Quiz  /  Capital Markets Class 11 MCQ Questions With Answers

  • 1. 
    _______ a market in which only the original issuer can sell or repurchase a financial asset

  • financial system
  • primary market
  • capital market
  • secondary market

  • 2. 
    _______ a strategy of holding different kinds of investments to minimize risk

  • portfolio diversification
  • bond
  • futures contract
  • risk

  • 3. 
    What is the main advantage of a mutual fund for an investor?

  • Its price doesn't change much.
  • It offers diversity in investment.
  • It has a set maturity date.
  • It can be sold at a profit.

  • 4. 
    _______ a market in which all financial assets can be sold to someone other than the original issuer

  • primary market
  • secondary market
  • financial system
  • capital market

  • 5. 
    _______ a network of savers, investors, financial assets, and financial institutions that work together to transfer savings to investment uses

  • secondary market
  • primary market
  • financial system
  • capital market

  • 6. 
    Which type of financial organization is a nonprofit service cooperative

  • commercial bank
  • mutual fund
  • insurance company
  • credit union

  • 7. 
    The rate of return on a corporate, municipal, or government bond is its _______ .

  • par value
  • compensation rate
  • interest rate
  • coupon rate

  • 8. 
    _______ the dollars that become available for investors to use when others refrain from consuming

  • risk
  • equities
  • bond
  • savings

  • 9. 
    _______ stocks that represent ownership shares in corporations

  • equities
  • capital market
  • secondary market
  • futures contract

  • 10. 
    _______ a situation in which the outcome is not certain, but the probabilities can be estimated

  • equities
  • portfolio diversification
  • risk
  • bond

  • 11. 
    What kind of fund collects and invests income for later payments to eligible recipients?

  • pension fund
  • credit union fund
  • insurance fund
  • mutual fund

  • 12. 
    Which two investments are at opposite ends of the risk spectrum?

  • Treasury notes and futures
  • Savings bonds and Treasury notes
  • Equities and futures
  • Equities and futures

  • 13. 
    _______ formal contract to repay borrowed money and interest on the borrowed money at regular future intervals

  • equities
  • savings
  • bond
  • futures contract

  • 14. 
    Which of the following is an advantage of a 401(k) plan?

  • Most employers match a portion of your contributions.
  • You may withdraw funds at any time without penalty.
  • You never pay taxes on your contributions.
  • Your contributions are invested in high-return, high-risk fund

  • 15. 
    What is the name of the fee paid for an insurance policy?

  • interest
  • pension
  • contribution
  • premium

  • 16. 
    Junk bonds usually have low ratings because _______ .

  • they have a low rate of return
  • they have a low risk of default
  • they are not risky investments
  • they are a high-risk investment

  • 17. 
    _______ a market in which financial capital is loaned and/or borrowed for at least one year

  • primary market
  • secondary market
  • financial system
  • capital market

  • 18. 
    _______ is an agreement to buy or sell at a specific date in the future at a predetermined price

  • equities
  • futures contract
  • bond
  • savings

  • 19. 
    Which of the following financial organizations specializes in buying installment contracts from merchants who sell on credit?

  • a bank
  • a credit union
  • a finance company
  • an insurance company

  • 20. 
    What is the main difference between Treasury bonds, Treasury notes, and Treasury bills?

  • the amount of time for maturity
  • the interest rate
  • the minimum purchase requirement
  • the method of sale
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