Practice Questions for AMFI Test

1. A close-ended mutual fund has a fixed : d. to the agent through which he/she
a. NAV subscribed to the units of the fund
b. fund size
c. rate of return 9. The "load" charged to an investor in a mutual fund
d. number of distributors is
a. entry fee
2. The maximum load that a fund can charge is b. cost of the paper on which the unit
determined by the : certificates are printed
a. AMC c. the fee the agent charges to the investor
b. SEBI d. the expenses incurred by fund managers for
c. AMFI marketing a mutual fund scheme
d. distribution agents based on demand for the
fund 10. A mutual fund is owned by
a. the Govt. of India
3. The amount required to buy 100 units of a scheme b. SEBI
having an entry load of 1.5% and NAV of Rs.20 is : c. all its investors
a. Rs.2000 d. AMFI
b. Rs.2015
c. Rs.1985 11. Units from an open-ended mutual fund are bought
d. Rs.2030 a. on a stock exchange
b. from the fund itself
4. A gilt fund is a special type of fund that invests : c. from AMFI
a. in very high quality equity only d. from a stock broker
b. in instruments issued by companies with a
sound track record 12. A mutual fund is not
c. in short-term securities a. owned jointly by all investors
d. in government securities only b. a company that manages investment
portfolios of high networth individuals
5. Of the following fund types, the highest risk is c. a pool of funds used to purchase securities
associated with on behalf of investors
a. Balanced Funds d. a collective investment vehicle
b. Gilt Funds
c. Equity Growth Funds 13. "Load" cannot be recovered
d. Debt Funds a. at the time of the investor's entry into the
fund
6. The NAV of a mutual fund : b. as a fixed amount each year
a. is always constant c. at the time the investor exits the fund
b. keeps going up at a steady rate d. from the fund's distribution agent
c. fluctuates with market price movements
d. cannot go down at all 14. The most important advantage of a money market
mutual fund is
7. An open-ended mutual fund is one that has : a. quick capital appreciation
a. an option to invest in any kind of security b. high regular income
b. units available for sale and repurchase at all c. safety of principal
times d. no loads
c. an upper limit on its NAV
d. a fixed fund size 15. Some close-ended funds are quoted at a discount
to their NAV because
8. An investor in a close-ended mutual fund can get a. of high expense ratios
his/her money back by selling his/her units: b. investors do not expect the current NAV to
a. back to the fund be sustained in future
b. to a special trust at NAV c. the repurchase price fixed by the fund in
c. on a stock exchange where the fund is listed lower than the NAV
 d. of the inherent risk involved in investing in
such type of funds 24. A Systematic Withdrawal Plan, allows investors
to get back the principal amounts invested in addition
16. The NAV of each scheme should be updated on to the income on investment
AMFI's website a. True
a. every quarter b. False
b. every month
c. every hour 25. Which of the following is untrue of an automatic
d. every day reinvestment plan?
a. The plan allows for automatic reinvestment
17. Debt funds target of all income and capital gains
a. low risk and stable income b. Automatic reinvestment allows for
b. protection of principal accumulation of additional units of the fund
c. high growth with risk c. The major benefit of automatic reinvestment
d. long term capital appreciation is compounding
d. The benefit of automatic reinvestment is
18. In which of the following do debt funds not invest often lost on account of the heavy load
a. government debt instruments charge on the reinvestment
b. corporate paper
c. financial institutions' bonds 26. Constraints imposed by most funds on check
d. equity of private companies writing are:
a. Account balance should not fall below the
19. Which of the following risks do not affect a debt minimum capital required
fund b. Checks issued must be for at least the
a. default by issuer on payment of interest or minimum amount specified
principal c. Number of checks per month must not
b. price fluctuations of the debt securities exceed a specified number
c. share price movements d. Both a & b above
d. interest volatility
27. The performance of a fund is largely measured by
20. Assured return or guaranteed monthly income the success of
plans are essentially a. the marketing function
a. Hybrid funds b. the operations function
b. Growth Funds c. the portfolio market function
c. Debt/Income funds d. none of the above
d. Sector funds
28. Generally invest in
21. A Fixed Term Plan Series is a. unlisted
a. an open-ended fund b. market-traded
b. a close-ended fund c. thinly traded
c. a fixed term bank deposit d. privately placed
d. a fixed term corporate bond
29. Which of the following is not an equity
22. NAVs of equity funds are not affected by instrument
a. Stock market movements a. preference shares
b. Events affecting the industry/sector in which b. equity warrants
the fund has invested Happenings in the c. ordinary debentures
companies in which the fund has invested d. convertible debentures
c. real estate prices
30. The drawback of an ordinary share is
23. The greatest potential for growth in capital is A. possibility of capital appreciation
offered by B. ownership privilege of the company
a. debt funds C. guaranteed dividend income
b. gilt funds D. no guaranteed income or security
c. growth funds
d. balanced funds
 b. dividend per face value
31. An owner of preference shares is given which of c. dividend per share to current market price
the following rights d. none of the above
a. voting rights
b. fixed dividend income from post-tax profits 39. Value stocks
c. voting rights and unlimited dividend income a. have high current dividend yield
d. no guaranteed rights b. yield high growth in earnings
c. are currently under valued
32. Market capitalisation of a company is calculated d. none of the above
by multiplying the number of outstanding shares by
a. R.10 40. A better performance than the return on index is
b. Face value of each share given by
c. Current market value of each share a. passive fund manager
d. dividend yield b. an active fund manager
c. all fund managers
33. The Price/Earnings (P/E) Ratio is an important d. non fund manager
measure of a company's anticipated performance. It is
calculated using: 41. A change in key personnel especially the fund
a. Market price and dividend manager of an AMC does not necessitate a revision
b. Market price and earning per share of the offer document
c. Market capitalisation and dividend a. True
d. Market price and face value b. False

34. A company whose earnings are strongly related to 42. If fresh litigation cases or adjudication
the state of economy is known as proceedings are referred by SEBI against the fund
a. Economy stocks sponsors or a company associated with the sponsors,
b. Cyclical Stocks then the offer document needs to be revised
c. Value Stocks a. True
d. Growth stocks b. False

35. A Growth stock refers to shares of a company 43. The offer document need not be revised if the
whose earnings are projected to grow at the normal management or the controlling interest in the AMC
market rates change
a. True a. True
b. False b. False

