Understanding the basics of investment is essential for Class 10 students studying Introduction to Financial Markets subect code 405 under the CBSE curriculum. This set of Investment Basics Class 10 MCQs is designed to help students test their knowledge and prepare effectively for exams.
Investment Basics Class 10 MCQ
1. What is investment?
a. Spending money on luxury items
b. Paying taxes
c. Saving the money for future returns
d. None of the above
2. Which of the following is NOT a reason for investment?
a. To beat inflation
b. To secure the future goals
c. Preparing for unavoidable circumstances
d. To keep the money idle
3. Suppose the inflation is 6% annually and you have purchased one item for 100 rs; then what will be the cost after 20 years?
a. Rs. 400
b. Rs. 150
c. Rs. 300
d. Rs. 321
4. Which of the followingng is the best time for starting the investment?
a. After the Job
b. As early as possible
c. When the inflation is very low
d. None of the above
5. Which of the following is a golden rule of investing?
a. Invest early
b. Invest regularly
c. Invest for the long term and not the short term.
d. All of the above
6. What precaution do you have to take before investment?
a. Find out the costs and benefits associated with the investment.
b. deal only through an authorised intermediary
c. know the liquidity and safety aspects of the investment
d. All of the above
7. If you want to invest in a share, with whom do you have a deal?
a. Social media influencers
b. Any person who offers high returns
c. Authorised intermediary
d. All of the above
8. Which of the following is not a type of interest rate?
a. Bank deposit
b. Property tax
c. Government bound
d. Fixed deposit in bank
9. Which of the following do not affect the interest rates?
a. Government borrowings
b. Inflation rate
c. Weather condition
d. All of the above
10. Who plays an important role in determining interest rate variation in India?
a. SEBI
b. Stock Exchange
c. Reserve Bank of India
d. None of the above
11. Which of the following is an example of a physical asset for investment?
a. Real estate
b. Gold/jewellery
c. Commodities
d. All of the above
12. Which of the following is an example of financial assets?
a. Pension fund
b. Small saving in post office
c. Fixed deposit in bank
d. All of the above
13. _ are a specialised form of mutual funds that invest in extremely short-term fixed income instruments and thereby provide easy liquidity.
a. Saving Bank account
b. Money Market or Liquid Funds
c. Fixed Deposits with Banks
d. All of the above
14. __ is often the first banking product people use, which offers low interest of approximately 4%-5% p.a.
a. Saving Bank account
b. Money Market or Liquid Funds
c. Fixed Deposits with Banks
d. All of the above
15. __ are also referred to as term deposits, and the minimum investment period for bank FDs is 30 days.
a. Saving Bank account
b. Money Market or Liquid Funds
c. Fixed Deposits with Banks
d. All of the above
16. PPF stands for _.
a. Provident Public Fund
b. Public Fund Provident
c. Public Provident Fund
d. None of the above
17. Which of the following is a long-term financial option available for investment?
a. Post Office Saving
b. Public Provident Fund
c. Company Fixed Deposit
d. All of the above
18. A bond is generally a promise to repay the principal along with a fixed rate of interest on a specified date, called the __.
a. Maturity Date
b. End Date
c. Withdrawal Date
d. Payment Date
19. If you want to invest in NSC and PPF, then where do you have to go?
a. Banks
b. Private Companies
c. Post Offices
d. Stockbrokers
20. Investing money in shares, bonds and debentures is a part of:
a. Securities market instruments
b. Post office schemes
c. Physical Assets
d. None of the above
21. What do you mean by ‘company fixed deposits’?
a. A long-term investment over 20 years
b. Short-term to medium-term investment
c. Personal savings accounts
d. None of the above
22. What do you mean by cumulative fixed deposit?
a. The principal and interest are paid together at the end.
b. Interest is paid monthly.
c. Interest is paid every day.
d. None of the above
23. If interest is earned by company FDs, is this interest taxable?
a. No, it is tax-free.
b. Yes, it is taxable.
c. Yes, only for senior citizens
d. None of the above
24. Mutual fund units are issued and redeemed by the __.
a. Fund Management Company
b. Fund distributor
c. Government of India
d. None of the above
25. The Securities Contract (Regulation) Act was introduced in _.
a. 1956
b. 1957
c. 1958
d. 1959
26. NSE stands for _.
a. National Stock Exchange
b. National Saving Exchange
c. Nominated Stock Exchange
d. None of the above
27. What is a ‘Debt Instrument’?
a. A financial tool used to borrow money
b. A tool for measuring inflation
c. Type of share
d. A method for calculating interest
28. Who basically issues debt instruments?
a. Individuals
b. Stock Exchanges
c. Government
d. All of the above
29. Which of the following is not considered a debt instrument?
a. Fixed deposits
b. Bonds
c. Debentures
d. Equity Shares
30. What is a debenture?
a. A type of savings account
b. A type of mutual fund
c. An unsecured loan instrument issued by companies
d. A government bond
31. A derivative is a product whose value is derived from the value of one or more basic variables, called _.
a. Underlying
b. Underpaying
c. Undervalue
d. None of the above
32. A mutual fund is a body corporate registered with __.
a. SEBI
b. SBI
c. Post Office
d. None of the above
33. A __ is like a bank wherein the deposits are securities (viz., shares, debentures, bonds, government securities, units, etc.) in electronic form.
a. Depository
b. post office
c. A vault for storing gold
d. None of the above
34. _ is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form.
a. Depository
b. Dematerialisation
c. Post Office
d. None of the above
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