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MBA Finance Financial Markets — practice questions

Explore 59 free Financial Markets questions in MBA Finance Financial Management. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Markets questions and exercises with answers

Showing questions 1–30 of 59.

A financial market links savers and investors, performing what is known as its:Read the answer and worked solution →The process by which allocation of funds is done through banks or markets is called:Read the answer and worked solution →Which is one of the four functions of a financial market?Read the answer and worked solution →By making financial assets easy to buy and sell, markets provide:Read the answer and worked solution →Financial markets are classified on the basis of the:Read the answer and worked solution →Instruments with a maturity of less than one year are traded in the:Read the answer and worked solution →The money market has:Read the answer and worked solution →Which is a major participant in the money market?Read the answer and worked solution →A Treasury bill is an instrument of short-term borrowing by the:Read the answer and worked solution →Treasury bills are also known as:Read the answer and worked solution →A 91-day Treasury bill of face value 1,00,000 bought for 96,000 earns the investor:Read the answer and worked solution →The difference between the issue price of a treasury bill and its redemption value is called:Read the answer and worked solution →Treasury bills are available for a minimum amount of:Read the answer and worked solution →A short-term unsecured promissory note issued by large creditworthy companies is:Read the answer and worked solution →Using funds raised through commercial paper to meet floatation costs of a bigger issue is called:Read the answer and worked solution →Short-term finance repayable on demand, with maturity of one day to fifteen days, used between banks, is:Read the answer and worked solution →The interest rate paid on call money loans is known as the:Read the answer and worked solution →Unsecured, negotiable, short-term bearer instruments issued by commercial banks are:Read the answer and worked solution →A bill of exchange used to finance credit sales, drawn by the seller and accepted by the buyer, becomes a:Read the answer and worked solution →A trade bill accepted by a commercial bank is known as a:Read the answer and worked solution →Facilities and institutional arrangements through which long-term funds are raised form the:Read the answer and worked solution →The SENSEX, the benchmark index of the BSE, is made up of how many actively traded stocks?Read the answer and worked solution →Catch the money market toolsRead the answer and worked solution →Pop the market functionsRead the answer and worked solution →Run the market numbersRead the answer and worked solution →Slice the market wordsRead the answer and worked solution →Money or capital marketRead the answer and worked solution →Sort instrument, issuer and termRead the answer and worked solution →Type the numberRead the answer and worked solution →Financial markets bingoRead the answer and worked solution →

Worked practice questions

A financial market links savers and investors, performing what is known as its:

  1. Allocative function
  2. Executive function
  3. Legislative function
  4. Protective function
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Correct answer: A. Allocative function

1. Funds move to their most productive use. 2. Households save and firms invest. 3. That is the allocative function. _Source: syllabus Business Studies Part II, Chapter 10, Financial Markets._

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The process by which allocation of funds is done through banks or markets is called:

  1. Financial arbitration
  2. Financial intermediation
  3. Financial speculation
  4. Financial liquidation
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Correct answer: B. Financial intermediation

1. Banks and markets compete for savings. 2. Both channel funds to firms. 3. That process is financial intermediation. _Source: syllabus Business Studies Part II, Chapter 10, Financial Markets._

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Which is one of the four functions of a financial market?

  1. Facilitating price discovery
  2. Fixing the annual budget
  3. Printing the currency notes
  4. Collecting the income tax
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Correct answer: A. Facilitating price discovery

1. Demand and supply meet in the market. 2. A price for the asset emerges. 3. That is price discovery. _Source: syllabus Business Studies Part II, Chapter 10, Financial Markets._

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