Tybfm Sem6 Vcpe
Tybfm Sem6 Vcpe
Tybfm Sem6 Vcpe
TYBFM –SEMESTER VI
a. Venture Capital
b. Merchant Banking
c. Leasing
d. Initial Public Offer (IPO)
a. Seed Capital
b. Start-up Capital
c. Second Round Financing
d. Third Round Financing
3. ________________ is a broad term that refers to any type of non-public ownership equity
securities that are not listed on a public exchange.
a. Debt Capital
b. Mezzanine Financing
c. Private Equity
d. Public Listing
4. The Purpose of Valuation is to assess the ___________ and viability of the venture and to
divide of the percentage of the VCF ownership in the new venture.
a. Availability
b. Feasibility
c. Profitability
d. Capital
5. Which of the following regulator has issued guidelines for PE funds investment in insurance
companies?
a) IRDA
b) RBI
c) SEBI
d) PFRDA
6. Which of the following is the investment phase of private equity?
a) Second phase
b) First phase
c) Third phase
d) Fourth phase
7. A sale of the portfolio company to another private equity is known as?
a) Merger
b) Primary sale
c) Buyback
d) Secondary sale
8. The analysis method in which analysis comes from the ‘tree’ like shape the analysis creates
where each ‘branch’ is a particular decision that can be undertaken?
a) Decision tree Method
b) Discussion tree method
c) Directing tree method
d) Dual tree method
9. NPV stands for?
a) Net Present Value
b) National Present Value
c) Notional Present Value
d) Non Present Value
10. Company issue securities for the first time publically is called as?
a) Open market
b) IPO
c) Right issue
d) Bonus issue
11. In following method company offer securities to their existing shareholders?
a) Right Issue
b) IPO
c) FPO
d) Open market
12. Which of the following regulatory authority supervises and control banking sector in India?
a) SEBI
b) IRDA
c) PFRDA
d) RBI
13. Which of the following capital used to acquire other assets?
a) Acquisition capital
b) Merger capital
c) Takeover capital
14. Bridge financing is also called as?
a) Mezzanine finance
b) Share capital
c) Seed capital
d) Preference capital
15. _______________ are equity shares with special rights. For example, they may be entitled to
a fixed dividend or shares of the profits.
a. Ordinary Shares
b. Preferred Ordinary Shares
c. Preference Shares
d. Debentures
16. ________________ act as an intermediary to link up the sources of ideas and the sources of
funds.
a. Merchant Banking
b. Leasing
c. Venture Capital
d. Equity Capital
17. Loan Financing that is halfway between equity and secure debt is provided by
_____________________ Firms.
a. Private Equity
b. Mezzanine
c. Public Listed
d. Partnership
18. The Term _______________ refers financial investment in a highly risky and growth
oriented venture with the objective of earning a high rate of return.
a. Leasing
b. Venture Capital
c. Merchant Banking
d. Paid up Capital
19. Which of the following is generally the first capital invested by sources outside the firm, and
the last to exit?
a) Venture capital
b) Borrowed fund
c) Cash Flow
d) Loan
20. Which of the following firm provides loan finance that is halfway between equity and
secured debt?
a) Term loan
b) Mezzanine
c) Preferred ordinary share
d) Seed capital
21. The liability of general partner is?
a) Limited
b) Unlimited
c) No liability
d) Lowest liability
22. Which of the following acts as an intermediary link between sources of idea and the sources
of fund?
a) Merchant banker
b) Credit Rating agency
c) Venture Capital
d) Term Loan
23. What is LBO?
a) Leveraged buyout
b) Long borrowing
c) List Buyout
d) Limited buyout
a. First Stage
b. Second Stage
c. Third Stage
d. Acquisition
26. ___________ provide finance by buying trade debts at a discount, either on a recourse basis
or on a non-recourse basis.
a. Merchant Bankers
b. Factoring Companies
c. Mezzanine Firms
d. Venture Capital
27. Second Stage financing is typically known as _____________ because it finances the
growth of expanding companies prior to an IPO.
a. Bridge Financing
b. Term Financing
c. Seed Financing
d. Loan Financing
28. _____________is the Initial Meeting between the venture capitalist and Entrepreneur and
key members of management team for review of business plan and due diligence.
