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Prelims-IAS –ECONOMICS MCQ Ans-23

Prelims-IAS –ECONOMICS MCQ-23

1…

  • ANS-D
  • GDR is denominated in some freely convertible currency generally in Dollar but euro etc. is also possible.
  • Both way conversion is possible.

2…

  • ANS-C
  • A rise in ‘SENSEX’ means an overall rise in prices of shares of group of companies registered with Bombay Stock Exchange.

3…

  • ANS-D
  • Market capitalization is calculated by multiplying a company’s shares outstanding by the current market price of one share.
  • The investment community uses this figure to determine a company’s size, as opposed to sales or total asset figures, frequently referred to as market cap or M-Cap.
  • In share market bulls and bears are in constant struggle, lets learn about these terms,

The Bulls:

  • A bull market is when everything in the economy is great, people are finding jobs, gross domestic product (GDP) is growing, and stocks are rising.
  • Picking stocks during a bull market is easier because everything is going up.
  • Bull markets cannot last forever though, and sometimes they can lead to dangerous situations if stocks become overvalued.
  • If a person is optimistic and believes that stocks will go up, he or she is called a “bull” and is said to have a “bullish outlook”.

The Bears:

  • A bear market is when the economy is bad, recession is looming and stock prices are falling.
  • Bear markets make it tough for investors to pick profitable stocks.
  • One solution to this is to make money when stocks are falling using a technique called short selling.
  • Another strategy is to wait on the sidelines until you feel that the bear market is nearing its end, only starting to buy in anticipation of a bull market.
  • If a person is pessimistic, believing that stocks are going to drop, he or she is called a “bear” and said to have a “bearish outlook”.

4…

  • ANS-C
  • Mutual funds are regulated by SEBI.

5…

  • ANS-D
  • In case of Inflation Indexed Bond, interest rate is calculated as per the CPI.

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