This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 12 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A $ 100 deposit into my checking account at My Bank increases my checkable deposits by $ 100, and the bank's ..... by $ 100. A) Loans. B) Reserves. C) Securities. D) Capital. Show Answer Correct Answer: B) Reserves. 2. Demand deposits are considered money because: A) They are issued by government. B) They cannot be withdrawn. C) They are transferable by cheque. D) They earn interest. Show Answer Correct Answer: C) They are transferable by cheque. 3. What is a day trader? A) One who buys & sells stocks on a minute by minute basis to try to make a quick profit. B) Someone who holds onto their investments for a long period of time. C) One who deals with the U.S. market only. D) One who specializes in certain kinds of stocks that are related to people's day-to-day needs. Show Answer Correct Answer: A) One who buys & sells stocks on a minute by minute basis to try to make a quick profit. 4. Financial Market is classified into A) Organized and unorganized market. B) Regulatory and non-regulatory market. C) Reformatory and non-reformatory market. D) Controlled and uncontrolled Market. Show Answer Correct Answer: A) Organized and unorganized market. 5. Under ..... lease, the lessee has the option to buy the asset at the end of the lease term. A) Financial/Capital. B) Operating. C) Leverage. D) Sale and lease back. Show Answer Correct Answer: A) Financial/Capital. 6. Unit trusts are described as open-ended funds because they: A) Only invest in government securities. B) Are not regulated. C) Always accept new investments. D) Restrict the number of shares issued. Show Answer Correct Answer: C) Always accept new investments. 7. What do we call the money a bank lends to someone to buy a house? A) Mortgage. B) Stock. C) Investment. D) Equity. Show Answer Correct Answer: A) Mortgage. 8. Through which method of floatation companies allots securities to institutional investors and selected individuals. A) E-IPO's. B) Private Placement. C) Offer for sale. D) Right issue. Show Answer Correct Answer: B) Private Placement. 9. Cost of capital can be divided into three item except; A) Cost of preferred share. B) Cost of investment. C) Cost of debt. D) Cost of common share. Show Answer Correct Answer: B) Cost of investment. 10. This term refers to how easily an asset can be converted to cash: A) Liquidity. B) Eurobond. C) Commodity. D) Currency. Show Answer Correct Answer: A) Liquidity. 11. What does the acronym ETF stand for in the context of financial markets? A) Economic Trade Federation. B) Equity Trading Facility. C) Exchange Traded Fund. D) Electronic Trading Fund. Show Answer Correct Answer: C) Exchange Traded Fund. 12. The "Red Flags Rule" mandates that companies must disclose data breaches to customers, protect consumer data, prevent fraud and identity theft, and ensures training and compliance to spot identity theft and leak issues A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 13. The length of time you need to work at a company before you can take the employer's matching contribution with you is known as A) Vesting. B) 401(k) plans. C) Mutual funds. D) Diversification. Show Answer Correct Answer: A) Vesting. 14. A treasury bill is an instrument of: A) Dividend. B) Short term debt. C) Long term debt Interest. D) None of the above. Show Answer Correct Answer: B) Short term debt. 15. According to the Efficient Market Hypothesis, in an efficient market: A) Prices fully reflect available information. B) Prices remain constant. C) Insider trading guarantees profits. D) Prices lag behind information. Show Answer Correct Answer: A) Prices fully reflect available information. 16. A(n) ..... is a stock that reinvests its earnings in the business instead of paying regular dividends. A) Growth stock. B) Municipal bond. C) Mutual fund. D) None of the above. Show Answer Correct Answer: A) Growth stock. 17. In the equation MV = PT, 'M' stands for: A) Market demand. B) Supply of money. C) Marginal utility. D) Monetary policy. Show Answer Correct Answer: B) Supply of money. 18. Which of the following are primary concerns of the bank manager? A) Maintaining sufficient reserves to minimize the cost to the bank of deposit outflows. B) Extending loans to borrowers who will pay low interest rates, but who are poor credit risks. C) Acquiring funds at a relatively high cost, so that profitable lending opportunities can be realized. D) Maintaining high levels of capital and thus maximizing the returns to the owners. Show Answer Correct Answer: A) Maintaining sufficient reserves to minimize the cost to the bank of deposit outflows. 19. Secondary market deals with the ..... of existing securities. A) Stock. B) Purchase-sale. C) Purchase. D) Sale. Show Answer Correct Answer: B) Purchase-sale. 20. When a new depositor opens a checking account at the First National Bank, the bank's assets ..... and its liabilities ..... A) Decrease; decrease. B) Increase; decrease. C) Increase; increase. D) Decrease; increase. Show Answer Correct Answer: C) Increase; increase. 21. What is market capitalization? A) Market capitalization is the total revenue of a company. B) Market capitalization is the total market value of a company's outstanding shares of stock. C) Market capitalization is the total profit a company makes annually. D) Market capitalization refers to the number of employees in a company. Show Answer Correct Answer: B) Market capitalization is the total market value of a company's outstanding shares of stock. 