Question 1

Equity cult is spreading very fast in India due to

Accepted Answer

The equity cult is spreading rapidly in India due to a combination of factors including a high propensity to save among Indians, tax concessions on dividend income, and tax concessions on capital gains. These factors collectively make equity investments more attractive, encouraging more individuals to participate in the stock market.

Question 2

Market where issuers sell new shares is called

Accepted Answer

The primary market is where new securities are sold for the first time to investors. This includes initial public offerings (IPOs) where companies sell new shares to the public.

Question 3

Private placement is preferred by companies ,because it is

Accepted Answer

Private placement is preferred by companies because it is cost-effective (less regulatory and underwriting fees), time-effective (faster than public offerings), and access-effective (enables direct negotiation with a select group of investors).

Question 4

Grey market is an

Accepted Answer

The grey market refers to the trading of goods, securities, or other items through channels that are legal but unofficial, unauthorized, or unintended by the original manufacturer. Unlike black markets, grey market goods are not illegal; however, they are sold outside of the manufacturer's authorized trading channels.

Question 5

The latest stock market to come up in India is

Accepted Answer

The MCX Stock Exchange (MCX-SX), now known as the Metropolitan Stock Exchange (MSE), is the latest major stock exchange to be established in India, after the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Question 6

Saving is for

Accepted Answer

Saving can serve multiple purposes, including funding a happy retirement, hedging against inflation, and materializing dreams or goals. Each of these reasons highlights a different aspect of why individuals might choose to save money, reflecting the multifaceted nature of savings.

Question 7

Financial goals of an individual may be

Accepted Answer

Financial goals vary widely among individuals and can include a range of objectives such as funding retirement, covering the costs associated with significant life events like marriage, or purchasing luxury items like premium segment cars.

Question 8

Investment is the

Accepted Answer

Investment refers to the employment of funds on assets with the expectation of earning returns, typically in the form of income or capital appreciation.

Question 9

Investment is done with the following objective

Accepted Answer

Investment is typically done with the objective of achieving stability of income and capital growth. Investors aim to secure their financial future by investing in assets that offer the potential for steady income streams and appreciation in value over time.

Question 10

. Economic well being of a person depends on

Accepted Answer

Economic well-being is influenced by how wisely one invests, as it involves making informed decisions that can lead to better returns and financial security.

Question 11

Investor must be very cautious when he is buying shares belong to

Accepted Answer

The Z group of shares typically represents companies that have failed to comply with exchange regulations, making them riskier investments.

Question 12

Bear market means

Accepted Answer

A bear market is characterized by falling stock prices, typically by 20% or more from recent highs, reflecting widespread pessimism and negative investor sentiment.

Question 13

For trading in the stock exchange

Accepted Answer

For trading in the stock exchange, a bank account, PAN card, and demat account are all essential requirements.

Question 14

Dematerialization eliminates the risk of

Accepted Answer

Dematerialization, the process of converting physical shares into electronic form, eliminates the risks associated with physical certificates, such as forgery (fake certificates), theft, and delays in transfer, thereby addressing all the issues mentioned.

Question 15

Merchant banking involves

Accepted Answer

Merchant banking encompasses a wide range of services including advisory services, issue management, and market operations, among others.

Question 16

Inflation will

Accepted Answer

Inflation leads to an increase in the general price level of goods and services, which escalates costs, reduces the purchasing power of money (since each unit of currency buys fewer goods and services), and can reduce savings as the real value of money saved decreases over time.

Question 17

India follows

Accepted Answer

India follows a sectorial regulatory system, where different sectors such as banking, insurance, and securities markets are regulated by separate regulatory bodies like the Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), and Securities and Exchange Board of India (SEBI), respectively.

Question 18

Investment environment constitutes

Accepted Answer

The investment environment includes financial instruments (like stocks and bonds), financial markets (where these instruments are traded), and financial intermediaries (such as banks and mutual funds) that facilitate transactions.

Question 19

Stock exchange is

Accepted Answer

The stock exchange is a secondary market where investors buy and sell securities they already own.

Question 20

Financial planning is

Accepted Answer

Financial planning involves smart investment and smart spending, aiming for a balanced and effective approach to managing finances.

Quiz 1: Equity Cult, Market and Investment in India