Top 350+ Solved Financial Markets and Institutions MCQ Questions Answer
Q. It is an instrument of short-term borrowing by the Government of India maturing in lessthan one year.
a. Commercial bill
b. Treasury bill
c. Call money
d. None of the above
Q. Who issues a treasury bill?
a. Any nationalised bank
b. Any private sector bank
c. Reserve Bank of India
d. All of the above
Q. It is used as an alternative to bank borrowing for large and creditworthy companies,
a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above
Q. It is a method by which banks borrow from each other to be able to maintain the cash reserve ratio.
a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above
Q. A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit
a. Expensive in comparison with banks who raise funds from these sources.
b. Cheaper in comparison with banks who raise funds from these sources.
c. Creates no effect on other sources.
d. None of the above
Q. It is a short-term, negotiable, self-liquidating instrument which is used to finance thecredit sales of firms.
a. Commercial bill
b. Commercial papers
c. Call money
d. None of the above
Q. The capital market consists of
a. Development banks
b. Commercial banks
c. Stock exchanges
d. All of the above
Q. A company can raise capital through the primary market in the form of
a. Equity shares
b. Preference shares
c. Debentures
d. All of the above
Q. They can be issued to individuals, corporations and companies during periods of tightliquidity when the deposit growth of banks is slow but the demand for credit is high.
a. Commercial papers
b. Call money
c. Commercial bill
d. Certificate of deposit
Q. Which of the following participants represent capital market?
a. Development banks
b. Commercial banks
c. Stock exchanges
d. All of the above
Q. Under this method of floatation in primary market, a subscription is invited from generalpublic to invest in the securities of a company through the issue of advertisement.
a. Private placement
b. Offer through prospectus
c. Offer for sale
d. All of the above
Q. Jaykant is holding hundred shares of a company. He has been given a privilege offer to subscribe to a new issue of shares of the same company in proportion of 2:1 to the number of shares already possessed by him. Identify the method of floatation being described in the above case.
a. Offer through prospectus
b. Offer for sale
c. Rights issue
d. Private placement
Q. Stock Exchange works as a mechanism for valuation of securities through the forces of demand and supply. Identify the related function of performed by the stock exchanges.
a. Providing liquidity and marketability to existing securities.
b. Safety of transaction.
c. Pricing of security.
d. Spreading of equity cult.
Q. Stock exchanges provide an opportunity to the investors to disinvest and invest. Identify the related function of the stock exchange.
a. Providing scope for speculation.
b. Providing liquidity and marketability to existing securities.
c. Pricing of security.
d. Spreading of equity cult.
Q. The process of holding shares in electronic form is known as
a. Demutualisation
b. Dematerialisation
c. Speculation
d. None of the above