Important Questions with Answers for Class 12 CBSE 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
Mention the kind of issue in which stock is offered to an existing stockholder.
Answer: Right Issue
Name to money market instruments
Answer: a) Treasury Bills b) Commercial Paper
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.
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
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.
|Basis||Money Market||Capital Market|
|Participants||The participants are a bank, financial institution, RBI, and corporate||The participants are corporate banks, financial institute, retail investors, and investors|
|Instruments||Instruments traded are Commercial paper, certificates of deposit, call money, treasury bill, etc.,||Instruments traded are debenture, stocks, and bonds|
|Expected Return||Less return||High return|
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.
Also Check: Business Studies MCQs
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|Chapter-wise Important Questions (2019-2020) for CBSE Class 12 Business Studies|
|Chapter 1 – Nature and Significance of Management||Chapter 7 – Directing|
|Chapter 2 – Principles of Management||Chapter 8 – Controlling|
|Chapter 3 – Business Environment||Chapter 9 – Financial Management|
|Chapter 4 – Planning||Chapter 11 – Marketing|
|Chapter 5 – Organising||Chapter 12 – Consumer Protection|
|Chapter 6 – Staffing|