This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 14 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is an Indian depository receipt? A) It is a depository account with any of the depositories in India. B) It is an instrument in the form of deposit receipt issued by Indian depositories. C) A deposit account with a public sector bank. D) An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company. Show Answer Correct Answer: C) A deposit account with a public sector bank. 2. The most important characteristic of money for determining its value is A) Homogeneity. B) Portability. C) Durability. D) How limited it is in supply. Show Answer Correct Answer: D) How limited it is in supply. 3. A bond purchased at 7% yield becomes more attractive when? A) Interest rate drops to 6%. B) Interest rate rises to 8%. C) Repo rate increases. D) None of the above. Show Answer Correct Answer: A) Interest rate drops to 6%. 4. Money market deals in ..... A) Medium-term securities. B) Short term Securities. C) Long term Securities. D) None of these. Show Answer Correct Answer: B) Short term Securities. 5. Sistem yang mengalokasikan sumber daya keuangan dalam bentuk hutang dan ekuitas sesuai dengan penggunaannya yang paling efisien adalah ..... A) Bentuk pasar modal. B) Tujuan pasar modal. C) Definisi pasar modal. D) Keuntungan pasar modal. Show Answer Correct Answer: C) Definisi pasar modal. 6. To finance the building of a new police station, a local government is most likely to issue a A) Money market bond. B) High-yield bond. C) Municipal bond. D) Treasury bond. Show Answer Correct Answer: C) Municipal bond. 7. Which of the following is not true with respect to spot market liquidity? A) The more willing buyers and sellers there are, the more liquid a market is. B) The spot markets for heavily traded currencies such as the Japanese yen are very liquid. C) A currency's liquidity affects the ease with which an MNC can obtain or sell that currency. D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate. Show Answer Correct Answer: D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate. 8. The Message Window in the NEAT system is used to: A) Display detailed financial reports. B) Provide market news, corporate actions, and auction-related information SIR. C) Display orders placed by the user. D) Execute trades automatically. Show Answer Correct Answer: B) Provide market news, corporate actions, and auction-related information SIR. 9. An investor who prefers lower returns with known risks rather than higher returns with unknown risks. A) Bears and pigs. B) Bulls and chicken. C) Risk-neutral. D) None of the above. Show Answer Correct Answer: B) Bulls and chicken. 10. A person who buys or sells equities for his or her clients is a A) Financial advisor. B) Accountant. C) Stockbroker. D) Insurance agent. Show Answer Correct Answer: C) Stockbroker. 11. The main regulator of the capital market in India is: A) NABARD. B) SEBI. C) RBI. D) Ministry of Finance. Show Answer Correct Answer: B) SEBI. 12. Development stocks and Government bonds are instruments of the: A) Foreign exchange market. B) Capital market. C) Money market. D) Commodity market. Show Answer Correct Answer: B) Capital market. 13. Which of the following are reported as assets on a bank's balance sheet? A) Bank capital. B) Borrowings. C) Savings deposits. D) Reserves. Show Answer Correct Answer: D) Reserves. 14. Investors look for the following while investing A) Return. B) Risk. C) Liquidity. D) All. Show Answer Correct Answer: D) All. 15. "Stock Exchange" A) A person who manages the buying and selling of stocks. B) A market where stocks can be bought and sold. C) The range of investments held by a person or organization. D) A report that describes a company's financial history. Show Answer Correct Answer: B) A market where stocks can be bought and sold. 16. Which financial institution handles insurance regulation in India? A) IRDAI. B) SEBI. C) SIDBI. D) RBI. Show Answer Correct Answer: A) IRDAI. 17. Foreign exchange A) Financial institution. B) Financial instrument. C) Financial market. D) None of the above. Show Answer Correct Answer: C) Financial market. 18. Which financial market is known for trading long-term debt securities with maturities A) Stock Market. B) Forex Market. C) Commodity Market. D) Bond Market. Show Answer Correct Answer: D) Bond Market. 19. What is one way to avoid herd instinct? A) Investing in what is trending on Twitter. B) Following the advice of celebrity investors. C) Buying stocks that have the highest growth in the past year. D) Doing your own research and developing your own opinions. Show Answer Correct Answer: D) Doing your own research and developing your own opinions. 20. One helpful guideline for investing is that A) You should invest in stocks before paying off credit card debt. B) If you have a low income, you must worry about tax liability first. C) The longer you have to invest, the more risk you can take. D) The less time you have to invest, the more risk you should take. Show Answer Correct Answer: C) The longer you have to invest, the more risk you can take. 21. A broker has bought 100 shares of PVR on behalf of client A. He has also sold 1000 shares of PVR for client B on the same day. How will he settle delivery obligations with the clearing corporation? A) Receive 100 shares from and deliver 1000 shares to the clearing corporation. B) Receive 100 shares first and then deliver 1000 shares to the clearing corporation. C) Deliver 900 shares net to the clearing corporation. D) None of the above. Show Answer Correct Answer: C) Deliver 900 shares net to the clearing corporation. 