Gauhati University Question Papers
Investing in stock markets’ 2019
Paper: COM-GE-1046 (B)
1. Answer the following as directed:1×10=10
(a) “The basic objective of investor is to minimize the risk and maximize the return on investment.” Write whether the statement is true of false.
(b) In India, Mutual fund scheme was started in:
iv) None of the above(Choose the correct alternative)
(c) Which of the following is not associated with the open-ended mutual fund?
i) It has a fixed maturity period.
ii) The investors can subscribe their fund at any time.
iii) It provides prompt liquidity to investors.
iv) The investors have an option to redeem their holding at any time.(Choose the correct alternative)
(d) Which of the following is the oldest stock exchange of India?
i) Calcutta stock exchange
ii) Ahmadabad stock exchange
iii) Bombay stock exchange
iv) Gauhati stock exchange (Choose the correct alternative)
(e) Who is the regulatory authority of Indian Stock Market?
Ans. SEBI is the regulatory authority of Indian Stock Market.
(f) Which of the following is related in case of market order of investor?
i) To buy shares at lowest possible price.
ii) To sale shares at highest possible price.
iii) Both i) and ii)
iv)None of the above (Choose the correct alternative)
(g) Write the full form of CRISIL.
Ans: Credit Rating Information Services of India Limited
(h) Which of the following is the feature of derivative?
i) It is an instrument whose value depends upon the value of some underlying assets.
ii) It arises out of contract between two parties.
iii) It may be financial or commodity derivatives.
iv) All of the above (Choose the correct alternative)
(i) Security market is a market for equity, debts and derivatives.” This statement is:
(j) Liquidity ratio of a company basically consists of:
i) Current ratio
ii) Liquid ratio
iii) Both i) and ii)
iv) None of the above (Choose the correct alternative)
2. Answer the following questions in about 50 words each: 2×5=10
(a) Give the meaning of investment.
Ans: Investment is the employment of funds with the aim of getting return on it. In general terms, investment means the use of money in the hope of making more money. In finance, investment means the purchase of a financial product or other item of value with an expectation of favorable future returns.
(b) What is online trading of stock?
Ans: Online trading of stocks means trading in securities in stock market with the help of internet and computers or mobile. Users can search different stocks online and make investment in the stock of their interest at a convenience of home. They need not took the help of any stock broker.
(c) Define NAV.
Ans: Net Asset Value (NAV) refers to the value of each unit of a mutual fund scheme which is equivalent to:
Unit-holders’ Funds in the Scheme ÷ No. of Units
It can also be calculated as:
(Total Assets minus Liabilities other than to Unit holders) ÷ No. of Units
(d) What is a commodity derivative?
The term ‘commodity Derivative’ stands for a contract whose price is derived from or is dependent upon an underlying commodity. The underlying commodity could be metals such as gold, silver, steel aluminum, gas, agriculture products and minerals.
(e) Give an idea of primary market.
Ans: Primary market which is also called new issue market represents a market where new securities i.e. shares, debentures and bonds that have never been previously issued are offered. It is a market of fresh capital. The main function of this market is to facilitate the transfer of funds from willing investors to the entrepreneurs who need funds.
3. Answer any four questions of the following in about 150 words each: 5×4=20
a) Explain the procedure of buying and selling of securities in the stock market.
b) Mention the four ratios generally used by investors to evaluate the performance of a company.
c) Write a short note on the history of mutual fund.
Ans. For answer visit here
d) Describe the factors affecting the choice of mutual fund.
e) Briefly explain the participants of derivative market.
Ans. Visit here for the Answer on participants of derivative market
f) Write an explanatory note on the following:
Load and no-load mutual funds
IPO and FPO
4. Answer the following questions in about 600 words each:4×10=40
(a) What is meant by mutual fund? Explain its advantages and disadvantages. 2+8
Ans. For Full Answer on mutual fund and its advantages and disadvantages Read this page
Explain four types of instruments that are used in investment of fund. 10
(b) Discuss in detail the functions of capital market. 10
Explain the various tools used for the analysis in the future prospect of a company. 10
(c) In which year SEBI came into effect? Also point out the principal functions of SEBI. 2+8=10
Ans. visit here for the answer
Distinguish between: 5+5=10
i) Open-ended mutual fund and closed-ended mutual fund
Ans. Visit here for the Answer of this Question
ii) Limit order and Market order
(d) What is meant by forward contract? Also point out the difference between forward contract and future contract. 4+6=10
Ans. visit here for the Answer of this Questions
Write note on any two of the following: 5×2=10
i) Benefits of credit rating
ii)Common mistakes while investing
iii) The role of broker in stock market
iv) Price earnings ratio