NCFM CAPITAL MARKET (DEALERS) Module mock test questions

CAPITAL MARKET (DEALERS) Module

Q1
An application for arbitration can be filed within ____ from the date of dispute [ 1 Mark ]

(a) 45 days
(b) 3 months
(c) 1 year
(d) 6 months
(e) I am not attempting this question

Q2
Which of the following is FALSE about trade cancellation in the NEAT system? [ 1 Mark ]

(a) The counterparty to the trade makes similar request on the same trading day.
(b) Identity of the users are disclosed to keep transparency.
(c) The user can use trade cancellation screen for cancelling trades done during the day.
(d) The user can request for trade cancellation from the previous trades screen.
(e) I am not attempting this question

Q3
Which is the settlement system followed by NSCCL with effect from April 1, 2003? [ 2 Marks ]

(a) Daily Settlement
(b) T+2 rolling settlement
(c) Account Period Settlement
(d) T+3 rolling settlement.
(e) I am not attempting this question

Q4
Which of the following statement/s is TRUE on the NEAT system?
(A) Disclosed quantity orders cannot be modified to such a quantity where the disclosed quantity is greater than the order quantity.
(B) Except for the Limited Physical market, a user cannot modify an order to a quantity less than the specified Regular Lot and multiples of Regular Lot.
(C) Orders cannot be modified to a quantity greater than the issued capital for the security. [ 2 Marks ]

(a) Only statements (A) and (C)
(b) Only statements (B) and (C)
(c) Statements (A), (B) and (C)
(d) Only statement (C)
(e) I am not attempting this question

Q5
Which of the following functions a branch manager can perform on the NEAT system [ 2 Marks ]

(a) The branch manager can receive the End of Day reports for the trading firm.
(b) The branch manager can view and perform order and trade related activities for the trading firm.
(c) The branch manager can view and perform order and trade related activities and receive the End of Day reports for all dealers under that branch.
(d) The branch manager can receive the End of Day reports of all the branches of the trading firm.
(e) I am not attempting this question

Q6
The daily margin in T+2 rolling settlement comprises of ___________. [ 2 Marks ]

(a) Mark to Market Margin and Gross Exposure Margin
(b) Mark to Market Margin, Gross Exposure Margin and Value at Risk-based Margin
(c) Mark to Market Margin and Value at Risk-based Margin
(d) Gross Exposure Margin and Value at Risk-based Margin
(e) I am not attempting this question

Q7
Which of the following statement/s is TRUE on the NEAT system?
(A) Circulars, as and when issued by NSEIL, are available to members on the intranet in their respective trading member directory identified by their trading member id.
(B) A message is flashed on the NEAT screen when the circular is downloaded.
(C) The circular file is ********.wri where ******** indicates the department and Circular No. [ 2 Marks ]

(a) Only statements (B) and (C)
(b) Only statements (A) and (B)
(c) Statements (A), (B) and (C)
(d) Only statements (A) and (C)
(e) I am not attempting this question

Q8
Which of the following is not true about Mark to Market Margin? [ 2 Marks ]

(a) Mark to market margin is computed on the basis of mark to market loss of a member.
(b) Mark to market margin is calculated by marking each transaction in a scrip to the closing price of the scrip at the end of trading
(c) Mark to market profit/loss across different securities within the same settlement is set off to determine the mark to market loss for a settlement.
(d) Mark to market loss is the notional loss which the member would incur in case the cumulative gross outstanding position of the member in some securities were closed out at the closing price of the securities
(e) I am not attempting this question

Q9
Auction is held in PQR for 10,000 shares.
The closing price of PQR on that day was Rs.149.00
The last traded price of PQR on that day was Rs.144.0
The close price of PQR last Friday was Rs.145.00
The previous day's close price of PQR was Rs.154.00
What is the maximum allowable price at which the member can put a sell order in the auction for PQR? (Assume Price Band applicable for Auction market is +/-20%) [ 3 Marks ]

