This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 20 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Persons or institutions to whom money is owed A) Creditors. B) Financial Institutions. C) Interest. D) Collateral. Show Answer Correct Answer: A) Creditors. 2. Jelaskan mengapa investor mungkin tertarik membeli municipal bonds (obligasi daerah) dibandingkan obligasi lain? A) Karena municipal bonds menawarkan tingkat bunga lebih tinggi. B) Karena municipal bonds bebas dari pajak federal atas bunga yang diperoleh. C) Karena municipal bonds selalu dijamin oleh aset fisik suatu daerah. D) Karena municipal bonds diterbitkan oleh pemerintah lokal setempat. Show Answer Correct Answer: B) Karena municipal bonds bebas dari pajak federal atas bunga yang diperoleh. 3. What is the main advantage of a mutual fund for an investor? A) Its price doesn't change much. B) It has a set maturity date. C) It can be sold at profit. D) It offers diversity in investment. Show Answer Correct Answer: D) It offers diversity in investment. 4. Which of the following statements about risk is TRUE? A) Risk is about how much money you can lose. B) If an asset's risk increases, its price will also increase. C) A risky asset is more likely to deliver higher return than a less risky asset. D) Risk is about how uncertain your returns could be. Show Answer Correct Answer: D) Risk is about how uncertain your returns could be. 5. A company posted an EPS of ₹ 20 in the financial year 2021-22. The company's EPS is expected to increase by 20% next year, if the company's stock is currently trading at ₹ 100, the forward PE of the company is: A) 5. B) 6. C) 6.17. D) 4.17. Show Answer Correct Answer: D) 4.17. 6. Name the institutions that provide Demat services in India. A) Venture Capitalist. B) Merchant Banking. C) Mutual Fund. D) NSDL/CDSL. Show Answer Correct Answer: D) NSDL/CDSL. 7. What is the role of money as a medium of exchange? A) It provides a common measure for valuing goods and services. B) It retains its value over time. C) It serves as a widely accepted means of facilitating transactions. D) It can be used to settle debts in the future. Show Answer Correct Answer: C) It serves as a widely accepted means of facilitating transactions. 8. Which of the following instruments is typically traded in the money market? A) Corporate bonds. B) Equity shares. C) Commercial paper. D) Real estate investment trusts. Show Answer Correct Answer: C) Commercial paper. 9. Imagine you are an international trader. You are dealing with global markets where convertible currencies are traded and their conversion rates are determined. What is this market called? A) Auction Market. B) Debt Market. C) Equity Market. D) Foreign Exchange Market. Show Answer Correct Answer: D) Foreign Exchange Market. 10. Payment people receive when they lend money A) Interest. B) Premium. C) IRA. D) None of the above. Show Answer Correct Answer: A) Interest. 11. All of the following are nontransaction deposits EXCEPT A) Savings accounts. B) Small-denomination time deposits. C) Checkable deposits. D) Certificates of deposit. Show Answer Correct Answer: C) Checkable deposits. 12. Is the market which helps existing investors to sell their securities. A) Primary Market. B) Capital Market. C) Secondary Market. D) Commodity Maket. Show Answer Correct Answer: C) Secondary Market. 13. Which of the following is a component of national capital markets? A) Foreign exchange market. B) International bond market. C) Debt and equity. D) Cybermarkets. Show Answer Correct Answer: C) Debt and equity. 14. Money market instruments are typically used for long-term financing. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 15. Secondary reserves are so called because A) They can be converted into cash with low transactions costs. B) They are not easily converted into cash, and are, therefore, of secondary importance to banking firms. C) 50% of these assets count toward meeting required reserves. D) They rank second to bank vault cash in importance of bank holdings. Show Answer Correct Answer: A) They can be converted into cash with low transactions costs. 16. Assume that a bank's bid rate on Swiss francs is $ 0.45 and its ask rate is $ 0.47. Its bid/ask percentage spread is A) About 4.26%. B) About 4.03%. C) About 4.17%. D) About 4.44%. Show Answer Correct Answer: A) About 4.26%. 17. SEBI stands for: A) Securities and Exchange Board of India. B) Securities and Economic Board of India. C) State Economic Banking Institution. D) Securities and Exchange Board of India. Show Answer Correct Answer: A) Securities and Exchange Board of India. 18. What is the time frame typically associated with money market instruments? A) More than five years. B) Three to five years. C) Six months to two years. D) Up to one year. Show Answer Correct Answer: D) Up to one year. 19. Currency plus bank current deposits from the private non-bank sector best defines which term A) M3. B) Currency. C) M1. D) Bond market. E) Debt. Show Answer Correct Answer: C) M1. 20. Compared with a purely competitive labor market, a monopsonistic market will result in A) Higher wage rates and a higher level of employment. B) Higher wage rates and a lower level of employment. C) Lower wage rates and a higher level of employment. D) Lower wage rates and a lower level of employment. Show Answer Correct Answer: D) Lower wage rates and a lower level of employment. 