2012
FINANCIAL INSTITUTIONS AND MARKETS
(Finance Major)
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
Answer all questions:
1. Answer the following as directed:
Direction for (1) to (5): Select the most appropriate answer from the multiple choices given against each.
1) The minimum number of days for which a bid should remain open during book building is:
a) 3 days.
b) 15 days.
c) 30 days.
d) None of the above.
2) Which of the following does not govern the capital market?
a) The SEBI Act 1992.
b) The Depositories Act 1996.
c) The Securities Contract (Regulation) Act, 1956.
d) Capital Issues (Control) Act 1947.
3) An arrangement where a group of banks participate to provide funds for a single loan is known as:
a) Loan syndication.
b) Venture financing.
c) Securitization.
d) None of the above.
4) Which of the following is the oldest Stock Exchange in India?
a) Ahmadabad Stock Exchange.
b) Bombay Stock Exchange.
c) Calcutta Stock Exchange.
d) National Stock Exchange.
5) Which of the following is not a money market instrument?
a) Treasury Bill.
b) Certificate of Deposit.
c) National Savings Certificate.
d) None of the above.
6) The process of converting electronic holdings of securities into physical certificate is known as:
a) E-conversion.
b) Dematerialization.
c) Rematerialization.
d) None of the above.
Direction for (7) and (8): State whether the following statements are ‘True’ or ‘False’.
7) National Savings Certificate is not a security.
8) The price of an issue of share is decided by SEBI.
Direction for (9) and (10): Write answer in one or two sentences each:
9) Give three examples of non-fund based financial services.
10) Define ‘derivatives’.
2. Answer the following in about 50 words each: 2x5=10
a) Who regulate the securities market in India?
b) What do you mean by Initial Public Offer (IP))?
c) Give the meaning of ‘depository’ in the context of securities.
d) What is demutualization of stock exchange?
e) Define non-banking finance company.
3. Answer the following in about 200 words each: 5x4=20
(a) What are the indicators of economic development?
Or
Briefly discuss the importance of credit rating agencies.
(b) State the weaknesses of cooperative banks in India.
Or
Distinguish between commercial bank and development bank.
(c) Write a short note on Securities Contract Act, 1956.
Or
How does RBI control credit supply?
(d) How is a demutualised stock exchange different from a mutual stock exchange?
Or
What are the functions of a stock exchange?
4. What is capital market? What are its functions? 4+6=10
Or
What is money market? Outline the salient features of Indian Call Money Market. 4+6=10
5. Define ‘financial system’ and discuss the components of a formal financial system. 3+7=10
Or
Examine the role of financial institution in the economic development of a country. 10
6. Discuss the role of commercial banks in promoting economic growth of a country. 10
Or
State the objectives and salient features of development banks. 10
7. Discuss the role of Reserve Bank of India as regulator and supervisor of the Indian financial system. 10
Or
Discuss the role of SEBI in protecting the interest of investors. 10
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