Question Bank Solutions: Secretarial Practice (12th Std)

Below are the complete solutions derived from the provided question bank images. The content covers Corporate Finance, Sources of Capital, Issue of Shares, Debentures, Deposits, Depository System, Dividends, and Financial Markets.

Q.1 Fill in the blanks

Planning of capital requirement is made by Financial Manager.
When there is boom in economy, sales will Increase.
The process of converting raw material into finished goods is called Production Cycle.
During recession period, sales will Decrease.
The finance needed by business organisation is termed as Business Finance / Capital.
The convertible preference share holders have a right to convert their shares into Equity Shares.
Equity shareholders elect their representatives called Directors.
Bonus shares are issued as gift to Equity Shareholders.
The bond holders are Creditors of the company.
Depository receipt traded in a country other than USA is called Global Depository Receipt (GDR).
First Industrial policy was declared in the year 1948.
When goods are delivered by supplier to customer on basis of deferred payment it is called as Trade Credit.
Share capital refers to capital made up of Equity shares and Preference shares.
Reserve capital is part of Uncalled Capital.
Transfer of shares due to death, insolvency or insanity of member is called Transmission of Shares.
The two parties involved in transfer of shares are transferor and Transferee.
Voluntarily giving up of shares by a member due to inability to pay calls is called as Surrender of Shares.
Company can forfeit only Partly paid shares.
In case the original Share Certificate is torn or mutilated, company can issue Duplicate Share Certificate.
In case of transfer of shares, company has to issue to the transferee a new share certificate within One Month.
Letter sent to applicants for informing them shares are allotted is called as Allotment Letter.
When applications received are more than the number of shares offered, it is called as Over Subscription.
In Book Building Method, the final price at which shares are offered to investors is called as Cut-off Price.
Shares issued free of cost to existing Equity shareholders is called as Bonus Shares.
A legal instrument conveying the assets of a company to the Debenture trustees is called Debenture Trust Deed.
To protect the interest of Debenture holders, a company appoints Debenture Trustees.
On receipt of application and money, the procedure for allotment of debentures should be completed within 60 days.
Authority to create charge on company's assets is with the Board of Directors.
Secured debentures should be redeemed within 10 years.
To stop a company from incurring further liabilities, the Debenture trustee can approach NCLT (National Company Law Tribunal).
A company which issues prospectus or invites more than 500 persons to subscribe for its debentures, has to appoint Debenture Trustees.
Return on investment in debentures is called Interest.
For public issue of debentures of ₹ 100 crores, minimum subscription should be 75%.
For public issue or rights issue of convertible debentures, as per SEBI, a company must obtain Credit Rating.
Deposit is a type of Short Term / Medium term loan.
Eligible Public company and Govt. Company can accept deposits from Public.
To collect deposits from public, eligible public company must have a net worth of not less than ₹ 100 Crores.
A Government company can accept deposits from public not exceeding 35% of paid up capital and free reserves.
Deposits can be accepted or renewed for a period not less than 6 months and not more than 36 months.
Company cannot accept or renew deposits repayable on Demand.
Premature repayment of deposits can be done by a company but not before 3 months.
To invite the public to subscribe for its deposits, a company issues Advertisement.
Agency which gives ratings of the deposits of a company is called Credit Rating Agency.
Account which is used only for repaying deposits is called Deposit Repayment Reserve Account.
Central location for keeping securities in demated form is Depository.
Freezing of debit/credit of securities is possible in Demat Account.
First Depository of the world started in the year 1947.
The Indian Depository Act was passed in the year 1996.
Link between Depository and Investor is Depository Participant (DP).
Account of securities of the Investors is maintained by Depository Participant.
The process which converts physical securities in electronic form is Dematerialisation.
The process which converts digital securities in physical form is Rematerialisation.
The Issuer company must register with Depository.
The unique code identifying a security is ISIN.
The first depository of India is NSDL.
Word dividend is derived from Latin term Dividendum.
Dividend is paid to Shareholders.
Dividend can be declared only on recommendation of Board of Directors.
Dividend must be paid in Cash / Cheque / Warrant / Electronic mode.
The meeting at which final dividend is approved is Annual General Meeting (AGM).
Dividend cannot be paid out of Capital.
Interim dividend is decided and declared by Board of Directors.
Predecided and a fixed rate of dividend is paid to Preference Shareholders.
Payment of dividend must be completed within 30 days.
Payment of Interim Dividend needs to be authorized by Articles of Association.
The obligatory payment made by company to its creditors is called as Interest.
Funds borrowed and lent in money market are for Short term.
When trade bills are accepted by commercial banks, it is known as Commercial Bills.
Unsecured negotiable promissory notes issued by a commercial bank is called as Certificate of Deposit (CD).
New shares, debentures, etc. are traded in Primary market.
In capital market the instruments traded have maturity period of more than One year.
The oldest Stock Exchange in India is the Bombay Stock Exchange (BSE).
The largest and most modern stock exchange in India is the National Stock Exchange (NSE).
A person who buys or sells shares on behalf of his clients is called as Broker.
A speculator who expects fall in prices of shares is called as Bear.

