[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.
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.
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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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