DAY 1 – Basics of Investment - NISM Series XV

📌 What is Investment?

👉 Investment = putting money today to earn more in future

Example:
You buy a stock at ₹100 → it becomes ₹120 → profit ₹20

📌 Types of Investments (VERY IMPORTANT)

1. Equity (Stocks)

Ownership in company
High risk ⚠️
High return 🚀

Example: Buying shares of Reliance Industries

2. Debt (Bonds / FD)

You lend money
Fixed return
Low risk

3. Mutual Funds

Money managed by professionals
Mix of equity + debt

Example: SBI Mutual Fund

📌 Risk vs Return (MOST ASKED)

👉 Simple rule:

High return = High risk
Low risk = Low return

Investment	Risk	Return
FD	Low	Low
Mutual Fund	Medium	Medium
Stocks	High	High

📌 Time Value of Money (VERY IMPORTANT CONCEPT)

👉 Money today is more valuable than future

Why?

Inflation 📈
Opportunity to invest

Example:
₹100 today ≠ ₹100 after 5 years

📌 Inflation (Super Important)

👉 Inflation = price increase over time

Example:
Petrol ₹80 → ₹100

👉 It reduces your money value

🧠 Quick Revision (Remember this)

Investment = grow money
Equity = high risk, high return
Debt = safe, fixed return
Inflation reduces value
Time value = money today > future

🎯 Practice Questions (Try Now)

Q1. Which has highest risk?

a) FD
b) Bonds
c) Stocks
d) Mutual Funds

Q2. Inflation means:

a) Increase in profit
b) Increase in prices
c) Decrease in money supply
d) Increase in GDP

Q3. Which gives fixed return?

a) Equity
b) Debt
c) Mutual Fund
d) Crypto

DAY 1 – Basics of Investment – NISM Series XV