Chapter:

40+ Introduction to Financial Markets Solved MCQs

in Financial Services

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Commerce in Finance (B.Com Finance) .

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1.	In primary MARKETS the first time issued shares to be publicly traded, in stock market is considered as...
A.	traded offering
B.	public markets
C.	initial public offering.
D.	secondary market
Answer» C. initial public offering.

discuss

2.	The stock or shares that are also sold to investors without transacting through financial institution are classified as
A.	direct transfer
B.	indirect transfer
C.	global transfer
D.	home transfer
Answer» A. direct transfer

discuss

3.	The type of financial security which have linked payoff to another issued security is classified as –
A.	linked security
B.	derivative security
C.	payable security.
D.	receivables
Answer» B. derivative security

discuss

4.	In primary markets the property of shares which made it easy to sell newly issued security is considered as …
A.	increased liquidity
B.	decreased liquidity
C.	money flow
D.	Surplus
Answer» A. increased liquidity

discuss

5.	The money market where debt and stock are traded and maturity period is more than a year is classified as….
A.	short term markets
B.	capital markets
C.	long term markets
D.	money market
Answer» B. capital markets

discuss

6.	The example of derivative securities include.
A.	swap contract
B.	option contract
C.	future contract
D.	all of these
Answer» D. all of these

discuss

7.	In foreign financial markets , the growth is represented by the factors such as --
A.	saving in foreign countries
B.	investment opportunity
C.	a & b
D.	none of these
Answer» C. a & b

discuss

8.	The services provided by financial institutions as providing financing to any specific sector of economy such as real estate business are classified as----
A.	business allocation
B.	sector allocation
C.	credit allocation
D.	factor allocation
Answer» D. factor allocation

discuss

9.	The type of market in which securities with less than one year maturity are traded is classified as…
A.	money market
B.	capital market
C.	global market
D.	Stock exchange.
Answer» A. money market

discuss

10.	The type of structured market through which the funds flow with the help of financial instruments such as bond and stock is classified as –
A.	financial market
B.	funds market
C.	flow market
D.	capital market
Answer» A. financial market

discuss

11.	The process of selling and buying of stocks and bonds is classified as
A.	S- trade
B.	e trade
C.	stock trade
D.	none of these
Answer» B. e trade

discuss

12.	In capital markets the major suppliers of trading instruments are—
A.	government and corporation
B.	liquid corporation
C.	instrumental corporation
D.	Private Institutes
Answer» A. government and corporation

discuss

13.	The market in which transactions are done through computers and telephone without any specific location are classified as ----
A.	past counter
B.	future counter market
C.	over the counter markets
D.	None of these
Answer» C. over the counter markets

discuss

14.	The type of financial markets in which the corporation issues new funds to raise funds is classified as
A.	flow market
B.	primary market
C.	secondary market
D.	Money market
Answer» B. primary market

discuss

15.	The saving banks, insurance companies, mutual funds and commercial banks are all examples of –
A.	Non-financial institutions
B.	derivative institutions
C.	financial institutions
D.	banking institutes.
Answer» C. financial institutions

discuss

16.	The additional debt instrument or equity instruments of publically traded firm are included in the markets classified as –
A.	flow market
B.	primary market
C.	secondary markets
D.	derivative market
Answer» B. primary market

discuss

17.	The financial instruments of public markets include –
A.	Transfer funds
B.	bearer bonds
C.	shares
D.	debentures
Answer» C. shares

discuss

18.	The centralized market place where agents can have efficiently and quickly transaction is classified as –
A.	secondary market
B.	central market
C.	traded market
D.	primary market
Answer» A. secondary market

discuss

19.	The ability of an asset to be converted into cash very quickly is classified as –
A.	derivative security markets
B.	convertible securities
C.	liquidity
D.	fixed
Answer» C. liquidity

discuss

20.	The institutions classified as depository once and have loans as their major assets are classified as
A.	commercial banks
B.	commercial mortgages
C.	credit derivative
D.	All of these
Answer» A. commercial banks

discuss

21.	Merchant bankers are ------
A.	Merchants
B.	Banks
C.	Neither merchants nor banks
D.	None of these.
Answer» C. Neither merchants nor banks

