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Financial Market Question Bank

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Financial Market Question Bank

 

MCQs based on CBSE Sample Papers

Read the following statements carefully:

Statement I: Secondary Market directly promotes capital formation.

Statement II: Capital market deals in medium and long term securities such as equity shares and debentures.

In the light of given statements, choose the correct alternative from the following:

  1. Both the statements are true.
  2. Both the statements are false.
  3. Statement I is true, Statement II is false.
  4. *Statement II is true, Statement I is false.

 

SEBI calls for information and issues a show cause notice to stock exchange and its officials seeking explanation and conducting audit and enquiry. Which function is SEBI performing?

  1. *Regulatory function
  2. Development function
  3. Protective function
  4. Both 1 and 3

 

The allocative function of Financial market helps in ________

  1. Bringing transparency in trading procedure
  2. *Earning higher rate of return to household sector
  3. Better functioning of depository
  4. Determining the prices of securities

 

STATEMENT I: Electronic holdings can be converted into physical certificates with the process of dematerialization.

STATEMENT II: There is no danger of theft, loss or forgery of share certificates in dematerialization.

Choose the correct option from the following:

  1. Statement I is true and II is false
  2. *Statement II is true and I is false
  3. Both the statements are true
  4. Both the statements are false

 

__________ is a number assigned to each transaction by the stock exchange and is printed on the contract note.

  1. Client code number
  2. *Unique order code
  3. Permanent account number
  4. Depository participant number.

 

Which of the following statements is incorrect?

  1. Providing liquidity to securities is one of the functions of stock exchange
  2. Process of holding shares in electronic form is known as Dematerialization
  3. *Securities Exchange Board of India performs the regulatory function of controlling insider trading and imposing penalties for such practices.
  4. Capital market consists of Commercial banks, Development banks and stock exchange.

 

Arrange the steps involved in trading procedure at the stock exchange in correct sequence:

i) Settlement of order

ii) Opening of Demat Account

iii) Placing of order

iv) Execution of order

  1. a) (ii) ; (iv);( iii);(i)
  2. b) (ii) ;(i) ;(iii);(ii)
  3. c) (iii);(ii);( ii);(i)
  4. *d) (ii);(iii);(iv);(i)

 

The Finance Manager of Tele Pharma Limited, Mr Gupta wants to raise funds through debt or equity to the extent of ₹2 crores.
For this purpose, he approaches a well-regulated financial market that facilitates the mobilisation of long-term capital for companies. Identify the market where Mr Gupta can raise the funds.
1. Money market
2. Secondary market
3. *Capital market
4. Wholesale debt market

 

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