a. Expansion Financing
b. Preliminary Screening
c. Acquisition or Buyout
d. Buy Back
29. The Venture Capitalist is a _____________ sharing together the risk and rewards.
a. Financial Institution
b. Corporate Partner
c. Public Listed Company
d. Corporate Employee
Correct Answer: Corporate Partner
15. ____________ phase is known as the launch phase, whereby production is commenced and
sales happens.
a. Working Capital
b. Public Capital
c. Acquisition Capital
d. Borrowed Capital
a. Ordinary Shares
b. Preference Shares
c. Preferred Ordinary Shares
d. Bonus Shares
18. In a venture capital deal _____________ are shares usually held by the management and
family shareholders rather than the venture capital firm.
a. Preference Shares
b. Preferred Ordinary Shares
c. Ordinary Shares
d. Hedge Funds
19. ______________ principally provides overdrafts and short to medium term loans at fixed or
variable rates of interest.
a. Merchant Bankers
b. Clearing Banks
c. Finance Houses
d. Factoring Companies
20. Private Equity is a _________________ Investment fund, as its current market price cannot
be easily determined and cannot be transferred for a certain period of time.
a. Close Ended
b. Open Ended
c. Fund
d. Active
21. ________________ sits between public equity and outright ownership in terms of
investment horizon and degree of corporate control.
a. Venture Capital
b. Private Equity
c. Growth Capital
d. LBO
22. ____________ typically are made up of endowments, pensions, high net worth individuals
and institutional capital.
a. General Partners
b. Issuers
c. Limited Partners
d. None of these
23. The Organized private equity market has three major players, Private Equity issuers,
Intermediaries and ___________________.
a. Government Companies
b. Investment Managers
c. Merchant Bankers
d. Investors
24. A _________ is a form of ‘investment club’ in which the principal investors are institutional
investors such as pension funds, investment funds, endowment funds, insurance companies,
family offices / high net worth individuals and funds-of funds, and private equity fund
Managers.
a. Debt fund
b. Equity fund
c. Private equity fund
d. Private equity firm
25. ________ in private equity market vary widely in size and their reasons for raising capital
as well as in other ways.
a. Limited Partners
b. Issuers
c. Intermediaries
d. None of these
26. ________ aims at reducing risk, enhance returns and minimize the correlation with equity
and bond markets.
a. Equity Funds
b. Venture Capital
c. Hedge Funds
d. Private Equity
28. A sale of the portfolio company to another private equity is known as ________________.
a. Mergers
b. Secondary Sale
c. Buyback
d. IPO
29. _________ Structure is generally used where domestic investors are also expected to
participate in the fund.
a. Offshore
b. Co-investment
c. Unified
d. Mezzanine
30. Private equity funds typically operate as a limited partnership, which is controlled by a
private equity firm referred to as the ______________.
a. Limited Partners
b. General Partners
c. Investment Partners
d. Sleeping Partners
a. Asset- Based
b. Market
c. Income
d. Customer Based
32. The process by which the returned capital will be distributed to the investors and allocated
between Limited and General Partner is Called as___________________.
a. Distribution Waterfall
b. Carried Interest
c. Valuation
d. Private Equity Multiple
Correct Answer: Distribution Waterfall
34. Lock in period for money invested in Venture Capital is mostly for _______________.
a. 6 years
b. 3 years
c. 5 years
d. 10 years
35. Private Equity is just a rebranded version of what were called __________.
36. The general partners earn a share of the profits of the fund, referred to as
_________________.
a. Deferred Interest
b. Accrued Interest
c. Carried Interest
d. Management fees
a. Venture Capital
b. Private Equity
c. Growth Capital
d. Mezzanine Capital
45. Private equity funds typically operate as limited partnership, which is controlled by a
private equity firm referred to as the ________________.
a. Limited Partner
b. Sleeping Partner
c. Investment Partner
d. General Partner
a. Offshore
b. Co-investment
c. Unified
d. Mezzanine
48. The _____________ has unlimited liability with regard to third parties.
a. Limited Partners
b. General Partners
c. Investment Partner
d. Sleeping Partner
51. In ____________ phase the General Partners conceptualize the investment strategy and
offer capital raising to the potential investors on private placement basis.
a. Investment Period
b. Exit Stage
c. Profit distribution
d. Fund raising stage
52. ______________ holds the shares of many private partnerships that invest in private equities.
53. As per Investment guidelines of SEBI FVCI Regulations at least _______________ of the
investible funds must be invested in unlisted equity shares or equity linked instruments.
a. 80%
b. 66.67%
c. 50%
d. 45%
54. _________________ are extensively used by real estate investors to structure investments
and also develop joint ventures.
