This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 27 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 27 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are commodities, and how are they traded in financial markets? A) Commodities are basic goods traded in financial markets, often through futures contracts and ETFs. B) Commodities are digital assets traded exclusively on social media platforms. C) Commodities are luxury items traded only in physical stores. D) Commodities are services offered by financial advisors in exchange for fees. Show Answer Correct Answer: A) Commodities are basic goods traded in financial markets, often through futures contracts and ETFs. 2. With a 10% reserve requirement ratio, a $ 100 deposit into New Bank means that the maximum amount New Bank could lend is A) $ 100. B) $ 10. C) $ 110. D) $ 90. Show Answer Correct Answer: D) $ 90. 3. What is the role of credit ratings in the bond market? A) Credit ratings are used to set interest rates for loans. B) Credit ratings influence the stock market performance. C) Credit ratings determine the maturity dates of bonds. D) Credit ratings help assess the risk of bond investments, influencing yields and investor decisions. Show Answer Correct Answer: D) Credit ratings help assess the risk of bond investments, influencing yields and investor decisions. 4. If a trader wants to instantly see the details of a security without adding it to the Market Watch, which window should they use? A) Message Window. B) Inquiry Window. C) Order/Trade Window. D) Snap Quote. Show Answer Correct Answer: D) Snap Quote. 5. How do financial intermediaries reduce transaction costs? A) By providing loans only to large corporations. B) By increasing interest rates for borrowers. C) By pooling resources, providing expertise, and efficiently matching borrowers and lenders. D) By eliminating all fees associated with transactions. Show Answer Correct Answer: C) By pooling resources, providing expertise, and efficiently matching borrowers and lenders. 6. The Company's estimated Earnings Per Share is USD 10. The company made a bonus issue of 1 for 4. What will be the estimated EPS after the bonus share issue. A) USD 8.00. B) USD 2.5. C) USD 10. D) USD 12. Show Answer Correct Answer: A) USD 8.00. 7. The 'rate at which money circulates' is also known as its: A) Liquidity. B) Velocity. C) Density. D) Scarcity. Show Answer Correct Answer: B) Velocity. 8. What is the difference between a Traditional and Roth IRA? A) A traditional IRA's contributions are not taxed until you withdraw them at retirement. A Roth IRA's your contributions are taxed when you invest. B) A Roth IRA's contributions are not taxed until you withdraw them at retirement. A Traditional IRA your contributions are taxed when you invest them in. C) All the above. D) None of the above. Show Answer Correct Answer: A) A traditional IRA's contributions are not taxed until you withdraw them at retirement. A Roth IRA's your contributions are taxed when you invest. 9. Securities Exchange Board of India (SEBI) was established in ..... A) 2001. B) 1984. C) 1956. D) 1988. Show Answer Correct Answer: D) 1988. 10. What does fintech primarily drive in the financial sector? A) Reduced consumer access. B) Higher transaction fees. C) Digital transformation. D) Increased regulatory complexity. Show Answer Correct Answer: C) Digital transformation. 11. Why is saving money important? A) It allows you to spend more freely. B) It guarantees instant wealth. C) Saving money is important for financial security and achieving future goals. D) It eliminates all financial risks. Show Answer Correct Answer: C) Saving money is important for financial security and achieving future goals. 12. How do bonds differ from stocks? A) Bonds provide dividends; stocks offer interest payments. B) Bonds are loans to issuers; stocks represent ownership in a company. C) Bonds are equity investments; stocks are fixed-income securities. D) Bonds are shares in a company; stocks are debts owed by issuers. Show Answer Correct Answer: B) Bonds are loans to issuers; stocks represent ownership in a company. 13. Ather Energy raised IPO funds primarily for: A) Printing their own currency. B) Buying foreign companies. C) Manufacturing & R&D expansion. D) Launching crypto tokens. Show Answer Correct Answer: C) Manufacturing & R&D expansion. 14. A credit union ..... A) Is a financial institution that focuses on taking deposits and using them to fund mortgages. B) Is a non-profit institution owned by its members and provides financial services to its members. C) Offers a broad range of deposit account and gives loans to individuals and businesses. D) Is a financial institution for students only. Show Answer Correct Answer: B) Is a non-profit institution owned by its members and provides financial services to its members. 15. Which best describes what generally occurs in financial markets? A) Assets are traded. B) I have no idea. C) All the above. D) None of the above. Show Answer Correct Answer: A) Assets are traded. 16. If investors speculate in derivative contracts rather than in the underlying asset, they will probably achieve ..... returns, and they are exposed to relatively ..... risk. A) Lower higher. B) Higher higher. C) Higher lower. D) Lower lower. Show Answer Correct Answer: B) Higher higher. 