JAYA ENGINEERING COLLEGE

Thiruninravur-602024

Question Bank
Department : Department of Management Studies Subject Code : BA4002
Year/ Sem : II/ 03 Subject : Financial Markets
Regulation : 2021 Staff Incharge: Sweetlin Jenisha. E, Asst Prof-MBA

UNIT I FINANCIAL MARKETS IN INDIA 9

Indian financial system and markets – structure of financial markets in India –Types-Participants in financial
Market – Regulatory Environment, - RBI, CCIL, Common securities market, Money market, - Capital market -
Governments philosophy and financial market – financial instruments
PART A (2 marks)
1 Define financial Markets.
2 Define primary market.
3 What do you mean by CCIL?
4 Define capital market.
5 What is financial market?
6 What is money market?
7 What are the types of financial markets?
8 RBI – comment on the abbreviation
9 Give some financial market examples.
10 Differentiate Investor and Speculator.
11 Identify the two types of information necessary for security analysis.
12 Classify the different kinds of bonds.
13 Give five characteristics of common stock.
14 Can you assess the importance of warrants?
15 What are the features of preference shares?
16 Distinguish between Investment and Gambling.
17 Identify the features of warrants.
18 State about Investment in the Finance point of view.
19 Give five qualities required for successful investing.
20 Interpret the objectives of Investment.
21 Define security as per Security Contract Regulation Act.
22 Summarize the concept of Risk and Return.
23 How do you show your understanding on speculation?
24 Classify the types of risk.
25 What is risk free rate of return?

PART B (13 marks)

1 Explain about the structure of financial markets in India.
2 Who are the stakeholders of financial market- explain?
3 What is the role of RBI in Finance system of India?
4 What are the roles of government in financial markets?
5 Clearing corporation of India Limited – Explain with objectives.
6 What are the objectives of investors in investing their funds in the stock market?
7 Discuss the various mutual fund schemes available for investors.
8 Elucidate about trade-off concept between risk and return in Investments.
9 Differentiate between fundamental and technical analysis.
10 What do you know about the basics of fundamental analysis?
11 Explain the efficient market theory/ efficient market hypothesis with diagrammatic explanation.
 12 List out the various types of marketable financial Assets?
13 Explain risk/ return trade off with diagrammatic illustration.
14 What are the objectives of Investment – Explain?
15 Explain the valuation of stocks.

PART C (15 marks)

1 Comment on the statement “Government philosophy and financial markets”.
2 Discuss the structure of the Indian financial system.
3 (i) What is Preference share? (1) (ii) write short notes on cumulative, redeemable and convertible and
participating preference shares' (3 marks each) (l2)
4 Write about the history of stock exchanges in India.
5 What are the divisions of regulatory environment?
6 Explain the classification of financial instruments.
What are the types of financial markets?
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UNIT II INDIAN CAPITAL MARKET- PRIMARY MARKET 9

Primary Market - Primary market system - Types of scripts - Issue of capital: process, regulation pricing of
issue, – Methods of floating new issues, Book building- Primary markets intermediaries: commercial banks,
development banks, Merchant banker, issue managers, rating agencies etc – Role of primary market –
Regulation of primary market.
PART A (2 marks)
1 What is financial instrument?
2 What are the primary market intermediaries?
3 What do you mean by commercial paper?
4 Define issue of capital.
5 What are the methods of floating new issue?
6 Explain fixed offers method.
7 List out any two functions of capital market.
8 What is meant commercial bank? Name the various types of commercial banks?
9 Name some stock exchanges in India.
10 Name some credit rating agencies in India.
11 Explain merchant banker/Merchant banking.
12 Step out the capital issue process.
13 Define promissory note.
14 Define book building.
15 What is an index fund?
16 Distinguish between SML and CML.
17 Discuss how is Beta computed using CAPM?
18 Interpret the term AMC.
19 What do you mean by diversification?
20 How would you summarize portfolio selection?
21 Compare entry and exit load in mutual fund.
22 Analyse the term Jensen measure.
23 What is your opinion on portfolio management?
24 What is an index fund?
25 Distinguish between SML and CML.
 PART B (13 marks)
1 Credit Rating Agency explain with types of CRA in India.
2 Explain about the development banks under PMI.
3 Explain the different methods through which floating of a new issues can be done.
4 Describe the various intermediaries involved in a primary market.
5 Illustrate the structure of Indian capital market and discuss the same.
6 Define issue manager and process of issue management.
7 Give a detailed note about the commercial banks.
8 Explain the types or classification of primary market.
9 Explain the issue of principal process.
10 Explain about the role of primary market.
11 “Mutual funds are best form of investments”-Discuss.
12 Give a detailed account on the Markowitz‟s risk diversification.
13 Analyse with example the patterns of portfolio revision.
14 Trace growth of mutual funds in India. What is the need to regulate different types of mutual
funds in India?
15 What do you mean by Capital Asset Pricing model?

