Q140. Which list comprises examples of derivative or derivative-linked financial contracts?
[WBCS Mains 2019]
A. Warrants only
B. Swaptions only
C. Baskets only
D. Warrants, swaptions and baskets
Answer: (D) Warrants, swaptions and baskets
Explanation: Derivatives derive value from an underlying security, index, interest rate or other reference. Swaptions are options on swaps; warrants confer an option-like right; basket instruments may reference a specified group of assets.
Q139. What are the customary tenors of India’s main Treasury-bill series?
[WBCS Mains 2019]
A. 91, 182 and 364 days
B. 92, 183 and 365 days
C. 93, 184 and 366 days
D. 31, 62 and 124 days
Answer: (A) 91, 182 and 364 days
Explanation: The principal regular Treasury-bill maturities are 91, 182 and 364 days. These discount securities finance short-term central-government requirements and are widely held and traded by institutions managing cash and liquidity.
Q138. What term describes a scheme using money from new investors to pay returns promised to existing investors?
[WBCS Mains 2019]
A. Underwriting
B. Ponzi scheme
C. Regulated index mutual fund
D. Para-banking
Answer: (B) Ponzi scheme
Explanation: A Ponzi arrangement meets promised payouts using later investors’ contributions rather than sufficient genuine investment profit. Its apparent success depends on continuing inflows and becomes unsustainable when withdrawals exceed fresh funds.
Q137. Which year saw the Securities and Exchange Board of India acquire statutory status?
[WBCS Mains 2019]
A. 1982
B. 1988
C. 1992
D. 2000
Answer: (C) 1992
Explanation: SEBI began as a non-statutory body in 1988 and gained legislative authority under the SEBI Act in 1992. Statutory status provided stronger enforcement powers over market conduct, investor protection and intermediaries.
Q136. What offence occurs when securities are traded using confidential price-sensitive information not publicly available?
[WBCS Mains 2019]
A. Ordinary bull trading
B. Bear-market hedging
C. Insider trading
D. Initial public offering
Answer: (C) Insider trading
Explanation: Insider trading involves dealing in securities while possessing material unpublished price-sensitive information. Securities regulations prohibit such conduct to protect market integrity and equal access to information for investors.
Q135. What are the offshore instruments through which registered foreign portfolio intermediaries historically offered indirect access to Indian shares?
[WBCS Mains 2019]
A. Certificates of deposit
B. Participatory notes
C. Sovereign currency reserves
D. Ordinary promissory notes
Answer: (B) Participatory notes
Explanation: Participatory notes are offshore derivative instruments linked to Indian securities, issued by eligible registered foreign investors to overseas clients. They allow economic exposure without each final investor holding the underlying domestic securities directly.
Q134. Which exchange was a major founding promoter of National Securities Depository Limited?
[WBCS Mains 2019]
A. NABARD
B. Securities clearing corporation only
C. National Stock Exchange
D. Regional Rural Banks
Answer: (C) National Stock Exchange
Explanation: NSDL helped introduce depository and dematerialised securities infrastructure in India. National Stock Exchange was a principal promoter, together with major institutional participants, supporting electronic holding and settlement of securities.
Q133. Which mutual-fund structure normally has a fixed corpus and specified maturity?
[WBCS Mains 2019]
A. Open-ended fund
B. Close-ended fund
C. All overnight funds
D. Every index fund
Answer: (B) Close-ended fund
Explanation: Close-ended funds issue units for a defined subscription period and generally have a stipulated maturity. Open-ended schemes normally permit continuing purchase or redemption, subject to their scheme documents and applicable market rules.
Q132. In what year did the SARFAESI law become an Act?
[WBCS Mains 2019]
A. 1992
B. 2005
C. 2002
D. 2000
Answer: (C) 2002
Explanation: The SARFAESI Act was enacted in 2002 to facilitate enforcement of security interests and recovery of secured debts by eligible lenders. It also sets out mechanisms involving asset reconstruction and securitisation, subject to legal safeguards.
Q131. Which banking exposures are covered by the broad expression stressed assets?
[WBCS Mains 2019]
A. Only performing loans
B. Only collateral held in trust
C. Only cash reserves
D. Non-performing loans, restructured exposures and write-offs
Answer: (D) Non-performing loans, restructured exposures and write-offs
Explanation: Stressed assets are wider than headline non-performing loans because financial distress can also be represented by restructuring and write-offs. The categories differ in accounting treatment, but together help analyse underlying asset-quality problems.
