1. If interest rates rise, the prices of existing bonds:

2. What is market risk?

3. What is price risk?

4. What is a firm-specific risk?

5. What is an example of an industry-specific risk?

6. Which investment is most affected by interest rate risk?

7. Which of the following is an example of market risk?

8. Interest rate risk affects which type of investment the most?

9. What happens to bond prices when interest rates decrease?

10. If an investor sells a bond before maturity in a rising interest rate environment, they will:

11. What is a major cause of volatility in stock prices?

12. Which type of risk is market-wide and affects all securities?

13. Which risk is difficult to avoid, even with diversification?

14. What happens to the value of an investment if the real rate of return is negative?

15. Which risk could lead to an inability to sell an asset quickly at its current market value?

16. What is one of the main reasons why risks cannot be completely avoided in investing?

17. Which risk management strategy involves not taking an investment due to lack of understanding?

18. Which investment strategy requires superior market knowledge to manage risks?

19. Why is diversification a recommended strategy for risk management?

20. What does the term “credit risk” refer to?

21. Which behavioral bias leads to relying on easily recalled information when making investment decisions?

22. What is confirmation bias in investment decision-making?

23. Which bias causes investors to follow the actions of others without independent analysis?

24. Loss aversion refers to:

25. Which strategy involves making changes to asset allocation based on changing market conditions?

26. What is the main objective of strategic asset allocation?

27. Rebalancing a portfolio involves:

28. Why is rebalancing recommended in strategic asset allocation?

29. What does risk profiling evaluate in an investor?

30. Overconfidence in investing can lead to:

31. Which bias leads to an investor allocating more to risky assets after a bull market?

32. How does familiarity bias affect an investor’s portfolio?

33. What is tactical asset allocation often referred to as?

34. Which behavioral bias explains why investors avoid profitable opportunities due to perceived risks?

35. What happens during the rebalancing process of a portfolio?

36. What role do ethical standards play in investment behavior?

37. The need to take risk arises from:

38. Why is rebalancing needed in tactical asset allocation?

39. Which behavioral bias explains the tendency to invest more in what is known rather than exploring new options?

40. What is the primary goal of tactical asset allocation?

41. What is the purpose of rebalancing in asset allocation?

42. What is an example of strategic asset allocation?

43. How does herd mentality affect investment decisions?

44. What should investors do to reduce behavioral biases in decision-making?

45. What does a risk profiler evaluate?

46. Which of the following is one option for managing investments?

47. What is the second option for managing investments, according to the text?

48. What is a mutual fund?

49. What is one of the requirements for managing investments oneself?

50. Which question should NOT be asked when deciding between managing investments oneself or outsourcing?

51. What does SEBI regulate in relation to mutual funds?

52. What is a common mistake when comparing the costs of managing investments oneself versus outsourcing?

53. What is one hidden cost of managing investments oneself?

54. How is the value of time considered in investment management?

55. What emotional factor can lead to mistakes in managing one’s own investments?

56. What is the main benefit of outsourcing investment management to professionals?

57. According to the text, who would likely benefit more from investing through mutual funds?

58. What does mutual fund management involve?

59. Which of the following is a task that may require outsourcing due to lack of time or expertise?

60. When one compares the cost of a mutual fund to managing investments oneself, which hidden cost is often missed?

61. What type of investor is more likely to face challenges with emotional attachment when managing investments?

62. If the management cost of a mutual fund is 2% and an investor could generate 12% by investing themselves, what would the mutual fund return after costs?

63. What is one advantage of using a mutual fund?

64. Who sets the guidelines on the fees charged by mutual funds?

65. What role does SEBI play in mutual funds?

66. What should an investor consider before managing their own investments?

67. What is a common emotional bias that might affect investment decisions when managing one’s own money?

68. When comparing mutual funds and managing investments, why might mutual funds be more beneficial?

69. Why might wealthier individuals prefer to use professional investment services?

70. How does emotional attachment affect investment decisions?

71. What type of cost is associated with managing one’s own investments, besides time?

72. What should one consider if they are skilled at managing their own money but do not enjoy it?

73. What factor does the text suggest could make mutual funds a better option than self-managed portfolios?

74. Why might an investor outsource the management of their portfolio?

75. What is a key advantage of investing through mutual funds for most people?

76. What is the correct understanding of investing in mutual funds?

77. What does a mutual fund scheme provide access to?.

78. How does a mutual fund help an investor?.

79. What type of entity is a mutual fund?

80. What is the primary role of mutual funds?.

81. How are the terms ‘fund’ and ‘scheme’ used in the mutual fund industry?

82. What does the money raised by mutual funds benefit?

83. How do mutual funds contribute to the economy?

84. What role do mutual funds play in corporate governance?

85. In what way can mutual funds act as a market stabilizer?

86. In 2022, how did mutual funds provide market stability?

87. What is a mutual fund scheme?

88. What are the primary investment objectives of mutual fund schemes?.

89. What does an equity fund aim to achieve?.

90. What is the primary objective of a hybrid fund?.

91. What type of fund is focused on providing high liquidity?.

92. What is the investment objective of a long-duration fund?.

93. What is the relationship between a mutual fund scheme’s investment objective and its asset allocation?.

94. What is included in the investment policy of a mutual fund scheme?

95. What kind of assets would a mutual fund invest in if its objective is liquidity?

96. What type of mutual fund scheme would invest in equities to achieve capital appreciation?

97. What is a focused fund?

98. What does a diversified fund do?

99. What kind of mutual fund scheme would adopt a growth style of investing?

100. What happens to the profits or losses generated by a mutual fund scheme?.