36. Which of the following is generally true for a 44. An AMC cannot explain adverse variations
growth stock between expense estimates for the scheme on offer
a. steady capita appreciation and steady and actual expenses for past schemes in
dividends yields a. financial newspapers
b. high capital appreciation and high dividend b. business channels on TV
yields c. the offer document
c. high capital appreciation but low dividend d. AMFI newsletter
yields
d. steady capital appreciation but high dividend 45. Information on estimated expenses to be incurred
yields by a scheme is not found in the offer document, but
in brochures of the fund
37. Shares of companies with large capital market a. True
capitalisation b. False
a. have greater growth potential
b. are more liquid 46. When comparing a fund's performance with that
c. are not available of its peer group, the following cannot be compared
d. none of the above a. Two debt funds with 5 year maturities
b. A broad-based equity fund with an IT Sector
38. Dividend yield for a stock is Fund
a. dividend per share c. A bond fund with a bond
 d. A government securities fund with a
government security
47. An AMC must explain adverse variation between
expense estimates for the scheme on offer and actual
a. expenses for past schemes in
b. financial newspapers
c. business channels on TV
d. offer document
e. AMFI Newsletter
48. Information on estimated expenses to be incurred
by a scheme is not found in the offer document, but
in brochures of the fund
a. True
b. False
49. The offer document and key information
memorandum contain financial information for
a. all schemes of all mutual funds in the capital
market
b. all schemes launched by the particular fund
during the last 3 fiscal years
c. none of the schemes
d. companies in which investment is proposed
50. The functions and responsibilities of the sponsor,
AMC, trustees and custodian of the mutual fund are
listed in
a. offer document only
b. key information memorandum
c. both offer document and key information
memorandum
d. none of the above
51. Information about trusteeship fees is included in
the offer document but not in the key information
memorandum
e. True
f. False
52. The following information about the constitution
of the mutual fund is found in both the offer
document and key information memorandum
e. activities of the sponsor
f. summary of trust deed provisions
g. name and addresses of the board of trustees
h. all of the above
53. The investment objectives of the fund an investor
selects for investment
e. are of no relevance
f. should be the same as his own investment
objectives
g. change with market movements
h. change with change in the AMC's key
personnel
54. The investment policies listed out in the offer
document of a fund do not include
e. the type of securities in which the scheme
will invest principally
f. asset allocation pattern
g. policy of diversification
h. the specific securities in which the fund will
invest
55. If a scheme's name implies that it will invest
primarily in a particular type of security or in certain
industry/sector, then it should invest atleast the
following percentage of its total assets in the
indicated type of security/industry/sector
e. 100%
f. 80%
g. 65%
h. 40%
56. For assured return schemes, information about the
guarantor's net worth which justifies the guarantor's
ability to meet any shortfalls in the returns assured
under the scheme can be found in
e. the offer document
f. the key information memorandum
g. both (a) and (b)
h. none of the above
57. The names and background of key personnel of
the AMC
e. need not be disclosed to investors
f. are of no relevance as they may change
g. are disclosed in the offer document
h. are declared in newspaper advertisements
58. The minimum amount to be raised, and the
maximum target amount
e. are not known before the offer is concluded
f. can be decided based on investor response to
the offer
g. are defined as per SEBI Regulations before
the offer is made
h. need not be disclosed in the offer document
59. The circumstances for refund of investment in the
initial offer and period within which refund must be
carried out are not specified in the offer document,
but only on the application
e. True
f. False
60. Offer related information required to be listed in
the offer document and key information
memorandum includes
e. dates of opening, closing, earliest closing,
allotment and despatch of certificates
f. procedure for transfer and transmission of
units
 g. both the above
h. neither of the above
61. In the offer document, funds are required to make
disclosures summarising associate transactions and
their impact on the performance of the scheme for the
last
e. one fiscal year
f. 2 fiscal years
g. 3 fiscal years
h. 5 fiscal years
62. The circumstances under which a scheme shall be
wound up are to be described in the offer document
at the time of the initial launch of the scheme itself
e. True
f. False
63. The following do not form a part of the
investment procedure described in an offer document
e. various plans under the scheme (e.g.
dividend reinvestment plant)
f. minimum initial (and subsequent)
investment
g. details of who can invest
h. details of other competing mutual funds
64. A scheme's policy on dividends and distribution
e. is decided by the fund manager as per is
market outlook
f. can be changed to suit the requirements of
the AMC
g. need not be consistent
h. should be disclosed at the time of initial
launch
65. SEBI restricts mutual fund investments in
companies forming part of the same group as the
AMC. This is:
e. not true
f. in the interest of investor protection
g. applied only to some mutual funds, not all
h. not favourable to investors at all
66. A disclosure should be made in the offer
document if an AMC has invested more than the
following percentage of its net assets in group
companies
e. 50%
f. 40%
g. 25%
h. 10%
67. Mutual funds are allowed to borrow
e. freely to meet their requirements
f. for investment purposes
g. only to meet redemption demands
h. not allowed at all
68. As a part of borrowing policy, the following need
not be disclosed in an offer document
e. purpose and circumstances of borrowing
f. regulatory limits on borrowing
g. potential risk to AMC and unit-holders
h. names of lenders
69. Valuation norms for non-traded securities should
be disclosed
e. at the end of every financial year
f. every quarter
g. in the offer document at the time of launch
of the scheme
h. should not be disclosed, being confidential
information
70. Procedure for redemption or repurchase need not
e. be described in the offer document
f. include how redemption or repurchase price
of units would be determined
g. include names of centres where redemption
can be effected
h. indicate the redemption or repurchase price
as at the end of the current fiscal year
71. The fund need not describe its accounting policies
in the offer document as these are of no use to an
investor
e. True
f. False
72. The accounting policies of a fund should be in
accordance with
d. GAAP
e. SEBI regulations
f. ICAI Guidelines
g. American GAAP
73. Tax treatment of investments does not
e. form a section in the offer document
f. describe the tax elements applicable to
investors who invest in the fund
g. form a section in the key information
memorandum
h. offer tax advice to investors
74. Documents available to investors for inspection
do not include
c. Memorandum and Articles of Association of
AMC
d. consent of auditors and legal advisors
e. investment management reports
 f. reports based on which actual investments g. Provident Funds
are made h. Non Banking Finance Companies

75. Investors' rights under a scheme are 84. It is compulsory to use fund agents/intermediaries
e. uniform for all schemes of all funds for investing MFs
f. not defined e. True
g. listed in the offer document f. False
h. available with stock exchanges
85. Generally, which category of investors need
76. The offer document for a scheme should describe advice for Investing in Mutual Funds
how the NAV of the scheme is to be computed c. Non Banking Finance Companies
e. True d. Insurance Companies
f. False e. Foreign Institutional Investors
f. Individuals
77. An offer document contains an AMC's investor
grievance's history for the past 86. Most eligible investors of Mutual Funds can
e. one fiscal year broadly be grouped into either individual or
f. 2 fiscal years institutional investors
g. 3 fiscal years e. True
h. six months f. False

