Bonds, equities, stocks, and currencies are all exchanged in a financial market. Only a few financial markets handle trillions of dollars in daily security business transactions, while others are smaller and less active.
Definition of Financial Market
There are several marketplaces where securities are traded in the financial sector, including the stock exchange, the bond market, the foreign exchange market, and many more. Economies based on capitalism cannot function without financial markets. Smaller financial markets with less activity are more common, but only a tiny number of them transact securities transactions worth trillions of dollars every single day. This is a market where firms can increase their cash flow, corporations can reduce their risks, and investors can increase their cash flow.
Meaning of Financial Markets
The stock market is a financial market that allows investors to buy and sell publicly traded company shares. The main stock market is where new stocks are originally launched, while the secondary stock market is where stock securities are traded.
Types of Financial Markets
- Over the Counter (OTC) Market
- Bond Market
- Money MarketsDerivati
- Forex Market
Functions of Financial Market
- Securities pricing is influenced by market forces such as supply and demand and the opinions of investors. Markets, where financial assets and securities can be traded, are referred to as Financial Markets. It distributes the country's scarce resources. It acts as a go-between for investors and collectors, facilitating the transfer of funds.
- Gives barter assets a boost in liquidity
- More efficient use of resources since parties do not have to expend additional resources in order to locate potential customers for the exchange of securities. It also saves money since it provides useful details about the financial instruments that are exchanged there
- Using the most productive means of exchange, helps people make use of their money.
Following are some of the multiple choice questions on the Financial Markets with answers that will help the students in developing their knowledge.
Financial Markets MCQ
1. All activities related to finance and organized into a system called ‐‐‐‐----‐‐‐‐‐‐‐‐.
2. Which agency regulates and supervises NBFCs?
3. A Treasury Bill is basically:
4. The objectives of SEBI include -------------.
5. Which of the following instruments is not traded in a money market?
6. The first computerized online stock exchange in India was
7. The main characteristics of money market transactions which enables it to have active secondary market are:
8. Listing is mandatory for ------------------.
9. Who appoints the chairman of SEBI?
10. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is the market where the existing securities of companies are traded.
11. Which tends to be riskier, stocks or bonds?
12. Which of these is NOT a derivative instrument?
13. Which of the following is included in the financial assets?
14. It is necessary for an investor to obtain Certificate of Deposits for ™ ________lakh.
15. Who is the current governor of RBI?
16. Securities of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ companies are traded in secondary market.
17. OTCEI stands for Over the Counter ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of India.
18. Secondary market deals with the ________ of existing securities.
19. Call money or call loans are ________ .
20. Maturity period to call money is
21. A person who buys or sells equities for his or her clients is a
22. Those who want to borrow money to purchase items such as houses and items.
23. The amount that a bond issuer promises to pay the buyer at maturity.
24. ________ is a part of capital market.
25. At present only two depositories are registered with SEBI .
26. Dinesh has 100 equity shares of a company. He wants to sell 50 of these shares. Which market should he approach?
27. Who is known as Lender of the last Resort?
28. IPO stands for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.
29. Which is the major part of financial system?
30. When it comes to investments in general, the higher the ____ the higher the potential reward.
31. Regulator of Secondary market is
32. Which of the following words does not belong to the stock exchange?
34. Which of the following is not capital market instruments?
35. Which is term of where buyers and sellers of securities meet in one central location to conduct trades?
36. Dinesh has 100 equity shares of a company. He wants to sell 500 of these shares. Which market should be approach?
37. An ideal Capital market is one
39. What is the term describing an overall decrease in stock prices?
40. What are these? NYSE - NASDAQ
41. Shares of stock from a variety of companies that you own are called?
42. When stocks overall are rising, the market is called?
43. The government agency responsible for regulating the stock market?
44. Term that refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares.
45. Which of the following cannot accept Demand Deposits?
46. NBFC does not Include
47. Financial Market is classified into
48. Indian Financial System is a link between
49. A short term debt obligation backed by govt.with a maturity of less than 1 year.
50. Primary market deals with selling of securities for the first time through the following method
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