This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 2 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. SEBI protects the interest of A) Investor. B) Companies. C) Brokers. D) None of the above. Show Answer Correct Answer: A) Investor. 2. Apa perbedaan utama antara bank syariah dan bank konvensional? A) Bank syariah tidak memberikan layanan pinjaman. B) Bank syariah hanya melayani umat Muslim. C) Bank syariah hanya beroperasi di negara Islam. D) Bank syariah tidak mengenakan bunga, tetapi menggunakan sistem bagi hasil. Show Answer Correct Answer: D) Bank syariah tidak mengenakan bunga, tetapi menggunakan sistem bagi hasil. 3. Which of the following falls in the Category of Zero Coupon Bond? A) Treasury Bill. B) Commercial Paper. C) Certificate of Deposit. D) Commercial Bill. Show Answer Correct Answer: A) Treasury Bill. 4. What is the difference between commercial banks and investment banks? A) Commercial banks focus on deposits and loans; investment banks focus on underwriting and advisory services. B) Commercial banks are government-owned; investment banks are privately held firms. C) Commercial banks provide financial advice; investment banks focus on consumer loans. D) Commercial banks invest in stocks and bonds; investment banks handle personal savings. Show Answer Correct Answer: A) Commercial banks focus on deposits and loans; investment banks focus on underwriting and advisory services. 5. An ..... is simply the rate at which one currency is converted into another. A) Exchange rate. B) Conversion rate. C) Interest rate. D) None of the above. Show Answer Correct Answer: A) Exchange rate. 6. Which of the following is a money market instrument? A) Treasury bills. B) Treasury bills. C) Corporate bonds. D) Equity shares. Show Answer Correct Answer: A) Treasury bills. 7. Which of the following bank assets is the most liquid? A) Consumer loans. B) Reserves. C) State and local government securities. D) U.S. government securities. Show Answer Correct Answer: B) Reserves. 8. Which is the best description of a 'money market' A) Those people and organisations who want money and the people and organisations who are willing and able to supply money. B) Any place where buyers and sellers come together. C) The exchanges made in an economy for goods and services. D) A financial institution where investors can make deposits. Show Answer Correct Answer: A) Those people and organisations who want money and the people and organisations who are willing and able to supply money. 9. ..... the interest coverage ratio better is the firm's ability to meet its interest burden. A) Higher. B) Lower. C) Does not matter. D) None of the above. E) Not Attempted. Show Answer Correct Answer: A) Higher. 10. The price of a bond including accrued interest, also known as A) Face Value + Coupon. B) Dirty Price-Accrued Interest. C) Coupon Rate x Face Value. D) Purchase Price + Interest. Show Answer Correct Answer: B) Dirty Price-Accrued Interest. 11. The money put into this type of account has already had taxes taken out. A) Roth IRA. B) Pension. C) Traditional IRA. D) 401K. Show Answer Correct Answer: A) Roth IRA. 12. The minimum period till which a debt instrument must be retained in order to qualify as Long Term is: A) 2 year. B) 1 year. C) 4 year. D) 3 year. Show Answer Correct Answer: D) 3 year. 13. Raghav, age 23, has just started earning. What will be his approach towards investments? A) Wealth consolidation. B) Wealth accumulation. C) All the above. D) None of the above. Show Answer Correct Answer: A) Wealth consolidation. 14. If interest rates rise, speculative demand for money will: A) Increase. B) Decrease. C) Become unpredictable. D) Stay constant. Show Answer Correct Answer: B) Decrease. 15. Which motive for money demand is influenced by income level? A) Only transaction motive. B) Only precautionary motive. C) Both transaction and precautionary motives. D) Only speculative motive. Show Answer Correct Answer: C) Both transaction and precautionary motives. 16. Profitability Ratio is measured as ..... A) Future growth prospects of a company. B) Payout to shareholders. C) Sales growth of a firm. D) Operating / management efficiency of a firm. E) Not Attempted. Show Answer Correct Answer: D) Operating / management efficiency of a firm. 17. A bank will want to hold more excess reserves (everything else equal) when A) It expects to have deposit inflows in the near future. B) Brokerage commissions on selling bonds increase. C) The cost of selling loans falls. D) The discount rate decreases. Show Answer Correct Answer: B) Brokerage commissions on selling bonds increase. 18. Banks that actively manage liabilities will most likely meet a reserve shortfall by A) Calling in loans. B) Borrowing federal funds. C) Selling municipal bonds. D) Seeking new deposits. Show Answer Correct Answer: B) Borrowing federal funds. 19. Current market price of the share is USD 60. The company made a bonus issue of 1 for 4. Which of the following could be the approximate market value per share after the bonus issue. A) USD 48. B) USD 60. C) USD 15. D) USD 65. Show Answer Correct Answer: A) USD 48. 