What is a key advantage of investing in mutual funds through Systematic Investment Plans (SIPs)?

Guaranteed high returns Elimination of market risk Rupee cost averaging Fixed interest rates

What does 'rupee cost averaging' enable mutual fund investors to do?

Buy more units when the market is up and less when it's down Buy more units when the market is down and less when it's up Invest a fixed amount regardless of market fluctuations Predict future market movements

What is a Systematic Transfer Plan (STP) in the context of mutual funds?

Transferring money from a savings account to a mutual fund Transferring money from one mutual fund scheme to another Withdrawing money from a mutual fund scheme Investing a lump sum amount in a mutual fund

What is a recommended strategy for mitigating financial risk in mutual fund investments?

Investing all funds in a single high-return sector Timing the market to buy low and sell high Investing in a balanced way across multiple asset classes Relying solely on past performance of a fund

What is a characteristic of sector-specific mutual funds?

They guarantee higher returns than diversified funds They are considered less risky than diversified funds They focus on investments in specific industries or sectors They are suitable for all investors regardless of risk appetite

Which of the following is NOT a factor to consider before investing in a mutual fund scheme?

Expense ratio of the scheme Fund manager's experience Popularity of the fund on social media Investment objective of the scheme