1. Which of the following is a financial goal?

Rs.6 lakhs required for sisters wedding

A sizable sum needed to buy a new car in two years time
Rs. 10 lakhs needed for purchasing a flat
Rs.5 lakhs needed after two years to pay childs tuition fees [Correct answer NOTselected]

2. Mr. Khanna requires Rs.10 lakhs in six months time to pay his sons admission fees. An
appropriate investment to set aside money for his goal would be
Equity shares of high-growth companies
Real estate
Short term debt fund [Correct answer NOT selected]
Long term corporate bond

3. Jaya needs Rs.5 lakhs urgently for an emergency medical procedure. Which investment is
she most likely to tap?
Shares of Hindalco Ltd
Bank deposit [Correct answer NOT selected]
Gold jewellery
5-year bonds of a finance company

4. A conservative investor wants to accumulate Rs.20 lakhs in 3 years time. What would be an
appropriate investment option for him?
Shares of selected growth companies
Bank deposits and good quality bonds [Correct answer NOT selected]
Property
Gold funds

5. Investment A appreciates in value by 20% after one year. Investment B appreciates by 40%
after three years. Which gives a higher return?
Investment B, because it has a higher absolute return
Investment A, because it can be exited after just one year
Investment B, because it has a higher holding period
Investment A, because it has a higher annualized return [Correct answer NOTselected]

6. The concept of time value of money implies that

Money should be invested immediately without wasting time
Due to inflation, money has a lower purchasing value in future
The timing of investment influences final returns
Current cash inflows can be re-invested to earn a return that increases future value [Correct answer NOT selected]

7. An investor in mutual funds typically enters the fund at a certain value, and exits at another
value after a specified holding period. The appropriate measure to assess his return is
Absolute return
Annualized return
Holding Period Return [Correct answer NOT selected]
IRR

8. An investment in 7% tax free bonds is compared with an investment in a 9% bank deposit

where interest is taxable. Both have a one year investment horizon. Which of the following is
true?
The bond interest is tax free so it is better
For an investor who is not taxable, the bank deposit offers a better return [Correct answer NOT selected]
For an investor with a 30% tax rate, the bank deposit gives higher post tax return
For an investor with a 10% tax rate, the bank deposit gives lower post-tax return

9. A retired person is depending on a monthly annuity income to finance his expenses. The
greatest risk faced by his cash flows is

Business risk
Exchange rate risk
Interest rate risk
Inflation risk [Correct answer NOT selected]

10. Investment in a government security issued at a fixed interest rate is subject to

Credit risk
Business risk
Interest rate risk [Correct answer NOT selected]
Liquidity risk

11. An investor purchases equity shares of a cement manufacturing company. The returns
from his investment do not face
Interest rate risk [Correct answer NOT selected]
Credit risk
Business risk
Inflation risk

12. An investor holds a large portfolio of shares from different companies and industries. Her
portfolio is likely to be protected from
Credit risk
Inflation risk
Liquidity risk
Unsystematic risk [Correct answer NOT selected]

13. Interest on a NSC

Is paid out annually
Is compounded and paid out quarterly
Is accumulated and paid at the end of the term [Correct answer NOT selected]

14. Which of the following instruments under Section 80C enjoys an EEE status?
ELSS
PPF [Correct answer NOT selected]
SCSS

15. FMPs achieve lower mark-to-market risk by investing in

shorter term securities that mature before the tenor of the fund
floating rate securities with reset tenor less than six months
securities whose maturity matches that of the fund [Correct answer NOT selected]

16. Short term debt funds carry

High mark to market risk
Low mark-to-market risk [Correct answer NOT selected]
No mark-to-market risk

17. Which of these asset classes is most likely to meet the objective of generating regular
income?
Equity
Cash and equivalents
Debt [Correct answer NOT selected]

18. Which of these asset classes is primarily used to meet regular needs for liquid cash?
Debt
Cash and equivalents [Correct answer NOT selected]
Equity

19. The long term goal of an investor is to build a corpus that is adequate to serve his income
needs after retirement. The portfolio when constructed, should have a higher allocation to

Debt
Cash equivalents
Equity [Correct answer NOT selected]

20. An investor who seeks a high level of return and is willing to bear the risks of such
investments is likely to be recommended
Aggressive portfolio [Correct answer NOT selected]
Conservative portfolio
Moderate portfolio

21. Which of the following products is a pure insurance product?

ULIP
Money back policy
Term insurance policy [Correct answer NOT selected]
Whole life policy

22. In which of the following situations will the insured not have insurance cover?
Surrendered policy [Correct answer NOT selected]
Paid-up policy
Term policy
Both (a) and (b)

23. The premium payable on a ULIP is higher for the same sum assured as a term policy
because
The period of cover is shorter
A portion of the premium is used for investment [Correct answer NOT selected]
The pool of insured is smaller
The risk is higher

24. The term of insurance in non-life insurance is typically

Decided by the insured
Decided based on sum insured
One year [Correct answer NOT selected]
Flexible

25. Growth-oriented investments are suitable for which stage of retirement savings?
Accumulation stage [Correct answer NOT selected]
Distribution stage
Income stage
Investment stage

26. Inflation does which of the following to retirement planning?

Reduces the periodic savings required
Reduces the return generated by an investment
Increases the retirement corpus required [Correct answer NOT selected]
Increases the value of the corpus created

27. The retirement corpus may require review

Every year
Every time there is a significant change in financial situation [Correct answer NOTselected]
Closer to the distribution period
Not at all

28. Which of the following is a solution to manage inadequacy of retirement corpus closer to
retirement?
Invest in riskier assets
Postpone retirement [Correct answer NOT selected]
Reduce periodic savings
Increase corpus target

29. Commission received from business forms part of income from ___________.
Business and profession [Correct answer NOT selected]
Capital Gains
Salary
Other sources

30. Long term capital gain from sale of shares is ____________________.

Taxed at 10%
Exempt from tax [Correct answer NOT selected]
Taxed at 20%
Taxed at 15% with indexation

31. The Rajiv Gandhi Equity Savings Scheme, 2012 allows exemption up to _______ for
investments made in eligible securities up to Rs. 50,000.
100%
50% [Correct answer NOT selected]
40%
60%

32. For a person to be qualified as a NRI, he must have stayed outside India for a minimum
period of _____ days in a previous financial year.
365
280
182 [Correct answer NOT selected]
150

33. Which of the following persons is expected to comply with registration requirement under
SEBI (Investment Advisers) Regulations, 2013:
Fund Manager of an AMC
A distributor of a mutual fund who only receives commission from the AMC.
An IFA who charges advisory fees to investors [Correct answer NOT selected]
A Chartered Accountant practicing his profession

34. The minimum tangible assets to be maintained by an individual investment adviser are
Rs. _______.
1 lac [Correct answer NOT selected]
25 lacs
5 lacs
10 lacs

35. Registration and regulation of securities market intermediaries is the function of _____.
AMFI
SEBI [Correct answer NOT selected]
PFRDA
SRO

36. A person who has a complaint against an insurance company must lodge his complaint
with___.
SCORES
IGMS [Correct answer NOT selected]
CGMS
RBI