The primary market is where companies issue new securities to raise funds directly from investors. In Class 10 Introduction to Financial Markets – Primary Market MCQs, students will learn key concepts such as IPO (Initial Public Offering), FPO (Follow-on Public Offering), rights issues, private placements, and the role of SEBI.
Primary Market Class 10 MCQ
1. Why is the purpose of primary maket?
a. To trade old security
b. A place where you can by commodities
c. A place where you can sale new securites
d. None of the above
2. Which of the following are responsible to raise resources through the primary market?
a. Private companies
b. Foreign investors
c. Indian Banks
d. Government and corporate issuers
3. In what price securites can be issued in the primary market?
a. Only at premium
b. Only at face value
c. At face value, discount, or premium
d. Only at discount
4. Which type of security can be issued in the primary market?
a. Only equity
b. Only debt
c. Only share
d. Equity and debt
5. Face value is qualto market price of any compnay.
a. Yes
b. No
6. Face value is also known as __.
a. Dividend value
b. Premium value
c. Par value
d. None of the above
7. What do you mean by the face value of a bond?
a. The amount paid to the holder at maturity
b. The interest you earn
c. The trade value
d. The market price
8. What affect the trading price of a debt security in the market?
a. Fluctuations in interest rates
b. Government policie
c. Stock market
d. All of the above
9. If any nominal amount assigned to a security is known as _.
a. Dividend
b. Face value
c. Market value
d. Interest rate
10. The security is generaly issued in donominations of __.
a. Rs 3, Rs 7, Rs 11
b. Rs 1, Rs 2, Rs 20
c. Rs 5, Rs 10, Rs 100
d. All of the above
11. Suppost security is sold below its face value then it is knons as _.
a. Premium
b. Dividend
c. Interest
d. Discount
12. Why the companies invite the public to invest in shares?
a. Because the capital and bank loans may not be enough
b. Because of SEBI guidlines
c. To reduce taxes
d. To increase product sales
13. If any companies invite public to invest in share, what is the method called __.
a. Rights issue
b. Public issue
c. Bonus issue
d. All of the above
14. Who make the rules for allotting shares to applicants in a public issue?
a. RBI
b. SEBI
c. Stock brokers
d. Promoters
15. Primarily, issues can be classified as a _.
a. Public
b. Rights
c. Preferential issues
d. All of the above
16. What is the another name of Preferential Issues?
a. Private placements
b. Public offerings
c. Right offering
d. None of the above
17. What type of issue is available to the general public?
a. Private issue
b. Public issue
c. Right issue
d. None of the above
18. What type of issue is available for individuals or institutions.
a. Private issue
b. Public issue
c. Preferential issue
d. None of the above
19. IPO offers its shares to the public for the first time, What is the full form of IPO?
a. Indian Post Office
b. Initial Public Offering
c. Indian Public Office
d. Indian Public Offering
20. What do you mean by Follow-on Public Offering (FPO)?
a. A fresh issue by an already listed company
b. IPO by a private company
c. A bonus
d. None of the above
21. Who can participate in Right Issue?
a. Only New investors
b. Government agencies
c. Only existing shareholders
d. All of the above
22. What do you mean by Preferential Issue?
a. An issue to general public
b. An issue to shareholders
c. An issue ot governemnt agency
d. An issue to a selected group of persons
23. Under which companies act is preferential issue governed?
a. Section 71
b. Section 81
c. Section 91
d. Section 101
24. When ever Preferential allotment is there, which regulatory body guidelines must be followed?
a. RBI
b. SEBI
c. IRDA
d. None of the above
25. Which of the following is not consider the type of further issue?
a. Rights issue
b. Follow-on Public Offering
c. Preferential Issue
d. Initial Public Offering
26. The price at which a company’s shares are offered initially in the primary market is called as __.
a. Issue price
b. Fixed price
c. New price
d. None of the above
27. The market value of a quoted company, which is calculated by multiplying its current share price (market price) by the number of shares in issue is called as _.
a. Market Fund
b. Market Capitalisation
c. Market Price
d. All of the above
28. When an issue is not made to only a select set of people but is open to the general public is known as __.
a. Public issue
b. General issue
c. Private placement
d. None of the above
29. If the issue is made to a select set of people, it is called _.
a. Public issue
b. General issue
c. Private placement
d. None of the above
30. Who decides the price of an issue?
a. Reserve Bank of India
b. Securites and Exchagne Board of India
c. Issuing Company
d. The Stock exchange
31. What is not a role of SEBI.
a. SEBI does not play any role in price fixation.