55. _____________ prescribes the manner in which a foreign venture capital investor can make
investments.
a. SEBI Regulations
b. FEMA Regulations
c. Income- Tax Act, 1961
d. Insurance Regulatory and Development Authority (IRDA)
56. In ___________ stage, the capital is raised to buy equity stakes in high potential companies.
a. Fund raising
b. Investment Period
c. Exit
d. Winding up
57. The ______________prescribe the sectoral limits on foreign investments into India.
a. FEMA Regulations
b. SEBI Regulations
c. Income Tax Act, 1961
d. Credit Rating Agency
59. As per SEBI guidelines the minimum tenure of each scheme of a Private Equity fund is
_____________ years.
a. Seven
b. Two
c. Three
d. Five
60. Which of the following model where dividends continue to grow at a constant rate for an
extended period of time?
a) The Gordon Growth Model
b) Zero Growth Model
c) Market Comparable Method
d) Venture capital method
61. Which of the following is a transaction of a company used to acquire other business?
a) LBO
b) Growth fund
c) Distressed debt
d) Term loan
62. An activity by which investors support entrepreneurial talent with finance and business
skills to exploit capital gain is called as
a) Venture capital
b) Term loan
c) Borrowed fund
d) Bond
63. Which of the following is the combination of offshore and domestic investment?
a) Unified Investment
b) Offshore Fund Structure
c) Co-investment fund structure
d) Share capital
64. Who among the following provides investment advisory services to private equity firms?
a) Management company
b) Broker
c) Sub broker
d) Portfolio
66. The purpose of _____________ is to ensure that the start-up grows into a profitable
business enterprise
a. Business Incubators
b. Initial Public Offer (IPO)
c. Financial Institutions
d. Convertible Debentures
a. Venture Capitalist
b. Angel Investors
c. Fund Managers
d. Equity Share Holders
68. A ________________ is a document which outlines the key financial and other terms of a
proposed investment in a venture capital undertaking.
69. Private Equity funds have been classified under ________________ of Alternative
Investment Funds by SEBI.
a. Category IV
b. Category III
c. Category II
d. Category I
70. Each Private Equity fund must have a minimum corpus of at least __________________
Crore Rupees.
a. 20
b. 10
c. 15
d. 30
71. Expenses for Managing the fund including Management Fee falls under
__________________ Expenses.
a. Extraordinary
b. Operational
c. Organizational
d. Tax-Related
72. The Venture Capitalist or Private Equity Investors usually seek protection against dilution
through ____________________.
a. Ratchet Mechanism
b. Representations and Warranties
c. Investor Side Letters
d. Investment Committee (IC)
73. The _______________ is expected to compensate investors for giving up access to their
capital.
a. Seed Capital
b. Illiquidity Premium
c. Management Fees
d. Loan Capital
74. The _____________ concerns’ expected earnings at the initial stage and also at the time of
quitting.
a. Lending
b. IPO
c. Revenue
d. Borrowing
a. Income
b. Revenue
c. Sponsor
d. Profit
76. _________ Valuation is the act or process of assessing value or price of financial asset or
liability.
a. Debenture
b. Financial
c. Share
d. Business
77. There are three methods for ___________ of Private Equity - Conventional method, first
Chicago method and revenue multiplier method.
a. Valuation
b. Exit
c. Funding Risk
d. Investments
78. There are various types of risk involved in _____________ such as counterparty risk,
market risk, liquidity risk, legal, regulatory funding risk.
a. Merchant Banking
b. Private Equity
c. Leverage Buy Out (LBO)
d. Growth Capital
79. The __________ trade-off is an effort to achieve a balance between the desire for the lowest
possible risk and the highest possible return.
a. Risk
b. Return
c. Dividend
d. Risk Return
a. Legal
b. Liquidity
c. Regulatory
d. Price or Market
82. Valuation techniques that are expected to be used to estimate fair value in the future should
be evaluated using market inputs as of the date the investment was made. This process is
known as ______________.
a. Calibration
b. Venture Capital Method
c. Net Assets
d. Multiple Growth Model
84. The Valuers should seek to understand any substantive differences that legitimately occur
between the exit price and the previous fair value assessment. This concept is known as
________________.
a. Calibration
b. Multiple Growth Model
c. Earnings Multiple
d. Back Testing
85. Venture Capitalist Method will value the entrepreneur’s business and the amount of
___________that must be surrendered to the Venture Capitalist.
a. Management Fees
b. Loans
c. Equity
d. Carried Interest
86. The _______________ method attempts to estimate a valuation based on the market
capitalization of comparable listed companies.
