This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The SEC was created in response to what event? A) WWI. B) The Stock Market Crash of 1929. C) President Roosevelt's New Deal. D) Creation of the New York Stock Exchange. Show Answer Correct Answer: B) The Stock Market Crash of 1929. 2. What is the primary role of the Securities Exchange commission? A) To protect investors. B) To establish interest rates. C) To manage the national economy. D) To ensure the money supply. Show Answer Correct Answer: A) To protect investors. 3. An ideal Capital market is one A) Where market operations are inconsistent. B) Must provide insufficient information to investors. C) Which facilitates economic growth. D) Where finance is available at higher cost. Show Answer Correct Answer: C) Which facilitates economic growth. 4. All the following companies can be categorized as having a high operating leverage EXCEPT: A) Asset Management Companies. B) Brokerage Firms. C) Registrar and Transfer Agents. D) FMCG. Show Answer Correct Answer: D) FMCG. 5. Below are all types of return except: A) Actual return. B) Expected return. C) Required return. D) Possible return. Show Answer Correct Answer: D) Possible return. 6. PK Enterprises Limited has sold an entire lot of 5, 00, 000 equity shares @ ₹ 9 each to Prosperous Bank Private Limited. The bank, in turn, will offer the shares to the general public for subscription @ ₹ 11 per share. Identify the method of floatation being described in the given lines. A) Offer for sale. B) Rights issue. C) Private placement. D) Offer through prospectus. Show Answer Correct Answer: A) Offer for sale. 7. Liquidity can best be described as ..... A) Long term assets. B) The speed and ease with which an asset can be converted to cash without losing value. C) Any asset with value. D) Cash, bank deposits and shares. Show Answer Correct Answer: B) The speed and ease with which an asset can be converted to cash without losing value. 8. In primary markets, first time issued shares to be publicly traded, in stock markets is considered as A) Issuance offering. B) Initial public offering. C) Public markets. D) Traded offering. Show Answer Correct Answer: B) Initial public offering. 9. This term refers to facilities through which debt and equity are raised A) Money market. B) Capital market. C) Treasury market. D) Call market. Show Answer Correct Answer: B) Capital market. 10. What kind of fund collects and invests income for later payments to eligible recipients? A) Credit union fund. B) Pension fund. C) Mutual fund. D) Insurance fund. Show Answer Correct Answer: B) Pension fund. 11. ..... stocks that represent ownership shares in corporations A) Secondary market. B) Futures contract. C) Capital market. D) Equities. Show Answer Correct Answer: D) Equities. 12. Which of the following takes advantage of the internal trading? A) All shareholders. B) All Debentureholders. C) People having secret information of the company. D) All the employees. Show Answer Correct Answer: C) People having secret information of the company. 13. Type of markets where the exchange is made with an agreement to buy or sell a particular commodity or security at a predetermined price at a specified time in the future. A) Commodity market. B) Derivatives market. C) Futures market. D) Spot market. Show Answer Correct Answer: C) Futures market. 14. Which of the following is NOT a feature of speculation in financial markets? A) Arbitrage. B) Asset price bubbles. C) Herding behaviour. D) Profit. Show Answer Correct Answer: D) Profit. 15. The FPC is primarily responsible for ..... A) Macro-prudential regulation. B) Micro-prudential regulation. Show Answer Correct Answer: A) Macro-prudential regulation. 16. Commercial bills market is a part of A) Organised money market. B) Unorganised money market. C) Stock market. D) Capital market. E) None of the above. Show Answer Correct Answer: A) Organised money market. 17. A company sells its product on credit. Select the correct statement. A) Such sales will not impact the company's profit and loss statement. B) Such sales will appear as liability in the company's balance sheet. C) Such sales will appear as asset in the company's balance sheet. D) Such sales will impact the cash flow statement. Show Answer Correct Answer: C) Such sales will appear as asset in the company's balance sheet. 18. Exchange markets and over counter markets are considered as two types of A) Primary market. B) Secondary market. C) Floating market. D) Risky market. Show Answer Correct Answer: B) Secondary market. 19. Ram Enterprise wishes to invest ₹ 1, 10, 000 in treasury bills. What is the maximum number of treasury bills it can buy with this fund? A) 2. B) 6. C) 7. D) 4. Show Answer Correct Answer: D) 4. 20. This money market instrument is used by banks to maintain their cash reserve ratio A) Commercial paper. B) Call money. C) Certificate of deposit. D) Commercial bill. Show Answer Correct Answer: B) Call money. 21. 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) Most trading is through centralized exchange. Show Answer Correct Answer: A) The funds are raised for a short period of time. 22. Which of the Following correctly describes the Securities and Exchange Commission? A) A governmental agency hat regulates federal spending. B) A private commission that exchanges money. C) A federal agency that maintains fair and efficient markets. D) An Interest group that lobbies for regulations in economics. Show Answer Correct Answer: C) A federal agency that maintains fair and efficient markets. 23. Which one of the following types of securities has no priority in a bankruptcy proceeding? A) Senior debt. B) Straight bond. C) Convertible bond. D) Common stock. E) Preferred stock. Show Answer Correct Answer: D) Common stock. 24. While the SEC and FINRA both share the role of protecting investors, key differences between the two include: A) The SEC regulates Security Markets and FINRA regulates Brokers and firms. B) The SEC regulates public corporations only, FINRA deals solely with private companies. C) The SEC is a for-profit organization and FINRA is a non-profit. D) All of the Answers are correct. Show Answer Correct Answer: A) The SEC regulates Security Markets and FINRA regulates Brokers and firms. 25. True or False:Riskier investments can have higher profits, but also greater losses. A) True. B) False. Show Answer Correct Answer: A) True. 26. If the money supply/access to credit was reduced, what would happen to the Price Level? A) Falls/Deflation. B) Rises/Inflation. Show Answer Correct Answer: A) Falls/Deflation. 27. Individuals, corporations, and governments can be either savings deficit units or savings surplus units. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 28. The most important characteristic of money for determining its value is A) How limited it is in supply. B) Durability. C) Homogeneity. D) Portability. Show Answer Correct Answer: A) How limited it is in supply. 29. How many companies are included in the SENSEX of India? A) 25. B) 50. C) 111. D) 30. Show Answer Correct Answer: D) 30. 30. Educating the investor is the ..... function of SEBI. A) Protective. B) Regulatory. C) Both the above. D) Developmental. Show Answer Correct Answer: A) Protective. ← PreviousNext →Related QuizzesMarkets And Institutions QuizzesFinance QuizzesFinancial Markets And Institutions Quiz 1Financial Markets And Institutions Quiz 2Financial Markets And Institutions Quiz 3Financial Markets And Institutions Quiz 4Financial Markets And Institutions Quiz 5Financial Markets And Institutions Quiz 6Financial Markets And Institutions Quiz 7Financial Markets And Institutions Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books