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    Question

    Which of the following describes a mechanism to maintain

    stability in price after listing of securities?
    A Underwriting Correct Answer Incorrect Answer
    B Front running Correct Answer Incorrect Answer
    C Green-shoe option Correct Answer Incorrect Answer
    D Circuit breakers Correct Answer Incorrect Answer
    E Arbitrage Correct Answer Incorrect Answer

    Solution

    The green Shoe Option is an option to allocate shares in excess of the shares which have already been issued to the public. This is a price stabilizing mechanism and SEBI introduced the Green Shoe mechanism in Indian capital markets in 2003.

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