20. What is the significance of interest rates in financial markets? A) They only affect the money market. B) They are irrelevant to market operations. C) They influence the cost of borrowing and the return on savings. D) They determine the value of stocks. Show Answer Correct Answer: C) They influence the cost of borrowing and the return on savings. 21. Face value of a share is A) Value of tangible assets. B) Book value. C) Fixed denominations. D) Market value. Show Answer Correct Answer: C) Fixed denominations. 22. A stock is a(n) ..... instrument. A) Equity. B) Debt. C) All the above. D) None of the above. Show Answer Correct Answer: A) Equity. 23. Which statement best describes how an investor makes money off debt? A) An investor makes money by earning interest. B) An investor DO NOT make money by earning interest. C) All the above. D) None of the above. Show Answer Correct Answer: A) An investor makes money by earning interest. 24. An example of economies of scale in the provision of financial services is A) Investing in a diversified collection of assets. B) Providing depositors with a variety of savings certificates. C) Hiring more support staff so that customers don't have to wait so long for assistance. D) Spreading the cost of writing a standardized contract over many borrowers. Show Answer Correct Answer: D) Spreading the cost of writing a standardized contract over many borrowers. 25. Putability (put option) A) Gives the bond holders the option to convert the bond into another security, typically the common stock of the firm issuing the convertible bonds. B) Gives the holder the right, under certain circumstances to sell the bond back to the firm. C) Allows the issuing firms to retire the bonds before the maturity by paying a prescribed price. D) Allows the investor to redeem the bond. Show Answer Correct Answer: A) Gives the bond holders the option to convert the bond into another security, typically the common stock of the firm issuing the convertible bonds. 26. Apa prinsip utama yang digunakan dalam operasional bank syariah? A) Spekulasi Pasar. B) Margin Kredit. C) Sistem Bunga. D) Profit Sharing. Show Answer Correct Answer: D) Profit Sharing. 27. Which institution was the regulator responsible for ensuring financial institutions held sufficient capital and had effective risk management practices following the Global Financial Crisis of 2007-09? A) Australian Prudential Regulation Authority(APRA). B) Reserve Bank of Australia (RBA). C) Australian Securities and Investments Commission (ASIC). D) Treasury. Show Answer Correct Answer: A) Australian Prudential Regulation Authority(APRA). 28. The Dow Jones Industrial Average consists of A) 60 from various companies around the world. B) 30 stocks that are considered representative of the market as a whole. C) The top-selling 250 stocks over a 10 year period. D) 500 stocks that change annually. Show Answer Correct Answer: B) 30 stocks that are considered representative of the market as a whole. 29. It represent ownership claims on a company's net assets. A) Shareholder. B) Equity Securities. C) Stock Market. D) Stock Certificate. Show Answer Correct Answer: B) Equity Securities. 30. What is "mark-to-market gain" ? A) Profit on maturity of a bond. B) Bonus units in mutual funds. C) Appreciation in bond value due to interest rate fall. D) Dividend payout. Show Answer Correct Answer: C) Appreciation in bond value due to interest rate fall. 31. Which of the following statements is true with regard to financial markets? A) They link the households which save funds and business firms which invest these funds. B) They work as an intermediary between the savers and the investors by mobilising funds between them. C) They allocate funds available for investment into their most productive investment opportunity. D) All of the above. Show Answer Correct Answer: D) All of the above. 32. Which component is not a part of capital market? A) Derivative Market. B) Debt Market. C) Insurance Market. D) Equity Market. Show Answer Correct Answer: C) Insurance Market. 33. The process of buying and selling securities through internet is called: A) Digital marketing. B) E-commerce. C) Online trading. D) Retail banking. Show Answer Correct Answer: C) Online trading. 34. Primary and secondary markets: A) Function independently. B) Control each other. C) Compete with each other. D) Complement each other. Show Answer Correct Answer: D) Complement each other. 35. Which of the following is not a protective function of stock exchange? A) Prohibition of fraudulent and unfair trade practices. B) Controlling insider trading. C) Regulation of takeover bids by companies. D) Promotion of fair practices and code of conduct in securities market. Show Answer Correct Answer: C) Regulation of takeover bids by companies. 36. What does tax deferred mean when it comes to 401k? A) You pay taxes as you go. B) You pay taxes later when you withdraw. C) You pay taxes now when you contribute. D) You never have to pay taxes. Show Answer Correct Answer: B) You pay taxes later when you withdraw. 37. In which of the following markets would a government issue Treasury bonds? A) Capital market. B) Derivatives Market. C) Foreign Exchange Market. D) Money market. Show Answer Correct Answer: A) Capital market. 38. How many companies comprise the Bombay Stock Exchange 'Sensex'? A) 50. B) 20. C) 40. D) 30. Show Answer Correct Answer: D) 30. 