Class 12 Business Studies Chapter 10 MCQ and Important Questions of Financial Markets for the academic session 2022-2023. Class 12 Business Studies MCQ are important study material for CBSE as well as other State board students during the exam preparation. Class 12 Business Studies Chapter 10 Solutions.

Class 12 Business Studies Chapter 10 MCQ


The settlement cycle in stock exchange is

[A]. T + 1
[B]. T + 2
[C]. T + 3
[D]. T + 4

SEBI was established in

[A]. 1994
[B]. 1984
[C]. 1988
[D]. 2013

……… is the market where “second hand” securities are bought and sold for investment and speculation.

[A]. Primary market
[B]. Secondary market
[C]. Money
[D]. Capital


[A]. Repurchase agreement
[B]. Representative of a company.
[C]. Reliance Petroleum
[D]. Repossess

Functions of Financial Markets

    1. Mobilisation of Savings and channeling them into the most productive uses.
    2. Helps in Price Determination.
    3. Provides Liquidity to Financial Assets.
    4. Reduces the Cost of Transactions.

Which of the following is not a money market security?

[A]. Treasury Bills
[B]. Certificate of deposit
[C]. Commercial paper
[D]. Kisan Vikas Patra

On which day, the stock exchange delivers the share or makes payment to the other broker?

[A]. Transaction day
[B]. Pay-in day
[C]. Pay-out day
[D]. None of the above

After the trade has been executed, the broker issues a Contract Note to the investor within

[A]. 12 hours
[B]. 24 hours
[C]. 48 hours
[D]. 72 hours

It is the market for short term funds which deals in assets whose period of maturity is upto 12 months.

[A]. Capital market
[B]. Primary market
[C]. Secondary market
[D]. Money market

Instruments of Money Market

    • Treasury Bills
    • Commercial Paper
    • Call Money
    • Certificate of Deposit
    • Commercial Bill

Who issues a treasury bill?

[A]. Reserve Bank of India
[B]. Post office
[C]. Commercial Banks
[D]. Industrial banks

Only high net worth companies can use this method to finance/borrow funds.

[A]. Trade bills
[B]. Treasury bills
[C]. Call money
[D]. Commercial papers

The method by which banks borrow from each other to adhere to CRR requirement

[A]. SLR
[B]. Call money
[C]. Certificate of deposit
[D]. Open market operations

A rise in call money rates makes other sources of finance such as commercial paper and certificates of deposit

[A]. Cheaper
[B]. Expensive
[C]. No effect
[D]. Both [a] and [b]

Floatation of New Issues in Primary Market

1. Offer through Prospectus/ Initial Pubic Offer.
2. Offer for Sale.
3. Private Placements.
4. Rights Issue.
5. e-IPOs.


Companies finance their credit sales using this method of finance.

[A]. Call money
[B]. Trade bills/ Commercial bills
[C]. Commercial papers
[D]. Certificate of deposit

Which of the following are participants representing capital market?

[A]. Development banks
[B]. Commercial banks
[C]. Stock exchanges
[D]. All of the above

A company can raise capital through the primary market by way of

[A]. Debentures
[B]. Preference shares
[C]. Equity shares
[D]. All of the above

The process of holding shares in electronic form is known as

[A]. Speculation
[B]. Demonetisation
[C]. Dematerialisation
[D]. Demutualisation
Functions of a Stock Exchange

1. Providing liquidity and Marketability to Existing Securities.
2. Pricing of Securities.
3. Safety of Transaction.
4. Contributes to Economic Growth.
5. Spreading of Equity Culture.
6. Providing Scope for Speculation.


Which type of functions does SEBI performs?

[A]. Protective
[B]. Regulatory
[C]. Developmental
[D]. All types

This number is assigned to each transaction by the stock exchange and printed on the contract note.

[A]. Contract account number
[B]. Serial order number
[C]. Transaction ID
[D]. Unique order code

Which of the below mentioned statement is a protective function of stock exchange?

[A]. Controlling insider trading
[B]. Regulating take-over bids by larger companies
[C]. Keeping a close watch on malpractices by brokers
[D]. All of the above

The ………. keeps securities in electronic form on behalf of the investor?

[A]. Stock exchange
[B]. Bank locker
[C]. Depository
Trading and Settlement Procedure

1. Selection of Broker.
2. Opening Demat Account with Depository.
3. Placing the order.
4. Executing the order.
5. Settlement.

How is this topic related to the previous topic financial management?

Just as the topics planning and controlling are inter-related, the topics financial management and financial markets related to each other. MCQs can be made in such a manner that they cover both topics.

Is it sufficient to revise the chapter by doing only MCQs?

MCQs help the students in revising the topics. They are an aid or supplement to boost knowledge of students. However, if the examination is completely MCQs based, then the important of MCQs rises manifold.

What are the important sub-topics in this chapters financial market for preparing MCQs?

The sub-topics money market instruments, difference between capital market and money market and trading procedure on stock exchange are to be learnt thoroughly.