PART C (15 marks)

1 What do you mean by the regulation of primary market?
2
What do you mean by government failure?
3 What are the methods of determining price of new shares?
4 Give a detail about the SEC and market failure.
5 Explain the five primary market intermediaries.
6 Explain the Indian and International capital market.
7 Give the Institutional Framework of capital market.
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UNIT III SECONDARY MARKET 9
Stock exchanges in India - History and development -listing - Depositaries - Stock exchange mechanism:
Trading, Settlement, risk management, Basics of pricing mechanism - Player and stock exchange - Regulations
of stock exchanges –Role of SEBI – BSE, OTCEI, NSE, ISE, - Role of FIIs, MFs and investment bankers –
Stock market indices – calculation.
PART A (2 marks)
1 Define depository.

2 Define settlement.
3 What do you mean by risk management?
4 Define investment bankers.

5 Explain OTCEI.
6 What is over-the counter exchange?
7 Highlight any two conditions that the prospective member of a stock exchange should satisfy.
8 Mention some secondary market instruments.
9 Define secondary market
10 Mention some participants in financial markets.
11 Analyse the two major market indicators considered as a barometer of Indian capital
market.
 12 How do the leverage policies affect a company’s performance?
13 What do you mean by security market line? Define “Efficient frontier”.
14 What is Random Walk Hypothesis? What are the various levels of market Efficiency?
15 Explain trend reversal.
16 How will you identify support level of a stock?
17 Analyse any two oscillators.
18 What are Oscillators?
19 What is resistance level of a stock?
20 What do you mean by short sale?
21 What are the various forms of EMH?
22 Analyse the usage of moving average method in technical analysis.
23 Explain the importance of Oscillators in technical analysis.
24 Differentiate fundamental analysis from technical analysis.
25 Analyse the usage of moving average method in technical analysis.

PART B (13 marks)

1 Explain the structure of secondary market.
2 What do you mean by stock market indices?
3 Briefly explain depositories and listing
4 Explain the basics of pricing mechanism.
5 What are the roles of FII?
6 Who are the players in stock exchange?
7 Give the history of depositories.
8 What do you mean by the regulations of stock exchange?
9 Explain the listing process.
10 Explain the role of SEBI.
11 What are the types of listing?
12 Briefly elaborate listing.

13 How do you select a portfolio?

14 What do you mean by markowitz model?
15 Explain the trade-off between liquidity and expected returns.

PART C (15 marks)

1 Write the stock exchange mechanism trading.
2 Give a detailed account on player and stock exchange.
3 Explain the role of SEBI, BSE & NSE.
4 (i)What is National Stock Exchange? (ii) List its various functions.
5 Explain the working of the depository system.
6 Explain powers, characteristics and functions of SEBI.
A developmental financial institute issues a money market instrument. It is issued by the financial insti -
7
tute during the time of tight liquidity. This helps the firm to mobilize large amount of funds in a short
period of time.

1. Which money market instrument is highlighted in the above case?

2. What are the characteristics of a money market instrument?
3. Which other type of body can issue this money market instrument? When?

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UNIT IV DEBT MARKET AND FOREX MARKET 9
Bond markets in India: Government bond market and its interface with capital market - Components of bond
market - G-Sec, T-Bills, Corporate Bonds, Yield conventions, Role of primary dealers, Auction Markets -
Pricing of Bonds
Introduction to Forex markets, basics in exchange rates theory - Forex risk exposures and basics of corporate
forex risk management.

PART A (2 marks)
1 Define bond market.
.
2 What are the components of bond market?
.
3 Write down the Forex.
.
4 Explain ISE.
.
5 What are the basic components of bonds?
.
6 What is exchange rate?
.
7 Explain the concept of pricing of bonds.
.
8 Define auction markets.
.
9 What do you mean by corporate bonds?
.
10. Explain T. Bills.
11. Define G.Sec.
12. Interpret the concept of company analysis.
13. What do you mean by lagging indicators of the economy? Give two Examples.
14. List the Criticisms for Fundamental Analysis.
15. Identify the characteristics of coincidental and lagging indicators of the economy. Give two
Examples.
16. Classify industry according to business cycle.
17. What is SWOT analysis?
18. Explain the use of ratio analysis.
19. Define T- bills.
20. What is intrinsic value of a share?
21. Analyse how Economic Forecasting is done?
22. Discuss the meaning of Economic analysis.
23 Interpret the industry life cycle stages.
24. What is the importance of P/E ratio?
25. What is Value vs. Growth investing?

