Financial Market MCQ Questions Class 12 :- Welcome guys In another Blog Of Exam Notes Hub today we provide Financial Market MCQ Questions Class 12 and this Questions is important for Your CBSE exam And also MCQ of Business Study Chapter 10 class 12 Is Important for those students who want to crack there CUET Exam so Business Studies Class 12 Chapter 10 MCQ is important and we also provide Free PDF of CBSE Business Studies MCQ for Class 12 with Answers Chapter 10 Financial Market. Business Studies MCQs for Class 12 Chapter 10

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Financial Market MCQ Questions Class 12 | Business Studies Class 12 Chapter 10 MCQ

Business Studies MCQs for Class 12, Chapter wise with solutions with free study material is an important notes for students  who wants to score good grades in their CBSE Exams. Student can learn Business Studies Class 12 Chapter 10 MCQ of Class 12 Business Studies Multiple Choice Questions along with answers to get higher Marks in there Exam so are we provide Top 20 Important Questions For Business study Class 12 chapter 10

Business Studies Class 12 Chapter 10 MCQ

Question 1: Financial Intermediation involves the allocation of funds from ________________.

1. a) Households to industries
2. b) Government to households
3. c) Banks to financial markets
4. d) Government to industries

Correct answer: a) Households to industries

Explanation: Financial intermediation is the process of allocating funds from saving surplus units (e.g. households) to saving deficit units (e.g. industries, government, etc.).

 

Question 2: Which of the following is NOT an alternative for financial intermediation?

1. a) Banks
2. b) Financial markets
3. c) Stock exchanges
4. d) Government institutions

Correct answer: c) Stock exchanges

Explanation: Stock exchanges are part of the financial markets, but they are not alternatives for financial intermediation; they are platforms for trading existing securities.

 

Question 3: What is the primary function of financial markets?

1. a) Maximizing short-term profits
2. b) Mobilization of savings
3. c) Allocating funds to households
4. d) Providing direct investment opportunities

Correct answer: b) Mobilization of savings

Explanation: Financial markets channel savings from individuals and institutions into avenues of investment.

 

Question 4: Which function of financial markets involves determining the prices of financial assets?

1. a) Providing liquidity
2. b) Mobilization of savings
3. c) Facilitating price discovery
4. d) Reducing the cost of transactions

Correct answer: c) Facilitating price discovery

Explanation: Demand and supply factors in financial markets determine the prices of various financial assets.

 

Question 5: How do financial markets provide liquidity to financial assets?

1. a) By offering high returns
2. b) By issuing new securities
3. c) By facilitating price discovery
4. d) By offering a ready market for buying and selling

Correct answer: d) By offering a ready market for buying and selling

Explanation: Financial markets provide liquidity by creating a platform where financial assets can be readily bought and sold.

 

Question 6: Which financial market deals with securities having a maturity period of less than one year?

1. a) Capital Market
2. b) Money Market
3. c) Foreign Exchange Market
4. d) Commodity Market

Correct answer: b) Money Market

Explanation: The money market deals with short-term financial instruments with a maturity period of less than one year.

 

Question 7: What is the main instrument issued by the RBI on behalf of the Central Government to meet short-term fund requirements?

1. a) Commercial Paper
2. b) Call Money
3. c) Certificate of Deposit
4. d) Treasury Bills

Correct answer: d) Treasury Bills

Explanation: Treasury Bills are issued by the RBI on behalf of the Central Government to raise short-term funds.

 

Question 8: Which money market instrument is a short-term unsecured promissory note issued by creditworthy companies?

1. a) Call Money
2. b) Commercial Bill
3. c) Certificate of Deposit
4. d) Commercial Paper

Correct answer: d) Commercial Paper

Explanation: Commercial Paper is a short-term unsecured promissory note issued by creditworthy companies.

 

Question 9: Which market deals with both debt and equity securities for long-term investments?

1. a) Capital Market
2. b) Money Market
3. c) Foreign Exchange Market
4. d) Commodity Market

Correct answer: a) Capital Market

Explanation: The capital market deals with long-term securities, including both debt and equity instruments.

 

Question 10: What is the main function of the Primary Market?

1. a) Trading of existing securities
2. b) Price discovery
3. c) Transferring securities between investors
4. d) Raising new capital by issuing securities

Correct answer: d) Raising new capital by issuing securities

Explanation: The primary market is where new securities are issued to raise capital.

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Question 11: Which method of floatation involves inviting subscriptions from the public through a prospectus?

