NCERT Class 12 Business Studies MCQ Questions Financial Markets with Answers are regarded as an extremely helpful book while preparing for the CBSE Class 12 Business Studies examinations. This study material owns a deep knowledge and the Solutions collected by the subject matter wizards are no different.

MCQ Questions for Class 12 Business Studies– Financial Markets provides us a comprehensive introduction to all the concepts. It provides a clear picture of what is the  Financial Market and how it has functioned. Free Online MCQ Questions for Class 12 Business Studies with Answers was Prepared Based on Latest Exam Pattern and Syllabus. Students can solve the Important MCQ Questions with Answers to know their preparation level.

1. Which one of the following is not a function of financial market?

(a) Mobilization of savings
(b) Price determination of securities
(c) Floating of companies
(d) Lowering transaction cost

2. Which one of the following is a money market instrument?

(a) Unit of mutual fund
(b) Debenture
(c) Bond
(d) Treasury bill

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.

4. Secondary market is in the form of

(a) stock exchange.
(b) money market
(c) new issue market.
(d) commercial exchange

5. SEBI is a regulator of

(a) capital market.
(b) money market
(c) commodity market.
(d) overseas market

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

7. 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.

8. 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.

9. 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.

10. 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.

11. Which of the following statements is not true with regard to primary market?

(a) Is also known as the old issues market.
(b) It facilitates the transfer of investible funds from savers to entrepreneurs.
(c) It deals with new securities being issued for the first time.

(d) It facilitates the transfer of investible funds from savers to entrepreneurs.

12. Which of the following statements is not true with regard to capital market?

(a) The funds are raised for a short period of time.
(b) Both debt and equity funds can be raised.
(c) It is classified into two types.
(d) All of the above.

13. _______ 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

14. 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

15.__________ is the organisations, institutions that provide long term funds.

(a) Capital market
(b) Money market
(c) Primary market
(d) Secondary market

16. 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

17. Stock exchange is known as __________ market for securities.

(a) Primary market
(b) Secondary market
(c) Capital market
(d) None of the above

18. _________ is a market for lending & borrowing of short term funds.

(a) Money market
(b) Primary market
(c) Capital market
(d) All of the above

19. ____________ is also called zero coupon bond.

(a) Trade bills
(b) Call money
(c) Treasury bills
(d) Commercial papers

20. 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

21. Primary and secondary markets:

(i) Control each other
(ii) Complement each other
(iii) Compete with each other
(iv) Function independently

22. The settlement cycle in NSE is

(i) T+5
(ii) T+3
(iii) T+2
(iv) T+1

23. NSE commenced futures trading in the year:

(i) 1999
(ii) 2000
(iii) 2001
(iv) 2002

24. Secondary market is in the form of

(i) stock exchange.
(ii) money market
(iii) new issue market.
(iv) commercial exchange

25. Which of the following statements is not true with regard to Commercial paper?

(i) Is a long-term unsecured promissory note with a fixed maturity period
(ii) It usually has a maturity period of 15 days to one year.
(iii) It is sold at a discount and redeemed at par.
(iv) Companies use this instrument for bridge financing.

Answer:

1. Answer (c) Floating of companies

2. Answer (d) Treasury bill

3. Answer (a) complement each other.

4. Answer (a) stock exchange.

5. Answer (a) capital market.

6. Answer (b) Commercial paper

7. Answer (b) It is situated at specific locations.

Explanation: (b) it has no physical locations

8. Answer (c) They carry high risk of default.

(c) they carry no risk of default

9. Answer (a) Is a long-term unsecured promissory note with a fixed maturity period.

Explanation: (a) it is a short-term instrument

10. Answer (c) There is a direct relationship between call rates and other short-term money market instruments.

Explanation: (c) There is an inverse relationship between call rates and other short-term money market instruments

11. Answer  (a) Is also known as the old issues market.

Explanation: (a) it is a new issue market

12. Answer (a) The funds are raised for a short period of time.

Explanation: (a) it deals in long term funds

13. Answer (b) Financial market

14. Answer (d) All of the above

15. Answer (a) Capital market

16. Answer (c) Private placement

17. Answer (b) Secondary market

18. Answer (a) Money market

19. Answer (c) Treasury bills

20. Answer (d) All of the above

21. Answer (ii) Complement each other

22. Answer (iii) T+2

23. Answer (ii) 2000

24. Answer (i) stock exchange.

25. Answer (i) Is a long-term unsecured promissory note with a fixed maturity period