CBSE Class 10 Question Paper 2026 Solution Introduction to Financial Markets

FOR CBSE CLASS 10 EXAM PREPARATION

CBSE Class 10 2026
Question Paper
Solution · Introduction
to Financial Markets
EXAM YEAR TYPE

CBSE Class 10 2026 Question Paper Solution
SUBJECT

Introduction to Financial Markets

Notes · Sample Papers · Previous Year Papers · Mock Tests

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Strictly Confidential a
(For Internal and Restricted use only)
Secondary School Examination, 2026 (Xth)
SUBJECT NAME: INTRODUCTION TO FINANCIAL MARKETS (405)
(Q.P. CODE /Set No:92/4)

General Instructions: -
1 You are aware that evaluation is the most important process in the actual and correct
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assessment of the candidates. A small mistake in evaluation may lead to serious problems
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which may affect the future of the candidates, education system and teaching profession. To

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avoid mistakes, it is requested that before starting evaluation, you must read and understand
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the spot evaluation guidelines carefully.
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“Evaluationa a
policy is a confidential policy as it is related to the confidentiality of
g conducted, evaluation done and several other aspects. Its leakage to
publicain any manner could lead to derailment of the examination system and affect the
examinations

life and future of millions of candidates. Sharing this policy/document to anyone,
publishing in any magazine and printing in Newspaper/Website, etc. may invite action
under various rules of the Board and IPC.”
3 Evaluation is to be done as per instructions provided in the Marking Scheme. It should not be
done according to one’s own interpretation or any other consideration. Marking Scheme
should be strictly adhered to and religiously followed. However, while evaluating, answers
which are based on latest information or knowledge and/or are innovative, they may be
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assessed for their correctness otherwise and due marks be awarded to them. In
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Class-X, while evaluating two competency-based questions, please try to understand

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given answer and even if reply is not from marking scheme but correct competency is
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enumerated by the candidate, due marks should be awarded.
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a only and do not constitute the complete answer. The
The Marking scheme carries only suggested
These are in the nature of Guidelines
students can have their own expression and if the expression is correct, the due marks should
be awarded accordingly.
5 The Head-Examiner must go through the first five answer books evaluated by each evaluator
on the first day, to ensure that evaluation has been carried out as per the instructions given in
the Marking Scheme. If there is any variation, the same should be zero after deliberation and
discussion. The remaining answer books meant for evaluation shall be given only after
ensuring that there is no significant variation in the marking of individual evaluators.
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Evaluators will mark ( √ ) wherever answer is correct. For wrong answer CROSS ‘X’ be
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marked. Evaluators will not put right (✓) while evaluating which gives an impression that

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answer is correct and no marks are awarded. This is most common mistake which
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evaluators are committing.
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awarded for different parts of the question should then be totaled
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left-hand margin and encircled. This may be followed strictly.
If a question does not have any parts, marks must be awarded in the left-hand margin and
encircled. This may also be followed strictly.
9 If a student has attempted an extra question, answer of the question deserving more marks
should be retained and the other answer scored out with a note “Extra Question”.
10 No marks to be deducted for the cumulative effect of an error. It should be penalized only
once.
11 A full scale of marks 50 has to be used. Please do not hesitate to award full marks if the
answer deserves it.
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12 Every examiner has to necessarily do evaluation work for full working hours i.e., 8 hours every
day and evaluate 20 answer books per day in main subjects and 25 answer books per day in
other subjects (Details are given in Spot Guidelines).This is in view of the reduced syllabus
and number of questions in question paper.
13 Ensure that you do not make the following common types of errors committed by the Examiner
in the past :-
● Leaving answer or part thereof unassessed in an answer book.
● Giving more marks for an answer than assigned to it.
● Wrong totaling of marks awarded on an answer.
● Wrong transfer of marks from the inside pages of the answer book to the title page.
● Wrong question wise totaling on the title page.
● Wrong totaling of marks of the two columns on the title page.
● Wrong grand total.
● Marks in words and figures not tallying/not same.
● Wrong transfer of marks from the answer book to online award list.
● Answers marked as correct, but marks not awarded. (Ensure that the right tick mark is
correctly and clearly indicated. It should merely be a line. Same is with the X for incorrect
answer.)
● Half or a part of answer marked correct and the rest as wrong, but no marks awarded.

