This quiz works best with JavaScript enabled. Home > Economics > Finance > Markets > Financial Markets – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Markets Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. World's largest stock exchange founded in 1790. A) NASDAQ. B) AMEX. C) EuroNext. D) NYSE. Show Answer Correct Answer: D) NYSE. 2. ..... is a person invests in financial markets to reduce the risk of price volatility in exchange markets. A) Risk seeker. B) Arbitrageur. C) Hedger. D) Speculator. Show Answer Correct Answer: C) Hedger. 3. Primary market is associated with ..... issues. A) Old. B) New. C) Old and New. D) Very Old. Show Answer Correct Answer: B) New. 4. Financial markets and institutions A) Involve the movement of huge quantities of money. B) Affect the profit of business. C) Affect the type of goods and services produced in an economy. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. Which of the following is an advantage of a 401(k) plan? A) You may withdraw funds at any time without penalty. B) Most employers match a portion of your contributions. C) You never pay taxes on your contributions. D) Your contributions are invested in high-return, high-risk fund. Show Answer Correct Answer: B) Most employers match a portion of your contributions. 6. What is the relationship between risk and return? A) Inverse. B) Opposite. C) Multiple. D) Direct. Show Answer Correct Answer: D) Direct. 7. Shares of stock from a variety of companies that you own are called? A) Diversity. B) Commission. C) Dividend. D) Portfolio. Show Answer Correct Answer: D) Portfolio. 8. It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year. A) Secondary market. B) Primary market. C) Capital market. D) Money market. Show Answer Correct Answer: D) Money market. 9. A document that discloses information about a company's earnings, assets, and liabilities A) Contract. B) Corporate Bond. C) Prospectus. D) Treasury Bond. Show Answer Correct Answer: C) Prospectus. 10. Stock that guarantees dividends but gives no voting rights A) Primary stock. B) Stock exchange. C) Preferred stock. D) Common stock. Show Answer Correct Answer: C) Preferred stock. 11. In money market, large firms also ..... when they have surplus cash (e.g:invest in commercial paper) and ..... when they are short of money. A) Borrow; lend. B) Lend; borrow. C) Sell securities; buy securities. D) Issue securities; call back securities. Show Answer Correct Answer: B) Lend; borrow. 12. Money Market is regulate by A) SBI. B) RBI. C) CBI. D) SEBI. Show Answer Correct Answer: B) RBI. 13. Which market directly contributes for capital formation and increase in capital offirms? A) Primary market. B) Secondary market. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Primary market. 14. Claims of ownership in a corporation (stock) A) Equities. B) Principal. C) Par value. D) Speculation. Show Answer Correct Answer: A) Equities. 15. What is a return? A) Investing money. B) Spreading out investments to reduce risk. C) Bringing an item back to the store. D) The money an investor receives above and beyond the sum of money initially invested. Show Answer Correct Answer: D) The money an investor receives above and beyond the sum of money initially invested. 16. Year when PSE was transformed from a non-profit, non-stock, member-governed organization into a shareholder-based, revenue-earning corporation headed by a president and a board of directors A) 2016. B) 2010. C) 2011. D) 2001. Show Answer Correct Answer: D) 2001. 17. The primary liabilities of a commercial bank are A) Bonds. B) Mortgages. C) Deposits. D) None of above. Show Answer Correct Answer: C) Deposits. 18. In Right Issue, shares are issued to A) General public. B) Existing shareholders. C) Institutes only. D) None of the above. Show Answer Correct Answer: B) Existing shareholders. 19. The use of income today that allows for future benefit. A) Savings. B) Investment. C) Secondary market. D) Risk. Show Answer Correct Answer: B) Investment. 20. Stocks or documents that represent a claim on the income and property of the borrower are known as A) Financial intermediaries. B) Financial assets. C) Mutual funds. D) None of above. Show Answer Correct Answer: B) Financial assets. 21. The new issues market is also known as A) Money market. B) Secondary market. C) Stock exchange. D) Primary market. Show Answer Correct Answer: D) Primary market. 22. Financial institutions that protect individuals and corporations (policyholders) from adverse events. A) Finance Companies. B) Commercial Banks. C) Thrift Banks. D) Insurance Companies. Show Answer Correct Answer: D) Insurance Companies. 23. The government agency responsible for regulating the stock market? A) Federal Reserve Board. B) Federal Trade Commission. C) Interstate Commerce Commission. D) Securities and Exchange Commission. Show Answer Correct Answer: D) Securities and Exchange Commission. 24. The capital market consists of A) Development banks. B) Commercial banks. C) Stock exchanges. D) All of the above. Show Answer Correct Answer: D) All of the above. 25. Which of the following cannot be called as a debt instrument as referred to in financial transactions? A) Loans. B) Certificate of deposit. C) Bonds. D) Stocks. Show Answer Correct Answer: A) Loans. 26. Primary market facilitates business firms A) New issue market. B) Indirect market. C) Medium term finance. D) Short term finance. Show Answer Correct Answer: A) New issue market. 27. Under this method of floatation in the primary market, a subscription is invited from the general public 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. Show Answer Correct Answer: B) Offer through prospectus. 28. For which investment will you receive interest payments? A) Stocks. B) Currencies. C) Unit trust. D) Bonds. Show Answer Correct Answer: D) Bonds. 29. Reducing risk through the purchase of assets whose returns do not always move together is A) Intermediation. B) Discounting. C) Diversification. D) None of above. Show Answer Correct Answer: C) Diversification. 30. They can be issued to individuals, corporations and companies during periods of tight liquidity 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. Show Answer Correct Answer: D) Certificate of deposit. ← PreviousNext →Related QuizzesFinance QuizzesEconomics QuizzesFinancial Markets Quiz 1Financial Markets Quiz 3Financial Markets Quiz 4Financial Markets Quiz 5Financial Markets Quiz 6Financial Markets Quiz 7Financial Markets Quiz 8Financial Markets Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books