This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 39 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 39 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which part of the financial system handles short-term funds? A) Money market. B) Capital market. C) Insurance market. D) Forex market. Show Answer Correct Answer: A) Money market. 2. NRE accounts are best suited for? A) Income earned in India. B) Tracking NRI expenses. C) Managing foreign income and repatriation. D) None of the above. Show Answer Correct Answer: C) Managing foreign income and repatriation. 3. With reference to the capital markets of India, pick the incorrect statement from the following: A) Capital markets make possible to generate foreign capital. B) Capital Markets provide funds for projects in backward areas. C) The existence of a stock exchange enables companies to raise permanent capital. D) Intermediaries include various entities such as MCX-SX, BSE, NSE, other regional stock exchanges. Show Answer Correct Answer: D) Intermediaries include various entities such as MCX-SX, BSE, NSE, other regional stock exchanges. 4. Which of the following is NOT a function of financial intermediaries? A) Risk reduction. B) Liquidity transformation. C) Providing financial advice. D) Eliminating investment risk entirely. Show Answer Correct Answer: D) Eliminating investment risk entirely. 5. Long-term bonds are ..... than short-term bonds. A) More liquid. B) Less risky. C) Less sensitive to interest rate changes. D) Subject to more uncertainty. Show Answer Correct Answer: D) Subject to more uncertainty. 6. Which of the following statements about the characteristics of debt and equity are true? A) They can both be long-term financial instruments. B) They both involve a claim on the issuer's income. C) They both enable a corporation to raise funds. D) All three choices provided. Show Answer Correct Answer: D) All three choices provided. 7. If a trader buys a stock expecting it to rise over a few days, which type of trader are they likely to be? A) Position trader. B) Swing trader. C) Options trader. D) Day trader. Show Answer Correct Answer: B) Swing trader. 8. Money Market is Regulated by which body A) SEBI. B) RBI. C) IRDA. D) NSE. Show Answer Correct Answer: B) RBI. 9. Which of the following is purchased at half the face value? A) Tax-exempt bond. B) Mutual fund. C) Treasury note. D) Savings bond. Show Answer Correct Answer: D) Savings bond. 10. Clearing houses in trading systems are responsible for: A) Ensuring settlement of trades. B) Issuing shares. C) Determining IPO prices. D) Printing money. Show Answer Correct Answer: A) Ensuring settlement of trades. 11. In the balance sheet of a company, amounts due to the suppliers of goods and services brought on credit, will reflect under the head ..... A) Loans and Advances. B) Current Liabilities and Provisions. C) Miscellaneous expenditure. D) Contingent Liabilities. E) Not Attempted. Show Answer Correct Answer: B) Current Liabilities and Provisions. 12. Which is an example of a commodity market product? A) Mutual fund units. B) Crude oil futures. C) Credit default swaps. D) Currency forwards. Show Answer Correct Answer: B) Crude oil futures. 13. ..... represents an ownership in the business or a company. A) Equity. B) Debt. C) All the above. D) None of the above. Show Answer Correct Answer: A) Equity. 14. Investment that can be converted to cash at short notice is called A) Liquid investment. B) Volatile investment. C) Speculative investment. D) None of the above. Show Answer Correct Answer: A) Liquid investment. 15. What is not a function of a Central Bank? A) Act as a banker to the central government. B) Advise and assist the central government on financial and monetary ideas. C) Have control over the issue of currency and the nation' reserve of gold. D) Supervise other bank activity and regulate bank investment/spening. E) Implement officially determine monetary policy of reguating the monetary and banking system. Show Answer Correct Answer: D) Supervise other bank activity and regulate bank investment/spening. 16. Tools to reduce the moral hazard problem in debt contracts include A) Collateral and net worth. B) Monitoring and enforcement of restrictive covenants, and financial intermediaries. C) Collateral and net worth, monitoring and enforcement of restrictive covenants, and financial intermediaries. D) None of the above. Show Answer Correct Answer: C) Collateral and net worth, monitoring and enforcement of restrictive covenants, and financial intermediaries. 17. What is the word for the full amount of a loan MINUS the interest? A) Interest. B) Principal. C) Capital. D) Investment. Show Answer Correct Answer: B) Principal. 18. In a(n) ..... market, dealers in different locations buy and sell securities to anyone who comes to them and is willing to accept their prices. A) Exchange. B) Over-the-counter. C) Common. D) Barter. Show Answer Correct Answer: B) Over-the-counter. 19. .Dematerialization is the process of holding securities in A) Paper mode. B) Electronic mode. C) Physical form. D) Wallet. Show Answer Correct Answer: B) Electronic mode. 20. If banks do not have sufficient liquidity of what are they at risk? A) Insolvency. B) Bankruptcy. C) All the above. D) None of the above. Show Answer Correct Answer: A) Insolvency. 21. What does it mean to invest money? A) To invest money means to spend it all immediately. B) To invest money means to allocate funds to generate a return. C) Investing money is the same as saving it in a bank account. D) To invest money means to give it away for free. Show Answer Correct Answer: B) To invest money means to allocate funds to generate a return. 22. Securities Fraud, also known as Stock or Investment Fraud, involves: A) "Ponzi" or "Pump and Dump" Schemes targeted at investors. B) Insider Trading. C) Misrepresenting information investors use to make decisions. D) All Options are Correct. Show Answer Correct Answer: D) All Options are Correct. 23. Which of the following factors can influence foreign exchange rates? A) Interest rates. B) Economic indicators. C) Political stability. D) All of the above. Show Answer Correct Answer: D) All of the above. 24. Statutory body governing the capital market A) Commercial Banks. B) RBI. C) SEBI. D) IDBI. Show Answer Correct Answer: C) SEBI. 25. Because ..... are less liquid for the depositor than ..... , they earn higher interest rates. A) Money market deposit accounts; time deposits. B) Checkable deposits; savings accounts. C) Savings accounts; checkable deposits. D) Savings accounts; time deposits. Show Answer Correct Answer: C) Savings accounts; checkable deposits. ← 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