This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 48 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 48 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the main advantage of a mutual fund for an investor? A) It can be sold at profit. B) Its price doesn't change much. C) It has a set maturity date. D) It offers diversity in investment. Show Answer Correct Answer: D) It offers diversity in investment. 2. Which of the following statements about risk is TRUE? A) Risk is about how uncertain your returns could be. B) Risk is about how much money you can lose. C) A risky asset is more likely to deliver higher return than a less risky asset. D) If an asset's risk increases, its price will also increase. Show Answer Correct Answer: A) Risk is about how uncertain your returns could be. 3. A company posted an EPS of ₹ 20 in the financial year 2021-22. The company's EPS is expected to increase by 20% next year, if the company's stock is currently trading at ₹ 100, the forward PE of the company is: A) 5. B) 4.17. C) 6. D) 6.17. Show Answer Correct Answer: B) 4.17. 4. Name the institutions that provide Demat services in India. A) NSDL/CDSL. B) Mutual Fund. C) Merchant Banking. D) Venture Capitalist. Show Answer Correct Answer: A) NSDL/CDSL. 5. What is the role of money as a medium of exchange? A) It provides a common measure for valuing goods and services. B) It retains its value over time. C) It serves as a widely accepted means of facilitating transactions. D) It can be used to settle debts in the future. Show Answer Correct Answer: C) It serves as a widely accepted means of facilitating transactions. 6. Which of the following instruments is typically traded in the money market? A) Commercial paper. B) Real estate investment trusts. C) Equity shares. D) Corporate bonds. Show Answer Correct Answer: A) Commercial paper. 7. Imagine you are an international trader. You are dealing with global markets where convertible currencies are traded and their conversion rates are determined. What is this market called? A) Foreign Exchange Market. B) Equity Market. C) Auction Market. D) Debt Market. Show Answer Correct Answer: A) Foreign Exchange Market. 8. Payment people receive when they lend money A) Interest. B) Premium. C) IRA. D) None of the above. Show Answer Correct Answer: A) Interest. 9. All of the following are nontransaction deposits EXCEPT A) Savings accounts. B) Small-denomination time deposits. C) Checkable deposits. D) Certificates of deposit. Show Answer Correct Answer: C) Checkable deposits. 10. Is the market which helps existing investors to sell their securities. A) Primary Market. B) Secondary Market. C) Capital Market. D) Commodity Maket. Show Answer Correct Answer: B) Secondary Market. 11. Which of the following is a component of national capital markets? A) Foreign exchange market. B) International bond market. C) Debt and equity. D) Cybermarkets. Show Answer Correct Answer: C) Debt and equity. 12. Money market instruments are typically used for long-term financing. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 13. Secondary reserves are so called because A) They can be converted into cash with low transactions costs. B) They are not easily converted into cash, and are, therefore, of secondary importance to banking firms. C) 50% of these assets count toward meeting required reserves. D) They rank second to bank vault cash in importance of bank holdings. Show Answer Correct Answer: A) They can be converted into cash with low transactions costs. 14. Assume that a bank's bid rate on Swiss francs is $ 0.45 and its ask rate is $ 0.47. Its bid/ask percentage spread is A) About 4.44%. B) About 4.26%. C) About 4.03%. D) About 4.17%. Show Answer Correct Answer: B) About 4.26%. 15. SEBI stands for: A) Securities and Exchange Board of India. B) Securities and Economic Board of India. C) State Economic Banking Institution. D) Securities and Exchange Board of India. Show Answer Correct Answer: A) Securities and Exchange Board of India. 16. What is the time frame typically associated with money market instruments? A) More than five years. B) Up to one year. C) Three to five years. D) Six months to two years. Show Answer Correct Answer: B) Up to one year. 17. Currency plus bank current deposits from the private non-bank sector best defines which term A) M1. B) Bond market. C) Debt. D) Currency. E) M3. Show Answer Correct Answer: A) M1. 18. Compared with a purely competitive labor market, a monopsonistic market will result in A) Higher wage rates and a higher level of employment. B) Higher wage rates and a lower level of employment. C) Lower wage rates and a higher level of employment. D) Lower wage rates and a lower level of employment. Show Answer Correct Answer: D) Lower wage rates and a lower level of employment. 19. Which financial market deals with currencies? A) Commodity market. B) Forex market. C) Capital market. D) Money market. Show Answer Correct Answer: B) Forex market. 20. Which principle of insurance states that the insured must have a legitimate interest in the subject matter? A) Insurable Interest. B) Claim Settlement. C) Policy Coverage. D) Risk Assessment. Show Answer Correct Answer: A) Insurable Interest. 21. Suppose that many big corporations decide not to issue bonds, since it is now too costly to comply with new financial market regulations. What is the expected effect on interest rates? A) Interest rates might rise. B) Interest rates might fall. C) No change in interest rates. D) None of the above. Show Answer Correct Answer: A) Interest rates might rise. 22. Relative to a stock, a bond provides A) Higher dividend. B) Lower dividend. C) Higher level of risk. D) Lower level of risk. Show Answer Correct Answer: D) Lower level of risk. 23. What is the primary purpose of property insurance? A) To guarantee a fixed income during retirement. B) To cover damages to personal property from theft or natural disasters. C) To offer discounts on home repairs. D) To provide health benefits to policyholders. Show Answer Correct Answer: B) To cover damages to personal property from theft or natural disasters. 24. Which of these activities is carried out by an Investment bank? A) Provide loans and overdrafts to small businesses. B) Provide an efficient means of payment. C) Accept deposits from households. D) Help governments to privatise a public sector enterprise. Show Answer Correct Answer: D) Help governments to privatise a public sector enterprise. 25. Who decides the allotment proportion of shares in an IPO to the Applicants? A) RTA. B) Stock Exchange. C) SEBI. D) Company. Show Answer Correct Answer: D) Company. ← 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