Chapter Exam

Chapter 7: Stock Exchange — Online MCQ Test

Q: Which of the following is a function of a stock exchange?

Answer: B. Providing liquidity to securities — A stock exchange provides liquidity by making it easy to buy and sell securities quickly.

Q: A person buys shares with the intention of selling them at a higher price after a short period. Such a person is called a:

Answer: B. Speculator — A speculator buys and sells securities mainly to gain from short-term price changes.

Q: A shareholder wants to sell shares quickly without searching for a buyer personally. Which stock exchange feature helps most in this situation?

Answer: A. Liquidity — Liquidity means securities can be converted into cash quickly through active market trading.

COMMERCE · CLASS 12th · Tamil Nadu State Board

Practice Chapter 7: Stock Exchange with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 12th COMMERCE. This chapter covers: Focusing on secondary markets this chapter details stock exchange history features functions and stakeholder benefits. Students examine Indian stock exchanges speculator categories.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 7: Stock Exchange — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 12th COMMERCE — Chapter 7: Stock Exchange, with answers and explanations. These are sample questions; the exam has its own separate question set.

What is a stock exchange?

A. A place where agricultural goods are sold directly to consumers
B. An organized market for buying and selling securities ✓
C. A government office that issues currency notes
D. A market only for buying raw materials

Answer: B. An organized market for buying and selling securities
A stock exchange is an organized market where shares, debentures, and other securities are traded.

Which of the following is a function of a stock exchange?

A. Printing new share certificates
B. Providing liquidity to securities ✓
C. Fixing the income tax rate
D. Approving industrial licenses

Answer: B. Providing liquidity to securities
A stock exchange provides liquidity by making it easy to buy and sell securities quickly.

A person buys shares with the intention of selling them at a higher price after a short period. Such a person is called a:

A. Investor
B. Speculator ✓
C. Debtor
D. Broker

Answer: B. Speculator
A speculator buys and sells securities mainly to gain from short-term price changes.

A shareholder wants to sell shares quickly without searching for a buyer personally. Which stock exchange feature helps most in this situation?

A. Liquidity ✓
B. Monopoly
C. Lack of regulation
D. Price secrecy

Answer: A. Liquidity
Liquidity means securities can be converted into cash quickly through active market trading.

Which of the following is the most appropriate statement about recent market innovations in stock exchange trading?

A. Trading is now done only by physical presence in the trading ring
B. Electronic trading systems have replaced open outcry methods in many exchanges ✓
C. Shares can be traded only after printing fresh certificates every time
D. Stock exchange transactions are not recorded anywhere

Answer: B. Electronic trading systems have replaced open outcry methods in many exchanges
Modern exchanges use electronic trading platforms, which improve speed, transparency, and efficiency.