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Investment Basics Class 10 Questions and Answers provides important questions with simple and easy-to-understand answers for Class 10 students. The questions cover basic investment concepts, types of investments, risk and return, savings, financial planning, and other important topics. These questions are useful for exam preparation, revision, and developing a clear understanding of investment basics.
Investment Basics Class 10 Questions and Answers
Q. Investments with low risk involve minimal or no levels of risk, providing stable and often guaranteed returns. These options are ideal for risk-averse investors seeking a secure way to earn returns. Which of following is not low-risk investment? (CBSE 2025-26)
(A) Fixed Deposits
(B) Public Provident Fund (PPF)
(C) Sukanya Samriddhi Yojana
(D) Equities
Answer: (D) Equities
Q. _________ are interconnected with investments via a diverse array of intermediaries that employ various financial instruments known as ‘Securities’. (CBSE 2025-26)
(A) Savings
(B) Interest
(C) Income
(D) Profit
Answer: (A) Savings
Q. Statement-1 : The debt includes various instruments that enable the buying and selling of loans in exchange for interest. (CBSE 2025-26)
Statement-2 : Debt funds typically offer lower returns compared to equity investments.
(A) Statement 1 is true, but statement 2 is false.
(B) Statement 1 is false, but statement 2 is true.
(C) Both statements are false.
(D) Both statements are true.
Answer: (D) Both statements are true.
Q. What does investment mean ? (CBSE 2025-26)
(A) An increase in national stocks over time
(B) The use of fund to acquire products and services that contribute to the production process
(C) The use of funds for assets with the aim of generating future income or returns
(D) The application of money to purchase a flat or a house
Answer: (C) The use of funds for assets with the aim of generating future income or returns
Q. Investment in precious metal is a type of _________ class. (CBSE 2025-26)
(A) Monetary Assets
(B) Real Assets
(C) Financial Assets
(D) Liquid Assets
Answer: (B) Real Assets
Q. Statement-1 : A company’s market capitalization can provide insight into a stock’s risk factor. (CBSE 2025-26)
Statement-2 : Larger companies tend to be more established and have stocks with high volatility.
(A) Statement 1 is true, but statement 2 is false.
(B) Both statements are true.
(C) Both statements are false.
(D) Statement 1 is false, but statement 2 is true.
Answer: (A) Statement 1 is true, but statement 2 is false.
Q. Which of the following is a long-term investment option ? (CBSE 2024-25)
(A) Saving Bank Account
(B) Money Market or Liquid Fund
(C) Fixed Deposits with bank with less than one year tenure
(D) Post Office monthly income scheme
Answer: (D) Post Office monthly income scheme
Q. Read the following statements Assertion (A) and Reason (R) and choose the correct option from those given below : (CBSE 2024-25)
Assertion (A) : Equity shareholders are supposed to be the owners of the company.
Reason (R) : Equity shareholders have a right to vote in the Annual General Meeting for passing any resolution.
Options :
(A) Both (A) and (R) are true and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
Answer: (A) Both (A) and (R) are true and (R) is the correct explanation of (A).
Q. Fixed deposits with banks, small saving instruments with post offices, insurance/provident/pension funds, etc. or securities market related instruments like shares, bonds, debentures, etc. are examples of : (CBSE COMP 2024-25)
(A) Current Assets
(B) Financial Assets
(C) Real Assets
(D) Physical Assets
Answer: (B) Financial Assets
Q. Which one of the following factors does not govern the interest rates ? (CBSE COMP 2024-25)
(A) Demand for Money
(B) Supply of Money
(C) Rate of Return
(D) Inflation Rate
Answer: (C) Rate of Return
Q. When we borrow money, we are expected to pay for using it – this is known as __________. (Gain / Interest / Profit) (CBSE 2024-25)
Answer: Interest
Q. What does maturity of a ‘Bond’ refer to ? (CBSE 2024-25)
Answer: Maturity of a bond refers to the date on which the bond comes to an end. On the maturity date, the borrower repays the principal amount to the investor. It is the final repayment date of the bond.
Q. “Equities have the potential to increase in value over time”. What are the benefits of investing in equities or shares ? (any two) (CBSE 2022-23)
Answer: Equities can provide higher returns over a long period of time compared to many other investment options. Shareholders may receive dividends from the profits earned by the company.
OR
Equities help in capital appreciation as their value may increase over time. They provide an opportunity to become a part owner of the company.
Q. “The Depository provides its services to investors through its agents.” By what destignation are the agents known as ? (CBSE 2021-22)
Answer: The agents of a Depository are known as Depository Participants (DPs). They act as intermediaries between the Depository and investors and provide depository services to investors.
Q. Describe any two benefits of dematerialized (Demat) account. What is meant by ‘Gilt Funds’ ? (CBSE 2021-22)
Answer: Any Two Benefits of Demat Account:
- It eliminates risks associated with physical certificates such as loss, theft, forgery, and damage.
- It enables quick and easy transfer of securities in electronic form with less paperwork.
Gilt Funds: Gilt Funds are mutual funds that invest mainly in Central and State Government securities. These funds are considered safe because they are backed by the Government.
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