4 4

55

Which of the following is(are)True about salvage value

56

Current ratio is

57

Quick Ratio is

The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. helps to measure the ability of the firm to Also known as the meet its current working capital ratio liabilities an alternative measure of liquidity Also known as Acid- that does not include test ratio inventory Estimated value that an asset will realize upon its sale at the end of the useful life

The value can be a best guess of the end value or can be determined by a All of the regulatory body. above

None of the Both (1) and (2) above

None of the Both (1) and (2) above

58

Debt ratio refers to

59 60

Which of the following is(are)True about EPS Which ratio refers to Market value per share/EPS

61 62 63 64 65 66

Entity concept of accounting requires that Which of the following is not a non operational risk Duration of call money is In India the main regulator for the money market is If a deposit of Rs. 100,000/- earns a rate of 6% compounded continuously for three years, the deposit will be worth The FV of a cash flow stream of Rs. 1000 received at the end of each year over 5 years at 6% will be

Indicates how well the companys the extent to earnings can cover the which borrowed relative contributions interest payments on funds support the of creditors and owners its debt firms assets. serves as an traditional method indicator of refers to earning per of determining companys share corporate value profitability Net profit margin Gross profit Price to ratio margin ratio earnings ratio The business firm is regarded as a separate entity as The business be treated distinct from the separate from its persons who are owners connected to it. Both (1) and (2) Credit Risk 2 days SEBI 1,18,789.00 5637.09 Currency Risk 14 days SBI 1,19,668.05 42142.67 Market Risk 1 day RBI 1,19,721.74 5667.12 The discount rate that makes the NPV zero 17.66%

None of the above

All of above None of the above

4 3

None of the above. None of the above. None of the above NSE 1,19,722.80 5677.30

3 4 3 3 3 1

67 68

IRR is The IRR of the following cashflow stream is 100000, 50000, 50000, 40000. Assume yearly cashflows.

NPV of all the cash flows 19.69%

PV of positive cash flows 10.23%

None of the above None of the above

3 1

69 70 71 72

The BPD offers, A)FLEXCUBE UBS, B) FLEXCUBE CBS, C).FLEXCUBE PBS The section of SOX that requires attestation by the CEO and CFO is: PrimeSourcing offers solutions for, A).Trade Finance, B).Retail Management, C).Investment Banking P/E ratio of a share is:

All of the above 302 All of the above Issue price of share/EPS

1&2 404 1&2 Market price of share/EPS

1&3 210 1&3 Dividend/EPS To ensure development of underwriting market in govt. bonds Minimum fill order results in the acquisition of a permanent asset

2&3 All of the above 2&3 Preference Share/EPS

1 2 3 2

73 74

Which of the following is not an objective of PDs: If you place an order to buy 1000 shares and specify each trade should be 200 shares you have entered a:

Ensure development To ensure of secondary market in development of Government bonds Financial markets Disclosed Quantity Order Fill or Kill Order

None of the above Maximum fill order results in acquisition of current asset

2 3

75

Capital expenditure is an expenditure which

benefits the current accounting period

will benefit the next accounting period

76

77

If Rs.5, 00,000 is left on deposit to earn a rate of 5% for 5 years. What it is 641018.62, worth if the interest is (i) quarterly compounding (ii) half-yearly compounding 640000.00,620000.00,61 640042.27, (iii) continuous compounding? 0000.00 642012.71 If a company's Gross profit is Rs.63,000, salary expenses are 4,000,Rent is 6,000,Interest payments are 5,000,other income is 5,000 and taxes are 20% on the net profits,then what is EBIT? 53,000 58,000

631081.23,640024.1 None of the 7,642111.51 above

63,000 Preference dividend is a tax deductible expense to the company.

46,400

78

79 80 81

Which of the following is (are) true? Suppose ABC Ltd co. has following cost and values: market value of Debt Rs. 500 crs., market value of equity - Rs 350 crs.,cost of debt:12%,cost of equity:17%,Tax:35%.Compute WACC 11.59%

Equity shareholders can Preference claim their unpaid shareholders do not dividend legally have voting rights.

None of the above None of the above All of the above 7 and 2 easy and inexpensive to set up

12% Inflation 5 and 7 Fund raising from outside is easy

5% Political Stability 2 and 7

1 4 3

82

Worldwide currency prices are affected by changes in interest The minimum number of persons required to form a private limited company and a public limited company respectively are? 2 and 5 Life of a firm is limited to the life of a Which of the following is an advantage of a sole proprietorship? proprietorship

83

Bank borrow in the call money market to

give loans

limited personal liabilities meet sudden demand for funds arising due to large meet the cash reserve payments and ratio remittances 7% short term government securities. debentures

2&3

84 85

Which of the following is the example of risk-free interest rate? which of the following is not a money market instrument?

SBI Mutual Fund @11% 9% Long-term return Debenture. Treasury bills certificate of deposits the interest earned is non-taxable to the investor Debentures 41350 book building personal income tax market order

All of the above call money

3 3

86 87 88 89 90 91

When an investment pays only simple interest rate,this means

the future value of investment wil be low

Which of the following is not a source of long-term finance? Equity shares What is the future value of Rs.20000 invested now for a period of 5 years at an interest rate of 8%? 29387 Price Discovery of a security is done by the following process Income earned by soleproprietorship is taxable under An order which gets activated only when the market price of that security reaches the trigger price What is the return on investment per annum for an asset purchased for Rs.82,50,000 and leased for Rs,1,00,000 per mont .h for 18 months,after which it is sold to fetch Rs.80,00,000? Who are all kown as stakeholders of a company? Mr.Ram purchases a house worth Rs.12 lacs, after seven years he is planning to sell; he gets a value of Rs.10 lacs. What is the risk involved? Which of the following factors influence inflation? (i) Interest rate (ii) rising supply (iii) reducing demand The money that is lent for one day is known as? rights issue corporate tax stop loss order

the interest rate is interest is earned on lower than the the original comparable investment investments 3 Reserves and Commercial Surplus Papers 4 30710 private placement HUF limit order 20700 None of the above Wealth tax None of the above 1 2 2 1

92 93

15.6 Creditors

6.93 Suppliers

18.79 Shareholders

10.4 All of the above None of the above

3 4

94 95 96

Credit risk only (i) call Sales - cost of goods sold

Market risk only (ii) repo

Liquidity risk (i) and (ii) notice

3 1 1

97

Gross profit is equal to

(ii) and (iii) term Opening stock + Sales - closing stock + purchases purchases Net profit - expenses closing stock Increase in owner's equity (i) and (iii) Decrease in owner's equity All of the above

98 99

From the accounting point of view,loss means Which of the following are investments Avenues? (i) Hedge Funds (ii) Property (iii).Ploughing cash back into business

Increase in liability (i) and (ii) Stock

Decrease in asset (ii) and (iii) Vehicle

4 4 4

100 Which of the following are/is not a fixed asset?

Fixed deposit in bank both (i) and (ii)

101 Which of the following is not an intangible asset? 102 P&L account is prepared for a period of one year by following

Goodwill consistency concept

Trade mark conservation concept

Franchise

Accounts receivables

4 3

time period concept cost concept

103 Accounting does not record non-financial transactions because of

Entity concept

104 Depreciation is calculated on the

cost price of asset

Money measurement concept accrual concept cost + transport + installation market price expenses

cost cancept cost or market value whichever is less

Calculate the opening cash balance if the closing cash is:Rs.1,43,000.Rent paid:20,000,out of which advance rent is:3,000.Salaries paid: 20,000 and to 105 be paid is:5,000.Other revenues:1,00,000 97,000 Opening capital is:80,000.Closing capital is:1,20,000.Net profit during the 106 year:20,000.The trader has

2,03,000 Brought additional capital of Rs.20,000

1,83,000 Brought additional capital of Rs.40,000

1,23,000 Drawings of Rs.40,000

Drawings of Rs.20,000

Opening stock:40,000.Closing stock:50,000.Sales:70,000.Assuning there is 107 no gros profit and direct expenses the purchases made during the year are: 80,000 The amount that has to be invested at the end of every year for a period of 6 years at a rate of interest of 15% in order to accumulate Rs.1000 at the end 108 of 6 years is equal to 112.42 Mr. Shankar deposits Rs.1,00,000 on retirement ina bank which pays 10% 109 annunal interest.How much can he draw for a period of 10 years. 16,273 Computers taken on hire by a business for a period of 1 year should be 110 classified as 111 Insure3 an icsurance solution product is provided by 112 Which of the following is a current liability?

