This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 40 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 40 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... is a part of money market. A) Commercial Bill. B) Equity share. C) Preference share. D) Debentures. Show Answer Correct Answer: A) Commercial Bill. 2. What is the highest FD rate in India? A) 9.1%. B) 8.5%. C) 8.2%. D) 7.5%. Show Answer Correct Answer: D) 7.5%. 3. What is interest? A) Interest is the cost of borrowing or the return on savings. B) Interest is a fee paid to a bank for account maintenance. C) Interest is the amount of money saved in a bank account. D) Interest is a type of investment strategy. Show Answer Correct Answer: A) Interest is the cost of borrowing or the return on savings. 4. The primary market is also called A) New issue market. B) IPo. C) Stock exchange. D) Over the counter market. Show Answer Correct Answer: A) New issue market. 5. They are the investors who do not consider the risks involved in the investment and are focused only on the expected returns. A) Bears and pigs. B) Bulls and chicken. C) Risk-neutral. D) None of the above. Show Answer Correct Answer: C) Risk-neutral. 6. A capital market is ideal when: A) Financial institutions are sufficiently developed. B) Finance is available at a reasonable cost. C) Capital is most productively allocated. D) All of these. Show Answer Correct Answer: D) All of these. 7. What is Foreign Exchange Market? A) A place where corporation and government can raise fund. B) A market for converting currency of one country into another country. C) Trading of instrument by an exchange of securities. D) None of the above. Show Answer Correct Answer: B) A market for converting currency of one country into another country. 8. Which of the following is NOT a type of mutual fund scheme? A) Equity funds. B) Debt funds. C) Commodity funds. D) Hybrid funds. Show Answer Correct Answer: C) Commodity funds. 9. Jack has a sum of money and is looking for a low-risk investment. Which of the following investment is suitable for Jack? A) A Real estate. B) B Ordinary shares. C) C Preference shares. D) D Government bond. Show Answer Correct Answer: D) D Government bond. 10. A monopsonist pays a wage rate that is A) Greater than the marginal revenue product of labor. B) Equal to the marginal revenue product of labor. C) Equal to the firm's marginal labor cost. D) Less than the marginal revenue product of labor. Show Answer Correct Answer: D) Less than the marginal revenue product of labor. 11. Which type of security is compared to a Treasury security to determine the default or credit risk premium? A) Equity security. B) Security j. C) Bond security. D) Stock security. Show Answer Correct Answer: B) Security j. 12. What is the term for provisions that can impact a security holder beneficially or adversely? A) Inflation. B) Default risk. C) Special provisions. D) Time to maturity. Show Answer Correct Answer: C) Special provisions. 13. What are bonds? A) Certificates of indebtedness. B) Shares of publicly traded companies. C) Bailing people out of tough situations. D) Certificates of profit. Show Answer Correct Answer: A) Certificates of indebtedness. 14. What is the primary function of the stock market? A) To facilitate the trading of goods and services. B) To provide a platform for investment in companies. C) To enable the exchange of currencies. D) To regulate the money supply. Show Answer Correct Answer: B) To provide a platform for investment in companies. 15. A retail company changes its credit policy. Earlier it used to extend credit for 120 days, however now it extends it for 90 days. The most likely impact on the company's balance sheet will be: A) Trade receivables will increase. B) Trade payables will increase. C) Cash conversion cycle will increase. D) Cash conversion cycle will decrease. Show Answer Correct Answer: D) Cash conversion cycle will decrease. 16. Risk in the Money Market is ..... A) High. B) Market Risk. C) Low Credit and Market Risk. D) Medium Risk. Show Answer Correct Answer: C) Low Credit and Market Risk. 17. Jayant is holding a hundred shares of a company. He has been given a privileged offered to subscribe to a new issue of shares of the same company in the proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case. A) Offer through prospectus. B) Offer for sale. C) Rights issue. D) Private placement. Show Answer Correct Answer: C) Rights issue. 18. What does a liquidity risk premium compensate for? A) High market value. B) Low transaction costs. C) Difficulty in selling the security quickly. D) High interest rates. Show Answer Correct Answer: C) Difficulty in selling the security quickly. 19. Of the following, which would be the last choice for a bank facing a reserve deficiency? A) Call in loans. B) Borrow from the Fed. C) Sell securities. D) Borrow from other banks. Show Answer Correct Answer: A) Call in loans. 20. COMPUTATION:Sheila has P750, 000 bank deposit, which earns 10% yearly. Here comes Arnold who has a loan of P750, 000 with interest of 25% yearly. The bank earns how much on the spread? A) 125, 000. B) 75, 000. C) 187, 500. D) 112, 500. Show Answer Correct Answer: D) 112, 500. 21. Which loan type re-sets faster after an RBI repo rate cut? A) MCLR-linked loan. B) NBFC-linked loan. C) RLLR-linked loan. D) None of the above. Show Answer Correct Answer: C) RLLR-linked loan. 22. The practice of making high risk financial decisions in hopes of getting a big return is called A) Diversification. B) Speculation. C) Day trading. D) Junk bond. Show Answer Correct Answer: B) Speculation. 23. Which of the following would not be considered a real asset? A) A corporate bond. B) A machine. C) A patent. D) A factory. Show Answer Correct Answer: A) A corporate bond. 24. An accurate statement about government bonds would be that A) They are all insured by your local bank. B) They are generally held for 3 or 6 months. C) They are usually a low-risk investment. D) They entitle the holder to a share of ownership in the bank. Show Answer Correct Answer: C) They are usually a low-risk investment. 25. Which type of mutual fund offers units that can be bought or sold at any time? A) Close-ended funds. B) Open-ended funds. C) Interval funds. D) Index funds. Show Answer Correct Answer: B) Open-ended funds. ← 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