78. Any pending cases or penalties levied on the 87. Commission rates or loads applicable to big
sponsors or AMC should be disclosed in the offer investors and small investors are
document e. same
e. True f. different
f. False g. not charges to either
h. none of the above
79. Who among the following are not eligible to
invest in MF 88. What document Mutual Fund distributors need to
e. Indian Companies refer for finding out eligible category of investors in a
f. Banks particular Mutual Fund Scheme
g. Non Banking Finance Companies e. SEBI Regulations Manual
h. Foreign Citizens f. AMFI booklet
g. Offer document
80. NRIs are eligible to invest in Mutual Funds h. RBI Guidelines
a. True
b. False 89. As per AMFI figures, how many agents
approximately, are there in India selling Mutual
81. The most important link between Mutual Fund Funds
and Investors is e. 50000
e. Government f. 100000
f. SEBI g. 75000
g. Fund distributors h. 150000
h. AMFI
90. Which Mutual Fund has majority of the agents
82. Are Overseas Corporate Bodies allowed to invest selling its Mutual Fund units in India
in Mutual Funds e. LIC Mutual Fund
e. No f. UTI Mutual Fund
f. Yes g. SBI Mutual Fund
g. if Ministry of Finance approves h. None of the above
h. if AMFI approves
91. Mutual Fund agents/distributors are not allowed
83. Who among the following are not Institutional to sell Financial Products other than Mutual Funds
Investors c. True
e. Banks d. False
f. Resident Individuals
92. Are Mutual Fund agents/distributors in India 100. A "glossary" of Defined Terms must be included
required to pass any examination to qualify to sell in the offer document
Mutual Fund Units e. True
c. Yes, a test conducted by AMFI f. False
d. Yes, a test conducted by SEBI
e. No
f. a Post Graduate university course 101. Standard risk factors are not
g. market driven
93. How many major distributor Companies are there h. common to all schemes
in India selling Mutual Fund units i. of relevance to novice investors
c. approximately 9 j. new to a regular investor
d. approximately 11
e. approximately 10 102. The risk of a scheme's NAV moving up or down
f. approximately 25 on the basis of capital market movements is a
standard risk factor
94. The offer document is not a legal document i. True
e. True j. False
f. False
103. Past performance of a sponsor/AMC mutual
95. A copy of all changes in the offer document has fund is not indicative of the future performance of the
to be filed with SEBI scheme. This is
c. True i. not true
d. False j. a standard risk factor for all schemes
k. a scheme-specific risk factor
96. The legal responsibility for the accuracy of the l. applicable only to gilt funds
statements made in the offer document lies with
e. SEBI 104. Risk arising from a scheme's investment
f. the AMC objective/strategy and proposed asset allocation is
g. AMFI i. not present
h. the Company Law Board j. common to all schemes
k. specific to that scheme
97. Though the offer document of a scheme is l. not applicable to debt funds
prepared as per SEBI Regulations and is filed with
SEBI, SEBI does not certify the accuracy or 105. In an assured returns scheme, if assurance is
adequacy of the document only for a limited period, it must be stated in the offer
f. True document that there is no guarantee for sustaining the
g. False assured return for the remaining duration of the
scheme
98. The following need not be covered in a Key i. True
Information Memorandum j. False
c. Risk Factors
d. Opening, Closing and earliest Closing Date 106. If the AMC is managing a fund for the first time,
of the offer this information can be found in
e. Disclaimer Clause i. newspapers
f. Functions and responsibilities of the j. SEBI
sponsor, trustees, AMC and Custodian k. AMFI Newsletter
responsibilities l. Offer document

99. The front page of an offer document need not 107. A compliance officer
cover i. stands guarantee to the information
e. opening, closing and earliest closing date of contained in the offer document
the offer j. belongs to SEBI
f. disclaimer clause k. cannot certify that the AMC's legal and
g. legal and regulator compliance procedural obligations are fulfilled
h. price of units l. cannot be appointed by the AMC
 j. before-and after-sales service to investors
108. The due diligence certificate that must be k. advertising of schemes
submitted to SEBI along with the draft offer l. stock broking
document cannot be signed by
i. the managing director of the AMC 116. Sales practices are never mandated by
j. an executive director of the AMC regulators, but arise from convention only
k. the compliance officer i. True
l. Investor relations officer j. False

109. A due diligence certificate does not certify that 117. Agents are compensated by mutual funds
g. the draft offer document forwarded to SEBI i. through salaries
is in accordance with SEBI regulations j. through commissions
h. all legal requirements connected with k. through an annual fee
launching of the scheme have been complied l. not in cash but in kind
with
i. disclosures made in the offer document are 118. In India the minimum or maximum
true, fair and adequate commissions payable to distributors are not
j. the AMC guarantees a good performance prescribed by law, but are decided using the fund's
own discretion
110. In developed countries, an important Mutual i. True
Fund marketing channel is through j. False
i. Insurance Companies
j. Banks 119. Lowest commissions are paid on
k. Non-Banking Finance Companies i. Equity funds
l. Retail Distributors j. tax benefit schemes of mutual funds
k. debt funds
111. Emerging or new channel for l. long-term investments in mutual funds
distributors/marketing of Mutual Fund in India is
i. Insurance Companies 120. Excess distribution expenses are to be borne by
j. Banks the
k. Qualified Mutual Fund agents i. AMC
l. Direct Sales agents of respective mutual j. unit holders
funds k. SEBI
l. AMFI
112. Mutual Funds often use their own employees to
mobilise funds from 121. To cover fund distribution expenses, open ended
g. retail investors funds
h. High Networth individuals/institutional g. charge a fee from agents
investors h. charge entry and exit loads from investors
i. all investors i. create a reserve
j. foreign investors j. sell investments