90,0000

1,10,000

70,000

114.24 18,797.10

114.42 20,000

112.44 15,850

2 1

fixed asset Mantas outstanding salaries

not an asset Castek Trademark

deferred revenue current asset expenditure 2 BNX Capco 2 Discount on issue of shares prepaid expenses 1 you can but 1.1923 USD for one EUR

113 If a EUR/USD is quoted as 1.1923,what does it mean?

you can buy 0.8387 USD you can buy 0.8387 for one EUR EUR for one USD.

114 Cash profit is

115 What are the functions of RBI? An order to sell shares, where brokers are given a particular limit for 116 sustenance of loss is know as An order that allows a trading members to buy or sell as soon as the order is released into market, failing which the order will be removed from the 117 system? 118 Order conditions are broadly classified into: 119 Order that remains in the system until it is cancelled by trading member? 120 Credit Rating Agencies promoted by IDBI 121 Credit Rating Agencies promoted by IFCI? Which of the following is/are the characteristics of money market instruments? 122 123 Known as Hybrid insurance policy?

None of the above 3 net profit - non trading profit Net profit + depreciation gross profit depreciation and and provision Gross profit - net profit operational expenses provision 1 c.Formulates b.Banker to the monetary and credit a.Issues Currency government policies d.All of the above 4 a.Limit order b.Cancel order c.Stop loss order d.Market order d.None of the above d.All of the above d.Disclosed quantity d.CARE d. Standard and Poor d.Both (B) and (C) d.Credit insurance 3

a.Immediate/cancel

b.Stop loss order b.Price related a.Time related conditions conditions a.Good till cancelled a.CRISIL a. CRISIL b.Good till date/day b.Standard and poor b. ICRA

c.Good till cancelled c.Quantity related conditions c.Immediate or cancel c.ICRA C. Care

1 4 1 4 2

a.Long term maturity a.Annuities

b.High liquidity b.Financial Loss insurance

c.Highly secured c.Locked fund insurance

2 3

124 Which of the following is an advantage of partnership firm?

a.Life of the firm is perpetual a.Hold securities in an account a.True IPO

c.Its ability to raise b.Personal liabilities of funds is virtually the partners are limited unlimited b.Hold Funds in an account b.False FPO

d.Its relatively free from government regulations as compared to joint stock companies 4 d.None of the above d.None of the above Bonus issue None of the above 1 None of the above 1

125 What is Depository? 126 Depositories are like banks for securities 127 The selling of securities to the public in the primary market is known as IPO is offered in 128 What is the basis of voting rights for members of Co-operative society ? 129 The most vital role amongst all the intermediary during a public issue is played by 130

c.Both (1) and (2) c.Dormant Funds Right issue

1 1 1

Primary Market

Secondary Market Proportion of shares held

Both of the above Members cannot vote

One Vote per member

Lead Manager

Bankers to the issuers Underwriter

All of the above 1

EPS is 131 DP's have to registered with 132 Which of the following are zero coupon debt securities? 133

Net profit Pref. dividend / total number of outstanding shares Stock exchange GILT securities

Gross profit / Outstanding shares SEBI RBI relief bond

Net profit / Outstanding shares RBI Treasury Bills

Net profit / market value of Outstanding shares 1 B&C 2 All of the above 3

Custodians perform which of the following activity on behalf of its client 134

Ensuring timely collection of monetary and non-monetary Ensure timely benefits on securities on settlement of funds behalf of the client and securities

Maintain clearing accounts with DPs

All of the above 4

The major difference between a broker and a sub-broker is 135

Broker is member of exchange while sub broker is not

Broker can trade on the exchange while sub broker cannot

The broker is registered but the sub broker need not to be registered

None of the above 2

Prime dealers in India are the one who are 136 In the Option, who is obligated to honor the deal ? 137

Dealer on the trading floor

Authorized dealers of Govt. Securities Authorized dealers of Members of appointed by RBI Govt. Securities Clearing house 2

Buyer of the option

Writer of the option

Clearing house

Stock exchange 2

PrimeSourcing is the 138 PrimeSourcing has domain expertise in which of the following areas 139

Services outsourcing Part of Product offerings division of OFSS Derivatives Trading and Processing Insurance claims Processing

Services outsourcing division of Consulting Parts of COE 2 MF accounting and operation All of the above 4

Mutual Fund facilitates pooling of investors funds which are managed by 140 What is the key regulation that govern the issuance the CPs ? 141

Assets Management The Trustees of the fund Company of the fund

Mutual Fund itself

Mutual Fund sponsor 2

Financial Analytics

Business Analytics

Risk Analytics

Banking Analytics 3 CP should be issued at least for a period of one year and above 2 None of the above 2

What is the key regulation that govern the issuance the CPs ? 142 Why does the central government borrow money? 143

Issuer must be banks

Issuers must have to be rated by credit rating agencies To close the budgetary deficit

They should be issued by RBI

To fund the MPs salary

Both of the above Trades that are pending for matching

What does order book show? 144

Trades that are matched Trades that are till yesterday matched till that time

List of the settled trades 3

Which of the following is not true for ROI 145 BOI shareholding Ltd. Is the clearing house for 146

ROI is usually expressed ROI is usually as a percentage expressed per annum

ROI does not take into account capital loss

ROI takes into account capital loss 3 None of the above 2

NSE

BSE

RBI

What is Net worth ? 147

Reserves and Surplus + Long term assets + Equity capital Equity Capital

Current Assets + Net profit + Reserves Net Profit 1 Money being illegally transferred to subsidiaries of the bank 1

AML solutions help banks to identify and combat 148 Which of the capital budgeting methods best suited to find out the time required for recovering initial investment cost ? 149 ROA sometimes also referred as ROI 150

Money being covered and moved by antisocial & anti-national elements

Likely money being Likely frauds being siphoned off by committed by senior management employees of the bank of the bank

NPV True

IRR FALSE

Pay-back period

B&C 3 1

Speculation is for 151 An amount of Money today is more valuable than the same amount of Money at a future date 152 In NPV outflows are taken as negative and inflows are taken as positive. 153

Minimize risk

Minimize loss

Profit from fluctuation

Hedging of risk 3

TRUE

FALSE 1

TRUE

False 1 Rate of Rate of discounting Rate of discounting discounting which which makes its NPV which makes its NPV makes its NPV equal to zero lower than zero greater than zero 2

IRR is a 154

Discounting rate only

Which of the statements is true ? 155 Through diversification you can protect your investment from 156

For project evaluation lower NPV are preferred over those having a higher NPV

For project evaluation higher NPV are preferred over those having a lower NPV Both of the above

