Abhipedia SEBI Test Series SEBI: Finance Mock Test...Abhipedia SEBI Test Series Abhipedia the...

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Abhipedia SEBI Test Series Abhipedia the 360-degree learning Portal For any query/ assistance Contact: 7250952757, www.abhipedia.com SEBI: Finance Mock Test 1. With reference to the ‘bottleneck inflation’ which of the following statements is correct? (a) Bottleneck inflation takes place when the supply falls drastically and the demand remains at the same level. (b) Bottleneck inflation takes place when the supply falls drastically along with the demand. (c) Bottleneck inflation takes place when the supply increases rapidly and the demand remains at the same level. (d) Bottleneck inflation takes place when the supply increases rapidly along with the demand. 2. Which of the following statement is/are correct about Insurance Regulatory and Development Authority of India(IRDAI)? 1. The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government ofIndia. 2. Insurance Regulatory and Development Authority of India is the regulator of all private sector insurance business and public sector insurance business in India. 3. It regulates the functioning of insurance companies to direct them to work in the public interest. (a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) All of the above 3. Which of the following statement is/are correct about Financial sector reforms in India ? 1. Financial sector reforms were initiated by the government since the early 1990’s have been meet the challenge of a complex financial structure. 2. The Narasimham Committee was established under the former RBI Governor M. Narasimham in August 1991 to look into all aspects of the financial system in India. 3. The Government initiatives to priorities the JAM Trinity- Jan Dhan, Aadhaar and mobile-holds the key to one of the biggest reforms aimed at transformingIndia. (a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) All of the above 4. Which of the following statement is/are correct about Crypto currencies ? 1. In India, crypto currencies are not officially recognized, virtual currencies stored in e- wallets are exposed to hacking and users are exposed to a lack of recourse in case of any problem ordisputes. 2. The finance ministry has set up a panel to study regulation of virtual currencies. (a) only 1 (b) only 2 (c) Both 1 and 2 (d) Neither 1 nor 2 5. What India can do to improve its Financial sector ? 1. India need to remain vigilant in maintain an open and integrated global financial system and the effects of reforms on emerging market and developing economies. 2. India should act as facilitator of growth.

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SEBI: Finance Mock Test

1. With reference to the ‘bottleneck inflation’

which of the following statements is correct? (a) Bottleneck inflation takes place when the

supply falls drastically and the demand remains at the same level.

(b) Bottleneck inflation takes place when the supply falls drastically along with the demand.

(c) Bottleneck inflation takes place when the supply increases rapidly and the demand remains at the same level.

(d) Bottleneck inflation takes place when the supply increases rapidly along with the demand.

2. Which of the following statement is/are correct

about Insurance Regulatory and Development

Authority of India(IRDAI)? 1. The Insurance Regulatory and

Development Authority (IRDA) is a national agency of the Government ofIndia.

2. Insurance Regulatory and Development Authority of India is the regulator of all private sector insurance business and public sector insurance business in India.

3. It regulates the functioning of insurance companies to direct them to work in the public interest.

(a) 1 and 2

(b) 2 and 3

(c) 1 and 3

(d) All of the above

3. Which of the following statement is/are correct

about Financial sector reforms in India ? 1. Financial sector reforms were initiated by

the government since the early 1990’s have

been meet the challenge of a complex financial structure.

2. The Narasimham Committee was established under the former RBI Governor M. Narasimham in August 1991 to look into all aspects of the financial system in India.

3. The Government initiatives to priorities the JAM Trinity- Jan Dhan, Aadhaar and mobile-holds the key to one of the biggest reforms aimed at transformingIndia.

(a) 1 and 2

(b) 2 and 3

(c) 1 and 3

(d) All of the above

4. Which of the following statement is/are correct

about Crypto currencies ? 1. In India, crypto currencies are not officially

recognized, virtual currencies stored in e-wallets are exposed to hacking and users are exposed to a lack of recourse in case of any problem ordisputes.

2. The finance ministry has set up a panel to study regulation of virtual currencies.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

5. What India can do to improve its Financial

sector ? 1. India need to remain vigilant in maintain

an open and integrated global financial system and the effects of reforms on emerging market and developing economies.

