20 extra multiple-choice questions for Stock Exchange (12th Standard Commerce, Samacheer Kalvi), beyond the ones printed in the textbook — each with the correct option highlighted and a clear, worked explanation. Free to read in English and Tamil.
Q1
In which year did the Dutch East India Company establish the Amsterdam Stock Exchange, the oldest stock exchange in the world?
- A. 1602Correct
- B. 1874
- C. 1956
- D. 1957
Explanation. The Class 12 lesson says the Amsterdam Stock Exchange was established in 1602 by the Dutch East India Company (VOC) and was later renamed the Amsterdam Bourse.
Q2
The Native Share and Stock Brokers Association, the first stock exchange in India, was recognised by the Government of India on 31 August 1957 under which Act?
- A. Securities Contracts (Regulation) Act, 1956Correct
- B. Indian Companies Act, 1956
- C. Depositories Act, 1996
- D. SEBI Act, 1992
Explanation. It was recognised on 31 August 1957 under the Securities Contracts (Regulation) Act, 1956, and later became the Bombay Stock Exchange.
Q3
Who defined stock exchanges as "privately organized markets which are used to facilitate trading in securities"?
- A. The Securities Contracts (Regulation) Act, 1956
- B. Husband and DockeraryCorrect
- C. The Pherwani Committee
- D. The Reserve Bank of India
Explanation. The lesson quotes Husband and Dockerary for this definition. The Securities Contracts (Regulation) Act, 1956 defines a stock exchange as an association, organisation or body of individuals.
Q4
The prices at which securities are bought and sold on a stock exchange, recorded and made public, are called
- A. Market quotationsCorrect
- B. Brokerage
- C. Premium
- D. Margin
Explanation. Under the function 'correct evaluation of securities', the published buying and selling prices are called market quotations; investors and lenders use them to judge the worth of securities.
Q5
A stock exchange is called a secondary market because it deals in
- A. New issues of shares only
- B. Existing or second-hand securitiesCorrect
- C. Commodities such as gold and wheat
- D. Short-term money market bills
Explanation. The feature 'deals in second hand securities' says it trades shares, debentures and bonds already issued by companies, that is existing securities, hence the name secondary market.
Q6
Securities that do not appear in the official list of a stock exchange and therefore cannot be traded on it are called
- A. Unlisted securitiesCorrect
- B. Seasoned securities
- C. Government securities
- D. Collateral securities
Explanation. Stock exchanges keep an official list of securities that may be traded on their floor; securities not in this list are unlisted securities and cannot be traded there.
Q7
Assertion (A): Stock exchanges are called financial barometers.
Reason (R): They act as development indicators of the national economy of the country.
- A. Both A and R are true and R is the correct explanation of ACorrect
- B. Both A and R are true but R is not the correct explanation of A
- C. A is true but R is false
- D. A is false but R is true
Explanation. Feature 10 of the lesson says stock exchanges are financial barometers and development indicators of the national economy, so R explains why they are called barometers.
Q8
Match the item with the heading under which the lesson lists it:
(a) Enhances goodwill - (1) Benefit to investors
(b) Liquidity - (2) Benefit to the community
(c) Fund raiser for Government - (3) Benefit to the company
(d) Failure to control unhealthy speculation - (4) Limitation of stock exchange
- A. (a)-3, (b)-1, (c)-2, (d)-4Correct
- B. (a)-1, (b)-3, (c)-2, (d)-4
- C. (a)-2, (b)-1, (c)-3, (d)-4
- D. (a)-3, (b)-2, (c)-1, (d)-4
Explanation. Goodwill is a benefit to the company, liquidity a benefit to investors, raising funds for Government projects a benefit to the community, and failure to control unhealthy speculation a limitation.
Q9
Which one of the following is NOT a limitation of stock exchange given in the lesson?
- A. Lack of uniformity and control of stock exchanges
- B. Absence of restriction on membership
- C. Failure to control unhealthy speculation
- D. Adding collateral value of securityCorrect
Explanation. Adding collateral value of security is a benefit to investors, since listed securities are good collateral for bank loans. The other three are listed limitations.
Q10
The Interconnected Stock Exchange of India (ISE), based at Mumbai, has been promoted by how many regional stock exchanges?
- A. 15Correct
- B. 21
- C. 23
- D. 24
Explanation. Section 7.05 says the ISE has been promoted by 15 regional stock exchanges, is based at Mumbai, and gives their member-brokers access to a national market segment.