None of the above 2

Market Risk

Unsystematic Risk

Operational Risk

Currency Risk 2

The minimum number of persons required to form a private limited company and a public limited company respectively are? 2 and 5 157 Equity share holders can face the risk of not only zero return on their return but also capital loss. 158 The method of raising fund from existing shares or debenture holder is known as 159 GDR is a negotiable certificate issued by 160 Debenture holders are 161 Stake holders of the company a US bank IPO TRUE

5 and 7

2 and 7

7 and 2 3

FALSE 1 FPO Rights issue Bonus issue 3 an International bank Share holders of the company RBI Creditor of the company SBI 2 A&C 4

Working Capital Management involves 162 _________________ is issued by a bank on behalf of its customer (Buyer) to the seller. 163

the relationship the relationship between between a firms the relationship a firms Long-term short-term assets and between a firms midassets and its long-term its short-term term assets and its liabilities liabilities mid-term liabilities B&C 2 Draft Cheque Letter of Credit None of the above 3 Proportion of Equity * Cost of Equity + Proportion of Debt * (1-Tax) 3

WACC is 164 __________________ of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment and the amount which is initially invested. 165 The Financial market / Securities market essentially comprises of few categories of participants namely 166

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt

Proportion of Equity * Proportion of Debt + Cost of Equity * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt (1-Tax)

IRR

NPV

Pay back

None of the above 2

Issuers of the securities, Investors in Securities Intermediaries

A&B

None of the above 3

Financial market facilitate 167 New issuance of the securities comes under which market? 168 The markets which provides short term debt financing and investment is known as 169 Book building is a process used in right issue for efficient price discovery. 170 When an already listed company makes either a fresh issue of securities to the public or an offer of sale to the public, through an offer document, it is known as 171 _______________ issues Treasury bills, Government dated securities and relief bonds? 172 Who regulates the issuance of government securities ? 173

The raising of capital (in the capital market)

The transfer of risk (in International trade (in the derivatives market) the currency market) All of the above 4

Debt market

Stock market

Secondary market

Primary market 4

Debt market

Money market

Derivatives market

Stock market 2

TRUE

FALSE 2

IPO

FPO

Preferred issue

Private placement 2

RBI SEBI

Government RBI

Banks Government

B&C 1 B&C 2

Who regulates the corporate debt ? 174

SEBI

RBI

Both of the above

None of the above 1 Bankers to the issue 1 Bankers to the issue 4 Bankers to the issue 4

The ______________ takes up the due diligence of companys operations/ management/ business plans/ legal activities etc... Lead Manager 175 Who assist the company right from preparing prospectus to the listing of securities at the stock exchange ? 176 Who carry out all the activities of ensuring that the fund are collected and transferred to the Escrow accounts ? 177 At the time of public offer, who is responsible to do `allotment of shares to the applicants DP account and dispatch of refund order ? 178 Quick ratio consider inventory Lead Manager Lead Manager Lead Manager

Merchant Banker

Underwriter

Merchant Banker

Underwriter

Merchant Banker

Underwriter

Merchant Banker

Underwriter

R&T agents 4

What is the major difference between current ratio and quick ratio ? 179

Current ratio consider inventory

Current ratio Quick ratio does not consider consider inventory inventory 3

RTGS and CLS solutions are provided under a 180

Cash management solutions

Treasury management Wealth management Trade finance solutions solutions solutions 1

Clearing house 181

Provides trading platform Holds securities on for its members behalf of its members

Match and reconciles trades

All of the above 3

Which of the services is not offered by a depository/DPs ? 182

Corporate Actions

Trading

Electronic credit Electronic settlement of securities of trades in Stock allotted in public Exchanges. issues. 2 National Securities Deposit Ltd 3

NSDL stands for 183

National Security Depository Ltd

National Securities Depository Participant National Securities Ltd Depository Ltd

Who take care of the Post-trading activities on behalf of their clients such as FIs, Asset management companies, Pension fund, FIIs etc? Custodian 184

Underwriter

Merchant banker

Lead manager 1

Which statement is false ? 185 The party who enters orders on the same side of the initiator is known as 186

Broker is not responsible for the acts and dealings of his Sub- A Sub-broker is an Broker agent of a broker

Sub broker has to registered with SEBI as well as Exchange of which his broker is the member

Clients of the sub broker are to be registered with the main broker 1 None of the above 2 Good till cancelled (GTC) 4 Good till cancelled (GTC) 3 T+4 2 IFCI 4 Secondary market 1 Notice money 1

Initiator

Competitor

Solicitor

Which order is comes under Time related condition ? 187 Which order is comes under Price related condition ? 188 In India, trades in rolling settlement are settled on what basis ? 189 Which institution is not working as a Credit Rating Agencies ? 190 _____________________ is the financial market for short term borrowing and lending, typically up to one year. 191 The money that is lent for one is known as 192 The money that is lent for more than one day but less than but less than 15 days it is referred to as 193 Which is the largest financial market in the world ? 194 International offering of debt /equity is managed by 195 Insurance is a solution provided by 196 Which ratio shows the earning left for share holders ? 197 This ratio measures the extent to which borrowed funds support the firms assets 198 What is Reverse Repo ? 199 Which statement(s) talks about financial position of the company at the end of an accounting period ? 200

All or none (AON)

Market Order

Stop Loss order

All or none (AON) T+1 CRISIL

Good till date (GTD) T+2 S&P and Moody

Stop Loss order T+3 ICRA

Money Market Call money

Stock market Notice money

MF market Term money

Call money FX market SEBI

Notice money Stock market RBI

Term money Money market Merchant banker

Notice money 4 Debt market 1 Prime broker 2 None of the above 3 Return on equity 2

BPD Gross profit ratio

PRSG Net profit ratio

Prime Sourcing Return on assets

Interest coverage ratio

Current ratio

Debt Equity ratio Selling and buying back Profit and loss statement

Debt ratio 4 None of the above 2

Buying and selling Swapping the cash flows back

Fund flow statements

Balance sheet

A&C 2

Basel II aims to cover the following risk exposure of a bank 201

Market risk

Operational risk

Credit risk

All of the above 4

Which statement is false ? 202

Trading member is responsible for clearing and settlement of the trades of his own or of his clients.

Trading member is responsible for clearing and settlement of his clients only.

Disclosed Quantity (DQ) is an order with a DQ condition allows the TM to disclose only a part of the order quantity to the market. Profit and loss statement

Market Order is an order to buy or sell securities at the best price obtainable at the time of entering the order. 2 None of the above 3

Which statement(s) talks about financial performance of the company during an accounting period ? Fund flow statement 203 What is return on investment per annum for an asset purchased for Rs. 750000 and leased it for Rs.15000 per month and later on sold it for Rs. 630000 ? 204 If Joe earns $125 interest in 30 months on money that was invested at 5%, find the Principal amount. 205 Ram has invested Rs. 100000 as a FD into a bank for 3 years. Where he will earn interest of 6% monthly compounding. At the end of third years what will be value of investment? 119698.05 206 You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years ? 6802.5 207 How much amount should you need for an investment such that you will receive Rs. 337011.63 after five years if rate of interest is 11% p.a. ? 208 Company XYZ has invested Rs. 5000000 and the expected return of the project amount to Rs. 1250000 annually. Calculate Payback period 209 $1,100

