Chapter 1: Financial Markets — Online MCQ Test
COMMERCE · CLASS 12 INTERMEDIATE 2 YEAR · Telangana State Board
Practice Chapter 1: Financial Markets with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers financial market concepts money market capital market primary secondary markets financial instruments and the regulatory role of SEBI..
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Chapter 1: Financial Markets — Important Questions & Answers
What is a financial market?
- A. A market where only goods are bought and sold
- B. A market for raising and exchanging financial assets and securities
- C. A market for selling agricultural products only
- D. A market where consumers buy daily-use goods
Answer: B. A market for raising and exchanging financial assets and securities
A financial market is a market for creation and exchange of financial assets like shares, bonds, and deposits. It helps in mobilising savings into investment.
A financial market is a market for creation and exchange of financial assets like shares, bonds, and deposits. It helps in mobilising savings into investment.
Which of the following is a function of the financial market?
- A. Producing industrial goods
- B. Mobilising savings
- C. Setting school curriculum
- D. Providing transport facilities
Answer: B. Mobilising savings
One important function of financial markets is to mobilise savings from the public and channel them into productive investment.
One important function of financial markets is to mobilise savings from the public and channel them into productive investment.
A company issues shares for the first time to the public through:
- A. Primary market
- B. Secondary market
- C. Money market
- D. Call money market
Answer: A. Primary market
In the primary market, securities are issued for the first time directly by the company to investors.
In the primary market, securities are issued for the first time directly by the company to investors.
Why are treasury bills considered a safe instrument in the money market?
- A. They are issued by the government and have short maturity
- B. They are issued only by private companies
- C. They are traded only in the primary market
- D. They are long-term instruments with high risk
Answer: A. They are issued by the government and have short maturity
Treasury bills are government securities with short maturity, making them highly safe and suitable for money market operations.
Treasury bills are government securities with short maturity, making them highly safe and suitable for money market operations.
Which statement is most accurate about SEBI’s role in the securities market?
- A. It only provides loans to companies
- B. It regulates and develops the securities market and protects investors
- C. It prints share certificates for companies
- D. It manages foreign exchange reserves
Answer: B. It regulates and develops the securities market and protects investors
SEBI’s main role is to regulate and develop the securities market and safeguard investor interests. It does not provide loans or manage currency reserves.
SEBI’s main role is to regulate and develop the securities market and safeguard investor interests. It does not provide loans or manage currency reserves.