0

Introduction to markets - class-IX

Attempted 0/35 Correct 0 Score 0

REPO is?

  1. Repurchase agreement

  2. Reliance Petroleum

  3. Read and Process

  4. None of the above


Correct Option: A
Explanation:

A repurchase agreement, or repo for short, is a type of short-term loan much used in the money markets, whereby the seller of a security agrees to buy it back at a specified price and time. The seller pays an interest rate, called the repo rate, when buying back the securities.

The total number of Stock Exchanges in India is:

  1. $21$

  2. $20$

  3. $23$

  4. $22$


Correct Option: A
Explanation:

There are a total of 21 stock exchanges in India, with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) being the largest. Both offer stocks with volume and opportunity as India and the exchanges continue to grow and attract foreign investment.

The Reserve Bank of India changes the cash reserve ratio from time.

  1. True

  2. False


Correct Option: A
Explanation:

The Reserve Bank of India changes the cash reserve ratio from time- this is a true statement. Cash reserve ration is one of the quantitative methods of controlling credit creation capacity of the commercial bank. During inflation, Cash reserve ration is raise in order to reduce the money supply in an economy to check inflation and vice-versa.

Paid dividends to common stockholders Rs 67, 600, 000 and common shares outstanding 55, 000, 000 then dividend per share will be _________.

  1. Rs 1.23

  2. Rs 0.81

  3. Rs 2.12

  4. Rs 2.78


Correct Option: A

A cheque is dishonored by______.

  1. non payment only.

  2. partial payment.

  3. both a & b.

  4. none of the above.


Correct Option: C
Explanation:

A cheque is dishonored by both non payment as well as partial payment. A cheque gets dishonored when the bank fails to pay the mentioned amount to payee. When the cheque deposited by anybody for collection or presented for payment gets refused by the bank, it is known as dishonor of cheque.

State Bank of India was originally known as _________.

  1. Centurion Bank

  2. United Bank of India

  3. Imperial Bank

  4. None of the Above


Correct Option: C
Explanation:

State Bank of India was originally known as Imperial Bank. Imperial Bank of India, 1955, was renamed on 30 April 1955 to the State Bank of India. Imperial Bank was established on 1921. Now, State Bank of India is one of the largest commercial banks of India.

An endorsement is said to be Partial endorsement, if it satisfies which of the following conditions?

  1. If the endorser sings his name only

  2. If the endorser adds a direction to pay the amount mentioned in the instrument to the order of a specified person

  3. If the endorse restricts or excludes the right to further negotiate the instrument

  4. If the endorser purports to transfer to the endorsee only a part of the amount payable


Correct Option: D
Explanation:

An endorsement is said to be Partial endorsement, if the endorser purports to transfer to the endorsee only a part of the amount payable. In simple terms, endorsement which allows transferring to the endorsee a part of the amount payable is known as partial endorsement.

An entry strategy in which a firm maintains its production facilities within its home country and transfers its products for sale in foreign markets is known as _________.

  1. Exporting

  2. Licensing

  3. Franchising

  4. International management


Correct Option: A
Explanation:

An entry strategy in which a firm maintains its production facilities within its home country and transfers its products for sale in foreign markets is known as exporting. Exporting can be defined as the act or process of sending goods and services to a foreign country for sale. Exporting helps to upgrade the rate of economic growth.

The process by which allocation of funds is done is called ____.

  1. financial intermediation

  2. financial integration

  3. financial disinvestment

  4. financial leveraging


Correct Option: A
Explanation:

The process by which allocation of funds is done is called financial intermediation. This process helps to channelize funds from the borrowers to lenders. Financial intermediation generally cause reduction in transaction cost. This process is mainly performed by the financial intermediaries, such as stockbroker, commercial bank, investment bank, etc.

Certificates of deposit (CD) help to mobilize a large amount of money for short periods.

  1. True

  2. False


Correct Option: A
Explanation:

Certificates of deposit (CD) help to mobilize a large amount of money for short periods- this is a true statement. CDs are freelyy negotiable. It can be issued for a period of 91 days to 1 year. It is generally issued at a discount on the actual amount of deposits held.

Holders of assets can readily sell their financial assets through the mechanism of the financial market. This is because financial markets provide _________.

  1. valuable information about securities being traded in the market

  2. assistance in Price Discovery

  3. liquidity to Financial Assets

  4. all of the above


Correct Option: C
Explanation:

Holders of assets can readily sell their financial assets through the mechanism of the financial market. This is because financial markets provide liquidity to Financial Assets. Liquidity of financial assets means that financial assets can be converted into cash in a short time, with little or no loss in value.

State, with reasons, whether the following statements are True or False
The financial market contributes towards the nation's economic growth and development.