17. The time and resources spent trying to exchange goods and services are called A) Bargaining costs. B) Transaction costs. C) Contracting costs. D) Barter costs. Show Answer Correct Answer: B) Transaction costs. 18. In which of the companies will you expect a high asset turnover: A) Retail companies. B) Power companies. C) Heavy machinery companies. D) Infrastructure companies. Show Answer Correct Answer: A) Retail companies. 19. What is the interest rate paid on a bond called? A) Face value. B) Coupon rate. C) Yield rate. D) Market rate. Show Answer Correct Answer: B) Coupon rate. 20. Investors who are voting owners in the company. They have one vote per share of the stock they own. A) Preferred stock. B) Capital market. C) Common stock. D) Original owners. Show Answer Correct Answer: C) Common stock. 21. Which sentence describe the risk and returns of investing in stocks? A) They offer the lowest risk and the lowest potential returns. B) They offer the highest risks and the highest potential returns. C) They offer the lowest risk, but the highest potential returns. D) They offer the highest risks, but the lowest possible returns. Show Answer Correct Answer: B) They offer the highest risks and the highest potential returns. 22. What is an arbitrage opportunity? A) A chance to buy a stock. B) A price discrepancy that allows for risk-free profit. C) A loan offered by a bank. D) A type of insurance. Show Answer Correct Answer: B) A price discrepancy that allows for risk-free profit. 23. Individuals, corporations, and governments can be either savings deficit units or savings surplus units. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 24. Which of the following includes investors as actual voting owners of the company? A) Growth stock. B) Common stock. C) Income stock. D) Preferred stock. Show Answer Correct Answer: B) Common stock. 25. The share of checkable deposits in total bank liabilities has A) Expanded moderately over time. B) Expanded dramatically over time. C) Shrunk over time. D) Remained virtually unchanged since 1960. Show Answer Correct Answer: C) Shrunk over time. 26. What is a municipal bond? A) A type of mutual fund. B) A loan from a bank. C) A debt security issued by local governments. D) A type of corporate stock. Show Answer Correct Answer: C) A debt security issued by local governments. 27. What is the word for the person or bank that lends someone money A) Borrower. B) Capital. C) Principal. D) Creditor. Show Answer Correct Answer: D) Creditor. 28. What does "bid" mean? A) Bid is the lowest price currently offered to sell a stock. B) Bid is the average price of a stock over the last month. C) Bid refers to the total number of shares available for purchase. D) Bid is the highest price currently offered to buy a stock. Show Answer Correct Answer: D) Bid is the highest price currently offered to buy a stock. 29. Imagine you are a trader at a bustling trading center. This center has established rules and regulations, and it's where traders like you meet to trade futures contracts and options in commodities and financial instruments. What is this place called? A) Commodity Market. B) Equity Market. C) Futures Market. D) Spot Market. Show Answer Correct Answer: C) Futures Market. 30. An IPO refers to: A) Initial Public Offering. B) Institutional Price Offer. C) Initial Public Offering. D) Investment Purchase Option. Show Answer Correct Answer: A) Initial Public Offering. 31. Venture capital guidelines in India are regulated by ..... A) SEBI. B) RBI. C) Stock Exchange. D) SBI. Show Answer Correct Answer: A) SEBI. 32. In the context of financial markets, what does the term 'liquidity' refer to? A) The ability to convert assets into cash quickly without significant loss in value. B) The ability of a company to pay its long-term debts. C) The rate at which interest accumulates on a loan. D) The amount of cash a company holds on its balance sheet. Show Answer Correct Answer: A) The ability to convert assets into cash quickly without significant loss in value. 33. Assume the Canadian dollar is equal to $ 0.88 and the Peruvian nuevos soles is equal to $ 0.35. The value of the Peruvian nuevos soles in Canadian dollars is: A) About 0, 236 Canadian dollars. B) About 0.3977 Canadian dollars. C) About 0.3621 Canadian dollars. D) About 2.51 Canadian dollars. Show Answer Correct Answer: B) About 0.3977 Canadian dollars. 34. The money market is a financial market for trading in: A) Long-term financial assets. B) Short-term financial assets. C) Real estate. D) Commodities like gold and oil. Show Answer Correct Answer: B) Short-term financial assets. 35. Which type of investment is primarily used to hedge against inflation? A) Commodities. B) Municipal bonds. C) Treasury bonds. D) Stocks. Show Answer Correct Answer: A) Commodities. 36. Which of the following is NOT one of the benefits of investing in an online brokerage firm? A) Cheaper/less fees. B) Easier to navigate/understand. C) Advice from stockbrokers. D) None of the above. Show Answer Correct Answer: C) Advice from stockbrokers. 37. What is the primary role of the Securities Exchange commission? A) To establish interest rates. B) To protect investors. C) To manage the national economy. D) To ensure the money supply. Show Answer Correct Answer: B) To protect investors. 