This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 20 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is a futures contract? A) A bond that pays interest for a short term. B) A contract to buy or sell an asset at a predetermined price in the future. C) An agreement to lend money. D) A type of stock. Show Answer Correct Answer: B) A contract to buy or sell an asset at a predetermined price in the future. 2. Purification of investment income received means that certain proportion of the dividend, which corresponds to the proportion of interest earned by the company, must be given to charity. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 3. In a direct transfer, funds typically flow from: A) Mutual funds to corporations. B) Venture capitalists to new business ventures. C) Investment banks to savers. D) Public investors to government agencies. Show Answer Correct Answer: B) Venture capitalists to new business ventures. 4. A $ 5 million deposit outflow from a bank has the immediate effect of A) Reducing deposits and reserves by $ 5 million. B) Reducing deposits and loans by $ 5 million. C) Reducing deposits and securities by $ 5 million. D) Reducing deposits and capital by $ 5 million. Show Answer Correct Answer: A) Reducing deposits and reserves by $ 5 million. 5. An asset is ..... A) Something that is owned. B) Something that is owed. C) Something that is transferred. D) Something that is kept. Show Answer Correct Answer: A) Something that is owned. 6. What is the primary benefit of having health insurance? A) To offer discounts on gym memberships. B) To cover the cost of luxury treatments. C) To provide financial protection against high medical expenses. D) To guarantee a specific income during illness. Show Answer Correct Answer: C) To provide financial protection against high medical expenses. 7. A ..... is an option to sell shares of stock at a specified time in the future. A) Call option. B) Put option. C) Bull market. D) None of the above. Show Answer Correct Answer: B) Put option. 8. Which of these is a capital market instrument? A) Certificate of Deposit. B) Commercial Paper. C) Treasury Bills. D) Corporate Bonds. Show Answer Correct Answer: D) Corporate Bonds. 9. Islam banking and finance system offers more ethical and efficient alternative tothe interest-based conventional financial system. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 10. Where can a trader modify their buy/sell orders in the NEAT system? A) Market Watch Window. B) Order/Trade Window. C) Message Window. D) Inquiry Window. Show Answer Correct Answer: B) Order/Trade Window. 11. Which of the following is not a function of money? A) Medium of exchange. B) Store of value. C) Limited in supply. D) Unit of account. Show Answer Correct Answer: C) Limited in supply. 12. Merchant banks concept in India introduced by A) SBI B) PNB C) Grindlays Bank D) City bank A) A. B) B. C) C. D) D. Show Answer Correct Answer: C) C. 13. What is the primary role of a financial regulator like the SEC (U.S. Securities and Exchange Commission)? A) To provide investment advice to individuals. B) To enforce securities laws and protect investors. C) To set interest rates for banks. D) To issue government bonds. Show Answer Correct Answer: B) To enforce securities laws and protect investors. 14. Mr Lim is a high risk tolerance. Which investment tool is suitable for Mr Lim? A) A Shares. B) B Debenture. C) C Fixed deposit of bank. D) D Fixed income unit trust. Show Answer Correct Answer: A) A Shares. 15. Which is not a function of the reserve bank A) Provide loans to property buyers. B) Advise the government on financial action. C) Control over currency and gold. D) Dictate the interest rates other banks offer. Show Answer Correct Answer: A) Provide loans to property buyers. 16. Primary assets are A) Bill. B) Bank deposit. C) Mutual fund. D) None of the above. Show Answer Correct Answer: A) Bill. 17. In India, the Central Government issues A) A. treasury bills. B) B. dated securities. C) Both a & b. D) Certificate of deposits. Show Answer Correct Answer: C) Both a & b. 18. What is a potential risk associated with speculative trading? A) Guaranteed returns. B) Market fluctuations. C) Long-term stability. D) Low transaction fees. Show Answer Correct Answer: B) Market fluctuations. 19. Alexander is analyzing the bond market and notices an inverted yield curve. What does this indicate about interest rates over time? A) Interest rates decrease over time. B) Interest rates increase over time. C) Interest rates remain constant. D) Interest rates fluctuate randomly. Show Answer Correct Answer: A) Interest rates decrease over time. 20. Money market instruments are: A) Short term papers. B) Long term papers. C) Equity instruments. D) Both a & b. Show Answer Correct Answer: A) Short term papers. 21. What does the capital market deal with? A) Short-term loans and savings accounts. B) Long-term debt and equity securities. C) Real estate and commodities. D) Foreign exchange and derivatives. Show Answer Correct Answer: B) Long-term debt and equity securities. 22. Which of the following is not true about ADR? A) An ADR is a U.S. dollar denominated form of equity ownership in a non-U.S. company. B) ADRs may be used in public or private markets inside or outside US. C) ADRs do not eliminate the currency risk associated with an investment in a non-U.S. company. D) ADR represents the foreign shares of the company held on deposit by a custodian bank in the company's home country. E) Not Attempted. Show Answer Correct Answer: B) ADRs may be used in public or private markets inside or outside US. 23. Consider the following statements:1.Sensex is based on 50 of the most important stocks available on the Bombay Stock Exchange(BSE). 2.For calculating the Sensex, all the Sensex stocks are assigned proportional weightage. 3.Sensex became operational in 1978-79 with the base value of 100. Which of the statements given above is/are correct? A) 2 only. B) 1 and 3. C) 2 and 3. D) None of the above. Show Answer Correct Answer: C) 2 and 3. 24. IRR is best used when? A) You invest in gold. B) A investment has a single inflow and outflow. C) You invest in a recurring deposit. D) There are multiple cash flows over time in an investment. Show Answer Correct Answer: D) There are multiple cash flows over time in an investment. 25. The secondary market provides funds directly to the issuing firm. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. ← 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