This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 69 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 69 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The share of ownership in a corporation that gives holders voting rights and a share of profit. A) Common Stock. B) Preferred Stock. C) Stock index. D) Primary market. Show Answer Correct Answer: A) Common Stock. 2. The main advantage of diversification as an investment policy is that it A) Reduces risk to investors. B) Increases investors' access to their money. C) Offsets the effects of inflation on investments. D) Guarantees a fixed rate of return on an investment. Show Answer Correct Answer: A) Reduces risk to investors. 3. What is the main function of a mutual fund? A) The main function of a mutual fund is to provide loans to individual investors. B) The main function of a mutual fund is to offer high-risk investment opportunities. C) The main function of a mutual fund is to sell insurance products to clients. D) The main function of a mutual fund is to provide investors with a diversified investment option managed by professionals. Show Answer Correct Answer: D) The main function of a mutual fund is to provide investors with a diversified investment option managed by professionals. 4. A government bond is A) An IOU from the government. B) A promise from the government to repay a loan. C) A fixed rate loan to the government. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. Floatation Costs are met usually by funds raised through ..... This is also known as ..... A) Treasury Bill, Bridge Financing. B) Call Money, Private Placement. C) Commercial Paper, Bridge Financing. D) Commercial Bill, Private Placement. Show Answer Correct Answer: C) Commercial Paper, Bridge Financing. 6. Which of the statements given below is/are correct regarding "bear market" ?1.It refers to fall in the value of investments 2.Investors rush to buy stocks instead of selling 3.Unemployment levels may rise.Select the correct answerfrom given below: A) 1 only. B) 2 and 3 only. C) 1 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: C) 1 and 3 only. 7. Sensex is dependent on ..... companies. A) 30. B) 50. C) 100. D) 500. Show Answer Correct Answer: A) 30. 8. Which of the following are bank assets? A) The building owned by the bank. B) A discount loan. C) A negotiable CD. D) A customer's checking account. Show Answer Correct Answer: A) The building owned by the bank. 9. How can investors purchase equities? A) They can buy a 401(k) plan through a bank. B) They can buy futures in corporate bonds. C) They can buy them directly on the internet. D) They have to use a stockbroker. Show Answer Correct Answer: C) They can buy them directly on the internet. 10. The following is a zero coupon security which pays no interest A) Treasury bills. B) Dated securities. C) The State Development Loans (SDLs). D) All the above. Show Answer Correct Answer: A) Treasury bills. 11. Why do companies issue stocks? A) To create and investment opportunity into other businesses. B) To increase employee cooperation and an operating level. C) To be traded individually. D) To raise money for economic investment and to fund operating costs. Show Answer Correct Answer: D) To raise money for economic investment and to fund operating costs. 12. An example of a firm's financing decision would be: A) Acquiring a competitive firm. B) Determining how much to pay for a specific asset. C) Paying dividends to shareholders. D) Deciding whether or not to increase the price of its products. Show Answer Correct Answer: C) Paying dividends to shareholders. 13. Who regulates the financial markets? A) Mr. Gilman. B) Securities and Exchange Commission. C) CIA. D) Granville PD. Show Answer Correct Answer: B) Securities and Exchange Commission. 14. The money market facilitates: A) Long-term loans and investment. B) Short-term loans and investment. C) The sale of company shares only. D) Government infrastructure projects. Show Answer Correct Answer: B) Short-term loans and investment. 15. Which of the following is NOT a type of financial asset traded in financial markets? A) Stocks. B) Bonds. C) Currencies. D) Real estate. Show Answer Correct Answer: D) Real estate. 16. What is the name of the Australian Share Market? A) ASX. B) ASM. C) AXS. D) SMA. E) ESX. Show Answer Correct Answer: A) ASX. 17. ..... is defined as a claim on the property or income of a borrower. A) Financial asset. B) Stock. C) Equity. D) None of the above. Show Answer Correct Answer: A) Financial asset. 18. The capital market is a financial market for trading in: A) Short-term financial assets. B) Long-term financial assets. C) Foreign currencies. D) Commercial papers. Show Answer Correct Answer: B) Long-term financial assets. 19. Which is/are the ways by which companies can raise foreign currency resources? A) American Depository Share. B) Global Depository Receipts. C) Euro Issues. D) All of the above. E) Not Attempted. Show Answer Correct Answer: D) All of the above. 20. What is the purpose of futures markets in currency trading? A) To allow traders to speculate on currency values and hedge against potential losses. B) To eliminate the risk of currency trading entirely. C) To fix the exchange rate for future transactions without any speculation. D) To provide loans to businesses in foreign currencies. Show Answer Correct Answer: A) To allow traders to speculate on currency values and hedge against potential losses. 21. Which best describes the role that government and business play in investments? A) They both receive capital to use for growth. B) They DO NOT receive capital to use for growth. C) All the above. D) None of the above. Show Answer Correct Answer: A) They both receive capital to use for growth. 22. If, after a deposit outflow, a bank needs an additional $ 3 million to meet its reserve requirements, the bank can A) Reduce deposits by $ 3 million. B) Increase loans by $ 3 million. C) Sell $ 3 million of securities that the bank currently owns. D) Repay its discount loans from the Fed. Show Answer Correct Answer: C) Sell $ 3 million of securities that the bank currently owns. 23. If a firm requires to two crores for six months time to keep the stock of raw material, it should approach(a) (b) (c) (d) A) Money market. B) Capital market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Money market. 24. A company sells its product on credit. Select the correct statement. A) Such sales will not impact the company's profit and loss statement. B) Such sales will appear as liability in the company's balance sheet. C) Such sales will appear as asset in the company's balance sheet. D) Such sales will impact the cash flow statement. Show Answer Correct Answer: C) Such sales will appear as asset in the company's balance sheet. 25. ..... is a feature specified in the debt contract that permits its sale to another investor A) Convertibility. B) Callability. C) Putability. D) Negotiability. Show Answer Correct Answer: D) Negotiability. ← 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