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NISM Securities Markets Foundation Certification Examination

Financial Planning and Securities Markets

Q1.

The asset allocation of a investor should be ideally aligned to:

Their financial goals

Their return requirements

Their risk preference

All the above

Q2.

An investor who has a short-term financial need may choose to invest primarily in

Gold for better appreciation

Bonds for steady return

Equities for better return

Property for higher value

Q3.

Which of the following step is part of financial planning?

Establish and define the client-planner relationship

Gather client data, including goals

Analyze and evaluate financial status

Develop and present financial planning recommendations

All the above

Q4.

The current cost of a college admission may be Rs. one lakh, if the rate at which the cost increases is taken at 8% then the cost of the college admission after 4 years would be:

Rs. 136,048

Rs. 132,048

Rs. 133,048

Rs. 134,048

Q5.

Which of the following is a specific financial goal?

Invest in equity for long term wealth of Rs. 5 cr

Build enough assets to last this life time of 30 years

Create corpus of Rs. 15 lakhs in next 5 years for child’s education

Create a corpus of Rs. 1 cr to fund the future needs

Q6.

Diversification reduces the risk of a portfolio, primarily because:

It manages the weightage to various assets based on the market view.

It helps to increase the return of the portfolio.

It reduces the risk of simultaneous loss in all assets.

It enables reducing the allocation to each asset.

Q7.

Asset allocation and diversification reduces the risk of loss in a portfolio and stabilizes the returns that the portfolio generates.

True

False

Q8.

Securities do not provide the flexibility and ease of investments to implement a financial plan.

True

False

Q9.

(I) A risk-averse investor may not be willing to invest in a risky investment. (II) If the goal is short-term, high risk investments will be preferred.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q10.

Your future goals are dependent upon

Current level of income

Expenses

Existing investments

Assets

All of the above

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