FPT MCQ 2021

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LJ MBA

FPT
MCQ QUESTIONS

1. Assessment year is the period of 12 months commencing from ……………. Every year.

A) 1st March B) 31st March C) 1st April D) 30 th April

2. Health and Educational cess is charges at the rate of ……..

A) 2% B) 1% C) 4% D) 5%

3. As per Income tax Act, Person includes ……………

A) Individual B) HUF C) Local Authority D) All of the above

4. citizen of India who goes abroad for the purpose of employment, he must stay in India in the
previous year for at least ............................. days to become a resident

A) 90 days B) 162 days C) 180 days D) 182 days

5. Previous year means the financial year immediately preceding the…………………...

A) Accounting Year B) Assessment Year C) All of the above D) None of the above

6. It is a certificate, where the employer is certifying details regarding the salary you have
earned during the year:-

A) Form 16 B) Form AS C) Form 18 D) Form 15

7. An annual consolidated tax statement that can be accessed from the income-tax website by
all taxpayers using their Permanent Account Number

A) RACES B) TRA C) RSA D) TRACES

8. Following statement declares the net tax liability, claiming of tax deductions:-

A) TRA B) ITR C) ITS D) ITTR

9. Computation of full value of consideration is applicable in which of the following?

Dr.Sweety Shah, LJMBA


Form 16A Form 16 Form 17 Form 18

10. Payment done for medical insurance will be permissible under which deduction?

80C 80CCD 80E 80D

11. Wealth distribution includes:

Investment planning Risk and Insurance planning Retirement planning Estate planning

12. Wealth protection includes

Investment planning Risk and Insurance planning Tax planning Estate planning

13. Which of the following is a step of financial planning process

a) Develop your financial goals

b) Identify problems

c) Make a budget

14. Which of the following is real capital

A) Income from occupation

B) Income from real assets

C) Income from financial investments

15. A person of 60 years will invest in which of the following?

A) Equity

B) Mutual fund

C) Derivatives

D) No investment

16. What is the full form of SWP?

A) Systematic Withdrawal Plan

B) Systematic Worry Plan

C) Systematic Worth Plan

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D) Systematic Wealth Plan

17. The borrower receives monthly loan instalments for the loan duration?

A) Mortgage B) Reverse Mortgage C) Secured loan D) Unsecured loan

18. The main thing taken into consideration for time value of money is :-

A) Premiums B) Tariffs C) Interest rate D) Credit limit

19. Following is the safest investment?

A) FD B) Derivatives C) Individual stock D) Mutual funds

20. If there is a no gap in current financial situation and financial goal what should be done?

A) Increase income or reduce expenses

B) Increase expenses or reduce income

C) Take a house

D) Do nothing

21 Someone who gets VRS should invest the money in which avenue?

A) Invest entire amount in equity

B) Invest entire amount in real estate

C) Invest in various retirement schemes

D) Invest entire amount in gold

25 Factors that have an impact on career opportunities:-

A) Social influences

B) Economic conditions

C) Trends in industry and technology

D) All of the above

26 What is the formula of savings ratio?

a) Annual savings (Net surplus)/ Annual income

Dr.Sweety Shah, LJMBA


b) Expenses / Annual income

c) Assets/ liabilities

d) none of the above

27) Which of the following is not a real investment?

A) Real estate B) Gold C) Paintings D) Treasury bills

28) Negotiable deposits issued by schedule commercial banks and all india financial institutions
in demat form is called:-

a) Certificate of deposit

b) Deposit

C) Fixed deposit

d) None of the above

29) Which of the following is applicable only to senior citizen?

A) Savings account

B) FD

C) SCSS( Senior citizen savings scheme)

D) None of the above

30) What is the full form of NSC

a) National savings certificate

b) Nations surplus certificate

c) National staff copy

d) none of the above

31) For post office savings scheme benefit of 80C is available till maximum amount of?

a) 2,00,000

b) 1,00,000

Dr.Sweety Shah, LJMBA


c) 1,50,000

d) none of the above

32) Full form of EET is

A) Earn exempt taxable

B) Exempt exempt taxable

C) Earn earn taxable

D) None of the above

33) Wealth accumulation includes:


1. Investment planning
2. Risk and Insurance planning
3. Retirement planning
4. Estate planning
Ans. 1

34) Which is one of the step in the process of financial planning?