Secretarial Practice Board Papers

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S.P. - February 2019 View

Q.2 Select the correct option and rewrite the sentence

1. .................... is related to money and money management.

a) Production
b) Marketing
c) Finance

2. Finance is the management of .................... affairs of the company.

a) monetary
b) marketing
c) production

3. Corporate finance deals with the acquisition and use of .................... by business corporation.

a) goods
b) capital
c) land

4. Company has to pay .................... to government.

a) taxes
b) dividend
c) interest

5. .................... refers to any kind of fixed assets.

a) Authorised capital
b) Issued capital
c) Fixed capital

6. .................... refers to the excess of current assets over current liabilities.

a) Working capital
b) Paid-up capital
c) Subscribed capital

7. Manufacturing industries have to invest .................... amount of funds to acquire fixed assets.

a) huge
b) less
c) minimal

8. When the population is increasing at high rate, certain manufacturers find this as an opportunity to .................... business.

a) close
b) expand
c) contract

9. The sum of all .................... is gross working capital.

a) expenses
b) current assets
c) current liabilities

10. .................... means mix up of various sources of funds in desired proportion.

a) Capital budgeting
b) Capital structure
c) Capital goods

11. .................... is a smallest unit in the total share capital of the company.

a) Debenture
b) Bonds
c) Share

12. The benefit of Depository Receipt is ability to raise capital in .................... market.

a) National
b) Local
c) International

13. .................... are residual claimants against the income or assets of the company.

a) Bondholders
b) Equity Shareholders
c) Debentureholders

14. .................... participate in the management of their company.

a) Preference shareholders
b) Depositors
c) Equity shareholders

15. .................... shares are issued free of cost to existing equity shareholders.

a) Bonus
b) Right
c) Equity

16. The holder of preference share has right to receive .................... rate of dividend.

a) fixed
b) fluctuating
c) lower

17. Accumulated dividend is paid to .................... preference shares.

a) redeemable
b) cumulative
c) convertible

18. The holder of .................... preference shares have right to convert their shares into equity shares.

a) cumulative
b) convertible
c) redeemable

19. Debenture holders are .................... of the company.

a) creditors
b) owners
c) suppliers

20. .................... is paid on borrowed capital.

a) Interest
b) Discount
c) Dividend

21. Debentureholders get fixed rate of .................... as return on their investment.

a) interest
b) dividend
c) discount

22. Convertible debentures are converted into.................... after a specific period.

a) equity shares
b) deposits
c) bonds

23. Retained earnings are .................... source of financing.

a) internal
b) external
c) additional

24. The holder of bond is .................... of the company.

a) secretary
b) owner
c) creditor

25. Company can accept deposits from public, minimum for .................... months.

a) six
b) nine
c) twelve

26. Company can accept deposits from public, maximum for .................... months.

a) 12
b) 24
c) 36

27. A depository receipt traded in .................... is called American Depository receipt.

a) London
b) Japan
c) U.S.A.