Balance sheet

6.30%

8.00%

6.93%

6.54% 2

$1,000

$1,200

$1,150 2

119700.05

119668.05

119660.05 3

6805.5

6807.5

6809.5 1

100000

300000

400000

200000 4

3.5

4 4

What is the out of the money in put option? 210

The underlying The underlying securities securities is trading is trading above the put below the put options strike price options strike price

The underlying securities is trading at the put options strike price

None of the above 2

If a EUR/USD pair is quoted as 1.19166, what does it mean ? 211

You can buy 0.839166 EUR for one USD

You can buy 1.19166 You can buy 1.19166 None of the USD for one EUR EUR for one USD above 2

The right but not the obligation to buy (sell) some underlying cash instruments at a pre-determined rate on a pre-determined expiration date at a pre-set notional amount relates to Futures 212

Forward

Options

Swaps 3

Leverage ratio refers to 213

The ability of a firm to meet its obligations in the short run

Provide an indication of the long-term solvency of the firm

How does equity stock of the How efficiently the company is assets are utilized by assessed in the a firm capital market 2

Which statement is correct ? 214 Which is the most popular market for trading of debt instruments? 215 Currently the ___________________ facility is used for the limited physical market as per the SEBI directives. 216

It provides service connected with recording of allotment A Depository is of securities or transfer an intermediary where of ownership of the securities are held in securities in the record the electronic form. of a depository Stock exchange market

A depository cannot directly open the accounts and provide services to the clients. All of the above 4

OTC market

Wholesale market

A&C 1

Normal Market

Odd lot Market

Auction Market

A&C 2 None of the above 3

The party who enters orders on the opposite side of the initiator is known as Initiator 217 Which ratio(s) is known as `Efficiency Ratio ? 218 What is the value of the furniture at the end of 5 years if the PV is 500000 and depreciation rate is 10% ? 219 350000 Fixed asset turnover ratio

Competitor

Solicitor

Receivables turnover Inventory turnover ratio ratio All of the above 4 295245 250000 305125 2

Calculate WACC where market value of debt: Rs. 600,000,000, Market value of Equity: Rs. 800,000,000, Cost of debt: 9%, Cost of Equity: 16%, Tax:35% 220

11.65%

12.75%

12%

11.83% 1

An investment with an initial cash out flow of $100,000 pays back $34,432 in the first year, $39,530 in the second year, $39,359 in the third year, and $32,219 in the fourth year. If the rate of return is 12%, find the Net Present Value (NPV) 10545.55 221 Consider an investment of $1,000 that is expected to yield $500 in 1 year and $700 in 2 years. What is the NPV of the investment at an annual discount rate of 9%? 222

10645.45

10745.45

10845.55 3

47.77

47.89

47.98

47.78 2

Companys gross profit is 63000, salary expenses are 4000, rent is 6000, interest payments are 5000, other income is 5000, and taxes are 20% on the net profits. The company declares 15% as dividend to the share holders. What is the amount which will be transferred to reserves and 223 surplus?

35800

36040

38500

39060 2

What is the ROI for a new project that is expected to cost Rs. 500,000 over the next five years and deliver an additional Rs. 700,000 in increased profits during the same time ? 30% 224 What is the depreciation charge per annum if machinery has been valued as 50000, life of machinery is 10 years and the salvage value is 5000 ? 2250 225 _________________ is a process of determining investment in a project that is expected to produce a cash inflow over a period of time 226

40%

50%

60% 2

2500

4500

5000 3

Cost of capital

Capital structure

Capital budgeting

Cash flow 3

select * from EXAM.QUESTION_MASTER WHERE qid = 5608

QUESTION

ANS1 Direct investment in the equity,debt and derivatives market

Which of the following is (are) NOT true for Mutual funds? Consider a house purchased for Rs 7,00,000 and leased out at Rs 10,000 per month for 1 year.The house is sold after 1 year to fetch Rs 6,50,000.What would be the ROI(%) in this case. 10% Ensures that you are able to meet your obligations in Which of the following is (are) TRUE about liquidity time Consider a sum of Rs 2,00,000 invested to earn a rate of 11% per anum for 5 years. The Future Value at the end of the 5th year would work out to be

337009.62 It is that rate of discounting in a project that makes its NPV zero

Which of the following is(are) true for IRR

Which of the following is(are) True about equity capital

Represents ownership capital Debentures are instruments for raising long term debt capital. Clearing house determines the cumulative obligations of each member and electronically transfers the data to clearing members referes to people and entities involved in buying and selling of debt and the quantity and prices Of those transactions over time. Refers to the market for long term requirement

Which of the statements are (True)

Which of the following are True with reference to the clearing and settlement cycle.

With reference to the debt market which of the following are True

10

With reference to money market which of the statements are Not True. Which one among the undermentioned credit rating agencies is promoted by ICICI

11

CARE

12 13 14

Which of the following holds True for an OTC market. Duration of call money is In India the main regulator for the money market is

Very popular way of trading 2 days SEBI

15 16

Which of the following holds True for forward contract In India Derivative markets comes under the regulation of

It is a type of derivatives RBI Responsible for safekeeping of investments of the fund and monitors all benefits due to the fun The commission that an investor has to pay while purchasing units of a mutual fun Shareholders Balance sheet shows the financial position of the company at a given point of time

17

Custodian is

18 19

Net Asset Value is Following are considered as stake holders of the company

20

Which of the Following is(are) True

21 22

Cash and funds flow statement portrays the Which of the following are accounting concepts

Financial position of the company at any point of time Entity

23 24 25

Cost concept of accounting suggests that All Assets are necessarily With reference to the balance sheet of a sole proprietorship concern Profit is treated as a

Every transaction has 2 aspects Debits Asset

26

Revenue reserves represent

Unsecured Loans

27

28 29 30 31 32 33

PrimeSourcing''s virtual university to enable continuous learning is known as You buy bonds worth Rs. 500,000/- on which you get a return of Rs. 90,000/for the year. At the end of the year you sell the bonds for 4,80,000/- What is your ROI You purchased gold at Rs. 10,000/- per 10 grams and sold it after a year at an ROI of 12%. The selling price of gold per gram is The present value of an annuity of Rs. 1000 paid yearly for 5 years earning 6% is The NPV of the following cashflow stream at a cost of capital of 11% is: 100000, 50000, 50000, 40000. Assume yearly cashflows. If a party A makes a periodic payment at LIBOR to party B and Party B pays a fixed 3% to Party A, the transaction is called If an asset is being depreciated at a constant amount every year, the method is called:

Prime University

14% Rs. 1000 Rs. 5637.09 12974.4 Interest rate swap Reducing balance method Ratio Analysis System

34

The term RAS refers to:

35

Dividend yield is

The rate of dividend

36 37 38 39 40 41

ORTOS is a solution for: The compliance solutions of I-Flex are in the areas of: A) Clause 49, B)AML, C)SOX The owner of the company introduces Rs 6,000 as cash and Rs 4,000 in the form of machinery.The liability of the company would be All Assets are necessarily All liabilities are necessarily The difference of Assets and Liabilities is

Basel II Compliance All of the above Rs 6,000 Debits Debits Reserves Borrowings of the company against which no security has been provide

42

Reserves in accounting terms refers to

43

Revenue reserves represent

44

Capital reserves represents

45

PrimeSourcing is the

Unsecured Loans Balanxce in the profit and Loss account which has not been appropriated to any particular reserve account. Services Outsourcing Division of i-flex solutions lt

46 47 48

Credit or default risk is highest for Basel II aims to cover the following risk exposures of a bank The most vital role amongst all intermediaries during a public issue is played by

Government Bonds Credit Risk Bankers to the Issue It is an asset but not physical in nature

49

Amortisation refers to

50

Goodwill refers to

51

Cost of goods sold refers to

It is an asset but not physical in nature Revenue generated from the sale of all the companys products or services Sum of operating profit and non-operating surplus- nonoperating deficit.

