DSSSB – 2021 Male
- Match the items of List – II with the items of List – I relating to Methods of Raising Finance and select the code of correct matching.
List I List II (a) Short Term Capital (i) Issue of Equity Shares (b) Medium Term Capital (ii) Clean Advance from Bank (c) Long Term Capital (iii) Public Deposits (iv) Factoring (v) Discounting of Bills (iv) Issue of Preference Shares 1. (a) – (iii) (v)
(b) – (ii)
(c) – (i) (iv)
2. (a) – (i) (iv) (v)
(b) – (ii) (iii)
(c) – (iv)
3. (a) – (iv) (v)
(b) – (ii) (iii)
(c) – (i) (iv)
4. (a) – (iii) (iv) (v)
(b) – (ii) (iii)
(c) – (i) (iv) - “______________consists of buying and selling commodities, or securities, or other property, in the hope of a profit from anticipated changes of value” .
1. Margin Trading
2. Arbitrage
3. Initial Margin
4. Speculation - Which one of the following statements is true?
1. Long-term finance is generally required for a period of 20 years or more.
2. Long-term finance is not required in all types of business activities -manufacturing, trading as well as transport business, etc.
3. long-term finance can be withdrawn at a short notice
4. long-term finance is associated with long-term return on the investment - A document issued by Reserve Bank of India on behalf of the Central Government for meeting its temporary deficits and financing the expenditure, is known as —
1. Money bill
2. Short-term liability bill
3. Commercial bill
4. Treasury bill - Which of these is/are the method of making Capital Issue :
a) Offer for sale
b) Private placement
c) Rights issue
d) Bid and Offer
1. Only (a), (b), (d)
2. Only (a), (c), (d)
3. Only (a), (d)
4. Only (a), (b), (c) - Inside trading refers to trading in the scripts of a company by persons having access to___________ price sensitive information to make private gains or reduce losses.
1. unpublished
2. published
3. analysed
4. synthesized - Which of the following is not an individual component of systematic risk?
1. Market risk
2. Inflation risk
3. Interest rate risk
4. Purchasing power risk - What is the maturity term for most of the treasury bills when issued?
1. 91 days
2. 60 days
3. 90 days
4. 81 days - Read the Assertion and Reasoning and select the correct option.
Assertion (A): The Reserve Bank of India is the apex organisation in the Indian money market.
Reasoning (R): In April, 1988, it set up the Discount and Finance House of India (DFHI) to perform the function of stablising the money market in India.
1. (A) and (R) both are correct ; and (R) is the right explanation of (A).
2. Both (A) and (R) are incorrect.
3. (A) is correct ; but (R) is incorrect.
4. (A) and (R) both are correct ; but (R) is not the right explanation of (A). - Choose the correct statement .
1. GDRs is a convertible bond.
2. Portfolio investment is an investment where the foreign party does not seek control over the investment.
3. Foreign direct investment is an investment where the foreign party retains control over the investment.
4. FCCBs cannot be converted into GDRs. - Which of the following statements is/are true?
A. When the required rate of return is equal to nominal rate, the value of bond is equal to its par value.
B. If the required rate of return is greater than the nominal rate, the value of a bond is more than its par value.
C. When the required rate of return is less than nominal rate, the value of bond is less than its par value.
1. Only A and B are correct
2. A and C are correct
3. Only A is correct
4. Only B is correct - The intrinsic value of a bond or any fixed income security is equal to –
1. The present value of expected cash flows
2. The realisable value of a bond
3. The previous year’s value of cash flows
4. The economic value of a bond - What is an index of operational efficiency?
1. Operating Leverage
2. Combined Leverage
3. Return on Investment Leverage
4. Financial Leverage - Which of the following statements is false?
1. International finance focuses on areas such as foreign direct investment and currency exchange rates.
2. Borrowers are the issuers of debt instruments in the form of Promissory Notes, Bonds and Commercial Paper.
3. When the dollar rises in value relative to a foreign currency, the current assets and current liabilities of a U.S. foreign subsidiary increase in dollar value
4. The needs of borrowers differ in terms of amounts, the length or period for which borrowings are needed, and the currency in which borrowings are raised. - The intrinsic value of a bond or any fixed income security is ______ the present value of the expected cash flows.
1. equal to
2. less than
3. not related to
4. more than - In India, the first step towards building up a structure of development finance institutions was taken up with which establishment?
1. State Industrial Development Corporations
2. Industrial Finance Corporation of India
3. State Financial Corporations
4. Industrial Credit and Investment Corporation of India
DSSSB – 2021 Female First Shift
- Which of the following is not a function of SEBI?
