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 2 of 15

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Q11.
Which of the following is a long-term financial instrument dealt with in the capital market?

a.

Treasury Bills

b.

Commercial Papers

c.

Equity Shares

d.

Certificates of Deposit

Discuss
Answer: (c).Equity Shares Explanation:Capital markets deal with long-term financial instruments, including Equity Shares.
Q12.
What is the function of SEBI in the capital market with respect to instruments?

a.

Issuing Equity Shares

b.

Providing Dividends

c.

Ensuring safety and protection of investors

d.

Regulating short-term financial claims

Discuss
Answer: (c).Ensuring safety and protection of investors Explanation:SEBI plays a role in ensuring the safety and protection of investors in the capital market.
Q13.
What distinguishes Common Stocks from Preference Shares?

a.

Voting rights

b.

Claim on earnings and assets

c.

Maturity period

d.

Market value

Discuss
Answer: (a).Voting rights Explanation:Common Stocks provide shareholders with voting rights, while Preference Shares do not.
Q14.
What does the Par Value of stock represent?

a.

Market condition

b.

Economic significance

c.

Contingent liability

d.

Corporate charter

Discuss
Answer: (d).Corporate charter Explanation:Par Value of stock is a recorded figure in the corporate charter and register.
Q15.
How is the Book Value per share of common stock calculated?

a.

Total shares minus liabilities

b.

Market value minus liabilities

c.

Total shares plus liabilities

d.

Market value plus liabilities

Discuss
Answer: (a).Total shares minus liabilities Explanation:Book Value per share is calculated as shareholders' equity (total shares minus liabilities and preferred stocks) as shown in the balance sheet.
Q16.
What role does the Capital Market play in promoting and sustaining the growth of an economy?

a.

Enhancing savings habits

b.

Mobilizing savings

c.

Augmenting trade, commerce, and industry

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The Capital Market plays a crucial role in promoting and sustaining economic growth by encouraging savings, mobilizing funds, and contributing to trade, commerce, and industry.
Q17.
How does the Capital Market contribute to financial risk management?

a.

Identifying and analyzing financial risk

b.

Diversification and transfer of risk

c.

Mobilizing funds to business houses

d.

Encouraging corporate governance principles

Discuss
Answer: (b).Diversification and transfer of risk Explanation:The Capital Market contributes to financial risk management through the identification, analysis, and diversification or transfer of financial risk.
Q18.
Who regulates the Indian Capital Market, similar to the role of the U.S. Securities and Exchange Commission ( SEC ) in the United States?

a.

Securities and Exchange Board of India (SEBI)

b.

Financial Services Authority ( FSA )

c.

Australian Securities and Investments Commission

d.

China Securities Regulatory Commission

Discuss
Answer: (a).Securities and Exchange Board of India (SEBI) Explanation:SEBI controls and regulates the Indian Capital Market, similar to the role of SEC in the United States.
Q19.
In which year was the Securities and Exchange Board of India (SEBI) established as an administrative body?

a.

1988

b.

1992

c.

1998

d.

2000

Discuss
Answer: (a).1988 Explanation:SEBI was set up as an administrative body in the year 1988.
Q20.
What is the dual function mandated for SEBI under the SEBI Act of 1992?

a.

Conducting research on securities market trends

b.

Investor protection and fostering the development of the securities market

c.

Establishing stock exchanges across the country

d.

Regulating foreign exchange transactions

Discuss
Answer: (b).Investor protection and fostering the development of the securities market Explanation:SEBI is mandated to perform a dual function of investor protection and fostering the development of the securities market under the SEBI Act of 1992.
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