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Financial Market Management — CBSE Class 10 board question

Q1. [1]
In a book building issue, the issuer is required to indicate either the price band or a floor price in the prospectus. The actual discovered issue price can be any price in the price band or any price above the floor price. This issue price is referred to :
  1. (A) Floor Price
  2. (B) Price Band
  3. (C) Cut-off Price
  4. (D) Market Price
Previously asked in CBSE board exam
2025 92 Q4 (ii)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer

(C) Cut-off Price

In a book building issue, the actual discovered issue price — which can be any price in the price band or above the floor price — is called the Cut-off Price.

Source: Chapter 3, Section 3.1 – "What is Cut-Off Price?"

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Explanation

The passage directly defines Cut-off Price as the discovered issue price in a book building process. Students often confuse it with Floor Price (minimum bid price) or Price Band (the range). Remember: Floor Price = minimum; Price Band = range; Cut-off Price = final discovered price after book building.

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