22. The market value size of outstanding instruments of capital markets depends on factors? A) Primary cash flows. B) Number of issued securities. C) Market prices of securities. D) Number of issued securities and market prices of securities. Show Answer Correct Answer: D) Number of issued securities and market prices of securities. 23. What does FII stand for? A) Federal Interest Investment. B) Foreign Interest Investment. C) Foreign Income Investor. D) Foreign Institutional Investor. Show Answer Correct Answer: D) Foreign Institutional Investor. 24. The money market where debt and stocks are traded and maturity period is more than a year is classified as: A) Counter markets. B) Long-term markets. C) Shorter term markets. D) Capital Markets. Show Answer Correct Answer: D) Capital Markets. 25. Investment banks help companies raise capital by helping corporations design securities with features that are currently attractive to investors. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 26. Intermediaries who are agents of investors and match buyers with sellers of securities are called? A) Traders. B) Investment bankers. C) Dealers. D) Brokers. Show Answer Correct Answer: D) Brokers. 27. Corporate bonds are issued by ..... A) Banks. B) Private Companies. C) Local Governments. D) The Federal Government. Show Answer Correct Answer: B) Private Companies. 28. ..... is the organizations, institutions that provide long term funds. A) Capital market. B) Secondary market. C) Money market. D) Primary market. Show Answer Correct Answer: A) Capital market. 29. What is the main objective of the RBI's monetary policy? A) Control inflation. B) Promote savings. C) Regulate imports. D) Tax collection. Show Answer Correct Answer: A) Control inflation. 30. Which of these is not a function of SEBI? A) Regulating securities market. B) Controlling monetary policy. C) Protecting investor interests. D) Controlling monetary policy. Show Answer Correct Answer: B) Controlling monetary policy. 31. Solve a numerical problem on equity valuation. A) $ 25. B) $ 60. C) $ 15. D) $ 40. Show Answer Correct Answer: D) $ 40. 32. Three ways people can save money with little risk include ..... A) Buying an insurance policy, contributing to a pension fund, buying stock. B) Have a savings account, buying certificates of deposit, buying stock. C) Buying an insurance policy, contributing to a finance company, buying CDs. D) Have a savings account, buying certificates of deposit, buying an insurance policy. Show Answer Correct Answer: D) Have a savings account, buying certificates of deposit, buying an insurance policy. 33. A marketable document of title to a time deposit for a specified period may be referred to as a ..... A) Commercial Bill. B) Certificate of Deposit. C) Treasury Bill. D) Government Securitites. Show Answer Correct Answer: B) Certificate of Deposit. 34. Which of the following is an advantage of a 401(k) plan? A) You never pay taxes on your contributions. B) You may withdraw funds at any time without penalty. C) Your contributions are invested in high-return, high-risk funds. D) Most employers match a portion of your contributions. Show Answer Correct Answer: D) Most employers match a portion of your contributions. 35. When you deposit $ 50 in your account at First National Bank and a $ 100 check you have written on this account is cashed at Chemical Bank, then A) The assets of First National rise by $ 50. B) The assets of Chemical Bank rise by $ 50. C) The reserves at First National fall by $ 50. D) The liabilities at Chemical Bank rise by $ 50. Show Answer Correct Answer: C) The reserves at First National fall by $ 50. 36. In a stock exchange, what does a "stock broker" do? A) Buys and sells stocks on behalf of clients B) Issues stocks to companies C) Regulates the market D) Conducts financial audits A) A. B) C. C) D. D) B. Show Answer Correct Answer: A) A. 37. If a bank needs to acquire funds quickly to meet an unexpected deposit outflow, the bank could A) Borrow from another bank in the federal funds market. B) Buy U.S. Treasury bills. C) Buy corporate bonds. D) Increase loans. Show Answer Correct Answer: A) Borrow from another bank in the federal funds market. 38. What types of financial assets are traded in financial markets? A) Real estate, art, collectibles. B) Insurance policies, savings accounts. C) Stocks, bonds, derivatives, currencies, and commodities. D) Mutual funds, retirement plans. Show Answer Correct Answer: C) Stocks, bonds, derivatives, currencies, and commodities. 39. What is currency speculation? A) Investing in foreign stocks. B) Converting currencies for trade. C) Buying and selling currencies to profit from price changes. D) Buying currencies to hold long-term. Show Answer Correct Answer: C) Buying and selling currencies to profit from price changes. 40. Spreading out your investments to reduce risk is known as ..... A) Portfolio. B) Diversification. C) Par value. D) None of the above. Show Answer Correct Answer: B) Diversification. 41. Money that has no intrinsic value and is legal tender only because of government decree is called A) Credit. B) Representative money. C) Fiat money. D) Currency. Show Answer Correct Answer: C) Fiat money. 