True/False

Question 11 Mark

A Stock Exchange contributes to capital formation and economic growth. (True/ False)

Answer

True.Explanation:
As savings get channelised into their most productive investment avenues through the process of disinvestment and reinvestment.

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Question 21 Mark

'Prohibition of fraudulent and unfair trade practices in securities market is a development function of Securities and Exchange Board of India (SEBI). (True/ False)

Answer

False.
Explanation:
As 'prohibits fraudulent and unfair trade practices in securities market' is a protective function of Securities and Exchange Board of India (SEBI).

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Question 31 Mark

Money market is a market for short-term funds. (True/ False)

Answer

True.Explanation:
As money market deals in monetary assets whose period of maturity is up to one year.

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Question 41 Mark

Primary market involves purchase and sales of existing securities. (True/ False)

Answer

False.
Explanation:
As primary market involves sale of securities by the new companies or further issue of securities by the existing companies to the investors

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Question 51 Mark

All trade bills are commercial bills. (True/ False)

Answer

False.Explanation:
When a trade bill is accepted by a commercial bank only then it becomes a commercial bill.

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Question 61 Mark

Securities and Exchange Board of India (SEBI) was set up in 1978. (True/ False)

Answer

False.
Explanation:
As Securities and Exchange Board of India (SEBI) was set up in 1988.

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Question 71 Mark

We must open a bank account before starting trading in securities. (True/ False)

Answer

False.Explanation:
A demat account should be opened with a depository to keep securities in electronic form.

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Question 81 Mark

Financial market provides liquidity to financial assets. (True/ False)

Answer

True.
Explanation:
As conversion of financial assets into cash is done easily through mechanisms of the financial markets.

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Question 91 Mark

A stock market index is a barometer of consumer behaviour. (True/ False)

Answer

False.
Explanation:
As a stock market index is a barometer of market behaviour, as it reflects market direction and indicates day-to-day fluctuations in stock prices.

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Business Studies True/False

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