  1. True

  2. False


Correct Option: A
Explanation:

The financial market contributes towards the nation's economic growth and development. This statement is True. 
Reasons : 
(a) The place where people and institutions borrow money are brought together with those having surplus funds, is called a Financial Market.
(b) The financial market contributes to national growth by facilitating continuous flow of surplus fund to business enterprises (sick and deficit units) through its allocative function ensuring higher rate of return to the savers/household by investing the scarce resources in the enterprises having higher productivity, increasing the rate of capital formation. 
(c) The financial market contributes a lot to the development of the entreprenurial class by financing their business requirements. It obtain funds from individual households private and public sector units. Central govt. etc. and supply these funds to those business units who need it for productive purpose.
(d) The components of Financial Market is money market and capital market. It helps in accelerating the rate of industrial and economic development of the country. As a result, the standard of living and social welfare goes up. Thus, Financial market contributes towards the nations growth and development.

Answer the following question.
Primary and secondary markets _______.

  1. Compete with each other

  2. Complement each other

  3. Function independently

  4. Control each other


Correct Option: B
Explanation:

Primary market deals with the issue of new securities. That is, through the primary market a company raises capital directly from the borrowers. That is, once the securities are issued in primary market, they are then traded in the secondary market. It is in this sense that both the markets complement each other

The amount of gold, reserve currencies and special drawing rights available for the finance of International trade is known as ______.

  1. international liquidity

  2. special drawing rights

  3. international monetary fund

  4. none of the above


Correct Option: A

The most important techniques for maintaining marketing control is?

  1. Cost analysis

  2. Market share analysis

  3. Non-financial control

  4. Marketing audit


Correct Option: A

Deep financial market is ________________________.

  1. The market which attracts funds in large volume

  2. The market that attracts funds from all types of investors.

  3. The underdevelopment market due to government regulations

  4. The market that provides opportunities for sufficient orders at suitable interest rates below and above the market price.

  5. The market that has easy effective interlinkages between its various parts and sub-parts.


Correct Option: D
Explanation:

`Deep market is one where there are always sufficient orders for buying and selling at fine quotations, both below and above the market price, and where there are good opportunities for swap deals.

Giving excess protection to domestic markets, which have high entry barriers for foreign firms, over valuation of exchange indicates the adoption of _________ by the country?

  1. Inward oriented strategy

  2. Inflation control

  3. Liberalization

  4. Outwards oriented strategy

  5. Export promotion strategy


Correct Option: A
Explanation:

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy.

The factors responsible for integration of financial markets are ___________________.

  1. Increased cross penetration of foreign ownership.

  2. Liberalization of regulations governing the financial markets

  3. The development of new financial instruments

  4. All of the above

  5. Both (A) and (C) above


Correct Option: D
Explanation:

Integration of financial markets involves the freedom and opportunity to raise funds from and to invest anywhere in the world, through any type of instrument. All the given factors are responsible for Integration of financial markets. 

The net liquidation value of a firm is the best indicator of its financial health. This is the proposal of ____________.

  1. Beaver model

  2. L C Gupta model

  3. Wilcox model

  4. Altman's Z score model

  5. None of the above


Correct Option: C
Explanation:

Wilcox proposed that the net liquidation value of the firm is the best indicator of its financial health. The net liquidation value can be obtained by the difference in liquidation value of a firms assets and the liquidation value of its liabilities.

The long-term investment of a firm involves __________________.

  1. Irreversible investments

  2. Investments which benefit the firm for number of years

  3. All of the above

  4. None of the above


Correct Option: C
Explanation:

Long-term decisions involve setting up of the firm, expansion, diversification modernization and other similar capital expenditure decisions requiring huge investment made by raising long-term sources, the benefits of which can be seen only in the long term. Because of the huge investments involved these decisions are irreversible.

The intermediary between the customers and suppliers who perform financing and debt collection services is called a ________.

  1. Bank

  2. Factor

  3. Mutual fund

  4. NBFC

  5. Merchant Banker


Correct Option: B
Explanation:

Factoring is a financial service under which the factor undertakes collection, accounting and management of the client's debt. Thus the factor is an intermediary between the supplier and the customers who performs financing and debt collection services.

An industrial company which has at the end of any financial year accumulated losses greater than its net worth is said to be _______________.

  1. Bankrupt

  2. Sick

  3. Weak

  4. Both (A) and (C) above

  5. None of the above


Correct Option: B
Explanation:

Sick industrial company is company registered for not less than five years which has to the end of any financial year, accumulated losses equals to or exceeding its entire net worth.

Deregulation and globalization of the financial markets increase the volatility in ___________.