52

PBIT refers to

53

Analysis of Balance sheet is important as it

Identifies potential liquidity problems

54

The Balance sheet can be valued by using which valuation method

Historical Cost

55

Which of the following is(are)True about salvage value

Estimated value that an asset will realize upon its sale at the end of the useful life

56

Current ratio is

Also known as the working capital ratio

57

Quick Ratio is

Also known as Acid-test ratio

58

Debt ratio refers to

relative contributions of creditors and owners

59 60

Which of the following is(are)True about EPS Which ratio refers to Market value per share/EPS

refers to earning per share Net profit margin ratio

61 62 63 64 65 66

Entity concept of accounting requires that Which of the following is not a non operational risk Duration of call money is In India the main regulator for the money market is If a deposit of Rs. 100,000/- earns a rate of 6% compounded continuously for three years, the deposit will be worth The FV of a cash flow stream of Rs. 1000 received at the end of each year over 5 years at 6% will be

The business be treated separate from its owners Credit Risk 2 days SEBI 1,18,789.00 5637.09 NPV of all the cash flows 19.69% All of the above 302

67 68 69 70 71 72

IRR is The IRR of the following cashflow stream is 100000, 50000, 50000, 40000. Assume yearly cashflows. The BPD offers, A)FLEXCUBE UBS, B) FLEXCUBE CBS, C).FLEXCUBE PBS The section of SOX that requires attestation by the CEO and CFO is: PrimeSourcing offers solutions for, A).Trade Finance, B).Retail Management, C).Investment Banking

73 74

All of the above Issue price of P/E ratio of a share is: share/EPS Ensure development of secondary market in Government Which of the following is not an objective of PDs: bonds If you place an order to buy 1000 shares and specify each trade should be 200 Disclosed shares you have entered a: Quantity Order benefits the current accounting period 640000.00,620000. 00,610000.00

75

76

77

Capital expenditure is an expenditure which If Rs.5, 00,000 is left on deposit to earn a rate of 5% for 5 years. What it is worth if the interest is (i) quarterly compounding (ii) half-yearly compounding (iii) continuous compounding? If a company's Gross profit is Rs.63,000, salary expenses are 4,000,Rent is 6,000,Interest payments are 5,000,other income is 5,000 and taxes are 20% on the net profits,then what is EBIT?

53,000

78

79 80 81

Which of the following is (are) true? Suppose ABC Ltd co. has following cost and values: market value of Debt Rs. 500 crs., market value of equity - Rs 350 crs.,cost of debt:12%,cost of equity:17%,Tax:35%.Compute WACC Worldwide currency prices are affected by The minimum number of persons required to form a private limited company and a public limited company respectively are?

Equity shareholders can claim their unpaid dividend legally

11.59% changes in interest 2 and 5 Life of a firm is limited to the life of a proprietorship

82

Which of the following is an advantage of a sole proprietorship?

83

Bank borrow in the call money market to

give loans SBI Mutual Fund @11% return Treasury bills

84 85

Which of the following is the example of risk-free interest rate? which of the following is not a money market instrument?

86 87 88 89 90 91

When an investment pays only simple interest rate,this means

the future valueof investment wil be low

Which of the following is not a source of long-term finance? Equity shares What is the future value of Rs.20000 invested now for a period of 5 years at an interest rate of 8%? 29387 Price Discovery of a security is done by the following process Income earned by soleproprietorship is taxable under An order which gets activated only when the market price of that security reaches the trigger price What is the return on investment per annum for an asset purchased for Rs.82,50,000 and leased for Rs,1,00,000 per mont .h for 18 months,after which it is sold to fetch Rs.80,00,000? Who are all kown as stakeholders of a company? rights issue corporate tax stop loss order

92 93

15.6 Creditors

94 95 96

Mr.Ram purchases a house worth Rs.12 lacs, after seven years he is planning to sell; he gets a value of Rs.10 lacs. What is the risk involved? Credit risk Which of the following factors influence inflation? (i) Interest rate (ii) rising supply (iii) reducing demand only (i) The money that is lent for one day is known as? call Sales - cost of goods sold

97 98 99

Gross profit is equal to

From the accounting point of view,loss means Increase in liability Which of the following are investments Avenues? (i) Hedge Funds (ii) Property (iii).Ploughing cash back into business (i) and (ii)

100 Which of the following are/is not a fixed asset? 101 Which of the following is not an intangible asset? 102 P&L account is prepared for a period of one year by following

Stock Goodwill consistency concept

103 Accounting does not record non-financial transactions because of

Entity concept

104 Depreciation is calculated on the

cost price of asset

Calculate the opening cash balance if the closing cash is:Rs.1,43,000.Rent paid:20,000,out of which advance rent is:3,000.Salaries paid: 20,000 and to be 105 paid is:5,000.Other revenues:1,00,000 97,000 Opening capital is:80,000.Closing capital is:1,20,000.Net profit during the 106 year:20,000.The trader has Drawings of Rs.20,000

Opening stock:40,000.Closing stock:50,000.Sales:70,000.Assuning there is no 107 gros profit and direct expenses the purchases made during the year are: 80,000 The amount that has to be invested at the end of every year for a period of 6 years at a rate of interest of 15% in order to accumulate Rs.1000 at the end of 108 6 years is equal to 112.42 Mr. Shankar deposits Rs.1,00,000 on retirement ina bank which pays 10% 109 annunal interest.How much can he draw for a period of 10 years. 16,273 Computers taken on hire by a business for a period of 1 year should be 110 classified as 111 Insure3 an icsurance solution product is provided by 112 Which of the following is a current liability?

fixed asset Mantas outstanding salaries you can buy 0.8387 USD for one EUR Net profit + depreciation and provision

113 If a EUR/USD is quoted as 1.1923,what does it mean?

114 Cash profit is

115 What are the functions of RBI? An order to sell shares, where brokers are given a particular limit for 116 sustenance of loss is know as

a.Issues Currency a.Limit order

An order that allows a trading members to buy or sell as soon as the order is 117 released into market, failing which the order will be removed from the system? a.Immediate/cancel a.Time related 118 Order conditions are broadly classified into: conditions a.Good till 119 Order that remains in the system until it is cancelled by trading member? cancelled 120 Credit Rating Agencies promoted by IDBI 121 Credit Rating Agencies promoted by IFCI? a.CRISIL a. CRISIL

122

Which of the following is/are the characteristics of money market instruments? a.Long term maturity a.Annuities

123 Known as Hybrid insurance policy?

124 Which of the following is an advantage of partnership firm? 125 What is Depository? 126 Depositories are like banks for securities 127 The selling of securities to the public in the primary market is known as IPO is offered in 128 What is the basis of voting rights for members of Co-operative society ? 129

a.Life of the firm is perpetual a.Hold securities in an account a.True IPO

Primary Market One Vote per member

The most vital role amongst all the intermediary during a public issue is played by Lead Manager 130 Net profit Pref. dividend / total number of outstanding shares Stock exchange

EPS is 131 DP's have to registered with 132 Which of the following are zero coupon debt securities? 133

GILT securities Ensuring timely collection of monetary and nonmonetary benefits on securities on behalf of the client

