This quiz works best with JavaScript enabled. Home > Economics > Finance > Markets > Financial Markets – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets Quiz 12 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Investing in a money market mutual fund in a certificate of deposit because unlike CDs, money market funds A) Are not insured by the FDIC. B) Are not protected by the Securities and Exchange Commission. C) Do not earn a fixed interest rate. D) Must be held for a preset amount of time. Show Answer Correct Answer: A) Are not insured by the FDIC. 2. . 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. Show Answer Correct Answer: C) Call money. 3. Which of the following organization is the regulator of mutual funds in India A) RBI. B) CRISIL. C) SEBI. D) AMFI. Show Answer Correct Answer: C) SEBI. 4. ..... is a part of capital market. A) Call Money. B) Primary Market. C) Secondary Market. D) Primary and Secondary Market. Show Answer Correct Answer: D) Primary and Secondary Market. 5. Which component is not a part of capital market? A) Derivative Market. B) Debt Market. C) Insurance Market. D) Equity Market. Show Answer Correct Answer: C) Insurance Market. 6. Trading center with established rules and regulations, and where buyers and sellers meet to trade futures contracts and options in commodities and financial instruments A) Futures Market. B) Commodity Market. C) Spot Market. D) Equity Market. Show Answer Correct Answer: A) Futures Market. 7. Who is an ISSUER of a Security? A) Offers a security-such as a stock or bond-for sale to the public. B) Entity that interposes itself as the buyer to every selling brokerage firm. C) An institution authorized to pay the principal plus premium. D) Provides portfolio services. Show Answer Correct Answer: A) Offers a security-such as a stock or bond-for sale to the public. 8. Which is the major part of financial system? A) Financial market. B) Financial institutions. C) Financial securities. D) All of above. Show Answer Correct Answer: D) All of above. 9. The expected rate of return of the money market is ..... A) Very high. B) Less. C) Zero. D) None of the above. Show Answer Correct Answer: B) Less. 10. Which two investments are at opposite ends of the risk spectrum? A) Treasury notes and futures. B) Savings bonds and Treasury notes. C) Equities and futures. D) Equities and futures. Show Answer Correct Answer: A) Treasury notes and futures. 11. The regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency A) Check clearing. B) Foreclosures. C) Monetary policy. D) Reserves. Show Answer Correct Answer: C) Monetary policy. 12. Who undertakes the administration and investment activities of the fund (mutual fund)? A) AMC-Asset Management Company. B) Distributor. C) Sponsor. D) Trustee. Show Answer Correct Answer: A) AMC-Asset Management Company. 13. Which of the following statements is not true with regard to money market? A) It involves low market risk. B) It is situated at specific locations. C) Deals in unsecured and short-term debt instruments. D) The instruments traded are highly liquid. Show Answer Correct Answer: B) It is situated at specific locations. 14. How do savings bonds differ from other forms of bonds? A) Provides interest payments. B) Lower price at time of purchase. C) Higher return rate. D) Shorter time period. Show Answer Correct Answer: B) Lower price at time of purchase. 15. People who hold shares are known as ..... A) General public. B) Bankers. C) Shareholders. D) Stockbrokers. Show Answer Correct Answer: C) Shareholders. 16. Regulation usually focuses on Competition-making financial markets competitive to benefit consumers. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 17. Bank can raise money by ..... A) Issue securities. B) Borrow from other bank. C) Borrow from BNM. D) All of above. Show Answer Correct Answer: D) All of above. 18. What is the maximum duration for which term money can be lent/borrowed? A) 15 days. B) 1 day. C) 30 days. D) 1 year. Show Answer Correct Answer: D) 1 year. 19. The regulatory body for the securities market in India is ..... A) RBI. B) TRAI. C) IRDA. D) SEBI. Show Answer Correct Answer: D) SEBI. 20. Financial market facilities business firms A) To minimize funds requirement. B) To rise funds. C) To recruit workers. D) To make more sales. Show Answer Correct Answer: B) To rise funds. 21. Who issues treasury bills( T-bills) in Malaysia? A) Malaysian Government. B) BNM. C) Commercial Banks. D) Investment Banks. Show Answer Correct Answer: A) Malaysian Government. 22. In the past financial markets were less regulated. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 23. ..... IS ALSO KNOWN AS 'ZERO COUPAN BOND' A) DEBENTURES. B) T-BILLS. C) TRADE BILLS. D) COMMERCIAL PAPER. Show Answer Correct Answer: B) T-BILLS. 24. Financial Market is classified into A) Organized and unorganized market. B) Regulatory and non-regulatory market. C) Reformatory and non-reformatory market. D) Controlled and uncontrolled Market. Show Answer Correct Answer: A) Organized and unorganized market. 25. The delivery of financial services electronically is called: A) E-Business. B) E-Finance. C) E-Commerce. D) None of above. Show Answer Correct Answer: B) E-Finance. 26. Which of the following is the supply side of finance? A) Financial Institutions. B) Insurance Companies. C) Financial Institutions and Insurance Companies. D) Industry. Show Answer Correct Answer: C) Financial Institutions and Insurance Companies. 27. Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called A) Moral Selection. B) Risk Sharing. C) Asymmetric information. D) None of above. Show Answer Correct Answer: C) Asymmetric information. 28. The financial instrument with shortest maturity period is A) Call money. B) Certificate of deposit. C) Commercial bill. D) Treasury bill. Show Answer Correct Answer: A) Call money. 29. A bonus share announced by a company: A) Decreases the EPS. B) Increases the EPS. C) Reduces the free float of the company. D) Increases the profit made by the company. Show Answer Correct Answer: A) Decreases the EPS. 30. Secondary market is also known as A) Stock Exchange. B) Primary market. C) Financial Market. D) New Issue Market. Show Answer Correct Answer: A) Stock Exchange. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesFinancial Markets Quiz 1Financial Markets Quiz 2Financial Markets Quiz 3Financial Markets Quiz 4Financial Markets Quiz 5Financial Markets Quiz 6Financial Markets Quiz 7Financial Markets Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books