CBSE Class 12 Business Studies Financial Markets MCQs Set C

Question: Which one of the following is a money market instrument?
(a) Unit of mutual fund
(b) Debenture
(c) Bond
(d) Treasury bill

Answer : D

Question: 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.
(a) Offer through prospectus
(b) Offer for sale
(c) Rights issue
(d) Private placement

Answer : C

Question: A Treasury bill is an instrument of _____________
(a) Long term debt
(b) Short term debt
(c) Interest
(d) Dividend

Answer : B

Question: 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

Answer : C

Question: It acts like a bank and keeps securities in electronic form on behalf of the investor,
(a) Depository Participant
(b) Depository
(c) Stock exchange
(d) None of the options

Answer : B

Question: ___ is the market which helps existing investors to sell their securities.
(a) Primary market
(b) Secondary market
(c) Capital market
(d) Commodity market

Answer : B

Question: _______ Market instruments enjoy higher degree of liquidity
(a) Both money and capital market
(b) Money market
(c) Capital market
(d) None of the options

Answer : B

Question: Identify the correct sequence of steps to be followed in the trading procedure at Stock Exchange
(a) Opening a trading account and Demat account, Placing an order, Settlement of order, Execution of order
(b) Settlement of order, Opening a trading account and Demat account, Placing an order, Execution of order
(c) Opening a trading account and Demat account, Placing an order, Execution of order, Settlement of order
(d) Placing an order, Opening a trading account and Demat account, Execution of order, Settlement of order

Answer : C

Question: Which of the following is not a part of capital market?
(a) Banks
(b) Financial Institutions
(c) Stock Exchanges
(d) RBI

Answer : D

Question: Which one of the following is not a function of financial market?
(a) Mobilisation of savings
(b) Price determination of securities
(c) Floating of companies
(d) Lowering transaction cost

Answer : C

Question: It is a legally enforceable document which is issued by a stock broker within 24 hours of the execution of a trade order.
(a) PAN number
(b) Unique Order Code
(c) Contract Note
(d) None of the options

Answer : C

Question: It is a number assigned to each transaction by the stock exchange and is printed on the contract note.
(a) PAN number
(b) Unique Order Code
(c) Contract Note
(d) None of the options

Answer : B

Question: Treasury bills are also known as _____________
(a) Fixed interest Bonds
(b) Low Interest Bonds
(c) Flat Rate Bonds
(d) Zero Coupon Bonds

Answer : D

Question: Which of the following statements is not true with regard to Treasury bills?
(a) Are issued in the form of a promissory note.
(b) They are highly liquid and have assured yield
(c) They carry high risk of default.
(d) They are available for a minimum amount of ₹25,000 and in multiples thereof.

Answer : C

Question: Which of the following is a method of floatation?
(a) Offer for sale
(b) Private Placement
(c) Offer through prospectus
(d) All of the above

Answer : D

Question: 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

Answer : D

Question: It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year.
(a) Primary market
(b) Secondary market
(c) Capital market
(d) Money market

Answer : D

Question: __________ is the organisations, institutions that provide long term funds.
(a) Capital market
(b) Money market
(c) Primary market
(d) Secondary market

Answer : A

Question: 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.

Answer : A

Question: _________ is a market for lending & borrowing of short term funds.
(a) Money market
(b) Primary market
(c) Capital market
(d) All of the above

Answer : A

Question: 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.
(a) Providing liquidity and marketability to existing securities.
(b) Safety of transaction.
(c) Pricing of security.
(d) Spreading of equity cult.

Answer : C

Question: Which of the following are the instruments of money market?
(a) Call money
(b) Certificate of deposits
(c) Trade bills
(d) All of the above

Answer : D

Question: ___ is a short-term unsecured promissory note issued by reputed business organisations at a price lower than its face value and redeemable at par.
(a) Treasury bill
(b) Commercial paper
(c) Certificate of deposit
(d) Promissory note

Answer : B

Question: The mandatory detail that an investor has to provide to the broker at the time of opening a demat account is
(a) Date of birth and address
(b) PAN number
(c) Residential status (Indian/NRI)
(d) Bank account details.

Answer : B

Question: The National Stock Exchange of India was recognized as stock exchange in the year:
(a) 1995
(b) 1992
(c) 1994
(d) 1993

Answer : D

Question: Which of the following statements is not true with regard to Call money?
(a) It is short-term finance repayable on demand.
(b) Its maturity period ranges from one day to fifteen days.
(c) There is a direct relationship between call rates and other short-term money market instruments.
(d) It is used for inter-bank transactions.

Answer : C

Question: 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

Answer : C

Question: Which of the following statements is not true with regard to stock exchange?
(a) It provides a platform for buying and selling of new securities.
(b) It curbs the marketability of the securities.
(c) By providing a ready market, it extends liquidity to the securities.
(d) It provides a platform for buying and selling of old securities.

Answer : B

Question: Primary and secondary markets develop simultaneously because they
(a) complement each other.
(b) complement with each other
(c) control each other.
(d) function independently.

Answer : A

Question: _______ is a link between savers & borrowers, helps to establish a link between savers & investors
(a) Marketing
(b) Financial market
(c) Money market
(d) None of these

Answer : B