This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 28 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An increase in inflation typically leads to: A) No change in interest rates. B) Lower interest rates. C) A decrease in stock prices. D) Higher interest rates. Show Answer Correct Answer: D) Higher interest rates. 2. What is a currency swap? A) A method of currency speculation. B) A type of forward contract. C) The simultaneous purchase and sale of foreign exchange for two different dates. D) The exchange of currencies at the current rate. Show Answer Correct Answer: C) The simultaneous purchase and sale of foreign exchange for two different dates. 3. ..... protection is the major responsibility of SEBI. A) Investor. B) Broker. C) Agent. D) Trustee. Show Answer Correct Answer: A) Investor. 4. A treasury bill is also known as a ..... A) G-Bill. B) Gov-bill. C) State-bill. D) T-Bill. Show Answer Correct Answer: D) T-Bill. 5. Apa perbedaan utama antara pasar uang dan pasar modal? A) Pasar uang menyediakan pembiayaan untuk perusahaan, sedangkan pasar modal tidak. B) Pasar uang dan pasar modal tidak memiliki perbedaan. C) Pasar uang berfokus pada instrumen jangka panjang, sedangkan pasar modal pada instrumen jangka pendek. D) Pasar uang berfokus pada instrumen jangka pendek, sedangkan pasar modal pada instrumen jangka panjang. Show Answer Correct Answer: D) Pasar uang berfokus pada instrumen jangka pendek, sedangkan pasar modal pada instrumen jangka panjang. 6. Type of financial security which have linked payoff to another issued security is classified as A) Linked security. B) Derivative security. C) Payable security. D) Non-issuing security. Show Answer Correct Answer: B) Derivative security. 7. Oldest Stock Market in India A) Bombay. B) Calcutta. C) Delhi. D) None of the above. Show Answer Correct Answer: A) Bombay. 8. Using the Standard & Poor's index to gauge bond quality, which of the following symbols correctly identifies the highest investment grade? A) C. B) AAA. C) D. D) Aaa. Show Answer Correct Answer: B) AAA. 9. How do financial markets help individuals and companies? A) By providing entertainment. B) By raising funds and investing savings. C) By offering educational services. D) By manufacturing products. Show Answer Correct Answer: B) By raising funds and investing savings. 10. What is the market strategy that favors trying to find stocks that are undervalued in the market? A) Value investing. B) Buy and holding. C) Investing for growth. D) Market timing. Show Answer Correct Answer: A) Value investing. 11. ....is an institution or arrangement that facilitates the exchange of financial instruments. A) Unorganised sector. B) Organised sector. C) Financial market. D) Capital market. Show Answer Correct Answer: C) Financial market. 12. What is a significant driver of asset bubbles and market crashes? A) Herd instinct. B) Innovations in technology. C) Low interest rates. D) Government regulations. Show Answer Correct Answer: A) Herd instinct. 13. ..... refers to the time at which payment to a bondholder is due. A) Par value. B) Coupon rate. C) Maturity. D) None of the above. Show Answer Correct Answer: C) Maturity. 14. XW Group Company planned to expand its business. Therefore it sold new shares below market price to raise money as well as to give existing shareholders the priority to purchase the shares.Which type of shares is mentioned in the above example? A) C Rights issues. B) D Preference shares. C) B Blue chips. D) A Bonus shares. Show Answer Correct Answer: A) C Rights issues. 15. FINRA regulates: A) Investment Advisors. B) Financial Advisors. C) Stock Brokers. D) All Options are Correct. Show Answer Correct Answer: D) All Options are Correct. 16. How do financial institutions contribute to economic stability? A) They primarily focus on maximizing profits. B) They have no impact on the overall economy. C) They only provide loans to large corporations. D) Financial institutions contribute to economic stability by providing security for savings, facilitating resource allocation, offering credit, managing risks, and supporting monetary policy. Show Answer Correct Answer: D) Financial institutions contribute to economic stability by providing security for savings, facilitating resource allocation, offering credit, managing risks, and supporting monetary policy. 17. An account that pays interest on a specific sum of money that a person has deposited for a specific period of time. If withdrawn before that time, the bank imposes a penalty fee. A) Money Market Account. B) Certificate of Deposit (CD). C) Savings Account. D) Checking Account. Show Answer Correct Answer: B) Certificate of Deposit (CD). 18. When stock prices decrease as investors fear their ability to make a profit A) Bull Market. B) Bear Market. C) All the above. D) None of the above. Show Answer Correct Answer: B) Bear Market. 19. Who pays interest on a loan A) A lender. B) A creditor. C) A credit union. D) A borrower. Show Answer Correct Answer: D) A borrower. 20. The price paid to have. a policy on a monthly basis A) Savings. B) Premium. C) Cost. D) None of the above. Show Answer Correct Answer: B) Premium. 21. The Nigerian Stock Exchange was formerly known as: A) The Abuja Stock Exchange. B) The West African Stock Exchange. C) The National Securities Exchange. D) The Lagos Stock Exchange. Show Answer Correct Answer: D) The Lagos Stock Exchange. 