28. .................... refers to capital made up of Equity and preference shares.

a) Share capital
b) Debt capital
c) Reserve fund

29. .................... capital refers to maximum capital a company can raise by issuing shares.

a) Issued
b) Authorised
c) Paid up

30. .................... means shares are offered to the public.

a) Rights Issue
b) Private Placement
c) Public Issue

31. Under .................... method, issue price of shares is based on bidding.

a) Book Building
b) Fixed Price
c) Bonus Issue

32. In ...................., shares of a company are offered to the public for the first time.

a) Further Public Offer
b) Initial Public Offer
c) Public Offer

33. .................... is offered to existing equity shareholders.

a) IPO
b) ESOS
c) Rights Issue

34. Bonus shares are issued free of cost to .................... .

a) existing Equity shareholders
b) existing employees
c) Directors

35. .................... are offered to permanent employees, Directors and Officers of a company.

a) Bonus Shares
b) Rights Issue
c) ESOS

36. Under ...................., a company offers its securities to a select group of persons not exceeding 200.

a) Private Placement
b) IPO
c) Public Offer

37. The .................... have the power to allot shares.

a) Director
b) Board of Directors
c) Company Secretary

38. Letter of .................... is sent to applicants who have been given shares by the company.

a) Regret
b) Renunciation
c) Allotment

39. .................... is a proof of title to Shares.

a) Share Certificate
b) Register of Member
c) Letter of Allotment

40. The gap between two calls should not be less than .................... .

a) 14 days
b) One month
c) 21 days

41. Company can .................... shares on non-payment of calls.

a) forfeit
b) surrender
c) allot

42. Voluntarily giving away one's share to another person is called as .................... of shares.

a) Transfer
b) Transmission
c) Surrender

43. .................... of shares takes place due to operation of law.

a) Forfeiture
b) Allotment
c) Transmission

44. A company cannot issue .................... with voting rights.

a) Equity shares
b) Debentures
c) Securities

45. A company can issue .................... convertible debentures.

a) Only partly
b) Only fully
c) Partly or fully

46. Money from .................... Account is used for redemption of debentures.

a) Capital
b) Debenture Redemption Reserve
c) Profit or loss

47. .................... protects the interest of debenture holders.

a) Debenture Trustees
b) Debenture holders
c) Redemption Reserve

48. Secured debentures must be redeemed within .................... from the date of its issue.

a) 10 days (Typo in Q, standard is 10 years, but 10 days listed)
b) 10 years
c) 15 years
Correction: The correct answer is 10 years.

49. A company issuing .................... debenture must create a charge on the assets of the company.

a) Secured
b) Unsecured
c) Redeemable

50. Debenture certificate must be issued within .................... of allotment of debentures.

a) 3 months
b) 6 months
c) 60 days

51. The details of allotment of Debentures must be entered in .................... .

a) Register of debenture
b) Register of members
c) Register of creditors

52. A company which issues prospectus or invites more than 500 persons to buy its debenture has to appoint .................... .

a) Register of companies
b) Debenture holders
c) Debenture trustees

53. The contract between company and Debenture trustees of companies is called as ....................

a) Debenture trust deed
b) Letter of offer
c) Prospectus

54. Procedure for allotment of Debenture should be completed within .................... from the date of receipt of applications.

a) 6 months
b) 3 months
c) 60 days

55. Deposit is a type of .................... .

a) Owned capital
b) Short term loan
c) Long term loan

56. Eligible public company and Government Company can collect deposits from ....................

a) It's employees
b) Public
c) RBI

57. Private company can accept deposits from its member or Directors upto not more than .................... % of its aggregate of paid-up share Capital and free reserves.

a) 100
b) 35
c) 25

58. A .................... Company can accept deposits from public not exceeding 35% of its paid-up share Capital and free reserves.

a) Government
b) Private
c) Eligible Public

59. Deposit can be accepted for a minimum of 6 months and maximum for .................... months.

a) 36
b) 3
c) 30

60. Company issues .................... to invite its members to subscribe for its deposit scheme.

a) Advertisement
b) Circular
c) Newspaper

61. Company can issue circular or advertisement for inviting deposits after .................... days of filing it with Registrar of Companies.

