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Money and Banking (part – II)

📆 September 24, 2024

Total Questions: 268

141. The Head Office of National Stock Exchange of India is located at : [M.P.P.C.S. (Pre) 1996]

Correct Answer: (a) Mumbai
Solution:National Stock Exchange of India was established in November, 1992 on the recommendation of Manohar J. Pherwani Committee . The head office of NSE of India is located at Mumbai.
  • It is the world's eleventh-largest stock exchange by market capitalization and India's largest by daily turnover and number of trades for both equities and derivatives trading.
  • As of August 2021, the NSE has a market capitalisation of more than US$3.4 trillion and around 2000 listings.
  • Despite the existence of a number of other exchanges, the NSE and the Bombay Stock Exchange are India's two most important stock exchanges, accounting for the great bulk of share transactions.
  • The S&P CNX Nifty, often known as the NSE NIFTY (National Stock Exchange City), is a market capitalization-weighted index of fifty large stocks.
  • Although NSE is owned by a group of India's largest financial institutions, banks, insurance firms, and other financial intermediaries, its ownership and management are separate entities.
  • At least two foreign investors, NYSE Euronext and Goldman Sachs have purchased NSE stock. Stock NSE VSAT terminals, totalling 2799, cover more than 1500 cities across India as of 2006.
  • In terms of the number of trading inequities, the NSE is the world's third-largest stock exchange. With a growth rate of 16.6 per cent, it is the world's second-fastest-growing stock exchange.

142. The promoter of National Stock Exchange of India is : [U.P.P.C.S. (Pre) 2013]

Correct Answer: (d) All of the above
Solution:National Stock Exchange of India was set up in November, 1992 on the recommendation of Manohar J. Pherwani Committee. The Promoters of NSE of India were IDBI, SBI IFCI, LIC, GIC, IDFC etc. At present (as on 31,03.2024), promote and promoter group shareholding in NSE of India is zero, while public shareholding and non promoter-non public shareholding are at 56.20% and 43.89% respectively.

143. Consider the following statements : [U.P.P.C.S. (Pre) 2005]

1. Sensex is based on 50 of the most important stocks available on the Bombay Stock Exchange (BSE).

2. For calculating the Sensex, all the stocks are assigned proportional weightage.

3. New York Stock Exchange is the oldest stock exchange in the world.

Which of the statement/s given above is/are correct ?

Correct Answer: (a) 2 only
Solution:Sensex is calculated using a 'Market Capitalization-Weighted' methodology. As per this methodology, the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. For calculating the Sensex, all the stocks are assigned proportional weightage. The Amsterdam Stock Exchange (ASE), which lays claim of being the oldest continuing stock market, has embarked upon a series of initiatives to win back trading lost to London. What began in the 17th century as dealings in shares of the United East India Company in coffee house along Bam Square and grew into the world's third largest market by 1940's the ASE is now finding itself struggling to hold onto its fifteenth ranking worldwide.

The New York Stock Exchange traces its origin to 1792, when 24 New York city stockbrokers and merchants signed the Buttonwood Agreement. This agreement set in motion the NYSE's unwavering commitment to investors and issuers.

144. A rise in 'SENSEX' means : [U.P.S.C (Pre) 2000]

Correct Answer: (c) an overall rise in prices of shares of group of companies registered with Bombay Stock Exchange
Solution:
  • Sensex is the benchmark index of the BSE.
  • It was launched on January 1, 1986, as a basket of 30 stocks representing the country's largest, financially-sound companies listed on the BSE.
  • The term 'Sensex' is a blend of words 'Sensitive' and 'Index' and was coined by stock market expert Deepak Mohini.
  • The Sensex reflects the movements in the Indian stock market. It is considered the benchmark index of the Indian stock market.
    How is the Sensex calculated?
  • It was calculated based on the market capitalisation, or "Full Market Capitalisation", when it was launched but shifted to a "Free-float Market Capitalisation" methodology from September 1, 2003.
  • Free-float is the proportion of total shares issued by the company that is readily available for trading to the general public. It does not take into account promoters' holdings, government holdings, and other shares that will not be available in the market for trading in the ordinary course of events.
    About Bombay Stock Exchange (BSE)
  • It is the oldest and largest stock exchange in India.
  • It was established in 1875 as the Native Share and Stock Brokers' Association.
    In 1957, the Indian Government gave recognition to the BSE under the Securities Contracts Regulations Act.
  • It is located on Dalal Street, Mumbai, and lists over 6000 companies.
    BSE boasts a variety of trading options in equity, fiat, debt instruments, derivatives, and mutual funds.
  • In addition, it offers multiple trading services like clearing, settlement, risk management, and investor awareness.

145. 'SENSEX' is the popular Index of Bombay Stock Exchange (BSE) . It is measured on the basis of how many blue chip companies listed in BSE ? [U.P.P.C.S. (Pre) 2021]

Correct Answer: (b) 30
Solution:
  • Sensex is the benchmark index of the BSE.
  • It was launched on January 1, 1986, as a basket of 30 stocks representing the country's largest, financially-sound companies listed on the BSE.
  • The term 'Sensex' is a blend of words 'Sensitive' and 'Index' and was coined by stock market expert Deepak Mohini.
  • The Sensex reflects the movements in the Indian stock market. It is considered the benchmark index of the Indian stock market.
    How is the Sensex calculated?
  • It was calculated based on the market capitalisation, or "Full Market Capitalisation", when it was launched but shifted to a "Free-float Market Capitalisation" methodology from September 1, 2003.
  • Free-float is the proportion of total shares issued by the company that is readily available for trading to the general public. It does not take into account promoters' holdings, government holdings, and other shares that will not be available in the market for trading in the ordinary course of events.
    About Bombay Stock Exchange (BSE)
  • It is the oldest and largest stock exchange in India.
  • It was established in 1875 as the Native Share and Stock Brokers' Association.
    In 1957, the Indian Government gave recognition to the BSE under the Securities Contracts Regulations Act.
  • It is located on Dalal Street, Mumbai, and lists over 6000 companies.
    BSE boasts a variety of trading options in equity, fiat, debt instruments, derivatives, and mutual funds.
  • In addition, it offers multiple trading services like clearing, settlement, risk management, and investor awareness.