1. Identify the problem
2. Determine your current financial situation
3. Determine objectives
4. Take a decision for financial plan
Ans.2

35) Which of the following is a tangible goal?


1. Career
2. Marriage
3. House
4. Children
Ans. 3

36) Goal setting should be:


1. Not measurable
2. Realistic
3. Not specific
4. Should not be attainable
Ans. 2

Dr.Sweety Shah, LJMBA


37) Which of the following is a factor influencing life goals?
1. Neighbors
2. Friends
3. Colleagues
4. Employment position
Ans. 4

38) Which of the following is a stage of career planning?


1. Assess and research personal goals, abilities and career fields
2. Create and implement your financial plan
3. Determine your current financial situation
4. Review financial plan
Ans. 1

39) Which of the following is an intangible goal?


1. Car
2. Jewellary
3. Education
4. Personal assets
Ans.3

40) What is the meaning of a budget?


1. A past statement
2. Balance sheet
3. Estimated statement
4. Cash flow statement
Ans.3

41) Which of the following is included in calculating personal networth of an individual?


1. Fixed expenses
2. Variable expenses
3. Property
4. Semi-varibale expenses
Ans.3

42) What is the formula of current ratio?


1. Current liabilitites/ current assets

Dr.Sweety Shah, LJMBA


2. Current assets/ Current liabilities
3. Current assets/ Networth
4. Current liabilities/ Total liabilities
Ans. 2

43) The goals that take more than five years to achieve?
1. short-term goal
2. intermediate goal
3. long-term goal
4. Current goal
Ans. 3

44) What is the amount of money you would need to deposit now in order to have a desired
amount in the future?
1. Present Value
2. Future Value
3. Future cost
4. Market Value
Ans. 1

45) Which of the following can quickly be converted to cash?


1. Property
2. Liquid assets
3. Long term assets
4. Loan
Ans. 2

46) What is the amount of income that is left after paying taxes and other deductions from your
gross pay
1. Gross pay
2. Total pay
3. Take home pay
4. Gross deductions
Ans. 3

47) What is the process called in which interest is earned on both the principal and on any
previously earned interest?
1. Re calculating

Dr.Sweety Shah, LJMBA


2. Simple interest
3. Totalling
4. Compounding
Ans. 4

48) Which of the following is called a corporation’s written pledge to repay a specific amount of
money, along with interest?
1. Mutual fund
2. Corporate bond
3. Common stock
4. Preferred stock
Ans. 2

49) The income that is not taxed is called?


1. Tax-deferred income
2. Gross total income
3. Tax-exempt
4. Net income
Ans. 3

50) What is an expense that you can subtract from your adjusted gross income to figure your
taxable income?
1. Tax-deduction
2. Inclusion
3. Expense
4. Tax
Ans. 1

51) Which of the following is a real investment?


1. Securities
2. Bonds
3. Real Estate
4. Stocks
Ans. 3

52) Which of the following is a financial investment?


1. Real Estate
2. Precious objects

Dr.Sweety Shah, LJMBA


3. Art objects
4. Treasury bonds
Ans. 4

53) What is called a pool of money managed by a professional fund manager?


1. Equity
2. Bonds
3. Derivatives
4. Mutual funds
Ans. 4

54) What is the full form of NAV?


1. Net Asset Value
2. Net Arbitrage Value
3. Net Aggregate Value
4. Net Ask Value
Ans. 1

55) Following is a very convenient method of investing in mutual funds every month and it
works like an annuity:-
1. SWP
2. SIP
3. IPO
4. SPI
Ans. 2

56) In the following option you can invest a lump sum amount and then start withdrawing it:-
1. SWP
2. SIP
3. IPO
4. SPI
Ans. 1

57) What is the full form of NPS?


1. National Plan Scheme
2. National Periodic System
3. National Pension Scheme
4. National Product Scheme

Dr.Sweety Shah, LJMBA


Ans. 3

58) Which of the following is distribution phase of financial planning life cycle approach?
1. Planning to transfer accumulated wealth to other persons or entitites
2. Income and expenses are rising
3. Education phase
4. Mid career
Ans. 1

59) Which of the following could be inflow at the time of retirement?