a. Market Comparable
b. Decision Tree Analysis
c. Venture Capital
d. Discounted Cash Flow
87. ______________ is mainly applied to value mature companies that are expected to grow at
the same rate forever.
a. Zero Growth Dividend Model
b. The Gordon Growth Model
c. Multiple Growth Model
d. Price Earning Valuation Method
88. The Investor employs ____________method to identify whether the stock is dealing at a
premium or at discount.
a. The Gordon Growth Model
b. Price Earning Valuation
c. Zero Growth Dividend Model
d. Multiple Growth Model
89. In Price Earnings Valuation Method, A higher than Average PE may mean that the market
expects earnings to __________ in the future.
a. Rise
b. Fall
c. Remain Unchanged
d. Fluctuate
90. Three alternative Scenarios of Success (Best), Sideways Survival (Base) and Failure
(Downside) are part of _______________ evaluation method.
a. Conventional Venture Capitalist
b. The First Chicago
c. Revenue Multiplier
d. Zero Growth Dividend Model
91. In ____________ method importance is given to the time of starting the investment and the
time of leaving the investment.
a. The First Chicago
b. Zero Growth Dividend Model
c. Revenue Multiplier
d. Conventional Venture Capitalist Evaluation
92. _________________ provides a highly effective structure within which you can lay out
options and investigate the possible outcomes of choosing those options.
a. Decision Tree Analysis
b. Market Comparable Method
c. Discounted Cash Flow
d. Venture Capital Method
93. Survival is based on less growth and delays in bringing the projects to completion,
necessitating ___________ cost.
a. Lower
b. Zero
c. Higher
d. Negative
94. ____________ pays for the operating cost of the fund manager’s business and any excess
belongs to the partners of the fund management company.
a. Carried Interest
b. Income Fee
c. Salaries
d. Bonus
95. Any Private Equity deal will primarily focus on the ___________ valuation of the company.
a. Post-Money
b. Exit Money
c. Pre-Money
d. Earnest Money
97. _____________ for private equity investments is still relatively small when compared to the
total size of the private equity fund market.
a. Secondary Market
b. Primary Market
c. Bond Market
d. Currency Market
99. In India, the acquiring company can form a ________ which is a subsidiary of the acquirer
with a minimum equity capital.
a. Joint Venture
b. Fund of Fund
c. Sponsor
d. SPV
100. Lenders who are involved in mezzanine finance are ________ term investors.
a. Long
b. Short
c. Medium
d. Quick
101. Which of the following entity has the legal power to act on behalf of the investment
fund?
a) General Partner
b) Limited liability partner
c) Unlimited liability partner
d) Bank
102. Which of the following regulatory authority will regulate and supervise the Foreign
Venture capital investment route?
a) SEBI ( Venture capital funds) Regulations
b) SEBI ( Foreign Venture Capital Investors) Regulations
c) RBI
d) IRDA
103. Which of the following is needed for developing a product in the initial stages?
a) Seed capital
b) Second round capital
c) Merchant Banking
d) Leasing
93. A form of Buyout whereby a small portion of stakes will be held by the management and
remaining by the private equity financing is known as____________.
a. Partial Buyout
b. Equity Buyout
c. Private Equity Buyout
d. Management Buyout
95. ______________ are an excellent way for investors to gain a diversified exposure to the
private equity asset class.
96. The risk that the organization is exposed due to human error or mis-judgment is called as
_________________.
a. Capital Risk
b. Operational Risk
c. Legal Risk
d. Price Risk
97. In ____________________ the extent and terms of debt financing play a major role in
structuring and completion of the transaction.
