When a company offers its shares to the public for the first time, the issue is called:

The correct answer is A, 1992. SEBI first appeared in April 1988 as an administrative arrangement with no legal powers, and it became a statutory regulator when the Securities and Exchange Board of India Act was passed in 1992; the words quoted in the question are taken from the preamble of that Act, which speaks of protecting investors, promoting the development of the securities market and regulating it. Because the statutory body dates from the Act, 1992 is the year every examination expects. Option B, 1999, is the year the Central Depository Services Limited was set up, the second depository in India. Option C, 1987, and option D, 1985, come before even the administrative body existed. Keep the sequence in mind: the Securities Contracts (Regulation) Act of 1956, SEBI as an administrative body in 1988, the SEBI Act in 1992 and the Depositories Act in 1996.

The correct answer is B, the Bombay Stock Exchange. It was founded in 1875 as the Native Share and Stock Brokers’ Association, grew out of brokers meeting under a banyan tree in Bombay, and is the oldest stock exchange in Asia; it now stands on Dalal Street and its benchmark index is the Sensex. Option A, the National Stock Exchange, was incorporated only in 1992 and began trading in 1994, though it was the first in India to offer fully screen-based electronic trading. Option C, the Calcutta Stock Exchange, was established in 1908 and is the second oldest in the country, which makes it the most tempting distractor. Option D, the Madras Stock Exchange, came later still and is one of the regional exchanges that lost business once electronic trading made a nationwide market possible.

The correct answer is B, 30. The Sensex, or Sensitive Index, of the Bombay Stock Exchange is built from thirty large, well established and actively traded companies drawn from the main sectors of the economy, and it is weighted by free-float market capitalisation. Option A, 20, matches no Indian benchmark index. Option C, 50, is the number of companies in the Nifty 50 of the National Stock Exchange, and swapping the two is the standard error in this question. Option D, 100, is the size of broader indices such as the Nifty 100 and the older BSE 100. Two more facts are asked with this one: the base year of the Sensex is 1978-79 with a base value of 100, while the Nifty 50 has 1995 as its base year with a base value of 1000.

The correct answer is B, 1978-79. The Sensex was compiled backwards to 1978-79 and that year was given a base value of 100, so the index number states how many times the market value of its thirty constituents has grown since then. Option A, 1950-51, is the base year long used for national income series, not for a share index, and it is a favourite distractor because students remember it from the national income chapter. Option C, 1993-94, and option D, 2011-12, are base years used at different times for the Index of Industrial Production and the wholesale and consumer price series, which is exactly why they appear here. Remember the pair: Sensex 1978-79 with base 100, Nifty 50 with 3 November 1995 as its base date and base value 1000.

The correct answer is B, the Reserve Bank of India. The money market deals in short-term funds of up to one year, through treasury bills, commercial paper, certificates of deposit and call money, and the Reserve Bank regulates it as part of its control over credit and liquidity. Option A, SEBI, regulates the capital market, where long-term funds are raised through shares, debentures and bonds, and the question sets the two against each other on purpose. Option C, the Ministry of Corporate Affairs, administers company law, including the issue of shares by a company, but it is not a market regulator. Option D, the Insurance Regulatory and Development Authority of India, regulates insurers. Where a product straddles both markets, such as a corporate bond, the two regulators work under an agreed division of responsibility.