Merchant Banking Certification Free Demo Test 4 /10 Merchant Banking Certification Free Demo Test 4 1 / 10 1. When there’s more than one main banker for a business offering its shares to the public, each banker’s duties should be clearly defined. A document stating these responsibilities must be given to SEBI (Securities and Exchange Board of India) at least ________ days before the start of the subscription period. a) 15 days b) Two months c) One month d) 45 days Explanation:The given statement, mentions that when there is more than one Lead Merchant Banker involved in an issue, The responsibilities of each banker need to be clearly defined. A statement detailing these responsibilities must be provided to SEBI (Securities And Exchange Board Of India) at least 45 days before the opening of the issue for subscription. 2 / 10 2. Which law or rule gives the SEBI the authority to exempt certain situations from the requirement to make a public offer, as long as specific conditions are met? a) The Monopolies and Restrictive Trade Practices Act b) SEBI (Prohibition of Insider Trading) Regulations c) The Securities Contract (Regulation) Act d) SEBI ( Substantial Acquisition of Shares and Takeover) Regulation Explanation:SEBI ( Substantial Acquisition of Shares and Takeover) Regulation provides cases which are exempt from the obligation to make an open offer. 3 / 10 3. __________ is when someone promises to buy something right from the start. a) Soft underwriting b) Hard underwriting c) Guaranteeing d) Tangible underwriting Explanation:Hard underwriting is when an underwriter agrees to buy his commitment at its earliest stage. The underwriter guarantees a fixed amount to the issuer from the issue. The underwriter bears a risk which is much higher than soft underwriting. In case of soft underwriting, the underwriter has to take up his share of devolvement (i.e. underwriting commitment less procurement) in case public response to the offer is not sufficient. 4 / 10 4. In every kind of __________, the merchant banker plays a crucial role, making things happen for the whole deal. a) Company incorporation b) Lease Out c) Corporate restructuring d) Hypothecations Explanation:In all types of corporate restructuring, the merchant banker performs the pivotal role, acting as a catalyst for the entire deal. Corporate restructuring involves mergers, amalgamations, de-mergers, acquisitions, takeovers etc. 5 / 10 5. Further Public Offer [FPO] can be made only through book-building issues through the stock exchange route. State Whether True or False? a) False b) True Explanation:Further Public Offer (FPO) can be made either through the book-building process or the fixed price method. It is not limited to the book-building route; the fixed price method is also a valid option for FPOs. 6 / 10 6. What helps figure out the right price and interest in stocks during an Initial Public Offering (IPO)? a) Book Building Process b) Demand Discovery Process c) Price Bidding Process d) None of the above Explanation:Book Building Process is a mechanism where, during the period for which the book for the offer / public issue is kept open, bids are collected from investors at various prices at which they are willing to subscribe to a certain number of shares,which is within the price band specified by the issuer. 7 / 10 7. Are Mutual Funds in India classified as Institutional investors? True or False? a) False b) True Explanation:Institutional investors comprise of domestic Financial institution, Mutual funds, FIIs etc commonly known as Qualified Institutional Buyers (QIBs). 8 / 10 8. A company needs to have a minimum paid up capital of Rs 10 crore to list on BSE and Rs 20 crore to list on NSE – State whether True or False ? a) True b) False Explanation:As per the listing agreement, a company should have a minimum paid up capital of Rs 10 crore to be eligible for listing on both BSE and NSE. 9 / 10 9. One of the criteria which has to be satisfied by a company which wants to come out with a public issue in the ‘Fast Track Issue ‘ process is that the company has redressed at least _____ of the total shareholder / investor grievances or complaints re a) 80% b) 95% c) 99% d) 90% Explanation:In the ‘Fast Track Issue’ process, one of the criteria for a company to come out with a public issue is that the company has redressed at least 95% of the total shareholder/investor grievances or complaints. Therefore, the correct answer is 95%. 10 / 10 10. 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. Your score is 0% Restart quiz Exit