2B QUIZ
Master the Basics of Capital Markets
Welcome to the 2B Quiz, designed to test your knowledge of capital markets, securities, and investment practices. This quiz will challenge your understanding of key concepts in financing, equity, and corporate actions.
Take this opportunity to:
- Enhance your financial literacy
- Assess your understanding of investment principles
- Prepare for certification or professional assessments
_______ capital is/are for perpetuity from the point of view of the company.
Debt
B. Equity
Both debt and equity
Equity capital gives returns to the investors in the form of
Dividend
Capital Appreciation
Both (a) and (b)
The interest that a company will have to pay on the debt raised will depend upon its_______.
Default Risk
Market Risk
Liquidity Risk
Which of the following is a hybrid security?
Equity shares
Preference shares
Non-convertible debentures
All the options above
Debt capital is always raised for short-term periods. State whether True or False.
True
False
_____ rights give the equity investor a say in the management of the company.
Voting
Dividend
Both voting and dividend
A 20 percent dividend declared on face value of Rs 10 and market price of Rs 120 translates into a dividend payout of _____.
Rs. 2.00
Rs. 24.00
Rs. 20.00
Rs. 12.00
Which of the following is/are examples of corporate actions?
Dividend
Bonus issue
Stock split
All the options above
Preference shareholders get preference over debenture holders in the payment of dividend. State whether True or False.
True
False
A company may issue additional shares to existing shareholders without any capital contribution from the shareholders based on the number of shares an investor holds. This is known as _______.
Bonus issue
Rights issue
Preferential issue
_________ of a bond refers to the interest payable on a bond.
Coupon
Inflation rate on Principal
Market Price
Face Value
A bond with a higher credit rating will pay _______ interest rates.
Higher
Lower
Unrelated
The prices of bonds are ________ related to interest rate movements
Directly
Inversely
Not
A zero coupon bond is always issued at a premium. State whether True or False.
True
False
The YTM of a bond is the yield that investors will earn on holding a bond to maturity. State whether True or False.
True
False
Warrants are usually issued along with _________.
Equity shares
Preference shares
Debentures
Mutual funds
The non-convertible portion of a partly convertible debenture is ________ on maturity.
Issued as new debenture
Repaid in cash
Converted into mutual fund units
The stocks that underlie a Depository Receipt (DR) issue are held by a __________.
Depository Bank/ (Local Custodian)
Stock Exchanges
Registrars and Transfer Agents
Stock Brokers
Holders of Depository Receipts do not have _______ rights.
Voting
Dividend
Dividend and Voting
Capital appreciation
The payment of interest and repayment of principal, in case of a Foreign Currency Convertible Bond (FCCB), is in foreign currency. State whether True or False.
True
False
The Apex regulator of the securities markets in India is ________.
Reserve Bank of India (RBI)
Securities and Exchange Board of India (SEBI)
Association of Mutual Funds in India (AMFI)
Ministry of Corporate Affairs (MCA)
Insider trading is controlled by the regulations prescribed by __________.
Reserve Bank of India (RBI)
Securities and Exchange Board of India (SEBI)
Association of Mutual Funds in India (AMFI)
Ministry of Corporate Affairs (MCA)
The Investor Education and Protection Fund (IEPF) is funded by unpaid dividends remaining unclaimed for at least_________.
Five years
Seven years
Eight years
Ten years
The protection of investors’ interests is a secondary objective of SEBI. State whether True or False.
True
False
SEBI has the power to enforce penalties. State whether True or False.
True
False
The RTA as a custodian of data acts as the repository of information of ___________ data.
Investor
Regulator
Intermediaries
One of the main tasks undertaken by an Investor Service Centre (ISC) / Official Point of Acceptance (OPA) is:
Providing sale necessities like forms for depositories.
Providing statutory documents such as Scheme information Document (SID) and Statement of Additional Information (SAI)
Not providing statement of account on regular basis to distributors and investors
Not maintaining information distribution of dividend
Registrar and Transfer Agents (RTAs) servicing more than 2 crore folios are known as ___________.
Qualified RTAs
Qualitative RTAs
Special RTAs
Superior RTAs
A depository may keep both the record keeping in-house, and outsource to an RTA. State whether True or False.
