mutual fund. After deducting the entry load, remaining money is a. Invested in a well-diversified portfolio of securities as per the investment o!ective . "aintained in a ank as fi#ed deposit c. Invested in land, uilding, plant and machinery required for the mutual fund d. $sed to pay the management fee and other recurring e#penses of the fund %. &et Asset 'alue per unit means a. ((ook value of assets ) liailities)*$nits outstanding, . $nit capital * $nits outstanding c. &et assets dividend y Initial numer of units d. ("arket value of assets ) +iailities)*$nits outstanding ,. -hen you place deposit with a ank, u ecome a. a orrower from the ank . a lender to the ank c. a shareholder of the ank d. a unit holder in the ank .. /uring new fund offer (&01) $nits of an open ) ended fund are purchased form a. A (roker . 2he mutual 0und itself c. A depository d. a 3tock 4#change 5. 1wnership of the mutual fund y the unit holders is a. (eneficial. . "utual and eneficial. c. Individual d. "utual 6. /irectly investing in equity shares is etter then investing in equity shares through a mutual fund ecause of a. 2ailor ) made portfolio . Asence of /istriution e#pense c. 7ontrol over costs d. All of the aove. 8. "utual fund schemes in India follow accounting policies laid down y a. 34(I . Institute of 7hartered Accounts of India c. Indian 2rust Act 19:%. d. Association of "utual 0unds in India :. 2he value of funds net assets is ;s. 1<<<. 2here are 1<< units outstanding. "r. 3ingh owns , units. 2he 'alue of his ownership is a. ;s.,<< . ;s.,< c. ;s., d. &ot =ossile to calculate unless more information is given 9. A person who purchase deentures issued y a company is a lender to the company. An income fund invests in deentures issued y a company. A unit holder of this income fund. a. Is a lender to the company . Is a share holder in that company c. has no relationship to that company d. Is a creditor to that company. 1<. =rivate sector was permitted to enter the mutual fund industry in India in the year a. 199, . 196, c. 19:8 d. 1996 11. In India the first mutual fund was estalished> a. efore 34(I regulation 1996. . efore $2I was estalished in 196,. c. after 34(I regulation 1996. d. when pulic sector mutual funds were estalished in 19:8. 11. 2he Assets under management in the Indian mutual fund industry as at end of financial year %<<.-%<<5 was close to. a. ;s 15, cr. . ;s. 15,<cr c. ;s.15,<<cr. d. ;s 15,,<<<cr 1, Identify the 71;;472 statements? a. Investing in a mutual fund is likely to e less risky compared to directly investing in the market. . A mutual fund enales a small investor uild a diversified portfolio c. Investment in a mutual fund offers more liquidity. d. All are correct. 1. -hen you invest in an open-ended mutual fund scheme, which of the following decisions is *are not taken y you? a. -hich share to uy and which share to sell? . -hat prospective changes would e made to the load structure? c. At what &A' you should e#it? d. 2he first two decisions. 15. 2he correct description of a mutual fund is a. It is a company . it is a development financial institution c. It is a financial intermediary d. it is non-anking finance company 16. 2he irth place of mutual funds is. a. $@ . Aapan c. 7anada d. $3A 18. Important development (s) that took place in the Indian mutual fund industry 0eruary %<<, was*were a. ;epealing> of $2I Act . estalishment of $2I"0 . 7reation of level playing field d. all of the aove. 1:. /istriutors are required to aide y a code of conduct as prescried y 34(I. 2his code is ased on a. AB&I . A"0I c. A;& d. A&"I 19. An open end fund a. is open for one-time sale of fi#ed numer of units . offers repurchase facility su!ect to certain ovious conditions c. is always oliged to keep issuing new units at all times d. offers repurchase facility unconditionally at all times 18. A gilt fend is a special type of fund that invests a. in dated securities only . in very high quality equity only c. "ainly in very high quality corporate onds d. mainly in high quality money market instruments 1:. 2he period from %<<. onwards is known in the Indian mutual funds industry as a. =eriod of consolidation and growth . 4mergence of large and uniform industry c. 4mergence of private funds d. entry of pulic sector funds. %%. 