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Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Deep financial market is ________________________.

  1. The market which attracts funds in large volume

  2. The market that attracts funds from all types of investors.

  3. The underdevelopment market due to government regulations

  4. The market that provides opportunities for sufficient orders at suitable interest rates below and above the market price.

  5. The market that has easy effective interlinkages between its various parts and sub-parts.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

`Deep market is one where there are always sufficient orders for buying and selling at fine quotations, both below and above the market price, and where there are good opportunities for swap deals.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Giving excess protection to domestic markets, which have high entry barriers for foreign firms, over valuation of exchange indicates the adoption of _________ by the country?

  1. Inward oriented strategy

  2. Inflation control

  3. Liberalization

  4. Outwards oriented strategy

  5. Export promotion strategy
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The factors responsible for integration of financial markets are ___________________.

  1. Increased cross penetration of foreign ownership.

  2. Liberalization of regulations governing the financial markets

  3. The development of new financial instruments

  4. All of the above

  5. Both (A) and (C) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Integration of financial markets involves the freedom and opportunity to raise funds from and to invest anywhere in the world, through any type of instrument. All the given factors are responsible for Integration of financial markets. 

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The net liquidation value of a firm is the best indicator of its financial health. This is the proposal of ____________.

  1. Beaver model

  2. L C Gupta model

  3. Wilcox model

  4. Altman's Z score model

  5. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Wilcox proposed that the net liquidation value of the firm is the best indicator of its financial health. The net liquidation value can be obtained by the difference in liquidation value of a firms assets and the liquidation value of its liabilities.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The long-term investment of a firm involves __________________.

  1. Irreversible investments

  2. Investments which benefit the firm for number of years

  3. All of the above

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Long-term decisions involve setting up of the firm, expansion, diversification modernization and other similar capital expenditure decisions requiring huge investment made by raising long-term sources, the benefits of which can be seen only in the long term. Because of the huge investments involved these decisions are irreversible.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The intermediary between the customers and suppliers who perform financing and debt collection services is called a ________.

  1. Bank

  2. Factor

  3. Mutual fund

  4. NBFC

  5. Merchant Banker
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Factoring is a financial service under which the factor undertakes collection, accounting and management of the client's debt. Thus the factor is an intermediary between the supplier and the customers who performs financing and debt collection services.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

An industrial company which has at the end of any financial year accumulated losses greater than its net worth is said to be _______________.

  1. Bankrupt

  2. Sick

  3. Weak

  4. Both (A) and (C) above

  5. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sick industrial company is company registered for not less than five years which has to the end of any financial year, accumulated losses equals to or exceeding its entire net worth.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Deregulation and globalization of the financial markets increase the volatility in ___________.

  1. Internal rates

  2. Exchange rates

  3. Prices of financial assets

  4. All of the above

  5. Both (A) and (B) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The most important and visible effect of globalization and integration of financial markets is the increase in volatility in:
1. Interest rates
2. Exchange rates &
3. Prices of financial assets change quite frequently in response to various changes taking place in different segments of the financial markets  all over the world.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

The strategy of laying stress on domestic production which is usually adopted by developing countries is called as ________________.

  1. Open economy strategy

  2. Growth oriented strategy

  3. Inward oriented strategy

  4. Export substitution strategy

  5. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy. Thus the main feature of the inward oriented strategy is to lay stress on domestic production.

Multiple choice business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

Delhi is often described as a 'cosmopolitan' city. This means that it ____________

  1. is the principal city

  2. is a city of great wealth

  3. is a city with a global reputation

  4. is a city with an ethnically diverse population
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A cosmopolitan city is a city that has a high diversity of population with the high number of population with a better life style than a village which suggests that it is a city of great wealth too.