1. It conducts as commercial banks.
2. It drafts regulations on securities market.
3. It trains intermediaries of the securities market
4. It conducts investigation on irregularities in share market and enforce action. - The ________ of a project is the present value of future expected cash flows divided by initial outlay.
1. Net present value
2. Internal rate of return
3. Accounting rate of return
4. Profitability index - There are four components of Indian Financial System.
1. Financial Institution
2. Financial Market
3. Financial Securities.
Which one is the remaining fourth from the following?
1. Financial Accounting
2. Non- financial Institution
3. Financial Management
4. Financial Services - Which of the following is the market where short term and long term government securities are traded.
1. Gilt- edged securities Market
2. Mortgages Market
3. Term loans Market
4. Primary Market - Identify which statement is not true regarding SEBI act.
1. It promotes efficient services by brokers, merchants etc.
2. It protects the interest of the investors
3. It establishes a nationwide trading facility for all type of securities
4. It regulates the securities market. - In _______ new financial securities are issued through stock exchange to facilitate capital formation.
1. Money Market
2. Secondary Market
3. Primary Market
4. Capital Market - What does SEBI stands for–
1. Securities and Expenses Board of India
2. Selling and Exchange Board of India
3. Securities and Exchange Board of India
4. Selling and Expenses Board of India - What is the motive behind the cash held for meeting unexpected needs of cash cycle?
1. Speculative motive
2. Saving motive
3. Transaction motive
4. Precautionary motive - Cash cycle means–
1. The Time taken between cash disbursement and cash collection.
2. The Time taken between sales and purchase of goods.
3. The Time taken between purchase of assets and sale assets.
4. The Time taken between collection of payment and re- disbursement. - Which is not the basic feature of primary capital market ?
1. It has various methods of raising capital including Offer for sale
2. It facilitates issuance of new securities.
3. It creates liquidity for investors.
4. It is not the name of any particular place but the activity of bringing in new issues - In cash credit arrangement, interest is charged on:
1. approved limit of cash credit – amount withdrawn
2. interest is not charged under this arrangement
3. approved limit of cash credit
4. amount withdrawn - “A _______ refers to a situation where there is the possibility of loss.”
1. Loss
2. Probability
3. Risk
4. Uncertainty - A proposed foreign exchange system in which frequent and automatic small adjustments in the par value of a currency is allowed to occur within a band of rates, is known as-
1. Capital account
2. Crawling peg
3. Ceiling peg
4. Floor peg - _______ are managed on day to day basis through official intervention in foreign exchange markets.
1. Pegged exchange rates
2. Floating exchange rates
3. Independent float
4. Co-operative arrangements - ______ is the time duration of conversion of cash into cash equivalents and thereafter back into cash.
1. Tax cycle
2. Operating cycle
3. Inventory cycle
4. Non operating cycle - Which statutory authority regulates the money and credit supply of commercial banking and controls foreign exchange operations?
1. Bureau of industrial cost & prices
2. Reserve bank of India
3. The MRTP commission
4. Bureau of public enterprises - Select one example of risk which is pure and static from the examples given below-
1. Investment in stock market
2. Inflation
3. Technological changes
4. Robbery
DSSSB – 2021 Female Second Shift
- Which of the following represent ranges of the period of a commercial paper?
1. 120 to 365 days
2. 60 to 90 days
3. 20 to 40 days
4. 7 days to 1 year - The securities contracts (Regulations) Act, 1956 has defined stock exchange as an association established for the purpose of assisting, regulating and controlling business of ______.
1. Buying, selling and dealing in wheat , rice and sugar.
2. Buying, selling and dealing in gold and silver.
3. Buying, selling and dealing in securities.
4. Buying, selling and dealing in goods and services. - The SEBI under SEBI Act, has been made the administrative authority for enforcement of general control over the trading of stock exchange while companies Act Contains provision of _________.
1. Listing of securities.
2. Regulation of contracts in securities.
3. Issue of capital, disclosure of important information, special audit.
4. Recognition of stock exchange. - Which of the following is not the function of stock exchange?
1. It provides ready and continues market for buyers and sellers for the existing shares and debentures/bonds.
2. It provides ready and continuous market for buyers and sellers for the existing shares and debentures/bonds.
3. Provide safety to dealings and investments in securities.
4. It does not permit speculation of securities. - ______is a contract between two parties to buy or sell an asset at a specified price on a future date.