113. Retail distribution channels are a critical
element in the distribution of mutual funds in India
i. True
j. False
114. "Sales Practices" cover the following areas
i. desirable marketing practices
j. agents' responsibilities to the investor
k. ethical code of conduct
l. all of the above
115. The following are not termed as "sales
practices"
i. agents commission
122. Trail commission means paying
h. no commission at all
i. the entire commission up-front
j. part of the commission up-front and the
balance in phases
k. the entire commission after five years
123. Sub-brokers serve as agents of the principal
broker and a mutual fund is not answerable for their
activities
i. True
j. False
124. In India, Mutual fund agents' rate and services
are at present defined by
g. SEBI rules
h. stock exchange bye-laws
i. AMFI rules
j. convention
125. Along with the application, it is mandatory to
distribute
i. investment rebate
j. offer document
k. key information memorandum
l. none of the above
126. To sell funds effectively, an agent need not
g. be fully aware of the important
characteristics of the scheme
h. know his/her client's risk profile
i. give after sales service
j. offer large investment rebates
127. For investors to correctly compare performance
of different funds SEBI's advertising codes include
i. uniform computation of yields
j. uniform presentations of dividends
k. identical time periods
l. all of the above
128. SEBI's advertising code mandate that all
performance calculations in a fund's advertisement
should be based
g. NAV
h. the NSE Fifty Index
i. the BSE Sensex
j. none of the above
129. An agent's appointment by a fund
i. requires SEBI's approval
j. is a lengthy and cumbersome process
k. is mandatorily preceded by an AMFI test
l. does not require any approval
130. An investor does not have recourse to his agent
in case of errors, problems or the quality of the
investment
c. True
d. False
131. An agent can offer and sell a funds's units at
i. any price he chooses
j. a price determined by competition among
agents
k. a price based on demand for that fund's units
l. the public offering price currently in effect
132. All buy orders through an agent do not become
valid till the fund accepts and confirms the orders
i. True
j. False
133. When an agent purchases, offers or sells units,
ensuring compliance with applicable regulations is
the responsibility of
i. the fund
j. the agent
k. AMFI
l. SEBI
134. The terms of appointment of a broker by a fund
are
g. laid down by SEBI
h. laid down by AMFI
i. not uniform to all funds
j. none of the above
135. The code of ethics for mutual funds published
by AMFI
g. is mandatory
h. is in the form of recommended practices
i. is unfavourable to investors
j. does not cover distribution and selling
practices
136. The AMFI code of ethics does not cover the
following prescriptions
g. Adequate disclosures should be made to the
investors
h. Funds should be managed in accordance
with stated investment objectives
i. conflict of interest should be avoided in
dealings with directors or employees
j. each investment decision should be
approved by investors
137. Distribution and sales practices are only partly
regulated by SEBI at present
i. True
j. False
138. Which of the following distribution channels is
preferred by private mutual funds
i. Individual Agents
j. Small Distribution companies
k. established distribution companies
l. the Internet
139. Which of the following sales practices is
prescribed by regulation
i. AMFI Code of Ethics
j. SEBI Advertising
 k. AMFI's Code for Agents k. today
l. None of the above
148. For a open-ended fund,the repurchase price
140. In a mutual fund investors' subscriptions are should not be lower than
accounted for as g. NAV
i. liabilities h. 95% of NAV
j. deposits i. 93% of NAV
k. unit capital j. 97% of NAV
l. none of the above
149. For a close-ended fund, the repurchase price
141. Investments made by a mutual fund on behalf of should not be lower than
investors are accounted as i. NAV
e. assets j. 95% of NAV
f. liabilities k. 93% of NAV
g. capital l. 97% of NAV
h. none of the above
150. For a scheme that has a load, the AMC can
142. Liabilities in the balance sheet of a mutual fund change an investment management fee not exceeding
are g. 1.50%
g. in the form of long-term loans h. 2.00%
h. strictly short term in nature i. 1.25%
i. combination of long term and short term j. 0.50%
j. not allowed as per regulations 151. Initial expenses of launching schemes should
not exceed
143. Net Asset Value (NAV) of a mutual fund k. 15% of amount received
scheme is defined as the schemes l. 10% of amount raised
g. assets minus liabilities m. 6% of amount raised
h. assets per unit n. 5% of the amount raised
i. assets minus liabilities per unit
j. none of the above 152. Which of the following expenses cannot be
charged to the scheme
144. The day on which NAV is calculated by a fund k. Audit fees
is known as l. costs related to investor communication
g. computation date m. winding costs for terminating the scheme
h. valuation date n. penalties and fines for infraction of laws
i. record date
j. book closure date 153. Which of the following are not true for Equity
Linked Savings Schemes?
145. A funds NAV is affected by m. Investors can claim an income tax rebate
e. Purchase and sale of investment securities n. There is a lock-in period before investment
f. valuation of all investment securities held can be withdrawn
g. units sold or redeemed o. There are not specific restrictions on
h. all of the above investment objectives for the fund managers
p. These funds cannot invest in equity
146. When computing NAV of fund SEBI requires
accrual of major expenses to be accounted 154. Which of the following is not true for Index
i. quarterly Funds
j. annually m. These funds invests in the shares that
k. on a day to day basis constitute a specific index
l. when actually paid n. The investment in shares is in the same
proportion as in the index
147. If a fund calculates NAV daily, it will include o. These funds take only the overall market
all the transaction concluded up to risk
h. last week p. These funds are not diversified
i. last two days
j. previous day
155. The structure which is required to be followed 162. A transfer in the management of a close-ended
by mutual funds in India is laid down by scheme does not require the consent of
k. Financial Ministry k. unit holders with 75% voting rights
l. Securities & Exchange Board of India l. SEBI
(SEBI) m. Trustees
m. Fund Sponsor n. AMC
n. Association of Mutual Funds of India
(AMFI) 163. The fund sponsor has to contribute
k. nothing to the AMC
156. The Board of Trustees of a mutual fund: l. the total networth of the AMC
m. act as a protector of investors' interests m. atleast 40% of the AMC's networth
n. directly manage the portfolio of securities n. exactly 50%
o. do not have the right to dismiss the AMC
p. cannot supervise and direct the working of 164. The sponsor of a mutual fund may be compared
the AMC to
m. a director in a Company
157. The AMC of a mutual fund cannot n. the Chief Executive of a Company
m. undertake advisory services or financial o. Promoter of a Company
consulting p. an equity shareholder in a Company
n. cannot invest the funds in government paper
o. act as a trustee of more than one mutual 165. Issuing and redeeming units of a mutual fund is
fund the role
p. cannot invest the funds in securities m. the custodian
n. the transfer agent
158. The trust that manages a mutual fund is o. the trustees
appointed by p. the bankers
m. The Finance Ministry
n. R.B.I 166. The fund sponsors should have a sound financial
o. SEBI track record of
p. The sponsor of that mutual fund k. 7 years
l. 12 months
159. The custodian of a mutual fund: m. 5 years
k. is appointed for safekeeping of securities n. 3 years
l. need not be an entity independent of the
sponsors 167. The networth of an asset management company
m. not required to be registered with SEBI should be greater than
n. does not give or receive deliveries of m. Rs.100 Crores
physical securities n. can be decided by the Sponsor
o. should be atleast Rs. 10 Crores at all times
160. Transfer Agents of a mutual fund are not p. should be greater than Rs.10 Crores
responsible for
m. issuing and redeeming units of the mutual 168. The AMC and directors are answerable to
fund k. Stock Exchanges
n. updating investor records l. The Board of Trustees
o. preparing transfer documents m. Agents and distributors
p. investing the funds in securities markets n. Stock Brokers

161. Distributors or agents 169. The role of an AMC is to act as

m. can distribute several mutual funds 1. promoters
simultaneously 2. investment managers
n. cannot appoint sub-agents or sub-brokers 3. distribution agents
o. should be only individuals not companies or 4. regulators
banks
p. should not be an employee or associate of 170. A change in the following key people does not
the AMC materially impact the performance of the fund
 m. Fund sponsors
n. Trustees of the fund 178. The entry of mutual funds in India was initiated
o. Fund Manager by mutual funds set up by
p. Members of the AMFI Committee k. Public Sector Banks
l. Private Sector mutual funds
171. To transfer the management of a scheme from m. Unit Trust of India
one AMC to another, the consent of the following is n. mutual funds set up by insurance companies
required
k. SEBI 179. For a close-ended scheme to change its
l. Unit holders fundamental attributes, it must obtain the consent of
m. both SEBI and unit holders m. 50% of unit holders
n. none of the above n. 50% of trustees
o. 75% of unit holders
172. As per SEBI's principles, the AMC and the p. none of the above
Board of Trustees of a fund should belong to the
same sponsors 180. The largest corpus of investable funds in India is
l. True with
m. False e. Bank-owned mutual funds
f. Private Sector mutual funds
173. After UTI, the first mutual funds were started by g. UTI
k. private sector banks h. Insurance Companies
l. public sector banks
m. financial institutions 181. The Board of Trustees of the UTI does not have
n. non-banking finance companies nominees from
m. RBI
174. The highest authority among the following is the n. LIC
k. SEBI o. IDBI
l. Company Law Board p. The Bombay Stock Exchange (BSE)
m. RBI
n. Ministry of Finance 182. UTI Cannot provide
k. corporate finance
175. The entity that SEBI does not regulate is l. engage in real estate and property
m. share registrars development business
n. mutual funds m. provide merchant banking services
o. stock exchanges n. invest in securities
p. non-banking finance companies
183. The "Capital" of a scheme does not include
176. The accounts and all other records of an AMC m. unit capital
are filed with n. reserves
k. AMFI o. borrowing
l. Registrar of Companies p. networth of the AMC
m. Agents' Association
n. UTI 184. Which of the following are Self Regulatory
Organisations
177. A close-ended scheme of a mutual fund is not k. Bombay Stock Exchange
governed by l. SEBI
m. Exchange Rules of the stock exchange m. AMFI
where it is listed n. RBI
n. Listing Agreement between the fund and the
stock exchange 185. A Self Regulatory Organisation can regulate
o. guidelines issued by the Ministry of k. all entities in the market
Commerce l. only its own members in a limited way
p. Companies Act provisions relating to m. its own members with total jurisdiction
transactions in securities n. no entity at all