1. Salary
2. Bonus
3. Incentives
4. Pension
Ans. 4

60) In which of the following scheme borrower receives monthly loan installments for the loan
duration?
1. Mortgage
2. Reverse Mortgage
3. Secured loan
4. Unsecured loan
Ans. 2

61) Which of the following is risk free scheme for retirement planning?
1. PPF
2. NPS
3. ELSS
4. Equity
Ans. 1

62) Wealth creation will be done during which of the following years?
1. Retirement years
2. Post retirement years
3. Childhood years
4. Accumulation years
Ans. 4

Dr.Sweety Shah, LJMBA


63) If a person satisfies none of the basic conditions then is called?
1. Resident
2. R&OR
3. Non resident
4. RBNOR
Ans.3

64) Following is an income on which tax is exempted:-


1. Agricultural income
2. Salary
3. Business profit
4. Rent
Ans.1

65) Following is not a capital asset:-


1. Property
2. Gold bonds
3. Movable property
4. Immovable property
Ans.2

66) A series of equal regular deposits is sometimes called an _______.


1. Annuity
2. Investment
3. Lumpsum
4. Interest
Ans.1

67) Which of the following is not a step of financial planning process?


1. Determine your current financial situation
2. Identify alternative courses of action
3. Evaluate your alternatives
4. Create your career plan
Ans.4

68) What is the full form of GAV


1. Gross Asset Value
2. Gross Annual Value

Dr.Sweety Shah, LJMBA


3. Gross Aggregate Value
4. Gross Actual Value
Ans.2

69) Exemption u/s 54B is applicable to following eligible capital asset to be sold:-
1. Residential house
2. Agriculture land
3. Any LT asset
4. NHAI Bonds
Ans.2

70) Which of the following section is for Interest on loan for Higher Education
1. Sec 80EE
2. Sec 80EEE
3. Sec 80GG
4. Sec 80E
Ans.4

71) Annual Income = 1500, Total expenses = 1200, Calculate savings ratio
1. 0.80
2. 0.20
3. 0.67
4. 0.30
Ans.2

72) Maximum amount deductible under sec 80C is?


1. 400000
2. 50000
3. 1500000
4. 150000
Ans.4

73) Payment done for Life insurance premium will be permissible under which deduction?
1. 80C
2. 80CCD
3. 80E
4. 80F
Ans.1

Dr.Sweety Shah, LJMBA


74) Payment done for medical insurance will be permissible under which deduction?
1. 80C
2. 80CCD
3. 80E
4. 80D
Ans.4

75) It is a certificate, where the employer is certifying details regarding the salary you have
earned during the year:-
1. Form 16
2. Form AS
3. Form 18
4. Form 15
Ans.1

76) This form is an annual consolidated tax statement that can be accessed from the income-
tax website by all taxpayers using their Permanent Account Number (PAN)
1. Form 16
2. Form AS
3. Form 26AS
4. Form 15
Ans.3

77) It is a web-based application of the Income Tax Department that provides an interface to all
stakeholders associated with TDS administration:-
1. RACES
2. TRA
3. RSA
4. TRACES
Ans.4

78) A form that is used to declare the net tax liability, claiming of tax deductions:-
1. TRA
2. ITR
3. ITS
4. ITTR
Ans.2

Dr.Sweety Shah, LJMBA


79) Following is one of the basic conditions to check the residential status:-
1. Presence of atleast 192 days in India during PY
2. Presence of atleast 162 days in India during PY
3. Presence of atleast 172 days in India during PY
4. Presence of atleast 182 days in India during PY
Ans.4

80) An asset held by assessee for less than 36 months immediately prior to its date of transfer is
called?
1. Long term capital asset
2. Short term capital asset
3. Terminal Capital asset
4. Medium term captial asset
Ans.2

81) Payment done for medical treatment of person with disability will be permissible under
which deduction?
1. 80C
2. 80CCD
3. 80DD
4. 80EE
Ans.3

82) Payment done for donation will be permissible under which deduction?
1. 80C
2. 80G
3. 80E
4. 80EE
Ans.2

83) The year immediately preceeding current year is called?


1. Previous year
2. Assessment year
3. Current year
4. Following year
Ans.1

Dr.Sweety Shah, LJMBA


84) What is a primary consideration when evaluating the time value of money?
1. Premiums
2. Tariffs
3. Interest rate
4. Credit limit
Ans.3

85) Which of the following is a reason to invest your money:


1. You will receive a lower rate of return than from a savings account.
2. When you invest, you earn a lot of money in a very short period of time.
3. Investing can help you reach your long-term financial goals.
4. There is no risk involved in investing in the stock market.
Ans.3

86) Which of the following investments is riskiest?


