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B Com Exam  >  B Com Test  >  Indian Economy  >  Test: Money Market and Capital Market structure in India- 2 - B Com MCQ

Money Market and Capital structure in India- 2 - Free MCQ Practice Test


MCQ Practice Test & Solutions: Test: Money Market and Capital Market structure in India- 2 (10 Questions)

You can prepare effectively for B Com Indian Economy with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Money Market and Capital Market structure in India- 2". These 10 questions have been designed by the experts with the latest curriculum of B Com 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

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Test: Money Market and Capital Market structure in India- 2 - Question 1
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What is the primary function of the new issue market?

Detailed Solution: Question 1

The primary function of the new issue market, also known as the primary market, is to promote savings and investments in new corporate enterprises or the expansion, diversification, growth, or modernization of existing ones. This market facilitates the transfer of funds from investors to entrepreneurs who are setting up new businesses or seeking to enhance their existing ones. It plays a crucial role in channeling savings into long-term investments, contributing to the economic growth and industrial development of a country.

Test: Money Market and Capital Market structure in India- 2 - Question 2
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Which of the following securities are traded in the secondary market?

Detailed Solution: Question 2

The secondary market is where existing securities are bought and sold. This includes securities that have been previously issued and are already in circulation. Debentures, which are debt instruments issued by established companies, are an example of securities traded in the secondary market. This market provides liquidity to investors by allowing them to sell their holdings when needed.

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Test: Money Market and Capital Market structure in India- 2 - Question 3
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Which institution was established to provide liquidity and further develop secondary market instruments in India?

Detailed Solution: Question 3

Discount and Finance House of India (DFHI) was established in 1988 with the aim of providing more liquidity to the market and further developing secondary market instruments. It played a role in enhancing the trading of securities and fostering the growth of the Indian capital market.

Test: Money Market and Capital Market structure in India- 2 - Question 4
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Which financial institution is responsible for promoting and supporting small industries in India?

Detailed Solution: Question 4

The National Small Industries Corporation (NSIC) is the financial institution responsible for promoting and supporting small industries in India. It provides various services and financial assistance to help small businesses thrive and contribute to the economy.

Test: Money Market and Capital Market structure in India- 2 - Question 5
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Which market allows for the purchase and sale of existing securities like shares and debentures?

Detailed Solution: Question 5

The secondary market is where existing securities like shares and debentures are purchased and sold. It provides a platform for investors to trade these securities, offering liquidity and allowing for price discovery based on market demand and supply.

Test: Money Market and Capital Market structure in India- 2 - Question 6
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What is the purpose of financial institutions in the Indian capital market?

Detailed Solution: Question 6

Financial institutions in the Indian capital market play a vital role in providing medium and long-term loans to businesses for industrial growth and development. These institutions assist in promoting new companies, expanding existing ones, and meeting financial requirements during economic challenges. They contribute significantly to the growth and development of industries in the country.

Test: Money Market and Capital Market structure in India- 2 - Question 7
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Which committee's recommendations led to the introduction of liquidity adjustment facility in India?

Detailed Solution: Question 7

The introduction of the Liquidity Adjustment Facility (LAF) in India was based on the recommendations of the Narsimham Committee. LAF is a tool used by the Reserve Bank of India (RBI) to manage liquidity and interest rates in the financial system.

Test: Money Market and Capital Market structure in India- 2 - Question 8
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What is the main objective of the Industrial Finance Corporation of India (IFCI)?

Detailed Solution: Question 8

The main objective of the Industrial Finance Corporation of India (IFCI) is to promote and provide financial assistance to industrial projects in the country. It plays a crucial role in supporting the growth and development of industries by offering medium and long-term loans.

Test: Money Market and Capital Market structure in India- 2 - Question 9
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Which institution was established to regulate and control the business of buying and selling securities in an organized manner?

Detailed Solution: Question 9

A stock exchange is an institution established to regulate and control the business of buying and selling securities in an organized manner. It provides a platform for investors to trade securities like shares and debentures.

Test: Money Market and Capital Market structure in India- 2 - Question 10
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Which market is also known as the primary market and involves the issuance of new securities?

Detailed Solution: Question 10

The market that is also known as the primary market and involves the issuance of new securities, such as shares and bonds, is the new issue market. This market allows companies to raise capital by offering new securities to investors for the first time.

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About this B Com Practice Test

This test contains 10 MCQs on Money Market and Capital Market structure in India- 2 with detailed solutions for each question. It is part of the Indian Economy course on EduRev, designed to align with the current B Com syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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If you found this Money Market and Capital Market structure in India- 2 MCQ Test helpful, you can further enhance your B Com preparation with in-depth courses on EduRev, for all the subjects and topics available in Indian Economy course. The course offers:
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