This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 23 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Type of market in which financial instruments with up to 1 year maturity are traded is called: A) Money market. B) Capital market. C) Stock market. D) Bond market. Show Answer Correct Answer: A) Money market. 2. True or False:Riskier investments can have higher profits, but also greater losses. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 3. The secondary market deals with: A) The buying and selling of new securities. B) The buying and selling of old (second-hand) securities. C) The issuance of treasury bills. D) Short-term inter-bank lending. Show Answer Correct Answer: B) The buying and selling of old (second-hand) securities. 4. How many companies are included in the SENSEX of India? A) 111. B) 50. C) 30. D) 25. Show Answer Correct Answer: C) 30. 5. A ..... is defined as a collection of financial assets. A) Portfolio. B) Pension fund. C) Prospectus. D) None of the above. Show Answer Correct Answer: A) Portfolio. 6. Which of the following banks are insured by the DICGC? A) Cooperative Banks. B) Foreign banks functioning in India. C) Local area banks. D) Regional rural banks. E) All the above. Show Answer Correct Answer: E) All the above. 7. What factors influence stock prices? A) Employee satisfaction, brand loyalty, customer reviews. B) Company size, product pricing, marketing strategies. C) Company performance, market conditions, investor sentiment, economic indicators, interest rates, geopolitical events. D) Social media trends, advertising spend, seasonal sales. Show Answer Correct Answer: C) Company performance, market conditions, investor sentiment, economic indicators, interest rates, geopolitical events. 8. Which recent development has made it easier for individuals to engage in speculation? A) Decreased market volatility. B) Limited access to information. C) Increased regulation. D) Trading apps and online platforms. Show Answer Correct Answer: D) Trading apps and online platforms. 9. For a firm to have its securities listed on an exchange, it must meet certain requirements. These usually include measures of profitability, size, market value, and public ownership. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 10. Money market where debit and stocks are traded and maturity period is more than a year is classified as A) Short term markets. B) Long term markets. C) Capital market. D) None of these. Show Answer Correct Answer: C) Capital market. 11. Insurance that protects your family against financial loss due to your death is A) Disability insurance. B) Coinsurance. C) Life insurance. D) Comprehensive insurance. Show Answer Correct Answer: C) Life insurance. 12. RBI was established in the year: A) 1947. B) 1950. C) 1969. D) 1935. Show Answer Correct Answer: D) 1935. 13. A high Price-Earnings (P/E) ratio usually indicates that investors expect: A) Immediate dividend cuts. B) Higher future earnings growth. C) Financial distress. D) Lower future growth. Show Answer Correct Answer: B) Higher future earnings growth. 14. ..... is providing loans, guarantees, risk management products, and advisory services to low and middle income countries. A) The International Finance Corporation (IFC). B) The International Bank for Reconstruction and Development (IBRD). C) The Multilateral Investment Guarantee Agency (MIGA). D) None of the above. Show Answer Correct Answer: B) The International Bank for Reconstruction and Development (IBRD). 15. What is the function the NEAT system? A) To quickly access trading functions using functional buttons. B) To monitor price movements of selected securities. C) To display stock prices in real time. D) To view detailed security reports. Show Answer Correct Answer: C) To display stock prices in real time. 16. Kimchi Premium is: A) Premium in cryptocurrency trading in South Korean exchange vs Rest of the World. B) Premium in debt trading in South Korean exchange vs Rest of the World. C) Premium in gold trading in South Korean exchange vs Rest of the World. D) Premium in equities trading in South Korean exchange vs Rest of the World. Show Answer Correct Answer: A) Premium in cryptocurrency trading in South Korean exchange vs Rest of the World. 17. The allocated function is performed by A) Financial market. B) Capital market. C) Money market. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. Piece of ownership in a company, mutual fund or other investment A) Share/stock. B) 401K. C) Bond. D) None of the above. Show Answer Correct Answer: A) Share/stock. 19. The main characteristics of money market transactions which enables it to have active secondary market are: A) Securities that trade in one year or less. B) Securities that are of large denomination. C) Securities that are very liquid. D) All above. Show Answer Correct Answer: D) All above. 