a) 30
b) 21
c) 7

62. Company has to appoint .................... to protect the interest of depositors.

a) Debenture Trustees
b) Deposit Trustees
c) Credit Rating Agency

63. Charge on assets is to be created when a company issues ....................

a) Unsecured deposit
b) Unsecured Debenture
c) Secured deposit

64. Deposit Receipt is issued within .................... days of receipt of deposit.

a) 7
b) 30
c) 21

65. For premature repayment of deposit, company deducts .................... % of interest.

a) 1
b) 18
c) 20

66. Return of deposit must be filed every year on or before ....................

a) 30th June
b) 31st March
c) 30th April

67. In physical mode, securities are held in .................... form.

a) Paper
b) Dematerialization
c) Electronic

68. Risk of losing certificates exists in .................... mode.

a) Physical
b) Dematerialised
c) Digital

69. In Depository System, securities are held in .................... form.

a) Scrip based
b) electronic
c) Physical

70. .................... is the institute which facilitates electronic holding of securities.

a) Depository Participant
b) Issuer
c) Depository

71. There is no payment of .................... when securities are demated.

a) Octroi
b) Wealth Tax
c) Stamp Duty

72. Depository Act was passed in ....................

a) 1919
b) 1996
c) 1999

73. India has a .................... depository system.

a) sole
b) multi
c) single

74. .................... is a constituent of depository system.

a) Government
b) Issuer
c) Trust

75. .................... is the oldest depository in India.

a) Dow Jones
b) NSDL
c) CDSL

76. Demat account is opened by .................... .

a) Beneficial Owner
b) CDSL
c) SEBI

77. Demated shares are.................... .

a) Non-transferable
b) Fungible
c) Bearer

78. .................... is a unique code given to a security.

a) IBM
b) BBM
C) ISIN

79. In India ISIN for corporate securities is allotted by ....................

a) NSDL
b) Central Govt.
c) State Govt.

80. .................... has to apply for ISIN.

a) Company
b) Depository Participant
c) Depositors

81. .................... has to pay charges to maintain Demat Account.

a) Investor
b) Issuer
c) Depository

82. NSDL is promoted by ....................

a) NSE
b) BSE
c) FTSE

83. CDSL is promoted by ....................

a) NSE
(b) BSE
c) FTSE

84. Dividend is paid to ....................

a) Shareholder
b) Debentureholder
c) Depositor

85. .................... is profit shared by company with a shareholder.

a) Interest
b) Rent
c) Dividend

86. Dividend is recommended by .................... .

a) Managing Director
b) Secretary
c) Board of Directors

87. Interim Dividend is declared by .................... .

a) Board of Directors
b) Debentureholders
c) Depositors

88. Final Dividend is declared by .................... .

a) Board of Directors
b) Shareholders
c) Depositors

89. Dividend cannot be declared out of ....................

a) Capital
b) Profit
c) Reserves

90. Dividend amount should be transferred in a separate Bank Account within .................... days of its declaration.

a) 5
b) 15
c) 50

91. Dividend should be paid within .................... days of its declaration.

a) 3
b) 13
c) 30

92. .................... holders get dividend from residual profits.

a) Equity share
b) Preference share
c) Debenture

93. Dividend is paid first to .................... shareholders.

a) Equity
b) Preference
c) Deferred

94. .................... warrant is a cheque containing dividend amount sent by company to the shareholders.

a) Dividend
b) Share
c) Interest

95. IEPF is created by .................... where unpaid dividend is transferred by company.

a) Central Govt.
b) Company
c) Shareholders

96. Payment of .................... Dividend must be authorised by the Articles of Association.

a) Interim
b) Final
c) Bonus

97. .................... is a return paid to creditors by the company.

a) Dividend
b) Interest
c) Rent

98. .................... is not linked to profits of the company.

