Please Answer these Questions
All questions are compulsory
1. People who save money for the future are sacrificing the needs and wants of the present. It is important to live life happily and comfortably in the present than to think and plan for the future.
a. Fully agree
b. Partially agree
c. I don’t know
d. Disagree
2.People keep money in a bank because of many reasons.What do you think is the correct reason?
a. Because the risk of losing money in a bank is almost zero ,the bank will pay interest on the amount deposited and returns the money when we need it.
b. Because the bank branch looks good and has air conditioning
c. Because the bank is owned by the Govt. of India
d. I don’t know
3. In Mumbai, the price of milk was Rs 30 per litre last year. Today it is Rs 40 per litre. What do you think is the reason for this?
a. Because milk is being exported out of the country
b. Because some of the big milk producing dairies had to close down
c. This is due to inflation and the frequent price increases by the dairy companies
d. I don’t know
4.My friend, Parth, a computer engineer aged 25 years joined an IT company last month. Parth told me his appointment letter states a monthly salary at Rs 50,000, but when he got his salary in his bank account, it was showing Rs 42,000..What is the reason for this?
a. Because the company deducted this amount as they did not approve of his dressing style and approach
b. Because the company was short of cash last month
c. Because the company deducted income tax
d. I don’t know
5.Why is there an income tax on the amount that we earn as income?
a. Because the government spends the money to build and maintain the country’s defense needs.
b. Because the government spends the money to build the country’s infrastructure needs.
c. Because the government collects this tax to pay for its expenditure.
d. All of the above
6.Now a days, banks are offering credit cards to almost every one. What is prudent use of a credit card?
a. Credit cards are to be used only in case of extreme emergency, when you run out of cash and you should pay the outstanding due before the due date or else a high interest rate is charged by the bank.
b. Use the credit card to buy whatever you would like to.
c. Give the credit card to your friends and family so that they can buy anything.
d. I don’t know
7.My friend Priti works in an insurance company. I went to borrow some money from her. She told me that she is a buying a mediclaim policy this month and has no spare money.What is a mediclaim policy?
a. A mediclaim policy allows you to buy equity stocks at a discount.
b. A mediclaim policy will pay for the hospital expenses in case anything were to happen to you and your family.
c. A mediclaim policy allows you to buy medicines from a chemist shop.
d. All of the above
8.You are very young and likely to live for a long time. Do you need life insurance?
a. Yes, buy a life insurance policy, as you have to protect your family in case of your untimely death.
b. No, life insurance is not required.
c. I don’t know.
d. Life insurance is for people who are over 60.
9.Now a days, many people take bank loans. They take a personal loan, if they want to buy any expensive product or service OR a car loan if they want to buy a car / vehicle. Should you take a bank loan?
a. No, it is better to borrow from friends and family.
b. Yes, if the bank is near to your house, only then you should take a bank loan.
c. You can use your savings and make a down payment. Bank loans come at a high interest cost.
d. May be, it depends on the bank
10.Indians generally prefer to invest in fixed deposits of banks because:
a. Because the risk of losing money in a bank is almost zero, the bank will pay interest on the amount deposited and returns the money when we need it.
b. Yes, if the bank is near to your house, only then you should invest in fixed deposits.
c. You can use your savings and make a down payment. Bank fixed deposits come at a high interest cost.
d. May be, it depends on the bank.
11.Investing in Equity stocks and IPOs and holding them for the long term is a good way to beat inflation.Why is this so?
a. Prices of equity stocks and IPOs tend to grow in the long term due to the growth in these companies. If these are sold after a few years, then your entire returns are tax-free and will beat inflation.
b. Because prices of equity stocks rise in line with inflation.
c. Because the govt. buys them from you and pays you a premium.
d. Because the govt. pays tax free interest on these stocks and IPOs.
12.My cousin Vivek works in a well-established broking house. He told me that investing money in good quality stocks every month is the best way to achieve long-term goals.How do you think this is possible?
a. Invest in a diversified basket of stocks, carefully chosen after research.
b. As stock prices tend to rise in the long term due to the company’s performance, the value of the initial investment amount also increases with time thus helping you achieve long-term goals.
c. Investing the surplus amount, every month would be the best way to beat the volatility (up and down movements) of stocks.
d. All of the above.
13.A couple of days back, I read an article in the newspaper about an offer for sale (OFS) by a leading public sector petroleum company owned by the Govt. of India. What is the benefit in doing so?
a. An offer for sale (OFS) by this company is a good opportunity to buy a very well established company. As the company grows in future, the stock price will also grow. You can hold that stock for the long term.
b. This company will pay a high rate of interest to investors.
c. I don’t know.
d. This company will give shares at a high discount.
14.I read an advertisement by a mutual fund company in which it promotes SIP as a method to create long-term wealth. I called my friend who is a certified financial planner and asked me about this.What do you think was his answer?
a. SIP is Systematic Investment Plan, wherein you can buy some units of a diversified equity fund every month, based on your available savings.
b. As the price of the unit keeps moving up or down due to market movements, over a period of time, you get an average price thereby beating market volatility.
c. There is no tax if you sell the units after a few years and your entire returns are tax-free.
d. All of the above.
15.My elder cousin Vikas told me that he is paying about Rs 25,000 every year for his life insurance policy.What is the need for buying insurance?
a. In life insurance, you cover your life against untimely death. In case of an unfortunate death, your dependants get the money so that they can meet the living expenses in your absence.
b. Life insurance should be bought by people who are either drink or smoke.
c. It is a waste of money.
d. Life insurance should be bought by people who serve in the armed forces only.
16.I read an advertisement about a mediclaim insurance policy. What is the need for buying this insurance?
a. Mediclaim insurance is to be only bought by people over 60 years of age.
b. In Mediclaim, you can cover the hospitalization expenses in case of any illness/accident and avoid paying costly hospital bills.
c. By buying this policy, you can cover the lives of your neighbors.
d. I don’t know.
17.My friend called me and told me he has bought a personal accident insurance policy. What is the need for buying this insurance?
a. This policy will cover injury and loss of a limb or two due to an accident and give you lump sum compensation.
b. This policy is for those people who work only on offshore duties outside India.
c. This policy is for sports persons and armed forces personnel only.
d. This policy will help you if you wish to donate your organs after your death.
18.Our family investment advisor has come yesterday and was discussing about tax-free bonds. What is a tax-free bond?
a. It is a bond wherein you give money to the company and it gives you a tax-free certificate in return.
b. It is a bond issued by some companies, which are specially allowed by the Govt.of India to issue bonds, which carry tax-free interest.
c. Tax free bond is issued by the income tax department and it allows you exemption from paying income tax for 10 years.
d. I don’t know.
19.Commodities like metals, agriculture products, and crude oil are available for online trading. What is the benefit of this?
a. Traders can trade on a daily basis for earning income or for hedging purpose.
b. Trading can be done as a hobby.
c. Trading can be done to save tax. The more you trade, the more tax you can save.
d. Trading can be done to double your money in one day.
20.I read an online advertisement about currency trading.What is the benefit in doing this?
a. Trading can be done as a hobby.
b. Traders can trade on a daily basis for earning income.
c. Trading can be done to save tax. The more you trade, the more tax you can save.
d. Trading can be done to double your money in one day.
