NISM VA Chapter 1: Investment Landscape All Topics MCQs PDF

1.1 MCQ on Investors and their Financial Goals

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1. Why is it important to start with “why” when discussing investments?

A) To understand the purpose of investment.

B) To know which investments are currently popular.

C) To find out what other people are investing in.

D) To impress others with your investment knowledge.

 

2. What are financial goals?

A) The needs of the investor.

B) The types of investments available.

C) The amount of money needed to invest.

D) The objectives that require money to fulfill.

 

3. What is the first step in goal setting?

A) Assigning timelines.

B) Identifying financial objectives.

C) Deciding on investment options.

D) Withdrawing money from investments.

 

4. What are some common financial goals?

A) Funding a child’s education, buying a vehicle, taking a big vacation.

B) Starting one’s own business, taking a sabbatical from work.

C) Funding the lifestyle in retirement, buying or renovating one’s house.

D) All of the above.

 

5. What is the role of a financial advisor in goal setting?

A) To decide which financial goals are important.

B) To invest the money on behalf of the investor.

C) To guide and help the investor make appropriate decisions.

D) To provide emergency funds in case of unexpected events.

 

6.What are some potential negative events that may require emergency funds?

A) Buying a house, funding a child’s education.

B) Taking a big vacation, starting a business.

C) Hospitalization, accident, theft, fire.

D) Retirement, renovation of one’s house.

 

7.What is the difference between financial objectives and financial goals?

A) Financial objectives require money to fulfill, while financial goals are just desires.

B) Financial objectives are the needs of the investor, while financial goals are the timeline and amount of funding required.

C) Financial objectives are undesirable events, while financial goals are desirable events.

D) Financial objectives are determined by a financial advisor, while financial goals are determined by the investor.

 

8. Why does one need to invest money for financial goals?

A) To impress others with their investment knowledge.

B) To make more money quickly.

C) To fulfill needs that cannot be met through current income.

D) To gamble and take risks.

 

9. What is an emergency fund?

A) A type of investment product.

B) A fund for unexpected events that require money.

C) A fund for retirement.

D) A fund for buying a house.

 

10. What are some examples of good-to-have financial goals?

A) Retirement, children’s education.

B) Buying a vehicle, taking a big vacation.

C) Funding a child’s education, buying or renovating one’s house.

D) Starting one’s own business, taking a sabbatical from work.

 

11. Why might someone need to create an emergency fund?

A) To impress others with their investment knowledge.

B) To make more money quickly.

C) To fulfill needs that cannot be met through current income.

D) To take risks and gamble.

 

12. What is the importance of goal setting in investment planning?

A) To identify the financial objectives that cannot be fulfilled through regular income

B) To create an emergency fund using investment products

C) To buy insurance policies to cover risks of undesirable events

D) A and C

 

13. Which of the following is not an example of a financial goal?

A) Funding a child’s education

B) Buying a vehicle

C) Starting a business

D) Going on a shopping spree

 

14. What are the potential negative outcome events that cannot be funded through investments?

A) Funding retirement or children’s education

B) Hospitalization or accidents

C) Buying a house or renovating one’s own house

D) Taking a sabbatical from work

 

15. What is the role of a financial advisor in goal setting?

A) To make decisions for the individual and family

B) To assign timelines and funding required for the goal

C) To guide and help one take an appropriate decision

D) To identify the financial objectives for the individual and family

 

16. Which of the following financial goals is considered a responsibility?

A) Buying a vehicle

B) Funding a grand vacation

C) Retirement planning

D) Starting a business

 

17. What is the purpose of an emergency fund in investment planning?

A) To fund the expenses associated with desirable events

B) To fund the expenses associated with undesirable events

C) To create a long-term investment plan

D) To identify the financial objectives for the individual and family

 

18. What is the purpose of identifying events in life that require funding?

A) To create an emergency fund

B) To assign timelines for achieving the goals

C) To decide the type of investment products to use

D) To identify the financial objectives that cannot be fulfilled through regular income

 

19. What is the importance of assigning timelines for achieving financial goals?

A) To identify events in life that require funding

B) To distinguish between good-to-have and responsibility goals

C) To decide the type of investment products to use

D) To plan to achieve the goal by a certain point in time

 

Answers-