NISM Chapter 1

Which among the following investment avenues does not offer income on a regular basis?

• Real Estate
• Bonds
• Stocks

• Physical Gold

Which of the following is not a type of mutual fund?

• Equity Fund

• Bond Fund

• Index Fund

• Derivative Fund

The purchasing power of currency changes on account of which of the following?

• Stock market performance

• Unemployment rates, social media trends, climate change
• Inflation

• Exchange rates, population growth, technological advancements

Among the given options, which investment avenue is most affected by market volatility?

• Real Estate

• Bonds

• Stocks

• Physical Gold

What is the real rate of return?

• The real rate of return is calculated by dividing the inflation rate by the nominal rate of return.
• The real rate of return is calculated by multiplying the inflation rate with the nominal rate of return.
• The real rate of return is calculated by subtracting the inflation rate from the nominal rate of return.
• The real rate of return is calculated by adding the inflation rate to the nominal rate of return.

When the interest rate in the economy increases, the price of existing bonds .

• remains constant
• fluctuates
• decreases
• increases

How does diversification help in investment?

• Diversification helps reduce risk by spreading investments across different assets.

• Diversification increases risk by concentrating investments in a single asset.

• Diversification has no impact on investment risk.

• Diversification is only applicable to short-term investments.

What is the primary purpose of an index fund?

• To outperform the market average

• To track a specific market index

• To invest in individual stocks

• To provide guaranteed returns

What is the impact of inflation on the purchasing power of currency?

• Increases the purchasing power

• Decreases the purchasing power

• No impact on purchasing power

• Stabilizes the purchasing power

How does the stock market performance affect the value of mutual funds?

• Stock market performance has no impact on mutual funds

• Stock market performance directly determines the value of mutual funds

• Stock market performance indirectly influences the value of mutual funds

• Stock market performance stabilizes the value of mutual funds