Question : Case Study 80
LMN Corporation is a well-established company planning to raise funds for its expansion projects. The company's management is considering the regulatory functions of SEBI.
Question :
How does SEBI protect the rights of investors?
Option 1: By issuing new shares
Option 2: By regulating credit rating agencies
Option 3: By preventing fraudulent activities
Option 4: By setting interest rates
Correct Answer: By preventing fraudulent activities
Solution : The correct answer is (c) By preventing fraudulent activities
SEBI (Securities and Exchange Board of India) protects the rights of investors primarily by preventing fraudulent activities in the securities market. It regulates and supervises the securities market to ensure fair and transparent dealings, which helps in protecting the interests and rights of investors. In summary, SEBI's role in preventing fraudulent activities and enforcing regulations promotes a fair and secure environment for investors, ultimately protecting their rights.
What is the primary regulatory role of SEBI?
Option 1: Allocating resources to companies
Option 2: Facilitating trading on stock exchanges
Option 3: Protecting the rights of investors
Option 4: Providing loans to companies
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