22. ..... is an agreement to buy or sell at a specific date in the future at a predetermined price A) Savings. B) Equities. C) Bond. D) Futures contract. Show Answer Correct Answer: D) Futures contract. 23. Why are investment bankers interested in money markets? A) For issuing life insurance. B) For short-term funding & corporate treasury solutions. C) For retail UPI payments. D) For trading crypto. Show Answer Correct Answer: B) For short-term funding & corporate treasury solutions. 24. What happens to commodity prices if there is a bad harvest? A) They go down. B) They remain the same. C) They become worthless. D) They go up. Show Answer Correct Answer: D) They go up. 25. Economic liberalisation in India was initiated in ..... A) 1991. B) 1990. C) 1992. D) 1993. Show Answer Correct Answer: A) 1991. 26. The two main dealers on the stock exchange are: A) Buyers and Sellers. B) Banks and Insurance Companies. C) Stock Brokers and Jobbers. D) Investors and Speculators. Show Answer Correct Answer: C) Stock Brokers and Jobbers. 27. Holders of equity have claims on both income and assets that are secondary to the claims of creditors. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 28. Which regulatory body is responsible for advising the Treasurer on financial issues? A) The RBA. B) The NSW Treasury. C) The CFR. D) The Commonwealth Treasury. Show Answer Correct Answer: D) The Commonwealth Treasury. 29. What is the importance of regulation in financial markets? A) Regulation promotes monopolies and limits competition in markets. B) Regulation increases market volatility and uncertainty. C) Regulation is unnecessary for investor confidence and growth. D) Regulation is important for stability, investor protection, fair practices, and preventing fraud in financial markets. Show Answer Correct Answer: D) Regulation is important for stability, investor protection, fair practices, and preventing fraud in financial markets. 30. The share of ownership in a corporation that gives holders voting rights and a share of profit. A) Preferred Stock. B) Stock index. C) Common Stock. D) Primary market. Show Answer Correct Answer: C) Common Stock. 31. The main advantage of diversification as an investment policy is that it A) Offsets the effects of inflation on investments. B) Reduces risk to investors. C) Increases investors' access to their money. D) Guarantees a fixed rate of return on an investment. Show Answer Correct Answer: B) Reduces risk to investors. 32. What is the main function of a mutual fund? A) The main function of a mutual fund is to provide loans to individual investors. B) The main function of a mutual fund is to offer high-risk investment opportunities. C) The main function of a mutual fund is to provide investors with a diversified investment option managed by professionals. D) The main function of a mutual fund is to sell insurance products to clients. Show Answer Correct Answer: C) The main function of a mutual fund is to provide investors with a diversified investment option managed by professionals. 33. A government bond is A) An IOU from the government. B) A promise from the government to repay a loan. C) A fixed rate loan to the government. D) All of the above. Show Answer Correct Answer: D) All of the above. 34. Floatation Costs are met usually by funds raised through ..... This is also known as ..... A) Treasury Bill, Bridge Financing. B) Call Money, Private Placement. C) Commercial Paper, Bridge Financing. D) Commercial Bill, Private Placement. Show Answer Correct Answer: C) Commercial Paper, Bridge Financing. 35. Which of the statements given below is/are correct regarding "bear market" ?1.It refers to fall in the value of investments 2.Investors rush to buy stocks instead of selling 3.Unemployment levels may rise.Select the correct answerfrom given below: A) 1 only. B) 2 and 3 only. C) 1 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: C) 1 and 3 only. 36. Sensex is dependent on ..... companies. A) 100. B) 500. C) 30. D) 50. Show Answer Correct Answer: C) 30. 37. Which of the following are bank assets? A) The building owned by the bank. B) A customer's checking account. C) A negotiable CD. D) A discount loan. Show Answer Correct Answer: A) The building owned by the bank. 38. How can investors purchase equities? A) They can buy them directly on the internet. B) They have to use a stockbroker. C) They can buy futures in corporate bonds. D) They can buy a 401(k) plan through a bank. Show Answer Correct Answer: A) They can buy them directly on the internet. 39. The following is a zero coupon security which pays no interest A) Treasury bills. B) Dated securities. C) The State Development Loans (SDLs). D) All the above. Show Answer Correct Answer: A) Treasury bills. 40. Why do companies issue stocks? A) To create and investment opportunity into other businesses. B) To increase employee cooperation and an operating level. C) To be traded individually. D) To raise money for economic investment and to fund operating costs. Show Answer Correct Answer: D) To raise money for economic investment and to fund operating costs. 