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B Com Exam  >  B Com Tests  >  Indian Financial System  >  Test: Indian Financial System - B Com MCQ

Test: Indian Financial System - B Com MCQ


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10 Questions MCQ Test Indian Financial System - Test: Indian Financial System

Test: Indian Financial System for B Com 2024 is part of Indian Financial System preparation. The Test: Indian Financial System questions and answers have been prepared according to the B Com exam syllabus.The Test: Indian Financial System MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Indian Financial System below.
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Test: Indian Financial System - Question 1
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Which of the following financial instruments is issued by the government to meet short-term liquidity needs and is available for maturities of 91 days, 182 days, and 364 days?

Detailed Solution for Test: Indian Financial System - Question 1
Treasury Bills (T-Bills) are short-term money market instruments issued by the government to meet its short-term liquidity needs. They come with maturities of 91 days, 182 days, and 364 days. T-Bills are usually issued at a discount to their face value, and on maturity, the government pays the face value to the holder.
Test: Indian Financial System - Question 2
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Which of the following financial instruments is used by companies to raise short-term funds, is unsecured, and usually backed by a good credit rating?

Detailed Solution for Test: Indian Financial System - Question 2
Commercial Papers (CP) are short-term debt instruments issued by corporations to raise funds for their short-term liquidity requirements. They are unsecured and are usually backed by a good credit rating. CPs are typically issued at a discount to their face value and have maturities ranging from 7 days to 1 year.
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Test: Indian Financial System - Question 3
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Which financial market involves the issuance of securities by companies to raise funds for their expansion and long-term financial needs?

Detailed Solution for Test: Indian Financial System - Question 3
The capital market is where companies raise funds for their long-term financial needs by issuing securities such as shares and bonds. It provides a platform for investors to invest their surplus funds and earn returns. The capital market consists of the primary market where new securities are issued and the secondary market where already issued securities are traded.
Test: Indian Financial System - Question 4
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Which type of financial market deals with low-risk, highly-liquid, short-term instruments, and includes transactions for periods ranging from a single day up to a year?
Detailed Solution for Test: Indian Financial System - Question 4
The money market deals with low-risk, highly-liquid, short-term financial instruments. It includes transactions for periods ranging from a single day up to a year. Instruments traded in the money market include Treasury Bills, Commercial Papers, Certificate of Deposit, and Banker's Acceptance.
Test: Indian Financial System - Question 5
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Which financial instrument provides ownership rights to investors and represents a claim to the payment of a sum of money sometime in the future and/or periodic payment in the form of interest or dividend?
Detailed Solution for Test: Indian Financial System - Question 5
Shares represent ownership rights in a company. Investors who hold shares are entitled to a portion of the company's profits in the form of dividends. Shares also provide the opportunity for capital appreciation as the value of shares can increase over time.
Test: Indian Financial System - Question 6
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Which financial intermediary offers advisory financial services and charges fees for services such as issue management, underwriting, and portfolio management?
Detailed Solution for Test: Indian Financial System - Question 6
Fee-Based Financial Intermediaries offer advisory financial services to organizations and charge fees for services such as issue management, underwriting, portfolio management, mergers and acquisitions, and corporate counseling. They play a crucial role in providing financial advice and services to clients.
Test: Indian Financial System - Question 7
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Which financial intermediary provides risk control to households by offering retirement income insurance and diversifying assets to hedge and control risk?
Detailed Solution for Test: Indian Financial System - Question 7
Pension funds provide risk control directly to households through retirement income insurance. They diversify their assets to hedge and control risk, ensuring that individuals receive steady income during their retirement years.
Test: Indian Financial System - Question 8
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What is the primary role of financial intermediaries in poverty reduction through microfinance?
Detailed Solution for Test: Indian Financial System - Question 8
Financial intermediaries play a significant role in poverty reduction by offering efficient microfinance services to low-income individuals. These services include providing savings, credit, and insurance facilities to help the poor manage risks, build assets, and engage in income-generating activities.
Test: Indian Financial System - Question 9
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What is the main function of financial market intermediaries in the context of firm restructuring and liquidation?
Detailed Solution for Test: Indian Financial System - Question 9
Financial market intermediaries play a role in restructuring and liquidation of firms by aggregating information on displaced capital (assets) and potential buyers. They act as matchmakers between savers and firms in the credit market, facilitating the efficient reallocation of assets.
Test: Indian Financial System - Question 10
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Which financial intermediary is responsible for pooling funds contributed by sponsors and beneficiaries to provide for future pension entitlements?
Detailed Solution for Test: Indian Financial System - Question 10
Pension funds are financial intermediaries that pool funds contributed by sponsors and beneficiaries to provide for future pension entitlements. They invest these funds to generate returns and ensure individuals have sufficient funds for retirement.
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