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Investment IQ Test

Use this tool to evaluate whether you should manage your investments yourself or whether you should approach/ use a professional manager.

This evaluation will consider your temperament, aptitude and technical knowledge. It should take you between 5 and 8 minutes to answer the 20 questions below.

  MouseOver on the for more information
   1. How often do you review your bank account statements?
Atleast once a month.
Definitely every quarter.
Less frequently than once a quarter.
2. According to the Rule of 72
The money you need to retire is approximately 72 times your annual income.
If you save only 5 percent of your income a year, the earliest you can retire is at age 72.
The time it will take for your money to double is 72 divided by a given interest rate.
The mortality age that Indians should plan their retirement fund for is 72.
Don't know.
3. EVA is commonly understood as
Estimated Value of Annuity.
Economic Value Added.
Enterprise Value Addition.
Efficient Value Arbitrageur.
Don't know.
4. Net present value refers to
The sum total of all future cash flows.
The current value of future cash flows adjusted by a discount rate.
The valuation of a business after including intellectual capital.
The value of a business after adjusting for the interests of the minority shareholders.
Don't know.
5. Mutual Funds are attractive to investors who want
Guaranteed returns.
The ability to diversify their portfolio and are seeking professional money managers.
A downside protection.
To benefit from the contribution of other investors who will buy later.
Don't know.
  6. Have you ever prepared a budget and implemented it?
Yes.
No.
7. A payout ratio is
The cost of debt for a company.
The percentage of a firm's profits that is paid to shareholders in the form of dividends.
The annual fees charged by the asset management company for managing a mutual fund.
Don't know.
8.The commonly understood meaning of Asset Allocation refers to
The distribution of assets of a deceased person amongst his/her heirs.
The process of differentiating assets dependent on whether they are liable to income-tax or wealth tax.
Planning the holdings of an HUF to minimise the tax liability.
The apportioning of investment funds among asset classes such as equity shares, debt, real estate, etc.
Don't know.
9. Which of the following statements best describes your approach to insurance?
I invest in insurance mainly to save taxes.
I have invested in insurance policies after carefully studying my family's financial needs in the event of my death.
I believe insurance is expensive.
I have a net worth well in excess of my family's financial needs and hence, do not need insurance.
I do not have any dependants and hence, do not invest in insurance.
10. In life insurance, premium payable for a fixed-term policy is cheaper than that payable for whole life policy as
Fixed-term policies have been available longer than whole life policies.
Fixed-term policies offer risk cover only for a limited period and hence, does not build a cash value.
Fixed-term does not pay you the entire sum assured in the event of death.
Fewer individuals opt for whole life policies in comparison to fixed-term policies.
Don't know.
  11. Have you made a will or assigned nominees to all your assets?
Yes.
No.
12. Short selling refers to
The sale of stocks that are expected to announce results that fall short of market expectations.
The sale of short term investments.
The sale of investments that have fallen short of your expected returns.
The sale of a security by a person who does not own the security.
Don't know.
13. Accounting on an accrual basis refers to
Reporting income and expenses in the financial year in which they are incurred.
Reporting income and expenses in the year they are received and paid.
Accumulating expenses and deducting them after the corresponding income is received.
Adding all free cash flows in a financial year to the previous year's capital to arrive at the current year's capital.
Don't know.
14. You save Rs10,000/year from age 25-33 and your twin sister saves the same from 33-60 - at 10% p.a. who will be richer at 60?
You.
Your Sister.
Don't know.
15.On investing Rs 20,000/year, which would give a better return after 20 years, if you are in the highest tax slab?
National Savings Certificate wherein the interest is re-invested.
Public Provident Fund.
A monthly income plan from a mutual fund that offers a guaranteed return of 10.75%.
An insurance policy that offers high returns.
Don't know.
16. Which of the following statements best describes you?
It is really difficult for me to find time for anything other than my work.
I barely manage to find time to meet my family and social commitments.
I have enough time to pursue my hobbies and special interests.
I never have a problem finding time.
Don't know.
17. For a company, Return on Net Worth refers to
The net profit divided by the net worth.
The amount of dividend paid per share divided by the market price of the share.
The amount of dividend paid as a proportion of the net worth.
The revenues divided by the net worth.
Don't know.
18. Which of the following is taxable?
Income from capital gains.
Insurance receipts.
Gifts.
Income from exports.
Don't know.
19. Opportunity cost is best described as
Using every opportunity to sell your bad investments at cost.
The cost of identifying investment opportunities for investment.
The value of what you give up to avail of an alternate option.
The strike price of a stock option.
Don't know.
20. Academically speaking, which of the following investment portfolios have the lowest risk to loss of capital
Equity shares of multinational companies.
Company debentures with the highest credit rating.
Government securities.
Debt mutual funds.
Don't know.
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