12th Standard CBSE Syllabus & Materials
12th Standard CBSE
CBSE 12th Economics Government Budget and the Economy Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Computer Science Interface Python with MySQL - New Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Computer Science Database Concept - New Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Computer Science Data Communication - New Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Computer Science Data Structures - New Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Computer Science Functions - New Previous year Question Papers Study Material - QB365 Set A

Published on: 19/08/2019
Financial Markets
Download CBSE Class 12th Standard CBSE Business Studies question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Business Studies
Questions + Answers key
Take MCQ Business Studies Test

1.
NSE is the latest, most modern and technology driven exchange. It is set up by Leading financial institutions, banks and insurance and other financial Intermediaries and managed by professionals.
i) State the objectives with which it was set.
ii) What values are looked upon by National stock exchange to serve the various stakeholders?
2.
Explain briefly how call rate is interlinked to other sources of finance such as commercial papers and certificate deposit.
3.
“Demutualization has reduced conflict the interest between exchange & broker”. Explain How?
4.
Name the two major alternative mechanisms through which allocation of funds can be done.
5.
Name the index of Bombay Stock Exchange.
6.
What do you mean by 'bridge financing'?
7.
'An instrument is transferable by endorsement and delivery.It is sold at a discount and redeemed at par'.Identify the instrument.
8.
In which market, are equity and debt marketed in the form of shares, stocks, bonds, government securities, etc?
9.
Give the meaning of money market.
10.
What is call money? Explain the effect of call rate on other sources of finance such as commercial paper.
11.
Explain any two functions of stock exchange
12.
Why are money market instruments more liquid, as, compared to capital market instruments?
13.
(a) Name the methods of floatation of issues in the primary market.
(b) Name and describe the privilege given to existing shareholders to subscribe to new issues.
(c) Name the main investors in the primary market.
14.
'In today's commercial world, the stock exchange perform many vital functions which lead the investors towards positive enviroment'. Explain how by giving any two reasons.
15.
A Company does window dressing in its financial statement to attract investors and creditors. Is it correct in your opinion? Which values are affected here?
16.
What is Bridge Financing? Which instrument of money market is used as a source of Bridge Financing?
17.
State briefly the names of the three interest gourps for productions of whose interest SEBI was established. Also write how it protects the interests of any one such group?
18.
“Stock Exchange spread the equity cult in the country”. Do you agree. Give reason.
1.
( )
Equality, Timeliness, safety
2.
( )
Call rate is interlinked to other sources of finance such as commercial paper in the following way ;
As call rate increases the demand for other sources such as commercial papers becomes more as they become cheaper in comparison to call money.
3.
( )
De mutualisation refers to reparation of ownership and management in stock exchange. Earlier brokers & intermediaries owned and operated stock exchange with demutualisation the conflict of interest between various groups has been minimized.
4.
( )
Banks and financial markets.
5.
( )
It is known as SENSEX.
6.
( )
Funds raised to meet floatation cost of new issue is known as bridge financing.It is done by issue of commercial paper by big and creditworthy companies.
7.
( )
Commercial paper.
8.
( )
Capital market.
9.
( )
Money market refers to market for short-term funds, which deals in monetary assets whose period of maturity is upto one year.
10.
Call money is a short term finance repayable on demand with a period of one to fifteen days. It is used to finance inter bank transaction. It is method by which banks borrow from each other to be able to maintain the cash reserve ratio with the RBI.
11.
The stock exchange is an institution which provides a platform for buying and selling of existing securities.
Functions performed by a stock exchange are:
(i) Provides liquidity and marketability to existing securities The primary function of a stock exchange is to provide a ready and continuous market where existing securities can be bought and sold.
This provides both liquidity and cash marketability to already existing securities in the market.
(ii) Pricing of securities Share prices on a stock exchange is determined by the forces of demand and supply.Stock market indices like SENSEX, NSE, etc reflect market direction and indicate day-to-day fluctuations in share prices.
Thus, both buyers and sellers can get constant information about price movements of shares in the market.
