This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which committee of the Bank of England is responsible for protecting consumers from unfair practices? A) Financial Policy Committee. B) Prudential Regulatory Authority. C) Financial Conduct Authority. D) None of above. Show Answer Correct Answer: C) Financial Conduct Authority. 2. Money market deals in ..... securities. A) Short-term. B) Long-term. C) Short-term and long-term. D) Mid-term. Show Answer Correct Answer: A) Short-term. 3. Assuming an efficient market with no surprise information, the most likely impact on the share price of a company after paying dividend will be: A) The price must increase irrespective of the divided paid or not. B) The price of the share must remain unchanged. C) The price of the share must decrease by the same amount of dividend paid. D) The price of the share must increase by the same amount of dividend paid. Show Answer Correct Answer: C) The price of the share must decrease by the same amount of dividend paid. 4. Sensex is dependent on..... companies. A) 30. B) 500. C) 50. D) 100. Show Answer Correct Answer: A) 30. 5. What is the equation for the Quantity Theory of Money? A) MV=PT. B) XM=PY. C) XY=ZY. D) QV=PM. Show Answer Correct Answer: A) MV=PT. 6. Stock Exchange works as a mechanism for valuation of securities through the forces ofdemand and supply. Identify the related function of performed by the stock exchanges. A) Providing liquidity and marketability to existing securities. B) Safety of transaction. C) Pricing of security. D) Spreading of equity cult. Show Answer Correct Answer: C) Pricing of security. 7. Unorganized banking sector consist of A) LIC. B) Commercial bank. C) Indigenous bank. D) RRB. Show Answer Correct Answer: C) Indigenous bank. 8. The Bank Secrecy Act requires financial institutions to report suspicious cash transactions over what amount? A) $ 10, 000. B) $ 50, 000. C) $ 100, 000. D) $ 5, 000. Show Answer Correct Answer: A) $ 10, 000. 9. A company operates in a sector characterized with high operating leverage. Which statement describes the sector most appropriately: A) Revenue will increase much faster than expenses. B) Profit will increase much faster than expenses. C) A large part of increase in revenue will translate into increase in profit. D) None of the above. Show Answer Correct Answer: C) A large part of increase in revenue will translate into increase in profit. 10. Which two investments are at opposite ends of the risk spectrum? A) Treasury notes and futures. B) Savings bonds and Treasury notes. C) Equities and futures. D) Equities and futures. Show Answer Correct Answer: A) Treasury notes and futures. 11. The safest instrument of money market is A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: C) Treasury Bill. 12. Each purchase occurring in the secondary markets increases the total stock of financial assets that exist in the economy. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 13. Participants in the capital market includes A) Individuals. B) Corporate. C) Financial Institutions. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. What is the name of the fee paid for an insurance policy? A) Interest. B) Premium. C) Pension. D) Contribution. Show Answer Correct Answer: B) Premium. 15. Unsecured money market instrument A) Commercial bill market. B) Treasury bill. C) Commercial paper. D) Certificate of deposit. Show Answer Correct Answer: C) Commercial paper. 16. If a firm requires to two crores for six months time to keep the stock of raw material, it should approach(a) (b) (c) (d) A) Money market. B) Capital market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Money market. 17. Financial services includes A) Call money market. B) Bill market. C) Leasing. D) None of the above. Show Answer Correct Answer: C) Leasing. 18. If you can make abnormal profits (after costs and risks) by investing in stocks using fundamental analysis, it means that the market is ..... A) Semi-strong form inefficient. B) Semi-strong form efficient. C) Weak form efficient. D) Weak form inefficient. Show Answer Correct Answer: A) Semi-strong form inefficient. 19. Common stockholders are also known as residual claimants. A) False. B) True. Show Answer Correct Answer: B) True. 20. Which among the following is NOT considered a financial institution? A) Credit cooperatives. B) Remittance centers. C) Revolving funds associations. D) Foreign exchange units. Show Answer Correct Answer: C) Revolving funds associations. 21. Money market deals with ..... instruments. A) Long term. B) Medium term. C) Short term. D) All of the above. Show Answer Correct Answer: C) Short term. 22. Capital market do not provide A) Debenture Funds. B) Long term Funds. C) Equity Funds. D) Short term Funds. Show Answer Correct Answer: D) Short term Funds. 23. Sarbanes Oxley was instituted as a direct result of: A) The corporate scandals of Enron, Worldcom, Tyco and others. B) The Recession of the early 2000's. C) The terrorist attacks Sept 11, 2001. D) Democrats taking over both houses of Congress in 2002. Show Answer Correct Answer: A) The corporate scandals of Enron, Worldcom, Tyco and others. 24. Who controls the capital market of India? A) SEBI. B) NABARD. C) RBI. D) IRDA. Show Answer Correct Answer: A) SEBI. 25. Primary assets are A) Bill. B) Bank deposit. C) Mutual fund. D) None of the above. Show Answer Correct Answer: A) Bill. 26. Stocks or shares that are sold to investors without transacting through financial institutions are classified as A) Pension transfer. B) Indirect transfer. C) Direct transfer. D) Global transfer. Show Answer Correct Answer: C) Direct transfer. 27. True or False:Stock values change daily. A) True. B) False. Show Answer Correct Answer: A) True. 28. The short term financial instruments traded in money market is commonly called A) Call Money. B) Certificate of deposits. C) Commercial paper. D) Trade bills. Show Answer Correct Answer: C) Commercial paper. 29. Securities Fraud, also known as Stock or Investment Fraud, involves: A) "Ponzi" or "Pump and Dump" Schemes targeted at investors. B) Insider Trading. C) Misrepresenting information investors use to make decisions. D) All Options are Correct. Show Answer Correct Answer: D) All Options are Correct. 30. Which of the following derivatives is classified as a contingent claim? A) Futures contracts. B) Interest rate swaps. C) Credit default swaps. D) None of above. Show Answer Correct Answer: C) Credit default swaps. ← PreviousNext →Related QuizzesMarkets And Institutions QuizzesFinance QuizzesFinancial Markets And Institutions Quiz 1Financial Markets And Institutions Quiz 2Financial Markets And Institutions Quiz 4Financial Markets And Institutions Quiz 5Financial Markets And Institutions Quiz 6Financial Markets And Institutions Quiz 7Financial Markets And Institutions Quiz 8Financial Markets And Institutions Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books