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22.	All type of activities which are of a financial nature are called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Financial market
B.	Primary market
C.	Capital market
D.	financial services.
Answer» D. financial services.

discuss

23.	Find out odd one..
A.	Fund based activity
B.	Fee based activity
C.	Modern activities
D.	Purchase of raw materials.
Answer» D. Purchase of raw materials.

discuss

24.	The number of lead merchant bankers may not exceeds in case any issue of , issue size less than Rs.50crore,number of MBs ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	1
B.	3
C.	2
D.	4.
Answer» C. 2

discuss

25.	R O C stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Registrar of companies
B.	Registered companies
C.	Registrar of consulter
D.	Registrar of capital.
Answer» A. Registrar of companies

discuss

26.	‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a written consent or authorization representing or acting on behalf of an individual in matters of business, private affairs or other legal matters.
A.	Memorandum of understanding
B.	R O C
C.	Agreement
D.	Power of authority.
Answer» D. Power of authority.

discuss

27.	Lead merchant banker should advice the issuer to enter into ‐‐‐‐‐‐‐‐ with a particular intermediary for the purpose of issue management.
A.	Memorandum of understanding
B.	R O C
C.	Agreement
D.	Arrangement.
Answer» A. Memorandum of understanding

discuss

28.	The number of lead merchant bankers may not exceed in case any issue of, issue size 200crore to 400crore.
A.	4
B.	3
C.	6
D.	5.
Answer» D. 5.

discuss

29.	Post issue management activities include:‐
A.	Analysis of collection
B.	Processing of data
C.	Issue of refund orders
D.	All of these.
Answer» D. All of these.

discuss

30.	Pre‐issue management activities include:‐
A.	Lead manager
B.	Underwriting
C.	Overall supervision
D.	None of these.
Answer» D. None of these.

discuss

31.	Merchant bank can help an organization specifically in promotional functions, ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Sponsoring the issue
B.	Marketing
C.	None of these
D.	All of these.
Answer» D. All of these.

discuss ⁽¹⁾

32.	Role of merchant bankers ‐‐‐‐‐‐‐‐.
A.	Mobilization of funds
B.	Promotional function
C.	Innovation
D.	All of these.
Answer» D. All of these.

discuss

33.	‐‐‐‐‐‐‐‐‐‐‐‐‐ is a financial intermediary who helps to mobilize and transfer capital from those who possess it to those who need it.
A.	Lease finance
B.	Venture capital
C.	Merchant banker
D.	hire purchaser .
Answer» B. Venture capital

discuss

34.	‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a method of renting assets.
A.	Hire purchase
B.	Lease
C.	hedge finance
D.	Credit rating.
Answer» B. Lease

discuss

35.	‐‐‐‐‐‐ is the opinion of the rating agency on the relative ability and willingness of the issuer of by instrument to meet the debt service obligations as and when they arise.
A.	Credit rating
B.	rating by merchant banker
C.	merit rating
D.	operating feed back.
Answer» A. Credit rating

discuss

36.	The features of hire purchase:
A.	The possession of goods is given to the buyer immediately.
B.	The ownership in the goods remains with the vendor till the last installment is paid.
C.	The seller can repossess the goods in case of default in payment .
D.	All of these.
Answer» D. All of these.

discuss

37.	Discounting of bills of exchange is an attractive ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ based financial service provided by the finance companies.
A.	Fee
B.	Fund
C.	Opinion
D.	Capital.
Answer» B. Fund

discuss

38.	Factoring is method of raising ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ finance through account receivable credit offered by commercial banks and factors.
A.	Long term
B.	Medium term
C.	short term
D.	all of these.
Answer» C. short term

discuss

39.	Insurance is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Instrument
B.	Contract
C.	Agreement
D.	Rating.
Answer» C. Agreement

discuss

40.	‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a fund based financial service, provides resources of finance receivable as well as facilities the collection of receivables.
A.	Leasing
B.	hedge finance
C.	Merchant banker
D.	Factoring.
Answer» D. Factoring.

