NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market
A company lists its existing shares on an exchange without raising any new money, and a merchant banker handles an offer by promoters to sell part of their holding to the public. This offer is best described as:
This is an offer for sale. Existing shareholders, here the promoters, sell their already issued shares to the public, and the sale proceeds go to those sellers rather than to the company. Rights, bonus and preferential issues all involve the company issuing new shares.
- AA rights issue
- BAn offer for saleCorrect
- CA bonus issue
- DA preferential allotment
Explanation
In an offer for sale, existing shareholders such as promoters sell their shares to the public, and the proceeds go to the sellers, not the company. A rights issue and a preferential allotment involve fresh shares issued by the company, and a bonus issue involves no payment at all.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to the Securities Market shows your real accuracy, how long you take and where you lose marks.
More Introduction to the Securities Market questions
- Which of the following is a key function of a stock exchange in the secondary market in India?
- A company lists its shares for the first time on an exchange after an IPO in which it sold new shares to investors. Subsequently, an investo…
- An investor sells 100 shares on a Monday under the T+1 rolling settlement on the NSE cash segment, with no holidays in the week. The investo…
- Which of the following is a role of SEBI as the regulator of the securities market in India?
- Which statement about the money market is correct?
- Which entity is responsible for regulating the securities market and protecting investor interests in India, while having been established u…