This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 3 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Banks acquire the funds that they use to purchase income-earning assets from such sources as A) Cash items in the process of collection. B) Savings accounts. C) Deposits at other banks. D) Reserves. Show Answer Correct Answer: B) Savings accounts. 2. Which of the following TERM does not belong to the stock exchange? A) IPO. B) KPO. C) NAV. D) NSE. Show Answer Correct Answer: B) KPO. 3. What type of relationship do risk and return have? A) A direct relationship. B) A geometric relationship. C) An inverse relationship. D) A parallel relationship. Show Answer Correct Answer: A) A direct relationship. 4. Which is not a function of the Foreign Exchange Market A) Convert the Currency. B) Law implication. C) Provide Insurance. D) None of the above. Show Answer Correct Answer: B) Law implication. 5. What are stocks? A) Shares of trading in a corporation. B) Shares of ownership in a corporation. C) Bonds that are traded. D) Bonds with potential to make money. Show Answer Correct Answer: B) Shares of ownership in a corporation. 6. In general, when market interest rates go up, the price of fixed rate bonds: A) Goes up as well. B) Goes down. C) Does not change. D) Goes up first, then falls back. Show Answer Correct Answer: B) Goes down. 7. What is STT and why is it relevant to capital gains taxation? A) It's a tax on annual profits. B) It ensures eligibility for LTCG/STCG tax benefits. C) It is a fixed service fee for brokers. D) None of the above. Show Answer Correct Answer: B) It ensures eligibility for LTCG/STCG tax benefits. 8. Which financial item is part of near money? A) Fixed deposits in commercial banks. B) Plastic money. C) Government currency. D) Checkable deposits. Show Answer Correct Answer: A) Fixed deposits in commercial banks. 9. What is the function of the securities market? A) A place where buyers and sellers of securities meet to enter into a transaction. B) A place where entrepreneurs can raise resources for their businesses. C) A place where various financial products such as shares, debentures, bonds, etc. are available for buying and selling. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 10. Superannuation is a financial product provided in which financial market? A) Derivatives market. B) Financial services market. C) Share market. D) Savings market. Show Answer Correct Answer: B) Financial services market. 11. What is the current yield if 11.50% bond sells in the market for Rs. 125? A) 9. B) 9.2. C) 9.15. D) Not Attempted. E) 9.25. Show Answer Correct Answer: B) 9.2. 12. What is a financial institution? A) A firm that makes money off of selling products. B) An intermediary that helps channel savings into economic investments. C) A corporation that typically falls into debt. D) A primary source of selling company investment strategy. Show Answer Correct Answer: B) An intermediary that helps channel savings into economic investments. 13. What is a junk bond? A) A low-rated bond with a higher risk of default. B) A bond issued by the government. C) A bond with a high credit rating. D) A bond that pays no interest. Show Answer Correct Answer: A) A low-rated bond with a higher risk of default. 14. It allows the issuing corporation to retire or repurchase outstanding shares within a predetermined period at a specified price. A) Callable. B) Convertible. C) Puttable. D) Cumulative. Show Answer Correct Answer: A) Callable. 15. Define speculation in the context of financial markets. A) Speculation is the act of trading financial instruments with the expectation of profit from future price changes. B) Speculation refers to the practice of saving money in a bank account for interest. C) Speculation is the process of investing in real estate for long-term gains. D) Speculation involves holding assets for a fixed period to avoid losses. Show Answer Correct Answer: A) Speculation is the act of trading financial instruments with the expectation of profit from future price changes. 16. Which one of the following is not a function of the financial market? A) Floating of companies. B) Lowering transaction cost. C) Mobilization of savings. D) Price determination of securities. Show Answer Correct Answer: A) Floating of companies. 17. Perbedaan motivasi antara partisipan pasar modal dengan pasar uang adalah di pasar modal mereka ..... A) Melakukan investasi jangka panjang. B) Menggudangkan dana untuk waktu yang singkat. C) Menggudangkan dana untuk waktu yang lama. D) Melakukan investasi jangka pendek. Show Answer Correct Answer: A) Melakukan investasi jangka panjang. 18. It involves parties and transactions related to loans granted to households who desire to buy properties, such as cars or appliances, travel, obtain education for themselves or their loved ones, or other similar needs ..... A) Over-the-counter market. B) Auction market. C) Mortgage market. D) Consumer credit market. Show Answer Correct Answer: D) Consumer credit market. 19. Which of the following is NOT a stock market index A) SEC Index. B) Dow Jones Industrial Average. C) NASDAQ Composite. D) S&P 500. Show Answer Correct Answer: A) SEC Index. 