Financial Markets Quiz

What is the primary function of financial markets?

• Speculation only

• Channel savings to investments

• Printing currency

• Tax collection

Which of these is a money market instrument?

• Equity shares

• Treasury Bills

• Preference shares

• Debentures

Which market deals with previously issued securities?

• Primary market

• Secondary market

• Money market

• Commodity market

Liquidity in financial markets refers to:

• Availability of cash reserves in RBI vaults

• Ease of converting assets to cash

• Availability of foreign exchange

• Increase in stock prices

SEBI regulates:

• Banking operations

• Stock exchanges & capital markets

• Pension disbursement

• Insurance premiums

Which is an example of a commodity market product?

• Mutual fund units

• Crude oil futures

• Credit default swaps

• Currency forwards

Forex market primarily deals with:

• Government bonds

• Equity shares

• Currencies

• Commodities

The main purpose of derivatives market is:

• Currency exchange

• Risk management and speculation

• Retail payments

• Venture capital funding

Primary markets are used to:

• Trade existing shares

• Issue securities for the first time

• Hedge currency risks

• Conduct inter-bank lending

Secondary markets are important because they:

• Decide IPO price bands

• Provide liquidity & price discovery

• Control inflation

• Issue government bonds