a) Dividend
b) Interest
c) Bonus

99. A financial market is a market in which people trade .................... and derivatives at low transaction costs.

a) Gold
b) Financial securities
c) Commodities

100. When the trade bills are accepted by commercial banks it is known as ....................

a) Treasury bills
b) Commercial bills
c) Commercial papers

101. Money market is a market for lending and borrowing of funds for .................... term.

a) short
b) medium
c) long

102. Central Government is a borrower in the money market through the issue of ....................

a) Commercial Papers
b) Trade Bills
c) Treasury Bills

103. .................... is the market for borrowing and lending long term capital required by business enterprises.

a) Money Market
b) Capital Market
c) Gold Market

104. A stock exchange is where stock brokers and traders can buy and sell ....................

a) gold
b) securities
c) goods

105. The .................... is the first stock exchange to be recognized by the Indian Government under the Securities Contracts (Regulation) Act.

a) BSE
b) NSE
c) OTCEI

106. .................... is a dealer in stock exchange who carries on trading of securities in his own name.

a) Jobber
b) Broker
c) Bull

107. A .................... who expects fall in price of a securities.

a) bull
b) bear
c) jobber

108. The practice of buying and selling within the same trading day before the close of the market on that day is called ....................

a) insider trading
b) day trading
c) auction

Q.3 Match the pairs

Set 1

Group 'A'	Matched Answer (Group 'B')
a) Capital budgeting	Investment decision
b) Fixed capital	Fixed assets
c) Working capital	Sum of current assets
d) Capital structure	Mix up of various sources of funds
e) Corporate finance	Deals with acquisition and use of capital

Set 2

Group 'A'	Matched Answer (Group 'B')
a) Equity Share Capital	Venture Capital
b) Debenture Trustees	Trust Deed
c) Preference Shareholders	Cautious Investor
d) Debenture Certificate	Instrument of Debt
e) Bonus Shares	Capitalisation of Profit

Set 3

Group 'A'	Matched Answer (Group 'B')
a) Death of member	Transmission of shares
b) Voluntary return of shares	Surrender of shares
c) Issue Price mentioned in prospectus	Fixed price issue method
d) ESPS	Offered to existing employees
e) Regret Letter	Non-allotment of shares

Set 4

Group 'A'	Matched Answer (Group 'B')
a) Issued capital	Capital offered to public to subscribe
b) FPO	Any issue after IPO
c) Bonus shares	Free shares issued to existing equity shareholders
d) Issued within two months	Share certificate
e) Forfeiture of shares	Non-payment of calls

Set 5

Group 'A'	Matched Answer (Group 'B')
a) Debenture Trustees	Protects interest of debenture holders
b) Debenture holders	No voting rights
c) Charge on assets	Secured debentures
d) Board of Directors	Power to issue debentures
e) Debenture certificate	Issued within 6 months of allotment of debentures

Set 6

Group 'A'	Matched Answer (Group 'B')
a) Private Company	100% aggregate of paid-up share capital + free reserves
b) Deposit Trust Deed	Signed at least 7 days before issuing advertisement
c) Secured Deposit	Charge on tangible assets
d) Tenure of deposit	Maximum 36 months
e) Return of Deposit	File on or before 30th June every year

Set 7

Group 'A'	Matched Answer (Group 'B')
a) Bad Delivery	Problem faced in physical mode
b) Depository Act	1996
c) ISIN	A 12 digit number/code
d) Depository Participant	Connects Depository and Investor
e) CDSL	Second Depository in India
f) Depository	Custodian of securities in electronic form
g) Beneficial owner	The Investor

Set 8

Group 'A'	Matched Answer (Group 'B')
a) Dividend	Appropriation of profit
b) Interest	Obligatory to pay
c) Interim Dividend	Decided and Declared by the Board of Directors
d) Final Dividend	Decided by Board; declared by Members
e) Fluctuating Rate of Dividend	Equity Shareholders

Set 9

Group 'A'	Matched Answer (Group 'B')
a) Dividend	Must inform stock exchange about Dividend declaration
b) Interest	Creditors
c) IEPF	Unpaid/Unclaimed Dividend
d) Unpaid Dividend Account	Balance of unpaid Dividend Transferred here
e) Listed Company	Must inform stock exchange about Dividend declaration (also matches "Listed Company")

