Test: Financial Markets - 1 | 10 Questions MCQ Test

QUESTION: 1

This a MCQ (Multiple Choice Question) based practice test of Chapter 10 - Financial Markets of Business Studies of Class XII (12) for the quick revision/preparation of School Board examinations

Q Primary and secondary markets:

A.
Complement each other
B.
Function independently
C.
Compete with each other
D.
Control each other

Solution:

Primary and secondary markets complement each other. Primary market deals with the issue of new securities. That is, through the primary market a company raises capital directly from the borrowers. On the other hand, secondary market deals in the purchase and sale of the existing securities. That is, once the securities are issued in primary market, they are then traded in the secondary market. It is in this sense that both the markets complement each other.

QUESTION: 2

The total number of Stock Exchanges in India is:

A.
22
B.
23
C.
25
D.
20

Solution:

There are a total of 23 stock exchanges in India, with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) being the largest.

QUESTION: 3

The settlement cycle in NSE is:

A.
T + 2
B.
T + 5
C.
T + 3
D.
T + 1

Solution:

QUESTION: 4

The National Stock Exchange of India was recognized as stock exchange in the year:

A.
1995
B.
1992
C.
1994
D.
1993

Solution:

The National Stock Exchange of India was promoted by leading Financial institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956

QUESTION: 5

NSE commenced futures trading in the year:

A.
2000
B.
2001
C.
2002
D.
1999

Solution:

QUESTION: 6

Clearing and settlement operations of NSE are carried out by:

A.
NSDL
B.
SBI
C.
NSCCL
D.
CDSL

Solution:

NSE Clearing Limited (NSE Clearing) (formerly known as National Securities Clearing Corporation Limited, NSCCL), a wholly owned subsidiary of NSE is responsible for clearing and settlement of all trades executed on NSE and deposit and collateral management and risk management functions.

QUESTION: 7

OTCEI was started on the lines of:

A.
NSE
B.
NYSE
C.
NASDAQ
D.
NASAQ

Solution:

OTCEI (Over the Counter Exchange of India) was incorporated in the year 1990 on the lines of NASDAQ which is the OTC in USA. OTCEI is a fully computerised and transparent stock exchange. It was established with the objective of addressing the needs of small companies and helps in maintaining the liquidity of their securities.

QUESTION: 8

To be listed on OTCEI, the minimum capital requirement for a company is:

A.
Rs. 10 crores
B.
Rs. 3 crores
C.
Rs. 25 crores
D.
Rs. 5 crores

Solution:

To be listed on OTCEI, the minimum capital requirement for a company is Rs 3 crores and the maximum is Rs 50 crores.

QUESTION: 9

A Treasury Bill is basically:

A.
An instrument to borrow short-term funds
B.
An instrument to borrow long-term funds
C.
An instrument of capital market
D.
None of the above

Solution:

A Treasury Bill is a short-term debt obligation with a maturity of one year or less which enable investors to save their short-term surplus funds while reducing their market risk.

QUESTION: 10

Instruments with a maturity period of less than one year are traded in ____

A.
Money market
B.
Capital Market
C.
NSEI
D.
Stock Exchange

Solution:

Money market instruments are short-term in nature. The maturity of these instruments is generally less than a year. The maturity of these securities can be as less as one day also.