CBSE Class 12 Business Studies Financial Markets MCQs Set 04

Question: Which of the following is not a protective function of stock exchange?
(a) Prohibition of fraudulent and unfair trade practices.
(b) Controlling insider trading.
(c) Regulation of takeover bids by companies.
(d) Promotion of fair practices and code of conduct in securities market.

Answer : C

Question: Which of the following statements is true with regard to financial markets?
(a) They link the households which save funds and business firms which invest these funds.
(b) They work as an intermediary between the savers and the investors by mobilising funds between them.
(c) They allocate funds available for investment into their most productive investment opportunity.
(d) All of the above

Answer : D

Question: A Treasury Bill is basically:
(a) An instrument to borrow short-term funds
(b) An instrument to borrow long-term funds
(c) An instrument of capital market
(d) None of the options

Answer : A

Question: The allocated function is performed by
(a) Financial market
(b) Capital market
(c) Money market
(d) All of the above

Answer : D

Question: The total number of Stock Exchanges in India is:
(a) 22
(b) 21
(c) 23
(d) 20

Answer : B

Question: Which of the following is the function of financial market?
(a) Mobilization of savings
(b) Price fixation
(c) Provide liquidity to financial assets
(d) All of the above

Answer : D

Question: Who issues a treasury bill?
(a) Any nationalised bank
(b) Any private sector bank
(c) Reserve Bank of India
(d) All of the above

Answer : C

Question: 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?
(a) ₹8,000
(b) ₹80,000
(c) ₹3,92,000
(d) ₹2,00,000

Answer : A

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

Answer : B

Question: SEBI is a regulator of
(a) capital market.
(b) money market
(c) commodity market.
(d) overseas market

Answer : A

Question: To be listed on OTCEI, the minimum capital requirement for a company is:
(a) Rs. 10 crores
(b) Rs. 3 crores
(c) Rs. 25 crores
(d) Rs. 5 crores

Answer : B

Question: It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio.
(a) Commercial bill
(b) Commercial papers
(c) Call money
(d) None of the options

Answer : C

Question: Instruments traded in capital market are__________
(a) Bonds
(b) Equity Shares and Preference Shares
(c) Debentures
(d) All of the above

Answer : D

Question: A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit
(a) Expensive in comparison with banks who raise funds from these sources.
(b) Cheaper in comparison with banks who raise funds from these sources.
(c) Creates no effect on other sources.
(d) None of the options

Answer : B

Question: The settlement cycle in NSE is:
(a) T + 2
(b) T + 5
(c) T + 3
(d) T + 1

Answer : A

Question: 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.
(a) Commercial papers
(b) Call money
(c) Commercial bill
(d) Certificate of deposit

Answer : D

Question: OTCEI was started on the lines of:
(a) NSE
(b) NYSE
(c) NASDAQ
(d) NASAQ

Answer : C

Question: Which of the following statements is not true with regard to money market?
(a) It involves low market risk.
(b) It is situated at specific locations.
(c) Deals in unsecured and short-term debt instruments.
(d) The instruments traded are highly liquid.

Answer : B

Question: Which of the following is a financial market’s function?
(a) Price fixation
(b) Providing liquidity to financial assets
(c) Mobilization of savings
(d) All of the options

Answer : D

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

Answer : C

Question: Secondary market is in the form of
(a) stock exchange.
(b) money market
(c) new issue market.
(d) commercial exchange

Answer : A

Question: Stock exchange is known as __________ market for securities.
(a) Primary market
(b) Secondary market
(c) Capital market
(d) None of the options

Answer : B

Question: NSE commenced futures trading in the year:
(a) 2000
(b) 2001
(c) 2002
(d) 1999

Answer : A

Question: The process of holding shares in electronic form is known as
(a) Demutualisation
(b) Dematerialisation
(c) Speculation
(d) None of the options

Answer : B

Question: Capital market deals in ___________
(a) Medium and long term securities
(b) Very short term securities
(c) Short term securities
(d) None of the options

Answer : A

Question: 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
(a) Regulatory function
(b) Protective function
(c) Developmental function
(d) None of the options

Answer : A

Question: What type of instruments are traded in a Money Market?
(a) Treasury bills
(b) Commercial bills
(c) Call money
(d) All of the above

Answer : D

Question: It serves as an intermediary between the investor and the depository who is authorised to maintain the accounts of dematerialised shares.
(a) Depository Participant
(b) Depository
(c) Stock exchange
(d) None of the options

Answer : A

Question: Which among the following is a major component of the financial system?
(a) Financial institutions
(b) Financial securities
(c) Financial market
(d) All of the options

Answer : D