98. To arrive at a standard market value, the fund managers calculate _______________ using a
standard method.
a. Exit Opportunities
b. Marketing Analysis
c. Financial Projections
d. Executive Summary
103. Venture capital investment are usually made at ___________ stage as compared to private
equity.
a. Later
b. Earlier
c. Expansion
d. Contraction
104. As per SEBI guidelines, the minimum tenure of each scheme of a PE fund is _______ years.
a. Seven
b. Three
c. Five
d. Two
108. ____________ is a minimum rate of return on the capital invested to be earned before the
General Partner can earn carried interest.
a. Hedge Funds
b. IRR
c. Angle Investors
d. Hurdle Rate
109. The rate of discount at which the series of cash outflows and inflows are discounted and net
present value of cash flows is zero is known as______________
a. Hedge Funds
b. Business Incubators
c. IRR
d. Angle Investors
110. HNIs who invest in very early stage of businesses _____________
a. Hedge Funds
b. Business Incubators
c. IRR
d. Angle Investors
111. The investee Company paying the dividend has to pay ______________.
a. Capital Gains Tax
b. Short Term Capital gains Tax
c. Dividend distribution tax
d. Long term Capital gains tax
a. Junior Debts
b. Senior Debts
c. Junior Unsecured Debts
d. Junior Secured Debts
a. Equity
b. Cash
c. Leverage
d. Plant
a. Trade Sale
b. Strategic Sale
c. Liquidation
d. IPO
a. Seed Funding
b. Buyouts
c. Distress Fund
d. Bridge Financing
a. Conglomerates
b. Large Organizations
c. Family owned business
d. Multinational companies
126. ______________ expects to emphasize investments in existing private companies that are
expanding through growth strategies or stages of business cycle
a. Private Equity
b. Corporate Finance
c. Venture capital
d. LBO
a. Private Equity
b. Corporate finance
c. Venture Capital
d. LBO
128. In ____________ option of LBO, shareholders simply sell their stock and all interest in the
target company to the buying groups and then the two firms may be merged.
a. Asset purchase
b. Stock Purchase
c. Venture capital
d. Special investing
129. _____________ is a hybrid of debt and equity financing that is typically used to finance the
expansion of existing companies.
a. Private Equity
b. Mezzanine Financing
c. Venture Capital
d. LBO
130. Venture capital and growth capital both are parts of ________________
a. Private Equity
b. Mezzanine Financing
c. Venture Capital
d. LBO
131. In India, the acquiring company can form a _____________ which was a 100% subsidiary
of the acquirer with a minimum equity capital
132. LBO, growth capital, Mezzanine Financing are parts of _____________ strategies.
a. Private Equity
b. Growth capital
c. Seed Funding
d. Bridge Financing
a. Leverage buyouts
b. Growth capital
c. Due Diligence
d. Special Purpose vehicle
134. _____________ allow for the sale of companies that are in distress or going through a
turnaround.
a. Leverage buyouts
b. Growth capital
c. Due Diligence
d. Special Purpose vehicle
a. Private equity
b. Due Diligence
c. Growth capital
d. Mezzanine Financing
136. A leveraged buyout is a strategy involving the ____________ of another company using a
significant amount of borrowed money.
a. Acquisition
b. Sale
c. Merger
d. Liquidation
137. Due Diligence refers to an examination of a potential __________to conform all material
facts of the prospective business opportunity.
a. Investment
b. Trade sale
c. Strategic Sale
d. Seed Funding
138. In India, the acquiring company can form a SPV which was ________ % subsidiary of the
acquirer with a minimum equity capital.
a. 100
b. 25
c. 50
d. 75
a. Equity
b. Debt
c. Cash
d. Assets
141. _____________ Funds focus on Companies that require funds for entering new markets
a. Growth
b. Distressed
c. Equity
d. Short-term
142. Private Equity Strategies are often categorized according to the stage of company and how
the company utilizes ____________
a. Capital
b. Land
c. Labour
d. Machinery
143. Corporate Finance expects to emphasize _____________ in existing Private companies that
are expanding through growth strategies
a. Investments
b. Strategic Sale
c. Buyouts
d. Liquidation
144. ____________ Debt is defined as raising new loan to pay out an existing loan
a. Refinanced
b. Non- controlling
c. Controlling
d. High – Yield
145. In ______________ target shareholders simply selltheir stock and all interest in the target
company to the buying group.
a. Stock Purchase
b. Refinancing
c. Asset Purchase
d. Debt Servicing
146. ____________ is a hazy investment category residing between venture capital and buyouts.
a. Growth Equity
b. Mezzanine Capital
c. LBO
d. Distressed debt
147. The lack of free cash flow makes it difficult for the company to obtain _________ financing
a. Debt
b. Equity
c. Medium term
d. Short term
148. The main difference between venture capital and ______________ is their risk profile and
investment strategy.
