Investments and Raising Capital

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Questions and Answers

What does the rule of 72 indicate?

Time taken for your money to double (correct)

Time taken for your money to halve

Time taken for your money to multiply by five

Time taken for your money to triple

Which regulatory body can you approach in case of a problem with non-receipt of dividend?

Securities and Exchange Board of India (SEBI) (correct)

Pension Fund Regulatory and Development Authority (PFRD)

Ministry of Corporate Affairs (MCA)

Reserve Bank of India (RBI)

What type of email is it when you are asked to provide personal and financial information to claim a prize?

Spam email

Mass marketing email

Phishing email (correct)

Marketing email

What type of investments are suitable for short term needs?

Low Risk Products Signup and view all the answers

What concept in investing does Systematic Investment Plan (SIP) help with?

Rupees cost averaging Signup and view all the answers

Which type of insurance is mandatory by law?

Third Party Liability under Motor Insurance Signup and view all the answers

How can a listed company raise money for expansion through issue of additional shares?

Rights issue or Follow-On Public Offering (FPO) Signup and view all the answers

Why is KYC mandatory while opening accounts under the Prevention of Money Laundering Act 2002?

To prevent illegal trading activities Signup and view all the answers

What does the rule of 72 help you calculate?

Time taken to double your money Signup and view all the answers

What is the main purpose of Systematic Investment Plan (SIP)?

To reduce the impact of market fluctuations Signup and view all the answers

Which of the following is NOT a type of Life Insurance product?

Marine Insurance Signup and view all the answers

Which organization is responsible for regulating the securities market in India?

Securities and Exchange Board of India (SEBI) Signup and view all the answers

What is associated with the term “Equated Monthly Installment” (EMI)?

Home Loan Signup and view all the answers

Which of the following is a secured loan?

Home Loan Signup and view all the answers

What is the process of launching a New Mutual Fund scheme known as?

New Fund Offer (NFO) Signup and view all the answers

What type of mutual fund scheme should you consider for surplus money needed in 30-45 days?

Liquid Fund Signup and view all the answers

What concept does the proverb 'Do not put all your eggs in one basket' refer to?

Diversification Signup and view all the answers

What should investors do if they find discrepancies in documents?

Report promptly to the concerned Stock Exchange, Intermediary or Asset Management company Signup and view all the answers

Which of the following is not an investment product?

Term Plan Signup and view all the answers

What is the main advantage of ETFs over regular Mutual Funds?

Higher daily Liquidity and Lower fees Signup and view all the answers

What does the principle of 'Time value of Money' mean?

A certain amount of money today is worth more than the same amount of money in future Signup and view all the answers

What is the relationship between inflation and the value of money?

Inverse or Opposite Signup and view all the answers

What is the term for buying an insurance policy from an insurance company?

Risk Transfer Signup and view all the answers

What do liabilities refer to in financial terms?

Money owed Signup and view all the answers

Study Notes

Investment and Finance

For short-term needs, investments should be made in low-risk products.
A listed company can raise money for expansion through a rights issue or follow-on public offering (FPO).

Public Issues

A company can issue additional shares through a rights issue or FPO.
Bonus issue or stock split is not a way to raise money for expansion.

KYC

KYC (Know Your Customer) is mandatory while opening accounts under the Prevention of Money Laundering Act 2002.
The purpose of KYC is to prevent illegal trading activities.

Insurance

Marine Insurance is not a type of life insurance product.
Term insurance, whole life insurance, and endowment policy are types of life insurance products.

Loans and EMI

Equated Monthly Installment (EMI) is associated with a home loan.
EMI is not associated with an ATM card, credit score, or savings account.
A home loan is a secured loan, whereas a credit card rollover debt is not.

Mutual Funds

A New Fund Offer (NFO) is the process of launching a new mutual fund scheme.
Liquid funds are suitable for investments with a short-term horizon of 30-45 days.

Financial Concepts

The rule of 72 indicates the approximate time taken for money to double at a given interest rate.
Systematic Investment Plan (SIP) helps with rupee cost averaging.
Diversification is the investment concept referred to by the proverb "Do not put all your eggs in one basket."

Insurance and Liability

Third-party liability under motor insurance is necessary by law.
Liabilities refer to money owed by a person.

Miscellaneous

Phishing is a type of email that asks for personal details, such as name, address, bank account number, and net banking password.
Ayushman Bharat provides healthcare facilities to poor families.
Time value of money means that a certain amount of money today is worth more than the same amount of money in the future.
Buying an insurance policy is an example of risk transfer.

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Description

This quiz tests your knowledge of investment options and ways for companies to raise capital for expansion.