12th Commerce - Book Back Answers - Chapter 7 - English Medium Guides ~ Kalvi Tips

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Tamil Nadu Board 12th Standard Commerce - Chapter 7: Book Back Answers and Solutions

This post covers the book back answers and solutions for Chapter 7 – Commerce from the Tamil Nadu State Board 12th Standard textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

By going through this material, you’ll gain a strong understanding of Commerce Chapter 7 along with the corresponding book back questions and answers (PDF format).

Question Types Covered:

1 Mark Questions: Choose the correct answer, Fill in the blanks, Identify the correct statement, Match the following
2 Mark Questions: Answer briefly
3, 4, and 5 Mark Questions: Answer in detail

All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

All the best, Class 12 students! Prepare well and aim for top scores. Thank you!

Chapter 7: Stock Exchange

I. Choose the correct answer.

1. _________ is the oldest stock exchange in the world.
a) London Stock Exchange
b) Bombay Stock Exchange
c) National Stock Exchange
d) Amsterdam Stock Exchange
Answer Key:
d) Amsterdam Stock Exchange

2. There are _________ stock exchange in the country.
a) 21
b) 24
c) 20
d) 25
Answer Key:
b) 24

3. Jobbers transact in a stock exchange
a) For their Clients
b) For their Own Transactions
c) For other Brokers
d) For other Members
Answer Key:
b) For their Own Transactions

4. A pessimistic speculator is
a) Stag
b) Bear
c) Bull
d) Lame Duck
Answer Key:
b) Bear

5. An optimistic speculator is
a) Bull
b) Bear
c) Stag
d) Lame duck
Answer Key:
a) Bull

II. Very short answer questions.

1. What is meant Stock Exchange?
Answer Key:

Stock Exchange is one of the important constituents of Capital market.
Stock Exchange is an organized market for the purchase and sale of industrial and financial security.

2. Write any 5 Stock Exchanges in India.
Answer Key:

The Bombay Stock Exchange
The Ahmedabad Stock Exchange Association Ltd.
Bangalore Stock Exchange Ltd.
Bhubaneshwar Stock Exchange
The Calcutta Stock Exchange Association Ltd.
The Cochin Stock Exchange Ltd.
The Delhi Stock Exchange Association Ltd.
The Guwahati Stock Exchange Ltd.
The Hydrabad Stock Exchange Ltd.
The Jaipur Stock Exchange Ltd.

3. What is meant by Remisier?
Answer Key:

He acts as an agent of a member of a stock exchange.
He obtains business for his principal.
ie., the member and gets a commission for that service.

4. Who is called a Broker?
Answer Key:

Brokers are commission agents, who act as intermediaries between buyers and sellers of securities.
They do not purchase or sell securities on their behalf.

5. What are the types of Speculator?
Answer Key:
Speculators in a stock market are of different types. They are named on the basis of animals behaviour.
They are:

Bull
Bear
Stag
Lame duck

III. Short answer questions.

1. What are the limitations of Stock exchange? (any 3)
Answer Key:

Lack of uniformity and control of stock exchanges.
Absence of restriction on the membership of stock exchanges.
Failure to control unhealthy speculation.
Allowing more than one charge in the place.

2. Explain Bull and Bear.
Answer Key:
Bull:

A Bull or Tejiwala is an operator who expects a rise in prices of securities in the future.
He is an optimistic speculator.
In anticipation of price rise he makes purchases of shares at present and other securities with the intention to sell at higher prices in future.

Bear:

A bear or Mandiwala speculator expects prices to fall in future and sells securities at present with a view to purchase them at lower prices in future.
A bear is a pessimistic speculator.
A bear does not have securities at present but sells them at higher prices in anticipation that he will supply them by purchasing at lower prices in future.

3. Explain Stag and Lame Duck.
Answer Key:
Stag:

A stag is a cautious speculator in the stock exchange.
He applies for shares in new companies and expects to sell them at a premium, if he gets an allotment.
He is also called a premium hunter.

Lame Duck:

When a bear finds it difficult to fulfill his commitment, he is said to be struggling like a lame duck.
A bear speculator contracts to sell securities at a later date.

IV. Long answer questions.

1. Explain the functions of Stock Exchange. (Any 5)
Answer Key:
Ready and Continuous Market:

Stock Exchange is, in fact, a market for existing securities.
If an investor wants to sell his securities, he can easily and quickly dispose them off on a stock exchange.

Correct Evaluation of Securities:

The prices at which securities are bought and sold are recorded and made public.
These prices are called “market quotations”.

Protection to Investors:

All dealings in a stock exchange are in accordance with well-defined rules and regulations.

Facilities for Speculation:

Speculation is an integral part of stock exchange operations.
As a result of speculation, demand for and supply of securities are equalized.

Seasoning of Securities:

Speculators and underwriters hold for a temporary period, securities issued by new companies.
They unlock them when the market is prepared to absorb the new issues.

2. Explain the features of Stock Exchange.

(Any 5)
Answer Key:
Market for Securities:

Stock exchange is a market, where securities of corporate bodies, government and semi-government bodies are bought and sold.

Deals in Second Hand Securities:

It deals with shares, debentures bonds and such securities already issued by the companies.

Regulates Trade in Securities:

Stock exchange does not buy or sell any securities on its own account.

Association of Persons:

A stock exchange is an association of persons or body of individuals which may be registered or unregistered.

Recognition from Central Government:

Stock exchange is an organized market. It requires recognition from the Central Government.

Financial Barometers:

Stock exchanges are the financial barometers and development indicators of national economy of the country.
Industrial growth and stability is reflected in the index of stock exchange.

3. Distinguish between Stock Exchange and Commodity Exchange (any 5)
Answer Key:

Feature	Stock Exchange	Commodity Exchange
Meaning	Stock Exchange (also called as Stock Market or Share Market) is one important constituent of capital market.	A commodity exchange is an exchange where commodities are traded.
Function	Providing easy marketability	Offering hedging or price insurance services and liquidity to securities.
Participants	Investors and Speculators.	Producers, dealers, traders and a body of speculators.
Forward Contract	Forward dealings are simplified as securities are fully standardized.	Standards are to be fixed for deliverable grades to facilitate futures contract.
Price Quotation	As regards forward dealings, only one quotation is possible.	For future dealings, multiple quotations are possible.

Prepared By:

B. MUTHUKUMAR
PG ASST COMMERCE
MKVK MATRIC HR SEC SCHOOL
TENKASI