discuss

41.	Financial service companies exclude ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Commercial banks
B.	Insurance companies
C.	Sole proprietorship
D.	Crepitating agencies.
Answer» C. Sole proprietorship

discuss

42.	Specialized financial institution, are also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Leasing companies
B.	U T I
C.	N B F C s
D.	Development bank.
Answer» D. Development bank.

discuss

43.	Financial services offered financing risk project e.g. Risk capital scheme of I F C I venture capital fund of I D F I etc. to provide ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
A.	Seed capital
B.	Venture capital
C.	Primary fund
D.	secondary fund.
Answer» B. Venture capital

discuss

44.	Identify odd one.
A.	C R I S I L
B.	I C R A
C.	C A R E
D.	I C I C I.
Answer» D. I C I C I.

discuss

40+ Introduction to Financial Markets Solved MCQs

In primary MARKETS the first time issued shares to be publicly traded, in stock market is considered as...

The stock or shares that are also sold to investors without transacting through financial institution are classified as

The type of financial security which have linked payoff to another issued security is classified as –

In primary markets the property of shares which made it easy to sell newly issued security is considered as …

The money market where debt and stock are traded and maturity period is more than a year is classified as….

The example of derivative securities include.

In foreign financial markets , the growth is represented by the factors such as --

The services provided by financial institutions as providing financing to any specific sector of economy such as real estate business are classified as----

The type of market in which securities with less than one year maturity are traded is classified as…

The type of structured market through which the funds flow with the help of financial instruments such as bond and stock is classified as –

The process of selling and buying of stocks and bonds is classified as

In capital markets the major suppliers of trading instruments are—

The market in which transactions are done through computers and telephone without any specific location are classified as ----

The type of financial markets in which the corporation issues new funds to raise funds is classified as

The saving banks, insurance companies, mutual funds and commercial banks are all examples of –

The additional debt instrument or equity instruments of publically traded firm are included in the markets classified as –

The financial instruments of public markets include –

The centralized market place where agents can have efficiently and quickly transaction is classified as –

The ability of an asset to be converted into cash very quickly is classified as –

The institutions classified as depository once and have loans as their major assets are classified as

Merchant bankers are ------

All type of activities which are of a financial nature are called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Find out odd one..

The number of lead merchant bankers may not exceeds in case any issue of , issue size less than Rs.50crore,number of MBs ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

R O C stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a written consent or authorization representing or acting on behalf of an individual in matters of business, private affairs or other legal matters.

Lead merchant banker should advice the issuer to enter into ‐‐‐‐‐‐‐‐ with a particular intermediary for the purpose of issue management.

The number of lead merchant bankers may not exceed in case any issue of, issue size 200crore to 400crore.

Post issue management activities include:‐

Pre‐issue management activities include:‐

Merchant bank can help an organization specifically in promotional functions, ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Role of merchant bankers ‐‐‐‐‐‐‐‐.

‐‐‐‐‐‐‐‐‐‐‐‐‐ is a financial intermediary who helps to mobilize and transfer capital from those who possess it to those who need it.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a method of renting assets.

‐‐‐‐‐‐ is the opinion of the rating agency on the relative ability and willingness of the issuer of by instrument to meet the debt service obligations as and when they arise.

The features of hire purchase:

Discounting of bills of exchange is an attractive ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ based financial service provided by the finance companies.

Factoring is method of raising ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ finance through account receivable credit offered by commercial banks and factors.

Insurance is a ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is a fund based financial service, provides resources of finance receivable as well as facilities the collection of receivables.

Financial service companies exclude ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Specialized financial institution, are also known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Financial services offered financing risk project e.g. Risk capital scheme of I F C I venture capital fund of I D F I etc. to provide ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Identify odd one.