MCQ Chapter 5 Managing Your Personal Finances Class 9 SST

1. What does liquidity mean in personal finance?

The amount of tax paid annually

The profit earned from an investment

The length of time an investment is held

How quickly and easily an asset can be converted into cash without affecting its value

Question 1 of 20

2. What is compounding?

Earning returns on the original investment as well as on returns already earned

Spending the interest earned every month

Borrowing money from several lenders

Dividing income equally among different expenses

Question 2 of 20

3. Why can starting investments early help build greater wealth?

Early investors never experience financial losses

Early investors are always guaranteed the highest interest rate

Their investments have more time to benefit from compounding

They do not need to save regularly

Question 3 of 20

4. Bhavisha and Dhruv each save ₹1,000 annually at 7% interest.Bhavisha starts at age 25, while Dhruv starts at age 35.Why may Bhavisha accumulate more money by age 65?

She saves a smaller amount every year

Her investments have more years to earn compounded returns

Dhruv's savings cannot earn interest

She does not need to consider investment risk

Question 4 of 20

5. Which of the following is a common investment option?

Unplanned shopping

Unnecessary borrowing

Impulse buying

Fixed deposit

Question 5 of 20

6. How does a fixed deposit work?

A person deposits a lump sum for a fixed period and receives interest at an agreed rate

A person lends money without expecting repayment

A person purchases ownership in several companies automatically

A person pays a monthly insurance premium for medical expenses

Question 6 of 20

7. Which of the following is a government-backed savings option mentioned in the chapter?

Corporate shares

Motor insurance

Public Provident Fund (PPF)

Consumer credit

Question 7 of 20

8. What is the main purpose of a bond?

To provide free insurance to every investor

To allow investors to lend money to a government or company for a fixed period

To guarantee that share prices will rise

To help individuals avoid all taxes

Question 8 of 20

9. A person buys a bond worth ₹10,000 that pays 5% annual interest.How much interest will the person receive after one year?

₹100

₹250

₹400

₹500

Question 9 of 20

10. What is the maturity period of a bond?

The duration between its issue date and the date when the issuer repays the principal

The time taken to open a bank account

The number of years required to calculate income tax

The period during which an investor cannot earn interest

Question 10 of 20

11. Which bonds are generally considered safer?

Bonds issued by companies with uncertain performance

Bonds that offer no repayment terms

Government bonds

Bonds purchased without examining their conditions

Question 11 of 20

12. What do shares represent?

A loan given to a family member

Ownership in a company

An insurance premium paid monthly

A compulsory payment to the government

Question 12 of 20

13. How may an investor earn returns from shares?

Only through a fixed government payment

By receiving guaranteed interest regardless of performance

Through compulsory monthly repayments from the company

Through dividends and an increase in share prices

Question 13 of 20

14. What is the BSE SENSEX?

A benchmark index of the Bombay Stock Exchange that tracks 30 large companies

A government scheme for health insurance

A type of fixed deposit offered by post offices

A method of calculating monthly loan instalments

Question 14 of 20

15. Why are shares generally considered riskier than fixed deposits?

Shares never provide any returns

Shares cannot be bought by individual investors

Share prices fluctuate because of market and company conditions

Fixed deposits always provide the highest returns

Question 15 of 20

16. What is a mutual fund?

A compulsory tax payment collected by the government

An investment that pools money from many investors and invests it in financial assets

A loan that must be repaid through monthly instalments

A savings method that involves keeping cash at home

Question 16 of 20

17. Who makes investment decisions for a professionally managed mutual fund?

Every customer who buys goods from a shop

The government tax department in every case

The insurance policyholder alone

Professional fund managers

Question 17 of 20

18. What is portfolio diversification?

Spreading investments across different types of assets

Investing all savings in one company's shares

Spending all investment returns immediately

Keeping all money in a single place without planning

Question 18 of 20

19. Why are mutual funds suitable for some people who cannot manage investments themselves?

They guarantee that investors will never lose money

They eliminate every form of market risk

Professional fund managers manage the investments

They always provide higher returns than shares

Question 19 of 20

20. Why do mutual fund advertisements warn investors about market risks?

Mutual funds never invest in financial assets

The value of investments can rise or fall, and investors may incur losses

All mutual funds provide the same guaranteed return

Investors are not allowed to read scheme-related information

Question 20 of 20

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