21. Which financial market deals with currencies? A) Money market. B) Capital market. C) Commodity market. D) Forex market. Show Answer Correct Answer: D) Forex market. 22. Which principle of insurance states that the insured must have a legitimate interest in the subject matter? A) Claim Settlement. B) Policy Coverage. C) Insurable Interest. D) Risk Assessment. Show Answer Correct Answer: C) Insurable Interest. 23. Suppose that many big corporations decide not to issue bonds, since it is now too costly to comply with new financial market regulations. What is the expected effect on interest rates? A) Interest rates might rise. B) Interest rates might fall. C) No change in interest rates. D) None of the above. Show Answer Correct Answer: A) Interest rates might rise. 24. Relative to a stock, a bond provides A) Higher level of risk. B) Lower dividend. C) Lower level of risk. D) Higher dividend. Show Answer Correct Answer: C) Lower level of risk. 25. What is the primary purpose of property insurance? A) To guarantee a fixed income during retirement. B) To provide health benefits to policyholders. C) To offer discounts on home repairs. D) To cover damages to personal property from theft or natural disasters. Show Answer Correct Answer: D) To cover damages to personal property from theft or natural disasters. 26. Which of these activities is carried out by an Investment bank? A) Provide loans and overdrafts to small businesses. B) Provide an efficient means of payment. C) Accept deposits from households. D) Help governments to privatise a public sector enterprise. Show Answer Correct Answer: D) Help governments to privatise a public sector enterprise. 27. Who decides the allotment proportion of shares in an IPO to the Applicants? A) Stock Exchange. B) Company. C) RTA. D) SEBI. Show Answer Correct Answer: B) Company. 28. What is the main purpose of a capital market? A) To provide loans to individuals only. B) To allocate financial resources efficiently. C) To manage government budgets. D) To regulate currency exchange rates. Show Answer Correct Answer: B) To allocate financial resources efficiently. 29. The BEST way to improve your credit rating is to A) Never get a credit card. B) Never borrow money from a bank. C) Never forget to pay your bills on time. D) Never accumulate assets and collateral. Show Answer Correct Answer: C) Never forget to pay your bills on time. 30. The principle amount (face value) A) Par Value. B) Coupon Rate. C) Maturity. D) Yield. Show Answer Correct Answer: A) Par Value. 31. Rosa deposited $ 500 in a saving account with a simple interest rate of 3% per year. If she made no other deposit or withdrawals, how much interest had she earned at the end of 2 years? A) $ 30.00. B) $ 1.50. C) $ 15.00. D) $ 3.00. Show Answer Correct Answer: C) $ 15.00. 32. Which would increase the demand for labor? A) A decrease in the wages of that type of labor. B) An increase in the prices of the resources that are substitutes for that type of labor. C) An increase in the prices of the resources that are complements to that type of labor. D) A decrease in the demand for the products produced by that type of labor. Show Answer Correct Answer: C) An increase in the prices of the resources that are complements to that type of labor. 33. How often does the forex market operate? A) 12/7. B) 12/5. C) 24/7. D) 24/5. Show Answer Correct Answer: D) 24/5. 34. Instruments traded in Capital Markets are ..... A) Bonds. B) Debentures. C) Equity Shares and Preference Shares. D) All of these. Show Answer Correct Answer: D) All of these. 35. The organisations/institutions that provide long term funds. A) Primary market. B) Secondary market. C) Capital market. D) Money market. Show Answer Correct Answer: C) Capital market. 36. Apa yang dimaksud dengan hak residual claimant bagi pemegang saham? A) Hak untuk menjual saham kapan saja tanpa batasan. B) Hak untuk mengklaim semua aset dan pendapatan yang tersisa setelah semua klaim lain dipenuhi. C) Hak untuk menerima dividen tetap setiap tahun. D) Hak untuk mengelola perusahaan secara langsung. Show Answer Correct Answer: B) Hak untuk mengklaim semua aset dan pendapatan yang tersisa setelah semua klaim lain dipenuhi. 37. Which factor is described as a continual increase in the price level of goods and services? A) Special provisions. B) Liquidity risk. C) Inflation. D) Default risk. Show Answer Correct Answer: C) Inflation. 38. Who controls the capital market of India? A) RBI. B) IRDA. C) NABARD. D) SEBI. Show Answer Correct Answer: D) SEBI. 39. How does a central bank's increase in the overnight policy rate affect the mortgage market? A) It generally decreases mortgage rates. B) It has no impact on mortgage rates. C) It increases the cost of borrowing, raising mortgage rates. D) It leads to higher demand for mortgage-backed securities. Show Answer Correct Answer: C) It increases the cost of borrowing, raising mortgage rates. 40. Which of the following best describes the purpose of FII? A) Long-term investment in companies. B) Short-term profit-seeking through market investments. C) Regulation of local businesses. D) Direct management of companies. Show Answer Correct Answer: B) Short-term profit-seeking through market investments. 