NISM XB CHAPTER 4

What do you mean by Debt Counselling?

Loans taken to buy financial assets, called

Risk capacity means :

Risk attitude means :

Risk tolerance means :

The process of dividing the portfolio among different assets so that the overall portfolio’s return is protected from the effect of a fall in one or few assets is called——-.

______ Means having a combination of investments in a portfolio in such a way that a fall in the value on one or few will be made up by other investments that are doing well.

When the credit card user does not pay the entire amount i.e. some amount is carried over for payment in the following business cycles, it is called—

Rank debt in order of their cost and deal with the —— debt first.

—- Is taking loan at lower interest rate to repay the high cost debt.

EMI stands for:

EMI is calculated using — function of MS excel

Loan instalments include payment of

—– Is a number assigned to each individual by a credit information bureau based on their credit behaviour and history.

A credit bureau is licenced by —–

Higher the leverage, more —– it is for the individual’s financial situation.

Which of the following is not included liquid assets?

Which among the following has highest liquidity?

—- Refers to all payments due to lenders, whether as principal or interest.

Goal value =

When a need can be expressed in terms of the sum of money required and the time frame in which it would be needed, we call it a——-.

Essential component of financial goal:

Unexpected high income from lottery, bonus etc., is called:

—– Is an approach to understand the risk appetite of investors.

Risk appetite —— as the number of earning members increases

Risk appetite decreases as the number of dependent members —–

An efficient asset allocation is one which include sasset classes that have—– correlation

Asset allocation that builds purely on the needsand preferences of the individual over the long term is called—–.

——– strategy can be defined as active management portfolio strategy that rebalance the percentage of asset held in various categories in order to take advantage of market pricing.

—— Strategy is need based and —— strategy is view based.

——– Strategy involves active asset allocationand——strategy involves passive assetallocation.

—– Works on the basis of a pre-specified model which does a mechanical rebalancing between asset classes.

——— Is the action of bringing a portfolio of investments that have deviated away from the targeted asset allocation back into its original allocation and to ensure that the allocation is aligned to the investor’s needs.

The person getting insured must willingly disclose and surrender to theinsurer his complete true information regarding the subject matter of insurance. Denotes which principal of insurance.

A person has an insurable interest —–

—- Is the need to cover risk to the life or earning ability of an asset, which includes the life of an individual as an asset generating income.

—– Is the need to protect the available income from an unexpected charge. Health insuranceand motor insurance are examples of insurance products that cover such risks.

— The need is to protect assets created. Insurance against the Fire or destruction of goods is an example of insurance product that covers the risk.

What do you mean by insurance planning?

——- Is a risk transfer mechanism where a small premium payment can result in payments from the insurance company to tide over risks from unexpected events.

Requirements of insurable risk:

Steps in insurance planning:

—— Insurance is a pure risk cover product. It pays a benefit only if the policy holder dies during the period for which one is insured.

—- Is a level premium plan with a savings feature. At maturity a lump sum is paid out, equal to the sum assured plus any accrued bonus. If death occurs during the term of the policy then the sum assured and any bonus accrued are paid out.

—— provides life insurance cover for the entire life of the insured person or upto a specified age.

—— Are add-ons to the basic insurance policy to supplement the insurance cover provided.

—— Insurance provides protection against most risks to property such as fire, theft etc

____ policy provides for a lump sum benefit to be paid if the named insured contracts certain specified diseases such as cancer, heart attack, stroke, kidney failure or multiple sclerosis

—- reimburse the medical expenses incurred for thepolicy holder and identified family members who are covered under the policy.

In case of health insurance policy claim is paid only if patient is admitted in hospital for —- hours.

The company indemnifies the insured in the event of accident caused by, or arising out of the use of the motor vehicle, anywhere in India against all sums including claimant’s cost and expenses which the insured shall become legally liable to pay in respect of (i) death or bodily injury to any person, (ii) damage to the property other than property belonging to the insured or held in trust or custody or control of the insured. Name Insurance.

—- Insurance is compulsory by law.

The amount of life insurance cover required depend supon the economic value that can be attached to human life. this is called the ——-

Which provides twice the amount insured in case the death happens due to the specific reason such as accidental death while the policy is in force?

Which provides a sum that could be double the sum assured on diagnosis of a life-threatening illness?

—— enables the insured to receive a periodic pay out if temporarily disabled, for a limited period of time.

—- Which is triggered if there is a disability or loss of income that makesit difficult to pay the premium.

——Is a protection for the company against losses arising out of death of a key person associated with the company.

—– Is the stage at which the saving and investment for the retirement corpus is made.

—— stage of retirement is when the corpus created in the accumulation stage is employed to generate the income required to meet expenses in retirement.

—— Is a general rise in prices of goods and services over a period of time.

—— Is the periodic rate of return on an investment after adjustment for inflation.

Real rate=

“—– each financial goal is looked at in isolation, and a dedicated investment plan is made to realis the financial goal.

—— Takes a consolidated view of all the financial goals of the person.

. Which of the following depends on the market?

Debt should ideally be taken for acquiring appreciating assets such as real estate.

Financing risky or volatile investment propositions with debt may entail high risk.

A healthy portion of such windfall gain should be set apart for the current expense need.

Risk appetite is higher when life expectancy is longer.

The returns on ULIPs are linked to the performances of the markets.

Higher the deductible that the insured is prepared for, Higher the insurance premium.

Investments made in the accumulation stage should be growth oriented.

Investment made at distribution stage is income-oriented primarily.

Philanthropic I.E. they want to devote time and / or money for larger social good.