SEBI - Investor Certification Examination
SEBI - Investor Certification Examination
Q 1. What is the first type of risk investors should understand before investing in securities?
Inflation risk
Market risk
Business risk
Volatility risk
Q 2. What is an example of unsystematic risk?
Stock market bubbles
Shift in management
Inflation
Volatility in stock prices
Q 3. What is the risk associated with the decline in the purchasing power of cash flows from an investment?
Market risk
Unsystematic risk
Inflation risk
Business risk
Q 4. How can liquidity risk be minimized?
By investing in volatile stocks
By diversifying investments
By avoiding regulatory changes
By investing in high-risk assets
Q 5. What is the risk associated with a business potentially ceasing operations due to unfavorable market conditions?
Currency risk
Volatility risk
Market risk
Inflation risk
Q 6. What type of risk involves fluctuations in stock prices even when companies are not in danger of failing?
Currency risk
Market risk
Volatility risk
Inflation risk
Q 7. When does currency risk occur?
When there is a possibility of losing money due to unfavorable movements in exchange rates
When businesses face unfavorable market conditions
When stock prices fluctuate rapidly
When investments cannot be quickly converted into cash
Q 8. What is one way investors can reduce risk in their investment portfolio?
Buying equities directly from the market
Ignoring rumors and unsolicited messages
Investing in a single sector
None of the above
Q 9. How can asset allocation help mitigate investment risk?
By concentrating investments in one sector
By reducing diversification
By spreading investments across various sectors and companies
None of the above
Q 10. What is the difference between the primary market and the secondary market?
In the primary market, investors buy securities from existing investors
In the secondary market, investors are allotted securities directly by the company
In the primary market, investors buy securities directly from the company
None of the above
Q 11. How can investors manage volatility risk in mutual fund investments?
By concentrating investments in a single fund
By investing only in long-term funds
By investing through Systematic Investment Plan (SIP)
None of the above
Q 12. What accounts are required to invest in equity shares?
Current Account, Trading Account, Demat Account
Savings Account, Investment Account, Demat Account
Savings Account, Trading Account, Demat Account
None of the above
Q 13. How can understanding a company's fundamentals help investors?
By following rumors and unsolicited messages
By concentrating investments in a single company
By making appropriate judgments about the company's health
None of the above
Q 14. What is ASBA?
An application for buying and selling securities
An authorization to the bank to block application money for subscribing to an issue
A type of mutual fund
None of the above
Q 15. How does ASBA benefit investors?
By allowing them to earn interest on the blocked amount
By providing instant refunds if the securities are not allotted
By facilitating direct debiting of application money only upon allotment
None of the above