This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 22 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of these is considered one of the key disruptive trends in financial services for 2025? A) Embedded finance. B) Reverse mortgages. C) High frequency trading for retail users. D) Manual compliance systems. Show Answer Correct Answer: A) Embedded finance. 2. The highest bond rating is A) D+. B) AAA. C) CCC. D) BB. Show Answer Correct Answer: B) AAA. 3. What is the primary function of the Title Bar in the NEAT system? A) To show user information and system status. B) To display real-time trading data. C) To place orders. D) To display a list of market securities. Show Answer Correct Answer: A) To show user information and system status. 4. The mandatory detail that an investor has to provide to the broker at the time of opening of Demat account is A) Date of birth and address. B) PAN number. C) Residential status. D) Bank account details. Show Answer Correct Answer: B) PAN number. 5. What are the two reasons people buy bonds? A) For high-risk, high-return investments and to own part of a company. B) For steady income through interest payments and to preserve capital. C) To gain voting rights in a company and for tax benefits. D) To participate in company management and for quick profits. Show Answer Correct Answer: B) For steady income through interest payments and to preserve capital. 6. If a bank has excess reserves greater than the amount of a deposit outflow, the outflow will result in equal reductions in A) Deposits and reserves. B) Deposits and loans. C) Capital and reserves. D) Capital and loans. Show Answer Correct Answer: A) Deposits and reserves. 7. Coupan of all floating rate bonds are reset on the basis of A) 10 Yrs Gov sec rate. B) Linked to benchmark rate. C) Repo rate. D) 5 Yrs Gov sec rate. Show Answer Correct Answer: B) Linked to benchmark rate. 8. A time draft payable to a seller of goods, with payment guaranteed by a bank is a commercial paper security. A) T-Bill. B) Negotiable CD. C) Repurchase agreement. D) Banker's acceptance. Show Answer Correct Answer: D) Banker's acceptance. 9. Which characteristic of money allows it to be used to settle debts and obligations in the future? A) Medium of Exchange. B) Unit of Account. C) Store of Value. D) Standard of Deferred Payment. Show Answer Correct Answer: D) Standard of Deferred Payment. 10. Gong Badak Kitchen recently sold 1, 000 shares of preferred stock. Determine the per share value of the stock if there is a 10 percent required rate of return and a preferred dividend of RM6.75. A) RM37.50. B) RM76.50. C) RM67.50. D) RM45.00. Show Answer Correct Answer: C) RM67.50. 11. Conversion of physical form of share certificate into an electronic entry is called A) Dematerialisation. B) Exchange Mechanism. C) Conversion. D) Rematerialisation. Show Answer Correct Answer: A) Dematerialisation. 12. Components of Indian Financial System A) Financial markets. B) Financial services. C) Financial instruments. D) All of the above. Show Answer Correct Answer: D) All of the above. 13. Which of the following provides credit rating services in India? A) NABARD. B) SIDBI. C) CRISIL. D) SEBI. Show Answer Correct Answer: C) CRISIL. 14. Market is the market for long term financial claim more than a year. A) Primary market. B) Capital market. C) Equity market. D) Secondary market. Show Answer Correct Answer: B) Capital market. 15. What are the features of financial regulators? A) Features of financial regulators include market stability, consumer protection, transparency promotion, fraud prevention, audits, supervision of financial institutions, and monetary policy implementation. B) Corporate governance oversight. C) Investment risk assessment. D) Tax collection enforcement. Show Answer Correct Answer: A) Features of financial regulators include market stability, consumer protection, transparency promotion, fraud prevention, audits, supervision of financial institutions, and monetary policy implementation. 16. When you deposit a $ 50 bill in the Security Pacific National Bank A) Its assets increase by $ 50. B) Its reserves decrease by $ 50. C) Its liabilities decrease by $ 50. D) Its cash items in the process of collection increase by $ 50. Show Answer Correct Answer: A) Its assets increase by $ 50. 17. Which system ensures electronic holding of shares? A) Demat system. B) IPO registry. C) Bond vaults. D) Physical certificates. Show Answer Correct Answer: A) Demat system. 18. If you receive $ 500 in simple interest on a loan that you made for $ 10, 000 for 5 years, what was the interest rate you charged? A) 5%. B) 7%. C) 1%. D) 10%. Show Answer Correct Answer: C) 1%. 19. What is total risk and how does it differ from systematic risk? A) Systematic risk can be eliminated through diversification. B) Total risk is only related to market fluctuations. C) Total risk refers to the risk of a single asset only. D) Total risk is the overall risk of an investment, while systematic risk is the portion of total risk that cannot be eliminated through diversification. Show Answer Correct Answer: D) Total risk is the overall risk of an investment, while systematic risk is the portion of total risk that cannot be eliminated through diversification. 