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General Studies

Topic – Financial Market

Sub Topic- -Primary Market- Price Stabilization Method

Relevance for Prelims and Mains

Practice Question for Mains

Question-1 What is price stabilization mechanism in Primary Market? How does it help in price stabilization ? (150 Words, 10 Marks)

(Post Ans in comment section)

Question-2 The green shoe option is a clause in the underwriting agreement of an IPO, which grants the underwriter –

1. the right to sell investors more shares than initially planned by the issuer

2. the right to sell investors Less shares than initially planned by the issuer

Select the correct option

a) 1 Only

b) 2 Only

c) 1& 2 Both

d) Neither 1 nor 2

Ans – a

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