a. Growth equity
b. Private equity
c. LBO
d. Distressed Financing
a. Mezzanine
b. Debt
c. Equity
d. All of the above
150. A private equity firm may offer mezzanine financing in the form of debt or preferred equity
where return expectations are around ____________ per year.
a. 15%-20%
b. 25%-30%
c. 25%-75%
d. 80%-100%
151. Companies will often search for other sources of capital before turning to mezzanine capital
because it is ______________
a. Expensive
b. Inexpensive
c. Irrelevant
d. None of the above
152. Under ___________ financing the lender has a right of ownership of the borrower’s share in
case the latter fails to pay back the funds in full on time.
a. Mezzanine
b. LBO
c. Distressed
d. Growth
153. _______________ debt is considered ant type of loan that is paid after all other corporate
debts and loans are repaid, in case of borrowers default.
a. Subordinate
b. Senior
c. Sub senior
d. Junior
154. The _________ participation is a distinguished feature of mezzanine financing where one or
more persons take an equity stake in a company, but without assuming any liability of the
company’s creditors
a. Silent
b. Loud
c. Sleeping
d. Active
155. Mezzanine Funds, due to their innovative structure are classified under _________ Capital
a. Tier I
b. Tier II
c. Tier III
d. Tier IV
156. Lenders willing to enter into the world of mezzanine financing tend to be _________
investors
a. Long Term
b. Short term
c. Medium Term
d. None of the above
157. ______________is a comparatively small but growing sector of the private equity and
hedge fund market.
a. Distressed debt
b. LBO
c. Mezzanine financing
d. Growth Capital
158. Special situation strategies are also known as _______________ strategies
a. Turnaround
b. Fund of Funds
c. Bridge Financing
d. PIPE deals
159. ____________ is a fund set up to distribute investments among a selection of private equity
fund managers, who in turn invest in capital directly.
a. Turnaround
b. Fund of Funds
c. Bridge Financing
d. PIPE deals
a. Dry powder
b. Trade Sale
c. Secondary Sale
d. High-yield Debt
a. Mezzanine Capital
b. Secondary Sale
c. Trade Sale
d. Dry Powder
a. Mezzanine Capital
b. Secondary Sale
c. Trade Sale
d. Dry Powder
163. __________________ is financing of businesses that have overcome the high risk stage
a. Mezzanine Capital
b. Secondary Sale
c. Trade Sale
d. Dry Powder
a. Turnaround
b. Bridge Financing
c. Buying a stake
d. PIPE Deals
167.____________ debt is a comparatively small but growing sector of the private equity and
hedge fund market.
a. Mezzanine Capital
b. Secondary Sale
c. Trade Sale
d. Distressed Debt
a. Due Diligence
b. Fund of Funds
c. Trade Sale
d. Distressed Buyouts
169. Many _____________ are “blind” pools, meaning that exposure to particular underlying
funds is not guaranteed.
a. Due Diligence
b. Fund of Funds
c. Trade Sale
d. Distressed Buyouts
Module IV
171. Private Equity funds typically have fixed life spans of about ______________ years.
a. 5-6
b. 8-10
c. 7-9
d. 8-9
172. When a fund exits its investment through an ______________ it does so through on
offering of shares to the public of either the portfolio company or the parent holding company.
a. IPO
b. Promoter buyback
c. Sale to other PE
d. Mergers and acquisition
173. The _____________ can easily look out for all for a Full exit from its investment in a
relatively short time and for an easily demonstrated price
a. Promoter
b. Venture capitalist
c. Sponsor
d. Director
174. The ___________ concern that an exit of the fund in the IPO tells investor that the
company has limited upside, which is the wrong message to send.
a. Promoter
b. Venture Capitalist
c. Sponsor
d. Underwriter
175. A sale of the portfolio company to another private equity firm is also known as a
______________ in private equity.
a. Secondary sale
b. BUY back
c. IPO
d. Merger & Acquisition
176. _____________ is a partial exit strategy in which a company restructures its capital
structure by Portfolio Company issuing new debt in order to be a special dividend to private
investors or shareholders.
a. Leveraged Recapitalization
b. Secondary Sale
c. Merger
d. Trade Sale
a. Leveraged Recapitalization
b. Secondary Sale
c. Merger
d. Trade Sale
178. A _________________ is a combination of two or more entities into one; the desired effect
being not just the accumulation of assets and liabilities of the distinct entities, but organization of
such entity into one business.