b. Promoting fair practices among market intermediaries
c. Protecting investor interests
d. All of the above
32. What does ‘price discovery through Book Building Process’ mean?
a. The price is decided by the stock exchange
b. The price is fixed by SEBI before the issue
c. The issuing company sets a fixed price without investor input
d. Investor bid the shares and final price is decided based on the demand
33. What happends in the Book Building process?
a. Company decide the price without asking investors
b. SEBI decides the price
c. Investors bid the shares and price will be decided
d. Price will alway same for everyone
34. Issue price can be any price in the price band or any price above the floor price. This issue price is called __.
a. Cut-Off Price
b. Bid Price
c. Market Price
d. Fixed Price
35. What is the floor price in case of book building?
a. The price decided by SEBI
b. The average price of the bids
c. The highest price of the bids
d. Floor price is the minimum price at which bids can be made.
36. What is a Price Band in a book built IPO?
a. The price decided for sold
b. The average price
c. The range within which investors can bid for shares
d. The price decided by SEBI
37. Who decides the Price Band?
a. The Stock exchange
b. SEBI
c. The issuer company in consultation with lead mangager
d. Reserve Bank of India
38. What is minimum number of days for which a bid should remain open during book building?
a. 5 days
b. 4 days
c. 3 days
d. 2 days
39. Can open outcry system be used for book building?
a. Yes
b. No
40. Can the individual investor use the book building facility to make an application?
a. Yes
b. No
41. How long does it take to get the shares listed after issue?
a. 5 working days
b. 7 working days
c. 40 working days
d. 12 working days
42. According to SEBI regulations, 2009, how many days from the issue closure should an investor know whether shares are allotted or not?
a. 5 working days
b. 7 working days
c. 40 working days
d. 11 working days
43. What is the maximum time allowed to complete the basic of Allotment after the issue closes?
a. 5 days
b. 7 days
c. 8 days
d. 10 days
44. What is the role of a ‘Registrar’ to an issue?
a. To manage the bidding process
b. To decide the price band of the issue
c. To maintain records of investors and handle allotment and refunds
d. All of the above
45. Does NSE provide any facility for IPO?
a. Yes
b. No
46. What are the advantages offer by NSE for Book Building?
a. The NSE system offers a nation wide bidding facility in securities
b. It provide a fair, efficient & transparent method for collecting bids using the latest electronic trading systems
c. Costs involved in the issue are far less than those in a normal IPO
d. All of the above
47. What is an ‘Abridged Prospectus’?
a. A legal agreement between company and SEBI
b. A short summary attached to the application form
c. A report prepared by Registrar
d. All of the above
48. Who prepares the ‘Prospectus’/‘Offer Documents’?
a. Stock Exchanges
b. Registrar to the issue
c. SEBI
d. Issuer company in consultation with lead managers
49. What does one mean by ‘Lock-in’?
a. The period where the share are not allowed to sold
b. The time given to investors
c. The IPO time period given to investors
d. All of the above
50. What is meant by ‘Listing of Securities’?
a. The securitie which is registered with SEBI
b. Issuing securites through a private placement
c. Making securites available for trading in stock exchagne
d. None of the above
51. What is a ‘Listing Agreement’?
a. An agrement between investors and brokers
b. An agrement between merchant banker and the company
c. An agrement between the issuing company and SEBI
d. A formal agrement between issuing company and stock exchage
52. As per the gudilines provided by SEBI, SEBI can recommends an issue?
a. Yes
b. No
53. What does ‘Delisting of securities’ mean?
a. Removing a company security from the stock exchagne
b. Transfering security from one exchange to another
c. Adding company to the stock exchage
d. None of the above
54. Does SEBI tag make one’s money safe?
a. Yes, SEBI give guarantee in every investments
b. No, SEBI is responsible for printing currency
c. No, SEBI only regulates the market
d. All of the above
55. Can companies in India raise foreign currency resources?
a. Yes
b. No
56. GDR Stands for __.
a. Global Depository Receipts
b. Global Depository Regulation
c. Global Depository Ratio
d. Global Depository Revenue
57. ADR Stands for __.
a. American Depository Receipts
b. American Depository Regulation
c. American Depository Ratio
d. American Depository Revenue
58. What is an American Depository Receipt?
a. A receipt issued by SEBI
b. A document used for domestic trading
c. A certificate issued by a US bank
d. None of the above
59. What is an ADS?
a. A bound issued by the U.S government
b. A share issued by the Indian government
c. A certificate issued by SEBI
d. A share representing ownership in a foreign company, traded in the U.S
60. Global Depository Receipts (GDRs) may be defined as a global finance vehicle.
a. Yes
b. No
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