WorksheetsMCQs on Financial Institutions
Total questions: 20
Worksheet time: 15mins
Compared to a bond, a debenture is:
Compared to a share, a stock:
What is the primary function of the money market?
Providing long-term loans for investment
Mobilizing savings for investment
Providing capital for day-to-day business operations
Enhancing good saving habits
An entrepreneur wants to raise short-term funds. Which money market instrument would be most suitable?
Treasury bill
Treasury certificate
Bill of exchange
Call money funds
Which of the following is NOT an instrument used in the capital market?
Treasury bill
Debenture
Bond
Development stock
Suppose an institution has surplus funds and wants to invest them in the money market to generate additional income. Which money market instrument would be the most appropriate?
Treasury bill
Treasury certificate
Bill of exchange
Call money funds
A company wants to raise long-term funds for a new project. Which capital market instrument would be the most suitable?
Share
Bond
Debenture
Development stock
Which of the following is the primary purpose of the capital market?
Providing capital for day-to-day business operations
Providing long-term loans for investment
Enhancing liquidity
Mobilizing savings for investment
What is the key difference between a share and a stock?
Shares are a unit of capital, while stocks are a bundle of shares.
Shares are fully paid, while stocks are not.
Shares are issued, while stocks are converted from shares.
Shares are traded on the stock exchange, while stocks are not.
Which of the following is NOT a function of the capital market?
Providing long-term loans for investment
Mobilizing savings for investment
Helping to grow and develop merchant banks
Enhancing the liquidity of the money market
Which of the following is the key difference between a treasury bill and a treasury certificate?
Treasury bills are issued by the central bank, while treasury certificates are issued by commercial banks.
Treasury bills have a shorter maturation period of 90 days, while treasury certificates have a longer maturation period of 12-24 months.
Treasury bills are discounted instruments, while treasury certificates are interest-bearing.
Treasury bills are used for raising long-term funds, while treasury certificates are used for raising short-term funds.
Which of the following is NOT an institution involved in the money market?
Central bank
Commercial banks
Acceptance house
Stock exchange
A company wants to raise long-term funds by issuing securities to the public. Which capital market instrument would be the most suitable?
Treasury bill
Treasury certificate
Bond
Debenture
Which of the following is the primary function of the capital market?
Providing capital for day-to-day business operations
Enhancing the liquidity of the money market
Mobilizing savings for investment
Providing long-term loans for investment
What is the primary purpose of a development stock?
Raising long-term loans for the government
Raising short-term loans for the government
Providing capital for day-to-day government operations
Enhancing the liquidity of the capital market
Which of the following institutions is NOT involved in the capital market?
Issuing houses
Insurance companies
Discount houses
Building societies
An investor has surplus funds and wants to invest in the capital market. Which of the following institutions would be the most appropriate for the investor to approach?
Central bank
Commercial bank
Stock exchange
Development bank
An investor has surplus funds and wants to participate in the capital market. Which of the following institutions would be the most appropriate for the investor to approach?
Central bank
Commercial bank
Stock exchange
Development bank
Which of the following is NOT a function of the money market?
Promoting economic growth and development
Helping to mobilize savings
Providing long-term loans for investment
Enhancing liquidity
What is the key difference between a share and a stock in terms of ownership?
Shares represent a smaller ownership stake, while stocks represent a larger ownership stake.
Shares represent a larger ownership stake, while stocks represent a smaller ownership stake.
Shares represent co-ownership of the business, while stocks represent a creditor relationship.
Shares and stocks represent the same level of ownership.