1. FD
2. Bonds
3. Individual stock
4. PPF
Ans.3

87) What is financial planning?


1. Financial Planning is the process of meeting one’s life goals through the proper
management of personal finances.
2. Financial Planning is the process of meeting one’s life goals.
3. Financial Planning is the proper management of personal finances.
4. Financial planning is managing life
Ans.1

88) Financial goals do not include


1. Buying a home
2. Earning the maximum return
3. Planning for retirement
4. Saving for child's education
Ans.2

89) According to the wealth life cycle approach, a 55 year old investor who is about to retire in
a few months is considered to be in

Dr.Sweety Shah, LJMBA


1. Distribution phase
2. Growth phase
3. Income phase
4. Accumulation phase
Ans.4

90) Net worth statement must include:


1. all assets
2. attitude to risk
3. personal details
4. career plan
Ans.1

91) PPF means


1. Person having Pension Facilities
2. Pension Planning Funds
3. Public Provident Fund
4. Permanent Practitioner’s Forum
Ans.3

92) Which type of deposits earns higher interest rate?


1. Savings Account
2. Current account
3. Personal savings account
4. Fixed Deposits
Ans.4

93) The amount of health and education cess to be collected along with income-tax for
assessment year 2020-21 shall be
1. 0.01
2. 0.02
3. 0.03
4. 0.04
Ans.4

94) Income Tax is charged in:-


1. Assessment Year
2. Financial Year

Dr.Sweety Shah, LJMBA


3. Accounting Year
4. Previous Year
Ans.1

95) A person includes which of the following:-


1. Individuals, HUF, Firm, Company only
2. Individuals, HUF, Company, Firm, AOP or BOI,Local Authority, Every Artificial Juridical
Person
3. Only Individual and HUF
4. Only Individual
Ans.2

96) Income includes :-


1. Capital gains
2. Lottery winnings
3. Profits or Gains Capital gains
4. Lottery winnings,Profits or Gains
Ans.4

97) Which amongst the following is not a head of Income?


1. Capital gains
2. Salaries
3. Income from house Property
4. Income from exports
Ans.4

98) Dr. Ranjan started his medical practice on 1st September, 2018. The previous year for the
profession for the assessment year 2019-20 would be
1. 1st September, 2018 to 31st March, 2019
2. 1st June, 2018 to 31st March, 2019
3. 1st April, 2018 to 31st March, 2019
4. 1st September, 2018 to 31st January, 2019
Ans.1

99) Which of the following is one of the additional condition for assessing residential status?
1. Presence in India for at least 182 days during 7 years immediately preceeding previous
year.

Dr.Sweety Shah, LJMBA


2. Presence in India for at least 200 days during 7 years immediately preceeding previous
year.
3. Presence in India for at least 730 days during 7 years immediately preceeding previous
year.
4. Presence in India for at least 530 days during 7 years immediately preceeding previous
year.
Ans.3

100) (GAV - Municipal tax) is:-


1. Net Annual Value
2. Gross Annual Value
3. Net Asset Value
4. Gross total income
Ans.1

101) Computation of full value of consideration is applicable in which of the following?


1. Salary
2. Capital Gain
3. Rent
4. Bonus
Ans.2

102) Which form is applicable for TDS on Income Other than Salary?
1. Form 16A
2. Form 16
3. Form 17
4. Form 18
Ans.1

103) Why there is a need for retirement planning?


1. Higher return
2. Higher risk
3. Fixed inflow of income
4. Promotion
Ans.3

104) What could be one of the retirement objectives?


1. Child education

Dr.Sweety Shah, LJMBA


2. Child marriage
3. Career growth
4. Post retirement hobbies
Ans.4

105) Which of the following expenses will decrease at the time of retirement?
1. Loan EMI
2. Electricity expenses
3. Medical expenses
4. Insurance expenses
Ans.1

106) Which of the following is associated with retirement?


1. Incentive
2. VRS
3. VPS
4. VTS
Ans.2

107) Why do one need emergency fund?