2he union udget 1999 is considered important for the Indian mutual fund industry ecause. a. It made $2I at par with other mutual funds. . It aolished the distinction etween short ) term capital gain and long ) term capital gain for mutual fund unit holders. c. It e#empted all mutual fund dividends from income ta# in the hands of unit holders d. It removed ta# on capital gains and dividends in the hands of units holders %,. 2he second mutual fund in the India was estalished y a. 3(I . 7anara (ank c. "organ 3tanley d. +I7 %.. -hich is 7orrect? a. $2I"0 was estalished y an Act of =arliament . $2I"0 has voluntarily adopted 34(I ;egulations c. $2I"0 launched $3 6. d. $2I"0 was not the first mutual fund in India %5. A person who analyses shares ased on finances and operations of the company is known as a. 7hartist . =ortfolio analyst c. 2echnical Analyst 7. 0undamental Analyst %6. -hat is an C4quity -arrant C? a. It is nothing ut an 4quity share of a company . It is a deit instrument that offers fi#ed interest rate c. It is an instrument that gives the holder the right to purchase equity shares in a company at fi#ed price in future d. &one of the aove %8. -hich of the following 34(I restrictions applies to a schemeDs investment in unlisted shares? a. A 7lose)ended scheme may invest a ma#imum of 1<E of its &A' in unlisted shares . An open-end scheme may invest a ma#imum of 5E of its &A' in unlisted shares c. (a) and ()aove d. &one of the aove %:. Fow would you measure the performance of an 4quity Inde# 0und? a. 2here is no need to enchmark an equity inde# fund . (y comparing it with return on Bovernment securities c. (y 7omparing its performance with a money market mutual fund d. (y comparing its performance with the Inde# it is designed to track %9. In an open-ended fund &A' per unit is ;s.11 4ntry load is %E An Investor invests ;s.11< she will get a. less then 1< units . 1< units c. more than 1< units d. 11 units ,<. $nits from an open-ended mutual fund are ought from a. &34. A"0I c. 34(I d. Agencies appointed y the A"7 ,1. A ond with a coupon rate of 9E when current coupons for onds of similar maturities are 11E will sell> a. At a price which is not related to interest rates for similar maturities . Aove face value 7. at face value d. elow face value ,%. /istriutors need to aide y rules and good conduct towards investors, (ecause a. A"0I code of conduct requires them to do so . 2he A"7 they represent requires them to do so c. Bood conduct means good usiness for them d. 0or all of the aove reasons ,,. Insider trading means> a. =ersonal trading transaction done y anyone with knowledge of the fund decisions in the concerned security . =ersonal trading transaction done y an insider of the A"7 *fund c. =ersonal trading transaction done y anyone associated with the fund d. =ersonal trading transaction done without prior approval of the A"7 ,.. ;esponsiility to ensure ethical ehavior on part of all mutual fund participants finally rests on a. 0und 2rustees . 34(I c. A"0I, d /istriutors ,5. 0und Fouse ratings y 7;I3I+, can e used y distriutors a. to know 7;I3I+Ds opinion on the fund management practices and over all management quality of an A"7 * fund house . to know risk of default y the A"7 . 0und house c. to evaluate the performance of the schemes managed y the A"7 * 0$&/ F1$34 d. to compare the performance of the schemes managed y different fund houses ,6. Asset allocation of a portfolio should e re- evaluated every time there is change in the a. 0amily siGe and requirement . market condition c. Ao of the investor d. all of the aove ,8. -hen would you review the financial plans of your client? a. -henever the investorDs personal circumstances of financial goals change . -henever stock market prices fall sharply c. 3hortly efore the filling of the Income 2a# returns of your client d. 4ach year at the time of the presentation of the Bovernment udget ,:. A five-year deep discount ound would? a. =ay interest on a quarterly asis . =ay interest on a yearly asis c. (e redeemed on maturity at the face value which is higher than the issue price with no payments in etween d. -ould offer yield ta# free income ,9. 3harpe and 2reynor rations are measures of a. Average return . risk c. risk ad!usted return d. eta of the portfolio .<. Aaco recommend of the following risk allocation for a low risk portfolio> a. 5<E govt. 3ecurities fund H 5<E "oney "arket funds . 5<E govt. 3ecurities fund H 5<E Inde# fund c. 5<E govt. 3ecurities fund H 5<E international funds d. 5<E govt. 3ecurities fund H 5<E aggressive growth funds .1. -hich classification of mutual funds does not e#its? a. =ension fund or provident fund . 