2. India should act as facilitator of growth.

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Select the correct answer using the code given below:

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

6. Which of the following statement is true about

Primary instruments ? 1. Primary investments like stocks are what

most beginning investors think of when they think about investing.

2. Understanding primary instruments provides the base knowledge for derivatives, whose prices are derived from the primary (underlying)asset.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

7. Which of the following statement is correct

about Derivative Instrument? 1. Derivatives create an alternative product

for investors seeking to benefit from changes in the market value of primary instruments.

2. Derivatives are generally more complex than primary instruments because of the pricing methodologies.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

8. Which of the following statement is correct

about Secondary Market ? 1. The secondary market is the stock market

where existing stocks are brought and sold by the retail investors through the brokers.

2. Secondary market does not controls the price of the stocks.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

9. The shares may be bought back by any

company under the prescribed rule and

regulations depending on- 1. To increase promoters holdings

2. To increase earning per share

3. To pay surplus cash not required by business

Select the correct answer using the code given

below:

(a) 1 and 2

(b)2 and 3

(c)1 and 3

(d)1, 2 and 3

10. In the derivative market trading is done mainly

through - 1. Future contract

2. Option contract

3. Stock contract

(a) 1 and 2

(b) 2 and 3

(c) 1 and 3

(d) 1, 2 and 3

11. The various kinds of equity shares are - 1. Equity Shares

2. Rights Shares

3. Bonus Shares

4. Cumulative Preference Shares

(a) 1 and 3

(b) 2 and 3

(c) 1, 2 and 3

(d) All of the above

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12. Which of the following statement is/are correct

? 1. Debentures are normally secured/charged

against the asset of the company in favors of debenture holder.

2. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

13. The various types of Bonds are- 1. Zero Coupon Bond: Bond issued at a

discount and repaid at a face value.

2. Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

14. Which of the following statement is/are correct

about Forward derivative ? 1. A forward contract is a contract between

three parties to buy/ sell an asset on a specific date in the future at a determined price.

2. It is mostly used for hedging purposes (insuring against price risk).

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

15. Which one of the following provides banking

services to all villages having a population upto

2000? (a) Plan for Financial Inclusion

(b) Plan for Financial Exclusion

(c) Plan for Financial Inclusion Technology

(d) None of the above

16. Consider the following statements regarding

the financial market: 1. Money market and capital market are the

two segments of the financial market of an economy.

2. The long-term financial market is called money market while the short time financial market is called capital market.

Which of the above statement is true?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

17. Consider the following statements regarding

the Call Money Market: 1. This is basically an inter-bank money

market where funds are borrowed and lent for one day.

2. Collateral Security is required to borrow from this market.

Which of the above statement is true?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

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18. Which of the following amendments have been

made to the GST Bill to be presented in the

Rajya Sabha? 1. 1% entry tax inclusion

2. Full compensation to states for 5 years for any revenue loss

3. Independent Dispute Resolution Mechanism

(a) 1, 2

(b) 1, 3

(c) 2, 3

(d) All of the above

19. What is the purpose of setting up of Small

Finance Banks (SFBs) in India? 1. To supply credit to small business units

2. To supply credit to small and marginal farmers

3. To encourage young entrepreneurs to set up business particularly in rural areas.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

20. What does the acronym IFCI mean? (a) International Finance Corporation of India

(b) Industrial Finance Corporation of India

(c) Institute of Financial Consultants of India

(d) Industrial Finance Council of India

21. When did the National Housing Bank start its

operations? (a) July, 1982

(b) July, 1988

(c) April, 1980

(d) March, 1971

22. What distinguishes each type of PPP(Public-

Private Partnership) model from one another is

- (a) the degree of risk and responsibility borne

by the private sector partner

(b) the degree of risk and responsibility borne by the public sector

(c) The private sector partner will bring in most of the investment requirements

(d) none of the above

23. In PPP(Public-Private Partnership) audit, the

emphasis would be - (a) on the means to achieve the PPP

arrangements

(b) on the end results of the PPP arrangements

(c) on the operational risks transferred to the private partner

(d) none of the above

24. Find out the incorrect statement w.r.to

PPP(Public-Private Partnership) audit? (a) value for money is the driver for adopting

the PPP approach rather than capital scarcity

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(b) there is conflicting and fundamentally differing approaches of two partners to the PPP agreement

