Money Market One Mark Online Test

Money Market One Mark Online Test (12th Standard Commerce)

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The money invested in the call money market provides high liquidity with ____.

A.Low Profitability B.High Profitability C.Limited Profitability D.Medium Profitability

A major player in the money market is the ____.

A.Commercial Bank B.Reserve Bank of India C.State Bank of India D.Central Bank

Debt instruments issued by corporate houses for raising short-term financial resources from the money market are called ____.

A.Treasury Bills B.Commercial Paper C.Certificate of Deposit D.Government Securities

The market for buying and selling of Commercial Bills of Exchange is known as a ____.

A.Commercial Paper Market B.Treasury Bill Market C.Commercial Bill Market D.Capital Market

A marketable document of title to a time deposit for a specified period may be referred to as a ____.

A.Treasury Bill B.Certificate of Deposit C.Commercial Bill D.Government Securities

The money market deals with financial assets and securities whose maturity period does not exceed ____.

A.three months B.six months C.one year D.five years

Who described the money market as "the collective name given to the various firms and institutions that deal in the various grades of near money"?

A.Crowther B.The Reserve Bank of India C.E. Gordon D.L. Natarajan

Consider the following statements about the money market:
1) There is no formal place like a stock exchange; transactions mostly take place over the phone.
2) It is a single homogeneous market.
3) It is a wholesale market where the volume of funds traded is very large.
Which of these are correct?

A.1 and 2 only B.1 and 3 only C.2 and 3 only D.1, 2 and 3

Which institutions are described as the nerve centre of the whole money market?

A.Discount houses B.Commercial banks C.Insurance companies D.Mutual funds

Q10

Pick the odd one out with respect to the sub-markets of the money market.

A.Call money market B.Acceptance market C.Bill market D.Stock exchange

Q11

According to the comparison table in the lesson, the minimum value of a treasury bill is ____.

A.Rs 10 B.Rs 100 C.Rs 25,000 D.Rs 5 lakhs

Q12

Who is the regulator of the money market?

A.SEBI B.The Central Bank C.Stock exchanges D.Merchant bankers

Q13

Consider the following about the capital market as compared with the money market:
1) Underwriting is a primary function.
2) It has low credit and market risk.
3) A price discovery mechanism exists in it.
Which of these are correct?

A.1 and 2 only B.1 and 3 only C.2 and 3 only D.1, 2 and 3

Q14

Pick the odd one out: which of these is NOT one of the new money market instruments that came into existence in India after 1986?

A.Commercial Papers B.Certificate of Deposits C.Treasury Bills D.Repo Instruments

Q15

On the basis of periodicity, which of the following is NOT a type of treasury bill?

A.91 days B.182 days C.273 days D.364 days

Q16

Assertion (A): Treasury bills are very popular and enjoy a higher degree of liquidity.
Reason (R): Treasury bills are issued by the Government.

A.Both A and R are true and R is the correct explanation of A B.Both A and R are true but R is not the correct explanation of A C.A is true but R is false D.A is false but R is true

Q17

Consider the following statements about treasury bills:
1) 91 days treasury bills are issued at a fixed discount rate of 4 per cent as well as through auctions.
2) The RBI issues 91 days and 182 days treasury bills on tap basis throughout the week.
3) 364 days treasury bills carry a fixed rate of interest.
Which of these are correct?

A.1 and 2 only B.2 and 3 only C.1 and 3 only D.1, 2 and 3

Q18

Due to their negotiable feature, certificates of deposit are also known as ____.

A.Negotiable certificates of deposit B.Inter-bank participation certificates C.Gilt-edged securities D.Accommodation bills

Q19

Which of the following is NOT a feature of a certificate of deposit?

A.It is issued at a discount to face value B.It is repayable on a fixed date without grace days C.It is a secured instrument backed by a charge on assets D.It is freely transferable by endorsement and delivery

Q20

Commercial bills are generally of ____ maturity.

A.7, 14 and 21 days B.30, 60 and 90 days C.91, 182 and 364 days D.1, 3 and 5 years

Q21

Match the type of commercial bill with its description:
a) Demand bill - 1) Not arising out of genuine trade transactions
b) Documentary bill - 2) No specific time of payment mentioned
c) Indigenous bill - 3) Accompanied by documents of title to goods
d) Accommodation bill - 4) Governed by native custom or usage of trade

A.a-2, b-3, c-4, d-1 B.a-3, b-2, c-1, d-4 C.a-2, b-4, c-3, d-1 D.a-1, b-3, c-4, d-2

Q22

Which of the following is NOT a purpose for which government securities are issued?

A.Refunding the maturing securities B.Advance refunding of securities not yet matured C.Raising fresh cash resources D.Financing the working capital of private companies

Q23

As each sale and purchase has to be negotiated separately, the gilt-edged market is a/an ____.

A.Over-The-Counter market B.Auction market C.Formal stock exchange market D.Call money market

Q24

Which office of the RBI undertakes to issue government securities?

A.Public Debt Office B.Department of Banking Supervision C.Monetary Policy Department D.Treasury Bill Office

Q25

Match the term with its meaning in the government securities market:
a) Grooming - 1) Purchase of one security against the sale of another by the RBI
b) Switching - 2) Securities sold to the highest bidder
c) Auctioning - 3) RBI acquiring securities nearing maturity to facilitate redemption
d) Tax rebate - 4) Incentive that makes these securities popular with investors

A.a-3, b-1, c-2, d-4 B.a-1, b-3, c-2, d-4 C.a-3, b-2, c-1, d-4 D.a-2, b-1, c-3, d-4

Q26

Which is the oldest, most developed and leading money market in the world?

A.New York Money Market B.London Money Market C.Tokyo Money Market D.Mumbai Money Market

Q27

Which of the following describes the liquidity profile of gilt-edged securities in the lesson?

A.Securities issued by the Central Government have high liquidity B.All gilt-edged securities have uniform liquidity C.Gilt-edged securities cannot be sold before maturity D.Only State Government securities are liquid

Q28

Certificates of deposit are issued in the form of ____.

A.Usance promissory notes B.Share certificates C.Demand bills D.Bearer bonds of the State Government

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About this Money Market test

This free online practice test covers Money Market from the 12th Standard Commerce (Samacheer Kalvi) syllabus. Choose the number of questions and an optional time limit, then answer and submit — everything is checked in your browser, with the correct answers and a worked explanation shown at the end. For the full solutions to every question in this set, see the solved MCQs page.

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