7losed ) end or open ) end c. +oad fund or no load fund c. Active fund or passive fund .%. $nit capital is found in the a. +iaility side of schemeDs alance sheet . asset side of the alance sheet c. ;evenue account d. equaliGation account .,. A sponsor of a mutual fund a. can act as the distriutor of the mutual fund . cannot act as the distriutor of the mutual fund c. can act as the trustee of the mutual fund d. can act as the custodian of the mutual fund ... 2o create investor awareness aout mutual funds, a ooklet titled C"aking "utual 0und -ork for you ) 2he Investors BuideI was pulished y a. 34(I . A"0I c. $nit 2rust of India d. Investor 4ducation and =rotection fund .5. /istriutors will find the information on performance of a scheme as compared to its enchmark in the a. @ey information "emorandum . 1ffer /ocument c. 0und Advertisements d. all of the aove .6. 34(I guidelines on personal investment and trading apply to a. A"7 employees and fund trustees . only A"7 employees c. 1nly fund trusteeDs d. anyone concerned with the funds .8. 2he C+oadI charged to an investor in a mutual fund goes to meet the a. 3elling and distriution e#penses . e#penses of A"0I c. =rinting stationery and posting e#penses d. marketing and sales promotion e#penses .:. -hich of the following statements is an adequate description of reality? a. -hen compared to gilt funds, securities in det funds have higher risk of default . Browth and risk are associated with equity funds c. /et fund have higher &A' fluctuation when compared to money markets funds d. All these statements descrie reality adequately % "arks Juestions .9. -hich of the following is true? a. A fund sponsor can contriute to the initial corpus of the trust . A fund sponsor can contriute to the capital of the A"7 c. A fund sponsor can invest in his own fundDs schemes d. All of the aove 5<. A unit holder purchased %<< units of a mutual fund at &A' of ;s.1%, each. 2here was no entry load. 2he fund purchased securities worth ;s.%.<< using this money. After one year the fund had %<,<<< units. 2he value of unit holders holding in that mutual fund would e a. ;s.%.<< . 1E of the value of fundDs portfolio at the time c. 1E of the net assets of the fund at that time d. cannot say with the given data 51. -hich of the following is &12 a characteristic of mutual fund a. =ooling of investments . market risk c. $niform unit holder rights d. safety of principal 5%. -hich of the following is incorrect? a. A value fund tries to seek out fundamentally sound companies whose shares are currently overpriced in the market . A alanced fund hold assets more or less in equal proportions etween det *money market securities and equities c. A growth fund would invest in the equity shares of companies whose earning are e#pected to rise at an aove average rate d. A fund that invests only in A34A& countries is an e#ample of specialty fund 5,. 2he annualiGed value of contingent deferred sales charge would a. Increase if the investor stays with the fund longer . ;emain content regardless of how long the investor stays with the fund c. /ecrease if the investor stays with the fund longer d. &one of the aove. 5.. -hich is * are the characteristic(s) of fi#ed term plans noticed in the Indian mutual fund industry? a. 7lose ) ended . "aturity shorter than one year c. &ot listed on stock e#change d. all of these 55. 4ach unit holder of a mutual fund is a. a creditor to that mutual fund . a detor to that mutual fund c. a trustee of that mutual fund d. part owner of the assets of that mutual fund 56. "utual funds offer the advance of portfolio diversification. 2his is est e#pressed y the statement. a. do not put all eggs in one asket . one ird in hand is etter than two in the ush c. -hat goes up must come down d. risk and return always goes hand in hand 58. 0und A invests in shares of companies in India. 0und ( invests in shares of companies in India and $3A. -e can say that a. /efinitely A is more diversified than ( . /efinitely A and ( are well-diversified c. -e need more information to identify which of them is etter diversified d. /efinitely ( is more diversified than A 5:. 