Financial Markets Test

Result

Financial Markets Test - 2

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

In the financial system, _________act as intermediaries.

A
Banks and financial market

B
Firms and households

C
Financial markets and firms

D
Banks and firms

Solution

In a financial system, banks and the financial market act as intermediaries. Households which have surplus can either deposit their funds with banks which in turn would lend to firms. Alternatively, through the financial markets, they can purchase shares and debentures issued by firms. In this way, banks and financial markets act as intermediaries for mobilising funds.
Question 2
1 / -0

The primary market is also known as ____________. Fill in the blank.

A
New issues market

B
New shares market

C
New securities market

D
New equities market

Solution

The primary market deals in issue of new securities. It is also known as the new issues market.

Hence, the correct answer is option A.
Question 3
1 / -0

Which of the following statements is not true with respect to financial markets?

A
Through financial markets, funds are directed to productive investment.

B
In financial markets, banks supply funds and firms demand funds.

C
They act as a link between those who save and those who invest.

D
They help render liquidity to various financial assets.

Solution

The statement as given in option 3 is not correct. In a financial market, households supply funds and business firms demand funds. In this way, financial markets act as a link between those who save and those who invest and the funds are channelled to productive investment. Moreover, as financial markets ease the process of sale and purchase of securities, it renders liquidity to assets.
Question 4
1 / -0

____ refers to an institution which keeps securities of investors in the electronic form. Fill in the blank.

A
Financial market

B
Stock exchange

C
Depository

D
Demat

Solution

A depository keeps securities of investors in electronic form. In a depository, an investor can deposit shares, withdraw shares and provide instructions for delivering or receiving shares.
Question 5
1 / -0

IPO stands for ___________. Fill in the blank.

A
Initial Public Offer

B
Initiating Public Offer

C
Inclusive Public Offer

D
Inviting Public Offer

Solution

IPO stands for Initial Public Offer. A company issuing capital through an online system must have an agreement with the stock exchange. This is referred as IPO.

Hence, the correct answer is option A.
Question 6
1 / -0

ABC Ltd. wanted funds for expansion in some new ventures. It decided to offer its existing shareholders new shares. Which of the following floatation methods is being described in the given situation?

A
e-IPO

B
Offer for sale

C
Rights issue

D
Private placement

Solution

The method being described in the given situation is ‘rights issue’. In this method, the existing shareholders are offered new shares. The shares offered are in proportion of the shares already held by them.

Hence, the correct answer is option A.
Question 7
1 / -0

To raise funds for a new project, RP Ltd. decided that it would consult certain brokers and offer shares to the public through them. Which of the following methods of floatation is being described in the given situation?

A
Private placement

B
Rights issue

C
Offer for sale

D
Issue through prospectus

Solution

The method of floatation being described in the given situation is ‘Offer for sale’. Under this method, securities are issued through intermediaries such as stock brokers or issuing houses. In other words, companies first sell the securities to intermediaries who in turn resell to public.

Hence, the correct answer is option B.
Question 8
1 / -0

Consider the following information: Statement 1: In a capital market, medium and long-term securities are traded. Statement 2: Securities traded in the capital market are considered to be liquid. Which of the following alternatives is correct with respect to the given information?

A
Neither Statement 1 nor Statement 2 is correct.

B
Only Statement 1 is correct.

C
Both Statement 1 and Statement 2 are correct.

D
Only Statement 2 is correct.

Solution

Both statements given in the question are correct.

In the capital market, long-term securities are traded such as bonds, equity, debentures, preference shares etc. These securities are considered liquid and they can be traded on the stock exchange.

Hence, the correct answer is option C.
Question 9
1 / -0

Which of the following stock exchanges was Asia’s first stock exchange?

A
National Stock Exchange

B
Bombay Stock Exchange

C
Over the Counter Exchange of India

D
None of the above

Solution

The Bombay Stock Exchange, established in 1875, was Asia’s first stock exchange.
Question 10
1 / -0

Which of the following statements is not true with respect to the primary market?

A
It deals in trade of existing securities.

B
Insurance companies are one of the investors in the primary market.

C
Funds raised in the primary market may be used for expansion purposes.

D
Capital can be raised in the primary market through equity, debentures etc.

Solution

Statement 1 is not true with respect to the primary market. The primary market deals in issue of new securities. Funds raised in the primary market are used for purposes such as establishing new firms, expansion of existing firms, modernisation etc. In the primary market, capital can be raised through equity, debentures, loans etc. The main participants in the primary market are financial institutions, banks, mutual funds and insurance companies.

Hence, the correct answer is option A.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Financial Markets Test - 2

Result

Financial Markets Test - 2

Score

-

Rank

-

SHARING IS CARING

Question 1

Banks and financial market

Firms and households

Financial markets and firms

Banks and firms

Solution

Question 2

New issues market

New shares market

New securities market

New equities market

Solution

Question 3

Through financial markets, funds are directed to productive investment.

In financial markets, banks supply funds and firms demand funds.

They act as a link between those who save and those who invest.

They help render liquidity to various financial assets.

Solution

Question 4

Financial market

Stock exchange

Depository

Demat

Solution

Question 5

Initial Public Offer

Initiating Public Offer

Inclusive Public Offer

Inviting Public Offer

Solution

Question 6

e-IPO

Offer for sale

Rights issue

Private placement

Solution

Question 7

Private placement

Rights issue

Offer for sale

Issue through prospectus

Solution

Question 8

Neither Statement 1 nor Statement 2 is correct.

Only Statement 1 is correct.

Both Statement 1 and Statement 2 are correct.

Only Statement 2 is correct.

Solution

Question 9

National Stock Exchange

Bombay Stock Exchange

Over the Counter Exchange of India

None of the above

Solution

Question 10

It deals in trade of existing securities.

Insurance companies are one of the investors in the primary market.

Funds raised in the primary market may be used for expansion purposes.

Capital can be raised in the primary market through equity, debentures etc.

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.