This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is the first commercial bank in India to launch a mutual fund? A) Canara Bank. B) Bank of India. C) SBI. D) HDFC. Show Answer Correct Answer: C) SBI. 2. Which of the following is NOT one of the benefits of investing in an online brokerage firm? A) Cheaper/less fees. B) Easier to navigate/understand. C) Advice from stockbrokers. D) None of above. Show Answer Correct Answer: C) Advice from stockbrokers. 3. How many companies comprise the Bombay Stock Exchange 'Sensex'? A) 30. B) 20. C) 40. D) 50. Show Answer Correct Answer: A) 30. 4. Which of the following is NOT a function of a Central Bank? A) Issue notes and coins. B) Ensure financial stability. C) Lender of last resort to government and financial institutions. D) Implement fiscal policy. Show Answer Correct Answer: D) Implement fiscal policy. 5. The difference between the price the corporation gets and the public offering price is called the broker-dealer spread. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 6. NBFC does not Include A) Agriculture activity. B) Sale of Immovable property. C) Industrial Activity. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. Which committee of the Bank of England is responsible for promoting good practice and setting standards for operations for individual firms? A) Financial Policy Committee. B) Prudential Regulatory Authority. C) Financial Conduct Authority. D) None of above. Show Answer Correct Answer: B) Prudential Regulatory Authority. 8. Which of these is NOT part of the Bank of England? A) FCA. B) PRA. C) FPC. D) None of above. Show Answer Correct Answer: A) FCA. 9. ..... formal contract to repay borrowed money and interest on the borrowed money at regular future intervals A) Savings. B) Equities. C) Bond. D) Futures contract. Show Answer Correct Answer: C) Bond. 10. When the expected return is lower than the required return, investors should sell the asset. A) True. B) False. Show Answer Correct Answer: A) True. 11. Trading procedure on a stock exchange. Which the correct order of steps below:-1.Placing an order2. Opening Demat Account3. Selecting a broker4.Settlement of transaction5. Executing the order A) 1, 2, 3, 5, 4. B) 1, 3, 4, 2, 5. C) 2, 1, 3, 5, 4. D) 3, 2, 1, 5, 4. Show Answer Correct Answer: D) 3, 2, 1, 5, 4. 12. Which of the following is not a part of capital market? A) Bank. B) RBI. C) Stock Exchange. D) Financial Institutions. Show Answer Correct Answer: B) RBI. 13. What is crucially provided by central banks to help them achieve their objective of financial stability? A) Supply of workers. B) Liquidity insurance. C) Worker insurance. D) Capital insurance. Show Answer Correct Answer: B) Liquidity insurance. 14. Which of the following organization is the regulator of mutual funds in India A) CRISIL. B) SEBI. C) AMFI. D) RBI. Show Answer Correct Answer: B) SEBI. 15. Plunging oil prices is an example of which of the following types of investment risk? A) Inflation risk. B) Political risk. C) Company risk. D) Industry risk. Show Answer Correct Answer: D) Industry risk. 16. Type of financial security which have linked payoff to another issued security is classified as A) Derivative security. B) Linked security. C) Payable security. D) Non-issuing security. Show Answer Correct Answer: A) Derivative security. 17. The main difference between ETF and Mutual fund is: A) ETF is active while Mutual fund is a passive instrument. B) Mutual fund can be traded like a stock while ETF can't be traded. C) ETF is traded real time in exchanges while mutual fund is not. D) None of the above. Show Answer Correct Answer: C) ETF is traded real time in exchanges while mutual fund is not. 18. Which of the following is the method of collecting capital? A) Public Issue. B) Offer for Sale. C) Private Placement. D) All the above. Show Answer Correct Answer: D) All the above. 19. The "Red Flags Rule" mandates that companies must disclose data breaches to customers, protects consumer data, prevents fraud and identity theft, and ensures training and compliance A) True. B) False. Show Answer Correct Answer: A) True. 20. The objectives of SEBI include A) To protect interests of inventors. B) To regulate securities market. C) To promote the development of the market. D) All of the above. Show Answer Correct Answer: D) All of the above. 21. In which of the companies will you expect a high asset turnover: A) Retail companies. B) Infrastructure companies. C) Power companies. D) Heavy machinery companies. Show Answer Correct Answer: A) Retail companies. 22. What does "FINRA" stand for? A) Federal Insured Regulatory Advisory. B) Financial Industry Regulatory Authority. C) Federal Institute for Religious Authority. D) None of the Answers are Correct. Show Answer Correct Answer: B) Financial Industry Regulatory Authority. 23. Which of the following is an advantage of a 401(k) plan? A) You may withdraw funds at any time without penalty. B) Your contributions are invested in high-return, high-risk fund. C) You never pay taxes on your contributions. D) Most employers match a portion of your contributions. Show Answer Correct Answer: D) Most employers match a portion of your contributions. 24. What is the minimum amount that can be invested in Treasury Bills? A) 15000. B) 20000. C) 10000. D) 25000. Show Answer Correct Answer: D) 25000. 25. The minimum period till which an equity investment must be retained in order to qualify as Long Term is: A) 1 year. B) 2 year. C) 3 year. D) 4 year. Show Answer Correct Answer: A) 1 year. 26. A bank pays 7% interest on its 1-year deposit. The Price-to-earning ratio of the FD is: A) 15.28. B) 14.00. C) 7. D) 14.28. Show Answer Correct Answer: D) 14.28. 27. Which of the following is the supply side of finance? A) Financial Institutions. B) Insurance Companies. C) Financial Institutions and Insurance Companies. D) Industry. Show Answer Correct Answer: C) Financial Institutions and Insurance Companies. 28. What is owned by stockholders and operated for profit? A) Commercial Bank. B) Mutual Savings Bank. C) Credit Union. D) Savings and loan association. Show Answer Correct Answer: A) Commercial Bank. 29. Regulator of Secondary market is A) PFRDA. B) IRDAI. C) SEBI. D) RBI. Show Answer Correct Answer: C) SEBI. 30. FINRA regulates: A) Investment Bankers. B) Financial Advisors. C) Stock Brokers. D) All Options are Correct. Show Answer Correct Answer: D) All Options are Correct. 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