NISM Series - IX Merchant Banking Cert. Mock Test-2 -

NISM Series - IX Merchant Banking Cert. Mock Test-2

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NISM Series – IX Merchant Banking Cert. Mock Test-2

1 / 50

Does the Merchant Banker applicant need to employ at least five people with the right experience to do the merchant banking business? True or False?

a) False

b) True

2 / 50

According to regulation 22 of the SEBI Merchant Banking Regulation, the lead manager must agree to a minimum underwriting obligation. This obligation is either a certain percentage of the total underwriting commitment or a specific amount, whichever is lower.

a) 5% , Rs. 25 lakh

b) 5% . Rs 10 lakh

c) 10% , Rs 50 lakh

d) 10% , Rs 25 lakh

3 / 50

A _______ is a document used when there is a book-built public issue.

a) Blue herring prospectus

b) Red herring prospectus

c) Black herring prospectus

d) Green herring prospectus

4 / 50

With the ASBA facility, investors can apply in _______ using their bank account.

a) Rights Issues

b) Public Issues

c) Preferential Issues

d) Both (1) and (2)

5 / 50

During an acquisition, is it possible to pay the offer price in cash?

a) No

b) Yes

6 / 50

The designated controlling branch of the bankers to the issue must send a _______ statement to the registrar to an issue. This statement indicates the number of applications received on that date from investors investing in the issue of the issuer company, along with the amount of application money received.

a) Weekly

b) Monthly

c) Daily

d) At the end of the issue

7 / 50

If a Merchant Banker is a promoter or director of the issuer of securities, can they be a lead manager or be associated with any activity regulated by SEBI? Yes or No?

a) Yes, he can be the lead manager

b) No, he cannot be the lead manager

8 / 50

The Offer Document is called _______ in the case of a public issue.

a) Prospectus

b) Letter of Offer

c) Application Form

d) None of the above

9 / 50

According to SEBI (Issue and Listing of Debt Securities) Regulations, issuers are permitted to retain oversubscription money up to a maximum of ______ of the base issue size.

a) 90%

b) 75%

c) 200%

d) 100%

10 / 50

Is the merchant banker involved in post-issue activities required to publish advertisements in newspapers providing details about oversubscription, basis of allotment, etc., once the issue is over?

a) No, such advertisements need not be given

b) Yes, such advertisements have to be given post issue

11 / 50

A Qualified Institutional Buyer (QIB) is _________.

a) SEBI registered FII and sub-account

b) Scheduled commercial bank

c) SEBI registered mutual fund, venture capital fund

d) All of the above

12 / 50

An announcement regarding the closure of the issue should be made only after the lead merchant banker is satisfied that at least ______ of the offer through the offer document has been subscribed, and a certificate regarding that has been obtained from the registrar to the issue.

a) 99%

b) 75%

c) 69%

d) 90%

13 / 50

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) 95%

b) 100%

c) 75%

d) 80%

14 / 50

The primary aim of the __________ is to consolidate and amend the law related to foreign exchange with the objective of facilitating external trade and payments.

a) SCRA 1956

b) FEMA 1999

c) RBI Act 1934

d) SEBI Act 1992

15 / 50

The _______ is the market where existing securities are bought and sold among traders and investors.

a) Primary Market

b) Commodity Market

c) Repo Market

d) Secondary Market

16 / 50

True or False: During the due diligence process, the Lead Manager and the issuer are assisted by external parties such as legal counsels, statutory auditors, and specialized industry experts.

a) True

b) False

17 / 50

The SEBI (Merchant Bankers) Regulations, 1992 stipulate that an application for registration as a Merchant Banker made under this regulation shall be accompanied by a non-refundable application fee of ________ and can be made only for Category I Merchant Banker.

a) Rs 25,000

b) Rs 10,000

c) Rs 1,00,000

d) Rs 50,000

18 / 50

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) False

b) True

19 / 50

Who has been granted statutory exclusivity in managing public offers by SEBI?

a) Merchant bankers

b) Custodians

c) Registrar and Transfer agents

d) Underwriters

20 / 50

After a public issue, ______ is required to oversee and monitor the resolution of investor grievances.

a) Registrar and Transfer Agent

b) Stock Exchange

c) Lead Merchant Banker

d) SEBI

21 / 50

In simpler terms: Before selling shares through the stock exchange, the seller(s) must announce their plan by 5 pm at least ______ days in advance.

a) T-2

b) T-1

c) T-4

d) T-3

22 / 50

In a fixed price issue, there is no Red Herring prospectus. Is this statement true or false?

a) False

b) True

23 / 50

What activities, other than advising and underwriting, can a Category 1 Merchant Banker engage in?

a) Arranging for the demat of securities

b) Legal advisor to the issue

c) Record keeping of all the applicants

d) Issue Management

24 / 50

In a Book Built offer, if the floor price is set at Rs 1000, then the cap cannot go beyond ______.

a) Rs. 1200

b) Rs. 800

c) Rs. 900

d) Rs. 1100

25 / 50

In an initial public offer, the entire pre-issue capital held by individuals other than promoters must be locked-in for a period of ____ year, with some exceptions.

a) 5

b) 1

c) 3

d) 2

26 / 50

According to stock exchange listing agreements, the issuer’s minimum market capitalization should be _________.

