This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 23 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the primary function of the mortgage market? A) To facilitate stock trading. B) To allow banks to lend money for home purchases. C) To provide loans for businesses. D) To sell government bonds. Show Answer Correct Answer: B) To allow banks to lend money for home purchases. 2. A financial market is one that: A) Offers financial assets with the highest historical return. B) Offers financial assets with the highest expected return. C) Involves the sale of financial assets for the first time. D) Offers the greatest number of financial assets. Show Answer Correct Answer: B) Offers financial assets with the highest expected return. 3. As a result of a bonus share issue A) Share price will increase. B) Number of shares outstanding will increase. C) Total equity of the company will increase. D) Earning Per Share will increase. Show Answer Correct Answer: B) Number of shares outstanding will increase. 4. What is the strategy of investing in a wide variety of securities to reduce risk called? A) Diversification. B) Stock Picking. C) Market Timing. D) Asset Allocation. Show Answer Correct Answer: A) Diversification. 5. Corporations pay out part of their profits in the form of a ..... to their stockholders. A) Coupon rate. B) Call option. C) Bond. D) Dividend. Show Answer Correct Answer: D) Dividend. 6. The role of an investment banker includes all of the following except: A) Underwriting securities. B) Advising the issuing company. C) Auditing company accounts. D) None of the above. Show Answer Correct Answer: C) Auditing company accounts. 7. The important goal of the financial service industry is to mobilise and allocate ..... A) Saving. B) Sales. C) Purchase. D) All of the above. Show Answer Correct Answer: A) Saving. 8. Which among the statements is NOT TRUE on the concept of relative inflation rate? A) Changes in relative inflation rates can affect international trade activity. B) Changes in relative inflation rates influences the demand for and supply of currencies. C) Changes in relative inflation rates can affect exchange rates. D) Changes in relative inflation rates does not influences to increase the exchange rate of foreign currencies. Show Answer Correct Answer: D) Changes in relative inflation rates does not influences to increase the exchange rate of foreign currencies. 9. What is insider trading? A) Trading based on public information. B) Insider trading is the illegal buying or selling of securities based on nonpublic, material information. C) Selling securities to avoid losses. D) Buying stocks only during market hours. Show Answer Correct Answer: B) Insider trading is the illegal buying or selling of securities based on nonpublic, material information. 10. The physical place where buyers and sellers meet to trade stocks is known as the A) Brokerage desk. B) Stock or securities exchange. C) Trading floor. D) Equities trader. Show Answer Correct Answer: B) Stock or securities exchange. 11. A bank pays 7% interest on its 1-year deposit. The Price-to-earning ratio of the FD is: A) 14.28. B) 14.00. C) 7. D) 15.28. Show Answer Correct Answer: A) 14.28. 12. Who ensures that all securities and funds are settled between broker and their customers who are buyers and sellers A) Stock Exchanges. B) Depository. C) Clearing Corporation. D) Registrar & Transfer Agent. Show Answer Correct Answer: C) Clearing Corporation. 13. Which of the following is the only correct example of a blue-chip stock? A) A large, well-known company traded on the NYSE. B) An established company that is traded over the Internet. C) A foreign-owned company that operates in the US. D) A new start-up firm. Show Answer Correct Answer: A) A large, well-known company traded on the NYSE. 14. If income increases while nominal money supply remains constant, equilibrium interest rate will: A) Fall. B) Rise. C) Stay unchanged. D) Become unstable. Show Answer Correct Answer: B) Rise. 15. ..... is maintained by an Exchange to make good investor claims, which may arise out of non-settlement of obligations by the trading member, who has been declared defaulter, in respect of trades executed on the Exchange. A) Investor Protection Fund (IPF). B) Investor Reimbursement Fund (IRF). C) Investor Education and Reimbursement Fund (IERF). D) Investor Education and Protection Fund (IEPF). E) Not Attempted. Show Answer Correct Answer: A) Investor Protection Fund (IPF). 16. If a client buys shares worth Rs. 4, 40, 000 and sells shares worth Rs. 5, 60, 000 through a broker, then the maximum brokerage payable to the broker is ..... A) Rs. 12000. B) Rs. 24000. C) Rs. 25000. D) Rs. 22000. E) Not Attempted. Show Answer Correct Answer: C) Rs. 25000. 17. Determine the Bid/ask spread with the following given data:Currency is British pound;Bid rate is $ 1.52;Ask rate is $ 1.60What is the bid/ask percentage spread? A) 0.05 or 5%. B) 0.04 or 4%. C) 0.06 or 6%. D) 0.03 or 3%. Show Answer Correct Answer: A) 0.05 or 5%. 18. What is an example of a debt security? A) Common stock. B) Preferred stock. C) Bonds. D) Options. Show Answer Correct Answer: C) Bonds. 19. Participants in the capital market includes A) Individuals. B) Corporate. C) Financial Institutions. D) All of the above. Show Answer Correct Answer: D) All of the above. 20. The Sarbanes Oxley Act of 2002 mandates: A) Banks to offer competitive rates to borrowers. B) Corporate officers must personally certify financial statements in writing. C) Bank deposits are insured up to $ 250, 000. D) None of the Options are Correct. Show Answer Correct Answer: B) Corporate officers must personally certify financial statements in writing. 21. Good currencies are widely accepted by all in exchange for goods and services, eliminating a problem of barter. This enables money to act 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: A) A medium of exchange. 22. The stock exchange acts as a barometer for measuring: A) The inflation rate. B) The economic performance. C) The unemployment rate. D) The government's budget deficit. Show Answer Correct Answer: B) The economic performance. 23. A money market investment is based on ..... A) Which markets the money is invested in. B) Length of time the money is loaned. C) The risk of the investment. D) Amount of money loaned. Show Answer Correct Answer: B) Length of time the money is loaned. 24. John is a new investor and he is learning about different types of markets. He came across a term which refers to a marketplace where trading of securities including equities, bonds, currencies and derivatives occurs. What is this market called? A) Financial Market. B) Call Market. C) Foreign Exchange Market. D) Bear Market. Show Answer Correct Answer: A) Financial Market. 25. Which of the following is a characteristic of the money market? A) Long-term securities. B) High-risk investments. C) Short-term borrowing and lending. D) Ownership financing. Show Answer Correct Answer: C) Short-term borrowing and lending. ← 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