186. The amount of authority enjoyed by a

 1. self-regulatory organisation is defined by
2. the apex regulatory authority 193. Unit-holders aggrieved by a Fund or AMC can
3. company law board get redressed from
4. its own members k. Consumer Courts
5. RBI l. SEBI
m. AMFI
187. The role of AMFI in the mutual funds industry n. RBI
is not to
k. promote the interests of the unit holders 194. If the Directors of an AMC commit fraud, Unit-
l. set a Code of Ethics holders investments' cannot be protected by the
m. regulate mutual funds Department of Company Affairs and the Company
n. increase public awareness of mutual funds in Law Board
the country k. True
l. False
188. The rights of investors in a mutual fund scheme
are laid down in 195. The responsibilities of a unit-holder do not
m. the Offer Document of that scheme include:
n. Quarterly Reports i. Monitor his investments carefully
o. Annual Reports j. being aware of information that affects his
p. marketing brochures investment in a major way
k. carefully studying the offer document
189. Unit holders of a mutual fund scheme do not l. taking decisions about where the fund
have a right to managers should invest
m. proportionate ownership of the scheme's
assets 196. UTIs scheme US-64 falls under the purview of
n. dividend declared for that scheme SEBI
o. dividend declared for other schemes of the m. True
mutual funds n. False
p. income declared under that scheme
197. UTI was set up by
190. After dividend declaration, unit-holders are l. SEBI
entitled to receive dividend within m. AMFI
m. one week n. A special act
n. one month o. RBI
o. 42 days
p. six weeks 198. Bank owned Mutual Funds are supervised by
k. SEBI
191. Unit holders' right to information does not l. RBI
include m. jointly by SEBI & RBI
i. obtaining from the trustees any information n. AMFI
having an adverse effect on their
investments 199. Investor does not have the right to receive any
j. inspecting major documents of a fund interest from an AMC if his redemption proceeds are
k. receiving of a copy of the annual financial not despatched within 10 working days
statements of that fund m. True
l. approving investment decisions of the fund n. False

192. Shortfalls in the case of assured returns schemes
are met
k. by sponsors of such schemes
l. only if the offer document specifically
provided such a guarantee by a named
sponsor
m. the Government of India
n. AMFI
200. If an investor failed to claim his redemption
proceeds within 3 years, he can claim the proceeds at
k. Par
l. Prevailing NAV
m. the on the date he has applied for
redemption
n. 15% below the prevailing NAV
 201. After closure of the initial offer an open ended
scheme, on going sales and repurchases must start
within
o. One week
p. 30 days
q. 45 days
r. 180 days
202. For scheme to be able to change its fundamental
attributes, it must obtain the consent of
o. 50% of the unit holders
p. 50% of the trustees
q. 75% of the unit holders
r. none of the above
203. The prospectus or Offer Document containing
the details of new scheme is first registered with the
q. AMFI
r. SEBI
s. Bombay Stock Exchange
t. Ministry of Finance
204. The offer document issued by mutual funds does
not serve the purpose of
q. announcing the scheme
r. giving detailed information about the
scheme
s. inviting the the investors
t. giving the fund manager's investment
outlook for the next quarter
205. The prospectus of a close-ended fund is issued
o. every year
p. only once at the time of issue
q. every quarter
r. every six months
206. Fundamental attributes of scheme
q. do not include the objective of the scheme
r. can be changed without the investor's
approval or knowledge
s. include the terms of the scheme
t. are not necessary for deciding whether to
invest in the scheme or not
207. The offer document
q. contains the terms of issue
r. gives no information relevant for making an
investment decision
s. is not the operating document describing the
scheme
t. cannot be called a reference document
208. SEBI does not require the following to be
included in the offer document issued by a mutual
fund
q. details of the Sponsor and the AMC
r. Description of the Scheme & investment
objective/strategy
s. Investors' Rights and Services
t. Performance of other mutual funds
209. 'Key Information Memorandum' is
o. an abridged version of the offer document
p. the Memorandum & Articles of Association
of the AMC
q. a sheet containing historical NAVs of other
fund schemes
r. Annual Report of the AMC
210. The offer document for a scheme remains valid
even if
q. the AMC is reconstituted
r. entry or exit load are changed
s. the scheme's NAV changes
t. new plans are added to existing schemes
211. The offer document has to be fully revised and
updated
q. every six months
r. once in two years
s. every quarter
t. every month
212. An addendum giving details of material change
in the offer document should be circulated
o. distributors/brokers
p. unit holders
q. SEBI
r. all of the above
213. Which of the following is not true for offer
documents of open-ended schemes
o. it is first issued at the time the scheme is
launched
p. it is registered with SEBI
q. it has to be revised periodically
r. it need not be revised at all
214. All important disclosures that the mutual fund is
required to make, by regulation, are contained in the
offer document
q. True
r. False
215. The offer document issued when an open-ended
scheme is launched is valid for all times, until
amended
q. True
r. False
 q. researches stocks extensively
216 The most important source of information for a r. does not buy and sell stocks often
prospective investor is s. does not have to go through the process of
o. offer document stock selection
p. Annual Report of the AMC t. does not have to track stocks
q. Economic Times
r. AMFI Newsletter 226 A fund manager managing an index fund
o. has to keep fund expenses low
217 The offer document need not be studied by an p. does not have to research stocks
investor before investing in a scheme q. does not have to balance his portfolio
q. True r. none of the above
r. False
227 A growth manager looks for
218 The offer document is not a legal document q. high current income
o. True r. undervalued stocks
p. False s. above average earnings growth
t. none of the above
219 Initial issue expenses are charged to a scheme in
the first year itself 228 A value manager does not look for
m. True o. stocks that are currently undervalued in the
n. False market
p. stocks whose worth will be recognised by
220 Scheme-wise annual report of a mutual fund the market in the long term
need not be q. high current yield
q. sent to all unit-holders r. long term capital appreciation
r. forwarded to SEBI
s. published as an advertisement 229 From an investor's viewpoint, the most important
t. stock exchanges is
q. a fund's investment style
221 Mutual funds value their investments r. performance of the fund
o. at purchase price s. the fund manager's judgement
p. on a mark-to-market basis t. none of the above
q. at par
r. at book value 230 Fundamental analysis involves
i. checking the foundations of the company's
222 Investors are totally exempt from paying any tax factory building
on the dividend income they receive from mutual j. research into the operations and finances of
funds the company
n. True k. studying the company's share prices
o. False l. none of the above