20. The following are features or components of finance, except: A) Utilization of funds. B) Deposit of funds. C) Availability of funds. D) Allocation of funds. Show Answer Correct Answer: B) Deposit of funds. 21. Saham preferen sering dianggap mirip dengan obligasi dari sudut pandang investor karena: A) Memberikan dividen tetap seperti bunga obligasi. B) Dapat diperdagangkan di pasar uang. C) Memiliki hak suara dalam perusahaan. D) Nilainya selalu naik. Show Answer Correct Answer: A) Memberikan dividen tetap seperti bunga obligasi. 22. What determines equilibrium interest rates? A) Supply and demand for loanable funds. B) Government regulations. C) Inflation rates. D) Stock market performance. Show Answer Correct Answer: A) Supply and demand for loanable funds. 23. Treasury Bills Commands ..... A) Medium Liquidity. B) Limited Liquidity. C) High Liquidity. D) Low Liquidity. Show Answer Correct Answer: C) High Liquidity. 24. When the expected return is lower than the required return, investors should sell the asset. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 25. Who pays the cost of deposits insurance? A) Insured bank. B) SEBI. C) Investor. D) RBI. Show Answer Correct Answer: A) Insured bank. 26. Which of the following is TRUE about the Title Bar? A) It displays the list of active orders. B) It provides market data for selected securities. C) It shows the current trading session and user information. D) It is used to input buy and sell orders. Show Answer Correct Answer: C) It shows the current trading session and user information. 27. The level of short term interest rates in BGN are determined by the decisions of: A) The Bulgarian National Bank. B) The European Central Bank. C) The Federal Reserve Bank of NY. D) The Prime minister of Bulgaria. E) BGN interest rates are not influenced by decisions of Central banks, but by market supply and demand. Show Answer Correct Answer: B) The European Central Bank. 28. ..... is the allotment of securities by a company to institutional investors and some selected individuals. A) Private Placement. B) Offer for sale. C) Offer to employees. D) Rights Issue. Show Answer Correct Answer: A) Private Placement. 29. Which of the following is NOT a characteristic of savings bond? A) They are issued by the government. B) They carry a high risk. C) They can be used to help pay for public works project. D) They are sold in low denominations. Show Answer Correct Answer: B) They carry a high risk. 30. How do money markets differ from capital markets? A) Capital markets trade exclusively in foreign currencies, while money markets do not. B) Money markets trade in short-term assets, while capital markets deal with long-term assets. C) Money markets regulate the financial sector, while capital markets provide loans to governments. D) Money markets are for private transactions only, while capital markets are open to the public. Show Answer Correct Answer: B) Money markets trade in short-term assets, while capital markets deal with long-term assets. 31. Economic Value Added (EVA) measures value by calculating: A) Operating profit minus interest. B) NOPAT minus cost of capital. C) Net profit minus dividends. D) Cash flow minus depreciation. Show Answer Correct Answer: B) NOPAT minus cost of capital. 32. Which of the following is a primary function of financial markets? A) To control inflation. B) To promote foreign trade. C) To facilitate the transfer of funds between savers and borrowers. D) To collect taxes. Show Answer Correct Answer: C) To facilitate the transfer of funds between savers and borrowers. 33. What is the main benefit of investing in a Commodity ETF? A) Easy access to a diverse range of commodities. B) Guaranteed returns. C) Higher taxes. D) Ownership of physical commodities. Show Answer Correct Answer: A) Easy access to a diverse range of commodities. 34. The primary market is concerned with: A) Raising new capital. B) Hedging foreign exchange risk. C) Trading existing securities. D) Speculating on share prices. Show Answer Correct Answer: A) Raising new capital. 35. Which risk is associated with the inability to sell a security at its fair-market value quickly? A) Special provisions. B) Liquidity risk. C) Default risk. D) Inflation risk. Show Answer Correct Answer: B) Liquidity risk. 36. Collects funds from savers and invests the funds in loans and other financial assets A) Financial intermediary. B) Primary market. C) Secondary market. D) Investment objective. Show Answer Correct Answer: A) Financial intermediary. 37. What is the strategy of holding different kinds of investments to minimize risk? A) Portfolio diversification. B) Capital market. C) Financial system. D) Primary market. Show Answer Correct Answer: A) Portfolio diversification. 38. In a(n) ..... , people who specialize in buying and selling stock represent the interests of a company without the company actually getting involved. A) OTC market. B) Secondary market. C) Primary market. D) Bear market. Show Answer Correct Answer: B) Secondary market. 