14 While evaluating the answer books if the answer is found to be totally incorrect, it should be
marked as cross (X) and awarded zero (0) Marks.
15 Any unassessed portion, non-carrying over of marks to the title page, or totaling error detected
by the candidate shall damage the prestige of all the personnel engaged in the evaluation
work as also of the Board. Hence, in order to uphold the prestige of all concerned, it is again
reiterated that the instructions be followed meticulously and judiciously.
16 The Examiners should acquaint themselves with the guidelines given in the “Guidelines for
Spot Evaluation” before starting the actual evaluation.
17 Every Examiner shall also ensure that all the answers are evaluated, marks carried over to the
title page, correctly totaled and written in figures and words.
18 The candidates are entitled to obtain photocopy of the Answer Book on request on payment of
the prescribed processing fee. All Examiners/Additional Head Examiners/Head Examiners are
once again reminded that they must ensure that evaluation is carried out strictly as per value
points for each answer as given in the Marking Scheme.
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MARKING SCHEME
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INTRODUCTION TO FINANCIAL MARKETS (Subject Code-405)
(PAPER CODE : 92) (M920405)
CLASS X
Q.No. EXPECTED OUTCOMES/VALUE POINTS Marks

SECTION – A: OBJECTIVE TYPE QUESTIONS

1. Answer any 4 out of given 6 questions on Employability Skills.
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i. (A) Specific feedback 1
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ii. (B) Realistic
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iii.(B) Ability 1
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iv.(D) Check for expiry of antivirus software and renew.
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v. (D) Fostering innovation and economic growth.
vi.(D) Space Research.
1
1

4x1=4

2. Answer any 5 out of given 6 questions.
i. (D) Equities 1
ii. (A) Savings 1
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iii. (C) Rights Issue 1
iv. (B) Providing liquidity and marketability for existing securities. 1
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(C) Determining the pricing of securities.
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Any of the above options should be given full marks to
examinee
v. (B) They are standardized and traded on exchanges. 1
vi.(D) Both statements are true. 1

5x1=5

3. Answer any 5 out of given 6 questions.
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i. (C) The use of funds for assets with the goal of generating future 1

. com income or returns.
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company’s securities for trading/buy and sell/transactions on a
1

stock exchange.
iv.(C) INB 1
v. (C) Assists, regulates, or controls the business of buying, selling or 1
dealing only in the commodity derivatives market.
vi. (A) Earning Per Share (EPS) 1

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4. Answer any 5 out of given 6 questions.
i. (B) Real Assets. 1
ii. (A) Statement 1 is true, but statement 2 is false. 1
iii.(D) Bonus Shares 1
iv.(D) Depository Participant 1
v.(C) Yes, the number of shares held by investors increased in 1
proportionate ratio in which a stock split.
vi.(C) Four 1

5x1=5

5. Answer any 5 out of given 6 questions.
i. (C) Open a demat account with a depository participant (DP) and 1
dematerialise his shares before selling.
ii. (A) Cut-off price 1
iii. (B) Yes, bonds are assessed on their credit quality. 1
iv. (C) Increased trading cost 1
v. Pay-in day is the settlement date on which brokers/trading 1
members deliver securities or pay funds to the stock
exchange/clearing house after a trade is executed. It generally
takes place on the second working day after the trade (T+2
settlement cycle).
(Any relevant definition)
vi. (A) Both A and R are true and R is the correct explanation of A. 1

5x1=5

SECTION – B: SUBJECTIVE TYPE QUESTIONS

Answer any 3 out of given 5 questions. Answer each question in 3x2=6
20-30 words.

