This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Stock price where it will be sold if all investors had information. A) Intrinsic price. B) Market price. C) Equilibrium price. D) Option price. Show Answer Correct Answer: A) Intrinsic price. 2. Securities Exchange Board of India (SEBI) was established in ..... A) 1956. B) 2001. C) 1988. D) 1984. Show Answer Correct Answer: C) 1988. 3. The expected rate of return of the money market is ..... A) Very high. B) Less. C) Zero. D) None of the above. Show Answer Correct Answer: B) Less. 4. Tools to reduce the moral hazard problem in debt contracts include A) Collateral and net worth. B) Monitoring and enforcement of restrictive covenants, and financial intermediaries. C) Collateral and net worth, monitoring and enforcement of restrictive covenants, and financial intermediaries. D) None of above. Show Answer Correct Answer: C) Collateral and net worth, monitoring and enforcement of restrictive covenants, and financial intermediaries. 5. It is a method by which bank borrow from each other to be able to maintain the cash reserve ratio. A) Commercial bill. B) Commercial Papers. C) Call money. D) None of the above. Show Answer Correct Answer: C) Call money. 6. Stocks or documents that represent a claim on the income and property of the borrower are known as A) Financial assets. B) Financial intermediaries. C) Mutual funds. D) 401(k) Plans. Show Answer Correct Answer: A) Financial assets. 7. Derivatives increase leverage A) False. B) True. Show Answer Correct Answer: B) True. 8. ..... is the organizations, institutions that provide long term funds. A) Capital market. B) Primary market. C) Secondary market. D) Money market. Show Answer Correct Answer: A) Capital market. 9. Federal funds are not sold by banks to other banks A) False. B) True. Show Answer Correct Answer: A) False. 10. Good currencies are widely accepted by all in exchange for goods and services, eliminating a problem of barter. This enables money to act as ..... A) A medium of exchange. B) A unit of account. C) A store of value. D) None of above. Show Answer Correct Answer: A) A medium of exchange. 11. The types of assets being traded, identified as 'Hard' and 'soft' are representative of ..... market A) Derivative. B) Commodity. C) Share. D) None of the listed options. Show Answer Correct Answer: B) Commodity. 12. What is a financial institution? A) A firm that makes money off of selling products. B) An intermediary that helps channel savings into economic investments. C) A corporation that typically falls into debt. D) A primary source of selling company investment strategy. Show Answer Correct Answer: B) An intermediary that helps channel savings into economic investments. 13. A Treasury Bill is basically: A) An instrument to borrow long term funds. B) An instrument to borrow short term funds. C) An instrument of capital market. D) None of the above. Show Answer Correct Answer: B) An instrument to borrow short term funds. 14. A company can raise capital through the primary market in the form of A) Equity shares. B) Preference shares. C) Debentures. D) All of the above. Show Answer Correct Answer: C) Debentures. 15. Which of the following derivatives provide payoffs that are non-linearly related to the payoffs of the underlying? A) Options. B) Forwards. C) Interest-rate swaps. D) None of above. Show Answer Correct Answer: A) Options. 16. Competition between financial institutions depends on the following criteria EXCEPT A) Profitability. B) Growth. C) Degree of risk. D) Interest rate. Show Answer Correct Answer: D) Interest rate. 17. Some of the key elements in the financial markets are A) Lenders and borrowers. B) Financial Intermediaries. C) Financial instruments. D) All of the mentioned options. Show Answer Correct Answer: D) All of the mentioned options. 18. Money market deals in ..... A) Medium-term securities. B) Short term Securities. C) Long term Securities. D) None of these. Show Answer Correct Answer: B) Short term Securities. 19. Which of the following has the highest risk? A) Fixed deposits. B) Treasury bonds. C) Stocks. D) Bonds (or sukuk). Show Answer Correct Answer: C) Stocks. 20. ..... the dollars that become available for investors to use when others refrain from consuming A) Bond. B) Risk. C) Savings. D) Equities. Show Answer Correct Answer: C) Savings. 21. ..... a market in which financial capital is loaned and/or borrowed for at least one year A) Secondary market. B) Financial system. C) Capital market. D) Primary market. Show Answer Correct Answer: C) Capital market. 22. The following are barriers to global integration EXCEPT A) Excessive cost of executing international transactions. B) Different accounting regulation. C) Lack of information about foreign companies. D) Price changes in response to supply and demand. Show Answer Correct Answer: D) Price changes in response to supply and demand. 23. Through which method of floatation companies allots securities to institutional investors and selected individuals. A) Private Placement. B) Offer for sale. C) Right issue. D) E-IPO's. Show Answer Correct Answer: A) Private Placement. 24. With reference to the capital markets of India, pick the incorrect statement from the following: A) Capital Markets provide funds for projects in backward areas. B) Capital markets make possible to generate foreign capital. C) The existence of a stock exchange enables companies to raise permanent capital. D) Intermediaries include various entities such as MCX-SX, BSE, NSE, other regional stock exchanges. Show Answer Correct Answer: D) Intermediaries include various entities such as MCX-SX, BSE, NSE, other regional stock exchanges. 25. Financial Market is classified into A) Organized and unorganized market. B) Regulatory and non-regulatory market. C) Reformatory and non-reformatory market. D) Controlled and uncontrolled Market. Show Answer Correct Answer: A) Organized and unorganized market. 26. How many times a security can be sold in a secondary market? A) Multiple Times. B) Only one Time. C) Three Times. D) Two time. Show Answer Correct Answer: A) Multiple Times. 27. The most commonly used multiple to value banks: A) Price to Book. B) Price to Sales. C) EV to EBITDA. D) Price to Earnings. Show Answer Correct Answer: A) Price to Book. 28. Type of funds which is managed by an institution from shareholders, pools them to be invested in securities A) Exchange-traded fund. B) Insurance fund. C) Mutual fund. D) Pension fund. Show Answer Correct Answer: C) Mutual fund. 29. What type of instruments are traded in a Money Market? A) Call money. B) Treasury bills. C) Commercial bills. D) All of the above. Show Answer Correct Answer: D) All of the above. 30. Which product is most likely to have a higher fee: A) Index fund. B) Passive fund. C) Regular mutual fund. D) Direct mutual fund. Show Answer Correct Answer: C) Regular mutual fund. ← 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 8Financial Markets And Institutions Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books