This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 10 Financial Markets – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 10 Financial Markets Quiz 8 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ....is the market for short term financial claim. A) Debt market. B) Equity market. C) Money market. D) Capital market. Show Answer Correct Answer: C) Money market. 2. The issuer of dated securities is A) Municipal corporation. B) Corporations. C) NBFCs. D) Government. Show Answer Correct Answer: D) Government. 3. Which of the following statements is not true with regard to primary market? A) Is also known as the old issues market. B) It facilitates the transfer of investible funds from savers to entrepreneurs. C) It deals with new securities being issued for the first time. D) It facilitates the transfer of investible funds from savers to entrepreneurs. Show Answer Correct Answer: A) Is also known as the old issues market. 4. The prices paid for resources affect A) The money incomes of households in the economy. B) The allocation of resources among different firms and industries in the economy. C) The quantities of different resources employed to produce a product. D) All the above. Show Answer Correct Answer: D) All the above. 5. Higher returns in financial markets are generally associated with higher risk. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 6. Which of the following is an example of a capital market institution? A) Clearing banks. B) Pension funds. C) London Stock Exchange. D) Insurance companies. Show Answer Correct Answer: C) London Stock Exchange. 7. The primary objective of the Bangko Sentral is to maintain price stability conducive to a balanced and sustainable fiscal policy. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 8. What is the yield of a bond? A) The yield of a bond is the interest rate set by the issuer. B) The yield of a bond is the price paid for the bond initially. C) The yield of a bond is the expected annual return on investment expressed as a percentage. D) The yield of a bond is the total amount paid at maturity. Show Answer Correct Answer: C) The yield of a bond is the expected annual return on investment expressed as a percentage. 9. The Net Asset Value (NAV) approach values a company by: A) Discounting future dividends. B) Multiplying earnings by a market multiple. C) Netting liabilities against assets. D) Estimating market sentiment. Show Answer Correct Answer: C) Netting liabilities against assets. 10. The reserves of a company rightfully belong to ..... A) Equity Shareholders. B) Institutional lenders. C) Promoters. D) Employees. Show Answer Correct Answer: A) Equity Shareholders. 11. WHAT RISK FACTOR IN BONDS FORCES MOST RETAIL INVESTOR TO HOLD THEM IN MATURITY A) LIQUIDITY RISK. B) INFLATION RISK. C) Market RISK. D) None of the above. Show Answer Correct Answer: A) LIQUIDITY RISK. 12. The oldest stock exchange in India is A) Delhi Stock Exchange. B) National Stock Exchange. C) Bombay Stock Exchange. D) Madras Stock Exchange. Show Answer Correct Answer: C) Bombay Stock Exchange. 13. Under this method of floatation in the primary market, a subscription is invited from the general public to invest in the securities of a company through the issue of advertisement. A) Private placement. B) Offer through prospectus. C) Offer for sale. D) All of the above. Show Answer Correct Answer: B) Offer through prospectus. 14. Sarbanes Oxley was instituted as a direct result of: A) The corporate scandals of Enron, Worldcom, Tyco and others. B) The Housing Crash of 2008. C) The terrorist attacks Sept 11, 2001. D) Democrats taking over both houses of Congress in 2002. Show Answer Correct Answer: A) The corporate scandals of Enron, Worldcom, Tyco and others. 15. Banks bring together ..... A) Savers and spenders. B) Savers and borrowers. C) Dealers and druggies. D) Cheeseburgers and fries. Show Answer Correct Answer: B) Savers and borrowers. 16. What is the minimum amount that can be invested in Treasury Bills? A) 20000. B) 15000. C) 25000. D) 10000. Show Answer Correct Answer: C) 25000. 17. On the liquidity spectrum, which asset is placed as the least liquid? A) Treasury bill. B) A house. C) Infrastructure. D) Sight deposit. Show Answer Correct Answer: C) Infrastructure. 18. The book building process in an IPO helps to: A) Print shares faster. B) Discover the fair issue price. C) Avoid SEBI regulations. D) Eliminate underwriters. Show Answer Correct Answer: B) Discover the fair issue price. 19. RBI issue 91-day Treasury bills in an auction where the cut off price was Rs. 98.75 what is the implied yield of the instrument??? A) 0.0725. B) 0.072. C) 0.0716. D) 0.0714. Show Answer Correct Answer: D) 0.0714. 20. Which of the following is NOT a type of financial market? A) Capital market. B) Money market. C) Forex market. D) Farming market. Show Answer Correct Answer: D) Farming market. 21. When securities are allotted to institutional investors & some selected individuals is referred to as ..... A) Initial public offer. B) Offer through prospectus. C) Private placement. D) Offer for sale. Show Answer Correct Answer: C) Private placement. 22. Which of the following enterprise organisations is allowed to distribute profit in the form of dividend? A) A Aikang Clinic. B) B Chan & Lim Partnership. C) C DF Public Limited Company. D) D The Associated Chinese Chambers of Commerce and Industry of Malaysia. Show Answer Correct Answer: C) C DF Public Limited Company. 23. The primary reason that individuals and firms choose to borrow long-term is to A) Reduce the risk that interest rates will fall before they pay off their debt. B) Reduce the risk that interest rates will rise before they pay off their debt. C) Reduce monthly interest payments, as interest rates tend to be higher on short-term than long-term debt instruments. D) Reduce total interest payments over the life of the debt. Show Answer Correct Answer: B) Reduce the risk that interest rates will rise before they pay off their debt. 24. The safer the debt instrument, the ..... is the rate of interest. A) Lower. B) Higher. C) Safety of debt instrument will not have any impact on the interest rate. D) None of the above. E) Not Attempted. Show Answer Correct Answer: A) Lower. 25. Explain the relationship between risk and return. A) Higher risk always leads to lower returns. B) Higher risk is associated with the potential for higher returns. C) Risk and return are unrelated. D) Lower risk guarantees higher returns. Show Answer Correct Answer: B) Higher risk is associated with the potential for higher returns. ← 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 9Class 12 Business Studies Chapter 10 Financial Markets Quiz 10Class 12 Business Studies Chapter 10 Financial Markets Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books