Important Questions with Answers for CBSE Class 12 Business Studies Chapter 10- Financial Markets which is outlined by expert Business Studies teachers from the latest version of CBSE (NCERT) books

CBSE Class 12 Business Studies Chapter-10 Important Questions

Question 1

Mention the kind of issue in which stock is offered to an existing stockholder.

Answer: Right Issue

Question 2

Name to money market instruments

Answer: a) Treasury Bills b) Commercial Paper

Question 3

Explain the four functions of ‘Secondary Market’.

Answer: The four functions of Secondary Market are mentioned below.

• The main function is to provide marketability and liquidity to the present securities and assets. It provides a platform for trading to present customers.
• It allows a constant estimate of the securities and helps in building demand and supply. This estimation helps in determining the price of the securities.
• It guarantees fairness and safety in a transaction.
• It gives a platform for channelising the saving to the most profitable way.

Question 4

State the protective function of the Securities and Exchange Board of India.

Answer: The protective function of the Securities and Exchange Board of India is.

• It examines violations such as violation of rules and insider trading, and disobey to the companies act.
• It provides information about the companies needed by the client.
• It provides guidelines related to the investments in securities.
• It also provides a code of conduct for business practices

Question 5

Write the difference between money market and capital market on the basis of participants, safety, instruments and expected return.

Answer: The difference between the money market and capital market are.

Also Check: Business Studies MCQs

Question 6

Explain the functions and objectives of the Securities and Exchange Board of India (SEBI).

Answer: Function of Securities and Exchange Board of India (SEBI) is divided into two parts

• Regulatory Function.
  • It helps in the registration of brokers and sub-broker and other associates of the market.
  • It helps in the registration of collective schemes and mutual funds
  • It regulates portfolio exchanges, share bankers, and merchant banker.
  • Probation of unfair trade practices and fraud.
  • Control insider trade and takeover bids.
• Development Function.
  • Educate investors.
  • Training of intermediaries.
  • Promotion of Code of Conduct and fair practices.
  • Conduct research and public information, useful for market participants.

Objectives of the Securities and Exchange Board of India (SEBI).

• Regulate share exchange and securities used to promote orderly function.
• Protect interest and right of individual investors, investors, and guide and train them.
• To prevent fraud and accomplish a balance between self-regulation by the security industry and its statutory body.

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