(c) The relevance of regularity and compliance audit is limited

(d) The private partners are unlikely to resist the move on the plea of commercial confidentiality

Which of following statement is correct about

Leasing? 1. It is a rental agreement that extends for a

year or more and involve fixed monthly payments

2. It is an agreement between two parties – the user (lessee) and the owner (lessor).

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

25. Who are Angel Investors? 1. They are group of individuals or an

individual itself who invest their own money.

2. They are involved in the functioning of the company though they may advice and ask for reports and status.

(a) only 1

(b) only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

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ete-Course---Sebi-Grade-A--Assistant-Manager--

-Sebi-1

Q

No Answer Explanation

1 A

This inflation takes place when the

supply falls drastically and the

demand remains at the same level.

Such situations arise due to supply-

side accidents, hazards or

mismanagement which is also known

as ‘structural inflation’. This could be

put in the ‘demand-pull inflation’

category.

2 D

Insurance Regulatory and

Development Authority of

India(IRDAI):

1. The Insurance Regulatory and

Development Authority (IRDA) is a

national agency of the Government

ofIndia.

2. It was formed by an Act of Indian

Parliament known as IRDA Act

1999, which was amended in 2002 to

incorporate some

emergingrequirements.

3. It headquarter is located in

Hyderabad.

4. It comprised of the Indian

Parliamentary Act and was passed

duly by the Indiangovernment.

5. Insurance Regulatory and

Development Authority of India is

the regulator of all private sector

insurance business and public sector

insurance business in India.

6. IRDA issues guidelines for various

insurance companies.

7. It regulates the functioning of

insurance companies to direct them

to work in the public interest.

3 D

Financial sector reforms in India: -

Financial sector is the mainstay of

any economy and it contributes

immensely in the mobilization and

distribution ofresources.

Financial sector reforms have long

been viewed as a significant part of

the program for policy reform in

developingnations.

The main objective of the financial

sector reforms are to allocate the

resources efficiently, increasing the

return on investment and accelerate

growth of the real sectors in

theeconomy.

Financial sector reforms were

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initiated by the government since the

early 1990’s have been meet the

challenge of a complex

financialstructure.

The Union Government has

proposed last year setting up

Financial Data Management Centre

(FDMC) based on recommendation

of a committee set up under the

Department of Economic Affairs

(DEC). The Committee was headed

by Ajay Tyagi, Additional Secretary

in Union Finance Ministry and has

submitted its report and a draft bill

titled The Financial Data

Management Centre Bill2016? ? The

Narasimham Committee was

established under the former RBI

Governor M. Narasimham in August

1991 to look into all aspects of the

financial system inIndia.

Forex market reform: Forex market

reform took place in 1993 and the

successive adoptions of current

account convertibility were the

acmes of the forex reform introduced

in the Indianmarket.

The Government initiatives to

priorities the JAM Trinity- Jan Dhan,

Aadhaar and mobile-holds the key to

one of the biggest reforms aimed at

transformingIndia.

Government’s million towards a

cashless economy is the significant

move in this direction.

4 C

Crypto currencies:- In India, crypto

currencies are not officially

recognized, virtual currencies stored

in e-wallets are exposed to hacking

and users are exposed to a lack of

recourse in case of any problem

ordisputes.

The RBI has been cautioning users

about the risk of dabbling in virtual

currencies that it does not recognise,

since 2013.

The finance ministry has set up a

panel to study regulation of virtual

currencies.

5 C

Financial sector is backbone of the

Indian economy. India need to

remain vigilant in maintain an open

and integrated global financial

system and the effects of reforms on

emerging market and developing

economies.

The role of India’s financial sector

regulators need to be change from

restrictors to facilitators and creators.

They should act as facilitator of

growth.

6 C

Primary instruments are standard

financial investments. They often

trade on mainstream exchanges with

high levels of liquidity. Their market

value is determined based on

assumptions about their individual

characteristics.

