Mutual Funds do not provide assured returns. Their returns are linked to their performance. They invest in shares, debentures, bonds etc. All these investments involve an element of risk.
Mutual Funds Class 10 MCQ
1. Who is the regulatory body of mutual funds in India?
a. Bombay Stock Exchange (BSE)
b. Reserve Bank of India
c. Securities and Exchange Board of India (SEBI)
d. None of the above
2. Which of the following is a benefit of investing in mutual funds?
a. Fixed interest rates
b. Guaranteed returns
c. Professional fund management
d. All of the above
3. What does NAV stand for in mutual funds?
a. Net Annual Value
b. Nominal Asset Volume
c. National Allocation Value
d. Net Asset Value
4. How is the NAV per unit calculated?
a. Net value of assets divided by number of units outstanding
b. Market price of each unit
c. Total liabilities divided by number of units
d. All of the above
5. When is the NAV of an open-end mutual fund scheme disclosed?
a. Daily
b. Weekly
c. Monthly
d. Quarterly
6. When is the NAV of a closed-end mutual fund scheme disclosed?
a. Daily
b. Weekly
c. Monthly
d. Quarterly
7. What type of information do mutual funds regularly provide to investors?
a. Tax details
b. Fund manager profile
c. Value of investments and portfolio disclosure
d. Transparency
8. Do mutual funds provide assured returns?
a. Yes, as per the guideline of SEBI
b. Yes, returns are fixed annually.
c. No, returns are based on government bonds.
d. No, returns depend on fund performance.
9. Which of the following is considered a type of risk associated with mutual funds?
a. Tax risk
b. Currency risk
c. Inflation risk
d. Market risk
10. What do you mean by market risk in mutual funds?
a. Risk because of fund manager decisions
b. Risk due to inflation
c. Risk due to overall fall in stock or bond
d. All of the above
11. What do you mean by non-market risk in mutual funds?
a. Risk due to bad news about the company
b. Risk due to interest rate change
c. Risk due to taxation policies
d. All of the above
12. What will happen to the bond price when the interest rates increase?
a. Bond price increase
b. Bond price will decrease
c. Bond price will not change
d. The bound price will fluctuate randomly.
13. What do you mean by credit risk in mutual funds?
a. Risk of company defaulting on bond obligations
b. Risk of SEBI revoking fund license
c. Risk of fund manager resigning
d. None of the above
14. Which of the following investments are commonly made by mutual funds?
a. Shares
b. Debentures
c. Bonds
d. All of the above
15. If investors are interested in a specific industry, then which of the following mutual funds is suitable?
a. Gilt Funds
b. Liquid Funds
c. Sector Funds
d. Diversified Funds
16. What is the investment strategy of index funds?
a. Invest in high-risk startups
b. Invest in government securities
c. Replicate the composition of a market index
d. None of the above
17. Which of the following mutual funds offer tax benefits?
a. Balance Funds
b. Liquid Funds
c. Sector Funds
d. Tax Saving Funds
18. Which of the following fund types is ideal for very short-term investment and high liquidity?
a. Liquid Funds
b. Money Market Funds
c. Both a) and b)
d. None of the above
19. Which of the following fund types combines equity and debt investments?
a. Gilt Funds
b. Sector Funds
c. Liquid Funds
d. Balanced Funds
20. What is the main benefit of balanced funds?
a. High volatility and quick returns
b. Exclusive investment in equity
c. Steady returns with reduced volatility
d. None of the above
21. Which of the following mutual funds does not have a fixed redemption date?
a. Open-ended fund
b. Close-ended fund
c. Fixed-ended fund
d. None of the above
22. How is the open-ended mutual fund price determined?
a. From SEBI
b. Based on performance
c. Based on IPO price
d. Linked to daily Net Asset Value (NAV)
23. What is the key benefit of close-ended mutual funds?
a. They are open for subscription throughout the year.
b. They are traded on stock exchanges.
c. They are not affected by market fluctuations.
d. All of the above
24. Which of the following plans allows reinvestment of declared dividends into the scheme?
a. Growth Plan
b. Sector Plan
c. Dividend Reinvestment Plan
d. Tax saving plan
25. How many days does a mutual fund take to send unit certificates after receiving a request?
a. 6 weeks
b. 6 days
c. 6 years
d. 30 days
26. What is the time limit for receiving redemption or repurchase proceeds?
a. 10 days
b. 30 days
c. 15 days
d. 45 days
27. Who has the authority for terminating the Asset Management Company (AMC) of a mutual fund?
a. SEBI alone
b. 75% of unit holders with SEBI approval
c. The fund manager
d. The stock exchange
28. Who can pass a resolution to wind up a mutual fund scheme?
a. SEBI alone
b. 75% of unit holders with SEBI approval
c. The fund manager
d. The stock exchange
29. If any person wants to send the complaints regarding mutual funds, they can send them to __.
a. RBI
b. SEBI
c. To stock exchange
d. All of the above
30. What do you mean by active fund management?
a. Fund managers take decisions based on market analysis.
b. Invest based on the fixed rules
c. Invest in only government bonds
d. None of the above
31. What is the work of a value manager in investments?
a. Companies that have a high current market value
b. Companies with high dividend payouts
c. Companies that are undervalued but expected to rise
d. All of the above
32. What are the risk factors of active fund management?
a. No diversification
b. Guaranteed losses
c. Fund managers’ decisions may go wrong.
d. None of the above
33. What is an exchange-traded fund (ETF)?
a. A mutual fund only invests in foreign stocks.
b. A basket of stock that trades like a stock on an exchange
c. A government bond
d. All of the above
34. How is the price of an ETF determined?
a. Set by SEBI
b. Based on supply and demand
c. Fixed once a year
d. All of the above
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