General Awareness Quiz on Capital Market & Money Market- 1st December 2020

Q1.The money market is-
(a)Encompasses the trade in both stocks and bonds.
(b)A document that orders a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued.
(c)The trade in short-term debt.
(d)An automated kiosk where in customer can print there passbook on their own.

Q2.The capital market encompasses the trade in-
(a)Stocks only
(b)Bonds only
(c)Both stocks and bonds
(d)Short term assets
(e)None of the above

Q3.Which of the following is/are Instruments of Money Market?
(a)Commercial Papers
(b)Treasury Bills
(c)Banker’s Acceptances
(d)Certificates of deposit
(e)All of the above

Q4.Which of the following is Not an Instrument of Capital Market?
(a)Bonds
(b)Debentures
(c)Shares
(d)Commercial Papers
(e)Preference Shares

Q5.Money Market Instruments mature within-
(a)A week
(b)A Month
(c)Three Months
(d)Six Months
(e)A year

Q6.What is Call Money?
(a)It portrays a short term loan with maturities term starting from one day to fourteen days, and it can be repaid on demand.
(b)It is the oldest and traditional money market instruments and practised across the globe.
(c)It is an agreement that specifies the sale and purchase of an asset.
(d)In this two parties sign an agreement, where one decides to pay a fixed rate of interest, and the other pay a floating rate of interest.
(e)All of the above

Q7.What is/are the features of Capital Market?
(a)Unites entrepreneurial borrowers and savers
(b)Deals long-term investments
(c)Agents are required
(d)It is controlled by government rules and regulations
(e)All of the above

Q8.What is/are the features of Money Market?
(a)It is fund-term market funds.
(b)It’s maturity period up to one year.
(c)It trades with assets that can be transformed into cash easily.
(d)Broker not required for the transaction
(e)All of the above

Q9.Which statement is Not true regarding Money Market?
(a)Money markets have low risk.
(b)Money markets are less liquid.
(c)Instruments mature within a year.
(d)To achieve short term credit requirements of the trade
(e)Money markets are informal in nature.

Q10.Which statement is true regarding Capital Market?
(a)Capital markets are informal in nature.
(b)Capital markets are highly liquid.
(c)Instruments matures within a year.
(d)ROI is comparatively high in capital market
(e)Capital markets have low risk.

Q11.If money is borrowed or lend for period between 2 days and 14 days it is known as-
(a)Call Money
(b)Term Money
(c)Notice Money
(d)Forward Money
(e)None of the above

Q12.__________ refers to borrowing/lending of funds for period between 15 days and one year-
(a)Call Money
(b)Term Money
(c)Notice Money
(d)Forward Money
(e)None of the above

Q13.In Indian money market, _____________ plays the central role, as it regulates and controls the money market-
(a)SEBI
(b)Ministry of Finance
(c)Indian Banking Association
(d)RBI
(e)SBI

Q14.Which of the following is the Capital Market Regulator?
(a)SEBI
(b)Ministry of Finance
(c)Indian Banking Association
(d)RBI
(e)SBI

Q15.What Are The Types Of Capital Markets?
(a)Interest Rate Swaps and Ready Forward Contract
(b)Call Money and Treasury Bill
(c)Treasury Bill and Secondary markets
(d)Interest Rate Swaps and Call Money
(e)Primary and Secondary markets

Solutions

S1.Ans.(c)
Sol.The money market is the trade in short-term debt.

S2.Ans.(c)
Sol.The capital market encompasses the trade in both stocks and bonds.

S3.Ans.(e)
Sol.Instruments of Money Market are-
(a)Commercial Papers
(b)Treasury Bills
(c)Banker’s Acceptances
(d)Certificates of deposits

S4.Ans.(d)
Sol.Commercial Papers is Not an Instrument of Capital Market.

S5.Ans.(e)
Sol.Money Market Instruments mature within a year.

S6.Ans.(a)
Sol.It portrays a short term loan with maturities term starting from one day to fourteen days, and it can be repaid on demand.

S7.Ans.(e)
Sol.Features of Capital Market
1-Unites entrepreneurial borrowers and savers
2-Deals long-term investments.
3-Agents are required.
4-It is controlled by government rules and regulations.
5-Deals in both commercial and non-commercial securities.
6-Foreign Investors.

S8.Ans.(e)
Sol.Few general money market features are-
1-It is fund-term market funds.
2-It’s maturity period up to one year.
3-It trades with assets that can be transformed into cash easily.
4-All the transactions take place through phone, email, text, etc.
5-Broker not required for the transaction
6-The components of a money market are the Commercial Banks, Non-banking financial companies, and Central Bank etc.

S9.Ans.(b)
Sol.Money markets are highly liquid.

S10.Ans.(d)
Sol.statements true regarding Capital market are-
(a)Capital markets are formal in nature.
(b)Capital markets are less liquid.
(c)Instruments take longer time to attain maturity.
(d)ROI is comparatively high in capital market
(e)Capital markets are riskier in comparison to money markets.

S11.Ans.(c)
Sol.If money is borrowed or lend for period between 2 days and 14 days it is known as Notice Money.

S12.Ans.(b)
Sol.Term Money refers to borrowing/lending of funds for period between 15 days and one year.

S13.Ans.(d)
Sol.In Indian money market, Reserve Bank of India plays the central role, as it regulates and controls the money market.

S14.Ans.(a)
Sol.SEBI is the Capital Market Regulator.

S15.Ans.(e)
Sol.The Capital Market instrument involves both the auction market and dealer market. It is classified into two sections: Primary Market and Secondary Market.
1-Primary Market: Here, fresh contracts are given to the people for the subscription purpose.
2-Secondary Market: The securities that have already been issued are exchanged among investors.

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