Multiple choice

Which of the following is the first step in financial planning?

  1. Asset Allocation

  2. Selection of fund

  3. Studying the features of a scheme

  4. Setting up financial objectives
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Financial planning must begin with clearly defined financial objectives - knowing what you're planning for (retirement, education, home purchase, etc.) and when you'll need the money. Only after objectives are set can you determine appropriate asset allocation, select specific funds, or study scheme features. Without clear goals, the rest of the planning process lacks direction.

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