1. Spot delivering contracts
2. Ready delivery contracts
3. Backward delivery contract
4. Forward delivery contracts - Fixed capital is not required for acquiring ________.
1. Office equipment
2. Paying salaries
3. Land and buildings
4. Plant and Machinery - How many depositories are there in India at present?
1. 4
2. 2
3. 5
4. 3 - In which year was the Kolkata Stock Exchange established?
1. 1909
2. 1911
3. 1910
4. 1908 - Which of the following is not one of the constituents of the depository system?
1. Issuing Company
2. RBI
3. DP
4. Investors - Which of the following is not a feature of money market?
1. Money market deals in securities like treasury bills, commercial paper, trade bills,deposit certificates, etc.
2. Money market is regulated by SEBI
3. Participants in money market are commercial banks, non-banking financial companies, etc.
4. It is related to short-term funds - The mix of equity and debt actually used by a company for meeting its requirement of capital is known as its ______.
1. Capital Structure
2. Capital Plan
3. Debt Structure
4. Leverage Effect - Factors to be considered while taking a financing decision
1. Cost of fund
2. Risk involved
3. Cash flow
1. 1 & 2 only
2. 1, 2 & 3
3. 2 & 3 only
4. 1 & 3 only - Which of the following is the oldest SFI (Special Financial Institution) that was set up in India?
1. Industrial finance corporation of India (IFCI)
2. Industrial Investment Bank of India (IIBI)
3. Industrial Development Bank of India (IDBI)
4. Industrial Credit and Investment Corporation of India (ICICI) - State in which scenario, the value of rupees in relation to Japanese yen will appreciate? Assume exchange rates are free to vary and other factors remain constant.
1. Real rate of interest in India are higher than that of Japan.
2. Growth rate of national income is higher than that of Japan.
3. Prices in India and Japan raises at the same time.
4. Inflation in India is higher than that of Japan. - Which of the following factors does not determine fixed capital requirement of a business?
1. Type of products
2. Process of Production
3. Size of business
4. Inventory turnover rate - With which of the following objectives EDII was established in Ahmedabad in 1983 as aresource organization?
1. To make the programs for SBI.
2. To co- ordinate the activities of small business development
3. To create institutional infrastructure for entrepreneurship development.
4. To develop the rural entrepreneurship. - NIESBUD was established by the –
1. State Government
2. Central Government
3. Reserve Bank of India
4. State Bank of India - Which of the following features is incorrect about cash-credit?
1. The borrower has the choice to withdraw money as and when required
2. Interest is charged on the amount withdrawn by the borrower.
3. Cash credit limit is decided by the RBI and is reviewed quarterly
4. Under this system, a person, firm or company can borrow money from the bank. - In the electronic / computer based system of recording and carrying out of share transactions, stock exchanges go in for –
1. static settlement
2. demat settlement
3. rolling settlement
4. fixed settlement
DSSSB – 2018 Male
- Capital Budgeting decisions are primarily taken for:
(a) Absolute short term purposes
(b) Short term purposes
(c) Medium term purposes
(d) Long term purposes - Which among the following is NOT a factor that determines capital structure of a company?
(a) Debtor turnover ratio
(b) Financial leverage
(c) Legal framework
(d) Cash Flow abilities - Which among the following is a reason for Under Capitalisation?
(a) High efficiency
(b) Unduly high price paid for assets
(c) Liberal dividend policy
(d) When fair return is not realised on capital employed - Which among the following may be an effect of Under Capitalisation?
(a) Dividends may be paid even if no profits are made
(b) Market value of shares may go up
(c) Market value of share may drastically fall
(d) Company may manipulate accounts to show profits in the event of loss - Which among the following is primarily NOT a finance function?
(a) Diversification decisions
(b) Financing decisions
(c) Dividend decisions
(d) Investment decisions - When the real valuation of assets is less than the amount of capital invested, such a situation is called as :
(a) Capital rationing
(b) Capital gearing
(c) Under capitalisation
(d) Over capitalisation - Suppose that a company only pays dividends when it cannot profitably reinvest its earnings. What can such a dividend decision be categorised as?
(a) Strict Dividend Decision
(b) Liberal Dividend Decision
(c) Active Dividend Decision
(d) Residual Passive Dividend Decision - ————-is the interest earned on a given deposit or a principal that has become a part of the principal at the end of a specified period.
(a) Simple Interest
(b) Time Value of Money
(c) Capital
(d) Compound Interest - The annuity with an indefinite life which makes continuous annual payment is termed as :
(a) Regular Annuity
(b) Perpetuity
(c) Depreciating Annuity
(d) Continuous Annuity - “A Rupee earned today is more valuable that earning the same rupee tomorrow.” Which of the following term in the language of Financial Management explains this theory?