'alue averaging means> a. Investing the same amount of funds regularly . Investing in one lump sum amount c. @eeping the target value of investment constant y investing the amount y which the investment value has gone down d. &one of the aove 59. A fund has to (eta of greater than 1. this means. a. 2he fund is more volatile than the market . the fund is as volatile as the market. c. 2he fund is less volatile than the market d. none of the aove. 6<. 0or a small investor in India, which of the following is e#pected to have a higher level of liquidly? a. 4quity shares in an unlisted company . /eenture issued y a company c. $nit of an open-ended "0 d. ;eal estate. 61. In a mutual fund, the &A' per unit is 1%. 2otal numer of units is 1<<. 2otal assets of this fund would e a. less than ;s 1%<< . e#actly ;s 1%<<. c. more than ;s 1%<< d. cannot say anything without additional information. 6%. A close ended mutual fund has a fi#ed a. market value of assets under management . net asset value per unit. c. unit capital and numer of units d. numer of units. 6,. An open end scheme can change its fundamental attriutes. a y otaining the consent of 85E of unit- holders at least 16. y allowing unit-holders to e#it the scheme after si# months without any e#it load 18. y informing each unit-holder individually of the proposed change and y allowing units holders to e#it the scheme without any e#it load. . After otaining prior approval from 34(I 6.. If an investor failed to claim the redemption proceeds after , years of due date he has right to receive an amount equal to> a. =revailing &A' . 0ace value of the unit c. due date &A' plus interest K 15E p.a. d. &A' at the end of three years after the due date. 65. ;ight to timely service includes. a. the right to otain information from the trustees that may have adverse earing on their investments. . ;ight to nominate a person in whom all the eneficial ownership rights in the units will vest in the event of death c. ;ight to receive dividend warrants in ,< days from the date of declaration d. ;ight to receive a copy of the annual financial statement of the fund. 66. Lield curve is a graph that shows. a. yields of various equities of various firm. . Lield from mutual funds. c. Lields of various onds of various maturities using one set of onds such as B 3ecs d. &one of the aove. 68. A unit of an open-end fund was purchased when is &A' was ;s .<*-At year end, its &A' was ;s ... 2he percentage annualiGed change in &A' I3. a. 1%E . 1<Ec. %5.<<E d. 15.<<E 6:. As per 34(I ("utual 0und) ;egulation, who acts as the protector of unit-holderDs interest ? a. 2rustees . 34(I c. "inistry of 0inance d. 7ompliance officer
6:. A no load ond scheme of a mutual fund has weekly average net assets of ;s.%<< crores it can charge ma#imum investment management fee of a. ;s. . 7r . %.5 7r c. % cr d. 5 cr
69. $nits of mutual fund are short term capital assets if a. 2hey are held for not more then twelve months proceeding the date of transfer. . 2hey are held for less than twelve months proceeding the date of transfer. c.2hey are held for not more than three years proceeding the date of transfer. d.2hey are held for less than three years proceeding the date of transfer. 8<. An investor has opted for a 3ystematic 2ransfer =lan. 2his means. a. he can transfer on a periodic asis a specified amount from one scheme to another . he is required to invest a fi#ed sum periodically c. the investment would provide the enefit of rupee cost averaging d. Fe can transfer on a periodic asis a specified amount from the scheme to his ank account 81. -hich of the following is &12 required to appear on the cover page of the offer document? a. /ate new fund offer opens . /ate new fund offer closes c. 4arliest closing date (if any) for the new fund offer d. /ate on which approved y trustees. 8%. A mutual fund launched a new scheme. It issued 1< crores units. 2he offer document mentioned entry load of %.%5E of face value. /uring the &ew 0und 1ffer period issue e#penses were ;s : crores. Fow much of this is orne out of entry load? a. ;s. %.%5 crore . ;s. 6 crore c. ;s : crore d. ;s ,.85 crore 8,. A mutual fund launched a new scheme. It issued 1< crores units. 2he offer document mentioned entry load of %.%5E of face value. /uring the new fund offer period issue e#penses were ;s.: crores. If initial issue e#pense is amortiGed over 5 years period, what would e the opening &A' per unit if management fees and other recurring e#penses are Mero? Assume that there is no reflection in value of underlying assets. a. 9.999: . 1<.<<<< c. 9..<<< d. 9.885