Custodians perform which of the following activity on behalf of its client 134

The major difference between a broker and a sub-broker is 135

Broker is member of exchange while sub broker is not

Prime dealers in India are the one who are 136

Dealer on the trading floor

In the Option, who is obligated to honor the deal ? 137

Buyer of the option

PrimeSourcing is the 138

Part of Product offerings

PrimeSourcing has domain expertise in which of the following areas 139

Derivatives Trading and Processing

Mutual Fund facilitates pooling of investors funds which are managed by 140 What is the key regulation that govern the issuance the CPs ? 141

The Trustees of the fund

Financial Analytics

What is the key regulation that govern the issuance the CPs ? 142 Why does the central government borrow money? 143

Issuer must be banks To fund the MPs salary Trades that are matched till yesterday ROI is usually expressed as a percentage

What does order book show? 144

Which of the following is not true for ROI 145 BOI shareholding Ltd. Is the clearing house for 146

NSE Reserves and Surplus + Equity capital

What is Net worth ? 147

AML solutions help banks to identify and combat 148 Which of the capital budgeting methods best suited to find out the time required for recovering initial investment cost ? 149 ROA sometimes also referred as ROI 150 Speculation is for 151

Money being covered and moved by anti-social & antinational elements

NPV True

Minimize risk

An amount of Money today is more valuable than the same amount of Money at a future date 152 In NPV outflows are taken as negative and inflows are taken as positive. 153

TRUE

TRUE

IRR is a 154

Discounting rate only

Which of the statements is true ? 155 Through diversification you can protect your investment from 156 The minimum number of persons required to form a private limited company and a public limited company respectively are? 157

For project evaluation lower NPV are preferred over those having a higher NPV Market Risk

2 and 5

Equity share holders can face the risk of not only zero return on their return but also capital loss. TRUE 158 The method of raising fund from existing shares or debenture holder is known as IPO 159 GDR is a negotiable certificate issued by 160 Debenture holders are 161 the relationship between a firms Long-term assets and its long-term liabilities Stake holders of the company a US bank

Working Capital Management involves 162 _________________ is issued by a bank on behalf of its customer (Buyer) to the seller. 163

Draft

WACC is 164

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt

__________________ of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment and the amount which is initially invested. IRR 165

The Financial market / Securities market essentially comprises of few categories of participants namely 166

Issuers of the securities, Investors in Securities The raising of capital (in the capital market)

Financial market facilitate 167 New issuance of the securities comes under which market? 168 The markets which provides short term debt financing and investment is known as 169 Book building is a process used in right issue for efficient price discovery. 170

Debt market

Debt market

TRUE

When an already listed company makes either a fresh issue of securities to the public or an offer of sale to the public, through an offer document, it is known as IPO 171 _______________ issues Treasury bills, Government dated securities and relief bonds? 172 Who regulates the issuance of government securities ? 173 Who regulates the corporate debt ? 174 The ______________ takes up the due diligence of companys operations/ management/ business plans/ legal activities etc... 175 Who assist the company right from preparing prospectus to the listing of securities at the stock exchange ? 176 Who carry out all the activities of ensuring that the fund are collected and transferred to the Escrow accounts ? 177 At the time of public offer, who is responsible to do `allotment of shares to the applicants DP account and dispatch of refund order ? 178 Quick ratio consider inventory Lead Manager Lead Manager Lead Manager Lead Manager SEBI SEBI RBI

What is the major difference between current ratio and quick ratio ? 179

RTGS and CLS solutions are provided under a 180

Cash management solutions Provides trading platform for its members

Clearing house 181

Which of the services is not offered by a depository/DPs ? 182

Corporate Actions

NSDL stands for 183 Who take care of the Post-trading activities on behalf of their clients such as FIs, Asset management companies, Pension fund, FIIs etc? 184

National Security Depository Ltd

Custodian

Which statement is false ? 185 The party who enters orders on the same side of the initiator is known as 186

Broker is not responsible for the acts and dealings of his Sub-Broker

Initiator

Which order is comes under Time related condition ? 187

All or none (AON)

Which order is comes under Price related condition ? 188 In India, trades in rolling settlement are settled on what basis ? 189 Which institution is not working as a Credit Rating Agencies ? 190 _____________________ is the financial market for short term borrowing and lending, typically up to one year. 191 The money that is lent for one is known as 192 The money that is lent for more than one day but less than but less than 15 days it is referred to as 193 Which is the largest financial market in the world ? 194 International offering of debt /equity is managed by 195 Insurance is a solution provided by 196 Which ratio shows the earning left for share holders ? 197 This ratio measures the extent to which borrowed funds support the firms assets 198

All or none (AON) T+1 CRISIL

Money Market Call money

Call money FX market SEBI

BPD

Gross profit ratio Interest coverage ratio

What is Reverse Repo ? 199

Swapping the cash flows

Which statement(s) talks about financial position of the company at the end of Fund flow an accounting period ? statements 200 Basel II aims to cover the following risk exposure of a bank 201 Market risk

Which statement is false ? 202 Which statement(s) talks about financial performance of the company during an accounting period ? 203 What is return on investment per annum for an asset purchased for Rs. 750000 and leased it for Rs.15000 per month and later on sold it for Rs. 630000 ? 204

Trading member is responsible for clearing and settlement of the trades of his own or of his clients. Fund flow statement

6.30%

If Joe earns $125 interest in 30 months on money that was invested at 5%, find the Principal amount. $1,100 205 Ram has invested Rs. 100000 as a FD into a bank for 3 years. Where he will earn interest of 6% monthly compounding. At the end of third years what will be value of investment? 206 You invest $5,000 today. You will earn 8% interest. How much will you have in 4 years ? 6802.5 207 How much amount should you need for an investment such that you will receive Rs. 337011.63 after five years if rate of interest is 11% p.a. ? 208 Company XYZ has invested Rs. 5000000 and the expected return of the project amount to Rs. 1250000 annually. Calculate Payback period 209 The underlying securities is trading above the put options strike price You can buy 0.839166 EUR for one USD 5 100000

119698.05

What is the out of the money in put option? 210

If a EUR/USD pair is quoted as 1.19166, what does it mean ? 211 The right but not the obligation to buy (sell) some underlying cash instruments at a pre-determined rate on a pre-determined expiration date at a pre-set notional amount relates to 212

Futures

Leverage ratio refers to 213

The ability of a firm to meet its obligations in the short run

Which statement is correct ? 214 Which is the most popular market for trading of debt instruments? 215 Currently the ___________________ facility is used for the limited physical market as per the SEBI directives. 216 The party who enters orders on the opposite side of the initiator is known as 217 Which ratio(s) is known as `Efficiency Ratio ? 218 What is the value of the furniture at the end of 5 years if the PV is 500000 and depreciation rate is 10% ? 219 Calculate WACC where market value of debt: Rs. 600,000,000, Market value of Equity: Rs. 800,000,000, Cost of debt: 9%, Cost of Equity: 16%, Tax:35% 220 An investment with an initial cash out flow of $100,000 pays back $34,432 in the first year, $39,530 in the second year, $39,359 in the third year, and $32,219 in the fourth year. If the rate of return is 12%, find the Net Present Value (NPV) 221

A Depository is an intermediary where the securities are held in the electronic form.