a. Leveraged Recapitalization
b. Secondary Sale
c. Merger
d. Trade Sale
179. The majority of venture capital exits have been achieved through _________________,
whereby company’s shares are being sold to another company, perhaps in the same industry
sector.
a. Leveraged Recapitalization
b. Secondary Sale
c. Merger
d. Trade Sale
180. One of the advantages for the buyer in a secondary sale is ______________
a. Promoters
b. Management
c. Another PE fund
d. Competitors
183. Sponsored ___________ are those in which the non U.S Company enters into an agreement
directly with a U.S. depository bank.
a. ADR
b. GDR
c. IDR
d. FDR
184. SEBI regulations state that _____________ means any person who is engaged in the
business of issue management.
a. Merchant banker
b. Private banker
c. Credit Banker
d. Investment banker
185. ______________ is a document which contains all the relevant information about the
company, promoters, projects, financial details etc.
a. Offer Document
b. MOU
c. AOA
d. GDR
a. Prospectus
b. Sale Certificate
c. MOU
d. AOA
a. IPO
b. Sale to another PE fund
c. Sale of strategic investors
d. Due Diligence
194. A ____________ is a combination of two or more entities in to one.
a. Merger
b. Acquisition
c. Takeover
d. Joint Venture
195. ______ refers to any of the purchase or sale of securities without any intervention.
a. Takeover
b. Amalgamation
c. Open market
d. Hostile takeover
196. ______ is a partial exit strategy in which company restructure the capital structure.
a. Recapitalization
b. Leveraged recapitalization
c. Secondary sale
d. Joint Venture
197. In leveraged recapitalization shareholders ______ control of the company.
a. Remain in
b. Losses
c. Transfer
d. Regains
198. If a company files the prospectus for IPO as well as pursue the trade sale the process is
called ___________
a. Public offer
b. Dual track
c. Secondary sale
d. Private Placement
199. Swap takes are the portfolio of _____ contracts.
a. Forward
b. Options
c. Call
d. Hedge
200. __________ can easily go for a full exit from investment in relatively short time.
a. Sponsors
b. Venture capitalist
c. Promoter
d. Merchant Banker
201. IPO is a ____________ process.
a. Easy
b. Time saving
c. Lengthy
d. Simple
202. Leverage Buyout is mainly financed by ____________ to obtain the domination of a
matured company.
a. Bank Loan
b. Project Finance
c. IPO
d. FPO
203. In India, the acquiring company can form a ____________ which is a 100% of subsidiary of
the acquirer with a minimum capital for the purpose of LBO.
205. In LBO, capitalized value of cash flowing to debt is ____________ than the same cash
stream flowing to equity.
a. Smaller
b. Greater
c. Equal
d. Lesser
207. A form of Buyout whereby a small portion of stakes will be hold by the management and
remaining by the private equity financing is known as____________.
a. Partial Buyout
b. Equity Buyout
c. Private Equity Buyout
d. Management Buyout
208. Growth equity is provided for the companies that require money for restructure operations
or _______.
209. Growth equity investment is traditionally done in company’s which have not take
prior_______ investment.
a. Institutional
b. Bonds
c. Debentures
d. Equity
210. From the target company’s perspective, growth capital is preferred when there is chance
that EBITDA multiple might _______________ the company.
a. Undervalue
b. Overvalue
c. Not assign value
d. Put into high risk category
a. Unlimited
b. Limited
c. Long term
d. Medium term
212. Private and public listed company’s selling part of the business is termed as ____________
a. Sale off
b. Flip off
c. Spin Off
d. Cut off
213. Lack of free cash flow makes it difficult for the company to obtain____________.
a. Growth Capital
b. Mezzanine capital
c. Equity finance
d. Debt financing
214. Growth equity investors invest more in ______________ industry
a. Modern
b. Small
c. Medium
d. Traditional
215. If one or more persons take an equity stake in the company without assuming any liability
to the company’s creditors, it is known as ________________ in mezzanine financing
a. Active
b. Silent
c. Sleeping
d. Dorment
216.___________ are most common form of mezzanine financing which are unsecured.
a. Subordinated debt
b. Loans
c. Margin Financing
d. Securitisation
217.___________ loan are normal loans, but their interest is not fixed, but is provisional upon
the results of business.
