Chapter Exam

Chapter 1: Financial Markets — Online MCQ Test

Q: Which of the following is a function of the financial market?

Answer: B. Mobilising savings — One important function of financial markets is to mobilise savings from the public and channel them into productive investment.

Q: A company issues shares for the first time to the public through:

Answer: A. Primary market — In the primary market, securities are issued for the first time directly by the company to investors.

COMMERCE · CLASS 12 INTERMEDIATE 2 YEAR · Telangana State Board

Practice Chapter 1: Financial Markets with a free chapter-wise online MCQ test for Telangana State Board CLASS 12 INTERMEDIATE 2 YEAR COMMERCE. This chapter covers: This chapter covers financial market concepts money market capital market primary secondary markets financial instruments and the regulatory role of SEBI.. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 1: Financial Markets — Important Questions & Answers (FAQ)

Frequently asked questions from Telangana State Board CLASS 12 INTERMEDIATE 2 YEAR COMMERCE — Chapter 1: Financial Markets, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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.

Next Chapter →

Chapter 2: Stock Exchange