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Securities Class 10 Questions and Answers provides important questions and easy-to-understand answers on the topic of securities. It covers key concepts such as shares, debentures, bonds, securities markets, and other basic financial instruments. These questions are useful for Class 10 students for learning important concepts, revision, and exam preparation.
Securities Class 10 Questions and Answers
Q. Stock exchanges facilitate opportunities for investors to engage in the buying and selling of securities. Identify the pertinent function of a stock exchange. (CBSE 2025-26)
(A) Price Rigidity
(B) Providing liquidity and marketability for existing securities
(C) Determining the pricing of securities
(D) Promoting the culture of equity investment
Answer: (B) Providing liquidity and marketability for existing securities
Q. Assertion (A) : SEBI has prescribed a set of rules and regulations for each entity. (CBSE 2025-26)
Reason (R) : The entity should operate within the legal framework as prescribed by SEBI.
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Answer: (A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
Q. Brokers usually have registration number that start with “________”. (CBSE 2025-26)
(A) INS
(B) INT
(C) INB
(D) IND
Answer: (C) INB
Q. Which of the following is not a security ? (CBSE 2024-25)
(A) Shares
(B) Debentures
(C) Bonds
(D) Fixed Deposit Receipts
Answer: (D) Fixed Deposit Receipts
Q. Companies whose potential for growth in sales and earnings are excellent, are growing faster than other companies in the market or other stocks in the same industry are called : (CBSE 2024-25)
(A) Value Stock
(B) Common Stock
(C) Growth Stock
(D) Debt Instrument
Answer: (C) Growth Stock
Q. Which of the following is not considered as the power of SEBI ? (CBSE COMP 2024-25)
(A) Regulating the business in stock exchanges and any other securities markets
(B) Registering and regulating the working of stock brokers, sub-brokers, etc.
(C) Regulating the foreign currency management
(D) Promoting and regulating self-regulatory organisations
Answer: (C) Regulating the foreign currency management
Q. ___________ refers to the periodic interest payments that are made by the borrower (who is also the issuer of the bond) to the lender (the subscriber of the bond). (CBSE COMP 2024-25)
(A) Maturity
(B) Coupon
(C) Principal Amount
(D) Yield
Answer: (B) Coupon
Q. The group of market participants that collectively facilitates interaction between investors and issuers is known as ____________. (CBSE COMP 2024-25)
(A) Regulators
(B) Custodians
(C) Bankers
(D) Intermediaries
Answer: (D) Intermediaries
Q. Which statement is not correct about the role of SEBI in an issue ? (CBSE COMP 2024-25)
(A) Any company making a public issue or a listed company making a rights issue of value of more than ₹ 50 lakh is required to file a draft offer document with SEBI for its observations.
(B) The validity period of SEBI’s observation letter is three months only, i.e. the company has to open its issue within three months period.
(C) SEBI mainly scrutinises the issue for seeing that adequate disclosures are made by the issuing company in the prospectus or offer document.
(D) SEBI also recommends issues and takes any responsibility for the financial soundness of any scheme or the project for which the issue is proposed to be made.
Answer: (D) SEBI also recommends issues and takes any responsibility for the financial soundness of any scheme or the project for which the issue is proposed to be made.
Q. Statement I : Bond is a negotiable instrument evidencing indebtedness. (CBSE COMP 2024-25)
Statement II : Bond is normally unsecured.
(A) Statement I is false, but Statement II is true.
(B) Statement I is true, but Statement II is false.
(C) Both Statements I and II are false.
(D) Both Statements I and II are true.
Answer: (D) Both Statement I and Statement II are true.
Q. “Its regulatory jurisdiction covers corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market.” (CBSE 2022-23)
(a) IRDA
(b) SEBI
(c) RBI
(d) PFRDA
Answer: (b) SEBI
Q. A bond giving investor the option to convert the bond into equity at a fixed conversion price is called _________. (CBSE 2022-23)
(a) Convertible Bond
(b) Zero Coupon Bond
(c) Treasury Bills
(d) Commercial Paper
Answer: (a) Convertible Bond
Q. Stock Exchange market is a vital component of a capital market. It facilitates the transaction between traders of financial instruments and targeted buyers. A stock exchange in India adheres to set of rules and regulations directed by Securities and Exchange Board of India or SEBI. The said authorised body functions to protect the interest of investors and aims to promote the stock market of India. In the view of this para, what do you mean by stock exchange ? What are the roles of stock exchange in securities market ? (CBSE 2024-25)
Answer: A Stock Exchange is a marketplace where buyers and sellers buy and sell securities such as shares, bonds and debentures.
Roles of Stock Exchange in Securities Market:
- It provides a platform for buying and selling securities.
- It ensures transparency and fair trading in the market.
- It provides liquidity and marketability to securities.
- It helps in price discovery of securities.
Q. It is a platform where buyers and sellers come together to trade financial tools during specific hours of any business day while adhering to SEBI’s well-defined guidelines. Name the organisation. (CBSE 2023-24)
Answer: The organisation is a Stock Exchange.
A stock exchange is a platform where buyers and sellers trade financial securities such as shares, bonds and debentures under the rules and regulations of SEBI.
Q. Your investment in a company or a government body through a debt instrument is a debt investment. What is a debt instrument ? Explain the features of debt instrument. (CBSE 2023-24)
Answer: A debt instrument is a contract under which one party lends money to another party on predetermined terms regarding interest payment and repayment of principal amount.
Features of a Debt Instrument:
- Maturity: It is the date on which the borrower repays the principal amount.
- Coupon: It is the periodic interest paid by the borrower to the lender.
- Principal: It is the original amount borrowed, also known as face value or par value.
Q. What does it mean to have securities listed on the stock exchange ? (CBSE 2025-26)
Answer:
- Listing of securities means the admission of a company’s securities for trading on a stock exchange through a formal agreement.
- It provides liquidity and marketability to securities and enables investors to buy and sell them easily.
Q. To verify the registration status of a broker or sub-broker, it is recommended to check their registration number or relevant details on the official website of the Securities and Exchange Board of India (SEBI). (CBSE 2025-26)
Answer:
- An investor can verify the registration status of a broker or sub-broker by checking the registration certificate issued by SEBI.
- A broker’s registration number begins with “INB”, while a sub-broker’s registration number begins with “INS”.
Q. XYZ Ltd. is a mid-sized manufacturing company seeking to raise funds for operational expansion. The company is considering issuing debt instruments to acquire the necessary capital. Their financial advisor has recommended the option of issuing debentures or commercial paper. In the context of paragraph, what is a debenture ? (CBSE 2025-26)
Answer:
- A debenture is a debt instrument issued by a private company to borrow money from investors for a fixed period.
- The company agrees to repay the principal amount along with interest at a predetermined rate. Debentures are commonly used by companies to raise long-term funds.
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