(a) Rs. 184.8
(b) Rs. 180.35
(c) Rs. 154
(d) Rs. 144
(e) I am not attempting this question

Q10
A trading member on the NSE, has a branch order value of Rs. 750 lakh for his Mumbai branch and Rs. 600 lakh for Delhi branch. Mumbai branch has two users 'X' and 'Y' with user order value limits of Rs. 200 lakh and Rs. 200 lakh respectively. Delhi branch has one user 'Z' with user order value limit of Rs. 450 lakh. The member applies for a new user at Mumbai. What is the maximum user order value that can be set for the new user? [ 3 Marks ]

(a) Rs. 500 lakh
(b) Any amount, as there is no restriction on User Order Value
(c) Rs. 350 lakh
(d) Rs. 150 lakh
(e) I am not attempting this question

Q11
A client shall make payment for securities purchased to the trading member _______. [ 2 Marks ]

(a) on receipt of the securities
(b) Any amount, as there is no restriction on User Order Value
(c) before the funds pay-in day
(d) within 24 hours of sale
(e) I am not attempting this question

Q12
Which of the following is NOT a derivative traded on Indian Stock Market? [ 1 Mark ]

(a) Index Options
(b) Stock Futures
(c) Index Futures
(d) Forward Rate Agreements
(e) I am not attempting this question

Q13
Contract note is signed by the _______. [ 1 Mark ]

(a) dealer
(b) dominant promoters
(c) directors
(d) authorised signatory
(e) I am not attempting this question

Q14
Which of the following is FALSE about auctions in the NEAT system? [ 2 Marks ]

(a) All auction orders are entered into the auction order book.
(b) Auction order matching takes place at the end of the solicitor period for the auction.
(c) Auction matching takes place only across orders belonging to the same auction.
(d) All auction trades take place at the last traded price for that day in the regular lot book in the normal market
(e) I am not attempting this question

Q15
In which book type on the NEAT system, does the user enter Limited Physical orders? [ 1 Mark ]

(a) SL
(b) RL
(c) OL
(d) SP
(e) I am not attempting this question

Q16
Which of the following statements is FALSE about the NEAT system? [ 1 Mark ]

(a) The order/trade slips are Confirmation/Modification/Cancellation/Rejection slips.
(b) Members can take print of confirmation slips at the end of the day from the reprint option in the supplementary menu
(c) Margin report is generated on-line.
(d) The trade and order slips are generated on-line.
(e) I am not attempting this question

Q17
If a client buys shares worth Rs. 1,25,000 and sells shares worth Rs. 75,000 through a sub-broker, then the maximum brokerage payable to him is ___. [ 2 Marks ]

(a) Rs. 24,000
(b) Rs. 16,000
(c) Rs. 3,000
(d) Rs. 20,000
(e) I am not attempting this question

Q18
A trading member submits ____________ to the stock exchange on an annual basis.
(A) audited financial statements
(B) networth certificate
(C) proof of renewal of insurance cover [ 2 Marks ]

(a) (A), (B) and (C)
(b) (A) and (C) only
(c) (B) and (C) only
(d) (A) only
(e) I am not attempting this question

Q19
Is it compulsory for a trading member to maintain a separate bank account for the Clients? [ 2 Marks ]

(a) Yes, only if his clients request for opening a bank account
(b) No
(c) Yes, only if his clients are not his relatives
(d) Yes
(e) I am not attempting this question

Q20
A copy of an advertisement has to be submitted by a trading member to NSE __________. [ 1 Mark ]

(a) for record
(b) for information
(c) after its issue in publication/media
(d) for prior approval before its issue in publication/media
(e) I am not attempting this question

Q21
A portfolio contains securities with the expected return as follows:-

Security
Probability
Return

A
40
30

B
20
30

C
40
50



What will be the expected return of the portfolio? [ 1 Mark ]

(a) 2.1
(b) 46
(c) 38
(d) 3,150
(e) I am not attempting this question

Q22
A settlement system has ________.
(A) counterparty risk
(B) systems risk
(C) liquidity risk [ 2 Marks ]

