This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 54 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 54 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What does the term "default" refer to in the context of default risk? A) Early payment. B) Missed or late payment. C) Increased payment. D) Reduced payment. Show Answer Correct Answer: B) Missed or late payment. 2. Which of the following assets is best desribed as, "near money" ? A) Money in a savings account. B) A £50 note. C) A share in BP. D) A flat in central London. Show Answer Correct Answer: B) A £50 note. 3. The amount that a bond issuer promises to pay the buyer at maturity. A) Par value. B) Coupon rate. C) Capital gain. D) Return. Show Answer Correct Answer: A) Par value. 4. Mr Lee is an individual investor who bought Company XYZ shares through a website of stockbroking company after analysing FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) for the last six months.Which function of stock index is relevant to the above example? A) A to help companies make production decision. B) B to provide fundraising facilities. C) C to provide a reference for buying and selling stocks. D) D to reflect country economic policies. Show Answer Correct Answer: C) C to provide a reference for buying and selling stocks. 5. What is a primary function of non-bank financial institutions (NBFIs)? A) Facilitating electronic payments. B) Offering specialized lending services. C) Providing traditional banking services. D) Conducting monetary policy. Show Answer Correct Answer: B) Offering specialized lending services. 6. Which one of the following is directly affected by the Reserve Bank's open market operation? A) Mortgage interest rates in the housing market. B) The interest rate on the overnight loans from the cash market. C) The value of shares on the Australian Securities Exchange. D) The interest rate on Commonwealth government securities. Show Answer Correct Answer: B) The interest rate on the overnight loans from the cash market. 7. Which of the following is true about mutual fund? A) Mutual funds are risk-free investments. B) Mutual Funds assure fixed returns. C) In mutual funds the target investors are the High Net worth investors. D) None of the above. E) Not Attempted. Show Answer Correct Answer: D) None of the above. 8. 'Invet' (likely a typo for Investment Banks) is listed as an institution in the: A) Money Market. B) Capital Market. C) Commodity Market. D) Foreign Exchange Market. Show Answer Correct Answer: B) Capital Market. 9. When is a bank technically bankrupt? A) If the workers leave. B) If the reduction in the bank's assets wipes out the whole of the bank's capital. C) If it makes a loss instead of a profit. D) If the firm fails to make a profit for 2 consecutive quarters. Show Answer Correct Answer: B) If the reduction in the bank's assets wipes out the whole of the bank's capital. 10. The barometer of an economy A) Banks. B) Bond Markets. C) Financial Institutions. D) Stock Markets. Show Answer Correct Answer: D) Stock Markets. 11. What is the term for the interest rate at which banks lend money to each other overnight? A) Federal Funds Rate. B) Prime Rate. C) Discount Rate. D) LIBOR (London Interbank Offered Rate). Show Answer Correct Answer: A) Federal Funds Rate. 12. Which of these is not a function of retail banks? A) Accepting deposits. B) Lending to economic agents. C) Investing money. D) Providing efficient and secure means of payment. Show Answer Correct Answer: C) Investing money. 13. What is Accrued Interest? A) Interest that is paid in advance. B) Interest that is not yet paid. C) Interest that is included in the clean price. D) Interest that is included in the dirty price. Show Answer Correct Answer: B) Interest that is not yet paid. 14. Which of the following is responsible for guaranteeing compensation for a specific loss or damage? A) Building societies. B) Central bank. C) Commercial bank. D) Insurance companies. Show Answer Correct Answer: D) Insurance companies. 15. The desire of people to hold money to satisfy short-term purchases, is the defintion of which term ..... A) Pension funds. B) Short-term money market. C) Transaction demand. D) Liquidity. E) Cash rate. Show Answer Correct Answer: C) Transaction demand. 16. The secondary market is in the form of A) Stock exchange. B) Money market. C) New issue Market. D) Commercial exchange. Show Answer Correct Answer: A) Stock exchange. 17. Stock Split leads to ..... A) No change in market capitalization. B) Increase in the number of outstanding shares. C) Decrease in the face value of the share of the company. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 18. Type of funds which is managed by an institution from shareholders, pools them to be invested in securities A) Mutual fund. B) Pension fund. C) Insurance fund. D) Exchange-traded fund. Show Answer Correct Answer: A) Mutual fund. 19. The safest instrument of money market is A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: C) Treasury Bill. 20. A company raises additional capital from existing shareholders through: A) IPO. B) Rights Issue. C) Buyback. D) Private Placement. Show Answer Correct Answer: B) Rights Issue. 21. The most important category of assets on a bank's balance sheet is A) Other assets. B) Securities. C) Loans. D) Cash items in the process of collection. Show Answer Correct Answer: C) Loans. 22. Raj Enterprises wishes to invest ₹ 1, 10, 000 in treasury bills. What is the maximum number of treasury bills it can buy with this fund? A) 6. B) 7. C) 4. D) 2. Show Answer Correct Answer: C) 4. 23. Bonds that are issued by state and local governments are called A) Internal bonds. B) Investment bonds. C) Junk bonds. D) Municipal bonds. Show Answer Correct Answer: D) Municipal bonds. 24. A ..... is a lower-rated, potentially higher-paying bond. A) Pension fund. B) Junk bond. C) Common stock. D) Municipal bond. Show Answer Correct Answer: B) Junk bond. 25. Which of the following statements is not true with regard to Commercial paper? A) Is a long-term unsecured promissory note with a fixed maturity period. B) It usually has a maturity period of 15 days to one year. C) It is sold at a discount and redeemed at par. D) Companies use this instrument for bridge financing. Show Answer Correct Answer: A) Is a long-term unsecured promissory note with a fixed maturity period. ← 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