Primary investments like stocks are

what most beginning investors think

of when they think about investing.

This is because investing in primary

instruments often requires only a

general knowledge of markets and

investment principles.

Understanding primary instruments

provides the base knowledge for

derivatives. Derivatives were created

to hedge against some of the risks of

primary instruments. Derivatives

also provide products for alternative

investing strategies that are based on

the speculation of values of

underlying primary instruments.

.A primary instrument is a financial

investment whose price is based

directly on its marketvalue.

.Primary instruments include cash-

traded products like stocks, bonds,

currencies, and spotcommodities.

.Understanding primary instruments

provides the base knowledge for

derivatives, whose prices are derived

from the primary (underlying)asset.

7 C

Derivatives create an alternative

product for investors seeking to

benefit from changes in the market

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value of primary instruments. They

are known as non- primary

instruments. Call and put options,

and futures are some of the

derivatives that can be used to profit

from primary instruments.

Derivatives get their name because

they are derived from the primary

(underlying)asset. Derivatives are

generally more complex than

primary instruments because of the

pricing methodologies. Derivative

products have values that are

generated from the primary

instrument. Options on stocks are

some of the most common derivative

products used by alternative

investors. Black Scholes is the main

methodology for calculating the price

of derivative options on stocks. It

determines the price of a derivative

product by considering five input

variables: the strike price offered by

the option, the current stock price, the

time to expiration of the option, the

risk-free rate and volatility.

8 A

The secondary market is the stock

market where existing stocks are

brought and sold by the retail

investors through the brokers. It is the

secondary market that controls the

price of the stocks. Generally when

we speak about investing or trading

at the stock market we mean trading

at the secondary stock market. It is

the secondary market where we can

invest and trade in the stocks to get

the profit from our stock market

investment.

9 D

The shares may be bought back by

any company under the prescribed

rule and regulations depending one or

more of the following reasons:

1. To increase promotersholdings,

2. To increase earning pershare,

3. Rationalise the capital structure by

writing off capital not represented by

availableassets,

4. To support share value,

5. To pay surplus cash not required

bybusiness.

10 A

In the derivative market trading is

done mainly through two instruments

– the Future contract and the Option

contract. In both these types of

contracts the stocks are bought and

sold in lot. The number of stocks for

each lot depends on the valuation of

the stock and the valuation of the lot

is determined by the number of the

stocks in a lot multiplied with the

current market price of the stock. For

trading in derivative market you have

to buy either the future contract or the

option contract. In a future contract

you are bound to close the deal within

a specific time and at a fixed arte.

While in case of option contract you

can also choose to ignore the

contract.

11 D

The various kinds of equity shares

are-

Equity Shares: An equity share

commonly referred to as ordinary

share also represents the form of

fractional ownership in which a

shareholder, as a fractional owner,

undertakes the maximum

entrepreneurial risk associated with a

business venture. The holders of such

shares are members of the company

and have voting rights.

Right Issues/Rights Shares The issue

of new securities to existing

shareholders at a ratio to those

already held.

Bonus Shares: Shares issued by the

companies to their shareholders free

of cost by capitalization of

accumulated reserves from the

profits earned in the earlier years.

Preferred Stock/Preference shares:

Owners of these kinds of shares are

entitled to a fixed dividend or

dividend calculated at a fixed rate to

be paid regularly before dividend can

be paid in respect of equity share.

They also enjoy priority over the

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equity shareholders in payment of

surplus. But in the event of

liquidation, their claim rank below

the claims of the company’s

creditors, bond

holders/debentureholders.

Cumulative Preference Shares: A

type of preference shares on which

dividend accumulates if remains

unpaid. All arrears of preference

dividend have to be paid out before

paying dividend onequity shares.

Cumulative convertible Preference

Shares: A type of preference shares

where the dividend payable on the

same accumulates, if not paid. After

a specified date, these shares will be

converted into equity capital of

thecompany.

Participating Preference Shares: The

right of certain preference

shareholders to participate in profits

after a specified fixed dividend

contracted far is paid. Participation

right is linked with the quantum of

dividend paid on the equity shares

over and above a particular

specifiedlevel.