(a) (B) and (C)
(b) (A) and (B)
(c) only (C)
(d) (A) and (C)
(e) I am not attempting this question

Q23
What does 'OM' indicate as an activity in the 'Activity Log' screen in the NEAT system? [ 1 Mark ]

(a) Order Modified
(b) Trade Cancelled
(c) Trade Modified
(d) Order Cancelled
(e) I am not attempting this question

Q24
NSE's Certification in Financial Markets does NOT allow flexibility in terms of ______. [ 1 Mark ]

(a) candidate's presence
(b) test date
(c) testing centre
(d) test time
(e) I am not attempting this question

Q25
How many depositories are there in India? [ 1 Mark ]

(a) 2
(b) 3
(c) 0
(d) 1
(e) I am not attempting this question

Q26
In the event of the user forgetting his password on the NEAT system, the trading member is required to _______. [ 1 Mark ]

(a) reset the password and inform the exchange
(b) login with a password of another user of the same trading member
(c) login with the default password and enter a new password
(d) inform the Exchange in writing to reset the password
(e) I am not attempting this question

Q27
Register of transactions (Sauda Book) shall be preserved for a period of _____ years by the stock broker as per the Securities Contracts (Regulation) Rules, 1957 [ 2 Marks ]

(a) 7
(b) 5
(c) 10
(d) 6
(e) I am not attempting this question

Q28
The members/custodians make available the required securities in their ____________ with Depository Participants by the prescribed pay-in time for securities. [ 2 Marks ]

(a) Client Account
(b) Receipt Account
(c) Delivery Account
(d) Pool Account
(e) I am not attempting this question

Q29
What is the maximum number of depository accounts that can be opened by an investor? [ 1 Mark ]

(a) Only one account with a particular depository participant
(b) One account only
(c) There is no restriction on the number of accounts an investor can open
(d) It depends on his Net Worth
(e) I am not attempting this question

Q30
VaR margin is charged at differential rate on the ____________ position of the client. [ 2 Marks ]

(a) Gross outstanding sale.
(b) Net sale
(c) Net outstanding sale.
(d) Gross sale.
(e) I am not attempting this question

Q31
Which of the following statements is TRUE? [ 1 Mark ]

(a) The reliance on public issues has increased in the recent past.
(b) Private placement is costly and time consuming.
(c) Public issues is a preferred means of raising resources in the corporate sector.
(d) The amount raised through private placements far exceeds that raised through public issues.
(e) I am not attempting this question

Q32
A registered sub-broker, holding registration granted by SEBI on the recommendation of a trading member, can transact through ____________ [ 1 Mark ]

(a) a stock exchange directly
(b) any member broker of a stock exchange
(c) the member broker who had recommended his application for registration
(d) any member broker of any stock exchange
(e) I am not attempting this question

Q33
______ or a corporate can become member of an exchange [ 1 Mark ]

(a) An individual, a partnership firm
(b) Hindu Undivided Family
(c) An individual, a partnership firm, Hindu Undivided Family
(d) An individual, Hindu Undivided Family
(e) I am not attempting this question

Q34
NSCCL uses services of _________ to transfer demat securities [ 1 Mark ]

(a) depositories
(b) clearing Banks
(c) share transfer agents
(d) custodians
(e) I am not attempting this question

Q35
A sub-broker can have a maximum of ___ clients. [ 1 Mark ]

(a) 500
(b) 50
(c) unlimited
(d) 100
(e) I am not attempting this question

Q36
The amount in unpaid dividend accounts of companies shall be transferred to the: ____. [ 2 Marks ]

(a) Dividend Equalisation Reserve
(b) Investor Education and Protection Fund
(c) Investor Protection Fund
(d) General Revenue Account of the Central Government
(e) I am not attempting this question

Q37
Which is the principal Act that governs the trading in securities market in India? [ 2 Marks ]

(a) Companies Act, 1956
(b) Securities Contracts (Regulation) Act, 1956
(c) SEBI Act, 1992
(d) Depositories Act, 1996
(e) I am not attempting this question

