Multiple Choice Questions on Financial Markets and Institutions

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Multiple Choice Questions on Financial Markets and Institutions. We provided the Multiple Choice Questions and Answers on Financial Markets and Institutions pdf in this post for free so that you can practice well for the exam.

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These types of competitive MCQs appear in the exams like UPSC, State PCS, CDS, NDA, Assistant Commandant, SSC, Railway, Bank, Delhi Police, UPSSC, and other Competitive Examinations, etc.

We covered all the financial institutions and markets MCQ with answers in Hindi on our website for your convenience.

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MCQ on Financial Markets and Institutions for Students

Consider the following statements. I. The money market refers to the market for short-term requirements and deployment of funds. II. The coupon rate is the specified interest rate on a fixed maturity security, fixed at the time of issue. III. Call money is money lent for one day. Which of the statements given above is/are correct?

(a) I and II only

(b) II and III only

(c) I and III only

(d) All of these

Option d - All of these

Which of the following statements are true about T-Bills? I. 14 days T-bill is auctioned every Friday every week. II. 91 days T-bill is auctioned every Friday every week. III. 182 days T-bill and 364 days T-bill are auctioned every alternate Wednesday. IV. 182 days T-bill and 364 days T-bill are auctioned on a fortnight basis. Choose the right answer from the codes given below.

(a) I, II and III

(b) I and IV

(c) II and III

(d) I, II and IV

Option b - I and IV

Capital market means ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Share market

(b) Cash market

(c) Commodities market

(d) All of the above

Option a - Share market

Open Market Operations, one of the measures taken by RBI in order to control credit expansion in the economy, means

(a) the sale or purchase of government securities.

(b) issuance of different types of bonds.

(c) auction of gold.

(d) to make available direct finance to borrowers.

Option d - to make available direct finance to borrowers

The capital market witnessed major reforms in the 1990s. Which of the following are the major reforms of the capital market? I. Set-up of the Investors Education and Protection Fund in 2001 under the purview of SEBI. II. The Insurance Regulatory and Development Authority was set up in 2000. III. The Multi-Commodity Exchange is set up. IV. Credit rating agencies were set up. Choose the correct answer using the codes given below.

(a) I, II and IV

(b) II and IV

(c) I and III

(d) I, II, III and IV

Option d - I, II, III and IV

Which of the following is true about the distinction between the money market and the capital market? I. The money market deals with long-term funds and the capital market deals with short-term funds. II. The money market deals in securities like treasury bills, commercial papers, etc, and the capital market deals with securities like shares, debentures, etc. III. Money market participants are commercial banks, NBFs, etc, and capital market participants are stock brokers, individual investors, etc. IV. Money market is regulated by SEBI and the capital market is regulated by RBI. ( Multiple Choice Questions on Financial Markets and Institutions )

(a) I, III, and IV

(b) II and III

(c) I and IV

(d) All of these

Option b - II and III

The SEBI was given statutory status in 1992 on the recommendation of ( Multiple Choice Questions on Financial Markets and Institutions )

(a) the Chakraborty Commission

(b) the Chelliah Committee

(c) the Tendulkar Committee

(d) the Narasimham Committee

Option d - the Narasimham Committee

To prevent the recurrence of scams in the Indian Capital Market, the government has assigned regulatory powers to ( Multiple Choice Questions on Financial Markets and Institutions )

(a) RBI

(b) SBI

(c) SEBI

(d) ICICI

Option c - SEBI

The basic regulatory authority for mutual funds and stock markets lies with the ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Government of India

(b) Reserve Bank of India

(c) SEBI

(d) Stock Exchanges

Option c - SEBI

A market for a relatively long-term financial instrument is known as ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Secondary market

(b) Primary market

(c) Capital market

(d) All of these

Option c - Capital market

As compared to capital markets, money markets ( Multiple Choice Questions on Financial Markets and Institutions )

(a) have smaller fluctuations in price.

(b) trade debt instruments with shorter terms.

(c) are usually more widely traded.

(d) All of the above

Option d - All of the above

The acronym SRO, being used in the capital market for various market participants, stands for which one of the following? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Self Regulatory Organisations

(b) Small Revenue Operators

(c) Securities Roll-back Operators

(d) Securities Regulatory Organisations

Option a - Self Regulatory Organisations

Consider the following statements about the Indian Capital Market. I. Primary Market in India is mainly dealt with new issues and debentures. II. The primary Market in India is supervised by the Insurance Regulatory Development Authority. Which of the statement(s) given above is/are correct?

(a) Only I

(b) Only II

(c) Both I and II

(d) Neither I nor II

Option a - Only I

Consider the following statements. I. The capital account surplus of a country means the money is flowing into the country. II. The capital account deficit of a nation suggests that the nation is increasing its claims on foreign assets. Which of the statements given above is/are correct? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Only I

(b) Only II

(c) Both I and II

(d) Neither I nor II

Option a - Only I

Consider the following statements. I. A scheme for attracting portfolios from Foreign Institutional Investors (Flls) in India was launched in 1992. II. A scheme to raise ADR/GDR/FCCBS issues from the international capital markets in India was initiated during 1992-1993. Which of the statements given above is/are correct? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Only I

(b) Only Il

(c) Both I and II

(d) Neither I nor II

Option c - Both I and II

The market in which loans of money can be obtained is called ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Reserve market

(b) Institutional market

(c) Money market

(d) Exchange market

Option c - Money market

Which of the following statement is correct about daily volumes in the call money market?

(a) These volumes are usually lower than the volumes in the repo markets.

(b) These volumes are comparable with volumes in the ICD and CP markets.

(c) They register the largest transaction value after government securities.

(d) Call money markets record the highest daily transaction value amongst all segments of debt markets.

Option d - Call money markets record the highest daily transaction value amongst all segments of debt markets

Nifty Junior is related to which one of the following markets of the Indian economy? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Indian money market

(b) Indian commodity market

(c) Indian currency market

(d) Indian equity market

Option a - Indian money market

In the context of the Indian economy, 'Open Market Operations' refers to ( Multiple Choice Questions on Financial Markets and Institutions )

(a) borrowing by scheduled banks from the RBI.

(b) lending by commercial banks to industry and trade.

(c) purchase and sale of government securities by the RBI.

(d) None of the above

Option c - purchase and sale of government securities by the RBI

The purchase or sale of government securities by the Central Bank from the general public in the bond market, in a bid to increase or decrease the money supply in the economy, is referred to as ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Open Market Operations

(b) Rationing of Credit

(c) Variable Reserve Ratio

(d) Clear Money Policy

Option a - Open Market Operations

The financial market for securities with maturities of less than one year is known as ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Derivatives market

(b) Cash market

(c) Money market

(d) Rupee market

Option c - Money market

India's financial system can be mainly divided into

(a) two categories

(b) three categories

(c) four categories

(d) five categories

Option a - two categories

Which one of the following is a specialized sub-market of the money market? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) Collateral loan market

(b) Discount market

(c) Bond market

(d) Acceptance of market

Option c - Bond market

India has a highly volatile part of the organized money market.

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(a) Government Securities Market

(b) Trade Bill Market

(c) Soliciting Money Market

(d) Deposit Certificate Market

Option c - Soliciting Money Market

Which one of the following is correct about the Commercial Papers (CPs) in the Indian money market? ( Multiple Choice Questions on Financial Markets and Institutions )

(a) It is issued by Indian Commercial Bank.

(b) It is issued by companies with a net worth of more than 5 crores.

(c) It is issued by the Central Government.

(d) All of the above

Option b - It is issued by companies with a net worth of more than 5 crores

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