146. 'BSE' Sensex' is an index to measure ups and down in the share market. The number of companies covered under the index are : [U.P.P.C.S. (Mains) 2005]

Correct Answer: (a) 30
Solution:The BSE SENSEX is a free-float market- weighted stock market index of 30 well- established and financially sound companies listed on the Bombay Stock Exchange. A rise in 'SENSEX' means an overall rise in prices of shares of this group of 30 companies.
  • Sensex is the benchmark index of the BSE.
  • It was launched on January 1, 1986, as a basket of 30 stocks representing the country's largest, financially-sound companies listed on the BSE.
  • The term 'Sensex' is a blend of words 'Sensitive' and 'Index' and was coined by stock market expert Deepak Mohini.
  • The Sensex reflects the movements in the Indian stock market. It is considered the benchmark index of the Indian stock market.
    How is the Sensex calculated?
  • It was calculated based on the market capitalisation, or "Full Market Capitalisation", when it was launched but shifted to a "Free-float Market Capitalisation" methodology from September 1, 2003.
  • Free-float is the proportion of total shares issued by the company that is readily available for trading to the general public. It does not take into account promoters' holdings, government holdings, and other shares that will not be available in the market for trading in the ordinary course of events.
    About Bombay Stock Exchange (BSE)
  • It is the oldest and largest stock exchange in India.
  • It was established in 1875 as the Native Share and Stock Brokers' Association.
    In 1957, the Indian Government gave recognition to the BSE under the Securities Contracts Regulations Act.
  • It is located on Dalal Street, Mumbai, and lists over 6000 companies.
    BSE boasts a variety of trading options in equity, fiat, debt instruments, derivatives, and mutual funds.
  • In addition, it offers multiple trading services like clearing, settlement, risk management, and investor awareness.

147. As on March 2014, no. of companies BSE Green Index includes was : [U.P.P.C.S. (Mains) 2014]

Correct Answer: (d) 25
Solution:As on March 2014, the total number of companies BSE Greenex Index included was 25. At present, the number of companies is the same, that is 25. The BSE Greenex is designed to measure the performance of the top 25 'green' companies in terms of greenhouse gas (GHG) emissions, market cap and liquidity.

It aims to cater to socially aware investors interested in green investments. It was launched in collaboration with IIM Ahmedabad. It considers factors like energy efficiency, waste reduction, and renewable energy adoption. It provides benefits to investors, industries, and the government by encouraging energy-efficient practices.

148. How many companies are included in BSE - GREENEX ? [U.P.P.C.S. (Pre) (Re-exam)]

Correct Answer: (a) 25
Solution:As on March 2014, the total number of companies BSE Greenex Index included was 25. At present, the number of companies is the same, that is 25. The BSE Greenx is designed to measure the performance of the top 25 'green' companies in terms of greenhouse gas (GHG) emissions, market cap and liquidity.

It aims to cater to socially aware investors interested in green investments. It was launched in collaboration with IIM Ahmedabad. It considers factors like energy efficiency, waste reduction, and renewable energy adoption. It provides benefits to investors, industries, and the government by encouraging energy-efficient practices.

149. Among the following major stock exchanged of India, the exchange which recorded highest turnover during the years 2000-01 is : [U.P.S.C (Pre) 2002]

Correct Answer: (d) National Stock Exchange
Solution:The stock exchanged which recorded highest turnover during the year 2000-01 was National Stock Exchange (NSE). It had turnover of 8.39 lakh crore in 2000-01. At present too, NSE has the highest turnover in India's share markets.
  • The National Stock Exchange is an Indian stock exchange headquartered in Mumbai, Maharashtra. It is the world's eleventh-largest stock exchange by market capitalization and India's largest by daily turnover and number of trades for both equities and derivatives trading.
  • As of August 2021, the NSE has a market capitalisation of more than US$3.4 trillion and around 2000 listings.
  • Despite the existence of a number of other exchanges, the NSE and the Bombay Stock Exchange are India's two most important stock exchanges, accounting for the great bulk of share transactions.
  • The S&P CNX Nifty, often known as the NSE NIFTY (National Stock Exchange City), is a market capitalization-weighted index of fifty large stocks.
  • Although NSE is owned by a group of India's largest financial institutions, banks, insurance firms, and other financial intermediaries, its ownership and management are separate entities.
  • At least two foreign investors, NYSE Euronext and Goldman Sachs have purchased NSE stock. Stock NSE VSAT terminals, totalling 2799, cover more than 1500 cities across India as of 2006.
  • In terms of the number of trading inequities, the NSE is the world's third-largest stock exchange. With a growth rate of 16.6 per cent, it is the world's second-fastest-growing stock exchange.

150. The volatility in the Indian share market is due to : [R.A.S./R.T.S (Pre) 2013]

(A) Inflow and outflow of foreign funds
(B) Fluctuations in foreign capital markets
(C) Changes in the Monetary Policy

Which of the above mentioned causes are correct ?

Correct Answer: (c) A, B and C
Solution:The main reasons for the volatility in Indian share market are as follows :

1. Inflow and outflow of foreign funds.

2. Fluctuations in foreign capital markets.

3. Changes in monetary policy.

4. Availability of liquidity in the market

5. Political situations

6. Economic outlook

7. Corporate performance etc.

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