Set 10

Group 'A'	Matched Answer (Group 'B')
a) Financial market	Trading of financial securities
b) Money market	Short term fund
c) Primary market	New issue market
d) Commercial paper	Unsecured promissory note

Set 11

Group 'A'	Matched Answer (Group 'B')
a) SEBI	To protect the interest of investors in securities market
b) Day Trading	Buying and selling of securities within the same trading day
c) Bull	Expects the price of shares rise in future
d) Bear	Expects the price of shares fall in future
e) BSE	One of the oldest stock exchange in India

Q.4 Write a word or a term or a phrase which can substitute each of the following statements

A key determinant of success of any business function: Finance
The decision of finance manager which ensures that firm is well capitalised: Financing Decision
The decision of finance manager to deploy the funds in systematic manner: Investment Decision
Capital needed to acquire fixed assets which are used for longer period of time: Fixed Capital
The sum of current assets: Gross Working Capital
The excess of current assets over current liabilities: Net Working Capital
The process of converting raw material into finished goods: Production Cycle
The boom and recession cycle in the economy: Business Cycle
The ratio of different sources of funds in the total capital: Capital Structure
The internal source of financing: Retained Earnings
The ‘real masters’ of the company: Equity Shareholders
A document of title of ownership of shares: Share Certificate
The holders of these shares are entitled to participate in the surplus profit: Equity Shareholders
A party through whom the company deals with debentureholders: Debenture Trustee
Name the shareholders who participate in the management: Equity Shareholders
The value of share which is written on the share certificate: Face Value
The value of share which is determined by demand and supply forces in the share market: Market Value
The policy of using undistributed profit for the business: Retained Earnings / Ploughing Back of Profit
It is an acknowledgement of loan issued by company to depositor: Fixed Deposit Receipt
A Dollar denominated instrument traded in USA: American Depository Receipt (ADR)
The Depository Receipt traded in country other than the USA: Global Depository Receipt (GDR)
Money raised by company from public for minimum 6 months to maximum 36 months: Public Deposit
Credit extended by the suppliers with an intention to increase their sales: Trade Credit
The credit facility provided to a company having current account with bank: Overdraft
Capital collected by way of issue of Equity and Preference shares: Share Capital
Part of issued capital subscribed by investors: Subscribed Capital
Capital that will be collected only at the time of winding up of a company: Reserve Capital
Highest bid price in Book Building method: Cap Price
Offering of shares by a company to the public for the first time: Initial Public Offer (IPO)
Subsequent issue of shares after an IPO: Further Public Offer (FPO)
Pre-emptive right given to existing Equity shareholders to subscribe to new issue of shares by company: Rights Issue
It is also called as ‘Capitalisation of Profits’: Bonus Shares
Appropriation of shares to an applicant: Allotment of Shares
Committee set up to decide the formula for allotment of shares in case of over subscription: Allotment Committee
Minimum amount to be collected from subscribers within thirty days of issue of prospectus: Minimum Subscription
Document which is a prima facie evidence of ownership of certain shares of a company: Share Certificate
Penal action taken by company on non-payment of calls: Forfeiture of Shares
Person to whom transferor is transferring the shares: Transferee
Transfer of shares due to operation of law: Transmission of Shares
Type of resolution needed to issue convertible debentures: Special Resolution
Account to be created for redemption of debentures: Debenture Redemption Reserve (DRR)
Institution appointed by company to protect the interest of debenture holders: Debenture Trustee
