Sample Questions

NISM-Series-9: Merchant Banking Mock Tests — 5 random MCQs with answers & explanations

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These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 What is an "Option Writer"?

  • A. A government regulator
  • B. A person who writes books about stocks
  • C. The person who sells an option and takes the risk for a fee (premium) Correct Answer
  • D. The person who buys an option
Explanation:
Writers (sellers) of options receive a fee but must fulfill the contract if the buyer chooses to use it.

Marks: 1

Q2 Where must an advertisement for a rights issue be published?

  • A. 1 Hindi national daily newspaper
  • B. 1 regional language daily newspaper where the issuer's office is located
  • C. 1 English national daily newspaper
  • D. All of the above Correct Answer
Explanation:
A rights issue advertisement must appear in at least one English national daily, one Hindi national daily, and one regional daily newspaper at least three days before the issue opens.

Marks: 1

Q3 What is a "Green Shoe Option"?

  • A. A mechanism to stabilize the share price after listing by allotting extra shares Correct Answer
  • B. A refund for investors if the price falls
  • C. A discount for eco-friendly companies
  • D. A choice to buy green-colored shares
Explanation:
It allows the company to issue up to 15% more shares to help keep the stock price steady.

Marks: 1

Q4 Who are the major investors in government securities market in India? (NISM workbook)

  • A. Banks and Insurance Companies
  • B. Provident Funds
  • C. Pension Funds
  • D. All of the Above Correct Answer
Explanation:
Major investors in the government securities market include banks, insurance companies, provident funds, state governments, and Foreign Portfolio Investors (FPIs).

Marks: 1

Q5 What amount must a company deposit with the Stock Exchange as "Security" before an IPO?

  • A. 0.1% of the issue
  • B. Rs. 10 crore flat
  • C. 1% of the public offer size Correct Answer
  • D. Nothing
Explanation:
This deposit ensures the company follows all the listing rules; otherwise, the exchange can keep it.

Marks: 1

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