223 Income distributed to unit-holders by a debt fund 231. Which of the following is not considered for
is liable to dividend distribution tax technical analysis
o. True q. historical data on the company's share price
p. False r. the company shares' trading volume
s. current market sentiment
224 A close-ended has average weekly net assets of t. the company's regulatory environment
Rs 200 crore.As per SEBI regulations, the AMC can
charge the fund with investment and advisory fees 232. Quantitative analysis is more likely to be done
upto: to evaluate a particular sector or industry rather than
o. Rs 2.25 crore any specific stock
p. Rs 2.00 crore o. True
q. Rs 2.50 crore p. False
r. Rs 3.00 crore
233. Fundamental analysis forms the basis to decide
225 A passive fund manager q. when to buy a given share
 r. whether to buy a given share or not p. security dealers
s. whether to use technical analysis or
quantitative analysis 242. Security dealers of a mutual fund
t. whether the company's factory can o. guard the cabin of the fund manager
withstand earthquakes p. execute buy and sell orders for the fund
q. decide which shares to buy or sell
234. Technical analysis guides the decision on r. none of the above
o. whether to buy or sell
p. the right time to buy or sell 243. As per SEBI's requirements each scheme of a
q. whether company's technical personnel are mutual fund should have a different fund manager
adequately qualified o. True
r. none of the above p. False

235. Which of the following is not an investment 244. Debt securities bought at a discount to their face
philosophy value are generally
o. capitalising on economic cycles m. interest bearing
p. focusing on growth sectors n. zero coupon bonds
q. capitalisation o. paying interest at a floating rate
r. finding value stocks p. none of the above

236. When expecting a fall in market price, fund 245. In India, a large part of debt securities pay
managers can reduce the loss in portfolio value by interest on
k. speculating m. a floating rate basis
l. not buying and selling shares at all for some n. a fixed rate plus a variable portion
days o. a fixed rate
m. using equity derivatives p. zero coupon basis
n. giving TV interviews to improve sentiment
246. The Indian debt market is largely wholesale in
237. Equity derivative instruments are nature
o. shares o. True
p. bonds p. False
q. contracts
r. notes 247. In the wholesale debt market, the largest
proportion of trading is seen in
238. A futures contract allows one to buy or sell the 1. Government Securities
underlying shares, but need not result in delivery 2. Corporate Bonds
q. True 3. T-Bills
r. False 4. PSU Bonds

239. Derivatives cannot be based on market indices 248. The largest proportion of trades done in the
q. True wholesale debt market is accounted by
r. False o. mutual funds
p. foreign banks
240. In a mutual fund, the overall decisions on q. Indian banks
allocating money to particular industries/sectors are r. financial institutions
taken by
q. equity analysts 249. Certificates of Deposits (CDs) are issued by
r. fund managers o. Regional Rural Banks
s. security dealers p. Corporates
t. trustees q. Scheduled commercial banks
r. none of the above
241. Continuous tracking of the companies in which
a mutual fund has invested is done by 250. Commercial Paper is issued by Corporate bodies
m. continuous tracking systems o. to meet short-term working capital
n. equity analysts requirements
o. trustees
 p. to finance the acquisition of long term w. extend the tenure of the debt
capital assets x. redeem the debt before maturity
q. to retire long term debt
r. to pay dividend 259. A put provision in a debt issue allows
251. Government securities are issued through the 1. investor to put away the certificates in safe
RBI deposit vaults
s. True 2. investors to redeem debt prior to maturity
t. False 3. issuers to redeem debt prior to maturity
4. investors to extend the tenure of debt
252. The yield on Treasury Bill (T-Bill) us
determined by 260. Current yield relates interest on a security to
s. the Government of India u. its current market price
t. auction v. its face value
u. the State Governments w. its fair value
v. floating rate method x. the current price of T-Bills

253. Which of the following are not normally found 261. To compare bonds with different coupon rates,
in the portfolio of a debt fund maturities and prices, investors would use:
u. long-dated Government Securities u. current yield
v. Corporate debentures v. technical analysis
w. bonds issued by financial institutions w. yield to maturity
x. certificates of deposit issued by banks x. fundamental analysis

254. Which of the following do not represent the 262. When interest rates rise, bond prices
amount an investor of a debt security will be paid 1. also rise
upon maturity 2. fall
u. par value 3. are not affected
v. face value 4. fluctuate either up or down
w. fair value
x. redemption value 263. Yield curve is also known as
s. Curve of Interest
255. Coupon of a debt security refers to t. Term Structure of Interest Rates
s. a piece of paper attached to the certificate u. Curve that yields
t. the return on investor would earn v. none of the above
u. the amount rate of interest paid on par value
of the bond 264. An important indicator of expected trends in
v. none of the above interest rates is
s. The Economic Times
256. Which of the following do not apply to the term t. the Sensex
'maturity' of a debt security? u. the Yield Curve
u. the date on which the certificates becomes v. the Chief Minister's Speech
old
v. the term of the bond 265. It may not be possible to reinvest interest
w. the date of redemption received at the same rate as principal. This is known
x. the date on which the issuer has to repay the as
amount s. reinvestment risk
t. inflation risk
257. Call or put provisions are used to modify the u. interest-rate risk
fixed maturity of debt securities v. call risk
u. True
v. False 266. A bond's rating indicates its
s. reinvestment risk
258. A call provision in a debt issue allows the issuer t. default risk
to u. inflation risk
u. call out the names of the investors v. interest-rate risk
v. redeem the debt on maturity
 v. the AMC management
267. If a bond cannot be sold at a price near its value, w. the marketing department based on what
it means that investment in this bond has distributors want
s. high liquidity risk x. the investors
t. high default risk
u. low liquidity risk 276. Which of the following measures are not taken
v. inflation risk by SEBI for protecting investors of mutual funds
s. mandating minimum levels of
268. The additional yield required to account for the diversification for mutual funds
risk of default by the borrower is known as t. ensuring that the funds are not used to
q. yield plus favour a few companies
r. yield spread u. tracking the securities that each fund has
s. yield extra invested in
t. yield premium v. ensuring that the funds are invested in
approved securities only
269. A high credit rating does not mean
o. high yield spread 277. As per SEBI norms, a fund's investments, in the
p. high perceived safety equity shares of any one company are restricted to
q. low yield spread u. 25% of NAV
r. low risk premium v. 10% of NAV
w. 50% of NAV
270. If 10-year government securities Neil 10% and a x. 100% of NAV
10-Year fixed deposit in a company yields 12%, the
yield spread is 278. A mutual fund manager is not allowed to sell
u. 12% short when he expects a crash in the market
v. 22% s. True
w. 10% t. False
x. 2%
279. In a mutual fund, having many schemes, al
271. The "duration" of an interest-bearing bond is securities bought can be held in a general account and
s. longer than its maturity transferred later to various schemes to attain certain
t. less than its maturity profit or loss objectives
u. equal to its maturity u. True
v. the quality of paper used for the certificate v. False

