This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. It is the number assigned to each transaction by the Stock Exchange and is printed on the contract note. A) PAN number. B) Unique order code. C) Contract note. D) None of the above. Show Answer Correct Answer: B) Unique order code. 2. Which of the following is included in the financial assets? A) Shares. B) Debentures. C) Treasury bill. D) All the above. Show Answer Correct Answer: D) All the above. 3. Shares of stock from a variety of companies that you own are called? A) Dividend. B) Portfolio. C) Commission. D) Diversity. Show Answer Correct Answer: B) Portfolio. 4. Moral Hazard occurs where ..... A) An economic agent takes excessive risks in the knowledge that they are insured or the government will protect them from any damages which arise as a result of taking those risks. B) An economic agent takes excessive risks in the knowledge that they are not insured or the government will not protect them from any damages which arise as a result of taking those risks. C) An economic agent takes limited risks in the knowledge that they will be profitable. D) An economic agent takes no risks in the knowledge that they are uninsured or the government will not protect them from any damages which arise as a result of taking risks. Show Answer Correct Answer: A) An economic agent takes excessive risks in the knowledge that they are insured or the government will protect them from any damages which arise as a result of taking those risks. 5. Under this method of floatation in the primary market, a subscription is invited from the general public to invest in the securities of a company through the issue of advertisement. A) Private placement. B) Offer through prospectus. C) Offer for sale. D) All of the above. Show Answer Correct Answer: B) Offer through prospectus. 6. Jayant is holding a hundred shares of a company. He has been given a privileged offered to subscribe to a new issue of shares of the same company in the proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case. A) Private placement. B) Offer for sale. C) Rights issue. D) Offer through prospectus. Show Answer Correct Answer: C) Rights issue. 7. Junk bonds usually have low ratings because ..... A) They are a high-risk investment. B) They have a low risk of default. C) They are not risky investments. D) They have a low rate of return. Show Answer Correct Answer: A) They are a high-risk investment. 8. Primary market is also called as A) Indirect Market. B) Secondary market. C) New Issue Market. D) Money market. Show Answer Correct Answer: C) New Issue Market. 9. On this day, the exchange will deliver the share or make payment to the other broker A) Pay-in day. B) Pay-out day. C) Transaction day. D) None of the above. Show Answer Correct Answer: B) Pay-out day. 10. Which committee of the Bank of England is responsible for identifying, monitoring and reducing systemic risks to the financial system? A) Financial Policy Committee. B) Prudential Regulatory Authority. C) Financial Conduct Authority. D) None of above. Show Answer Correct Answer: A) Financial Policy Committee. 11. Which of the following statements is not true with regard to stock exchange? A) It provides a platform for buying and selling of new securities. B) It curbs the marketability of the securities. C) By providing a ready market, it extends liquidity to the securities. D) It provides a platform for buying and selling of old securities.'. Show Answer Correct Answer: B) It curbs the marketability of the securities. 12. Which of the following financial organizations specializes in buying installment contracts from merchants who sell on credit? A) An insurance company. B) A bank. C) A finance company. D) A credit union. Show Answer Correct Answer: C) A finance company. 13. A marketable document of title to a time deposit for a specified period may be referred to as a ..... A) Government Securitites. B) Commercial Bill. C) Certificate of Deposit. D) Treasury Bill. Show Answer Correct Answer: C) Certificate of Deposit. 14. The type of market in which securities with less than one-year maturity is traded, is classified as: A) Transaction Market. B) Capital Market. C) Global Market. D) Money Market. Show Answer Correct Answer: D) Money Market. 15. A sinking fund contains funds set aside by the issuer of a bond to pay for the redemption of the bond when it matures. A) True. B) False. Show Answer Correct Answer: A) True. 16. Suppose that many big corporations decide not to issue bonds, since it is now too costly to comply with new financial market regulations. What is the expected effect on interest rates? A) Interest rates might rise. B) Interest rates might fall. C) No change in interest rates. D) None of above. Show Answer Correct Answer: A) Interest rates might rise. 17. ..... is a part of money market. A) Equity share. B) Preference share. C) Commercial Bill. D) Debentures. Show Answer Correct Answer: C) Commercial Bill. 18. Financial markets exist to A) Allocate scarce financial resources. B) Bring borrowers and lenders together. C) Price bonds, shares and currencies. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. When a trade bill is accepted by a commercial bank, it is known as a ..... A) Commercial Bill. B) Call money. C) None of these. D) Certificate of deposit. Show Answer Correct Answer: A) Commercial Bill. 20. Identify the method of floatation in Primary Market:Karro Limited has decided to sell its entire new issue of shares to a mutual funds company. A) Offer through Prospectus. B) Rights issue. C) Private Placement. D) Offer for Sale. Show Answer Correct Answer: C) Private Placement. 21. Which of the following cannot be called as a debt instrument as referred to in financial transactions? A) Certificate of deposit. B) Stocks. C) Bonds. D) Loans. Show Answer Correct Answer: D) Loans. 22. Which component is not a part of capital market? A) Insurance Market. B) Debt Market. C) Equity Market. D) Derivative Market. Show Answer Correct Answer: A) Insurance Market. 23. Two companies operating in the same sector are trading at different PE ratio. While one is trading at a PE ratio of 8 the other is trading at a PE ratio of 45. The most likely reason for the later company to trade at a PE of 45 can be: A) The company is expected to grow at a much faster pace than the former company. B) The company is much profitable than the former company. C) The company is much efficient than the former company. D) The company sales are much larger than the former company. Show Answer Correct Answer: A) The company is expected to grow at a much faster pace than the former company. 24. Inter bank fund requirement in the short run is met by A) Certificate of deposit. B) Call money. C) Treasury bill. D) Commercial bill. Show Answer Correct Answer: B) Call money. 25. When Mr. McFall gets paid, he knows he doesn't have to spend it all at once because money is A) Standard of Value. B) Medium of Exchange. C) Store of Value. D) Fiat money. Show Answer Correct Answer: C) Store of Value. 26. Which of the following IS NOT a function of FINANCIAL MANAGEMENT? A) Maximizes shareholders' wealth. B) Acquire assets for operations. C) Determines the company's current share price. D) Raise capital to purchase assets. Show Answer Correct Answer: C) Determines the company's current share price. 27. Components of Indian Financial System A) Financial markets. B) Financial services. C) Financial instruments. D) All of the above. Show Answer Correct Answer: D) All of the above. 28. Which is the major part of financial system? A) Financial market. B) Financial institutions. C) Financial securities. D) All of above. Show Answer Correct Answer: D) All of above. 29. Present Commerce Minister of India A) Arun Jaitley. B) Rajnadh Singh. C) Piyush Goyal. D) Nirmala Sitharaman. Show Answer Correct Answer: C) Piyush Goyal. 30. To meet floatation cost, firms generally issue the following instrument of moneymarket. A) Call Money. B) Commercial Paper. C) Treasury Bill. D) Commercial Bill. Show Answer Correct Answer: B) Commercial Paper. ← 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 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