IPO Basics – Level 2

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Question 1
Answer 1
Question 2
Answer 2
Question 3
Answer 3
Question 4
Answer 4
Question 5
Answer 5
Question 6
Answer 6
Question 7
Answer 7
Question 8
Answer 8
Question 9
Answer 9
Question 10
Answer 10
Question 11
Answer 11
Question 12
Answer 12
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Question 1

What is it called when a company decides to buy back all the shares it issued to the general public?*

Buyback

Bankruptcy

Delinquency

Delisting

Answer 1

Correct

Great job.

Every once in a while, companies decide to go “private” by buying back the shares they issued to the public. It is called voluntary delisting (in contrast to forced delisting which the stock exchange does if the company happens to be a fraud). The reasons for going private can differ from company to company.

Wrong

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The answer is “Delisting“

Every once in a while, companies decide to go “private” by buying back the shares they issued to the public. It is called voluntary delisting (in contrast to forced delisting which the stock exchange does if the company happens to be a fraud). The reasons for going private can differ from company to company.

Question 2

It is mandatory for a company to list itself on both the major stock exchanges: NSE & BSE.*

True

False

Answer 2

Correct

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No, the company can decide which exchange to list on. Most of the big companies list on both the exchanges whereas the smaller companies typically just list on BSE

Wrong

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The correct answer is “false“

No, the company can decide which exchange to list on. Most of the big companies list on both the exchanges whereas the smaller companies typically just list on BSE

Question 3

An Indian company can only list on Indian stock exchanges.*

True

False

Answer 3

Correct

Great job.

An Indian company can list on other exchanges if it wants (Reliance JIO, for example)

Wrong

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The right answer is “False“

An Indian company can list on other exchanges if it wants (Reliance JIO, for example)

Question 4

Stock markets are also called:*

Primary markets

Secondary markets

Answer 4

Correct

Great job.

The answer is “Secondary Markets”

Because when we buy shares from the stock market, we are buying them from other investors, not from the company directly

Wrong

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The answer is “Secondary Markets”

Because when we buy shares from the stock market, we are buying them from other investors, not from the company directly.

Question 5

What time does a company list on Indian stock exchanges?*

9:00 AM

10:00 AM

Any time

Answer 5

Correct

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Listing happens at 10 AM (pre-market rates start from 9:45)

Wrong

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The correct answer is “10 AM”

Listing happens at 10 AM (pre-market rates start from 9:45)

Question 6

Once a company’s shares are listed on the stock exchange, the buying and selling of those shares happen between:*

the company and the IPO applicants

other investors- the company has no direct involvement

Answer 6

Correct

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After the listing, all the buying and selling of that is happening every day is between other investors. The company is not involved in those transactions

Wrong

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After the listing, all the buying and selling of that is happening every day is between other investors. The company is not involved in those transactions

Question 7

What should be the minimum IPO size for it be of any interest to active traders?*

100 crores

500 crores

1000 crores

Answer 7

Correct

Great job.

The answer is “1000 Crores”

Active traders need liquidity for trading an IPO.

Wrong

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The Correct answer is “1000 Crores”

Active traders need liquidity for trading an IPO.

Question 8

Before the listing of an IPO, where can be get a sense of the price at which the IPO would be finally listed?*

Grey market

White market

Black market

Answer 8

Correct

Great job.

The answer is “Grey market“

Wrong

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The correct answer is “Grey market“

Question 9

An IPO which was priced at 500 rupees gets listed on the exchange at 600 rupees. It means that the listing happened at a:*

discount

premium

Answer 9

Correct

Great job.

The answer is “premium“

Wrong

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The correct answer is “premium“

Question 10

For active traders, the trading opportunities with an IPO come:*

before listing

after listing

Answer 10

Correct

Great job.

The answer is “after listing“

Wrong

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The correct answer is “after listing“

Question 11

If the listing happens at a discount, who is going to lose money:*

promoter of the company

IPO applicants who sell the shares

IPO applicants who hold the shares for long run

Answer 11

Correct

Great job.

The answer is “IPO applicants who sell the shares“

Wrong

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The correct answer is “IPO applicants who sell the shares“

Question 12

Up until 2020, which IPO has been the largest in terms of size (amount raised) in India’s history:*

Reliance Power

General Insurance Corporate

Coal India

ONGC

Answer 12

Correct

Great job.

The answer is “Coal India“

Wrong

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The correct answer is “Coal India“

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IPO Basics – Level 2

Question 1

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Question 3

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Question 4

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Question 5

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Question 9

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Question 10

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Question 11

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