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Mutual Fund and SIP Quiz: 10 Questions for Beginners

Written by the Quizzeela team · Reviewed by Utsav Raj
Last checked · 10 questions · Medium

Thinking about starting a SIP? Make sure you understand these 10 mutual fund basics first.

New to this topic? Read the guide firstSIP Investment: Meaning, How It Works and What If You Stop Play as a timed quiz and earn coins

1What does SIP stand for?

  1. Secure Insurance Policy
  2. Share Investment Program
  3. Systematic Investment Plan
  4. Simple Interest Plan
Show answer
Answer: C. Systematic Investment Plan. A SIP invests a fixed amount in a mutual fund at regular intervals.

2What does NAV mean for a mutual fund?

  1. National Average Value
  2. New Account Value
  3. Net Asset Value
  4. Net Annual Volume
Show answer
Answer: C. Net Asset Value. NAV is the price of one unit of the fund.

3Who regulates mutual funds in India?

  1. NPCI
  2. IRDAI
  3. SEBI
  4. RBI
Show answer
Answer: C. SEBI. SEBI, the Securities and Exchange Board of India, regulates mutual funds.

4What is the lock-in period of an ELSS tax-saving fund?

  1. 3 years
  2. 5 years
  3. No lock-in
  4. 1 year
Show answer
Answer: A. 3 years. ELSS funds have a three-year lock-in, the shortest among common tax-saving options.

5An index fund:

  1. Only holds gold
  2. Copies a market index like the Nifty 50
  3. Picks shares based on a manager's tips
  4. Gives guaranteed returns
Show answer
Answer: B. Copies a market index like the Nifty 50. Index funds simply track an index, which keeps costs low.

6What is the "expense ratio"?

  1. A yearly fee charged as a percentage of your investment
  2. The entry price
  3. The bank charge for a SIP
  4. The tax on profit
Show answer
Answer: A. A yearly fee charged as a percentage of your investment. A lower expense ratio leaves more of the returns for you.

7"Mutual fund investments are subject to market risks" means:

  1. You cannot withdraw
  2. The value can go up or down
  3. Only rich people can invest
  4. Returns are guaranteed
Show answer
Answer: B. The value can go up or down. Fund values move with markets, so returns are not guaranteed.

8Equity mutual funds mainly invest in:

  1. Property
  2. Gold coins
  3. Fixed deposits
  4. Shares of companies
Show answer
Answer: D. Shares of companies. Equity funds put most of their money in company shares.

9Debt mutual funds mainly invest in:

  1. Bonds and similar fixed-income securities
  2. Company shares
  3. Real estate
  4. Cryptocurrency
Show answer
Answer: A. Bonds and similar fixed-income securities. Debt funds invest in bonds, treasury bills and similar instruments.

10With a SIP, "rupee cost averaging" means you:

  1. Buy more units when prices are low and fewer when high
  2. Always buy at the highest price
  3. Pay no fees
  4. Get a fixed interest rate
Show answer
Answer: A. Buy more units when prices are low and fewer when high. A fixed monthly amount buys more units when prices fall, which averages out your cost.
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Sources: SEBI and AMFI investor education material. For learning only, not financial, tax or insurance advice. Found a mistake? Use "Report a mistake" in the timed quiz.