1. For buying a luxurious car
2. For buying jewellary
3. It will help in case if someone loses his/her job
4. For buying precious metals
Ans.3

108) Risk taker will invest higher proportion of his investment in which of the following avenue?
1. FD
2. PPF
3. Post office
4. Derivatives
Ans.4

109) Which of the following ratio will help to influence most in your investment decision?
1. P/E ratio
2. Current ratio
3. Turnover ratio
4. Debtors collection period

Dr.Sweety Shah, LJMBA


Ans.1

110) Which of the following is one of the limitation of investing in real estate?
1. Misleading advertisements
2. Illiquidity
3. Easy entry
4. No management concerns
Ans.2

111) Mr. Rushit has just taken retirement from his company has received Rs.50 lakhs as
retirement compensation. Which of the following is the best option for him?
1. Invest entire amount in equity
2. Invest entire amount in real estate
3. Invest in various retirement schemes
4. Invest entire amount in gold
Ans.3

112) A person whose age is 40 years and is working with a bank. What should be the best asset
allocation model for him?
1. 100% Debt
2. 80% Debt 20% equity
3. No savings and investment
4. 30% Debt and 70% equity
Ans.4

113) Which of the following is included in wealth protection in wealth cycle planning?
1. Investment planning
2. Tax planning
3. Estate planning
4. Risk and Insurance planning
Ans.4

114) What do we understand by human capital?


1. Income from real estate
2. Income from financial investments
3. Income from occupation
4. Income from precious metals
Ans.3

Dr.Sweety Shah, LJMBA


115) Which of the following can be considered as a short term liability?
1. Home loan
2. Credit card
3. Education loan
4. Business loan
Ans.2

116) If there is a large gap in current financial situation and financial goal what should be done?
1. Increase income or reduce expenses
2. Increase expenses or reduce income
3. Take a house
4. Go for a luxurious car
Ans.1

117) Who can assist you for tax planning?


1. Career counsellors
2. Seniour coporate executives
3. CA firm
4. Friends
Ans.3

118) Which of the following investment is under EEE category?


1. Stocks
2. PPF
3. Unit linked pension plan
4. IPO
Ans.2

119) The option to convert the bond into equity of the issuing firm on pre-specified terms is
under which of the following option?
1. Callable Bonds
2. Non convertible bonds
3. Amortizing bonds
4. Convertible Bonds
Ans.4

120) Goals that have a time frame of 2 to 5 years are called?

Dr.Sweety Shah, LJMBA


1. Short-term goals
2. Long-term goals
3. Intermediate goals
Ans.3

121) Which of the following value is also referred as compounding?


1. Present Value
2. Time Value
3. Value
4. Future Value
Ans.4

122) A personal balance sheet can also be referred as:-


1. Cash flow statement
2. Income statement
3. Networth statement
4. Expense statement
Ans.3

123) Who can avail Senior citizen saving scheme


1. anyone
2. anyone above 60 years
3. below 60 years
4. anyone above 30 years
Ans.2

124) A risk averse investor will choose which of the following alternative?
1. investment alternatives that offer the highest risk
2. investment alternatives that offer the medium risk
3. investment alternatives that offer the higher return
4. investment alternatives that offer the least risk
Ans.4

125) Which of the following increases liabilities but not assets?


1. Taking out a loan to buy a new car
2. Using a credit card to buy a computer
3. Paying off a student loan
4. Taking out a loan to go on vacation

Dr.Sweety Shah, LJMBA


Ans.4

126) Which of the following modifications to the list of assets and liabilities below would result
in a positive net worth?
1. Increasing car loan
2. Increasing credit card balance
3. Increasing investments
4. Reducing Car value
Ans.3

127) A high diabetic person should incorporate definitely which of the following in its financial
plan?
1. Retirement planning
2. Insurance planning
3. Tax planning
4. Investment planning
Ans.2

128) Which of the following investment is under EET category?


1. FPO
2. PPF
3. Unit linked pension plan
4. Stocks
Ans.3

129) For claiming refund which of the following statements are required to be filed?
1. UTR
2. ITR
3. RTI
4. TIR
Ans.2

130) Which of the following value is also referred as discounting?


1. Present Value
2. Time Value
3. Value
4. Future Value
Ans.1

Dr.Sweety Shah, LJMBA


131) Debt capital refers to:
1. factoring accounts receivable
2. money raised through the sale of shares
3. funds raised by borrowing that must be repaid
4. purchase of assets
Ans.3

132) A firm's profit that is distributed to shareholders is called:


1. stock certificate
2. dividends
3. interest
4. discounts
Ans.2

Dr.Sweety Shah, LJMBA

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