Financial Markets

17 solved questions from Class 12 Business Studies, each with the full working. Tap any question to see the step-by-step solution.

• 1 What is the primary topic or theoretical principle explored in 'Financial Markets' (Class 12 BUSINESS-STUDIES)? medium MCQ Chapter Core Principle
• 2 Which key mechanism or analytical rule is highlighted in 'Financial Markets'? medium MCQ Key Analytical Mechanism
• 3 What is the primary topic or principle explained in 'Financial Markets' (Class 12 Business Studies)? medium MCQ Chapter Core Concept
• 4 Which key observation or fact is central to understanding 'Financial Markets'? medium MCQ Key Fact & Mechanism
• 5 Why is the study of 'Financial Markets' important for students of Class 12? medium MCQ Learning Significance
• 6 What is a common application or real-world example related to 'Financial Markets'? medium MCQ Real World Application
• 7 What key takeaway should students retain after completing 'Financial Markets'? medium MCQ Chapter Summary & Takeaway
• 8 Explain two major differences between the primary market and the secondary market in India. medium 2 marks Primary vs secondary market
• 9 Discuss the role of SEBI in regulating an Initial Public Offering (IPO) in India. Include at least three specific functions performed by SEBI. hard 4 marks SEBI's role in IPO
• 10 An Indian company plans to raise ₹10 crore by issuing 1 lakh equity shares at a face value of ₹100 each. The underwriting commission is 2% of the issue size, and SEBI charges a registration fee of 0.1% of the issue size. Calculate the net amount the company will receive after deducting these charges. medium 3 marks Cost of raising capital through issue
• 11 An Indian company issues 500,000 equity shares at a face value of ₹150 each. The underwriting commission is 3% of the issue size. What is the total underwriting commission that the underwriter receives? easy 1 mark Underwriting commission calculation
• 12 A mutual fund has just issued 200,000 units at ₹20 each. The net asset value (NAV) of the fund is ₹18 per unit. If the expense ratio of the fund is 2%, what is the gross asset value (GAV) of the fund before expense charges? medium 2 marks NAV and GAV relationship with expense ratio
• 13 Explain how SEBI’s Market Surveillance System helps maintain price stability in the Indian equity market. Discuss at least three tools used by SEBI and provide an example of how each tool is applied. hard 4 marks SEBI market surveillance mechanisms
• 14 An Indian firm decides to raise additional capital through a rights issue of 50,000 equity shares. Each share has a face value of ₹200 and is offered at a premium of ₹30 per share. The underwriting commission is 1.5% of the total issue size and SEBI’s registration fee is 0.05% of the issue size. Calculate the total amount the company will receive after deducting the underwriting commission and registration fee. medium 2 marks Rights issue – calculation of net proceeds
• 15 Explain the mechanism of price discovery in the secondary market. In your answer, discuss the roles of supply and demand, market orders, and the impact of corporate announcements such as dividend declarations on the stock price. Illustrate with a numerical example showing how a dividend announcement can lead to a change in the market price of a share. hard 4 marks Price discovery in secondary market
• 16 ABC Ltd. intends to raise funds by issuing 10,000 debentures of ₹1,000 each at a discount of 2%. The company also agrees to pay a commission of 0.5% on the total issue size to the underwriter. Compute (i) the gross issue amount, (ii) the discount amount, (iii) the commission payable, and (iv) the net proceeds that ABC Ltd. will receive. hard 3 marks Debenture issue – net proceeds calculation
• 17 A company has 2,00,000 equity shares of face value ₹100 each. It announces a rights issue of 1 new share for every 4 existing shares at a subscription price of ₹80 per share. The underwriting commission is 2% of the issue size. Calculate: (i) entitlement ratio, (ii) theoretical ex‑right price (TERP), (iii) total amount raised, and (iv) net proceeds after deducting the underwriting commission. hard 4 marks Rights issue and TERP calculation