This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 53 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 53 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are the two reasons people buy bonds? A) For high-risk, high-return investments and to own part of a company. B) For steady income through interest payments and to preserve capital. C) To gain voting rights in a company and for tax benefits. D) To participate in company management and for quick profits. Show Answer Correct Answer: B) For steady income through interest payments and to preserve capital. 2. If a bank has excess reserves greater than the amount of a deposit outflow, the outflow will result in equal reductions in A) Deposits and reserves. B) Deposits and loans. C) Capital and reserves. D) Capital and loans. Show Answer Correct Answer: A) Deposits and reserves. 3. Coupan of all floating rate bonds are reset on the basis of A) 10 Yrs Gov sec rate. B) 5 Yrs Gov sec rate. C) Linked to benchmark rate. D) Repo rate. Show Answer Correct Answer: C) Linked to benchmark rate. 4. A time draft payable to a seller of goods, with payment guaranteed by a bank is a commercial paper security. A) T-Bill. B) Repurchase agreement. C) Negotiable CD. D) Banker's acceptance. Show Answer Correct Answer: D) Banker's acceptance. 5. Which characteristic of money allows it to be used to settle debts and obligations in the future? A) Medium of Exchange. B) Unit of Account. C) Store of Value. D) Standard of Deferred Payment. Show Answer Correct Answer: D) Standard of Deferred Payment. 6. Gong Badak Kitchen recently sold 1, 000 shares of preferred stock. Determine the per share value of the stock if there is a 10 percent required rate of return and a preferred dividend of RM6.75. A) RM67.50. B) RM76.50. C) RM37.50. D) RM45.00. Show Answer Correct Answer: A) RM67.50. 7. Conversion of physical form of share certificate into an electronic entry is called A) Exchange Mechanism. B) Conversion. C) Dematerialisation. D) Rematerialisation. Show Answer Correct Answer: C) Dematerialisation. 8. Components of Indian Financial System A) Financial markets. B) Financial services. C) Financial instruments. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Which of the following provides credit rating services in India? A) SEBI. B) CRISIL. C) NABARD. D) SIDBI. Show Answer Correct Answer: B) CRISIL. 10. Market is the market for long term financial claim more than a year. A) Primary market. B) Secondary market. C) Equity market. D) Capital market. Show Answer Correct Answer: D) Capital market. 11. What are the features of financial regulators? A) Features of financial regulators include market stability, consumer protection, transparency promotion, fraud prevention, audits, supervision of financial institutions, and monetary policy implementation. B) Corporate governance oversight. C) Investment risk assessment. D) Tax collection enforcement. Show Answer Correct Answer: A) Features of financial regulators include market stability, consumer protection, transparency promotion, fraud prevention, audits, supervision of financial institutions, and monetary policy implementation. 12. When you deposit a $ 50 bill in the Security Pacific National Bank A) Its liabilities decrease by $ 50. B) Its assets increase by $ 50. C) Its reserves decrease by $ 50. D) Its cash items in the process of collection increase by $ 50. Show Answer Correct Answer: B) Its assets increase by $ 50. 13. Which system ensures electronic holding of shares? A) Demat system. B) Physical certificates. C) Bond vaults. D) IPO registry. Show Answer Correct Answer: A) Demat system. 14. If you receive $ 500 in simple interest on a loan that you made for $ 10, 000 for 5 years, what was the interest rate you charged? A) 10%. B) 5%. C) 1%. D) 7%. Show Answer Correct Answer: C) 1%. 15. What is total risk and how does it differ from systematic risk? A) Systematic risk can be eliminated through diversification. B) Total risk is only related to market fluctuations. C) Total risk refers to the risk of a single asset only. D) Total risk is the overall risk of an investment, while systematic risk is the portion of total risk that cannot be eliminated through diversification. Show Answer Correct Answer: D) Total risk is the overall risk of an investment, while systematic risk is the portion of total risk that cannot be eliminated through diversification. 16. A major difference between leasing and borrowing is that in leasing, the ownership of the asset remains with the ..... A) Lessor. B) Lessee. C) All the above. D) None of the above. Show Answer Correct Answer: A) Lessor. 17. Who is the current Governor of the Reserve Bank of India (as of 2025)? A) Shaktikanta Das. B) Sanjay Malhotra. C) Urjit Patel. D) Raghuram Rajan. Show Answer Correct Answer: B) Sanjay Malhotra. 18. Buying and selling of shares can be done through a ..... A) Depository. B) Bank. C) Stock Exchange. D) Finance company. E) Not Attempted. Show Answer Correct Answer: C) Stock Exchange. 19. In general, banks make profits by selling ..... liabilities and buying ..... assets. A) Long-term; shorter-term. B) Short-term; longer-term. C) Illiquid; liquid. D) Risky; risk-free. Show Answer Correct Answer: B) Short-term; longer-term. 20. The Federal Deposit Insurance Corporation (FDIC) insures A) Commercial bank accounts. B) Credit union accounts. C) Money market accounts. D) Accounts at all financial institutions. Show Answer Correct Answer: A) Commercial bank accounts. 21. Payment made for the use of borrowed money is called A) Financial Institution. B) Creditors. C) Interest. D) Secured. Show Answer Correct Answer: C) Interest. 22. Name different types of financial regulators. A) Consumer Protection Agencies. B) Central Banks, Securities Regulators, Insurance Regulators, Banking Regulators. C) Financial Ombudsmen. D) Tax Authorities. Show Answer Correct Answer: B) Central Banks, Securities Regulators, Insurance Regulators, Banking Regulators. 23. What is the difference between a stock and a bond? A) Stock represents ownership, while a bond is a debt investment. B) Stock is always riskier than bonds. C) Stock and bond are both types of cryptocurrencies. D) Stock and bond have the same financial return. Show Answer Correct Answer: A) Stock represents ownership, while a bond is a debt investment. 24. The capital market can be divided into: A) Primary and secondary markets. B) Primary and secondary markets. C) Money and forex markets. D) Debt and derivatives. Show Answer Correct Answer: A) Primary and secondary markets. 25. Modern liability management has resulted in A) Increased sales of negotiable CDs to raise funds. B) Increase importance of deposits as a source of funds. C) Reduced borrowing by banks in the overnight loan market. D) Failure by banks to coordinate management of assets and liabilities. Show Answer Correct Answer: A) Increased sales of negotiable CDs to raise 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