Financial Markets And Institutions Set 16
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This set of Financial Markets and Institutions Multiple Choice Questions & Answers (MCQs) focuses on Financial Markets And Institutions Set 16
Q1 | _______ is a link between savers & borrowers, helps to establish a link between savers &investors
- Marketing
- Financial market
- Money market
- None of these
Q2 | Which of the following is the function of financial market?
- Mobilization of savings
- Price fixation
- Provide liquidity to financial assets
- All of the above
Q3 | __________ is the organisations, institutions that provide long term funds.
- Capital market
- Money market
- Primary market
- Secondary market
Q4 | When securities are allotted to institutional investors & some selected individuals isreferred to as _________.
- Initial public offer
- Offer through prospectus
- Private placement
- Offer for sale
Q5 | Stock exchange is known as __________ market for securities.
- Primary market
- Secondary market
- Capital market
- None of the above
Q6 | _________ is a market for lending & borrowing of short term funds.
- Money market
- Primary market
- Capital market
- All of the above
Q7 | ____________ is also called zero coupon bond.
- Trade bills
- Call money
- Treasury bills
- Commercial papers
Q8 | Which of the following are the instruments of money market?
- Call money
- Certificate of deposits
- Trade bills
- All of the above
Q9 | The short term financial instruments traded in money market is commonly called
- Call money
- Certificate of deposits
- Trade bills
- Commercial Paper
Q10 | Which of the following statements is not true with regard to money market?
- It involves low market risk.
- It is situated at specific locations.
- Deals in unsecured and short-term debt instruments.
- The instruments traded are highly liquid.
Q11 | Which of the following statements is not true with regard to Treasury bills?
- Are issued in the form of a promissory note.
- They are highly liquid and have assured yield
- They carry high risk of default.
- They are available for a minimum amount of ₹25,000 and in multiples thereof.
Q12 | Which of the following statements is not true with regard to Commercial paper?
- Is a long-term unsecured promissory note with a fixed maturity period.
- It usually has a maturity period of 15 days to one year.
- It is sold at a discount and redeemed at par.
- Companies use this instrument for bridge financing.
Q13 | Which of the following statements is not true with regard to Call money?
- It is short-term finance repayable on demand.
- Its maturity period ranges from one day to fifteen days.
- There is a direct relationship between call rates and other short-term money market instruments.
- It is used for inter-bank transactions.
Q14 | Which of the following statements is not true with regard to capital market?
- The funds are raised for a short period of time.
- Both debt and equity funds can be raised.
- It is classified into two types.
- All of the above
Q15 | Which of the following statements is not true with regard to primary market?
- Is also known as the old issues market.
- It facilitates the transfer of investible funds from savers to entrepreneurs.
- It deals with new securities being issued for the first time.
- It facilitates the transfer of investible funds from savers to entrepreneurs.
Q16 | Which of the following statements is not true with regard to stock exchange?
- It provides a platform for buying and selling of new securities.
- It curbs the marketability of the securities.
- By providing a ready market, it extends liquidity to the securities.
- It provides a platform for buying and selling of old securities.`
Q17 | Which of the following is not a protective function of stock exchange?
- Prohibition of fraudulent and unfair trade practices.
- Controlling insider trading.
- Regulation of takeover bids by companies.
- Promotion of fair practices and code of conduct in securities market.
Q18 | Raj Enterprises wishes to invest ₹1,10,000 in treasury bills. What is the maximumnumber of treasury bills it can buy with this fund?
- 6
- 7
- 4
- 2
Q19 | Which of the following statements is true with regard to financial markets?
- They link the households which save funds and business firms which invest these funds.
- They work as an intermediary between the savers and the investors by mobilising funds between them.
- They allocate funds available for investment into their most productive investment opportunity.
- All of the above
Q20 | The allocated function is performed by
- Financial market
- Capital market
- Money market
- All of the above
Q21 | It is a market for short-term funds which deals in monetary assets whose period ofmaturity is up to one year.
- Primary market
- Secondary market
- Capital market
- Money market
Q22 | It is an instrument of short-term borrowing by the Government of India maturing in lessthan one year.
- Commercial bill
- Treasury bill
- Call money
- None of the above
Q23 | Who issues a treasury bill?
- Any nationalised bank
- Any private sector bank
- Reserve Bank of India
- All of the above
Q24 | Suppose an investor purchases a 91 days Treasury bill with a face value of ₹2,00,000 for ₹1,92,000. By holding the bill until the maturity date, the investor receives ₹2,00,000. What is the amount of interest received by him?
- ₹8,000
- ₹80,000
- ₹3,92,000
- ₹2,00,000
Q25 | It is used as an alternative to bank borrowing for large and creditworthy companies,
- Commercial bill
- Commercial papers
- Call money
- None of the above