Indian Capital Market MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Indian Capital Market, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Indian Capital Market MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Indian Capital Market mcq questions that explore various aspects of Indian Capital Market problems. Each MCQ is crafted to challenge your understanding of Indian Capital Market principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Indian Capital Market MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Indian Capital Market. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Indian Capital Market knowledge to the test? Let's get started with our carefully curated MCQs!

Indian Capital Market MCQs | Page 1 of 15

Discover more Topics under IC 89 Management Accounting

Q1.
What is the Capital Market's role in the financial system?

a.

Mobilization of savings

b.

Formation of capital

c.

Canalizing funds into production processes

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The Capital Market plays a crucial role in the financial system by mobilizing savings, forming capital, and channelizing funds into the production processes of both private and government enterprises.
Q2.
What constitutes the Capital Market in India?

a.

Stock Market

b.

Bond Market

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:The Capital Market in India includes both the Stock Market (equity securities) and the Bond Market (debt).
Q3.
Which part of the financial market deals with short-term financial claims?

a.

Capital Market

b.

Money Market

c.

Stock Market

d.

Bond Market

Discuss
Answer: (b).Money Market Explanation:The Money Market is the financial market that deals with short-term financial claims, while the Capital Market deals with long-term financial claims.
Q4.
What are the key changes witnessed in the Indian capital market?

a.

Transparency

b.

Liquidity and pricing improvements

c.

Reduction in transaction costs

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The Indian capital market has seen significant changes in terms of disclosure, transparency, market-wide liquidity, pricing improvements, reduced transaction costs, and information system enhancements.
Q5.
What does the financial system play a crucial role in?

a.

Economic growth

b.

Information system improvement

c.

Market-wide liquidity

d.

Portfolio objectives

Discuss
Answer: (a).Economic growth Explanation:The financial system plays a crucial role in economic growth by mobilizing savings, forming capital, and facilitating the flow of funds into the production processes of enterprises.
Q6.
What role does the Financial Market play in mobilizing savings and resource allocation?

a.

Facilitation of price discovery

b.

Allocation of financial resources into economic activities

c.

Providing liquidity to financial assets

d.

Low-cost financing of activities

Discuss
Answer: (b).Allocation of financial resources into economic activities Explanation:Financial markets play a vital role in mobilizing savings and allocating financial resources into the economic activities of a country.
Q7.
What is the function of Financial Markets in price discovery?

a.

Mobilization of savings

b.

Allocation of financial resources

c.

Facilitation of price discovery

d.

Low-cost financing

Discuss
Answer: (c).Facilitation of price discovery Explanation:Financial markets facilitate price discovery through continual and structured interaction among buyers and sellers of financial assets.
Q8.
How do Financial Markets contribute to liquidity in financial assets?

a.

By mobilizing savings

b.

Through low-cost financing

c.

By providing a mechanism for easy selling of financial assets

d.

By reducing transaction costs

Discuss
Answer: (c).By providing a mechanism for easy selling of financial assets Explanation:Financial markets contribute to liquidity by allowing investors to easily sell their financial assets.
Q9.
What is the major benefit of Financial Markets in terms of financing activities?

a.

Mobilization of savings

b.

Low-cost financing

c.

Allocation of financial resources

d.

Price discovery

Discuss
Answer: (b).Low-cost financing Explanation:Financial markets reduce the cost of financing activities, including search costs and information costs.
Q10.
How are Financial Markets classified based on the maturity point of financial claims?

a.

Debt Market and Equity Market

b.

Cash Markets and Future Markets

c.

Exchange Traded Market and Over-the-counter Market

d.

Money Market and Capital Market

Discuss
Answer: (d).Money Market and Capital Market Explanation:Financial markets are classified into Money Market and Capital Market based on the maturity point of financial claims.
Page 1 of 15