Q11
Who acts as an agent of a member of a stock exchange, obtains business for that member and gets a commission for the service?
- A. RemiserCorrect
- B. Jobber
- C. Authorised clerk
- D. Stag
Explanation. The lesson describes the remiser as an agent of a member of a stock exchange who brings business to his principal, the member, and earns a commission.
Q12
In India, jobbers in the stock exchange are known as
- A. TaravaniwalasCorrect
- B. Tejiwalas
- C. Mandiwalas
- D. Dalals
Explanation. Jobbers are independent security merchants who trade on their own account and cannot take commission; in India they are called Taravaniwalas. Tejiwala is a bull and Mandiwala a bear.
Q13
A bear speculator is also known as
- A. Tejiwala
- B. MandiwalaCorrect
- C. Taravaniwala
- D. Premium hunter
Explanation. A bear or Mandiwala expects prices to fall and sells securities now, hoping to buy them back later at lower prices. Tejiwala is the name for a bull.
Q14
Which speculator applies for shares in new companies, sells them at a premium before allotment money is called, and is known as a premium hunter?
- A. Bull
- B. Bear
- C. StagCorrect
- D. Lame duck
Explanation. The stag is a cautious speculator who applies for new issues likely to carry a premium and sells before paying allotment money, so he is called a premium hunter.
Q15
A lame duck in the stock exchange is
- A. A bull who cannot pay for the shares he bought
- B. A bear who finds it difficult to fulfil his commitment to deliver securitiesCorrect
- C. A stag who fails to get an allotment
- D. A broker who loses his membership
Explanation. A bear contracts to sell securities he does not hold; when holders refuse to part with them on the appointed day, he struggles like a lame duck.
Q16
Consider the following statements comparing a stock exchange with a commodity exchange:
1. The object of a stock exchange is facilitating capital formation and making best use of capital resources.
2. Participants in a commodity exchange are only investors.
3. Cornering is easy in a stock exchange but difficult in a commodity exchange.
Which of the statements given above is/are correct?
- A. 1 only
- B. 1 and 3 onlyCorrect
- C. 2 and 3 only
- D. 1, 2 and 3
Explanation. The table in 7.07 gives statements 1 and 3. Commodity exchange participants are producers, dealers, traders and speculators; investors and speculators belong to the stock exchange.
Q17
The National Stock Market System (NSMS) was advocated by the High Powered Group on the Establishment of New Stock Exchanges, headed by
- A. M.J. PherwaniCorrect
- B. Husband
- C. Dockerary
- D. The Governor of RBI
Explanation. Section 7.08 says the NSMS was advocated by the High Powered Group headed by Shri M.J. Pherwani, popularly known as the Pherwani Committee.
Q18
The National Stock Exchange (NSE), a country-wide, screen-based, online and order-driven trading system, was incorporated in
- A. November 1992Correct
- B. May 1994
- C. November 1996
- D. December 1997
Explanation. NSE was incorporated in November 1992. It links members through a satellite network and has two segments, the debt segment and the capital segment.
Q19
Arrange the following in chronological order:
1. RBI sets up the Securities Trading Corporation of India (STCI)
2. Stock Holding Corporation of India Ltd (SHCIL) comes into being
3. NSDL is inaugurated as the first depository in India
4. BSE extends trading in dematerialised securities
- A. 2, 1, 3, 4Correct
- B. 1, 2, 3, 4
- C. 2, 3, 1, 4
- D. 1, 3, 2, 4
Explanation. SHCIL came into being in 1986, STCI was set up in May 1994, NSDL was inaugurated on 8 November 1996 and BSE extended demat trading from 29 December 1997.
Q20
Consider the following statements about stock market indices:
1. Nifty comes from the words 'National' and 'Fifty' and covers the 50 most actively traded stocks.
2. Sensex is the index of the National Stock Exchange.
3. Sensex has a list of 30 stocks.
Which of the statements given above is/are correct?
- A. 1 only
- B. 1 and 3 onlyCorrect
- C. 2 and 3 only
- D. 1, 2 and 3
Explanation. Nifty is the NSE index of 50 stocks (National + Fifty). Sensex, the sensitive index, belongs to the Bombay Stock Exchange and has 30 stocks, so statement 2 is wrong.