272. A bond with a coupon of 9% when interest rates 280. A mutual fund may invest in short-term deposits
for similar maturities are 11% will sell of scheduled commercial banks
p. above par m. True
q. below par n. False
r. at par
s. at a price unrelated to the prevailing interest 281. Mutual funds are allowed to lend
rate u. loans
v. securities
273. Changes in foreign exchange rates have no w. physical assets
bearing on interest rates x. none of the above
q. True
r. False 282. In case of listed securities of group companies
of the sponsor, mutual fund is not allowed to invest
274. Inflation and interest rates are inversely q. 25% of its net assets
proportional r. 10% of its net assets
s. True s. at all
t. False t. >5% of net assets

275. Investment policies of a mutual fund are 283. A mutual fund may transfer investments from
determined by one scheme to another
u. the fund manager u. not at all
 v. at current market rates r. total return takes dividend into account
w. at cost price while NAV change does not
x. at a fixed premium over market rate s. total return does not take NAVs into account
t. total return does not take the time period
284. Interest Rate Risk for an Indian debt fund can be into account
reduced by using
s. Futures 292. The most suitable measure of fund performance
t. Options for all fund types is
u. Interest Rate Swaps s. NAV Change
v. none of the above t. Total Return
u. Total Return with reinvestment
285. The Interest Rate Forecasting Unit of a debt v. none of the above
fund is generally manned by
s. technicians 293. The expense ratio used for measuring fund
t. statisticians performance is an indicator of
u. economists & econometricians q. product market condition
v. accountants r. growth in the economy
s. prevalent market practices
286. AMCs need not maintain records in support of t. the fund's efficiency
each investment decision
o. True 294. The Expense Ratio as a measure of a fund's
p. False performance is defined by a fund's
q. total expenses and average net assets
287. When interest rates for similar maturities' bonds r. total expenses and total assets
are 11%, bond with a 9% coupon rate will sell s. average expenses and average net assets
s. above par t. none of the above
t. below par
u. at par 295. While computing the Expense Ratio for a fund,
v. at a price unrelated to the interest rates for brokerage commissions on the fund's transactions are
similar securities not included in the fund expenses
q. True
288. The most suitable measure for a fund's r. False
performance does not depend on the
s. type of fund 296. The Expense Ratio is not of utmost importance
t. investment objective of the fund in case of
u. financial market conditions q. Debt fund
v. amount invested by investor r. Index fund
s. Equity fund
289. If the NAV of an open-ended fund was Rs.16 at t. Bond fund
the beginning of the year and Rs.22 after 13 months,
the annualised change in NAV is 297. The Expense Ratio is not affected by
s. 6.0% p. fund size
t. 34.6% q. average account size
u. 40.6% r. portfolio composition
v. 37.5% s. stock market conditions

290. Change in NAV as a measure of fund 298. The Income Ratio as a measure of a fund's
performance is more suitable for performance is defined by the fund's
u. growth funds s. total income and total assets
v. income funds t. net investment income and net assets
w. funds with withdrawal plans u. total income and net assets
x. none of the above v. none of the above

291. The difference between NAV change and total 299. The Income Ratio is more suitable for
return as measures of fund performance is evaluating the performance of
q. none s. Equity Funds
 t. Growth Funds
u. Regular Income Funds 308. Which of the following is of no relevance in
v. Index Funds evaluating a fund's performance
y. The performance of the stock market as a
300. Portfolio turnover rate of a fund measure the whole
s. size of the fund's portfolio z. The performance of other mutual funds
t. amount of buying and selling done by the aa. The returns given by other comparable
fund financial products
u. the average number of units sold by the fund bb. The change in wholesale price index
in one day
v. none of the above 309. The choice of an appropriate benchmark for
301. A high turnover rate for a fund indicates evaluating a fund's performance depends on
u. high transaction costs s. the fund manager
v. greater efficiency t. the investment objective of the fund
w. high returns to the investor u. SEBI
x. a rising market v. AMFI

302. Turnover rates would be most relevant to 310. An actively managed equity fund expects to
analyse the performance of y. be able to beat the benchmarks
w. equity funds z. earn the same returns as the benchmark
x. growth funds aa. have no benchmarks
y. debt funds bb. underperform when compared with the
z. value funds benchmark

303. Transaction costs include 311. For evaluating funds, the preferred benchmark
y. all expenses related to trading would be the
z. all expenes charged to the fund y. BSE Sensex
aa. distribution expenses z. S&P CNX Nifty
bb. none of the above aa. BSE 200
bb. S&P CNX Sectoral Indices
304. Which of the following are not included in
Transaction costs? 312. To evaluate a close-ended debt-fund, a suitable
y. brokerage commissions benchmark would be
z. stamp duty on transfers s. BSE Sensex
aa. custodians fees t. I-Sec's I-BEX
bb. agent commissions u. interest on bank fixed deposits of similar
maturity
305. Which of the following transaction costs are not v. S&P CNX Defty
quantified in the offer document
w. brokerage commissions 313. When comparing performance of two funds, the
x. dealer spreads following need not be similar
y. custodian's fees w. Risk profiles
z. registrar's fees x. Investment objectives
y. Fund size
306. The size of a fund has no bearing on its z. Fund managers
performance
y. True 314. Which of the following is false?
z. False w. ROI is a measure similar to Total Return
with Reinvestment of distribution
307. As per SEBI, mutual funds can borrow for short x. Total Return with Reinvestment of
term to the extent of distributions assumes reinvestment at NAV
w. total net assets on the distribution date
x. 50% of net assets y. As a measure of performance, Total Return
y. 25% of net assets with Reinvestment of distribution seeks to
z. 20% of net assets overcome the shortcomings of simple Total
Return
 z. Because of its simplicity, simple Total t. the financial planner
Return is preferred in practice to Total u. the investor himself
Return with Reinvestment of distribution v. a professional fund manager
w. an objective advisor
315. The basis of genuine investment advice should
be 323. Financial Planning comprises
1. the current market situation s. defining a client's profile and goals
2. the agent commissions paid by different t. recommending appropriate asset allocation
funds u. monitoring financial planning
3. financial planning to suit the investor's recommendations
situation v. all of the above
4. planning to complete the agent's annual
targets 324. Financial planning is relevant only for high
networth individuals
316. Financial goals do not include u. True
w. buying a home v. False
x. winning a sports gold medal
y. planning for retirement 325. Financial planning does work for older clients
z. saving for child's education y. True
z. False
317. Financial planning allows a person
w. to become a billionaire 326 Financial planning is primarily tax planning
x. to achieve financial goals through proper w. True
management of finances x. False
y. to invest in foreign countries
z. none of the above 327 In financial planning, all responsibility ends with
the financial planner and the client has no
318. Financial plans do not alter in any way the responsibilities
amount of tax an investor pays as the tax is on his y. True
income z. False
u. True
v. False 328 The constraint on financial planning due to
insufficient investable resources can be remedied to
319. Which of the following works with an investor some extent by
on his overall financial situation u. decreasing the standard of living
s. Tax Advisor v. disciplining children
t. Financial Planner w. disciplined monthly budgeting
u. Insurance Agent x. none of the above
v. Financial Advisor
329 In the growth option offered by mutual funds, the
320. A financial planner takes responsibility for the number of units held by an investor increases because
financial well-being of his/her clients of
y. True w. growth in net asset value i.e. capital
z. False appreciation
x. reinvestment of dividend which is like
321. Financial planners and their clients should focus compounding
on y. interest received on the fund's assets
w. allocating funds to asset classes (e.g. debt, z. none of the above
equity etc.)
x. allocating funds to individual securities 330 To maximise returns on investment, once an
y. tracking stocks which they feel have investor buys into a fund, he/she should hold on to it
potential no matter what happens
z. none of the above o. True
p. False
322. Within an asset class, which individual security
to invest in should be decided by 331 If an investor keeps investing a fixed amount at
regular intervals, the average cost of his purchases
will always be less than if he makes investment at
irregular periods
y. True
z. False
332. Which of the following lets an investor book
profits in a rising market and increase holdings in a
falling market
u. Fixed Rates of Asset Allocation
v. Flexible Ratio of Asset Allocation
w. Investment without any asset allocation plan
x. Buy and Hold Strategy
333. A Flexible Ratio of Asset Allocation means
y. continuously changing the ratio of various
assets in the portfolio
z. not doing any re-balancing and letting the
profits run
aa. active switching
bb. none of the above
z. none of the above
338. Which of the following investment products do
not give guarantee for return or capital
w. Bank deposits
x. Pubic provident fund (PPF)
y. National Savings Certificates (NSC)
z. Units of a mutual fund
339. The biggest advantage of investment in gold is
w. High returns
x. High appreciation in value
y. Low Purchase price
z. Hedge against inflation
340. The biggest disadvantage of investment in real
estate is
y. Less potential for capital appreciation
z. High purchase price
aa. Depreciation in value as time passes
bb. Value gets eroded due to inflation

