This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 11 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A bank is insolvent when A) Its liabilities exceed its assets. B) Its assets exceed its liabilities. C) Its capital exceeds its liabilities. D) Its assets increase in value. Show Answer Correct Answer: A) Its liabilities exceed its assets. 2. In general, banks would prefer to acquire funds quickly by ..... rather than ..... A) Reducing loans; selling securities. B) Reducing loans; borrowing from the Fed. C) Borrowing from the Fed; reducing loans. D) "calling in" loans; selling securities. Show Answer Correct Answer: C) Borrowing from the Fed; reducing loans. 3. Through correspondent banking, large banks provide services to small banks, including A) Loan guarantees. B) Foreign exchange transactions. C) Issuing stock. D) Debt reduction. Show Answer Correct Answer: B) Foreign exchange transactions. 4. From 1876 to 1913, exchange rates were dictated by the ..... Each currency was convertible into gold at a specified rate. Thus, the exchange rate between two currencies was determined by their relative convertibility rates per ounce of gold. Each country used gold to support its currency. A) Gold Regime. B) Gold Standard. C) Gold Equivalent. D) Gold Exhange Rate. Show Answer Correct Answer: B) Gold Standard. 5. What is the purpose of the stock market? A) To provide companies with a way to raise capital. B) To provide investors with an opportunity to earn profits. C) To regulate financial transactions. D) To provide loans to individuals. Show Answer Correct Answer: A) To provide companies with a way to raise capital. 6. Which is the first commercial bank in India to launch a mutual fund? A) SBI. B) HDFC. C) Canara Bank. D) Bank of India. Show Answer Correct Answer: A) SBI. 7. Money market deals in ..... securities. A) Short term. B) Long term. C) Mid Term. D) Both Short term and Long Term. Show Answer Correct Answer: A) Short term. 8. ..... is based on the uncertain event whose result determined by chance or accident A) Gambling. B) Speculation. C) Dead cat bouncing. D) Market fluctuations. Show Answer Correct Answer: A) Gambling. 9. Investors with risk-loving characteristics will purchase securities with higher expected returns, lesser risks, and more liquidity. Do you agree with this statement? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 10. Why is Bank Nifty considered an important index? A) It is used for fixed deposit pricing. B) It helps decide RBI's interest rates. C) It shows the performance of gold prices. D) It reflects the health of India's banking sector. Show Answer Correct Answer: D) It reflects the health of India's banking sector. 11. Which statement is correct in context of mutual fund A) A passive fund has lower fund expenses than active fund. B) Irrespective of the kind of fund, fund expenses remain constant across schemes of a fund house. C) An active fund has lower fund expenses than a passive fund. D) A passive fund has higher fund expenses compare to active fund expenses. Show Answer Correct Answer: A) A passive fund has lower fund expenses than active fund. 12. Pihak yang menyediakan barang modal dalam perjanjian leasing disebut A) Lessee. B) Lessor. C) Debitur. D) Kreditur. Show Answer Correct Answer: B) Lessor. 13. The fact that investors cannot distinguish good from bad companies leads to: A) Moral hazard problem. B) Adverse selection problem. C) Too-big-to-fail problem. D) None of the above. Show Answer Correct Answer: B) Adverse selection problem. 14. The rate of return on a corporate, municipal, or government bond is its ..... A) Compensation rate. B) Par value. C) Coupon rate. D) Interest rate. Show Answer Correct Answer: C) Coupon rate. 15. The quantity theory suggests a direct relationship between the money supply and: A) The value of money. B) The price level. C) The interest rate. D) The volume of goods. Show Answer Correct Answer: B) The price level. 16. Certificates of deposits (CDs) are a common investment because they: A) Are issued and insured by commercial banks. B) Require only a small investment and have various maturity rates. C) Are issued and insured by the U.S. government. D) Require only a small investment and pay high interest rates at maturity. Show Answer Correct Answer: B) Require only a small investment and have various maturity rates. 17. A private placement allows a firm to raise funds from a limited number of investors without a public offering. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 18. What is defined as the desire of people to hold money to satisfy short-term purchases? A) Share market. B) Transaction demand. C) Asset demand. D) Cash rate. Show Answer Correct Answer: B) Transaction demand. 19. They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high. A) Commercial papers. B) Call money. C) Commercial bill. D) Certificate of deposit. Show Answer Correct Answer: D) Certificate of deposit. 20. What is defined as the degree to which an asset can be converted into cash? A) Credit. B) Debt. C) Liquidity. D) Swap rate. Show Answer Correct Answer: C) Liquidity. 21. Which of the following institutions promotes industrial finance in India? A) IFCI. B) SEBI. C) RBI. D) LIC. Show Answer Correct Answer: A) IFCI. 22. Which of the following organization is the regulator of mutual funds in India A) CRISIL. B) SEBI. C) RBI. D) AMFI. Show Answer Correct Answer: B) SEBI. 23. Which one of the following has members rather than customers? A) Building societies. B) Central bank. C) Commercial bank. D) Insurance companies. Show Answer Correct Answer: A) Building societies. 24. The spot exchange rate is the rate at which a foreign exchange dealer converts one currency into another currency on a ..... A) Year. B) Week. C) Day. D) None of the above. Show Answer Correct Answer: C) Day. 25. Types of Speculators A) Bull. B) Stag. C) Lame Duck. D) Bear. E) All of the above. Show Answer Correct Answer: E) All of the above. ← PreviousNext →Related 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 8Class 12 Business Studies Chapter 10 Financial Markets Quiz 9Class 12 Business Studies Chapter 10 Financial Markets Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books