OTC market

Normal Market

Initiator Fixed asset turnover ratio

350000

11.65%

10545.55

Consider an investment of $1,000 that is expected to yield $500 in 1 year and $700 in 2 years. What is the NPV of the investment at an annual discount rate of 9%? 47.77 222

Companys gross profit is 63000, salary expenses are 4000, rent is 6000, interest payments are 5000, other income is 5000, and taxes are 20% on the net profits. The company declares 15% as dividend to the share holders. What 35800 223 is the amount which will be transferred to reserves and surplus?
What is the ROI for a new project that is expected to cost Rs. 500,000 over the next five years and deliver an additional Rs. 700,000 in increased profits during the same time ? 30% 224

What is the depreciation charge per annum if machinery has been valued as 50000, life of machinery is 10 years and the salvage value is 5000 ? 225

2250

_________________ is a process of determining investment in a project that is expected to produce a cash inflow over a period of time Cost of capital 226

select * from EXAM.QUESTION_MASTER WHERE qid = 5608

ANS2

ANS3

ANS4

ANS

Bears higher risk

Both 1 & 2

None of the above None of the above

20%

30%

Good sign of financial strength

Both 1 & 2

None of the above None of the above

336011.63 Projects having higher IRR are preferred to those having lower IRR Does not involve fixed obligation for repayment of dividen Preference Capital has some features of equity and some attributes of debentures.

337011.63

Both 1 & 2

None of the above

Only 1 ADR is a negotiable certificate issued by US bank.

Both 1 & 2

All of the above

Settlement is deemed to be complete upon declaration and release of pay-out of funds and securities. Both 1 & 2

None of the above.

There is no single location or exchange where debt market participants interact for common business. Both 1 & 2 Maturity period is less than one year.

None of the above None of the above. Standard and Poor and Moody

Both 1 & 2

ICRA

CRISIL

If an investor wants to buy or sell a bond , he or she must call the bank Trading occurs via a that makes the network of market In that middlemen called bond and asks for dealers quotes. All of the above. None of the 14 days 1 day above SBI RBI NSE It is an over the counter obligation to buy or sell a financial instrument Both (1) and (2) SEBI SBI

4 3 3

None of the above. ICICI

3 2

Performs record keeping functions and investor servicing. The commission that is charged when the investor exits the scheme. Creditors Profit and Loss or income statement shows the financial performance of the company over a period of time

Marketing funds to Regulatory the investors. body.

The market value of the assets minus its liabilities. All of the above Suppliers All of the above

3 4

All of the above flow of funds reflects the financial through the performance of the business during a company over a given accounting period of time perio Money Measurement Both (1) and (2) All Assets of the company are valued at their cost value . All of the above Any of the Credits above Liability Income accumulated retained earnings from the profits of normal business.

None of the above

None of the above None of the above

3 3

None of the above None of the above. Expenditure

2 1 2

Secured Loans

None of the above.

i-flex university

Flexcube university

None of the above

13.9% Rs. 1120 Rs. 4212.33 12973.76 Basis Swap Deferred charges method

14.1% Rs. 1115 Rs. 5637.90 14873.82

14.2% None of the above Rs. 4211.56 14500 Repo Transaction None of the above Repair, Assess, Sustain The rate of dividend/ market price Offshore development framework of IFlex Solutions Ltd

1 2 2 3 1 3

Total Swap Straight line method Reliability, Reference Availability, Association system serviceability The amount of The amount dividend/ Market received as dividend Price

Operational Risk Management 1&2 Rs 4,000 Credits Credits Secured Loans

Credit Card Solution 1&3

2 4 3 1 2 3

2&3 None of the Rs 10,000 above. Any of the None of the above above. Any of the None of the above above None of the Owners Equity above.

Money kept Profits which aside to meet future have been None of the contingencies. retained in the firm. above accumulated retained earnings from the profits of normal business.

Secured Loans

None of the above.

Reserves that arise out of non operational gains such as premium on Any of the None of the issue of shares. above above. Services Outsourcing Part of Division of i-flex Part of Product Centers of consulting Offering Excellence

Government Bonds Market Risk Underwriter It is excess of purchase price over the fair market value It is excess of purchase price over the fair market value

State or Municipal Corporation Bonds Operational Risk Lead Manager Paying off of debt in regular installments over a period of time Paying off of debt in regular installments over a period of time sum of costs incurred for manufacturing the goods sold during the accounting perio

Junk bonds All of the above Registrar

4 4 3

List of the settled trades

List of the settled trades

Non operating deficit A measure of profit which is not influenced by interest and tax factors.

None of the above

All of the None of the above above helps an investor to spot the May signify the degree to which a companys inability company is to meet financial leveraged or All of the obligations indebte above Current Market Value The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. Net realizable All of the Value Method above

The value can be a best guess of the end value or can be determined by a regulatory All of the body. above

helps to measure the ability of the firm to meet Both (1) and its current liabilities (2) an alternative measure of liquidity that does not Both (1) and include inventory (2)

None of the above

None of the above

Indicates how well the companys earnings can cover the interest payments on its debt traditional method of determining corporate value Gross profit margin ratio The business firm is regarded as a separate entity as distinct from the persons who are connected to it. Currency Risk 14 days SBI 1,19,668.05 42142.67 PV of positive cash flows 10.23% 1&2 404 1&2 Market price of share/EPS

the extent to which borrowed funds support the firms assets. serves as an indicator of companys profitability Price to earnings ratio

None of the above

All of above None of the above

4 3

Both (1) and (2) Market Risk 1 day RBI 1,19,721.74

None of the above. None of the above. None of the above NSE 1,19,722.80

3 4 3 3 3 1

5667.12 5677.30 The discount rate that makes the None of the NPV zero above None of the 17.66% above 1&3 210 1&3 2&3 All of the above

3 1 1 2 3 2

2&3 Preference Dividend/EPS Share/EPS To ensure development of To ensure underwriting development of market in govt. None of the Financial markets bonds above Minimum fill Maximum fill Fill or Kill Order order order results in the results in will benefit the next acquisition of a acquisition of accounting period permanent asset current asset 641018.62, 640042.27, 631081.23,640024 None of the 642012.71 .17,642111.51 above

2 3

58,000

63,000

46,400

Preference dividend is a tax Preference deductible shareholders do not expense to the have voting rights. company.

None of the above None of the above All of the above 7 and 2 easy and inexpensive to set up

12% Inflation 5 and 7 Fund raising from outside is easy

5% Political Stability 2 and 7

1 4 3

meet the cash reserve ratio 9% Long-term Debenture. certificate of deposits

limited personal liabilities meet sudden demand for funds arising due to large payments and remittances 2&3 7% short term government securities. All of the above debentures call money the interest rate is lower than the comparable investments Commercial Papers 20700 None of the above Wealth tax None of the above

3 3

the interest earned interest is earned is non-taxable to the on the original investor investment Reserves and Debentures Surplus 41350 book building 30710 private placement

3 4 1 2 2 1

personal income tax HUF market order limit order

6.93 Suppliers

18.79 Shareholders

10.4 All of the above None of the above (ii) and (iii) term Opening stock + purchases closing stock Decrease in owner's equity All of the above

3 4

Market risk only (ii) repo

Liquidity risk (i) and (ii) notice

3 1 1

Sales - closing stock Net profit + purchases expenses Increase in Decrease in asset owner's equity (ii) and (iii) (i) and (iii)

1 4 4

Vehicle Trade mark conservation concept Money measurement concept

Fixed deposit in bank Franchise time period concept

both (i) and (ii) Accounts receivables cost concept

4 4 3

accrual concept cost + transport + installation expenses

cost cancept cost or market value whichever is less

market price

2,03,000

1,83,000 1,23,000 Brought additional Brought additional capital of Drawings of capital of Rs.20,000 Rs.40,000 Rs.40,000