(a) Time Value of Money
(b) Valuation Concept
(c) Investment Concept
(d) Compounding of Money - A platform of an organised and regulated financial market where securities (bonds, shares, etc) are bought and sold at prices governed by forces of demand and supply and often regulated by a professional body is called as :
(a) Money Market
(b) Government Subsidiary Company
(c) Holding Company
(d) Private Limited Company - “The use of borrowed fund in anticipation of higher return to the shareholders,” – This is a concept called as
(a) Stakeholder Optimising
(b) Reverse Trading
(c) Trading on Equity
(d) Debenture Trading - The Over-the-Counter Exchange of India (OTCEI) has its headquarters in the city:
(a) Mumbai
(b) Hyderabad
(c) Delhi
(d) Kolkata - Which of the following is primarily NOT a key activity performed by a Finance Manager?
(a) Making Retrenchment Strategies
(b) Making Investment Decisions
(c) Performing Financial Planning
(d) Doing Financial Analysis - Which of the following theories has NO direct bearing on Capital Structure?
(a) Net Income Approach
(b) Net Operating Income Approach
(c) Arbitrary Pricing Approach
(d) Modigliani-Miller Approach - The choice of investment proposals under financial companies in terms of a given size of capital expenditure budget is known as :
(a) Capital Sponsoring
(b) Capital Gearing
(c) Capital Rationing
(d) Capital Diluting - ——————– is concerned with the design and delivery of financial products and advice to individual, businesses and governments.
(a) Financial Management
(b) Financial Leverage
(c) Finance
(d) Financial Services - Which of the following is the primary differentiating factor between ADR and GDR, as a part of depository receipt?
(a) Validity of Instruments
(b) Type of Financial Product
(c) Area of Operation
(d) Negotiability - The process of determining the present value of a future amount is typically called in finance language as :
(a) Cannibalising
(b) Valuation
(c) Discounting
(d) Compounding - Which of the following is NOT a primary purpose for holding cash?
(a) Transaction Motive
(b) Precautionary Motive
(c) Storage Motive
(d) Speculative Motive - Which of the following is primarily NOT responsible for change in the Working Capital?
(a) Change in the level of sale
(b) Change in the members of the Board of Directors
(c) Change in the operating expenses
(d) Changes in the technology - Which of the following methods takes into consideration the time value of money?
(a) Accounting Rate of Return Method
(b) Pay Back Method
(c) Accounting Rate of Return
(d) Discounted Cash Flow Techniques - The ability of a firm to use fixed financial charges to magnify the effects of changes in EBIT on the earnings per share is otherwise termed as:
(a) Combined Leverage
(b) Operating Leverage
(c) Long Term Leverage
(d) Financial Leverage - The argument that current dividends are less risky as compared to future / distant dividends and that the shareholders prefer dividends over retained earnings is known as:
(a) Interim Dividend Argument
(b) Bird in Hand Argument
(c) Apple in the Basket Argument
(d) Fish in the Net Argument - The different Rankings of the same projects as given by the NPV and IRR methods may take place. One of the following is NOT associated with it. Find out the same:
(a) Unequal Expected Lives
(b) Management Disparity
(c) Size-Disparity Problem
(d) Time-Disparity Problem - Which of the following is a contract in which a bonding company agrees to reimburse a firm up to a stated amount for financial losses caused exclusively by dishonest acts of managers or other employees?
(a) Zero Coupon Bond
(b) Indemnity Bond
(c) Fidelity Bond
(d) Corporate Bond - The NIFTY comprises stocks of Indian Companies belonging to ——–sectors in India.
(a) 8
(b) 15
(c) 12
(d) 5 - As per Profitability Index, a project will qualify for acceptance, If :
(a) PI < 1
(b) PI ≤ 0
(c) PI > 0
(d) PI > 1 - —————describes the relationship between the required return or cost of Equity Capital and the non-diversifiable risks of a firm measured by Beta Coefficient
(a) Stock Market Operations
(b) Systematic Risk Analysis
(c) Capital Assets Pricing Model
(d) Cost-Volume-Profit Analysis - ———————is NOT a credit rating agency.