12 C

Debentures: Bonds issued by a

company bearing a fixed rate of

interest usually payable half yearly

on specific dates and principal

amount repayable on particular date

on redemption of the debentures.

Debentures are normally

secured/charged against the asset of

the company in favour of debenture

holder.

Bond: A negotiable certificate

evidencing indebtedness. It is

normally unsecured. A debt security

is generally issued by a company,

municipality or government agency.

A bond investor lends money to the

issuer and in exchange, the issuer

promises to repay the loan amount on

a specified maturity date. The issuer

usually pays the bond holder periodic

interest payments over the life of the

loan.

13 C

The various types of Bonds are as

follows:

1. Zero CouponBond: Bond issued at

a discount and repaid at a face value.

No periodic interest is paid. The

difference between the issue price

and redemption price represents the

return to the holder. The buyer of

these bonds receives only one

payment, at the maturity of thebond.

2. ConvertibleBond: A bond giving

the investor the option to convert the

bond into equity at a fixed conversion

price.

14 A

The basic types of derivatives are

forward, futures, options, and swap.

Forward -

1. A forward contract is a contract

between two parties to buy/ sell an

asset on a specific date in the future

at a pre-determinedprice.

2. It is mostly used for hedging

purposes (insuring against price risk).

For example: If you are a farmer

producing onions and are concerned

about the volatility in the prices of

onions, you may enter into a forward

contract. A contract to sell 100 kgs of

onions to Arvind @ 40 per kg

on1/1/2018.

3. The contract will hedge the farmer

against the possible decline in prices.

But, for a contract to make sense, it

must be beneficial to both the parties.

Arvind must have entered the

contract as he thinks that the prices of

onion will be greater than Rs.40 on

1/1/2018 and he will not incur any

losses.

15 A

'Financial Inclusion' is the latest

powerful tool adopted by Reserve

Bank of India to fulfill the basic

objective of connecting every Indian

to the country's banking system.

Financial inclusion intends to help

people secure financial services and

products at economical prices such as

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deposits, fund transfer services,

loans, insurance, payment services,

etc. It aims to establish proper

financial institutions to cater to the

needs of the poor people.

16 A

In a financial market of an economy,

funds are transacted between the

fund-surplus and fund-scarce

individuals and groups on the basis of

either interest or dividend. Financial

might be an institutionalised or a non-

institutionalised will serve the motive

of supply of funds for the desired

time period. The time period can be a

long-term and a short-term.

Financial markets in every economy

are having two separate segments

today, one catering to the

requirements of the short-term funds

and the other to the requirements of

the long-term funds. The short-term

financial market is known as the

money market while the long-term

financial market is known as the

capital market. The money market

fulfils the requirements of funds for

the period up to 364 days (i.e. short-

term) while the capital market does

the same for the period above 364

days (i.e., long-term).

17 C

This is basically an inter-bank money

market where funds are borrowed

and lent for one day. Also known as

over-night borrowing (called as

money at call) and for a period up to

14 days (called short notice). No

collateral is required to borrow from

this market. Funds are usually raised

from this market up to three days—

the higher the interest, the longer the

period for which the funds have been

borrowed.

The scheduled commercial banks,

co-operative banks operate in this

market as both the borrowers and

lenders while LIC, GIC, UTI, IDBI

and NABARD are allowed to operate

as only lenders in this market. The

interest rate in this market depends

upon the demand and supply of the

funds on a particular day which is

market determined.

18 C

The planned amendments will seek to

withdraw the 1 per cent additional tax

(entry tax) proposed earlier;

Guarantee the States full

compensation over a period of five

years for any losses from the shift to

the new tax;

Propose a new mechanism for

dispute resolution, in which the

States will have greater say;

Introduce fresh assurance in the

amendment that the GST rate will

neither lead to revenue losses for

states not hurt the consumers.

19 A

The need for setting up small finance

banks in the country is for providing

financial assistance to people who are

unable to avail the facilities in the

unorganized sector.

The small finance banks are very

effective for promoting business of

industries which are part of the

unorganized sector and operate

through low cost operations and

traditional technologies.