6. As there are various stakeholders like customers, employees, 1
vendors, media etc, are always sending important information to
each other.
It has three important parts: - 1
1. Transmitting
2. Listening
3. Feedback

(Any other relevant answer) 1+1=2

7. 1. Self – awareness
2. Responsibility
3. Time Management
4. Adaptability
(Any four relevant point) 0.5 x 4=2

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2. Point and click
3. Drag and drop
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4. Double click

(Any four relevant points) 0.5 x 4=2

9. (a) A career is a line/path of work/job that a person takes for life. 1

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(Any other relevant definition)
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(b) Two ways are:
eemployment/ business
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1. Self
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2. l Wage employment/ Profession ag
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(Any other relevant answer) 1+1=2

10. To reduce inequalities we can:
1. be helpful to one another
2. be friendly with everyone
3. include everyone while working or playing.

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4. help others by including everyone whether they are small or

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big,boy or girl, belonging to any class or caste.

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(Any four relevant points) 0.5 x 4=2
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Answer any 4 out of given 6aquestions in 20-30 words each. 2x4=8

11. Key advantages of the book - building process within the NSE IPO
system are:
1. It provides a nationwide bidding platform for investors.
2. It ensures a fair and transparent price discovery process.
3. Bids are collected through an electronic system, reducing
errors.
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6. It increases trust and transparency in the IPO process.
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12. A debenture is a long-term debt instrument issued by a private or
public company to raise capital. It carries a fixed rate of interest
and is repayable after a specified period called the maturity period.

(Any other relevant definition) 2
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13. Two key services offered by Depository participants (DPs) to
investors are:
1. Dematerialisation (Demat)
Conversion of physical share certificates into electronic form
and storing them in the investor’s demat account.
2. Rematerialisation (Remat)
Conversion of securities from electronic form back into
physical share certificates at the request of the investor.
3. Account Maintenance
Maintaining the investor’s demat account and providing
regular account statements and holding reports.
4. Transaction Services
Facilitating buying, selling, and transfer of securities by
crediting or debiting the investor’s demat account.

(Any two relevant points) 1 x 2=2

14. Primary Risk: 1
Counterparty Risk – Risk that one party may not pay or deliver
securities.

How Clearing Corporations Reduce This Risk: 1
1. They act as a middleman between buyer and seller.
2. They collect margin money to cover possible losses.
3. They adjust prices daily according to market changes.
4. They keep a Settlement Guarantee Fund to complete
settlement if someone fails.

(Any two relevant points) 1+1=2

15. Items are included in the liabilities sections of a company’s balance
sheet as follows
1. Share Capital
2. Reserves and Surplus
3. Secured Loans
4. Unsecured Loans
5. Current Liabilities
6. Short-Term Provisions

(Any four relevant points) 0.5x4=2

16. The long-term financial strength of a firm is assessed using Solvency 1
Ratios or Capital Structure Ratios or Leverage Ratios.

Various Capital Structure Ratios are as follows: 1
1. Debt–Equity Ratio
2. Debt–Asset Ratio
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4. Debt Service Coverage Ratio (DSCR)
(Any two ratios)
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1+1=2

Answer any 3 out of the given 5 questions in 50-80 words each. 4x3=12

17. (a)Foreign Currency Convertible Bonds (FCCBs): 1
FCCBs are bonds issued by a company in a foreign currency. These
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bonds can later be converted into equity shares of the company at a
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fixed price after a certain period.
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Note (as per book):
FCCBs are Euro issues. ag
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If a student writes only “FCCBs are Euro issues”, full marks should
be awarded as per the textbook

(b) Lock - in: Lock-in refers to a fixed period during which certain 1
shares or investments cannot be sold or transferred. This period
begins after the shares are allotted.

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(c) Abridged Prospectus: An abridged prospectus is a short
summary of the full prospectus. It contains important details about
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the public issue and is attached to the application form to help
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investors understand the issue before investing.
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(d) Public Issue: A public issue is when a company offers its shares 1
or debentures to the general public through a stock exchange to raise
capital.