20. A major difference between leasing and borrowing is that in leasing, the ownership of the asset remains with the ..... A) Lessor. B) Lessee. C) All the above. D) None of the above. Show Answer Correct Answer: A) Lessor. 21. Who is the current Governor of the Reserve Bank of India (as of 2025)? A) Sanjay Malhotra. B) Shaktikanta Das. C) Urjit Patel. D) Raghuram Rajan. Show Answer Correct Answer: A) Sanjay Malhotra. 22. Buying and selling of shares can be done through a ..... A) Stock Exchange. B) Depository. C) Not Attempted. D) Finance company. E) Bank. Show Answer Correct Answer: A) Stock Exchange. 23. In general, banks make profits by selling ..... liabilities and buying ..... assets. A) Illiquid; liquid. B) Long-term; shorter-term. C) Risky; risk-free. D) Short-term; longer-term. Show Answer Correct Answer: D) Short-term; longer-term. 24. The Federal Deposit Insurance Corporation (FDIC) insures A) Commercial bank accounts. B) Credit union accounts. C) Money market accounts. D) Accounts at all financial institutions. Show Answer Correct Answer: A) Commercial bank accounts. 25. Payment made for the use of borrowed money is called A) Interest. B) Financial Institution. C) Creditors. D) Secured. Show Answer Correct Answer: A) Interest. 26. Name different types of financial regulators. A) Tax Authorities. B) Financial Ombudsmen. C) Consumer Protection Agencies. D) Central Banks, Securities Regulators, Insurance Regulators, Banking Regulators. Show Answer Correct Answer: D) Central Banks, Securities Regulators, Insurance Regulators, Banking Regulators. 27. What is the difference between a stock and a bond? A) Stock represents ownership, while a bond is a debt investment. B) Stock is always riskier than bonds. C) Stock and bond are both types of cryptocurrencies. D) Stock and bond have the same financial return. Show Answer Correct Answer: A) Stock represents ownership, while a bond is a debt investment. 28. Modern liability management has resulted in A) Increased sales of negotiable CDs to raise funds. B) Increase importance of deposits as a source of funds. C) Reduced borrowing by banks in the overnight loan market. D) Failure by banks to coordinate management of assets and liabilities. Show Answer Correct Answer: A) Increased sales of negotiable CDs to raise funds. 29. What does the term "default" refer to in the context of default risk? A) Missed or late payment. B) Early payment. C) Increased payment. D) Reduced payment. Show Answer Correct Answer: A) Missed or late payment. 30. Which of the following assets is best desribed as, "near money" ? A) A flat in central London. B) Money in a savings account. C) A £50 note. D) A share in BP. Show Answer Correct Answer: C) A £50 note. 31. The amount that a bond issuer promises to pay the buyer at maturity. A) Par value. B) Coupon rate. C) Capital gain. D) Return. Show Answer Correct Answer: A) Par value. 32. Mr Lee is an individual investor who bought Company XYZ shares through a website of stockbroking company after analysing FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) for the last six months.Which function of stock index is relevant to the above example? A) A to help companies make production decision. B) B to provide fundraising facilities. C) C to provide a reference for buying and selling stocks. D) D to reflect country economic policies. Show Answer Correct Answer: C) C to provide a reference for buying and selling stocks. 33. What is a primary function of non-bank financial institutions (NBFIs)? A) Offering specialized lending services. B) Facilitating electronic payments. C) Conducting monetary policy. D) Providing traditional banking services. Show Answer Correct Answer: A) Offering specialized lending services. 34. Which one of the following is directly affected by the Reserve Bank's open market operation? A) The value of shares on the Australian Securities Exchange. B) The interest rate on Commonwealth government securities. C) Mortgage interest rates in the housing market. D) The interest rate on the overnight loans from the cash market. Show Answer Correct Answer: D) The interest rate on the overnight loans from the cash market. 35. Which of the following is true about mutual fund? A) Mutual funds are risk-free investments. B) Mutual Funds assure fixed returns. C) In mutual funds the target investors are the High Net worth investors. D) None of the above. E) Not Attempted. Show Answer Correct Answer: D) None of the above. 36. 'Invet' (likely a typo for Investment Banks) is listed as an institution in the: A) Capital Market. B) Foreign Exchange Market. C) Money Market. D) Commodity Market. Show Answer Correct Answer: A) Capital Market. 37. When is a bank technically bankrupt? A) If it makes a loss instead of a profit. B) If the reduction in the bank's assets wipes out the whole of the bank's capital. C) If the workers leave. D) If the firm fails to make a profit for 2 consecutive quarters. Show Answer Correct Answer: B) If the reduction in the bank's assets wipes out the whole of the bank's capital. 