The different forms of small fiance

banks operating in the country are the

Suryoday Small Finance Bank Ltd,

Ujjivan Small Finance Bank Ltd,

Utkarsh Small Finance Bank Ltd and

many others.

20 B

IFCI Ltd. was set up in 1948 as

Industrial Finance Corporation of

India, a Statutory Corporation,

through `The Industrial Finance

Corporation of India Act, 1948’ of

Parliament to provide medium and

long term finance to industry.

It was the first Development

Financial Institution established by

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the Indian government after

independence.

Until the establishment of ICICI in

1956, IFCI remained solely

responsible for implementation of the

government's industrial policy

initiatives.

In 1993, it was reconstituted as a

company to impart higher degree of

operational flexibility and named as

IFCI Ltd.

Functions :

The functions of the IFCI are as

follows :

The corporation grants loans and

advances to industrial concerns.

Granting of loans both in rupees and

foreign currencies.

The corporation underwrites the

issue of stocks, bonds, shares etc.

The corporation can grant loans only

to public limited companies and co-

operatives but not to private limited

companies or partnership firms.

IFCI Ltd -

Founded : 1948

21 B

he National Housing Bank, the apex

institution of housing finance in

India, is a wholly-owned subsidiary

of RBI.

It started operating from 9th July,

1988 with an authorized paid-up

capital of RS. 450 crore.

It was set up under the National

Housing Bank Act, 1987.

NHB registers, regulates and

supervises Housing Finance

Company (HFCs), keeps surveillance

through On-site & Off-site

Mechanisms and co-ordinates with

other Regulators.

NHB – National Housing Bank :-

Founded - July 9, 1988

Headquarters - New Delhi, India

22 A

Public-private partnership (PPP) is a

model where the government

associates with private companies to

accomplish infrastructure projects.

This alliance between both the

parties, ensure financing, designing,

flourishing and maintaining of the

infrastructural amenities within the

country.

The PPP approach initiates the

efficient facilitation of public goods

to the people. This is because, such

projects are handed over to the

relevant private entities, who hold

expertise and knowledge in their

field.

23 B

Public Private Partnerships offer a

unique and innovative method of

involving the private sector in the

nation building activity and in

accelerating the delivery of public

goods and services of high quality

through joint enterprises, without

spreading the limited available

resources too thin.

In order to sustain the high annual

growth rate, Public Private

Partnership (PPP) will be an

attractive option in meeting this

challenge.

24 D

A sound framework should

encourage proactive information

disclosure of both the project contract

and the project’s performance. This is

done in order to promote

transparency and gain an acceptance

of the PPP model by the general

public as well as allowing for

performance auditing of the PPP

program. However, disclosure of the

contract will need to be limited to

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protect the legitimate interests of the

private partner in keeping

commercial information confidential,

as well as the need for the public

partner to protect its position for

future negotiations.

Contracts should clearly establish the

information disclosure requirements

as well as any exceptions from

disclosure.

Some countries include the suggested

extent of information disclosure by

the private partner in their PPP

guidelines and standards. This

includes templates for gathering and

collecting the relevant information

from the contract, suggested contents

of a project summary that should be

made available to the public, and

standard provisions for the contract

in this respect. In this sense,

publishing the full contract is not

universal and it is usually done with

redactions. However, publishing a

project summary or contract

summary is quite common and good

practice. Another recommended

approach is to require the private

partner to establish a website about

the project and its evolution,

especially during the Construction

Phase.

25 C

Leasing (Asset based Lenders)-

1. It is a rental agreement that extends

for a year or more and involve fixed

monthly payments.

2. It is an agreement between two

parties – the user (lessee) and the

owner (lessor). The lessor grants the

lessee right to use the property of the

lessor for a defined period. The lessee

just has the rights to use but does not

have the ownership rights.

3. In return Lessee agrees to pay

series of fixed payments to the lessor.

Lessor is also called Asset based

lender in this case.

26 A

Angel Investors:-

1. They are group of individuals or an

individual itself who invest their own

money

2. Angel Investors invest in the early

(concept) Stages of the company and

in return take a share in the company

3. They invest typically less money

than the Venture Capitalists

4. They are not involved much in the

functioning of the company though

they may advice and ask for reports

and status

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