38. What type of securities are ordinary shares traded on the ASX? A) Derivative securities. B) Debt securities. C) Government securities. D) Equity securities. Show Answer Correct Answer: D) Equity securities. 39. The following statements are true regarding the credit analysis EXCEPT A) Return to equity. B) Repayment. C) Risk bearing ability. D) Return to investment. Show Answer Correct Answer: A) Return to equity. 40. Who among the following can invest in the Debt market? A) Financial Institutions. B) Retail Investors. C) Mutual Funds. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 41. Apa yang dimaksud dengan istilah gharar yang dilarang dalam sistem perbankan syariah? A) Pembagian keuntungan secara tidak adil. B) Ketidakpastian atau ketidakjelasan dalam transaksi. C) Penerimaan bunga dari pinjaman. D) Segala bentuk perjudian. Show Answer Correct Answer: B) Ketidakpastian atau ketidakjelasan dalam transaksi. 42. When the general price level rises, real money balances: A) Decrease. B) Become irrelevant. C) Increase. D) Stay the same. Show Answer Correct Answer: A) Decrease. 43. The shares to be issued by the company that must not exceed the total amount stated in its Articles of Incorporation. A) Authorized Capital Stock. B) Preference Share. C) Treasury Share. D) Ordinary Share. Show Answer Correct Answer: A) Authorized Capital Stock. 44. Call money, treasury bill, C.R., etc are the instruments of A) Capital Market. B) Money market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: B) Money market. 45. Paper Gain/Loss or Realized Gain/Loss-A gain/loss is a paper gain until the sale of the stock-then it is realized. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 46. Which product benefits most in a falling interest rate cycle? A) FD. B) Gold ETF. C) Liquid funds. D) Long-duration G-Secs. Show Answer Correct Answer: D) Long-duration G-Secs. 47. Which institution regulates the capital market in India? A) NABARD. B) SIDBI. C) RBI. D) SEBI. Show Answer Correct Answer: D) SEBI. 48. The process of indirect finance using financial intermediaries is called A) Financial intermediation. B) Financial liquidation. C) Disintermediation. D) Resource allocation. E) Direct lending. Show Answer Correct Answer: A) Financial intermediation. 49. Which of the following best describes a financial market? A) A place where goods and services are exchanged. B) A venue where savers and borrowers are connected. C) A location for government policy discussions. D) A platform for online retail sales. Show Answer Correct Answer: B) A venue where savers and borrowers are connected. 50. The headquarters of SEBI is located in: A) Kolkata. B) Mumbai. C) Delhi. D) Chennai. Show Answer Correct Answer: B) Mumbai. 51. What is the significance of liquidity in financial markets? A) High liquidity always leads to higher profits. B) Liquidity is significant because it ensures efficient market functioning, enables quick transactions, and reduces price volatility. C) Liquidity is only important for large investors. D) Liquidity has no impact on market stability. Show Answer Correct Answer: B) Liquidity is significant because it ensures efficient market functioning, enables quick transactions, and reduces price volatility. 52. An institution that helps to bring savers, borrowers, and financial assets together is a A) Secondary market. B) Primary market. C) Financial market. D) Financial intermediary. Show Answer Correct Answer: D) Financial intermediary. 53. They issue stock to boost their capital base and they also manage trust funds that usually contain stocks. A) Insurance Companies. B) Savings Bank. C) Commercial Banks. D) Pension Funds. Show Answer Correct Answer: C) Commercial Banks. 54. If a U.S. firm is receiving 100, 000 euros in 90 days and wishes to avoid the risk from exchange rate fluctuations, it could: A) Sell euros 90 days from now at the spot rate. B) Purchase a 90-day forward contract on euros. C) Purchase euros 90 days from now at the spot rate. D) Sell a 90-day forward contract on euros. Show Answer Correct Answer: D) Sell a 90-day forward contract on euros. 55. Which of the following windows displays trading information for a list of selected securities? A) Market Watch Window. B) Inquiry Window. C) Snap Quote. D) Order/Trade Window. Show Answer Correct Answer: A) Market Watch Window. 56. Which of the following terms describes a strong stock market? A) Futures market. B) Spot market. C) Bull market. D) Bear market. Show Answer Correct Answer: C) Bull market. 57. The SEC was created in response to what event? A) The Stock Market Crash of 1929. B) WWI. C) President Roosevelt's New Deal. D) Creation of the New York Stock Exchange. Show Answer Correct Answer: A) The Stock Market Crash of 1929. 58. The largest percentage of banks' holdings of securities consist of A) Treasury and government agency securities. B) Tax-exempt municipal securities. C) State and local government securities. D) Corporate securities. Show Answer Correct Answer: A) Treasury and government agency securities. 59. Call money or call loans are ..... A) Fixed. B) Costly. C) Liquid. D) Cheap. Show Answer Correct Answer: C) Liquid. 60. Companies that sell shares of a portfolio of securities are known as A) Discount brokerage firms. B) Pension plans. C) Bear markets. D) Mutual funds. Show Answer Correct Answer: D) Mutual funds. ← 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