Financial Markets Class 10 Board Paper MCQ

This Class 10 Board Paper on Financial Markets presents a curated set of multiple-choice questions (MCQs) that cover key concepts such as securities, stock exchanges, mutual funds, derivatives, and regulatory bodies like SEBI.

Financial Markets Class 10 Board Paper MCQ

1. This financial asset is usually a debt instrument sold by companies or the government to raise funds for short-term or long-term projects.
a. Bonds
b. Debenture
c. Equity
d. Derivatives

Show Answer ⟶
a. Bonds

2. Assertion a. : Securities are financial instruments issued to raise funds.
Reason (R) : The primary function of the securities markets is to enable the flow of capital from those that have it to those that need it.

a. Both a. and (R) are true and (R) is the correct explanation of a..
b. Both a. and () 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.

Show Answer ⟶
a. Both a. and (R) are true and (R) is the correct explanation of a..

3. Book building is basically a process used in IPO for efficient _ .

Show Answer ⟶
Price discovery

4. NSE introduced a nationwide, on-line, fully-automated trading system where a member can punch into the computer the quantities of a security and the price at which he would like to transact, and the transaction is executed as soon as a matching sale or buy order from a counter party is found. This trading system is referred as:
a. Source Based Trading System (SBTS)
b. Screen Bound Trading System (SBTS)
c. Screen Based Trading System (SBTS)
d. Screen Based Trade System (SBTS)

Show Answer ⟶
c. Screen Based Trading System (SBTS)

5. Mr. Iyer is seller and Mr. Raj is the buyer of this contract. The predetermined quantity of rice to be sold is 500 kg and the price at which the rice will be sold is Rs. 20 per kg. Hence, the price of contract is Rs. 10,000 (500 x 20), which derives its value from the underlying – rice. The contract will be future date – two months from now. This will happen when the rice will be delivered to Mr. Raj’s warehouse and Mr. Iyer will receive ¥ 10,000. Identify this contract.

Show Answer ⟶
Forward Contract

6. These funds invest primarily in equity shares of companies in a particular business sector or industry
a. Growth Fund
b. Diversified Fund
c. Sector Fund
d. Index Fund

Show Answer ⟶
c. Sector Fund

7. Interest is an amount charged to the borrower for the privilege of using __.

Show Answer ⟶
Borrowed funds

8. Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities in addition to all intermediaries and persons associated with securities market. Which regulator is refered to here?
a. Reserve Bank of India (RBD
b. Securities Exchange Board of India (SEBI)
c. Registrar of Companies
d. Department of Company Affair

Show Answer ⟶
b. Securities Exchange Board of India (SEBI)

9. A listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document.
a. Rights Issue
b. IPO
c. Private Placements
d. Further Issue (FPO)

Show Answer ⟶
b. IPO

What is a Bonus share ?

Show Answer ⟶
Free additional shares given to existing shareholders from company’s reserves.

10. National Commodity and Derivatives Exchange Limited (NCDEX) is a national-level, technology-driven online commodity exchange with an independent Board of Directors and Professional management. In the context of this statement, define the Commodity Exchange.

Show Answer ⟶
A regulated marketplace for trading commodity derivatives.

11. Which of the following is not a profitability ratio ?
a. Gross Profit Ratio
b. Net Profit Ratio
c. Debt-Equity Ratio
d. Return on Capital Ratio

Show Answer ⟶
c. Debt-Equity Ratio

12. It is a platform where buyers and sellers come together to trade financial tools during specific hours of any business day while adhering to SEBI’s well-defined guidelines. Name the organisation.

Show Answer ⟶
Stock Exchange

13. Most companies are usually started privately by their promoter‘(s). However, the promoters’ capital and the borrowings from banks and financial institutions may not be sufficient for setting up or running the business over a long term. So companies invite the public to contribute towards the equity and issue shares to individual investors. The main objective(s) of primary market is/are
a. To raise funds
b. Issuance of New Securities
c. Capital Appreciation
d. Both a. and b.

Show Answer ⟶
d. Both a. and b.

14. _______are High Risk Investments.