Q38
Penalty points are charged to members for ______________. [ 2 Marks ]

(a) only for violation in respect of client code modifications.
(b) only for violation in respect of non-confirmation of custodial trades.
(c) only for gross exposure and turnover violations.
(d) All of the above
(e) I am not attempting this question

Q39
Members can submit which of the following as additional base capital to NSCCL. [ 2 Marks ]

(a) Cash.
(b) Bank Guarantee
(c) Fixed Deposit Receipts
(d) All of the above
(e) I am not attempting this question

Q40
A trading member on the NSE, has set the branch order value unlimited for his Chennai branch and Rs. 950 lakh for Kolkata branch. Chennai branch has two users 'X' and 'Y' with user order limits of Rs. 250 lakh and Rs. 300 lakh respectively. Kolkata branch has one user 'Z' with user order value limit of Rs. 350 lakh. The member applies for a new user at Kolkata. What is the maximum user order value that can be set for the new user? [ 3 Marks ]

(a) Not more than Rs. 950 lakh
(b) Zero
(c) unlimited
(d) Rs. 600 lakh
(e) I am not attempting this question

Q41
What is the minimum networth for a corporate member in Capital Market and F&O segments of NSEIL? [ 2 Marks ]

(a) Rs. 5 lakh
(b) Rs. 200 lakh
(c) Rs. 10 lakh
(d) Rs. 100 lakh
(e) I am not attempting this question

Q42
A trading member is getting a message that he has violated the gross exposure limit. The gross exposure at that point of time was Rs. 1300 lakh. What is his base capital? (Assume Rs. 1300 lakh is allowable gross exposure). [ 3 Marks ]

(a) Rs. 46.00 lakh
(b) Rs. 145.00 lakh
(c) Rs. 157.00 lakh
(d) Rs. 181.00 lakh
(e) I am not attempting this question

Q43
Rahul is supposed to receive Rs. 90,000 from Chandra after 3 years. If the interest rate is 8%, what is the present value of the amount due from Chandra? [ 2 Marks ]

(a) 81,444.9
(b) 71,444.9
(c) 86,444.9
(d) 91,444.9
(e) I am not attempting this question

Q44
Which of the following statement/s is TRUE about trade cancellation in the NEAT system?
(A) The trade cancellation request is sent to the Exchange for approval and message to that effect is displayed in the message window.
(B) When a request for the trade cancellation is approved by the Exchange, the parties to trade receive a system message confirming the trade cancellation and the trade cancellation slip is printed at their respective trader workstations.
(C) If the Exchange rejects the trade cancellation request, the trade cancellation rejection slip is printed at their respective trader workstations. [ 2 Marks ]

(a) Only statements (A) and (C)
(b) Only statement (C)
(c) Only statements (B) and (C)
(d) Statements (A), (B) and (C)
(e) I am not attempting this question

Q45
Which of the following obligation reports are NOT generated by the clearing software? [ 1 Mark ]

(a) Daily Obligation Statement
(b) Final Settlement Obligations Statement
(c) Margin Report
(d) Daily Obligation Statement of Custodial Trades
(e) I am not attempting this question

Q46
What can the corporate manager view in the 'Activity Log' screen in the NEAT system? [ 2 Marks ]

(a) He can view all activities that have been performed on any order for own User Id only.
(b) He can view all the activities that have been performed on any order or all orders under all branches or for a specific branch and for a specific dealer or for all dealers.
(c) He has no access to the 'Activity Log' screen.
(d) He can view all activities that have been performed on any order of the whole market.
(e) I am not attempting this question

Q47
What does 'LIS' indicate as a message code in 'Full Message window' in the NEAT system? [ 1 Mark ]

(a) All listing related messages
(b) There is no such message code as 'LIS' in the Full Message Window
(c) All messages related to suspension for trading of listed securities only
(d) All messages related to newly listed securities only
(e) I am not attempting this question