20. Equity Markets are regulated by A) SEBI. B) RBI. C) RBI and SEBI. D) IRDA. Show Answer Correct Answer: A) SEBI. 21. If there is any uncertainty with respect to the future payment, the investor would require return over and above the nominal rate of return. The additional component is called A) Inflation compensation. B) A plus b. C) Pure rate of return. D) Risk premium. Show Answer Correct Answer: D) Risk premium. 22. What is the Full form of CRISIL A) Customer Rating Information Services of India Ltd. B) Credit Ranking Information Services of India Ltd. C) Credit Rating Information Services of India Ltd. D) None of the above. Show Answer Correct Answer: C) Credit Rating Information Services of India Ltd. 23. To meet floatation cost, firms generally issue the following instrument of moneymarket. A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: B) Commercial Paper. 24. When inflation is rising, the Central bank would normally: A) Lower interest rates to tame inflation. B) More than one answer is correct. C) Would not do anyhting, as interest rates have nothing to do with inflation. D) Increase interest rates to tame inflation. Show Answer Correct Answer: D) Increase interest rates to tame inflation. 25. Which of the following methods enable trader to avoid delivery of commodity in a future transaction?I ArbitrageII HedgingIII Credit saleIV Spot trading A) C II, IV. B) B I, III. C) A I, II. D) D III, IV. Show Answer Correct Answer: C) A I, II. 26. The instrument used in capital market is A) Equity. B) Commercial paper. C) Treasury Bill. D) All the above. Show Answer Correct Answer: A) Equity. 27. It is important that young people start saving & investing early because of A) The depletion of Social Security. B) Compound interest. C) The instability of the U.S. economy. D) Low interest rates. Show Answer Correct Answer: B) Compound interest. 28. Who issues currency notes in India? A) SBI. B) SEBI. C) Finance Ministry. D) RBI. Show Answer Correct Answer: D) RBI. 29. A company can raise capital through the primary market in the form of A) Equity shares. B) Preference shares. C) Debentures. D) All of the above. Show Answer Correct Answer: C) Debentures. 30. Which segment deals in government securities? A) Commodity segment. B) Currency segment. C) Debt segment. D) Equity segment. Show Answer Correct Answer: C) Debt segment. 31. What is a Eurobond? A) A bond issued in the local currency. B) A bond that is regulated by local authorities. C) A bond issued outside the country in which it is denominated. D) A bond issued by the government only. Show Answer Correct Answer: C) A bond issued outside the country in which it is denominated. 32. The process of determining price based on investors' bids is called: A) Fixed pricing. B) Book building. C) Spot pricing. D) Auction pricing. Show Answer Correct Answer: B) Book building. 33. Which of the following has the highest risk? A) Stocks. B) Treasury bonds. C) Fixed deposits. D) Bonds (or sukuk). Show Answer Correct Answer: A) Stocks. 34. How much will an initial deposit of $ 300 accumulate in an account with 12% interest compounded monthly for five years? A) $ 545.01. B) $ 480.00. C) $ 315.30. D) $ 528.70. Show Answer Correct Answer: A) $ 545.01. 35. How does diversification help in investment strategies? A) Diversification eliminates all risks by avoiding any market fluctuations. B) Diversification increases risk by concentrating investments in one asset. C) Diversification guarantees higher returns by investing in a single market. D) Diversification reduces risk and stabilizes returns by spreading investments across different assets. Show Answer Correct Answer: D) Diversification reduces risk and stabilizes returns by spreading investments across different assets. 36. Which market directly contributes for capital formation and increase in capital offirms? A) Primary market. B) Secondary market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Primary market. 37. What is the main purpose of the stock market? A) To promote international trade. B) To enable people to buy and sell goods. C) To enable companies to raise capital by issuing shares. D) To regulate interest rates. Show Answer Correct Answer: C) To enable companies to raise capital by issuing shares. 38. 'Ask' means the ..... A) Traded Price. B) Market price. C) Seller's price. D) Buyer's price. E) Not Attempted. Show Answer Correct Answer: C) Seller's price. 39. Banks face the problem of ..... in loan markets because bad credit risks are the ones most likely to seek bank loans. A) Moral hazard. B) Intentional fraud. C) Moral suasion. D) Adverse selection. Show Answer Correct Answer: D) Adverse selection. 40. The Gramm Leach Bliley Act requires: A) Banks to make a profit. B) Banks to offer credit cards to consumers at whatever rate they want. C) Banks to notify customers of information-sharing practice + allow opt-outs. D) All of the Answers are correct. Show Answer Correct Answer: C) Banks to notify customers of information-sharing practice + allow opt-outs. 41. Who regulates the securities market in India? A) NABARD. B) SEBI. C) RBI. D) Ministry of Finance. Show Answer Correct Answer: B) SEBI. 42. If a U.S. firm will need C$ 200, 000 in 90 days to pay for imports from Canada and it wishes to avoid the risk from exchange rate fluctuations, it could: A) Sell Canadian dollars 90 days from now at the spot rate. B) Sell a 90-day forward contract on Canadian dollars. C) Purchase a 90-day forward contract on Canadian dollars. D) Purchase Canadian dollars 90 days from now at the spot rate. Show Answer Correct Answer: C) Purchase a 90-day forward contract on Canadian dollars. 