Show Answer ⟶
Equity shares and derivatives

15. Statement-1 : Depository facilitates securities between accounts on the instruction of the account holder.
Statement-2 : Depository also holds funds in account.

a. Both Statement-1 and Statement-2 are true.
b. Both Statement-1 and Statement-2 are false.
c. Statement-1 is false, but Statement-2 is true.
d. Statement-1 is true, but Statement-2 is false.

Show Answer ⟶
d. Statement-1 is true, but Statement-2 is false.

16. As the price of a security gets higher and higher, some investors may feel the price is too high for them to buy, or small investors may feel it is unaffordable. Splitting the stock brings the share price down to a more “attractive” level. Which corporate action is this ?
a. Dividend Payment
b. Buyback of share
c. Bonus share
d. Stock splits

Show Answer ⟶
d. Stock splits

17. ________of a company is a record showing source of funds and their application of creating/building assets.
a. Balance Sheet
b. Income Statement
c. Profit and Loss Account
d. Share Capital

Show Answer ⟶
a. Balance Sheet

18. The various products in which investments may be done are financial products viz. fixed deposits in bank, buying shares in stock market, investing in Mutual Funds, etc. and non-financial products viz. purchase of land, gold, silver, etc. The non-financial products are also known as :
a. Financial Assets
b. Current Assets
c. Real Assets
d. Both a. and c.

Show Answer ⟶
c. Real Assets

19. The companies that issue their shares are called issuers and the process of issuing shares to public is known as _.

Show Answer ⟶
Public Offering

20. Trading at the exchange offers investors, Which of the following is NOT true?
a. The best prices prevailing at time in the market
b. Lack of any counter party risk
c. Access to investor grievance and redressal mechanism
d. To do trading in the unlisted securities.

Show Answer ⟶
d. To do trading in the unlisted securities.

21. Assertion a.: The Depository has prescribed minimum balance.
Reason (R) : Investors can have zero balance in their demat account.
a. Both a. and (R) are true and (R) is correct explanation of a..
b. Both a. and (R) are true and (R) is not correct explanation of a..
c. a. is true, but (R) is false.
d. a. is false, but (R) is true.

Show Answer ⟶
d. a. is false, but (R) is true.

22. In case one of parties to the dispute is not satisfied with the complaint resolution process provided by the exchange then the concerned party may avail the provided by the exchange.
a. Clearing Corporation
b. Arbitration
c. SEBI
d. Court

Show Answer ⟶
b. Arbitration

23. After distributing dividends, a part of the profit is retained by the company for meeting fund requirements in future. The retained profits accumulated over the years are called :
a. General Profit
b. Capital Gain
c. Reserves and Surplus
d. Net Profit

Show Answer ⟶
c. Reserves and Surplus

24. What is the full form of NSE

Show Answer ⟶
National Stock Exchange

25. What are liquid funds?

Show Answer ⟶
Mutual funds investing in short-term debt instruments for quick liquidity.

26. Write the full form of SEBI
a. State Exchange Bank of India.
b. Stock Exchange Board of India.
c. Securities Exchange Board of India.
d. Sensex Exchange Board of India

Show Answer ⟶
c. Securities Exchange Board of India.

27. ____ is a place where buyers and sellers of securities can enter into transactions to purchase and sell shares, bonds, debentures etc.

Show Answer ⟶
Stock Exchange

28. IPO Stands for:

Show Answer ⟶
Initial Public Offering

29. NEAT stands for

Show Answer ⟶
National Exchange for Automated Trading

30. What is Equity Share

Show Answer ⟶
Ownership share in a company with voting rights and dividend eligibility.

31. The minimum number of days for which a bid should remain open during book building?
a. 1 day
b. 2 days
c. 3 days
d. 4 days

Show Answer ⟶
c. 3 days

32. ____________derivatives market trade contracts for which the underlying asset is commodity.

Show Answer ⟶
Commodity Derivatives Market

33. Define the term NAV.

Show Answer ⟶
Net Asset Value — value per unit of a mutual fund.

