Take Free Mock Test NISM Merchant Banking Free Mock Test There are no limits to taking the quiz.Answers will be displayed after submitting the quiz. Scroll down your screen to check your answers. 1 / 43 1. Which Act deals with laws relating to listed as well as unlisted Companies? A. SEBI Act B. Companies Act C. SCRA D. All of the above 2 / 43 2. Warrants can be issued along with public issue or rights issue of specified securities and a specified security may have ________ warrant(s) attached to it. A. only one B. one or more C. minimum five D. minimum two Explanation: Regulation 13 of SEBI (ICDR) Regulations states - an issuer shall be eligible to issue warrants in an initial public offer subject to the following:(a) the tenure of such warrants shall not exceed eighteen months from the date of their allotment in the initial public offer.(b) a specified security may have one or more warrants attached to it. 3 / 43 3. Who are the major investors in government securities market in India? A. Banks and Insurance Companies B. Provident Funds C. Pension Funds D. All of the Above 4 / 43 4. As per SEBI (ICDR) Regulation, the aggregate reservation on competitive basis for employees shall not exceed ___ percent of the post issue capital of the issuer. A. 5 B. 10 C. 15 D. 20 5 / 43 5. If the shares are not allotted to the investor than the Merchant Banker has to refund the application money within how many days from the date of closure of issue? A. 7 days B. 15 days C. 21 days D. 30 days Explanation: The issuer and the merchant banker have to ensure that specified securities are allotted and/or application money are refunded within 15 days from the date of closure of the issue. 6 / 43 6. SCORES system of SEBI does not deal with any complaints which fall under the purview of the other regulatory bodies i.e., IRDAI, PFRDA etc. State whether True or False. A. True B. False 7 / 43 7. In which market, securities are issued to investors for the first time? A. Primary Market B. Secondary Market C. Repo Market D. Currency Market 8 / 43 8. Takeover is the acquisition of substantial _________ for the purpose of seeking management control of the company. A. Rights B. Debentures C. Shares or Voting Rights D. None of the above 9 / 43 9. Which of the following ways are used by the Promoters to dilute/offload their holding in listed companies? A. Offer for sale of shares B. Qualified Institutional Placement Programme C. Preferential Issue D. None of the above 10 / 43 10. Offer Document is _______ called in case of a public issue or offer for sale. A. Prospectus B. Letter of Intent C. Company Information Document D. None of the above Explanation: Offer Document is called “Prospectus” in case of a public issue or offer for sale and “Letter of Offer” in case of a rights issue. 11 / 43 11. Which of the following document(s) need to be maintained by the merchant banker for a minimum period of 5 accounting years? A. a copy of profit and loss account for that period B. a copy of balance sheet as at the end of each accounting period C. a statement of financial position D. All of the above Explanation: These documents need to be maintained for a minimum period of 5 accounting years by the Merchant Banker:(a) a copy of balance sheet as at the end of each accounting period.(b) a copy of profit and loss account for that period.(c) a copy of the auditor’s report on the accounts for that period;(d) a statement of financial position.(e) Records and documents pertaining to due diligence exercised in pre-issue and post issue activities of issue management and in case of takeover, buy-back and delisting of securities. 12 / 43 12. _____is a fund that can invest in either all of the securities or a representative sample of securities included in the index. A. Exchange Traded Fund B. ELSS Fund C. Arbitrage Fund D. Warrant 13 / 43 13. The issuer and the merchant banker have to ensure that specified securities are allotted and/or application money are refunded within _______ from the date of closure of the issue. A. 7 days B. 10 days C. 15 days D. 30 days 14 / 43 14. A public issue can be declared to be closed even if _______ of it is subscribed. A. 15% B. 80% C. 90% D. 99% Explanation: An announcement regarding the closure of issue should be made only after the lead merchant banker is satisfied that at least 90% of the offer through the offer document have been subscribed and a certificate regarding that have been obtained from the registrar to the issue. 15 / 43 15. No advertisement shall be issued giving any impression that the issue has been fully subscribed or oversubscribed during the period the issue is open for subscription. State whether True or False. A. True B. False 16 / 43 16. Derivatives in which of the underlying assets are allowed in the Indian Market? A. Equities B. Currency C. Commodities D. All of the above 17 / 43 17. The SEBI (Substantial Acquisition of shares and takeovers) Regulations, 2011 ensures greater transparency, fairness, and equitable treatment to all investors. State whether True or False. A. True B. False 18 / 43 18. Which Act aims at prohibiting anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India? A. SEBI Act, 1992 B. Competition Act, 2002 C. Companies Act, 2013 D. FEMA, 1999 19 / 43 19. The merchant banker leading a public offer is popularly known as the ‘Lead Manager’. State whether True or False. A. True B. False 20 / 43 20. Who is required to look into and monitor the redressal of the investor grievances, if any which has arisen during issue management process? A. Registrar to an Issue B. Lead merchant banker C. Debenture Trustee D. Depository 21 / 43 21. Which of the following activities does the merchant banker have to perform in the process of Issue Management? A. Handles the statutory compliance requirements B. Event Manager C. Handles the investors’ interest in fiduciary capacity D. All of the above 22 / 43 22. Merchant Banker is involved in which of the following activities? A. Mergers B. Takeovers C. Acquisitions D. All of the above 23 / 43 23. A specified security may have one or more warrant attached to it. State whether True or False? A. True B. False 24 / 43 24. A rights issue shall be open for subscription for a minimum period of _______ days. A. 