The primary function of a stock exchange is to:
A) Issue new currency
B) Facilitate the buying and selling of stocks and securities
C) Control inflation
D) Regulate foreign exchange rates
Which of the following is a primary financial market?
A) Foreign exchange market
B) IPO market
C) Derivatives market
D) Money market
A bullish stock market is characterized by:
A) Falling stock prices
B) Rising stock prices
C) High interest rates
D) Decreasing investor confidence
The Karachi Stock Exchange (KSE) merged with other exchanges to form:
A) Pakistan Stock Market
B) Pakistan Stock Exchange (PSX)
C) Lahore Stock Market
D) Islamabad Stock Index
A stock that consistently pays dividends is called a:
A) Growth stock
B) Penny stock
C) Dividend stock
D) Speculative stock
Which of the following is a key feature of secondary markets?
A) Securities are sold for the first time
B) Investors trade previously issued securities
C) Companies raise initial capital
D) Bonds are exclusively traded
What is the main function of a financial market?
A) Increasing government revenue
B) Facilitating the transfer of funds from savers to borrowers
C) Controlling inflation
D) Regulating foreign trade
Which financial instrument represents ownership in a company?
A) Bond
B) Stock
C) Certificate of Deposit
D) Treasury Bill
The term “blue-chip stock” refers to:
A) A risky investment
B) Shares of large, well-established companies
C) Penny stocks
D) Stocks that have low liquidity
Which regulatory body oversees Pakistan’s financial markets?
A) Federal Board of Revenue (FBR)
B) Securities and Exchange Commission of Pakistan (SECP)
C) State Bank of Pakistan (SBP)
D) Ministry of Finance
A bear market is one where:
A) Stock prices are rising
B) Stock prices are falling
C) The government raises interest rates
D) Investors are overly optimistic
An IPO (Initial Public Offering) is when a company:
A) Issues shares to the public for the first time
B) Declares bankruptcy
C) Distributes dividends
D) Merges with another company
Which of the following is NOT a type of financial market?
A) Capital market
B) Money market
C) Real estate market
D) Derivatives market
What does market capitalization refer to?
A) The total number of shares issued by a company
B) The total value of a company’s outstanding shares
C) The number of investors in a market
D) The total revenue of a stock exchange
Which index measures the performance of the Pakistan Stock Exchange?
A) KSE-100 Index
B) PSX-200 Index
C) Karachi Composite Index
D) Islamabad Index
A high P/E (Price-to-Earnings) ratio indicates that a stock is:
A) Overvalued or has high growth expectations
B) Undervalued
C) Paying high dividends
D) Not actively traded
Which type of financial market deals with short-term borrowing and lending?
A) Money market
B) Capital market
C) Stock market
D) Foreign exchange market
A bond represents:
A) Ownership in a company
B) A loan made by an investor to a borrower
C) A stock option
D) A government subsidy
Stock prices are influenced by:
A) Inflation and interest rates
B) Company performance
C) Market speculation
D) All of the above
What is the role of a stockbroker?
A) To regulate financial markets
B) To facilitate buying and selling of stocks for investors
C) To print money
D) To manage foreign reserves
A mutual fund is a:
A) Government-regulated bond
B) Pool of funds from multiple investors used to buy securities
C) Fixed deposit account
D) Type of insurance policy
Which financial instrument derives its value from an underlying asset?
A) Stock
B) Bond
C) Derivative
D) Mutual fund
What does diversification mean in investment?
A) Investing all money in one stock
B) Spreading investments across various assets to reduce risk
C) Short-term trading
D) Buying stocks based on media speculation
Which is an example of a financial derivative?
A) Stocks
B) Futures contracts
C) Bank deposits
D) Treasury bills
The purpose of a central bank in financial markets is to:
A) Control inflation and regulate monetary policy
B) Trade stocks on the exchange
C) Set corporate tax rates
D) Issue company shares
A company’s earnings per share (EPS) is calculated as:
A) Net income ÷ Number of outstanding shares
B) Total revenue ÷ Total employees
C) Market value ÷ Total shares issued
D) Dividend per share ÷ Stock price
If an investor buys stock in a company, they become a:
A) Debtor
B) Shareholder
C) Lender
D) Bondholder
Which term refers to the ability to quickly buy or sell assets without affecting the price?
A) Volatility
B) Liquidity
C) Inflation
D) Capitalization