True
False
Registrar and Transfer Agent (RTA) has a critical role in Corporate Actions:
Transfer of dividend through NEFT
Transfer of dividend through RTGS
Dispatch of dividend in case bank details are not available
All the options above
The SEBI (RTA) Regulations defines Share Transfer Agent as –
A department or division, by whatever name called, of a body corporate performing the activities if at any time the total number of the holders of its securities issued exceed ten lakh.
A department or division, by whatever name called, of a body corporate performing the activities if at any time the total number of the holders of its securities issued exceed one thousand
A department or division, by whatever name called, of a body corporate performing the activities if at any time the total number of the holders of its securities issued exceed fifty thousand.
A department or division, by whatever name called, of a body corporate performing the activities if at any time the total number of the holders of its securities issued exceed one lakh.
A Registrar to an Issue and Share Transfer Agent shall avoid conflict of interest and make adequate disclosure of its interest. State whether True or False.
True
False
Qualified RTAs are market intermediaries who service more than 2 crore folios. They are also referred to as:
Surgical Infrastructure Institutions (SII)
Formal Institution on Infrastructure (FII)
Critical Infrastructure Institutions (CII)
Critical Institute on Infrastructure (CII)
Cyber-attacks and threats attempt to compromise the ___________, _________ and ____________ of the computer systems, networks and databases.
Confidentiality; Integrity; Availability
Confidentiality; Infrastructure; Availability
Criticality; Infrastructure; Availability
Identification of the ________________ of all investments, held except by individual investors, is necessary to prevent money laundering and ensure due diligence of KYC norms.
Transfer Agents
Beneficial Owners
Stock Brokers
The securities that a mutual fund scheme invests in depend upon its ________.
Investment objective
Investment style
Investment plan
Tax scenario
The type of expenses that can be charged to a fund and its limit is decided by _______.
Association of Mutual Funds in India
Securities and Exchange Board of India
Sponsors of Asset Management Companies
Board of Trustees of Asset Management Companies
Mutual funds have lower risks because of ________ & _______ compared to direct investing
Portfolio diversification; Customization
Professional Management; Asset concentration
Portfolio diversification; Professional Management
Asset concentration; Customization
The unit capital of a fund is the number of units issued multiplied by NAV of the fund. State whether True or False.
True
False
Total Expense Ratio (TER) is charged to the fund at the end of the financial year. State whether True or False.
True
False
At least _______ trustees must be independent of the sponsor.
Two-thirds
One-third
Three-fourths
One-fourth
The functioning of the Asset Management Company (AMC) is overseen by the _______.
Trustees
Registrars and Transfer Agents
Custodians
Sponsors
The remuneration of the constituents of a mutual fund is in the form of _______.
Profit sharing
Incentive
Fees
The sponsor contributes to the capital of the Asset Management Company (AMC). State whether True or False.
True
False
An Asset Management Company (AMC) can manage the funds of more than one mutual fund at the same time. State whether True or False.
True
False
Investors buy closed-end funds from the mutual fund during _______.
New Fund Offer (NFO)
Continuous Offer
Any time of the life of the fund
Information in the __________ is common to all schemes of a mutual fund
Scheme Information Document (SID)
Statement of Additional Information (SAI)
Fund Fact Sheet
Consolidated Account Statement (CAS)
Liquid funds invest in debt securities with maturity __________.
Upto 91 days
Upto 365 days
Upto 7 days
Equity Linked Savings Schemes (ELSS) are required to hold at least _____ percent of total assets in equity and equity related instruments.
65
50
80
35
Once the money is pooled from the investors, the fund defines the investment objectives and strategy of the scheme. State whether True or False.
True
False
During the New Fund Offer (NFO) the investors buy mutual fund units at:
NFO Price
NAV
Market Price
The updated Net Asset Value (NAV) of schemes (except for fund of fund schemes) for a day has to be made available on AMFI’s website by which time?
11 pm daily
11 pm weekly
10 am daily
10 pm weekly
Details of the unit capital required for calculating Net Asset Value (NAV) is provided by __________.
Trustees of Asset Management Company
SEBI
Registrar and Transfer Agent
AMFI
The cut-off time for liquid fund redemptions is _________.
2 pm
3 pm
1.30 pm
The time stamp put at the distributor’s end can be used to decide the applicable Net Asset Value (NAV). State whether True or False.
True
False
Which of the followings are not allowed to invest in mutual funds in India?
Resident Indian adult investors
Non Resident Indian investors
Hindu Undivided Family
Overseas Corporate Body
A mutual fund folio can have upto how many joint holders?