  1. Internal rates

  2. Exchange rates

  3. Prices of financial assets

  4. All of the above

  5. Both (A) and (B) above


Correct Option: D
Explanation:

The most important and visible effect of globalization and integration of financial markets is the increase in volatility in:
1. Interest rates
2. Exchange rates &
3. Prices of financial assets change quite frequently in response to various changes taking place in different segments of the financial markets  all over the world.

The strategy of laying stress on domestic production which is usually adopted by developing countries is called as ________________.

  1. Open economy strategy

  2. Growth oriented strategy

  3. Inward oriented strategy

  4. Export substitution strategy

  5. None of the above


Correct Option: C
Explanation:

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy. Thus the main feature of the inward oriented strategy is to lay stress on domestic production.

Delhi is often described as a 'cosmopolitan' city. This means that it ____________

  1. is the principal city

  2. is a city of great wealth

  3. is a city with a global reputation

  4. is a city with an ethnically diverse population


Correct Option: D
Explanation:

A cosmopolitan city is a city that has a high diversity of population with the high number of population with a better life style than a village which suggests that it is a city of great wealth too.

Which of the following is example of consumer's co-operative society?

  1. Haryana handloom

  2. Gujarat co-operative milk marketing federation

  3. Apna bazar

  4. Urban Cooperative banks


Correct Option: C
Explanation:

Apna bazar is an example of consumer's co-operative society. A consumer cooperative can be defined as a cooperative business owned by its customers for their mutual benefit. This type of cooperative business is service oriented rather than pecuniary profit.

Which strategy involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels?

  1. Product Development

  2. Market Penetration

  3. Diversification

  4. Market Development


Correct Option: A
Explanation:

Product development strategy involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels. It helps in the process of expansion of the existing business. Product development strategy can be defined as a process of bringing a new innovation to consumers from concept to testing through distribution.

________ are concerned about ethics, social responsibility and reputation of the company in which they invest.

  1. Employees

  2. Employers

  3. Investors

  4. Students


Correct Option: C
Explanation:

Investors are concerned about ethics, social responsibility and reputation of the company in which they invest. Investors do a critical evaluation of the background of the company before investing. Critical evaluation involves the ethical practices and social responsibility performed by the company.

A speculator who buys securities in anticipation of increase in prices is called ___________.

  1. Stag

  2. Bull

  3. Bear

  4. None of them


Correct Option: A
Explanation:

An investor or speculator is a person who subscribes to a new issue, expecting the price of the stock to rise immediately upon the start of trading is known as stag. The sole aim of a stag is to sell the shares soon after the allotment to realize a quick profit.

Which is India's largest private sector bank ___________.

  1. Axis Bank

  2. SBI

  3. ICICI Bank

  4. HDFC Bank


Correct Option: A
Explanation:

Axis Bank is India's largest private sector bank. Axis Bank provides spectrum of financial services including personal and corporate banking. It is famous for providing credit cards facility worldwide. The head office of Axis Bank is situated in Mumbai, Mahashtra.

Which banking company is known worldwide for its credit cards _______________.

  1. Axis Bank

  2. ICICI Bank

  3. HDFC Bank

  4. American Express


Correct Option: A
Explanation:

Axis Bank is known worldwide for its credit cards. Axis Bank is the third largest private sector bank in India. It offers a spectrum of financial serivces for personal and corporate banking. Head office of Axis Bank is situated in Mumbai.

To examine the productivity, a banker chooses the following criteria:

  1. Labour efficiency

  2. Capital efficiency

  3. Fixed assets efficiency

  4. All the above


Correct Option: D

Reasons for capital fight are __________________.

  1. Unstable political and economic climate

  2. Fear of war, terrorism etc.

  3. High inflation in home countries

  4. Attractiveness of foreign financial systems

  5. All of the above


Correct Option: E
Explanation:

Some of the reasons for capital flight are expected return on investment is higher abroad,unstable political and economic climate, fear of war, terrorism, etc. tax structure of local governments, high inflation in home country and attractiveness  of foreign financial system.

A Yankee bond is__________________________________.

  1. A dollar denominated bond issued for global market by a non-US entity.

  2. A dollar denominated bond issued in the US by a non-US entity.

  3. A dollar denominated bond issued by a US resident to non-US investors.

  4. All of (A), (B) and (C) above

  5. None of the above


Correct Option: B
Explanation:

Yankee bonds are US dollar denominated Bonds issued by foreign borrowers, (Usually foreign governments or entitles supranational ad highly rated corporate borrowers) in the US bond markets.

Which of the following is the banker's bank _________.

  1. SIDBI

  2. EXIM bank

  3. IDBI

  4. RBI


Correct Option: D
Explanation:
In India, Reserve Bank Of India or RBI is known as the banker's bank. It is so called because it acts as a bank for all the commercial banks in India. RBI holds their cash reserves, lends them short -term funds and provides them the central clearing and remittances facilities.
- Hide questions