22. The jobber's profit is known as: A) Spread. B) Brokerage. C) Commission. D) The jobber's turn. Show Answer Correct Answer: D) The jobber's turn. 23. What is the primary source of funds for commercial banks? A) Deposits. B) Investment income. C) Borrowings. D) Equity capital. Show Answer Correct Answer: A) Deposits. 24. Sit outflow results in equal reductions in A) Loans and reserves. B) Assets and liabilities. C) Reserves and capital. D) Assets and capital. Show Answer Correct Answer: B) Assets and liabilities. 25. In which market would a company issue new shares to the public for the first time? A) Foreign Exchange Market. B) Primary market. C) Derivatives Market. D) Secondary Market. Show Answer Correct Answer: B) Primary market. 26. Which organization manages monetary policy in India? A) Ministry of Finance. B) SEBI. C) RBI. D) IMF. Show Answer Correct Answer: C) RBI. 27. Who deals directly with the public, acting as their agents in the stock exchange? A) Issuing houses. B) Jobbers. C) Stock Brokers. D) Underwriters. Show Answer Correct Answer: C) Stock Brokers. 28. Money market provides ..... A) Short term Funds. B) Shares. C) Long term Funds. D) Medium term Funds. Show Answer Correct Answer: A) Short term Funds. 29. A level of performance that describes using the least amount of input to achieve the highest amount of output. A) Liquidity. B) Efficiency. C) Commodity. D) Market. Show Answer Correct Answer: B) Efficiency. 30. Listing requirements for the Second-Tier Securities Market are generally ..... for small/medium enterprises. A) Less stringent. B) The same as the main market. C) Non-existent. D) More stringent. Show Answer Correct Answer: A) Less stringent. 31. Which of the following statements is not true with regard to money market? A) It involves low market risk. B) It is situated at specific locations. C) Deals in unsecured and short-term debt instruments. D) The instruments traded are highly liquid. Show Answer Correct Answer: B) It is situated at specific locations. 32. What age must you be in order to withdraw from your 401k without any penalty? A) Doesn't matter what age. B) 65 years old. C) 59.5 years old. D) 59 years old. Show Answer Correct Answer: C) 59.5 years old. 33. What is meant by the term 'stock' in a financial market? A) A type of loan issued by a company. B) An ownership share in a company. C) A government bond. D) A certificate of deposit issued by a bank. Show Answer Correct Answer: B) An ownership share in a company. 34. What does a full service broker provide? A) A wide range of services such as market research, investment advice, and tax planning in addition to carrying out your trades. B) Basic trading services without additional support. C) Only tax planning services without investment advice. D) Exclusive access to high-risk investment opportunities. Show Answer Correct Answer: A) A wide range of services such as market research, investment advice, and tax planning in addition to carrying out your trades. 35. Which of the following best describes the function of financial intermediaries in financial markets? A) They provide legal advice to investors. B) They connect savers with borrowers. C) They regulate government policies. D) They manufacture goods for export. Show Answer Correct Answer: B) They connect savers with borrowers. 36. Two issues that play a major role in setting an investment objective. A) Time and results. B) Time and income. C) Diversification and return. D) Risk and return. Show Answer Correct Answer: B) Time and income. 37. Which of the following financial intermediaries commonly invests in stocks and bonds? A) Insurance companies. B) Pension funds. C) Mutual funds. D) All of these. Show Answer Correct Answer: D) All of these. 38. New York Stock Exchange is an example of A) Capital markets. B) Short-term markets. C) Money markets. D) Liquid markets. Show Answer Correct Answer: A) Capital markets. 39. When making a risky investment, investors usually demand a ..... A) Higher compensation. B) Lower compensation. C) Lower purchasing price. D) Higher selling price. Show Answer Correct Answer: A) Higher compensation. 40. The following share holders have no voting rights A) Equity. B) Preference. C) Common. D) None. Show Answer Correct Answer: B) Preference. 41. Which role of financial markets involves determining the prices of financial assets? A) Allocation of Capital. B) Risk Management. C) Price Discovery. D) Economic Growth. Show Answer Correct Answer: C) Price Discovery. 42. The 'jobber's turn' is the difference between his: A) Quoted price and actual transaction price. B) Selling and buying price. C) Commission earned and expenses. D) Short-term and long-term investment returns. Show Answer Correct Answer: B) Selling and buying price. 43. What did the Financial Services Modernization Act of 1999 do? A) It mandated that all banks must offer insurance services. B) It strengthened the Glass-Steagall Act's restrictions on banks. C) It reversed the Glass-Steagall Act's prohibition of commercial banks selling insurance or acting as investment banks. D) It allowed banks to only sell stocks and bonds. Show Answer Correct Answer: C) It reversed the Glass-Steagall Act's prohibition of commercial banks selling insurance or acting as investment banks. 