38. The barometer of an economy A) Banks. B) Bond Markets. C) Stock Markets. D) Financial Institutions. Show Answer Correct Answer: C) Stock Markets. 39. What is the term for the interest rate at which banks lend money to each other overnight? A) Discount Rate. B) Federal Funds Rate. C) Prime Rate. D) LIBOR (London Interbank Offered Rate). Show Answer Correct Answer: B) Federal Funds Rate. 40. Which of these is not a function of retail banks? A) Accepting deposits. B) Lending to economic agents. C) Investing money. D) Providing efficient and secure means of payment. Show Answer Correct Answer: C) Investing money. 41. What is Accrued Interest? A) Interest that is not yet paid. B) Interest that is included in the dirty price. C) Interest that is included in the clean price. D) Interest that is paid in advance. Show Answer Correct Answer: A) Interest that is not yet paid. 42. Which of the following is responsible for guaranteeing compensation for a specific loss or damage? A) Insurance companies. B) Commercial bank. C) Building societies. D) Central bank. Show Answer Correct Answer: A) Insurance companies. 43. The desire of people to hold money to satisfy short-term purchases, is the defintion of which term ..... A) Pension funds. B) Short-term money market. C) Transaction demand. D) Liquidity. E) Cash rate. Show Answer Correct Answer: C) Transaction demand. 44. The secondary market is in the form of A) Commercial exchange. B) New issue Market. C) Stock exchange. D) Money market. Show Answer Correct Answer: C) Stock exchange. 45. Stock Split leads to ..... A) No change in market capitalization. B) Increase in the number of outstanding shares. C) Decrease in the face value of the share of the company. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 46. Type of funds which is managed by an institution from shareholders, pools them to be invested in securities A) Insurance fund. B) Pension fund. C) Mutual fund. D) Exchange-traded fund. Show Answer Correct Answer: C) Mutual fund. 47. The safest instrument of money market is A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: C) Treasury Bill. 48. A company raises additional capital from existing shareholders through: A) IPO. B) Rights Issue. C) Private Placement. D) Buyback. Show Answer Correct Answer: B) Rights Issue. 49. The most important category of assets on a bank's balance sheet is A) Cash items in the process of collection. B) Securities. C) Other assets. D) Loans. Show Answer Correct Answer: D) Loans. 50. Raj Enterprises wishes to invest ₹ 1, 10, 000 in treasury bills. What is the maximum number of treasury bills it can buy with this fund? A) 4. B) 7. C) 2. D) 6. Show Answer Correct Answer: A) 4. 51. Bonds that are issued by state and local governments are called A) Municipal bonds. B) Junk bonds. C) Internal bonds. D) Investment bonds. Show Answer Correct Answer: A) Municipal bonds. 52. A ..... is a lower-rated, potentially higher-paying bond. A) Municipal bond. B) Pension fund. C) Common stock. D) Junk bond. Show Answer Correct Answer: D) Junk bond. 53. Which of the following statements is not true with regard to Commercial paper? A) Is a long-term unsecured promissory note with a fixed maturity period. B) It usually has a maturity period of 15 days to one year. C) It is sold at a discount and redeemed at par. D) Companies use this instrument for bridge financing. Show Answer Correct Answer: A) Is a long-term unsecured promissory note with a fixed maturity period. 54. Which among the following is NOT a valid stock exchange? A) NIKKEI 225. B) S & P. C) KOSPO. D) NASDAQ. Show Answer Correct Answer: C) KOSPO. 55. Stock that is paid first and offers no voting rights A) Common stock. B) Primary stock. C) Stock exchange. D) Preferred stock. Show Answer Correct Answer: D) Preferred stock. 56. Which of the following is NOT a feature of a bond? A) It has a maturity date. B) It is issued by companies or governments. C) It represents ownership in a company. D) It pays regular interest. Show Answer Correct Answer: C) It represents ownership in a company. 57. What are government bonds? A) Government bonds are physical currency issued by banks. B) Government bonds are debt securities issued by a government to finance its expenditures. C) Government bonds are stocks traded on the stock market. D) Government bonds are loans given to private companies for profit. Show Answer Correct Answer: B) Government bonds are debt securities issued by a government to finance its expenditures. 58. Every financial market has the following characteristic A) It determines the level of interest rate. B) It allows loans to be made. C) It allows common stock to be traded. D) It channels funds from lenders to borrowers. Show Answer Correct Answer: D) It channels funds from lenders to borrowers. 59. When an investment bank ..... securities, it guarantees a price for a corporation's securities and then sells them to the public. A) Overwrites. B) Underwrites. C) Overtakes. D) Undertakes. Show Answer Correct Answer: B) Underwrites. 60. You are allowed to withdraw money from your 401K at any time without penalty. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. ← 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