Q48
A person can become a member of __ recognised Stock Exchanges. [ 1 Mark ]

(a) 15
(b) any number of
(c) 10
(d) only one
(e) I am not attempting this question

Q49
In the demat environment, the securities are transferred from one account to another through book entry only on the instructions of the _______. [ 1 Mark ]

(a) beneficial owner
(b) company concerned
(c) stock exchange concerned
(d) depository
(e) I am not attempting this question

Q50
NSCCL pays-out demat securities to the members in the __________ from where these are transferred to the ____________ of the members. [ 2 Marks ]

(a) Clients Account, Pool Account
(b) Pool Account, Clients Account
(c) Delivery Account, Pool Account
(d) Receipt Account, Delivery Account
(e) I am not attempting this question

Q51
The maximum amount of claim payable from the IPF to the investor (where the trading member through whom the investor has dealt is declared a defaulter) is ________. [ 1 Mark ]

(a) Rs. 7 lakh
(b) Rs. 10 lakh
(c) Rs. 17 lakh
(d) Rs. 1 lakh
(e) I am not attempting this question

Q52
If a client buys shares worth Rs. 90,000 and sells shares worth Rs. 1,10,000 through a stock-broker, then the maximum brokerage payable is _____. [ 3 Marks ]

(a) Rs. 4,000
(b) Rs. 5,000
(c) Rs. 2,000
(d) Rs. 6,000
(e) I am not attempting this question

Q53
Which of the following does NOT issue securities in the primary market? [ 1 Mark ]

(a) Government of India
(b) Stock Exchanges
(c) Companies
(d) Financial Institutions
(e) I am not attempting this question

Q54
As per the provisions of SEBI (Prohibition of Insider Trading) regulations, any person who holds more than _____________ shares or voting rights in any listed company shall make such disclosure to the company. [ 2 Marks ]

(a) 2%
(b) 10%
(c) 5%
(d) 3%
(e) I am not attempting this question

Q55
Which address of the Corporate trading member is printed on the contract note?
(A) Registered office address
(B) Dealing office address
(C) Correspondence address [ 2 Marks ]

(a) (C)
(b) (B) and (C)
(c) (A) and (C)
(d) (A) and (B)
(e) I am not attempting this question

Q56
Mr. Desai has decided to deposit Rs. 100,000 in the bank annually. If the bank has a policy of continuous compounding and the prevailing interest rate is 11.5% how much would his deposit grow upto in 2 years? [ 2 Marks ]

(a) 166,141.11
(b) 171,507.54
(c) 185,570.7
(d) 224,871.26
(e) I am not attempting this question

Q57
A maximum penalty of Rs. _______ can be imposed for insider trading, as prescribed under SEBI Act, 1992. [ 2 Marks ]

(a) 5 lakh
(b) 50,000
(c) 3 lakh
(d) 1 lakh
(e) I am not attempting this question

Q58
What does 'P' indicate as a status in the 'Auction Inquiry' screen in the NEAT system? [ 1 Mark ]

(a) Auction is pending and yet to begin.
(b) Auction is deleted.
(c) There is no such status indicator as 'P' in the Auction Inquiry screen.
(d) Auction is over.
(e) I am not attempting this question

Q59
Every stock broker shall preserve the books of accounts and other records prescribed under the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 for a minimum period of _______ years. [ 2 Marks ]

(a) 7
(b) 3
(c) 5
(d) 2
(e) I am not attempting this question

Q60
Which of the following is/are TRUE about the ticker in the NEAT system?
(A) The user has the option of selecting the securities that should appear in the ticker.
(B) When a request for the trade cancellation is approved by the Exchange, the parties to trade receive a system message confirming the trade cancellation and the trade cancellation slip is printed at their respective trader workstations.
(C) The ticker displays information about any trade in the system as and when it takes place. [ 2 Marks ]

(a) Only statements (B) and (C)
(b) Statements (A), (B) and (C)
(c) Only statement (C)
(d) Only statements (A) and (C)
(e) I am not attempting this question


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