1. a) Offer for Sale
2. b) Private Placements
3. c) Rights Issue
4. d) Offer through Prospectus

Correct answer: d) Offer through Prospectus

Explanation: Offer through Prospectus involves inviting subscriptions from the public through a prospectus.

 

Question 12: What is the purpose of a Demat account?

1. a) To store physical certificates of securities
2. b) To facilitate trading in listed securities
3. c) To issue new shares to existing shareholders
4. d) To transfer funds between bank accounts

Correct answer: b) To facilitate trading in listed securities

Explanation: A Demat account holds securities in electronic form and facilitates trading in listed securities.

 

Question 13: What is the main regulatory body for the securities market in India?

1. a) RBI (Reserve Bank of India)
2. b) NSE (National Stock Exchange)
3. c) BSE (Bombay Stock Exchange)
4. d) SEBI (Securities and Exchange Board of India)

Correct answer: d) SEBI (Securities and Exchange Board of India)

Explanation: SEBI is the regulatory authority that oversees the securities market in India.

 

Question 14: Which function of SEBI involves preventing fraudulent trade practices in the securities market?

1. a) Protective Functions
2. b) Development Functions
3. c) Regulation Functions
4. d) Supervisory Functions

Correct answer: a) Protective Functions

Explanation: Protective functions of SEBI involve preventing fraudulent and unfair trade practices in the securities market.

 

Question 15: Which of the following statements about Dematerialization is true?

1. a) It refers to converting electronic securities to physical certificates.
2. b) It eliminates the risk of theft and forgery of physical certificates.
3. c) It increases the cost of transactions.
4. d) It promotes odd-lot trading.

Correct answer: b) It eliminates the risk of theft and forgery of physical certificates.

Explanation: Dematerialization involves converting physical certificates to electronic form, eliminating the risk of theft and forgery.

 

Question 16: What is the primary function of a Stock Exchange?

1. a) Creating new financial instruments
2. b) Providing short-term loans to businesses
3. c) Facilitating the exchange of securities into money and vice versa
4. d) Regulating monetary policy

Correct answer: c) Facilitating the exchange of securities into money and vice versa

Explanation: A Stock Exchange facilitates the trading of securities, converting them into money and vice versa.

 

Question 17: Which market deals with securities having a maturity period of more than one year?

1. a) Primary Market
2. b) Secondary Market
3. c) Money Market
4. d) Capital Market

Correct answer: d) Capital Market

Explanation: The capital market deals with securities having a maturity period of more than one year.

 

Question 18: Which function of financial markets helps in reducing the time, effort, and money spent on finding buyers and sellers?

1. a) Providing liquidity
2. b) Facilitating price discovery
3. c) Mobilization of savings
4. d) Reducing the cost of transactions

Correct answer: d) Reducing the cost of transactions

Explanation: Financial markets reduce the cost of transactions by providing information and facilitating trades at a low cost.

 

Question 19: Which market contributes to the economic growth by channelizing savings into productive investment avenues?

1. a) Money Market
2. b) Foreign Exchange Market
3. c) Commodity Market
4. d) Capital Market

Correct answer: d) Capital Market

Explanation: The capital market contributes to economic growth by channelizing savings into productive investments.

 

Question 20: What is the primary objective of the Securities and Exchange Board of India (SEBI)?

1. a) Promoting speculation in the securities market
2. b) Ensuring high returns for investors
3. c) Protecting the interests of investors and ensuring orderly growth of securities market
4. d) Regulating the monetary policy of the country

Correct answer: c) Protecting the interests of investors and ensuring orderly growth of securities market

Explanation: The primary objective of SEBI is to protect the interests of investors and promote the orderly growth of the securities market.

 

Related Post : Business study MCQ Class 12 | CUET

Chapter 1: Nature and Significance of Management MCQs
Chapter 2: Principles of Management MCQs
Chapter 3: Business Environment MCQs
Chapter 4: Planning MCQs with Answer
Chapter 5: Organising MCQs with Answer
Chapter 6: Staffing MCQs with Answer 
Chapter 7: Directing MCQs with Answer 
Chapter 8: Controlling MCQs with Answer
Chapter 9: Financial Management MCQs with Answer
Chapter 10: Financial Market MCQs with Answer
Chapter 11: Marketing MCQs with Answer
Chapter 12: Consumer Protection MCQs with Answer

Conclusion : Financial Market MCQ Questions Class 12

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FAQ : Financial Market MCQ Class 12

What are the functions of the financial market Mcq?

the Functions of Financial Market is given below:-

• Providing liquidy
• price finding
• reduce cost

And Many More Function of Financial Market