This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 4 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which motive for money demand is influenced by income level? A) Only transaction motive. B) Only precautionary motive. C) Both transaction and precautionary motives. D) Only speculative motive. Show Answer Correct Answer: C) Both transaction and precautionary motives. 2. Profitability Ratio is measured as ..... A) Sales growth of a firm. B) Future growth prospects of a company. C) Operating / management efficiency of a firm. D) Payout to shareholders. E) Not Attempted. Show Answer Correct Answer: C) Operating / management efficiency of a firm. 3. A bank will want to hold more excess reserves (everything else equal) when A) It expects to have deposit inflows in the near future. B) Brokerage commissions on selling bonds increase. C) The cost of selling loans falls. D) The discount rate decreases. Show Answer Correct Answer: B) Brokerage commissions on selling bonds increase. 4. Banks that actively manage liabilities will most likely meet a reserve shortfall by A) Calling in loans. B) Borrowing federal funds. C) Selling municipal bonds. D) Seeking new deposits. Show Answer Correct Answer: B) Borrowing federal funds. 5. Current market price of the share is USD 60. The company made a bonus issue of 1 for 4. Which of the following could be the approximate market value per share after the bonus issue. A) USD 15. B) USD 60. C) USD 65. D) USD 48. Show Answer Correct Answer: D) USD 48. 6. What is the significance of interest rates in financial markets? A) They only affect the money market. B) They are irrelevant to market operations. C) They influence the cost of borrowing and the return on savings. D) They determine the value of stocks. Show Answer Correct Answer: C) They influence the cost of borrowing and the return on savings. 7. Face value of a share is A) Fixed denominations. B) Value of tangible assets. C) Book value. D) Market value. Show Answer Correct Answer: A) Fixed denominations. 8. A stock is a(n) ..... instrument. A) Equity. B) Debt. C) All the above. D) None of the above. Show Answer Correct Answer: A) Equity. 9. Which statement best describes how an investor makes money off debt? A) An investor makes money by earning interest. B) An investor DO NOT make money by earning interest. C) All the above. D) None of the above. Show Answer Correct Answer: A) An investor makes money by earning interest. 10. An example of economies of scale in the provision of financial services is A) Investing in a diversified collection of assets. B) Providing depositors with a variety of savings certificates. C) Hiring more support staff so that customers don't have to wait so long for assistance. D) Spreading the cost of writing a standardized contract over many borrowers. Show Answer Correct Answer: D) Spreading the cost of writing a standardized contract over many borrowers. 11. Putability (put option) A) Gives the bond holders the option to convert the bond into another security, typically the common stock of the firm issuing the convertible bonds. B) Gives the holder the right, under certain circumstances to sell the bond back to the firm. C) Allows the issuing firms to retire the bonds before the maturity by paying a prescribed price. D) Allows the investor to redeem the bond. Show Answer Correct Answer: A) Gives the bond holders the option to convert the bond into another security, typically the common stock of the firm issuing the convertible bonds. 12. Apa prinsip utama yang digunakan dalam operasional bank syariah? A) Profit Sharing. B) Sistem Bunga. C) Spekulasi Pasar. D) Margin Kredit. Show Answer Correct Answer: A) Profit Sharing. 13. Which institution was the regulator responsible for ensuring financial institutions held sufficient capital and had effective risk management practices following the Global Financial Crisis of 2007-09? A) Australian Prudential Regulation Authority(APRA). B) Reserve Bank of Australia (RBA). C) Australian Securities and Investments Commission (ASIC). D) Treasury. Show Answer Correct Answer: A) Australian Prudential Regulation Authority(APRA). 14. The Dow Jones Industrial Average consists of A) 60 from various companies around the world. B) 30 stocks that are considered representative of the market as a whole. C) The top-selling 250 stocks over a 10 year period. D) 500 stocks that change annually. Show Answer Correct Answer: B) 30 stocks that are considered representative of the market as a whole. 15. It represent ownership claims on a company's net assets. A) Stock Market. B) Equity Securities. C) Shareholder. D) Stock Certificate. Show Answer Correct Answer: B) Equity Securities. 16. What is "mark-to-market gain" ? A) Profit on maturity of a bond. B) Bonus units in mutual funds. C) Appreciation in bond value due to interest rate fall. D) Dividend payout. Show Answer Correct Answer: C) Appreciation in bond value due to interest rate fall. 17. Which of the following statements is true with regard to financial markets? A) They link the households which save funds and business firms which invest these funds. B) They work as an intermediary between the savers and the investors by mobilising funds between them. C) They allocate funds available for investment into their most productive investment opportunity. D) All of the above. Show Answer Correct Answer: D) All of the above. 18. Which component is not a part of capital market? A) Debt Market. B) Equity Market. C) Insurance Market. D) Derivative Market. Show Answer Correct Answer: C) Insurance Market. 19. The process of buying and selling securities through internet is called: A) E-commerce. B) Online trading. C) Retail banking. D) Digital marketing. Show Answer Correct Answer: B) Online trading. 20. Primary and secondary markets: A) Compete with each other. B) Complement each other. C) Function independently. D) Control each other. Show Answer Correct Answer: B) Complement each other. 21. Which of the following is not a protective function of stock exchange? A) Prohibition of fraudulent and unfair trade practices. B) Controlling insider trading. C) Regulation of takeover bids by companies. D) Promotion of fair practices and code of conduct in securities market. Show Answer Correct Answer: C) Regulation of takeover bids by companies. 22. What does tax deferred mean when it comes to 401k? A) You pay taxes later when you withdraw. B) You pay taxes now when you contribute. C) You pay taxes as you go. D) You never have to pay taxes. Show Answer Correct Answer: A) You pay taxes later when you withdraw. 23. In which of the following markets would a government issue Treasury bonds? A) Money market. B) Derivatives Market. C) Capital market. D) Foreign Exchange Market. Show Answer Correct Answer: C) Capital market. 24. How many companies comprise the Bombay Stock Exchange 'Sensex'? A) 20. B) 30. C) 40. D) 50. Show Answer Correct Answer: B) 30. 25. What is the maximum duration for which term money can be lent/borrowed? A) 1 day. B) 15 days. C) 30 days. D) 1 year. Show Answer Correct Answer: D) 1 year. ← 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 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 10Class 12 Business Studies Chapter 10 Financial Markets Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books