Three
Four
Five
Joint holding not allowed
In a mutual fund transaction by a minor the PAN details of the _______ has to be given.
Minor
Guardian
Distributor
Both Guardian and Distributor
________ cannot be a nominee of a mutual fund investor.
Power of Attorney holder
Legal heir
Minor
Minors execute a power of attorney (PoA) in favour of their guardian. State whether True or False.
True
False
Redemption proceeds from mutual fund schemes are received through which of the following?
Cash
Bank transfers
Cheques
Bank transfers or cheques only
Which of the following payment modes is accepted for investing in a mutual fund?
Cash
Demand Draft
Bank Transfer
All the options above
_________ is an electronic fund transfer method that moves funds instantaneously.
Standing Instruction
Bank mandate
RTGS
Bearer cheque
National Automated Clearing House (NACH) is used by retail investors for ________.
Systematic Investment Plans (SIP)
One time lump-sum investments
Investors can invest upto Rs. 1,00,000 in cash in a scheme of a Mutual fund. State whether True or False
True
False
The transaction slip has which of the following details pre-printed to identify the mutual fund investor in the system?
Folio number
PAN details
Application number
Statement of Accounts (SoA), in case of NFO, has to be sent to the investors within _______ working days from closure of NFO
5
10
15
30
The redeemed units from an open-ended mutual fund are ________.
Extinguished
Converted into un-issued new units
The switch-out leg of a switch transaction implies ________.
Purchase
Redemption
Transfer
The R&T agent creates a mutual fund folio using the information in the transaction slip. State whether True or False
True
False
Which of the following change requests can be made by mutual fund investors to update details in their folio?
Change of address
Change of bank details
Change of nominee
All the options above
A change request in the authorized signatories of an institutional investor has to be accompanied by which of the following?
Copy of the Board of Directors resolution authorising the change
Copy of Memorandum of Association
Copy of Articles of Association
All the options above
Changes in the personal information of the investor are made by the _______ in the mutual fund folio.
Registrar and Transfer Agent
Mutual Fund Distributor
Custodians
Regulator
The request for a change in name of the holder is made through ________.
Letter
Telephone
Informal communication
Change in information in a folio can be made only through the pre-printed transaction slip. State whether True or False
True
False
An investor can register the power of attorney (PoA) either at the time of opening a fresh mutual fund folio or in his existing mutual fund folio.
True
False
Nomination is available for individual and non individuals investors
True
False
Exit load has the effect of reducing the redemption price for the investor
True
False
Consolidation of account statements are done on the basis of PAN
True
False
Statement of Accounts (SoA) is a proof of investment for the investor
True
False
The grantor cannot continue to operate the account even after giving a PoA.
True
False
Mutual fund investors can nominate someone to receive the investment proceeds in the event of their death.
True
False
A Power of Attorney holder can make a nomination
True
False
PoA holders are also not authorised to change the nomination details in an investor’s folio.
True
False
Individual investors can empower someone they trust, to do transactions on their behalf
True
False
The STT amount must be shown separately in the Statement of Account issued to the investor
True
False
A Gold ETF buys physical gold which is preserved safely by the custodian
True
False
Since liquid funds have very short-term maturity, the risk of NAV fluctuation is high
True
False
Banks does not provide collection and payment services to mutual funds
True
False
Custodians, registered under SEBI (Custodian) Regulations, are appointed by the trustees to carry out the custodial services for the schemes of the mutual fund
True
False
Custodians should be independent of the sponsor
True
False
AMCs should have a net worth of at least Rs. 50 crore at all times
True
False
As per SEBI regulations, dividend (IDCW) and redemptions are payable only to the investor’s bank accounts registered with RTA
True
False
Transmission is the process to transfer mutual fund units in case of the demise of the unit holder.
True
False
Mutual Fund units may be offered as collateral for various types of loans.
True
False
Once lien is marked, the units cannot be redeemed by the investor/ borrower without a no objection certificate (NOC) issued by the lender
True
False
Switch transaction is subject to long term / short term capital gains in the hands of the investor based on holding period and type of scheme.
True
False
AMCs may or may not charge loads to switch transactions
True
False
Switch transactions always have two legs
True
False
Registrar and Transfer (R&T) agents are identified as ‘intermediaries’ by the SEBI Act and are regulated by SEBI.
True
False
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