a) Rs 50 crores

b) Rs 100 crores

c) Rs 25 crores

d) Rs 75 crores

27 / 50

According to SEBI (Delisting of Equity Shares) Regulations, it is the responsibility of the promoter and the compliance officer to ensure compliance with SEBI’s regulations. Is this statement true or false?

a) False

b) True

28 / 50

According to SEBI Merchant Banking regulations, every merchant banker must inform SEBI about the location where the books of account, records, and documents are kept. Is this statement true or false?

a) False

b) True

29 / 50

Any non-promoter shareholder of eligible companies holding at least _____ of the share capital is also allowed to sell shares through the Offer For Sale (OFS) mechanism.

a) 5%

b) 15%

c) 20%

d) 10%

30 / 50

Any company that has been delisted under the voluntary delisting clause cannot apply for relisting its shares for a period of ________.

a) Two years

b) Three years

c) One year

d) Five years

31 / 50

PQR wants to become a merchant banker and is applying to SEBI. What is the minimum net worth needed for this?

a) Rs 10 crore

b) Rs 2 crore

c) Rs 3 crore

d) Rs 5 crore

32 / 50

For a company to go through the ‘Fast Track Issue’ process for a public offering, it needs to have resolved a minimum of _____ of the total grievances or complaints from shareholders or investors.

a) 95%

b) 80%

c) 99%

d) 90%

33 / 50

Every merchant banker must provide SEBI with all the details of a securities acquisition transaction involving a corporate entity whose issue is managed by that merchant banker within _______ days from the date of making such a transaction.

a) Fifteen

b) Ten

c) Thirty

d) Twenty one

34 / 50

True or False: Warrants may be issued alongside a public issue or rights issue of specified securities, but the duration of such warrants should not exceed 24 months from their date of allotment in the public/rights issue.

a) True

b) False

35 / 50

True or False: A merger happens when two companies join to create an entirely new enterprise, and neither of the original companies continues to exist independently.

a) False

b) True

36 / 50

The money market, handling bonds and deposits, is overseen by the _______.

a) Reserve Bank

b) Central Bank of India

c) SEBI

d) Finance Ministry

37 / 50

In India, Merchant Banking operations began in 1967, initiated by ________.

a) Standard Chartered Bank

b) Grindlays Bank

c) Citibank

d) HSBC Bank

38 / 50

According to SEBI SAST regulations, the open offer for acquiring shares made by the acquirer must be for at least ________ percent of the total shares of the target company, as of the 10th working day from the closure of the tendering period.

a) 30%

b) 10%

c) 18%

d) 26%

39 / 50

A listed company coming out with a Rights issue need not file the draft offer document with SEBI – State True or False ?

a) True

b) False

40 / 50

In situations where there is a devolvement on underwriters, the merchant banker must make sure that the notice for devolvement, which includes the obligations of the underwriters, is issued within a period of _____ days from the date of closing the issue.

a) 10

b) 15

c) 7

d) 5

41 / 50

Is it true or false that in the case of an offer for sale, the Offer Document is referred to as a Prospectus?

a) True

b) False

42 / 50

What does ‘Net Offer to Public’ mean ?

a) An offer of specified securities by a listed issuer to the public for subscription

b) Offer of shares to QIBs for the purpose of achieving minimum public shareholding requirements as required under Rule 19 (2)(b) of SCRR

c) An offer of specified securities by a listed issuer to the shareholders of the issuer as on the record date fixed for the said purpose.

d) An offer of specified securities to the public but does not include reservations made for certain investor-categories.

43 / 50

A preference issue is a _______

a) Issue of securities to Qualified Institutional Buyers (QIBs)

b) Issue of securities to only relatives and friends

c) Issue of securities to retail investors

d) Issue of securities to a group of persons on a private placement basis

44 / 50

When the issuer submits the draft document to the stock exchange for the listing of securities, it is also required to provide details of which of the following:
1. Passport number
2. PAN Card number
3. Bank Account Number

a) Only 3

b) Only 2

c) Both 1 and 3

d) All 1,2 and 3

45 / 50

As per the Companies Act, the prospectus issued by a company or in relation to an intended company shall be dated, and that date shall be considered as the __________.

a) Date of filing the prospectus with ROC

b) Date of publication of the prospectus

c) Date of filing with the Exchanges

d) Date of filing with SEBI

46 / 50

Is it true or false that the Companies Act of 1956 brought about an era of efficient capital market infrastructure, improved investor protection, reduced risks, and increased transparency of transactions in the securities market?

a) True

b) False

47 / 50

The issuer is required to announce the floor price or price band at least ____ working days before the opening of the bid for an IPO and at least _____ working day prior to the opening of the bid for an FPO in all the newspapers where the pre-issue advertisement was released.

a) 5, 1

b) 5, 3

c) 3, 3

d) 4, 2

48 / 50

As per the SEBI ICDR Regulations, who is included in the term “promoters and promoters group”?

a) the person or persons named in the offer document as promoters

b) The person or persons who are in control of the issuer

c) The person or persons who are instrumental in the formulation of a plan or programme

d) All of the above

49 / 50

Which of the following ways are used by the Promoters to dilute/offload their holding in listed companies?

a) Preferential Issue

b) Qualified Institutional Placement Programme

c) Offer for sale of shares

d) None of the above

50 / 50

Is it permissible for a merchant banker to act as a lead manager in an issue even if the merchant banker associated with the issue does not possess a SEBI certification of registration? – Yes or No

a) Yes

b) No

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NISM Series - IX Merchant Banking Cert. Mock Test-2

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