Financial Market

Q.

What is fixed capital? Explain with examples.

Q.

What Are the Similarities Between the Money Market and the Capital Market?

Q.

Which of the following is not a capital budgeting decision

1. merger

2. inventory level

3. expansion program

4. replacement of an asset

Q.

What Are the Roles of the Money Market?

Q.

Which of the following statements is not true with regard to the capital market?

1. The funds are raised for a short period of time.

2. It is classified into two types.

3. All of the above

4. Both debt and equity funds can be raised.

Q.

Which of the following statements is true with regard to financial markets?

1. They work as an intermediary between the savers and the investors by mobilising funds between them.

2. They allocate funds available for investment into their most productive investment opportunity.

3. They link the households which save funds and business firms which invest these funds.

4. All of the above.

Q.

These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed most. To give strength to the economy, SEBI is undertaking measures to develop the capital market. In addition to this there is another market in which unsecured and short-term debt instruments are actively traded everyday. These markets together help the savers and investors in directing the available funds into their most productive investment opportunity.

(a) Name the function being performed by the market in the above case.

(b) Also, explain briefly three other functions performed by this market.

Q.

When can a capital structure be considered optimum and what kind of capital structure is best for a firm?

Q.

What is the difference between a private market and a public market?

Q.

What is fixed capital? Enumerate any two of the factors determining the fixed capital requirements of an enterprise.

Q.

How does working capital affect both the liquidity as well as the profitability of a business?

Q.

__________ are the organisations, institutions that provide long term funds.

1. Capital markets

2. Primary markets

3. Secondary markets

4. Money markets

Q.

Which of the following is the Capital market line?

1. Capital allocation line of a market portfolio

2. Capital allocation line of a risk-free asset

3. Both 1 and 2

4. All of the above

Q.

What are primary markets? State any two features of the primary market.

Q.

What Is the Meaning of Capital Market?

Q. What are the main objectives of financial management?Briefly explain.

Q.

What is a money market? Give examples of the instruments traded in the money market.

Q.

A business who wants to start a manufacturing concern approaches you to suggest him whether following manufacturing concerns would require large or small working capital

(a) Bread (b) Sugar (c) Coolers.

Q.

___ is the link between surplus and deficit units or in other words, it brings together lenders and borrowers.

1. Financial Planning

2. Financial Decision

3. Financial Market

4. Financial Management

Q. This market transfers the money or capital from those who have surplus money to those who are in need of investment. Which of the following does it refer to?

1. Financial market
2. Money market
3. Capital market
4. None of the above

Q.

Why Is the Capital Market Better Than the Money Market?

Q.

___is more integral to a firm’s business plan because it directly affects profitability. It is typically expensive and is used to purchase assets that have a long, useful life. This includes machinery, buildings or production plants, and other long-term investments.

1. Working Capital

2. Fixed Capital

3. Embodied Capital
4. Objectified Capital

Q. Households and are two main parties of the financial system which are involved in the flow of funds.

1. Firms
2. Wholesalers
3. Retailers
4. Brokers

Q. is more integral to a firm's business plan because it directly affects profitability.

1. Fixed capital
2. Working capital
3. Operating capital

Q.

A business is part of a financial system in which there are two main parties - households that save money, and firms that invest the money for production. State true or false.

1. True

2. False

Q. system provides for efficient flow of funds from savers to investors.

1. Economic
2. Banking
3. Financial
4. Market

Q. Pankaj is engaged in Warehousing-Business. Identify the working capital requirements of Pankaj stating the reason in support of your answer. Pankaj is also planning to start his Transport business.
Explain any two factors that will affect his fixed capital requirements.

Q.

___ is more integral to a firm’s business plan because it directly affects profitability. It is typically expensive and is used to purchase assets that have a long, useful life.

1. Working Capital

2. Fixed Capital

Q. When a company feels that it is not easy to survive, then it sells its unit or some of its part to survive. This is a kind of ____________ retrenchment.

1. liquidation
2. turnaround
3. bankruptcy
4. divestment

Q.

___ helps in channelling surplus funds into the most productive uses.

1. Financial Planning

2. Fiancial Market

3. Financial Decision

4. All of the above