(a) CARE
(b) CRAII
(c) ICRA
(d) FIRCH
DSSSB – 2018 Female
- The rate at which currency can be bought or sold for immediate delivery is:
(a) Spot exchange rate
(b) Forward exchange rate
(c) Future exchange rate
(d) Cross rate - Bonds that are sold outside the country in whose currency they are denominated are called:
(a) Samurai bonds
(b) Yankee bonds
(c) Eurobonds
(d) Foreign bonds - Financial decisions of the firm are guided by:
(a) Risk-return trade-off
(b) Financial leverage
(c) Retention ratio
(d) Firm’s wealth - The change in the shareholder’s return caused by the change in the profit is termed as:
(a) Financial leverage
(b) Risk-return trade-off
(c) Operating leverage
(d) Profit planning - Determining optimum capital structure is a/an:
(a) Investment decision
(b) Financing decision
(c) Dividend decision
(d) Liquidity decision - While calculating cost of equity in CAPM model:
(a) Beta is always taken as 0
(b) Beta is always taken as 1
(c) Beta is estimated
(d) There is no need for Beta - Net present value is equal to zero when:
(a) IRR > Cost of capital
(b) IRR = Cost of capital
(c) IRR < Cost of capital
(d) IRR = 0 - When debt in the capital structure increases:
(a) WACC decreases
(b) WACC remains unchanged
(c) There is no relationship between the two
(d) WACC increases - Securities with maturity of less than one year traded in:
(a) Futures market
(b) Capital market
(c) Forward market
(d) Money market - Net income and Net operating Income approach to capital were given by:
(a) Harry Markowitz
(b) Modigliani and Miller
(c) William F Sharpe
(d) David Durand - In finance the term Working Capital means:
(a) Net assets
(b) Total assets
(c) Current assets minus current liabilities
(d) Depreciation - Mutual funds in India are regulated by:
(a) IRDA
(b) RBI
(c) SIDBI
(d) SEBI - Two key aspects of any investment are:
(a) Time and Money
(b) Profit and Loss
(c) Risk and Uncertainty
(d) Time and Risk - The number of stocks in BSE sensex is:
(a) 80
(b) 50
(c) 30
(d) 100 - An instrument whose value depends on the value of some underlying asset is called:
(a) Mutual fund
(b) Derivative
(c) Bond
(d) Debenture - The three major sources of risk are: business risk, interest rate risk and :
(a) Capital risk
(b) Personal risk
(c) Market risk
(d) Social risk - Which of the following is not a money market security?
(a) Commercial paper
(b) Certificate of deposit
(c) Treasury bills
(d) Debentures - The cost of equity is equal to the:
(a) Expected market return
(b) Risk the company incurs when financing
(c) Rate of return required by equity shareholders
(d) Cost of retained earnings plus dividend - A contract which gives its owner the right to buy or sell an underlying asset on or before a given date at a predetermined price is called:
(a) Swap
(b) Futures
(c) Option
(d) Annuity - Which one of the following would NOT tighten a firm’s credit policy?
(a) Lengthening of the discount period
(b) Implementing a more stringent credit standard
(c) Requiring a cash down payment on any purchase
(d) Shortening the net due period - Security X has an expected rate of return of 5% and standard deviation of 4%. Security Y has an expected return of 8% and standard deviation of 10%. If there is 75% investment in X and 25% investment in Y, then the return on portfolio will be:
(a) 14%
(b) 5.75%
(c) 7.5%
(d) 13% - Financial decision of the firm are guided by:
(a) Risk-return trade-off
(b) Financial leverage
(c) Firm’s wealth
(d) Retention ratio - The expected rate of return that an investor could earn by investing his money in financial assets of equivalent risk is called:
(a) Retention ratio
(b) Optimum capital structure
(c) Dividend-payout ratio
(d) Opportunity cost of capital - SEBI has made it mandatory for the companies to disclose their:
(a) Quarterly report and Annual report
(b) Monthly report and Annual report
(c) The annual report
(d) Monthly review and Annual report - ………… refers to a firm holding some cash to meet its routine expenses that are incurred in the ordinary course of business.
(a) Speculative motive
(b) Transaction motive
(c) Precautionary motive
(d) Compensating motive - The change in profit due to the change in sales is referred to as:
(a) Dividend payout ratio
(b) Operating leverage
(c) Financial leverage
(d) Profit planning - The market for raising short term funds is called:
(a) Retail market
(b) Short-term market
(c) Money market
(d) Capital market - Which of these is not a financial asset?
(a) Bond
(b) Patents
(c) Lease obligations
(d) Shares - Stock price of XYZ Ltd, is trading at Rs.60. the firm is expected to declare dividend of Rs.6 per share and is expected to grow at the rate of 12 percent per year. What is the cost of equity under dividend growth model?
(a) 22%
(b) 30%
(c) 35%
(d) 25% - A form of security analysis that attempts to forecast the movement of prices of securities based on its historical prices is called:
(a) Fundamental analysis
(b) Technical analysis
(c) Company analysis
(d) Historical analysis