Q. Which of the following statements is not true with regard to money market?
✅ Correct Answer: (B)
It is situated at specific locations.
Financial Market MCQs with answers
Dear candidates you will find MCQ questions of 12th Class - Business Studies | Chapter: Financial Market here. Learn these questions and prepare yourself for coming examinations. You can check the right answer of any question by clicking the option or by clicking view answer button.
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Q. Which of the following statements is not true with regard to Treasury bills?
✅ Correct Answer: (C)
They carry high risk of default.
Q. Which of the following statements is not true with regard to Commercial paper?
✅ Correct Answer: (A)
Is a long-term unsecured promissory note with a fixed maturity period.
Q. Which of the following statements is not true with regard to Call money?
✅ Correct Answer: (C)
There is a direct relationship between call rates and other short-term money market instruments.
Q. Which of the following statements is not true with regard to primary market?
✅ Correct Answer: (A)
Is also known as the old issues market.
Q. Which of the following statements is not true with regard to capital market?
✅ Correct Answer: (A)
The funds are raised for a short period of time.
Q. Which of the following statements is not true with regard to stock exchange?
✅ Correct Answer: (B)
It curbs the marketability of the securities.
Q. Which of the following is not a protective function of stock exchange?
✅ Correct Answer: (C)
Regulation of takeover bids by companies.
Q. 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?
✅ Correct Answer: (B)
4
Q. Which of the following statements is true with regard to financial markets?
✅ Correct Answer: (D)
All of the above
Q. It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year.
✅ Correct Answer: (D)
Money market
Q. It is an instrument of short-term borrowing by the Government of India maturing in less than one year.
✅ Correct Answer: (B)
Treasury bill
Q. Suppose an investor purchases a 91 days Treasury bill with a face value of ₹2,00,000 for ₹1,92,000. By holding the bill until the maturity date, the investor receives ₹2,00,000. What is the amount of interest received by him?
✅ Correct Answer: (A)
₹8,000
Q. It is used as an alternative to bank borrowing for large and creditworthy companies,
✅ Correct Answer: (B)
Commercial papers
Q. It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio.
✅ Correct Answer: (C)
Call money
Q. A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit
✅ Correct Answer: (B)
Cheaper in comparison with banks who raise funds from these sources.
Q. It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
✅ Correct Answer: (A)
Commercial bill
Q. A company can raise capital through the primary market in the form of
✅ Correct Answer: (D)
All of the above
Q. They can be issued to individuals, corporations and companies during periods of tight liquidity when the deposit growth of banks is slow but the demand for credit is high.
✅ Correct Answer: (D)
Certificate of deposit
Q. Which of the following participants represent capital market?
✅ Correct Answer: (D)
All of the above
Q. Under this method of floatation in primary market, a subscription is invited from general public to invest in the securities of a company through the issue of advertisement.
✅ Correct Answer: (B)
Offer through prospectus
Q. PK Enterprises Limited has sold an entire lot of 5,00,000 equity shares @ ₹9 each to Prosperous Bank Private Limited. The bank intum will offer the shares to general public for subscription @ ₹11 per share. Identify the method of floatation being described in the given lines.
✅ Correct Answer: (C)
Offer for sale
Q. Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case.
✅ Correct Answer: (C)
Rights issue
Q. Stock Exchange works as a mechanism for valuation of securities through the forces of demand and supply. Identify the related function of performed by the stock exchanges.
✅ Correct Answer: (C)
Pricing of security.
Q. Stock exchanges provide an opportunity to the investors to disinvest and invest. Identify the related function of the stock exchange.
✅ Correct Answer: (B)
Providing liquidity and marketability to existing securities.
Q. The process of holding shares in electronic form is known as
✅ Correct Answer: (B)
Dematerialisation
Q. One of the common irregularities noted by the Securities and Exchange Board of India during the inspection of a stock exchange was that it was dealing with unregistered sub-brokers. Identify the related function of Securities and Exchange Board of India
✅ Correct Answer: (A)
Regulatory function
Q. It acts like a bank and keeps securities in electronic form on behalf of the investor,
✅ Correct Answer: (B)
Depository
Q. It serves as an intermediary between the investor and the depository who is authorised to maintain the accounts of dematerialised shares.
✅ Correct Answer: (A)
Depository Participant
Q. It is a number assigned to each transaction by the stock exchange and is printed on the contract note.
✅ Correct Answer: (B)
Unique Order Code
Q. Identify the correct sequence of steps to be followed in the trading procedure at Stock Exchange
✅ Correct Answer: (C)
Opening a trading account and Demat account, Placing an order, Execution of order, Settlement of order
Q. The mandatory detail that an investor has to provide to the broker at the time of opening a demat account is
✅ Correct Answer: (B)
PAN number
Q. It is a legally enforceable document which is issued by a stock broker within 24 hours of the execution of a trade order.
✅ Correct Answer: (C)
Contract Note
Q. On this day, the exchange will deliver the share or make payment to the other broker,
✅ Correct Answer: (B)
Pay-out day
Q. When is a trade confirmation slip issued to the investor?
✅ Correct Answer: (B)
On execution of the order
Q. After the trade has been executed, the broker issues a Contract Note to the investor within
✅ Correct Answer: (B)
24 hours
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