This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 56 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 56 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The main characteristics of money market transactions which enables it to have active secondary market are: A) Securities that trade in one year or less. B) Securities that are of large denomination. C) Securities that are very liquid. D) All above. Show Answer Correct Answer: D) All above. 2. Equity Markets are regulated by A) SEBI. B) RBI. C) RBI and SEBI. D) IRDA. Show Answer Correct Answer: A) SEBI. 3. If there is any uncertainty with respect to the future payment, the investor would require return over and above the nominal rate of return. The additional component is called A) Pure rate of return. B) Inflation compensation. C) Risk premium. D) A plus b. Show Answer Correct Answer: C) Risk premium. 4. What is the Full form of CRISIL A) Customer Rating Information Services of India Ltd. B) Credit Ranking Information Services of India Ltd. C) Credit Rating Information Services of India Ltd. D) None of the above. Show Answer Correct Answer: C) Credit Rating Information Services of India Ltd. 5. To meet floatation cost, firms generally issue the following instrument of moneymarket. A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: B) Commercial Paper. 6. When inflation is rising, the Central bank would normally: A) Lower interest rates to tame inflation. B) Increase interest rates to tame inflation. C) Would not do anyhting, as interest rates have nothing to do with inflation. D) More than one answer is correct. Show Answer Correct Answer: B) Increase interest rates to tame inflation. 7. Which of the following methods enable trader to avoid delivery of commodity in a future transaction?I ArbitrageII HedgingIII Credit saleIV Spot trading A) A I, II. B) B I, III. C) C II, IV. D) D III, IV. Show Answer Correct Answer: A) A I, II. 8. The instrument used in capital market is A) Equity. B) Commercial paper. C) Treasury Bill. D) All the above. Show Answer Correct Answer: A) Equity. 9. It is important that young people start saving & investing early because of A) Low interest rates. B) The depletion of Social Security. C) Compound interest. D) The instability of the U.S. economy. Show Answer Correct Answer: C) Compound interest. 10. Who issues currency notes in India? A) Finance Ministry. B) RBI. C) SEBI. D) SBI. Show Answer Correct Answer: B) RBI. 11. A company can raise capital through the primary market in the form of A) Equity shares. B) Preference shares. C) Debentures. D) All of the above. Show Answer Correct Answer: C) Debentures. 12. Which segment deals in government securities? A) Equity segment. B) Debt segment. C) Commodity segment. D) Currency segment. Show Answer Correct Answer: B) Debt segment. 13. What is a Eurobond? A) A bond that is regulated by local authorities. B) A bond issued by the government only. C) A bond issued outside the country in which it is denominated. D) A bond issued in the local currency. Show Answer Correct Answer: C) A bond issued outside the country in which it is denominated. 14. The process of determining price based on investors' bids is called: A) Fixed pricing. B) Book building. C) Auction pricing. D) Spot pricing. Show Answer Correct Answer: B) Book building. 15. Which of the following has the highest risk? A) Stocks. B) Bonds (or sukuk). C) Treasury bonds. D) Fixed deposits. Show Answer Correct Answer: A) Stocks. 16. How much will an initial deposit of $ 300 accumulate in an account with 12% interest compounded monthly for five years? A) $ 528.70. B) $ 545.01. C) $ 315.30. D) $ 480.00. Show Answer Correct Answer: B) $ 545.01. 17. How does diversification help in investment strategies? A) Diversification eliminates all risks by avoiding any market fluctuations. B) Diversification increases risk by concentrating investments in one asset. C) Diversification guarantees higher returns by investing in a single market. D) Diversification reduces risk and stabilizes returns by spreading investments across different assets. Show Answer Correct Answer: D) Diversification reduces risk and stabilizes returns by spreading investments across different assets. 18. Which market directly contributes for capital formation and increase in capital offirms? A) Primary market. B) Secondary market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Primary market. 19. What is the main purpose of the stock market? A) To promote international trade. B) To enable people to buy and sell goods. C) To enable companies to raise capital by issuing shares. D) To regulate interest rates. Show Answer Correct Answer: C) To enable companies to raise capital by issuing shares. 20. 'Ask' means the ..... A) Traded Price. B) Market price. C) Seller's price. D) Buyer's price. E) Not Attempted. Show Answer Correct Answer: C) Seller's price. 21. Banks face the problem of ..... in loan markets because bad credit risks are the ones most likely to seek bank loans. A) Adverse selection. B) Moral hazard. C) Moral suasion. D) Intentional fraud. Show Answer Correct Answer: A) Adverse selection. 22. The Gramm Leach Bliley Act requires: A) Banks to make a profit. B) Banks to offer credit cards to consumers at whatever rate they want. C) Banks to notify customers of information-sharing practice + allow opt-outs. D) All of the Answers are correct. Show Answer Correct Answer: C) Banks to notify customers of information-sharing practice + allow opt-outs. 23. Who regulates the securities market in India? A) RBI. B) SEBI. C) NABARD. D) Ministry of Finance. Show Answer Correct Answer: B) SEBI. 24. If a U.S. firm will need C$ 200, 000 in 90 days to pay for imports from Canada and it wishes to avoid the risk from exchange rate fluctuations, it could: A) Purchase a 90-day forward contract on Canadian dollars. B) Sell a 90-day forward contract on Canadian dollars. C) Purchase Canadian dollars 90 days from now at the spot rate. D) Sell Canadian dollars 90 days from now at the spot rate. Show Answer Correct Answer: A) Purchase a 90-day forward contract on Canadian dollars. 25. What role do financial markets play in the economy? A) Financial markets play a crucial role in resource allocation, capital formation, and economic growth. B) Financial markets have no impact on job creation. C) Financial markets are only relevant for large corporations. D) Financial markets primarily focus on consumer spending. Show Answer Correct Answer: A) Financial markets play a crucial role in resource allocation, capital formation, and economic growth. ← 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