34. Write any two sources of funds shown in the balance sheet.

Show Answer ⟶
Share Capital and Borrowings

35. Debt-Equity Ratio reflects _____________ to finance the business.

Show Answer ⟶
Proportion of debt and equity used to finance business

36. What is meant by ‘Real rate of return?

Show Answer ⟶
The actual return earned on an investment after adjusting for inflation

37. “Its regulatory jurisdiction covers corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market.”
a. IRDA
b. SEBI
c. RBI
d. PFRDA

Show Answer ⟶
b. SEBI

38. Minimum number of days for which a bid remains open during book building.
a. Three days
b. Five days
c. Seven days
d. Nine days

Show Answer ⟶
a. Three days

39. “CRISIL is a credit rating agency in India”. Which of the following is not a credit rating agency in India :
a. CARE
b. ICRA
c. FITCH
d. RBI

Show Answer ⟶
d. RBI

40. Commodity derivatives market trade contracts for which the underlying asset is __.
a. Interest
b. Currency
c. Stock
d. Commodity

Show Answer ⟶
d. Commodity

41. Expand the term ‘ETF’.

Show Answer ⟶
Exchange Traded Fund

42. __ are specialised form of mutual funds that invest in extremely short-term fixed income instruments.
a. Liquid Funds
b. Public Provident Funds
c. Growth Funds
d. Debts Funds

Show Answer ⟶
a. Liquid Funds

43. “The market which deals in securities previously issued” is called __.
a. Primary Market
b. Debt Market
c. Secondary Market
d. Commodity Market

Show Answer ⟶
c. Secondary Market

44. How can we find Market Capitalisation of a company?

Show Answer ⟶
Current share price × Total number of outstanding shares

45. The trading system of NSE is called :
a. BOLT
b. NEAT
c. ODIN
d. FTEC

Show Answer ⟶
b. NEAT

46. A buyer of an option pays for the right to exercise his option. Identify term used for this.

Show Answer ⟶
Premium

47. What is the formula of P/E Ratio ?
a. Market price of a share / Earning per share.
b. Net profit / No. of outstanding share.
c. Net profit after tax / Total capital employed.
d. Net profit after tax / Net worth.

Show Answer ⟶
a. Market price of a share / Earning per share

48. Give two examples of financial assets.

Show Answer ⟶
Shares, Bonds

49. “It accompanies the application form of public issues.”
a. Income Statement
b. Annual Report
c. Prospectus
d. Financial Report

Show Answer ⟶
c. Prospectus

50. Owners of these kinds of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before the dividend can be paid in respect of equity shares. They also enjoy priority over the equity shareholders in payment of surplus.
a. Preference shares
b. Bonus share
c. Right share
d. Equity share

Show Answer ⟶
a. Preference shares

51. What do you understand by ‘Dematerialisation’?

Show Answer ⟶
Conversion of physical share certificates into electronic form

52. Amit holds 400 shares of X Ltd. Company decides to implement a stock spilt of 4 for 1. How many shares Mr. Amit will hold how many shares after this corporate action?
a. 400
b. 1600
c. 100
d. 800

Show Answer ⟶
b. 1600

53. Financial performance of the company and certain key financial parameters like Earning Per Share (EPS), P/E ratio, current size of equity etc. for arriving at the estimated future price. This is known as .
a. Industry Analysis
b. Corporate Analysis
c. Financial Analysis
d. Firm Analysis

Show Answer ⟶
c. Financial Analysis

54. “It is often the first banking product people use, which offers low interest.”
a. Fixed Deposit Account
b. Recurring Deposit Account
c. Current Deposit Account
d. Saving Bank Account

Show Answer ⟶
d. Saving Bank Account

55. What do you understand by ‘Global Depository Receipts’?

Show Answer ⟶
Negotiable financial instruments representing shares of foreign companies, traded internationally

56. A bond giving investor the option to convert the bond into equity at a fixed conversion price is called
a. Convertible Bond
b. Zero Coupon Bond
c. Treasury Bills
d. Commercial Paper

Show Answer ⟶
a. Convertible Bond

57. Hold the fund in account.
a. Bank
b. Depository
c. Demat
d. Cash

Show Answer ⟶
a. Bank

58. Mention two examples of ‘Corporate Actions’.

Show Answer ⟶
Bonus Issue, Stock Split

59. A part of the profit is retained by the company for meeting fund requirements in future.
a. Dividend
b. Interest
c. Reserves and Surplus
d. Revenue

Show Answer ⟶
c. Reserves and Surplus

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