What is the primary purpose of a Certificate of Deposit (CD)?

To raise short-term funds for trading in the derivatives market.

To provide a safe and interest-bearing investment for depositors.

To serve as collateral for loans in the money market.

To facilitate the buying and selling of stocks and bonds.

What is the primary purpose of Commercial Paper (CP)?

To facilitate the trading of commodities in the derivatives market.

To raise funds quickly for short-term financial needs.

To serve as a long-term investment option for individuals.

To provide collateral for mortgages in the real estate market.

What is the main difference between a Day order and an Immediate or Cancel (IOC) order?

Day orders are valid for the entire trading day, while IOC orders are valid only for the next minute.

Day orders can be modified after placement, while IOC orders cannot be modified.

Day orders are automatically canceled if not matched during the day, while IOC orders are immediately removed if not matched.

Day orders can be executed at any time during the day, while IOC orders can only be executed at the market open.

What is the purpose of a Limit Price/Order in trading?

To allow trading at the best available market price.

To specify a price at which an order should be executed.

To trigger a stop-loss order when the market price reaches a certain threshold.

To restrict trading to a specific time of day.

What is the primary function of the Clearing Mechanism in the financial market?

To set price bands for different securities.

To mark all open positions to market prices.

To determine the trading hours for different markets.

To issue new shares of stock to investors.

When is the final exercise settlement for options contracts typically conducted?

At the beginning of the trading day.

On the expiration day of the options contract.

On the day the options contract is purchased.

What is the primary purpose of the Special Opening Quotation (SOQ) for Global Indices options contracts?

To determine the trading hours for Global Indices options.

To calculate the final settlement price of Global Indices options.

To set the daily price bands for Global Indices.

To trigger stop-loss orders for Global Indices options.

What is the main advantage of using Certificates of Deposit (CDs) as an investment?

They are suitable for long-term investment goals.

They allow trading in the derivatives market.

They offer a safe and interest-bearing option for depositors.

They provide collateral for mortgages.

What is the primary reason for using an Immediate or Cancel (IOC) order?

To ensure that the order remains active for the entire trading day.

To buy or sell securities as soon as the order is released, with no partial matching allowed.

To modify the order after it has been placed in the market.

To trigger a stop-loss order when market conditions are favorable.

Financial and Securities Markets - 2 Free MCQ Practice Test with Solutions

	Financial Markets and Institutions 52 docs\|13 tests

	Financial Markets and Institutions 52 docs\|13 tests

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