39. What is the maximum duration for which term money can be lent/borrowed? A) 1 year. B) 1 day. C) 30 days. D) 15 days. Show Answer Correct Answer: A) 1 year. 40. Which type of financial market instrument is generally considered the least risky? A) Equity shares. B) Corporate bonds. C) Government securities. D) Real estate investments. Show Answer Correct Answer: C) Government securities. 41. Which has less risk? A) Bonds. B) Stocks. C) All the above. D) None of the above. Show Answer Correct Answer: A) Bonds. 42. Which partnership is Jio Financial Services engaged in for asset management / wealth business? A) With BlackRock. B) With Vanguard. C) With Fidelity. D) With UBS. Show Answer Correct Answer: A) With BlackRock. 43. Corporate financing comes ultimately from: A) The financial markets and intermediaries. B) Cash generated from the firm's operations. C) The issue of shares in the firm. D) Savings by households and foreign investors. Show Answer Correct Answer: D) Savings by households and foreign investors. 44. Venture capitalists typically provide funds to high-risk startup companies but take no active role in their management. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 45. Where are stocks that are not listed on stock exchanges traded? A) In private equity markets. B) On major stock exchanges. C) Through crowdfunding platforms. D) Over-the-counter (OTC) markets. Show Answer Correct Answer: D) Over-the-counter (OTC) markets. 46. Imagine you are an entrepreneur who wants to raise funds for your startup. You decide to give investors a chance to profit by allowing your company's stock shares to be traded. What type of market would this be? A) Debt Market. B) Over-the-counter Market. C) Auction Market. D) Equity Market. Show Answer Correct Answer: D) Equity Market. 47. Companies in this category have a market cap between $ 10 to $ 200 billion. A) Mid-cap. B) Large-cap. C) Mega-cap. D) Micro-cap. Show Answer Correct Answer: B) Large-cap. 48. What is the main purpose of diversification in investment portfolios? A) Reducing risk. B) Maximizing returns. C) Minimizing taxes. D) Increasing liquidity. Show Answer Correct Answer: A) Reducing risk. 49. How many categorizations of financial markets are mentioned in the text? A) 6. B) 10. C) 4. D) 8. Show Answer Correct Answer: D) 8. 50. What is the primary risk associated with a call option in the derivatives market? A) The risk of exercising the option too late. B) The risk of the underlying asset appreciating. C) The risk of market volatility. D) The risk of losing the premium paid for the option. Show Answer Correct Answer: D) The risk of losing the premium paid for the option. 51. Which among the following is considered to be the most liquid asset? A) Gold. B) Money. C) Land. D) Government bonds. Show Answer Correct Answer: B) Money. 52. These shares gives the holders distinct rights that enable them to be prioritized over the holders of ordinary shares. A) Ordinary Share. B) Treasury Shares. C) Ordinary Preference Share. D) Preference Share. Show Answer Correct Answer: D) Preference Share. 53. Spot transactions involve the exchange of foreign currencies at some specified time and rate in the future the whereas forward markets involve immediate exchange of foreign currency . A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 54. Higher wage rates and a higher level of employment for workers are the usual consequences of A) Inclusive or craft unionism. B) Exclusive or industrial unionism. C) An above-equilibrium wage rate. D) An increase in the productivity of labor. Show Answer Correct Answer: D) An increase in the productivity of labor. 55. If the money supply/access to credit was reduced, what would happen to the Price Level? A) Falls/Deflation. B) Rises/Inflation. C) All the above. D) None of the above. Show Answer Correct Answer: A) Falls/Deflation. 56. The process of holding shares in electronic form is known as A) Demutualisation. B) Dematerialisation. C) Speculation. D) None of the above. Show Answer Correct Answer: B) Dematerialisation. 57. The settlement cycle in Indian stock exchanges is currently: A) T+3. B) Same day. C) T+5. D) T+1. Show Answer Correct Answer: A) T+3. 58. Publicly Traded Companies are required to file financial statements and documents with which entity? A) FDIC-Federal Deposit Insurance Corporation. B) FRS-Federal Reserve System. C) SEC-Securities and Exchange Commission. D) REIT-Real Estate Investment Trust. Show Answer Correct Answer: C) SEC-Securities and Exchange Commission. 59. What types of financial instruments are traded in financial markets? A) Stocks and bonds. B) Treasury Bills. C) Foreign Currencies. D) Derivatives. E) All of the above. Show Answer Correct Answer: E) All of the above. 60. A situation in which the outcome is not certain, but the probabilities can be estimated A) Savings. B) Secondary market. C) Risk. D) Portfolio diversification. E) Primary market. Show Answer Correct Answer: C) Risk. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Business Studies Chapter 10 Financial Markets Quiz 1Class 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 8Class 12 Business Studies Chapter 10 Financial Markets Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books