PART B (13 marks)

1 Explain the role of primary dealers.
2 Discuss the structure of government securities market in India.
3 Explain the yield conventions.
4 Explain the process of pricing of bonds.
 5 What are the basics in exchange rates theory?
6 Explain G.Sec, T. Bills, Corporate bonds, Auction market.
7 Enumerate the significance of economic forecasting in fundamental analysis.
8 Explain the Dow theory.
9 Draw and explain the point and figure charts.
10 Explain the whole concept of risk and return.
11 Explain weak, strong and semi strong form of Efficient Market Hypothesis.
12 Analyse how Economic Forecasting is done?
13 Discuss the meaning of Economic analysis.
14 Interpret the industry lifecycle stages.
15 What is the importance of P/E ratio?

PART C (15 marks)

1 Explain in detail about the debt market.
2 What are the basic risks in forex and the risk management.

3 Write about interface of GBM with CM.

4 Explain in detail about the forex markets.

5 (i) What is foreign exchange? (ii) Explain how to manage forex risk exposure.
6 A developmental financial institute issues a money market instrument. It is issued by the financial insti -
tute during the time of tight liquidity. This helps the firm to mobilize large amount of funds in a short
period of time.

1. Which money market instrument is highlighted in the above case?

2. What are the characteristics of a money market instrument?
3. Which other type of body can issue this money market instrument? When?
7
What is SWOT analysis?
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UNIT V MUTUAL FUNDS, DERIVATIVES MARKETS AND VENTURE CAPITAL

AND PRIVATE EQUITY 9
Mutual funds institutions in India. Types of mutual funds, Basics in portfolio management, Metrics of
performance for fund manager.
Introduction to Derivatives and the size of derivatives markets -Brief introduction to forwards, Options, Futures
And Swaps. Role of VCs and PEs in financial markets - Venture capital and Private equity
PART A (2 marks)
1 Explain MF's
2 Name any four public sector mutual funds in India'
3 What is venture capital?
4 Mention some mutual fund institutions in India.
5 What are the types of mutual funds?
6 Define Private equity.
7 Define derivatives.
8 What do you mean by forwards?
9 Define Options.
10 Write the meaning of Futures.
11 Tell few lines about Swaps.
12 Explain derivatives market.
13 What is Book building and IPO?
14 Explain reverse book building.
15 Identify the different types of security markets.
16 Analyse the meaning of underwriting.
17 What is your opinion about primary market?
18 Interpret the role of Capital Market.
19 Identify the importance of IPO grading.
20 Explain the meaning of over subscription.
21 What are the facts considered in selecting OTCEI?
22 Analyse the parties involved in issue of shares in stock market.
23 What is the rolling settlement in trading of securities?
24 Interpret about trading on margin.
25 Who are the participants in financial market?

PART B (13 marks)

1 Discuss the different types of mutual fund schemes in India.
2 Explain the types of mutual funds?
3 Explain about the metrics of performance for fund manager.
4 Elaborate the Role of VCs and PEs in financial markets.
5 Explain about the size of derivatives markets.
6 Explain the characteristics of Book Building and its process.
7 Describe functions of NSDL.
8 Identify the various ways in which an initial public offer can be made?
9 The strength of the economy depends upon the capital market-Discuss.
10 What are the basics of technical analysis?
11 Differentiate between fundamental and technical analysis.
12 What do you know about the basics of fundamental analysis?
13 Tell about stock investment decisions (SID).
14 What is fundamental analysis and objectives of fundamental analysis?
15 Explain in detail about the industry classification.

PART C (15 marks)

1 (i) List the four major types of derivative contracts?
(ii) (ii) Explain all the four types of derivative contracts. (3 marks each)(12)
2 Elaborate the steps involved in venture capital financing.
3 What are the basics in portfolio management?
4 Introduce Derivatives and the size of derivatives markets
5 Illustrate forwards, Options, Futures And Swaps with a diagrammatic illustration.
6 Explain derivatives market.
7 What are the types of forwards and options – Explain.

STAFF INCHARGE HOD