41. The dollars that become available for investors to use when others refrain from consuming A) Savings. B) Primary market. C) Portfolio diversification. D) Risk. E) Secondary market. Show Answer Correct Answer: A) Savings. 42. This term refers to facilities through which debt and equity are raised A) Money market. B) Capital market. C) Treasury market. D) Call market. Show Answer Correct Answer: B) Capital market. 43. Which of the following represents ownership in a company? A) Options. B) Futures contracts. C) Debt securities. D) Equity securities. Show Answer Correct Answer: D) Equity securities. 44. What is the Securities & Exchange Commission (SEC)? A) A government agency that regulates financial markets & investigates securities fraud. B) A privately owned investment corporation that sells bonds & other investments. C) A legislative committee that ensures Congressmen are making ethical investment decisions. D) An independent agency that advises the government on economic policies. Show Answer Correct Answer: A) A government agency that regulates financial markets & investigates securities fraud. 45. From Mar 2020 to April 5$^{th}$ 2020 the Indian stock market is entering in A) Bear Phase. B) Bull Phase. C) All the above. D) None of the above. Show Answer Correct Answer: A) Bear Phase. 46. A company owned by families or a small number of investors and do not issue stock to the public. A) Public company. B) Private company. C) Industry. D) Portfolio. Show Answer Correct Answer: B) Private company. 47. A balanced fund typically invests in: A) Only stocks. B) Only bonds. C) A mix of stocks and bonds. D) Commodities only. Show Answer Correct Answer: C) A mix of stocks and bonds. 48. Mengapa individu atau perusahaan memilih untuk meminjam dengan tenor waktu yang lama? A) Bunga Pinjaman cenderung lebih tinggi daripada pinjaman jangka pendek. B) Mengurangi resiko suku bunga menurun sebelum mereka melunasi hutangnya. C) Bunga Pinjaman cenderung lebih kecil daripada pinjaman jangka pendek. D) Mengurangi resiko suku bunga meningkat sebelum mereka melunasi hutangnya. Show Answer Correct Answer: D) Mengurangi resiko suku bunga meningkat sebelum mereka melunasi hutangnya. 49. The major difference between debt market instruments and equity market instruments is A) The issuers. B) The maturities. C) The price of issuance. D) The market price. Show Answer Correct Answer: B) The maturities. 50. Financial markets and institutions A) Involve the movement of huge quantities of money. B) Affect the profit of business. C) Affect the type of goods and services produced in an economy. D) All of the above. Show Answer Correct Answer: D) All of the above. 51. An index fund is: A) A fund which is passive. B) A fund with higher fees. C) A fund which is active. D) A fund which can be traded in an exchange. Show Answer Correct Answer: A) A fund which is passive. 52. Which among the following is NOT considered a financial institution? A) Remittance centers. B) Foreign exchange units. C) Revolving funds associations. D) Credit cooperatives. Show Answer Correct Answer: C) Revolving funds associations. 53. You open a 5-year CD for $ 1, 000 that pays 2% interest, compounded annually. What is the value of that CD at the end of the 5 years? A) $ 5, 500. B) $ 1, 104.08. C) $ 5, 900. D) $ 1, 000. Show Answer Correct Answer: B) $ 1, 104.08. 54. If you are trading with a risk to reward ratio of 1:3, which of the following setups fits those parameters? A) Sally used a stop loss of 20 pips with a take profit of 10 pips. B) Ronald used a stop loss of 20 pips with a take profit of 25 pips. C) Stacy used a stop loss of 20 pips with a take profit of 60 pips. D) Marlin used a stop loss of 15 pips with a take profit of 30 pips. Show Answer Correct Answer: C) Stacy used a stop loss of 20 pips with a take profit of 60 pips. 55. Which ratio category is used to assess a company's ability to meet short-term obligations? A) Liquidity ratios. B) Market ratios. C) Profitability ratios. D) Activity ratios. Show Answer Correct Answer: A) Liquidity ratios. 56. Money market is use for ..... purpose A) Long Term. B) Stock. C) Short Term. D) Security. Show Answer Correct Answer: C) Short Term. 57. Term that refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. A) Market Capitalization. B) Market Volatility. C) Market Socialization. D) Market Diversification. Show Answer Correct Answer: A) Market Capitalization. 58. The aim of the Second-Tier Securities Market is to increase the: A) Supply of money. B) Volume of security in the market. C) Interest rates. D) Number of commercial banks. Show Answer Correct Answer: B) Volume of security in the market. 59. Which of the following investments has the greatest risk? A) Savings bond. B) Mutual Fund. C) Stock market. D) T-Bill. Show Answer Correct Answer: C) Stock market. 60. Kate could not attend the last shareholders meeting and thus she granted the authority to vote on her behalf to the managers of the firm. Which one of the following terms is used to describe the method by which Kate's shares were voted? A) Proxy. B) Consent-form. C) Cumulative. D) In absentia. E) Straight. Show Answer Correct Answer: A) Proxy. ← 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