Indian Capital Market MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Indian Capital Market, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Indian Capital Market MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Indian Capital Market mcq questions that explore various aspects of Indian Capital Market problems. Each MCQ is crafted to challenge your understanding of Indian Capital Market principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Indian Capital Market MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Indian Capital Market. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Indian Capital Market knowledge to the test? Let's get started with our carefully curated MCQs!

Indian Capital Market MCQs | Page 11 of 15

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Q101.
What external factor is a potential influence on interest rates in the expert opinion?

a.

Stable economic conditions

b.

Global stimulus programs

c.

Changes in government policies

d.

The US Federal Reserve's stimulus program

Discuss
Answer: (d).The US Federal Reserve's stimulus program Explanation:The US Federal Reserve's stimulus program is expected to influence interest rates.
Q102.
What is one way through which Indian companies can raise equity capital in the international capital market?

a.

Only through domestic stock exchanges

b.

By issuing Foreign Direct Investment (FDI)

c.

By issuing Foreign Currency Convertible Bonds ( FCCB )

d.

Through government grants

Discuss
Answer: (c).By issuing Foreign Currency Convertible Bonds ( FCCB ) Explanation:Indian companies can raise equity capital in the international capital market through the issuance of Foreign Currency Convertible Bonds ( FCCB ).
Q103.
What regulatory framework governs the issues of ADR, GDR, FCCB, and FCEB by Indian companies?

a.

Securities and Exchange Board of India (SEBI) Act

b.

Ministry of Corporate Affairs regulations

c.

Foreign Currency Convertible Bonds and Ordinary shares Scheme 1993

d.

Goods and Services Tax (GST) regulations

Discuss
Answer: (c).Foreign Currency Convertible Bonds and Ordinary shares Scheme 1993 Explanation:The issues of ADR, GDR, FCCB, and FCEB by Indian companies are regulated by the Foreign Currency Convertible Bonds and Ordinary shares Scheme 1993.
Q104.
Which of the following is NOT a way through which the Indian Capital market has globalized?

a.

Foreign Direct Investment (FDI)

b.

Foreign Currency Convertible Bonds (FCCB)

c.

Initial Public Offerings (IPOs)

d.

Foreign Currency Exchangeable Bonds (FCEB)

Discuss
Answer: (c).Initial Public Offerings (IPOs) Explanation:The globalization of the Indian Capital market involve FDI, FCCB, and FCEB, but IPOs are not explicitly involved.
Q105.
What is the purpose of the Depository Receipt mechanism?

a.

To regulate the domestic stock exchanges

b.

To facilitate the trading of commodities

c.

To provide a way for Indian companies to raise equity capital in the international market

d.

To manage foreign currency exchange rates

Discuss
Answer: (c).To provide a way for Indian companies to raise equity capital in the international market Explanation:The Depository Receipt mechanism provides a way for Indian companies to raise equity capital in the international market.
Q106.
Which regulatory body is responsible for regulations and circulars governing the issues of ADR, GDR, FCCB, and FCEB?

a.

Ministry of Finance, Govt. of India

b.

Securities and Exchange Board of India (SEBI)

c.

Reserve Bank of India (RBI)

d.

Ministry of Corporate Affairs

Discuss
Answer: (a).Ministry of Finance, Govt. of India Explanation:The Ministry of Finance, Govt. of India, has regulations and circulars governing the issues of ADR, GDR, FCCB, and FCEB.
Q107.
What is the primary purpose of issuing depository receipts (DRs) by a company?

a.

To regulate domestic stock exchanges

b.

To facilitate trading of commodities

c.

To gain recognition of corporate entity and activities in the international market

d.

To minimize currency risks

Discuss
Answer: (c).To gain recognition of corporate entity and activities in the international market Explanation:Issuing depository receipts helps a company gain recognition in the international market.
Q108.
Why are investors interested in American Depositary Receipts (ADRs)?

a.

To complicate investment portfolios

b.

Facility of investment only in the domestic market

c.

Easy trading and settlement of ADRs in US & EURO securities markets

d.

To increase currency risks

Discuss
Answer: (c).Easy trading and settlement of ADRs in US & EURO securities markets Explanation:Investors are interested in ADRs due to the simplified and easy way of trading and settlement, similar to US & EURO securities.
Q109.
What is emphasized by the issuance of depository receipts (DRs) by a company?

a.

Strict government regulations

b.

Recognition of corporate entity and activities

c.

Currency restrictions

d.

Limitations in holding foreign securities

Discuss
Answer: (b).Recognition of corporate entity and activities Explanation:The issuance of DRs emphasizes the recognition of the company's corporate entity and activities.
Q110.
What is NOT a reason for investors' interest in ADRs?

a.

Diversification of investment portfolio

b.

Easy trading and settlement of ADRs

c.

Restrictions in holding foreign securities

d.

Minimum or no currency risks

Discuss
Answer: (c).Restrictions in holding foreign securities Explanation:Investors are attracted to ADRs because of minimum or no currency risks, not restrictions in holding foreign securities.
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