42. Why might an importer use the futures market? A) To bypass currency regulations. B) To speculate on the price of raw materials. C) To invest in foreign real estate. D) To hedge against potential exchange rate fluctuations. Show Answer Correct Answer: D) To hedge against potential exchange rate fluctuations. 43. What is the purpose of the Market Watch Window in the NEAT system? A) To display detailed charts and analysis. B) To view trading details of securities that are of interest to the user. C) To display the latest news related to stocks. D) To place buy and sell orders. Show Answer Correct Answer: B) To view trading details of securities that are of interest to the user. 44. Which of the following is an example of commodity money? A) Token coins. B) Debit card. C) Cowrie shells. D) RM50 note. Show Answer Correct Answer: C) Cowrie shells. 45. A market in which all financial assets can be sold to someone other than the original issuer A) Risk. B) Primary market. C) Secondary market. D) Savings. E) Portfolio diversification. Show Answer Correct Answer: C) Secondary market. 46. A ..... can make shares seem more affordable to small investors (even though the underlying value of the company has not changed). A) Stock Investment. B) Stock Appreciation. C) Stock Split. D) Dividend. Show Answer Correct Answer: C) Stock Split. 47. Lower interest rates encourage ..... A) Savers to save more. B) Borrowers to borrow more. C) All the above. D) None of the above. Show Answer Correct Answer: B) Borrowers to borrow more. 48. A characteristic of a purely competitive labor market would be A) Workers supplying labor under a union contract. B) Price maker behavior by firms. C) Firms hiring different types of labor. D) Wage taker behavior by firms. Show Answer Correct Answer: D) Wage taker behavior by firms. 49. It acts like a bank and keeps securities in electronic form on behalf of the investor, (a) Depository Participant (b) Depository (c) Stock exchange (d) None of the above A) A) Depository Participant. B) Depository. C) Stockexchange. D) None of above. Show Answer Correct Answer: B) Depository. 50. Which of the following is not a method of transferring capital in the economy? A) Government fiscal transfer. B) Indirect transfer through financial intermediaries. C) Direct transfer. D) Indirect transfer through investment banks. Show Answer Correct Answer: A) Government fiscal transfer. 51. In general, people put money in risky investments because A) Such investments often earn the greatest profits. B) They receive bad advice from a financial analyst. C) No other investments are available at the time. D) They can take a tax deduction if they lose money. Show Answer Correct Answer: A) Such investments often earn the greatest profits. 52. An ideal Capital market is one A) Must provide insufficient information to investors. B) Where market operations are inconsistent. C) Which facilitates economic growth. D) Where finance is available at higher cost. Show Answer Correct Answer: C) Which facilitates economic growth. 53. Penjualan Pertama Kali Sekuritas (Saham atau Obligasi) pada Pasar Primer disebut dengan ..... A) Initial Public Offering. B) Primary Sale. C) Initial Primary Offering. D) Public Sale. Show Answer Correct Answer: A) Initial Public Offering. 54. In order to reduce the ..... problem in loan markets, bankers collect information from prospective borrowers to screen out the bad credit risks from the good ones. A) Adverse selection. B) Moral suasion. C) Moral hazard. D) Adverse lending. Show Answer Correct Answer: A) Adverse selection. 55. Registered intermediary between buyer and seller of instruments is called A) Stock Exchange. B) Depository Participant. C) Stock Broker. D) None of the above. Show Answer Correct Answer: C) Stock Broker. 56. In a manufacturing company, a manager is trying to achieve a level of performance where the least amount of raw materials and labor are used to produce the maximum number of products. What is this called? A) Market. B) Liquidity. C) Commodity. D) Efficiency. Show Answer Correct Answer: D) Efficiency. 57. An uptrend can best be described as ..... A) A long line of upward price movements. B) A new trend in trading. C) A series of higher highs and higher lows. D) A series of higher highs and lower lows. Show Answer Correct Answer: C) A series of higher highs and higher lows. 58. As per SEBI guidelines investment pattern of Midcap fund should be A) Minimum investment in equity & equity related instrument should be 50% of total asset class. B) Minimum investment in equity & equity related instrument should be 65% of total asset class. C) Minimum investment in equity & equity related instrument should be 80% of total asset class. D) Minimum investment in equity & equity related instrument should be 75% of total asset class. Show Answer Correct Answer: B) Minimum investment in equity & equity related instrument should be 65% of total asset class. 59. John wants to sell one of his assets quickly for cash. Which term refers to this ability? A) Eurobond. B) Currency. C) Commodity. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 60. A forward foreign exchange contract is best described as: A) Immediate exchange of currencies. B) Illegal speculative trading. C) Exchange at market price only. D) Future settlement at a price agreed today. Show Answer Correct Answer: D) Future settlement at a price agreed today. ← 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