MCQ Questions for Class 12 Business Studies Chapter 10 Financial Markets with Answers

Check the below NCERT MCQ Questions for Class 12 Business Studies Chapter 10 Financial Markets with Answers Pdf free download. MCQ Questions for Class 12 Business Studies with Answers were prepared based on the latest exam pattern. We have provided Financial Markets Class 12 Business Studies MCQs Questions with Answers to help students understand the concept very well.

Financial Markets Class 12 MCQs Questions with Answers

Question 1.
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

Answer: (c) Floating of companies


Question 2.
Which one of the following is a money market instrument?
(a) Unit of mutual fund
(b) Debenture
(c) Bond
(d) Treasury bill

Answer

Answer: (d) Treasury bill


Question 3.
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

Answer: (a) complement each other.


Question 4.
Secondary market is in the form of
(a) stock exchange.
(b) money market
(c) new issue market.
(d) commercial exchange

Answer

Answer: (a) stock exchange.


Question 5.
SEBI is a regulator of
(a) capital market.
(b) money market
(c) commodity market.
(d) overseas market

Answer

Answer: (a) capital market.


Question 6.
___ 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

Answer: (b) Commercial paper


Question 7.
___ is a source of financing to meet very short-term fund requirements of commercial banks with a provision of renewal.
(a) Treasury Bill
(b) Commercial Paper
(c) Certificate of Deposit
(d) Call Money

Answer

Answer: (d) Call Money


Question 8.
___ is the market which helps existing investors to sell their securities.
(a) Primary market
(b) Secondary market
(c) Capital market
(d) Commodity market

Answer

Answer: (b) Secondary market


Question 9.
___ is the institution which provides a platform for trading of existing securities having long-term maturity.
(a) SEBI
(b) WTO
(c) Stock exchange
(d) RBI

Answer

Answer: (c) Stock exchange


Question 10.
After the trade has been executed, the broker issues a Contract Note to the investor within
(a) 52 hours
(b) 24 hours
(c) 48 hours
(d) 12 hours

Answer

Answer: (b) 24 hours


Question 11.
On this day, the exchange will deliver the share or make payment to the other broker,
(a) Pay-in day
(b) Pay-out day
(c) Transaction day
(d) None of the above

Answer

Answer: (b) Pay-out day


Question 12.
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

Answer: (b) PAN number


Question 13.
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 above

Answer

Answer: (b) Unique Order Code


Question 14.
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 above

Answer

Answer: (b) Depository


Question 15.
The process of holding shares in electronic form is known as
(a) Demutualisation
(b) Dematerialisation
(c) Speculation
(d) None of the above

Answer

Answer: (b) Dematerialisation


Question 16.
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

Answer: (c) Pricing of security.


Question 17.
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

Answer: (c) Offer for sale


Question 18.
Which of the following participants represent capital market?
(a) Development banks
(b) Commercial banks
(c) Stock exchanges
(d) All of the above

Answer

Answer: (d) All of the above


Question 19.
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

Answer: (d) All of the above


Question 20.
It is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
(a) Commercial bill
(b) Commercial papers
(c) Call money
(d) None of the above

Answer

Answer: (a) Commercial bill


True or False

State with reasons whether the following statements are True or False.

1. Providing liquidity is an important function of stock exchange.

Answer

Answer: True; providing liquidity to securities is an important function of stock exchange.


2. Money Market is the market in which financial instruments having long-term maturity are dealt with.

Answer

Answer: False; financial instruments having short-term maturity are dealt with in the money market.


3. Stock exchange regulates the capital market.

Answer

Answer: False; SEBI (Securities and Exchange Board of India) regulates the capital market.


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