This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 25 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When stocks overall are rising, the market is called? A) A bull market. B) A bear market. C) Market capitalization. D) Market diversification. Show Answer Correct Answer: A) A bull market. 2. What does herd instinct refer to in financial markets? A) A phenomenon where people invest based on individual analysis. B) A behavior where people follow the actions of others assuming they have done their research. C) A strategy that involves investing in commodities only. D) A method of trading that relies on technical analysis only. Show Answer Correct Answer: B) A behavior where people follow the actions of others assuming they have done their research. 3. Stock markets link the ..... units (that have excess funds) with ..... units (that need funds). A) Surplus; deficit. B) Deficit; surplus. C) Debit; credit. D) Credit; debit. Show Answer Correct Answer: A) Surplus; deficit. 4. ..... is a market for lending & borrowing of short term funds. A) Money Market. B) Primary Market. C) Secondary Market. D) Capital market. Show Answer Correct Answer: A) Money Market. 5. A growth oriented investor will portray the following risk bearing capacity. A) Major investments in equity instruments. B) Wealth Protection. C) Least risk appetite. D) None of the above. Show Answer Correct Answer: A) Major investments in equity instruments. 6. Book Building exercise through the NSE's on-line system offers the following benefits: A) A fair, efficient & transparent method for collecting bids using latest electronic systems. B) Costs involved in the issue are far less than those in a normal IPO. C) The system reduces the time taken for completion of the issue process. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 7. The difference between savings and investments is that A) Savings earn money while investments do not. B) Investments earn money while savings do not. C) Savings are investments that are put to use. D) Investments are savings that are put to use. Show Answer Correct Answer: D) Investments are savings that are put to use. 8. What type of financing occurs when a firm expands its operations by floating a new issue of shares on the ASX? A) Equity financing in the primary financial market. B) Equity financing in the secondary financial market. C) Equity financing in the derivatives financial market. D) Debt financing in the secondary financial market. Show Answer Correct Answer: A) Equity financing in the primary financial market. 9. Which of the following is the supply side of finance? A) Financial Institutions. B) Insurance Companies. C) Financial Institutions and Insurance Companies. D) Industry. Show Answer Correct Answer: C) Financial Institutions and Insurance Companies. 10. Which of the following can be described as involving indirect finance? A) A corporation takes out loans from a bank. B) A corporation buys commercial paper in a secondary market. C) People buy shares in a mutual fund. D) All three choices provided. Show Answer Correct Answer: D) All three choices provided. 11. For a given return on assets, the lower is bank capital A) The lower is the return for the owners of the bank. B) The higher is the return for the owners of the bank. C) The lower is the credit risk for the owners of the bank. D) The lower the possibility of bank failure. Show Answer Correct Answer: B) The higher is the return for the owners of the bank. 12. In a business scenario, a company decides to reduce its financial risks by distributing the cost/consequences among several shareholders. What is this method called? A) Risk Sharing. B) Equity Sharing. C) Liquidity. D) Bond Market. Show Answer Correct Answer: A) Risk Sharing. 13. What role do financial markets play in the global economy? A) They have no impact on the global economy. B) They have a minor influence on the global economy. C) They play a crucial role in the global economy. D) They are only relevant to specific industries. Show Answer Correct Answer: C) They play a crucial role in the global economy. 14. How many banks are part of the Bank Nifty index? A) 10. B) 12. C) 50. D) 30. Show Answer Correct Answer: B) 12. 15. What is the money an investor receives above & beyond the money initially invested called? A) Savings. B) Liquidity. C) Retrograde. D) Return. Show Answer Correct Answer: D) Return. 16. Type of bonds that pay coupon interest are classified as A) Forward bond. B) Payment bonds. C) Coupon bond. D) Interest bonds. Show Answer Correct Answer: C) Coupon bond. 17. The types of assets being traded, identified as 'Hard' and 'soft' are representative of ..... market A) Derivative. B) Commodity. C) Share. D) None of the listed options. Show Answer Correct Answer: B) Commodity. 18. The short term financial instruments traded in money market is commonly called A) Call Money. B) Certificate of deposits. C) Commercial paper. D) Trade bills. Show Answer Correct Answer: C) Commercial paper. 19. Which two investments are at opposite ends of the risk spectrum? A) Treasury notes and futures. B) Savings bonds and Treasury notes. C) Equities and futures. D) Equities and futures. Show Answer Correct Answer: A) Treasury notes and futures. 20. WHEN NOMINAL INTEREST RATE IS ADJUSTED FOR INFLATION WE GET A) REAL INTEREST RATE. B) COUPON INTERST RATE. C) All the above. D) None of the above. Show Answer Correct Answer: A) REAL INTEREST RATE. 21. Credit is ..... A) Something owed to another company or organisation. B) The desire to purchase finanical assets. C) Retirement and superannuation funds. D) The right to own shares. E) The lending of money to another party with an agreement to repay the loan. Show Answer Correct Answer: E) The lending of money to another party with an agreement to repay the loan. 22. Which of the following would NOT be a way to increase the return on equity? A) Buy back bank stock. B) Pay higher dividends. C) Acquire new funds by selling negotiable CDs and increase assets with them. D) Sell more bank stock. Show Answer Correct Answer: D) Sell more bank stock. 23. Imagine you are a stock trader. You are trading in a market where you can place your orders at any time when the market is open. Buyers and sellers continuously place their orders and these orders are matched on a continuous basis. What type of market are you trading in? A) Continuous Market. B) Financial Market. C) Bond Market. D) Call Market. Show Answer Correct Answer: A) Continuous Market. 24. How do financial markets support business expansion? A) Financial markets support business expansion by providing access to capital for investment in growth initiatives. B) Financial markets only benefit large corporations. C) Financial markets primarily focus on consumer spending. D) Financial markets reduce the need for business planning. Show Answer Correct Answer: A) Financial markets support business expansion by providing access to capital for investment in growth initiatives. 25. The primary market is dominated by: A) Commercial banks. B) Merchant banks. C) Discount houses. D) The Central Bank. Show Answer Correct Answer: B) Merchant banks. ← 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