Period within which secured debentures should be redeemed: 10 Years
Type of debentures on which company has to create a charge on its assets: Secured Debentures
The document which contains terms and conditions agreed upon by the company and the Debenture trustees: Debenture Trust Deed
Time period within which the procedure for allotment of debentures is to be completed from the date of receipt of applications: 60 Days
Period within which debenture certificate must be issued by a company: 6 Months
Institution which redresses grievances of debenture holders: NCLT / Debenture Trustee
Authority which has power to issue debentures: Board of Directors
A company which can accept deposits from its members, directors or their relatives not exceeding 100% of aggregate of paid up share capital and free reserves: Private Company
Company which can accept deposits from public up to 35% of its paid-up share capital and free reserves: Eligible Public Company
Minimum tenure of a deposit: 6 Months
Maximum tenure of a deposit: 36 Months
Period within which a company has to create a charge on its tangible assets: 30 Days
Document issued by a company to invite its members to subscribe for its Deposits: Circular
Agreement between company and Deposit Trustee: Deposit Trust Deed
Account that can be used only for repaying deposits: Deposit Repayment Reserve Account
Time within which company has to issue deposit Receipt: 21 Days
Book which contains details of deposits accepted or renewed: Register of Deposits
This mode of holding securities may result in loss and theft of certificates: Physical Mode
The organization which holds the securities in electronic mode: Depository
This system eliminates storing of certificates: Depository System
This system allows faster and easier transfer of securities: Depository System
The oldest Depository of India: NSDL
The country where depository system started for the first time: Germany
The registered owner of securities: Depository
The Agent of the Depository: Depository Participant (DP)
This process converts securities into electronic form from physical form: Dematerialisation
This process converts securities into physical form from electronic form: Rematerialisation
This means securities are without distinctive identity number: Fungibility
This is the unique code for security given in depository system: ISIN
The return on investment paid to the shareholders of the company: Dividend
The meeting where final dividend is declared: Annual General Meeting (AGM)
The company which has to intimate stock exchange about declaration of dividend: Listed Company
The shareholders who get dividend at a fixed rate: Preference Shareholders
The shareholders who get dividend at a fluctuating rate: Equity Shareholders
Request by shareholder in prescribed form for payment of dividend into shareholders bank amount: Dividend Mandate
Number of days within which payment of dividend be completed by company, after its declaration: 30 Days
Dividend declared between two AGMs: Interim Dividend
Dividend decided and declared by the Board: Interim Dividend
The return paid to the creditors by the company: Interest
A market where people trade financial securities and derivatives at low transaction cost: Financial Market
A market which provides long term funds: Capital Market
A market which provides short term funds: Money Market
A money market instrument used by bank when one bank faces temporary shortage of cash: Call Money
A bill which is issued by Reserve Bank of India on behalf of the Government of India: Treasury Bills
A market which exclusively deals with the new issue of securities: Primary Market
A specific place where trading of securities is arranged in an organized method: Stock Exchange
The first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act: Bombay Stock Exchange (BSE)
A dealer in stock exchange who carries on trading of securities in his own name: Jobber
A speculator who expects the price of shares rise in the future: Bull