(iii) Safety of transactions The membership of a stock exchange is well defined according to the existing legal framework. This ensures that the investment of public is safe and they will get a fair deal in the market.
12.
Money market instruments are more liquid, as, whenever an investor wants to encash the securities of money market, the discount and Finance House of India provides a ready market.
Whereas, the capital market enjoys lesser liquidity and the securities may be less traded in the securities market.Thus, money market instruments are more liquid and may be encashed any time.
13.
(a) i. Prospectus issue
ii. Issue through intermediaries:
iii. Private placement:
iv. Rights issue:
(b)
The methods of floating new issues in the primary market are:
(i) Offer Through Prospectus: It is the method of floating new issues by inviting subscriptions from the public through issue of prospectus.
(ii) Offer for Sale: It is the method in which the securities are not issued directly to the public but through intermediaries like issuing houses or stock brokers.
(iii) Private Placement: It refers to the allotment of securities by a company to institutional investors and some selected individuals.
(iv) Rights Issue: It is the privilege given to existing shareholders to subscribe to new issue of shares in proportion to the number of shares they already hold.
(v) e-IPO: It refers to issuing securities through the online system of stock exchange.
(c) The main investors in the primary market are banks, financial institutions insurance companies , mutual funds and individuals.
14.
The stock exchange is an institution, which provides a platform for buying and selling of existing securities.
Functions of Stock Exchange
(i) Provides liquidity and marketability to existing securities
The primary function of a stock exchange is to provide a ready and continuous market where existing securities can be bought and sold.
This provides both liquidity and cash marketability to already existing securities in the market.
(ii) Pricing of securities
Share prices on a stock exchange are determined by the forces of demand and supply.Stock market indices like SENSEX, NSE, etc reflect market direction and indicate day-to-day fluctuations in share prices.
Thus, both buyers and sellers can get constant information about price movements of shares in the market.
(iii) Safety of transactions
The membership of a stock exchange is well defined according to the existing legal framework. This ensures that the investment of public is safe and they will get a fair deal in the market.
(iv) Contributes to economic growth
In stock exchange. the process of disinvestment and reinvestment channelise the savings into productive investment avenues. This leads to capital formation and economic growth
(v) Spreading Equity Cult
It is an organised market, which takes various steps to guide and educate investors, publish information about companies listed on the exchange and ensures better and safe trading practices. These practices have played a vital role in increasing the number of people investing in equity, thus leading to wider ownership of equity.
(vi) Provides Scope for Speculation
It is generally accepted that a certain degree of speculation is necessary to ensure liquidity and price continuity in the stock market. Thus, it provides sufficient scope for speculation in a restricted and controlled manner within the provisions of law.
15.
i) To cheat the investors/ lenders by providing them false information fraudulent activities
ii) Possibility of over capitalization
iii) Dissatisfaction amongst the employees
16.
Commercial paper is a source of bridge financing. Bridge financing refers to short term funds for seasonal and working capital needs. Le it may be used as an associated source of financing. If a company needs long term finance buy machinery it must raise these finds from the capital market. For this company must incur floatation costs – brokerage commission funds used to finance such needs over called bridge financing.
17.
The three interest group are :- Issuers, investors and intermediaries. SEBI protects interest of intermediaries by offering a competitive, professional and expanding market with adequate and efficient infrastructure so that they are able to render better service to investors and issuers.
18.
Yes, stock exchange spread equity cult in the country because will share of ownership of share of company’s possible. When share are offered in the stock exchange and subscribell by members of the public.
12th Standard CBSE Syllabus & Materials
12th Standard CBSE
CBSE 12th Computer Science Python Revision Tour I - New Previous year Question Papers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Business Studies Planning Important Questions And Answers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Business Studies Business Environment Important Questions And Answers Study Material - QB365 Set A
NEW12th Standard CBSE
CBSE 12th Business Studies Principles of Management Important Questions And Answers Study Material - QB365 Set A
CBSE 12th Standard CBSE Subjects
CBSE Standards