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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