This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 12 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Money paid to you by a financial institution when you deposit funds there. (How do you make money from bonds/cd's/savings accounts?) A) Allowance. B) Income. C) Interest. D) Tips. Show Answer Correct Answer: C) Interest. 2. Stock Exchange works as a mechanism for valuation of securities through the forces ofdemand and supply. Identify the related function of performed by the stock exchanges. A) Providing liquidity and marketability to existing securities. B) Safety of transaction. C) Pricing of security. D) Spreading of equity cult. Show Answer Correct Answer: C) Pricing of security. 3. What are dividends? A) Dividends are shares of stock distributed to employees. B) Dividends are taxes imposed on corporate earnings. C) Dividends are payments made to shareholders from a company's profits. D) Dividends are loans given to shareholders by the company. Show Answer Correct Answer: C) Dividends are payments made to shareholders from a company's profits. 4. An alternative method for estimating a stock price is to multiply the firm's earnings per share times the industry price earnings ratio. However, this ratio cannot be adjusted up or down to reflect specific characteristics of the firm. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 5. The Index of NSE is called ..... A) INDEX. B) NIFTY. C) SENSEX. D) LISTING. Show Answer Correct Answer: B) NIFTY. 6. The short term financial market is called the A) Forex market. B) The stock market. C) The money market. D) The wholesale market. Show Answer Correct Answer: C) The money market. 7. In the equation MV = PT, 'V' stands for: A) Value of money. B) Velocity of circulation of money. C) Volume of trade. D) Variable costs. Show Answer Correct Answer: B) Velocity of circulation of money. 8. What is the primary goal of speculators in financial markets? A) Long-term stability. B) Reducing market volatility. C) Making a profit. D) Increasing asset value. Show Answer Correct Answer: C) Making a profit. 9. What are the main components of the Indian financial system? A) Consumer behavior, market trends, inflation rates, employment statistics. B) Economic policies, trade agreements, foreign investments, tax regulations. C) Financial institutions, financial markets, financial instruments, regulatory bodies. D) Banking systems, insurance companies, stock exchanges, investment funds. Show Answer Correct Answer: C) Financial institutions, financial markets, financial instruments, regulatory bodies. 10. A bank with insufficient reserves can increase its reserves by A) Lending federal funds. B) Calling in loans. C) Buying short-term Treasury securities. D) Buying municipal bonds. Show Answer Correct Answer: B) Calling in loans. 11. Which type of insurance is specifically designed to cover damages to vehicles? A) Car insurance. B) Life insurance. C) Travel insurance. D) Home insurance. Show Answer Correct Answer: A) Car insurance. 12. What is the relationship between savers and borrowers in financial markets? A) Savers borrow funds from the market, while borrowers save those funds. B) Savers and borrowers have no interaction in financial markets. C) Savers supply funds to the market, and borrowers demand those funds, creating a cycle of lending and borrowing. D) Savers demand funds, and borrowers supply those funds. Show Answer Correct Answer: C) Savers supply funds to the market, and borrowers demand those funds, creating a cycle of lending and borrowing. 13. Institutions such as banks that collect funds from savers that can be loaned to borrowers are known as A) Financial intermediaries. B) Financial assets. C) Dividends. D) Credit Unions. Show Answer Correct Answer: A) Financial intermediaries. 14. Which of the following is a NOT possible advantage of direct financing? A) The amount of mobilized capital is large. B) Matching amounts of funds to be borrowed with those to be lent. C) Reduce cost of the financial intermediary involved. D) The amount of mobilized capital is limited. Show Answer Correct Answer: D) The amount of mobilized capital is limited. 15. Type of stock which is owned by few people, usually the companies' managers and not actively traded. A) Publicly-held stock. B) Treasury-held stock. C) Family-owned stock. D) Closely held stock. Show Answer Correct Answer: D) Closely held stock. 16. The Apex Body who controls the Capital Market of our country is A) RBI. B) SBI. C) SEBI. D) None of the above. Show Answer Correct Answer: C) SEBI. 17. Why do people invest in the stock market? A) To avoid financial risks and losses. B) To collect dividends and avoid taxes. C) To grow wealth and earn returns on investment. D) To support local businesses and communities. Show Answer Correct Answer: C) To grow wealth and earn returns on investment. 18. Which type of trader holds assets for weeks to months based on fundamental analysis? A) Day trader. B) Swing trader. C) Position trader. D) Options trader. Show Answer Correct Answer: C) Position trader. 19. High interest rates encourage businesses to invest more ..... A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 20. FINRA is a Government Organization that oversees the SEC A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 21. Which of the following is a feature of junk bonds? A) Low risk and low return. B) High risk and high return. C) Government-backed. D) Always pay dividends. Show Answer Correct Answer: B) High risk and high return. 22. What may cause government bond yields (interest rates on debt) to rise? A) Lower inflation. B) Higher inflation. C) Government spending restraint. D) A corruption crackdown. Show Answer Correct Answer: B) Higher inflation. 23. Weak-form market efficiency implies that: A) All private information is reflected in prices. B) Past price movements cannot be used to earn abnormal returns. C) Fundamental analysis is always profitable. D) Insider trading is allowed. Show Answer Correct Answer: B) Past price movements cannot be used to earn abnormal returns. 24. How do bonds function within financial markets? A) Bonds are primarily used for stock trading. B) Bonds function as debt instruments that provide fixed income to investors and financing to issuers. C) Bonds are a type of equity investment. D) Bonds only provide variable returns based on market performance. Show Answer Correct Answer: B) Bonds function as debt instruments that provide fixed income to investors and financing to issuers. 25. Which of the following is an example of a money market instrument? A) Mutual funds. B) Treasury bills. C) Corporate bonds. D) Equity shares. Show Answer Correct Answer: B) Treasury bills. ← 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