Q.5 State whether the following statements are True or False

Finance is related to money and money management. True
Business firm gives green signal to the project only when it is profitable. True
Corporate finance brings co-ordination between various business activities. True
Fixed capital is also referred as circulating capital. False
Working capital stays in the business almost permanently. False
The business will require huge funds, if assets are acquired on lease basis. False
The business dealing in luxurious products will require huge amount of working capital. True
A firm with large scale operations, will require more working capital. True
Liberal credit policy creates a problem of bad debts. True
Financial institutions and banks cater to the working capital requirement of business. True
Equity share capital is known as venture capital. True
Equity shareholders enjoy fixed rate of dividend. False
Equity shareholders are described as ‘shock absorber’ when company has financial crisis. True
Debenture holders have right to vote at general meeting of the company. False
Bond holders are owners of the company. False
Depository bank stores the shares on behalf of GDR holder. True
Financial institutions underwrite the issue of securities. True
Cash credit is given against hypothecation of goods or any security. True
Trade credit is major source of long term finance. True (Often considered short term, but textbook context might vary; standard answer is usually False for long term, but if referring to deferred payment over time it acts as finance. *Standard 12th Commerce answer key usually marks Trade Credit as Short Term source, thus False. However, keeping strictly to typical textbook keys: Trade credit is short term. Answer: False*)
Only fully paidup shares can be forfeited. False
The member transferring shares is called as transferor. True
Share certificate is issued for partly or fully paid up shares. True (For partly paid also issued).
Allotment of shares must be done within one month of receipt of application money. False (Within 60 days).
Sweat Equity shares are offered to Directors or employees of a company. True
Bonus Shares are issued at a discounted price to the Equity shareholders. False (Issued free of cost).
Floor price is the highest bid price under Book Building method. False
Calls not paid by shareholder is called as calls in arrears. True
Shares not offered to the public for subscription is called as subscribed capital. False
Authorised capital is mentioned in capital clause of Memorandum of Association. True
Debenture holders have no voting rights. True
Company cannot issue non-convertible debentures. False
Special Resolution is needed to issue convertible debentures. True
Debentures holders are paid interest. True
Debenture Trustees can not approach NCLT to redress grievances of debenture holders. False
All secured debentures should be redeemed within 20 years from date of its issue. False (Usually 10 years).
Company has to create a charge on its assets when it issues secured debentures. True
Debenture trustees are appointed to protect the interest of shareholders. False (Interest of Debenture holders).
Debenture certificate is issued within 6 six months of allotment of debentures. True
After allotment of Debentures names of Debenture holders are entered in the Register of Members. False (Register of Debenture Holders).
Return of deposit must be filed every year on or before 31st March. False (30th June).
Eligible public company can collect deposits from its members. True
Government company can collect deposits from its members. False (From Public).
A private company can collect deposits from public. False
Deposit can be accepted for a maximum of 36 months. True
Eligible public company can collect deposits from public not exceeding 35% of its paid-up share capital and free reserves. False (Aggregate 35% is correct, but from Public specifically is 25%). *Correction based on text: From Public 25%, From Members 10%. Aggregate is 35%. Statement says "from public not exceeding 35%". This is False.*
For secured deposits, company has to create a charge on its tangible assets. True
Deposit Receipt is issued within 21 days of receipt of deposits. True
Company appoints Credit Rating Agency to protect the interest of depositors. False (Appoints Deposit Trustee).
Deposit Trust Deed is an agreement between company and Deposit Trustee. True
Physical mode of holding securities is risky. True
Allotment of securities take longer time when in physical mode. True
Transfer of securities is easier in electronic mode. True
Bad delivery is likely in Depository System. False
Depository system began in the USA for the first time in the world. False (Germany).
India has a multi Depository System. True
Depository system is very similar to banking system. True
DP is a constituent of Depository System. True
DP is an agent of Depository. True
A Bank can work as a DP. True
DRF is required for conversion from physical to electronic. True
ISIN is a unique code given to the specific securities. True
Dividend is paid to registered shareholders of the company. True
Dividend is decided by the Board. True (Recommended by Board, Declared by SH, but Interim is decided by Board).
Dividend is decided by the shareholders. False (Declared by SH, recommended by Board).
Dividend once declared cannot be revoked. True
Dividend cannot be paid out of capital. True
Shareholders decide about the rate and amount of profit to be given as dividend. False (Board recommends).
All categories of shareholders get a fixed rate dividend. False
IEPF is the fund created by company. False (Central Govt).
Interest is a liability for company. True
Interest is paid to shareholders of company. False
A Financial Market is a market in which people trade financial securities and derivatives at high transaction costs. False (Low transaction costs).
Money market is the market for the long term funds. False (Short term).
Capital market is the market for the long term funds. True
Primary market is also known as new issue market. True
Secondary market is commonly known as stock market. True
Commercial paper is a secured promissory note. False (Unsecured).
Treasury bills are issued by commercial banks. False (By RBI for Govt).
A stock exchange is a reliable barometer to measure the economic condition of a country. True
Bombay Stock Exchange is the oldest stock exchange in India. True
A broker is a dealer in stock exchange who carries on trading of securities in his own name. False (Jobber).
Bear is a speculator who expects the prices of shares to rise in the future. False (Expects fall).

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HSC 12th Secretarial Practice MCQ Question Bank with Solutions (Complete)