39. LTCG on equity mutual funds post-Budget 2024 is applicable at? A) 10% above ₹ 1 lakh. B) 12.5% above ₹ 1.25 lakh. C) 15% above ₹ 2 lakh. D) 20% above ₹ 1 lakh. Show Answer Correct Answer: B) 12.5% above ₹ 1.25 lakh. 40. What term describes a bond price excluding interest accrued since the last payment? A) Clean Price. B) Spot Price. C) Accrued Interest. D) Dirty Price. Show Answer Correct Answer: A) Clean Price. 41. Which one is NOT a capital market instrument? A) Treasury Bills. B) Corporate bonds. C) Equity shares. D) Preference shares. Show Answer Correct Answer: A) Treasury Bills. 42. The money invested in the call money market provides high liquidity with ..... A) Low Profitability. B) Limited Profitability. C) Medium Profitability. D) High Profitability. Show Answer Correct Answer: A) Low Profitability. 43. Educating the investor is the ..... function of SEBI. A) Protective. B) Regulatory. C) Both the above. D) Developmental. Show Answer Correct Answer: A) Protective. 44. The Ex-dividend date of a company is 27$^{th}$ September 2022, when should you buy the stock to receive the dividend: A) 28$^{th}$ September 2022. B) 27$^{th}$ September 2022. C) 25$^{th}$ September 2022. D) 29th September 2022. Show Answer Correct Answer: C) 25$^{th}$ September 2022. 45. Global market in convertible currencies are traded and their conversion rates are determined. A) Auction Market. B) Equity Market. C) Debt Market. D) Foreign Exchange Market. Show Answer Correct Answer: D) Foreign Exchange Market. 46. It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year A) Secondary market. B) Capital market. C) Money market. D) Primary market. Show Answer Correct Answer: C) Money market. 47. The financial instrument which is related to money market is A) Debentures. B) Certificate of deposit. C) Equity share. D) Bonds. Show Answer Correct Answer: B) Certificate of deposit. 48. Which of the following is an example of a capital market instrument? A) .S. Treasury bills. B) Banker's acceptance. C) Stock options. D) Preferred stocks. Show Answer Correct Answer: D) Preferred stocks. 49. What is an organized venue for trading stock and other securities? A) Investment club. B) Stock exchange. C) Brokerage firm. D) Bank. Show Answer Correct Answer: B) Stock exchange. 50. What are derivatives in financial markets? A) Derivatives are cash instruments that do not depend on any underlying asset. B) Derivatives are financial instruments that derive their value from an underlying asset. C) Derivatives are fixed-income securities that pay a set interest rate. D) Derivatives are stocks that represent ownership in a company. Show Answer Correct Answer: B) Derivatives are financial instruments that derive their value from an underlying asset. 51. What does the acronym IPO stand for in the context of financial markets? A) International Public Offering. B) Initial Price Offering. C) Internal Public Offering. D) Initial Public Offering. Show Answer Correct Answer: D) Initial Public Offering. 52. Financial intermediaries A) Provide financial assistance to low-income families. B) Accept funds from savers to make loans to investors. C) Help the federal government manage the economy. D) Track data on international trading between various countries. Show Answer Correct Answer: B) Accept funds from savers to make loans to investors. 53. Which of the following is a short-term financial goal? A) Saving for a house. B) Saving for the prom. C) Saving for college. D) Saving to open a business. Show Answer Correct Answer: B) Saving for the prom. 54. ....is the market for short term financial claim. A) Capital market. B) Equity market. C) Money market. D) Debt market. Show Answer Correct Answer: C) Money market. 55. The issuer of dated securities is A) NBFCs. B) Government. C) Corporations. D) Municipal corporation. Show Answer Correct Answer: B) Government. 56. Which of the following statements is not true with regard to primary market? A) It facilitates the transfer of investible funds from savers to entrepreneurs. B) It deals with new securities being issued for the first time. C) Is also known as the old issues market. D) It facilitates the transfer of investible funds from savers to entrepreneurs. Show Answer Correct Answer: C) Is also known as the old issues market. 57. The prices paid for resources affect A) The money incomes of households in the economy. B) The allocation of resources among different firms and industries in the economy. C) The quantities of different resources employed to produce a product. D) All the above. Show Answer Correct Answer: D) All the above. 58. Higher returns in financial markets are generally associated with higher risk. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 59. Which of the following is an example of a capital market institution? A) Insurance companies. B) Clearing banks. C) Pension funds. D) London Stock Exchange. Show Answer Correct Answer: D) London Stock Exchange. 60. The primary objective of the Bangko Sentral is to maintain price stability conducive to a balanced and sustainable fiscal policy. 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 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 8Class 12 Business Studies Chapter 10 Financial Markets Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books