41. An example of a firm's financing decision would be: A) Deciding whether or not to increase the price of its products. B) Determining how much to pay for a specific asset. C) Acquiring a competitive firm. D) Paying dividends to shareholders. Show Answer Correct Answer: D) Paying dividends to shareholders. 42. Who regulates the financial markets? A) Mr. Gilman. B) Securities and Exchange Commission. C) CIA. D) Granville PD. Show Answer Correct Answer: B) Securities and Exchange Commission. 43. The money market facilitates: A) Long-term loans and investment. B) Short-term loans and investment. C) The sale of company shares only. D) Government infrastructure projects. Show Answer Correct Answer: B) Short-term loans and investment. 44. Which of the following is NOT a type of financial asset traded in financial markets? A) Stocks. B) Bonds. C) Currencies. D) Real estate. Show Answer Correct Answer: D) Real estate. 45. What is the name of the Australian Share Market? A) SMA. B) AXS. C) ASM. D) ESX. E) ASX. Show Answer Correct Answer: E) ASX. 46. ..... is defined as a claim on the property or income of a borrower. A) Financial asset. B) Stock. C) Equity. D) None of the above. Show Answer Correct Answer: A) Financial asset. 47. The capital market is a financial market for trading in: A) Short-term financial assets. B) Long-term financial assets. C) Commercial papers. D) Foreign currencies. Show Answer Correct Answer: B) Long-term financial assets. 48. Which is/are the ways by which companies can raise foreign currency resources? A) American Depository Share. B) Global Depository Receipts. C) Euro Issues. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 49. What is the purpose of futures markets in currency trading? A) To allow traders to speculate on currency values and hedge against potential losses. B) To eliminate the risk of currency trading entirely. C) To fix the exchange rate for future transactions without any speculation. D) To provide loans to businesses in foreign currencies. Show Answer Correct Answer: A) To allow traders to speculate on currency values and hedge against potential losses. 50. Which best describes the role that government and business play in investments? A) They both receive capital to use for growth. B) They DO NOT receive capital to use for growth. C) All the above. D) None of the above. Show Answer Correct Answer: A) They both receive capital to use for growth. 51. If, after a deposit outflow, a bank needs an additional $ 3 million to meet its reserve requirements, the bank can A) Repay its discount loans from the Fed. B) Sell $ 3 million of securities that the bank currently owns. C) Increase loans by $ 3 million. D) Reduce deposits by $ 3 million. Show Answer Correct Answer: B) Sell $ 3 million of securities that the bank currently owns. 52. If a firm requires to two crores for six months time to keep the stock of raw material, it should approach(a) (b) (c) (d) A) Money market. B) Capital market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Money market. 53. A company sells its product on credit. Select the correct statement. A) Such sales will not impact the company's profit and loss statement. B) Such sales will appear as liability in the company's balance sheet. C) Such sales will appear as asset in the company's balance sheet. D) Such sales will impact the cash flow statement. Show Answer Correct Answer: C) Such sales will appear as asset in the company's balance sheet. 54. ..... is a feature specified in the debt contract that permits its sale to another investor A) Convertibility. B) Callability. C) Putability. D) Negotiability. Show Answer Correct Answer: D) Negotiability. 55. What is a foreign bond? A) A bond that is not regulated. B) A bond sold outside the borrower's country and denominated in the local currency. C) A bond issued in the issuer's home country. D) A bond issued by international organizations. Show Answer Correct Answer: B) A bond sold outside the borrower's country and denominated in the local currency. 56. Clearing and settlement operations of NSE are carried out by: A) NSDL. B) NSCCL. C) CDSL. D) SBI. Show Answer Correct Answer: B) NSCCL. 57. The lending of money to another party, involving an agreement ot repay the temporary loan is ..... A) Cash rate. B) Credit. C) Liquidity. D) Debt. E) Currency. Show Answer Correct Answer: B) Credit. 58. The settlement cycle in NSE is: A) T+2. B) T+5. C) T+3. D) T+1. Show Answer Correct Answer: A) T+2. 59. How do insurance companies contribute to economic development? A) Insurance firms mainly invest in real estate and luxury goods. B) Insurance companies primarily focus on marketing and sales strategies. C) Insurance companies enhance economic stability and growth by providing risk management, encouraging investments, and facilitating financial security. D) Insurance providers are responsible for setting government policies. Show Answer Correct Answer: C) Insurance companies enhance economic stability and growth by providing risk management, encouraging investments, and facilitating financial security. 60. The markets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as A) Easy markets. B) Physical asset markets. C) Financial asset markets. D) Financial instruments. Show Answer Correct Answer: C) Financial asset markets. ← 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