This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 17 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. They invest a large proportion of pension fund contributions in the stock market. A) Insurance Companies. B) Securities Firms. C) Pension Funds. D) Savings Bank. Show Answer Correct Answer: C) Pension Funds. 2. Systematic risk in equities represented by A) Alfa. B) Gamma. C) Beta. D) Delta. Show Answer Correct Answer: C) Beta. 3. A futures contract differs from an option because a futures contract: A) Has no expiry date. B) Gives the right but not obligation. C) Creates an obligation for both buyer and seller. D) Is only used for speculation. Show Answer Correct Answer: C) Creates an obligation for both buyer and seller. 4. Two toy companies decide to merge because they believe they will be able to develop more ideas for new toys and produce and sell them faster, at lower costs. A) Horizontal. B) Vertical. C) Conglomerate. D) None of the above. Show Answer Correct Answer: A) Horizontal. 5. How do economic indicators influence financial markets? A) Financial markets are solely influenced by political events. B) Economic indicators only affect consumer behavior, not financial markets. C) Economic indicators influence financial markets by affecting investor confidence and central bank policies. D) Economic indicators have no impact on financial markets. Show Answer Correct Answer: C) Economic indicators influence financial markets by affecting investor confidence and central bank policies. 6. Which of the following derivatives provide payoffs that are non-linearly related to the payoffs of the underlying? A) Options. B) Forwards. C) Interest-rate swaps. D) None of the above. Show Answer Correct Answer: A) Options. 7. Which market deals with short-term debt instruments? A) Capital market. B) Money market. C) Secondary market. D) Futures market. Show Answer Correct Answer: B) Money market. 8. Liquidity in financial markets refers to: A) Availability of cash reserves in RBI vaults. B) Ease of converting assets to cash. C) Availability of foreign exchange. D) Increase in stock prices. Show Answer Correct Answer: B) Ease of converting assets to cash. 9. Which of the following is the only correct example of equity? A) A treasury bill. B) A treasury bond. C) A share of stock. D) A long-term certificate of deposit. Show Answer Correct Answer: C) A share of stock. 10. The amount of assets per dollar of equity capital is called the A) Asset ratio. B) Equity ratio. C) Equity multiplier. D) Asset multiplier. Show Answer Correct Answer: A) Asset ratio. 11. It is a legal documents which certify the ownership. A) Stock Certificates. B) Record Book. C) Bond Certificate. D) Treasury Bill. Show Answer Correct Answer: A) Stock Certificates. 12. . It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio. A) Commercial bill. B) Commercial papers. C) Call money. D) None of the above. Show Answer Correct Answer: C) Call money. 13. The ability to produce value and then acquire goods and services at a later date is money's function as ..... A) A medium of exchange. B) A unit of account. C) A store of value. D) None of the above. Show Answer Correct Answer: C) A store of value. 14. Central banks support financial institutions and governments bailouts failing firms, which leads to ..... A) Dukes of Hazzard. B) Moral hazard. C) Laziness. D) Moral practices. Show Answer Correct Answer: B) Moral hazard. 15. Which of the following characteristics differentiates junk bonds from investment-grade bonds? A) Junk bonds typically have higher liquidity. B) Junk bonds are issued by governments only. C) Junk bonds have a higher probability of default. D) Junk bonds offer guaranteed returns. Show Answer Correct Answer: C) Junk bonds have a higher probability of default. 16. The most liquid of the money market securities are A) Repurchase agreements. B) Banker's acceptances. C) Treasury bills. D) Commercial paper. Show Answer Correct Answer: C) Treasury bills. 17. Which term refers to the possibility of an investor losing some or all of an investment? A) Risk. B) Probability. C) All the above. D) None of the above. Show Answer Correct Answer: A) Risk. 18. Banks' asset portfolios include state and local government securities because A) They help to attract business from these government entities. B) Banks consider them helpful in attracting accounts of Federal employees. C) The Federal Reserve requires member banks to buy securities from state and local governments located within their respective Federal Reserve districts. D) There is no default-risk with state and local government securities. Show Answer Correct Answer: A) They help to attract business from these government entities. 19. What role do primary markets play in the financial system? A) They deal exclusively with the trading of commodities. B) They facilitate the initial sale of stocks and bonds to the public. C) They are the only markets where futures are traded. D) They provide short-term loans to corporations. Show Answer Correct Answer: B) They facilitate the initial sale of stocks and bonds to the public. 20. Debenture holders of a company are its A) Directors. B) Debtors. C) Creditors. D) Owners. Show Answer Correct Answer: C) Creditors. 21. Which regulator oversees pension funds in India? A) SEBI. B) RBI. C) PFRDA. D) IRDAI. Show Answer Correct Answer: C) PFRDA. 22. What is the name of the fee paid for an insurance policy? A) Interest. B) Pension. C) Contribution. D) Premium. Show Answer Correct Answer: D) Premium. 23. A deposit outflow results in equal reductions in A) Loans and reserves. B) Assets and liabilities. C) Reserves and capital. D) Assets and capital. Show Answer Correct Answer: B) Assets and liabilities. 24. Why is an active secondary market important? A) It eliminates risk. B) It increases company profits. C) It provides liquidity to investors. D) It reduces taxation. Show Answer Correct Answer: C) It provides liquidity to investors. 25. When you invest in a mutual fund, A) You have easier access to your money than a savings account. B) You are guaranteed a fixed return on your investment. C) Money that has been pooled from many investors is invested in a variety of stocks & bonds. D) Your money is invested in a variety of insurance policies. Show Answer Correct Answer: C) Money that has been pooled from many investors is invested in a variety of stocks & bonds. ← 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