👉 Prefer watching instead of reading? Watch this video: All about MUTUAL FUNDs
Q1. What is a mutual fund?
A. A bank account
B. A pool of money invested in assets
C. A loan service
D. A government scheme
Answer: B
Explanation: A mutual fund collects money from investors and invests it in various assets.
Q2. Who manages a mutual fund?
A. Government
B. Investor
C. Fund Manager
D. Bank
Answer: C
Explanation: A professional fund manager manages mutual fund investments.
Q3. What does SIP stand for?
A. Systematic Investment Plan
B. Secure Income Plan
C. Standard Investment Policy
D. Simple Interest Plan
Answer: A
Explanation: SIP allows regular investment in mutual funds.
Q4. Which type of mutual fund invests in shares?
A. Debt Fund
B. Equity Fund
C. Hybrid Fund
D. Liquid Fund
Answer: B
Explanation: Equity funds invest mainly in stock markets.
Q5. Which mutual fund is low risk?
A. Equity Fund
B. Debt Fund
C. Sector Fund
D. Small Cap Fund
Answer: B
Explanation: Debt funds invest in safer instruments like bonds.
Q6. What is NAV?
A. Net Asset Value
B. New Account Value
C. National Asset Value
D. Net Annual Value
Answer: A
Explanation: NAV represents the per-unit value of a mutual fund.
Q7. Which is best for beginners?
A. Direct stock trading
B. Mutual fund SIP
C. Crypto trading
D. Intraday trading
Answer: B
Explanation: SIP is beginner-friendly and reduces risk through regular investing.
Q8. What is diversification?
A. Investing in one asset
B. Investing in multiple assets
C. Avoiding investment
D. Saving money
Answer: B
Explanation: Diversification spreads risk across different investments.
Q9. What is a hybrid fund?
A. Only stocks
B. Only bonds
C. Mix of equity and debt
D. Gold only
Answer: C
Explanation: Hybrid funds invest in both equity and debt instruments.
Q10. Which factor affects mutual fund returns?
A. Weather
B. Market performance
C. Color of fund
D. Office location
Answer: B
Explanation: Mutual fund returns depend on market conditions.