44. The objectives of SEBI include A) To protect interests of inventors. B) To regulate securities market. C) To promote the development of the market. D) All of the above. Show Answer Correct Answer: D) All of the above. 45. An asset which gets its value from a contractual right or ownership claim A) Fixed asset. B) Financial Asset. C) Non financial asset. D) Fictitious Asset. Show Answer Correct Answer: B) Financial Asset. 46. Stabilization of prices of ..... is a function of the stock exchange. A) Foreign currencies. B) Consumer goods. C) Raw materials. D) Securities. Show Answer Correct Answer: D) Securities. 47. Who are the major investors in capital market A) Government Agencies. B) Insurance companies. C) Individual Investors. D) Treasury Department. Show Answer Correct Answer: B) Insurance companies. 48. America's oldest & most powerful stock exchange is called A) NASDAQ. B) Open Market Trade Commission. C) E Trade. D) The New York Stock Exchange. Show Answer Correct Answer: D) The New York Stock Exchange. 49. What is the significance of stock market indices? A) Stock market indices are used to predict the weather. B) Stock market indices help investors assess the performance of the market and make investment decisions. C) Stock market indices are only relevant for large corporations. D) Stock market indices have no impact on the economy. Show Answer Correct Answer: B) Stock market indices help investors assess the performance of the market and make investment decisions. 50. The following are advantages of efficient credit programme EXCEPT A) Less difficult collection problems for the debtor. B) Higher rates of repayment. C) Less credit diversion. D) Farmers face less debt obligation burden. Show Answer Correct Answer: A) Less difficult collection problems for the debtor. 51. Inggris, Amerika Serikat dan Jepang menyumbang lebih dari setengah dari semua perdagangan mata uang global. Mata uang yang mendominasi pasar valuta asing adalah ..... A) USD. B) Euro. C) Yen. D) Pounds. Show Answer Correct Answer: A) USD. 52. The trade-off for investing in real estate is A) Never getting your money back. B) Not being able to get your money quickly. C) Being able to sell property on short notice. D) Making a large profit. Show Answer Correct Answer: B) Not being able to get your money quickly. 53. The interest rate that a bondholder receives every year until the bond matures is called the A) Bond rating. B) Coupon rate. C) Mature value. D) Par value. Show Answer Correct Answer: B) Coupon rate. 54. A type of market in which each transaction takes place at predetermined time intervals A) Call Market. B) Financial Market. C) Bond Market. D) Continuous Market. Show Answer Correct Answer: A) Call Market. 55. In a period of prolonged economic growth and rising inflation, the Central bank is more likely to: A) Decrease interest rates to stimulate further the economy. B) Increase interest rates to stimulate further the economy. C) Lower interest rates to cool down the economy. D) Raise interest rates to cool down the economy. Show Answer Correct Answer: D) Raise interest rates to cool down the economy. 56. What is the purpose of a bond market? A) To allow governments to issue currency directly to the public. B) To provide a platform for trading stocks and shares. C) The purpose of a bond market is to enable the issuance and trading of debt securities, allowing entities to raise capital and investors to earn returns. D) To facilitate the buying and selling of real estate properties. Show Answer Correct Answer: C) The purpose of a bond market is to enable the issuance and trading of debt securities, allowing entities to raise capital and investors to earn returns. 57. Mr Fan invested RM 20, 000 in Bursa Malaysia. What are the benefits of investing in shares to Mr Fan? I enjoy fixed income annuallyII convert to cash easilyIII earn capital gainIV enjoy interest A) D II, IV. B) C II, III. C) B I, IV. D) A I, III. Show Answer Correct Answer: B) C II, III. 58. Current, the book value per share is GBP 40.50. The company has announced 2 for 5 bonus share issue. The book value per share after the Bonus issue could be, A) GBP 40.50. B) GBP 28.92. C) GBP 8.1. D) GBP 5.78. Show Answer Correct Answer: B) GBP 28.92. 59. What is the primary purpose of the money market? A) Stock trading. B) Long-term investment. C) Real estate investment. D) Short-term, highly liquid debt securities. Show Answer Correct Answer: D) Short-term, highly liquid debt securities. 60. Imagine you are an investor. You are in a market where you directly negotiate and transact business with other investors, without any intermediary such as resellers. What type of market is this? A) Auction Market. B) Foreign Exchange Market. C) Primary Market. D) Equity Market. Show Answer Correct Answer: C) Primary Market. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Business Studies Chapter 10 Financial Markets Quiz 1Class 12 Business Studies Chapter 10 Financial Markets Quiz 2Class 12 Business Studies Chapter 10 Financial Markets Quiz 3Class 12 Business Studies Chapter 10 Financial Markets Quiz 4Class 12 Business Studies Chapter 10 Financial Markets Quiz 5Class 12 Business Studies Chapter 10 Financial Markets Quiz 6Class 12 Business Studies Chapter 10 Financial Markets Quiz 7Class 12 Business Studies Chapter 10 Financial Markets Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books