Assertion Reason MCQs of Financial Markets BST class 12

Looking for Assertion Reason-based MCQs (Multiple Choice Questions) of Financial Markets chapter of Business Studies of Class 12 CBSE Board, ISC and other State Board.

We have compiled very important MCQs of chapter Financial Markets of Business Studies Class 12

Multiple Choice Question of Financial Markets chapter Business Studies Class 12 CBSE

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Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Instruments of the money market are close substitutes for money.

Reason(R): Discount Finance House of India provides a ready market for money market instruments.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – a)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Treasury Bills are considered negotiable instruments.

Reason (R): Treasury Bills have assured yield and negligible risk of default due to the soundness of RBI.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – b)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Commercial Paper is used for Bridge Financing.

Reason (R): Commercial Paper is a secured instrument and is issued by small companies.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – c)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Money market instruments are less risky.

Reason (R): Instruments of the money market have a shorter duration and issuers are financially sound.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – a)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Under Private Placement, the company offers the new shares to its existing shareholders in proportion of shares already held by them.

Reason (R): This method helps to raise capital more quickly as compared to public issue.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – d)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): Primary Market promotes capital formation directly.

Reason (R): Only buying of securities takes place in the Primary Market.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – b)

Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:

Assertion (A): There exists an inverse relationship between call rate and other short-term money market instruments.

Reason (R): A rise in call rate makes other sources of finance like certificates of deposit and commercial paper cheaper and banks raise funds from these sources.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
c) Assertion (A) is true but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True.

Ans – a)