43. What role do financial markets play in the economy? A) Financial markets play a crucial role in resource allocation, capital formation, and economic growth. B) Financial markets have no impact on job creation. C) Financial markets are only relevant for large corporations. D) Financial markets primarily focus on consumer spending. Show Answer Correct Answer: A) Financial markets play a crucial role in resource allocation, capital formation, and economic growth. 44. When the value of the British pound changes from $ 1.50 to $ 1.25, the pound has ..... and the dollar has ..... A) Depreciated; appreciated. B) Appreciated; depreciated. C) Appreciated; appreciated. D) Depreciated; depreciated. Show Answer Correct Answer: A) Depreciated; appreciated. 45. What is called when a company issues stock for the first time and may be bought by the general public? A) Initial Public Offering (IPO). B) Bond Issuance. C) Secondary Market Offering. D) Private Placement. Show Answer Correct Answer: A) Initial Public Offering (IPO). 46. Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the A) Moral hazard problem. B) Adverse selection problem. C) Lemon problem. D) Adverse credit risk problem. Show Answer Correct Answer: A) Moral hazard problem. 47. How do retail banks make a profit? A) Having a high positive spread. B) Having a high negative spread. C) Having a small negative spread. D) Having a small positive spread. Show Answer Correct Answer: A) Having a high positive spread. 48. Which of the following is NOT a characteristic of a well-functioning financial market? A) Liquidity. B) Market Manipulation. C) Price Discovery. D) Transparency. Show Answer Correct Answer: B) Market Manipulation. 49. Shares of stock from a variety of companies that you own are called? A) Diversity. B) Portfolio. C) Dividend. D) Commission. Show Answer Correct Answer: B) Portfolio. 50. What type of information can you find in the Inquiry Window? A) Real-time stock prices only. B) Latest trades and price movements. C) Detailed market data and analysis on selected securities. D) The list of all available securities. Show Answer Correct Answer: C) Detailed market data and analysis on selected securities. 51. Which of the following is NOT the benefits of financial intermediaries? A) Package small amounts by savers into large bundles for borrowers. B) Solve the problem of scarcity of capital. C) Reduce transaction cost. D) Increase risk of lending money. Show Answer Correct Answer: D) Increase risk of lending money. 52. This money market instrument is used by banks to maintain their cash reserve ratio A) Commercial paper. B) Call money. C) Certificate of deposit. D) Commercial bill. Show Answer Correct Answer: B) Call money. 53. Imagine you are studying the stock market and you come across a market where each transaction is scheduled at specific time intervals. What is this type of market called? A) Call Market. B) Financial Market. C) Bond Market. D) Continuous Market. Show Answer Correct Answer: A) Call Market. 54. Plunging oil prices is an example of which of the following types of investment risk? A) Industry risk. B) Inflation risk. C) Company risk. D) Political risk. Show Answer Correct Answer: A) Industry risk. 55. The National Stock Exchange was established on A) 1992. B) 1993. C) 1994. D) 1995. Show Answer Correct Answer: A) 1992. 56. Money market is a market for A) Long term fund. B) Short term fund. C) Medium term fund. D) All of the above. Show Answer Correct Answer: B) Short term fund. 57. The major liabilities of the commercial banks are? A) Deposits. B) Junk bonds. C) Swap bonds. D) Loans. Show Answer Correct Answer: A) Deposits. 58. Exchange markets and over counter markets are considered as two types of A) Floating market. B) Primary market. C) Risky market. D) Secondary market. Show Answer Correct Answer: D) Secondary market. 59. What are investment banks? A) Investment banks are financial institutions that help clients raise capital and provide advisory services for financial transactions. B) Investment banks are retail banks that offer personal loans and savings accounts. C) Investment banks are insurance companies that provide life and health coverage. D) Investment banks are government agencies that regulate financial markets. Show Answer Correct Answer: A) Investment banks are financial institutions that help clients raise capital and provide advisory services for financial transactions. 60. The Nigerian Stock Exchange was established in: A) 1960. B) 1970. C) 1950. D) 1985. Show Answer Correct Answer: A) 1960. ← 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