5 B. 10 C. 15 D. 20 Explanation: A rights issue shall be open for subscription for a minimum period of 15 days and a maximum period of 30 days. 25 / 43 25. A Merchant Banker applicant should have how many people in his employment who should be experienced to conduct the business of Merchant Banker? A. 5 B. 2 C. 7 D. 10 26 / 43 26. M/s ABC has come out with a public issue and its issue gets oversubscribed on the first day itself. Can it advertise this in newspapers before the issue closing date? A. Yes, the company can advertise B. No, the company cannot advertise Explanation: As per the SEBI ICDR Regulations - No advertisement shall be issued giving any impression that the issue has been fully subscribed or oversubscribed during the period the issue is open for subscription.An announcement regarding the closure of issue should be made only after the lead merchant banker is satisfied that at least 90% of the offer through the offer document have been subscribed and a certificate regarding that have been obtained from the registrar to the issue.However, such announcement should not be made before the issue closure date. 27 / 43 27. Department of Economic Affairs handles all matters related to the disinvestment of Government of India shareholding in Central Public Sector Enterprises. State whether True or False. A. True B. False 28 / 43 28. Who appoints the accountants and the auditors who help in reviewing and auditing financials and preparing financial statement as per SEBI (ICDR) Regulations for inclusion in the offer Document? A. Issuer Company B. Merchant Banker C. Association of Investment Bankers of India D. Ministry of Corporate Affairs 29 / 43 29. Which Act/Regulation prescribes the general obligations to be followed by Issuers and other intermediaries who are related with the process of issue management? A. The Securities Contract (Regulations) Act, 1956 B. The Companies Act 2013 C. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 D. SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 2011 30 / 43 30. As per the SEBI (Certification of Associated Persons in Securities Markets) Regulations, 2007, a certificate is valid for a period of ______ from the date of grant of certificate or revalidation as the case may be. A. 3 years B. 2 years C. 5 years D. 7 years 31 / 43 31. Which SEBI Regulation applies to delisting of equity shares of a company from all or any of the recognised stock exchanges where such shares are listed? A. SEBI (Buy-Back of Securities) Regulations, 2018 B. SEBI (Issue and Listing of Debt Securities) Regulations, 2008 C. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 D. SEBI (Delisting of Equity Shares) Regulations, 2021 32 / 43 32. Every merchant banker shall submit to SEBI complete particulars of any transaction for acquisition of securities of any Body Corporate whose issue is being managed by that merchant banker within ______ from the date of entering into such transaction. A. 30 days B. 15 days C. 21 days D. 45 days 33 / 43 33. __________ are the activities performed by a Merchant Banker.I - Merger and Acquisition;II - Stock Trading;III - Printing and Distribution of application forms;IV - Issue of debt securities. A. I and II B. I and IV C. III and IV D. II and III Explanation: A Merchant Banker is not involved in stock trading. Also, regarding printing of forms - The issuer company in consultation with the merchant bankers appoint the printers who are engaged in bulk printing of the offer document and application forms.A Merchant Banker is involved in issue and listing of debt and equity and also manages Mergers and Takeovers. 34 / 43 34. The escrow account opened for the purpose of fulfilling delisting requirements shall consist of either cash deposited with a scheduled commercial bank, or a bank guarantee in favour of the merchant banker, or a combination of both. State whether True or False? A. True B. False 35 / 43 35. Who is a Qualified Institutional Buyer? A. SEBI registered mutual fund, venture capital fund B. SEBI registered FPI C. Scheduled commercial bank D. All of the above 36 / 43 36. The fees payable by the merchant banker on grant of certificate of registration should be by a demand draft in favour of ‘Association of Investment Bankers of India (AIBI)’ payable at Mumbai. State whether True or False. A. True B. False 37 / 43 37. Merger is necessarily amongst two equal or comparable stature companies. State whether True or False. A. True B. False 38 / 43 38. The SLR and CRR rates are decided by which of the following regulatory bodies? A. Securities and Exchange Board of India B. Reserve Bank of India C. Insurance and Regulatory Authority of India D. Competition Commission of India 39 / 43 39. The issuer and the merchant banker shall ensure that the security created to secure the debt securities is adequate to ensure ____ asset cover for the debt securities. A. 50 percent B. 75 percent C. 80 percent D. 100 percent 40 / 43 40. A promoter of XYZ company wants to raise resources through public issue. He was barred from accessing the capital market last year by SEBI on account of insider trading. Is he eligible to come out with public issue? A. Yes, he can raise money through public issue B. No, he cannot raise money through public issue 41 / 43 41. Under ASBA facility, investors apply in __________ by using their bank account. A. Public Issues B. Rights Issues C. Preferential Issues D. Both (A) and (B) 42 / 43 42. When one company takes over another and clearly establishes itself as the new owner, the purchase is called a Merger- State True or False ? A. True B. False Explanation: The terms Merger and Acquisition are used synonymously; however, they are slightly different in their meanings.When one company takes over another and clearly establishes itself as the new owner, thepurchase is called an acquisition.A merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". 43 / 43 43. Further Public Offer (FPO) can be made only through book building issues through the stock exchange route. State whether True or False? A. True B. False Your score is 0% Restart quiz Exit Download Mock Test Free PDFDownload NISM Merchant Banking Workbook Paid Mock TestClear NISM Merchant Banking Certification Exam. Enroll Now