Optional:
Example: When a company launches an Initial Public Offering (IPO),
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it is making a public issue for the first time.
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No marks should be deducted if examinee has not written
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example
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ag (a) The purpose of a contract note in the secondary market. 2
1. It confirms that the trade has been executed.
2. It serves as a legal proof of the transaction.
3. It provides details of the trade (price, quantity, brokerage,
date, etc.).
4. It is useful for tax and record-keeping purposes.

(Any two relevant points)
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(b) A contract note enhances transparency and accountability in 2
the secondary market in several key ways.
1. It shows complete details of the transaction clearly.
2. It mentions brokerage and other charges separately.
3. It helps investors verify the trade was done correctly.
4. It serves as a record for tax and regulatory purposes.
5. It prevents disputes between the broker and investor.
6. It helps in dispute resolution by providing written proof.
7. It ensures compliance with stock exchange rules.
8. It increases transparency and trust in the secondary market.

(Any two relevant points. Some points may apply to both parts
and can overlap.)
2+2=4

19. (a) Aim of Investor Protection Fund (IPF). 2
1. Compensation for Losses – Pays investors (up to a fixed
limit) if a broker defaults or is expelled.
2. Promotes Investor Confidence – Builds trust in the capital
market.
3. Investor Education and Awareness – Conducts programs
and workshops to educate investors.
4. Ensures Fair Practices – Encourages ethical behaviour by
market intermediaries.
5. Reduces Risk for Small Investors – Provides security to
small and retail investors.
6. Supports Market Stability – Helps maintain stability in the
stock market during defaults.

(Any two relevant points)

(b) Role of Arbitration 2
1. It is an alternative dispute resolution mechanism provided
by the stock exchange.
2. It resolves disputes between trading members (brokers) and
their clients related to trades done on the exchange.
3. It provides a quick and cost-effective method compared to
court cases.
4. The decision is legally binding on both parties.
5. The process is conducted by independent arbitrators,
ensuring fairness.

Note:
As per the book, arbitration is an alternative dispute resolution
mechanism provided by the stock exchange to resolve disputes
between trading members and their clients regarding trades executed
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(Any two relevant points)
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20. (a) Various types of application of funds 3
1. Fixed Assets
2. Investments
3. Current Assets, Loans and Investment
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4. Miscellaneous expenditure and the Losses.
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. type of Applications of Fund. s e
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FixedlAssets ag
ag are long-term assets acquired for use in business
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operations and not for resale.
Examples: Land, Building, Machinery, Furniture, Vehicles, Plant and
Equipment.

Investments
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Examples: Shares, Debentures, Bonds, Mutual Funds, Fixed
Deposits.
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Current Assets, Loans and Investment
These are assets that can be converted into cash during the
normal course of business and are held for a short-term period.
Examples: Cash, Debtors, Inventories, Prepaid Expenses, Bills
Receivable.

Miscellaneous expenditure and the Losses
These represent expenses such as preliminary expenses and
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(b) Application of Funds (Importance) 1
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1. Shows how effectively a company uses its money.
a 2. Affects business growth.
3. Influences liquidity (ability to meet short-term obligations).
4. Builds investor confidence.
5. Acts as an important indicator of financial health.

(Any two relevant points)
3+1=4
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21. Categories of mutual fund investment styles based on Active 1
Fund Management:
1. Growth Style
2. Value Style

Growth Investing
1. Aims for capital appreciation (increase in stock value). 1.5
2. Invests in companies expected to give above-average
earnings growth.
3. Focuses on sectors with high potential or innovation.
4. The goal is to buy stocks that should rise in price due to
strong future earnings.

Value Investing
1. Focuses on finding undervalued companies. 1.5
2. Invests in companies trading below their true worth.
3. Chooses companies with strong fundamentals and
long-term growth potential.
4. Belief that the market will eventually recognize the
company’s true value.

1+1.5+1.5=4
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