🎯 Practice daily MCQs to improve your finance knowledge.
Q1. What is SIP?
A. Loan system
B. Investment method
C. Insurance plan
D. Tax system
Answer: B
Explanation: SIP (Systematic Investment Plan) allows you to invest small amounts regularly in mutual funds.
Q2. What is the main benefit of SIP?
A. High risk
B. Regular investment
C. No returns
D. Fixed income
Answer: B
Explanation: SIP helps in disciplined investing by allowing regular contributions over time.
Q3. What is the minimum amount required to start SIP?
A. ₹10,000
B. ₹5,000
C. ₹500
D. ₹50,000
Answer: C
Explanation: Many SIPs allow beginners to start with as low as ₹500 per month.
Q4. SIP is mainly used for investing in?
A. Gold
B. Mutual Funds
C. Real Estate
D. Cryptocurrency
Answer: B
Explanation: SIP is a method used to invest in mutual funds regularly.
Q5. Which type of fund is best for beginners?
A. Sectoral funds
B. Small-cap funds
C. Large-cap funds
D. Penny stocks
Answer: C
Explanation: Large-cap funds are more stable and less risky, making them suitable for beginners.
Q6. What is compounding in SIP?
A. Loss of money
B. Regular withdrawal
C. Growth on investment returns
D. Paying tax
Answer: C
Explanation: Compounding means earning returns on both your investment and previous gains.
Q7. What is the ideal duration for SIP?
A. 1 month
B. 6 months
C. Long-term (5+ years)
D. 1 week
Answer: C
Explanation: SIP works best when invested for the long term to benefit from compounding.
Q8. Which platform can be used to start SIP in India?
A. Social media
B. Banking apps or brokers
C. Gaming apps
D. News apps
Answer: B
Explanation: SIPs can be started through banks, mutual fund apps, or brokers.
Q9. What happens if market falls during SIP?
A. Investment stops
B. Loss always
C. You buy more units at lower price
D. SIP closes
Answer: C
Explanation: SIP benefits from market fluctuations by purchasing more units when prices are low.
Q10. Which is a good habit for SIP investors?
A. Stopping SIP frequently
B. Investing randomly
C. Staying consistent
D. Timing the market
Answer: C
Explanation: Consistency is key in SIP investing to achieve long-term financial goals.
Do you currently invest in SIP or planning to start soon? Share your answer in the comments!
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