What is the primary advantage of investing in equity mutual funds compared to debt mutual funds?

Guaranteed fixed returns Lower risk involvement Potential for higher returns Shorter investment horizon

What is the minimum percentage of total assets an Equity Mutual Fund must invest in equity shares of different companies to be classified as such?

40% 50% 60% 70%

Which of the following is NOT a factor to consider when investing in equity mutual funds?

Size of the fund Expense ratio Management Fee Risk reward ratio

What type of investment instrument do Debt Mutual Funds primarily invest in?

Stocks and bonds Real estate properties Commodities like gold and oil Debt instruments like bonds and treasury bills

Why are debt funds often considered less risky than equity investments?

They offer guaranteed returns They are backed by the government They provide fixed income They are not subject to market fluctuations

Which type of investor is generally recommended to invest in debt funds?

Investors with a high-risk tolerance Investors seeking short-term gains Investors with a lower risk tolerance Investors looking for tax-saving options

What is the key difference in taxation between equity funds and debt funds?

Equity funds are tax-exempt Debt funds have a higher tax rate Taxation on capital gains depends on the holding period for both Debt funds offer tax savings options

What is a significant advantage of equity mutual funds for long-term investors?

They offer guaranteed returns They provide a fixed monthly income They have the potential to outpace inflation They are less volatile than debt funds

What is the primary reason for the higher expenses associated with debt funds compared to equity funds?

They require more frequent trading They involve higher management fees They necessitate complex risk management systems They are subject to government regulations

What is the most crucial factor to consider before investing in any type of mutual fund, whether debt or equity?

Past performance of the fund The fund manager's reputation Your own risk appetite and investment goals Current market trends and economic conditions