🏫 Board💼 Business Studies

Financial Markets

13 Board Business Studies previous year questions on Financial Markets — options free on every question; 1 include the answer & explanation free, the rest unlock with PYQ Pass.

Q1 FREE PREVIEW

Identify the method of flotation in the Primary Market in which a company sells securities en bloc at an agreed price to a broker:

a

Rights Issue

b

Offer for Sale

c

e-IPOs

d

Offer through Prospectus

✓ Correct answer: b)

Offer for Sale

Explanation

Correct Answer: (B) Offer for Sale

Why “Offer for Sale” is correct?

In Offer for Sale, the company:

  • Sells securities en bloc (in bulk)

  • At an agreed price

  • To a broker or issuing house

Then the broker sells those securities to the public.

So the key words in the question are:

👉 “en bloc”
👉 “agreed price to a broker”

These clearly indicate Offer for Sale.

Why the other options are not correct? 1. Rights Issue

Shares are offered to existing shareholders, not to a broker.

2. e-IPOs

This is just an electronic method of applying for shares online.
It is not a separate method of flotation.

3. Offer through Prospectus

In this method, the company directly invites the public to subscribe to shares.
Shares are not first sold to a broker.

Q2

Which is the main problem of money market ?

a

Lack of capital

b

Hundi

c

Lack of market

d

None of these

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Q3
Identify the function performed by the Financial Market from the following statement:

“Holders of assets can readily sell their financial assets through the mechanism of the financial market.”

a

Reduction in transaction cost

b

Providing liquidity to financial assets

c

Facilitating price discovery

d

Mobilisation of savings and channelising them into the most productive uses

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Q4

Legally SEBI was established in

a

1988

b

1990

c

1992

d

1994

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Q5

Who controls the money market in India ?

a

Finance Department

b

RBI

c

Financial Institutions

d

SEBI

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Q6

____deals in new issued shares.

a

Secondáry market

b

Primary market

c

Both (A) and (B)

d

None of these

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Q7

Money market deals in

a

Short-term funds

b

Medium-term funds

c

Long-term funds

d

None of these

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Q8
Identify the correct sequence of trading and settlement procedure:

(A) The investor has to sign a broker-client agreement.
(B) The investor has to open a Demat Account.
(C) An order confirmation slip is issued to the investor by the broker.
(D) The broker then goes online and connects to the main stock exchange.

a

(A), (B), (C), (D)

b

(A), (C), (B), (D)

c

(B), (A), (D), (C)

d

(C), (B), (D), (A)

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Q9

The market where existing securities are bought and sold is known as:

a

Primary market

b

Secondary market

c

Capital market

d

Financial market

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Q10

............... creates Iiquidity.

a

Organised market

b

Unorganised market

c

Primary market

d

Secondary market

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Q11

Capital market deals in

a

Short-term funds

b

Medium-term funds

c

Long-term funds

d

None of these

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Q12
Identify the function performed by SEBI:

“It controls insider trading, takeover bids and imposes penalties for such practices.”

a

Protective functions

b

Regulatory functions

c

Developmental functions

d

Preventive functions

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Q13

The number of stock exchanges in India at present is

a

21

b

23

c

24

d

none of these

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