[Business Studies MCQs, Financial Markets, AHSEC, CBSE, Class 12, Objective Questions and Answers]
Business Studies Class 12 MCQs
Chapter 10: Financial Markets
Multiple Choice Questions and Answers
OBJECTIVE QUESTIONS (1 mark)
1. What is a financial market? Mention
its components.
Ans: It refers to the market which creates and exchanges financial
assets. It is divided into two parts: Money market and capital market.
2. What are financial assets?
Ans: It refers to the financial instruments or securities. For
e.g. shares, debentures, treasury bills, commercial paper etc.
3. What is floatation cost?
Ans: The expenditure incurred in issuing the securities is called
floatation cost.
4. Mention two methods of floating
securities by a company.
Ans: Initial Public offer, Books building method
5. What are the components of capital
market?
Ans: Primary market or New issue market and Secondary Market and
Stock exchange.
6. Name the market where new
securities are issued for the first time.
Ans: Primary Market or new issue market
7. Name the market which facilitates
purchases and sale of old or existing securities.
Ans: Secondary Market or stock exchange
8. What is a zero coupon bond?
Ans: It is a financial instrument for which no interest is paid
but is issued at a discount redeemable at par.
9. What type of trade-off function is
performed by the money market?
Ans: The money market establishes a balance between short term
financial supply and short term financial demand.
10. Name the instruments that are
traded in money market. 2013
Ans: Call money, Commercial Papers, Certificates of deposits,
Bills of exchange.
11. Name the instruments that are
traded in capital market.
Ans: Stocks, Shares, Debentures, Bonds, GDR (Global Depository
receipts)
12. Name the institutions operating in
the money market.
Ans: Central Bank, Commercial banks, Non-bank financial
institutions.
13. Name the institutions operating in
the capital market.
Ans: IDBI, IFCI, ICICI, Stock exchanges.
14.
In which year NSEI, BSE and OTCEI were
established?
2015, 2018
Ans: NSEI – In
1991 and BSE – In 1875. But, NSEI was recognized in 1992. OTCEI was established
in 1990.
15. With which stock exchanges the
Benchmark ‘Sensex’ and ‘nifty’ are associated?
Ans: Bombay stock exchange – Sensex, National Stock exchange - nifty
16. Which is the oldest stock exchange
in India?
Ans: Bombay stock exchange
17. Mention the statutory body for
regulation of stock exchanges in India.
Ans: SEBI (Securities and Exchange Board of India)
18. When was SEBI established? 2017
Ans: It was established in 1988 but was given statutory status in
1992.
19. State the segments of NSEI.
Ans: a) Wholesale debt market b) Capital market segment
20. State one development function of
SEBI
Ans: to carry out research work.
21. Money market is a market for short
terms funds i.e. for one year and capital market is a market for long
term funds i.e. for more than one year.
Ans: Given statement is true.
22. What are various types of
operators in stock exchange?
Ans: Brokers, jobbers, bulls, bears and stag.
23. Write the full form of NSEI, BSE
and OTCEI.
Ans: NSEI – National stock exchange of India (Nifty), BSE – Bombay
Stock Exchange (Sensex), OTCEI – Over the Counter Exchange of India.
24. State two promoters of NSEI.
Ans: a) Industrial development bank of India (IDBI) b) Life
insurance corporation of India (LIC)
25. How many stock exchanges are there
in India?
Ans: There are 24 recognised stock exchanges in India. Whereas at
national level there are two major stock exchange. These are: a) NSEI and b)
OTCEI.
26. Name two advisory committees set
up by SEBI.
Ans: a) Primary market Advisory committee. b) Secondary market
advisory committee.
27. Mention some specific features of
Treasury bills.
Ans: Treasury bill: It is also known as zero coupon bonds as no
interest is paid.
28. Name two buyers of Commercial
paper.
Ans: a) Banks b) Insurance companies.
29. What is meant by “Near Money?”
Ans: All very short term securities are called near money for e.g.
marketable securities.
30. What is price rigging?
Ans: It refers to the manipulation of prices of the securities by
agents/company for their own profits.
31. On what lines was OTCEI started?
Ans: It was started on the lines of NASDAQ (National Association
of securities Dealers Automated Quotation)
32. Name the system where there is
electronic book entry form of holding and transferring the securities.
Ans: Dematerialisation.
33. What is ‘Demutualisation of
securities?’
Ans: It separates the ownership and control of stock exchanges
from trading rights.
34. State four features of Commercial
paper.
Ans: a) Commercial paper is
debt instrument issued for a period of 15 days to one year
b) These are issued in the form of unsecured
promissory note.
c) These are transferable by mere endorsement
and delivery.
d) These are issued by large and creditworthy
companies.
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ALSO READ (AHSEC ASSAM BOARD CLASS 12)
1. AHSEC CLASS 12 BUSINESS STUDIES CHAPTERWISE NOTES
2. AHSEC CLASS 12 BUSINESS STUDIES QUESTION PAPERS (FROM 2012 TILL DATE)
3. AHSEC CLASS 12 BUSINESS STUDIES SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)
4. AHSEC CLASS 12 BUSINESS STUDIES IMPORTANT QUESTIONS
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35. State three features of Treasury
bills.
Ans: a) Treasury bills are instruments of money market issued by
the Government of India. They are freely transferable.
b) They are issued in the multiples of 25000.
c) These are in the form of Zero coupon bond
that is issued at a discount redeemable at par. No interest is given on such
securities.
36. What is Sensex and Nifty?
Ans: Sensex: It is a Market Capitalisation Weighted index of 30
stocks representing a sample of large, well-established and financially sound
companies. It is the oldest index in India.
Nifty: It is diversified weighted index of 50 stock from 23
sectors of the economy. It is used for benchmarking fund portfolios, index
based derivatives and index funds.