This quiz works best with JavaScript enabled. Home > Finance > Markets And Institutions > Financial Markets And Institutions > Financial Markets And Institutions – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets And Institutions Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Types of Speculators A) Bull. B) Stag. C) Lame Duck. D) Bear. E) All of the above. Show Answer Correct Answer: E) All of the above. 2. A company posted an EPS of ₹ 20 in the financial year 2021-22. The company's EPS is expected to increase by 20% next year, if the company's stock is currently trading at ₹ 100, the forward PE of the company is: A) 5. B) 6. C) 6.17. D) 4.17. Show Answer Correct Answer: D) 4.17. 3. Central banks support financial institutions and governments bailouts failing firms, which leads to ..... A) Moral practices. B) Dukes of Hazzard. C) Moral hazard. D) Laziness. Show Answer Correct Answer: C) Moral hazard. 4. The money invested in the call money market provides high liquidity with ..... A) High Profitability. B) Low Profitability. C) Medium Profitability. D) Limited Profitability. Show Answer Correct Answer: B) Low Profitability. 5. Capital market is a market for A) Short Term Finance. B) Medium Term Finance. C) Long Term Fiance. D) Both Short Term and Medium Term Fiance. Show Answer Correct Answer: C) Long Term Fiance. 6. James Beck is considering purchasing ABC Berhad stocks. What price should he be willing to pay for it (in RM) if the company is expected to pay RM2 dividend in one year and the dividends to grow at 5 percent indefinitely? James requires a 12 percent return for this investment. A) 31.25. B) 38.95. C) 29.33. D) 28.57. Show Answer Correct Answer: D) 28.57. 7. Direct exchange of goods/services for other goods/services is called: A) Money. B) Barter. C) Haggling. D) Liquidity. Show Answer Correct Answer: B) Barter. 8. What are the 2 tasks of the SEC? A) 1. Ensure companies make truthful statements and 2. treat investors honestly. B) 1. Ensure companies selling securities dont own stock in them or 2. work for them. C) 1. Ensure companies do not cheat on their taxes and 2. report all income. D) 1. Ensure companies follow standard accounting practice and 2. expense procedures. Show Answer Correct Answer: A) 1. Ensure companies make truthful statements and 2. treat investors honestly. 9. Some investment banks are so huge they pose systemic risks to the global financial system. A systemic risk refers to ..... A) The possibility that an event at a financial institution could trigger severe instability or collapse an entire industry or economy. B) The possibility that an event at a financial institution could allow for greater growth of an entire industry or economy. C) The possibility that an event at a financial institution could help increase the value of assets for investors. D) A situation where 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. Show Answer Correct Answer: A) The possibility that an event at a financial institution could trigger severe instability or collapse an entire industry or economy. 10. The following statements are true regarding commercial banks EXCEPT A) Are nonprofit organizations. B) The most dominant depository institution. C) Offer a wide variety of deposit accounts. D) Serve both the public and the private sector. Show Answer Correct Answer: A) Are nonprofit organizations. 11. The organisations/institutions that provide long term funds. A) Capital market. B) Secondary market. C) Money market. D) Primary market. Show Answer Correct Answer: A) Capital market. 12. Types of market for intermediate or long-term debt and corporate stocks. A) Derivatives markets. B) Capital markets. C) Stock markets. D) Futures markets. Show Answer Correct Answer: B) Capital markets. 13. The process of holding shares in electronic form is known as A) Demutualisation. B) Dematerialisation. C) Speculation. D) None of the above. Show Answer Correct Answer: B) Dematerialisation. 14. Assume that M/s ABC Limited, a retail company is trading at a Price to sales multiple of 4. After a few quarters a news report appear in a leading financial paper- "M/s ABC Limited gets re-rated." The most likely meaning of the headline is: A) The profit of the company has increased. B) The Price to sales multiple of the company exceeds 4. C) The losses that the company was making has decreased. D) The footfall in company's store has increased. Show Answer Correct Answer: B) The Price to sales multiple of the company exceeds 4. 15. ..... a strategy of holding different kinds of investments to minimize risk A) Risk. B) Futures contract. C) Bond. D) Portfolio diversification. Show Answer Correct Answer: D) Portfolio diversification. 16. Which agency regulates and supervises NBFCs? A) Finance Ministry. B) RBI. C) SEBI. D) Respective state government. Show Answer Correct Answer: B) RBI. 17. Money market instrument issued by the RBI on behalf of Central Govt is A) Commercial paper. B) Treasury bill. C) Call money. D) Commercial bill. Show Answer Correct Answer: B) Treasury bill. 18. Financial market facilitates business firms A) To make more sales. B) To rise funds. C) To recruit workers. D) To minimize fund requirement. Show Answer Correct Answer: B) To rise funds. 19. Money market Institutions are ..... A) Investment Houses. B) Mortgage Banks. C) Reserve Bank of India. D) Commercial Banks and Discount Houses. Show Answer Correct Answer: D) Commercial Banks and Discount Houses. 20. Financial markets and institutions A) Involve the movement of huge quantities of money. B) Affect the profit of business. C) Affect the type of goods and services produced in an economy. D) All of the above. Show Answer Correct Answer: D) All of the above. 21. Money can be described as follows, except: A) Unit of account. B) Ownership of a company. C) Store of value. D) Medium of exchange. Show Answer Correct Answer: B) Ownership of a company. 22. Cost of capital can be divided into three item except; A) Cost of preferred share. B) Cost of debt. C) Cost of common share. D) Cost of investment. Show Answer Correct Answer: D) Cost of investment. 23. Additional measures of bank performance include A) ROA and ROE. B) ROA, ROE and the NIM (net interest margin). C) ROE and the NIM. D) None of above. Show Answer Correct Answer: B) ROA, ROE and the NIM (net interest margin). 24. ..... a situation in which the outcome is not certain, but the probabilities can be estimated A) Bond. B) Portfolio diversification. C) Equities. D) Risk. Show Answer Correct Answer: D) Risk. 25. Transactions in common stock occur in the money market, due to the large amount of money involved in such transactions. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 26. If banks do not have sufficient liquidity of what are they at risk? A) Bankruptcy. B) Insolvency. Show Answer Correct Answer: B) Insolvency. 27. A retail company changes its credit policy. Earlier it used to extend credit for 120 days, however now it extends it for 90 days. The most likely impact on the company's balance sheet will be: A) Trade receivables will increase. B) Cash conversion cycle will decrease. C) Cash conversion cycle will increase. D) Trade payables will increase. Show Answer Correct Answer: B) Cash conversion cycle will decrease. 28. Capital market consist of A) Industrial securities market. B) Government securities market. C) Long term loan market. D) All of the above. Show Answer Correct Answer: D) All of the above. 29. Primary market deals with selling of securities for the first time through the following method A) Investor issue. B) Employee stock issue. C) Bonus declaration method. D) Book building. Show Answer Correct Answer: D) Book building. 30. Which of the following reasons is not responsible for the ups and downs in the Sensex? A) Rain. B) Monetary Policy. C) Political instability. D) None of the above. Show Answer Correct Answer: D) None of the above. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books