This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 31 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 31 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. It is a legally enforceable document which is issued by a stockbroker within 24 hours of the execution of a trade order. A) PAN number. B) Unique Order Code. C) Contract Note. D) None of the above. Show Answer Correct Answer: C) Contract Note. 2. A major limitation of the NAV approach is that it: A) Ignores liabilities. B) Uses historical cost for fixed assets. C) Overstates cash flows. D) Assumes perfect markets. Show Answer Correct Answer: B) Uses historical cost for fixed assets. 3. If banks do not have sufficient capital of what are they at risk if the value of their assets fall? A) Insolvency. B) Bankruptcy. C) All the above. D) None of the above. Show Answer Correct Answer: B) Bankruptcy. 4. What is liquidity in financial markets? A) The amount of cash available. B) The total value of assets. C) The ease of converting investments into cash. D) The level of government regulation. Show Answer Correct Answer: C) The ease of converting investments into cash. 5. What is defined as currency plus bank current deposits from the private non-bank sector? A) M1. B) Asset prices. C) M3. D) Market operations. Show Answer Correct Answer: A) M1. 6. Dinesh has 100 equity shares of a company. He wants to sell 500 of these shares. Which market should be approach? A) A. Secondary market. B) B. Primary market. C) C. Financial markets. D) Money market. Show Answer Correct Answer: A) A. Secondary market. 7. What is the main objective of financial services? A) Profit maximization. B) Wealth redistribution. C) Economic stabilization. D) Promoting tourism. Show Answer Correct Answer: C) Economic stabilization. 8. How do financial markets contribute to price discovery? A) Price discovery is solely determined by government regulations. B) Financial markets only serve as a platform for trading stocks. C) Financial markets do not reflect the actual value of assets. D) Financial markets contribute to price discovery by enabling the interaction of buyers and sellers, reflecting supply and demand dynamics. Show Answer Correct Answer: D) Financial markets contribute to price discovery by enabling the interaction of buyers and sellers, reflecting supply and demand dynamics. 9. Determine the Bid/ask spread with the following given data:Currency is Japenese yen;Bid rate is $ 0.0070;Ask rate is $ 0.0074;What is the bid/ask percentage spread? A) 0.054 or 5.4%. B) 0.044 or 4.4%. C) 0.064or 6.4%. D) 0.034 or 3.4%. Show Answer Correct Answer: A) 0.054 or 5.4%. 10. What are the major stock exchanges in the world? A) Sydney Stock Exchange, Mumbai Stock Exchange, Toronto Stock Exchange. B) Chicago Stock Exchange, Seoul Stock Exchange, Sao Paulo Stock Exchange. C) Hong Kong Stock Exchange, Paris Stock Exchange, Frankfurt Stock Exchange. D) New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, London Stock Exchange. Show Answer Correct Answer: D) New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Shanghai Stock Exchange, London Stock Exchange. 11. Purchasing a stock by paying only a fraction of its price and borrowing the remainder of the purchase price is called A) Buying in a bull market. B) Buying in a bull market. C) Buying on debt. D) Buying on margin. Show Answer Correct Answer: D) Buying on margin. 12. Which is not a component of the financial system? A) Financial institutions. B) Financial markets. C) Natural resources. D) Natural resources. Show Answer Correct Answer: C) Natural resources. 13. What is the role of the Federal Reserve in financial markets? A) The Federal Reserve manages the stock market directly by buying and selling stocks. B) The Federal Reserve primarily focuses on international trade agreements. C) The Federal Reserve plays a crucial role in regulating the financial system, managing monetary policy, and ensuring economic stability. D) The Federal Reserve is responsible for setting tax rates for individuals and businesses. Show Answer Correct Answer: C) The Federal Reserve plays a crucial role in regulating the financial system, managing monetary policy, and ensuring economic stability. 14. The book value of a share is Rs.75. The price to book ratio of the share is 1.75. The market price of the share is A) 131.25. B) 0.02. C) 42.85. D) 133. Show Answer Correct Answer: A) 131.25. 15. If a bank is determined to maintain or increase its lending what might it choose to do in the face of rising liquidity ratios? A) Print more money. B) Issue more shares or bonds. C) Increase dividends. D) Raise bonuses. Show Answer Correct Answer: B) Issue more shares or bonds. 16. NCDEX is ..... A) National Commodities and Derivatives Exchange. B) National Currency and Derivatives Exchange. C) New York Commodity & Derivatives Exchange. D) None of the above. E) Not Attempted. Show Answer Correct Answer: A) National Commodities and Derivatives Exchange. 17. ..... is a link between savers & borrowers, helps to establish a link between savers & investors A) Marketing. B) Financial Markets. C) Money Markets. D) None of these. Show Answer Correct Answer: B) Financial Markets. 18. Which of the following share issue will not bring fresh equity capital to the company. A) Rights issues. B) Initial Public Offering. C) Bonus issue. D) None of the above. Show Answer Correct Answer: C) Bonus issue. 19. Primary market deals with selling of securities for the first time through the following method A) Book building. B) Investor issue. C) Bonus declaration method. D) Employee stock issue. Show Answer Correct Answer: A) Book building. 20. Financial markets exist to A) Allocate scarce financial resources. B) Bring borrowers and lenders together. C) Price bonds, shares and currencies. D) All of the above. Show Answer Correct Answer: D) All of the above. 21. The Federal Deposit Insurance Company (FDIC) is a government agency that A) Provides health insurance for low-income people. B) Provides mortgage insurance for homeowners. C) Protects banks from the risks of bankruptcy. D) Protects the savings of people who deposit their money in banks. Show Answer Correct Answer: D) Protects the savings of people who deposit their money in banks. 22. A mutual fund that primarily invests in stocks is known as: A) Bond Fund. B) Equity Fund. C) Balanced Fund. D) Money Market Fund. Show Answer Correct Answer: B) Equity Fund. 23. James Beck is considering purchasing ABC Berhad stocks. What price should he be willing to pay for it (in RM) if the company is expected to pay RM2 dividend in one year and the dividends to grow at 5 percent indefinitely? James requires a 12 percent return for this investment. A) 28.57. B) 29.33. C) 31.25. D) 38.95. Show Answer Correct Answer: A) 28.57. 24. Asset transformation can be described as A) Borrowing long and lending short. B) Borrowing short and lending long. C) Borrowing and lending only for the short term. D) Borrowing and lending for the long term. Show Answer Correct Answer: B) Borrowing short and lending long. 25. A bond is a(n) ..... instrument. A) Equity. B) Debt. C) All the above. D) None of the above. Show Answer Correct Answer: B) Debt. ← 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