90,0000

1,10,000

70,000

114.24 18,797.10

114.42 20,000

112.44 15,850 deferred revenue expenditure Capco prepaid expenses

2 1

not an asset Castek Trademark

current asset BNX Discount on issue of shares

2 2 1

you can buy 0.8387 you can but 1.1923 None of the EUR for one USD. USD for one EUR above net profit - non gross profit trading profit Gross profit - net operational depreciation and profit expenses provision c.Formulates b.Banker to the monetary and d.All of the government credit policies above b.Cancel order c.Stop loss order d.Market order d.None of the above d.All of the above d.Disclosed quantity d.CARE d. Standard and Poor

4 3

c.Good till cancelled c.Quantity related conditions c.Immediate or b.Good till date/day cancel b.Stop loss order b.Price related conditions b.Standard and poor c.ICRA b. ICRA C. Care

1 4 1 4 2

d.Both (B) and (C) d.Credit insurance d.Its relatively free from government regulations as b.Personal liabilities c.Its ability to raise compared to of the partners are funds is virtually joint stock limited unlimited companies b.Hold Funds in an d.None of the account c.Both (1) and (2) above d.None of the b.False c.Dormant Funds above FPO Right issue Bonus issue b.High liquidity b.Financial Loss insurance c.Highly secured c.Locked fund insurance None of the above

2 3

4 1 1 1

Secondary Market

Both of the above

1 Proportion of shares Members cannot held vote Bankers to the issuers None of the above 1 Underwriter All of the above 1 Net profit / market value of Outstanding shares 1 SEBI RBI B&C 2 RBI relief bond Treasury Bills All of the above 3

Net profit / Gross profit / Outstanding Outstanding shares shares

Ensure timely settlement of funds and securities

Maintain clearing accounts with DPs

All of the above 4

The broker is registered but the Broker can trade on sub broker need the exchange while not to be sub broker cannot registered

None of the above 2

Authorized dealers of Govt. Securities appointed by RBI

Authorized dealers Members of of Govt. Securities Clearing house 2

Writer of the option

Clearing house

Stock exchange 2

Services Services outsourcing outsourcing division division of of OFSS Consulting

Parts of COE 2

Insurance claims Processing

MF accounting and operation All of the above 4

Assets Management Company of the fund Mutual Fund itself

Mutual Fund sponsor 2 Banking Analytics 3 CP should be issued at least for a period of one year and above 2 None of the above 2

Business Analytics

Risk Analytics

Issuers must have to be rated by credit They should be rating agencies issued by RBI To close the budgetary deficit

Both of the above

Trades that are Trades that are pending for matched till that time matching ROI is usually expressed per annum

List of the settled trades 3

ROI does not take ROI takes into into account account capital capital loss loss 3 None of the above 2

BSE

RBI

Long term assets + Equity Capital

Net profit + Reserves Likely money being siphoned off by senior management of the bank

Current Assets + Net Profit 1 Money being illegally transferred to subsidiaries of the bank 1

Likely frauds being committed by employees of the bank

IRR FALSE

Pay-back period

B&C 3 1

Minimize loss

Profit from fluctuation

Hedging of risk 3

FALSE 1 False 1 Rate of discounting which makes its NPV greater than zero 2 For project evaluation higher NPV are preferred over those having a lower NPV Both of the above Unsystematic Risk Operational Risk

Rate of discounting which makes its NPV equal to zero

Rate of discounting which makes its NPV lower than zero

None of the above 2 Currency Risk 2

5 and 7

2 and 7

7 and 2 3

FALSE 1 FPO an International bank Rights issue Bonus issue 3 RBI SBI 2 Share holders of the Creditor of the company company the relationship between a firms short-term assets and its short-term liabilities the relationship between a firms mid-term assets and its mid-term liabilities A&C 4

B&C 2 None of the above 3

Cheque

Letter of Credit

Proportion of Equity * Proportion of Debt + Cost of Equity * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * Cost of Debt (1-Tax)

Proportion of Equity * Cost of Equity + Proportion of Debt * (1-Tax) 3 None of the above 2

NPV

Pay back

Intermediaries The transfer of risk (in the derivatives market)

A&B

None of the above 3

International trade (in the currency market) All of the above 4

Stock market

Secondary market Primary market 4

Money market

Derivatives market Stock market 2

FALSE 2 Private placement 2 Government RBI Banks Government B&C 1 B&C 2 RBI Both of the above None of the above 1 Merchant Banker Underwriter Bankers to the issue 1 Merchant Banker Underwriter Bankers to the issue 4 Merchant Banker Underwriter Bankers to the issue 4 Merchant Banker Underwriter Quick ratio does not consider inventory Wealth management solutions R&T agents 4 Current ratio consider inventory Treasury management solutions Holds securities on behalf of its members Current ratio consider inventory 3 Trade finance solutions 1 Match and reconciles trades

FPO

Preferred issue

All of the above 3

Trading

Electronic settlement of trades in Stock Exchanges.

Electronic credit of securities allotted in public issues. 2

National Securities Depository Participant Ltd

National National Securities Securities Depository Ltd Deposit Ltd 3

Underwriter

Merchant banker Sub broker has to registered with SEBI as well as Exchange of which his broker is the member

Lead manager 1 Clients of the sub broker are to be registered with the main broker 1 None of the above 2 Good till cancelled (GTC) 4 Good till cancelled (GTC) 3 T+4 2 IFCI 4 Secondary market 1 Notice money 1

A Sub-broker is an agent of a broker

Competitor

Solicitor

Market Order

Stop Loss order

Good till date (GTD) Stop Loss order T+2 S&P and Moody T+3 ICRA

Stock market Notice money

MF market Term money

Notice money Stock market RBI

Term money Money market Merchant banker

Notice money 4 Debt market 1 Prime broker 2 None of the above 3

PRSG

Prime Sourcing

Net profit ratio

Return on assets

Return on equity 2

Current ratio

Debt Equity ratio

Debt ratio 4

Buying and selling back

Selling and buying None of the back above 2 Profit and loss statement

Balance sheet

A&C 2

Operational risk

Credit risk

All of the above 4

Trading member is responsible for clearing and settlement of his clients only.

Disclosed Quantity (DQ) is an order with a DQ condition allows the TM to disclose only a part of the order quantity to the market. Profit and loss statement

Market Order is an order to buy or sell securities at the best price obtainable at the time of entering the order. 2 None of the above 3

Balance sheet

8.00%

6.93%

6.54% 2

$1,000

$1,200

$1,150 2

119700.05

119668.05

119660.05 3

6805.5

6807.5

6809.5 1

300000

400000

200000 4

3.5

4 4

The underlying The underlying securities is securities is trading trading at the put below the put options strike options strike price price You can buy 1.19166 USD for one EUR You can buy 1.19166 EUR for one USD

None of the above 2 None of the above 2

Forward

Options

Swaps 3

Provide an indication of the long- How efficiently the term solvency of the assets are utilized firm by a firm

How does equity stock of the company is assessed in the capital market 2

It provides service connected with recording of allotment of securities or transfer of ownership of securities in the record of a depository Stock exchange market

A depository cannot directly open the accounts and provide services to the clients. All of the above 4 Wholesale market A & C 1

Odd lot Market

Auction Market

A&C 2 None of the above 3

Competitor Inventory turnover ratio

Solicitor Receivables turnover ratio

All of the above 4

295245

250000

305125 2

12.75%

12%

11.83% 1

10645.45

10745.45

10845.55 3

47.89

47.98

47.78 2

36040

38500

39060 2

40%

50%

60% 2

2500

4500

5000 3

Capital structure

Capital budgeting

Cash flow 3