a. Mortgage loans
b. Participating loans
c. Long term loans
d. Short term loans
218. Holders of _________ bonds have right to acquire shares or other equity instruments of the
company instead of accepting repayment
a. Non-convertible
b. Warrants
c. Convertible
d. Debentures
219. Mezzanine funding provides for _________ amount of funding than an asset backed loan
a. Lower
b. Similar
c. Higher
d. Shorter
220. Arranging for mezzanine finance is ____________ process
a. Simpler
b. Easier
c. Lengthy
d. Short
221. The lender of Mezzanine financing is assuming ________ risk as compared to traditional
lender
a. Greater
b. Lesser
c. Similar
d. No risk
a. LBO
b. Expansion Credit
c. Distressed Buyout
d. Mezzanine finance
223. When a private equity firm purchases a financially weak company below market value with
the intention of divesting the company in future for a higher value is known as ____________.
a. Distressed Buyout
b. Collateralized loan
c. Growth Equity
d. Leveraged Buyout
224.__________ strategies involve, investor providing debt and equity investments, in the form
of rescue financing.
a. Fund of Funds
b. Hedge financing
c. Special Situation
d. Endowments
a. Increase
b. Avoiding
c. Spread
d. Decrease
227.__________ usually referred in the context of mergers and acquisitions before finalizing
deal.
a. Due diligence
b. Company Analysis
c. Fundamental Analysis
d. Technical Analysis
228. Extensive due diligence in the private equity market is needed as _________ information
available to the public about the company
a. Extensive
b. Exhaustive
c. Collaborative
d. Little
229. In the process of diligence, a schedule of the Company’s ___________ largest customers in
terms of sale is utilized to study customer information.
a. 12
b. 15
c. 20
d. 50
230. Due diligence check list for start –up companies include Financial Information, Customer
Information and details of___________.
a. Income Statement
b. Cash Flow Statement
c. Fund Flow Statement
d. Organization Goodwill
a. Mandatory test
b. Reality Test
c. Blind test
d. Acid test
a. Financial Institution
b. Venture Capitalist
c. Public Listed Company
d. Corporate Employee
234. The Term Venture Capital refers to financial investment in a highly risky and growth
oriented venture with the objective of earning a. _______________.
a. High rate of return
b. Low rate of return
c. Moderate rate of return
d. No rate of return
235. Negotiating Investment involves an agreement between the venture capitalist and
management of the terms of the term sheet, often called as _____________.
a. Articles of Association
b. Registration Certificate
c. Memorandum of Understanding (MOU).
d. Certificate of incorporation
236. ______________financing is typically known as Bridge Financing because it finances the
growth of expanding companies prior to an IPO.
a. Second Stage
b. First Stage
c. Third Stage
d. Fourth Stage
237. _____________ is a close ended Investment fund, as its current market price cannot be
easily determined and cannot be transferred for a certain period of time.
a. Mezzanine Finance
b. Public Fund
c. Growth Capital
d. Private Equity
238. The Organized private equity market has three major players, Private Equity issuers,
_____________ and Investors
a. Government Companies
b. Investment Managers
c. Merchant Bankers
d. Intermediaries
239. The Organized private equity market has three major players, _____________ ,
Intermediaries and Investors.
a. Private Equity issuers
b. Government Companies
c. Investment Managers
d. Merchant Bankers
240. Hedge Fund aims at reducing ____________, enhance returns and minimize the correlation
with equity and bond markets.
a. Risk
b. Return
c. Capital
d. Work
241. A _____________ of the portfolio company to another private equity is known as Merger
a. Sale
b. Auction
c. Buyback
d. IPO
242. The process by which the returned __________will be distributed to the investors and
allocated between Limited and General Partner is called as Distribution Waterfall
a. Capital
b. Share
c. Ownership
d. Funds
243. The process by which the returned capital will be distributed to the investors and allocated
between ____________ and General Partner is called as Distribution Waterfall.
a. Shareholders
b. Customers
c. Limited Partner
d. Employees
244. The process by which the returned capital will be distributed to the investors and allocated
between Limited Partner and ______________is called as Distribution Waterfall.
a. Shareholders
b. Customers
c. General Partner
d. Employees
245. Lock in period for money invested in ____________ is mostly for 10 years.
a. Money Market
b. Venture Capital
c. Equity Share
d. Joint Venture
246. The ___________ earn a share of the profits of the fund, referred to as Carried Interest.
a. General partners
b. Limited Partners
c. Shareholders
d. Vendors
247. Due Diligence refers to an _____________of a potential investment to confirm all material
facts of the prospective business opportunity.
a. Examination
b. Verification
c. Turnaround
d. Sale