SEBI - Investor Certification Examination
SEBI - Investor Certification Examination
Q 1. What is financial literacy?
The ability to read financial documents
Understanding and effectively managing personal finances
The skill of calculating interest rates
Knowledge of stock market trends
Q 2. Why is financial literacy important?
It helps people avoid taxes.
It assists in making informed financial decisions
It allows people to retire early
It ensures people get rich quickly
Q 3. What is a Ponzi scheme?
A type of legitimate investment
A fraudulent investment scheme promising high returns
A government savings plan
A retirement fund
Q 4. What is the purpose of financial planning?
To save money for emergencies
To manage daily expenses
To plan and manage future income and expenses
To avoid spending money
Q 5. Which of the following is NOT a component of personal finance?
Saving
Spending
Investing
Shopping
Q 6. What is the primary benefit of retirement planning?
Avoiding taxes
Ensuring funds are available for leisure activities
Securing financial stability after retirement
Buying expensive properties
Q 7. What should be the first step in financial planning?
Investing in the stock market
Creating a budget
Taking a loan
Buying insurance
Q 8. Why is it important to be cautious of investment schemes promising very high returns?
They are usually safe investments
They may be fraudulent, like Ponzi schemes
They guarantee profits
They require minimal investment
Q 9. What does diversification in investing mean?
Putting all money in one type of investment
Spreading investments across various asset classes
Investing only in stocks
Saving all cash in a bank
Q 10. Which of the following is a tax-saving investment?
High-interest loans
Real estate
Retirement savings plans
Credit cards
Q 11. What is a key benefit of having an emergency fund?
It can be invested in high-risk stocks
It covers unexpected expenses
It provides a steady income
It can be used for luxury purchases
Q 12. What is the primary function of insurance?
To increase wealth
To protect against financial loss
To save money on taxes
To invest in the stock market
Q 13. Why should one avoid high-interest loans?
They are easy to obtain
They increase financial burden with high repayment costs
They are tax-free
They have low monthly payments
Q 14. What is the benefit of setting financial goals?
It helps in winning lotteries
It provides a clear direction for managing finances
It guarantees financial success
It ensures no financial risks
Q 15. What is the role of an investor protection measure?
To ensure guaranteed returns
To protect investors from fraudulent schemes and losses
To double the investments quickly
To encourage speculative investments