334. The strategy advisable for an investor to 341. Which of the following is not an advantage of
maximise investment return in the long run is bank deposits?
w. buy and hold on to investments for a long u. Liquidity
time v. High perceived safety
x. liquidate poorly performing investments w. Low entry price
from time to time x. High yield after tax
y. liquidate good performing investments fro
time to time 342. Listing of shares at a stock exchange ensures
z. switch from poor performers to good w. guaranteed returns
performers x. long term capital appreciation
y. low risk
335. A criticism of rupee-cost averaging is z. high liquidity
w. Investment is for the same amount at regular
intervals 343. The rate of interest paid by a company on
x. Over a period of time, the average purchase debentures issued by it depends on
price will work out higher than if one tries to u. the stock market situation
guess the market highs and lows v. SEBI guidelines
y. It does not tell you when to buy, sell or w. the company's credit rating
switch from one scheme to another x. the amount of money being raised
z. Rupee cost averaging has no serious
shortcomings 344. Which of the following is not a characteristic of
company fixed deposits
336. In India, individual investors do not have direct u. A higher rate of interest
access to v. higher risk
q. capital market instruments w. unfavourable effect of tax
r. real estate x. very high liquidity
s. bullion
t. money market instruments 345. Which of the following is untrue for Public
Provident Fund Schemes
337. Which of the following entities can given loans s. The interest is tax-free
against securities t. Post-tax returns are attractive
w. UTI u. Liquidity is rather low
x. Banks v. none of the above
y. Mutual funds
 cc. individual investors re not allowed to
346. Indira Vikas Patra is an investment product invest in Government Securities
popular with dd. the amount required for investment is
u. rural investors very large
v. investors in high tax bracket ee. safety of principal is not guaranteed
w. urban investors ff. none of the above
x. risk taking investors
355. The amount an insurance company would
347. Finance Acts of 2000 and 2001 have reduced pay to the nominee if a policyholder died is
tax-free interest on Public Provident Fund to known as the
t. 12% aa. premium
u. 10.5% bb. sum assured
v. 9% cc. face value
w. 11% dd. real value

348 Most individuals invest in life insurance policies 356. Dividends distributed by mutual funds are
for aa. taxed at source
w. risk protection bb. taxed in the hands of the investors
x. tax benefits cc. are subject to capital gains tax
y. easy liquidity dd. are tax-free in the hands of the investor
z. high returns
357. Investing through mutual fund is a better
349. Annual contribution to Public Provident Fund option than investing directly in the stock market
should be because
w. Rs.10000 identifying stocks is a difficult process
x. between 100 and Rs.6000 agents get commissions on mutual fund investment
y. between Rs.600 and Rs.1000 returned are guaranteed by mutual funds
z. none of the above all of the above

350. The current yield on Indira Vikas Patra works 358. A small investor can build a diversified
out to portfolio by
w. 10.5% aa. buying one share each of all listed
x. 11% companies
y. 10% bb. investing in a mutual fund
z. 9% cc. borrowing enough money to buy shares
351. The tenure of an Indira Vikas Patra is of well-managed companies
y. 7 years dd. none of the above
z. 6 years
aa. 5 years 359. Which of the following is not an advantage
bb. 3 years of mutual fund investment over direct investment
cc. Higher liquidity
352. The maturity period of RBI Relief Bonds is dd. Lower transaction costs
aa. 5 years ee. Greater convenience
bb. 6 years ff. guaranteed returns
cc. 7 years
dd. 8 years 360. There is no contractual guarantee for
repayment of principal or interest to an investor
353. The annual yield on RBI Relief Bonds is in
cc. 9.5% w. bank deposit
dd. 9.5% before tax x. debt fund
ee. 8.5% before tax y. secured debentures
ff. 8.5% after tax z. all of the above

354. Individual investors do not normally invest 361. Which of the following debt investments is
in Government Securities because not rated
cc. Corporate Bonds
 dd. Commercial Paper
ee. Company Deposit 369. International funds invest in various and so
ff. Debt Fund are low risk funds
w. True
362. Gold and real estate are attractive x. False
investment options only in high inflation
economies 370. Investment in gold is a hedge against
cc. True inflation but investment in a precious metal fund
dd. False falls in the high risk category
w. True
363. Direct investment in stock market can be a x. False
better option than investing through mutual
funds if the investor 371. By their very nature, growth funds are
w. wants better returns than those offered considered as high risk funds
by mutual funds aa. True
x. has large capital, knowledge and bb. False
resources for research
y. has identified a bullish phase in the 372. Short Term bond funds are
stock market aa. low risk funds
z. wants to invest for the long term bb. moderate risk funds
cc. high risk
364. Deciding on strategies such as long-term dd. of the above depending on the market
compounding, cost averaging, value averaging,
active switching, all depend on the 373. The risk level of commodity funds is
aa. stock market situation on date x. high risk category
bb. amount of money to be invested y. determined by the commodity price
cc. investor's risk tolerance movements
dd. phase through which the economy is z. cannot be specified
passing aa. low risk category

365. Financial Planning involves 374. As compared to a fund with fluctuating total
aa. studying financial management returns, a fund with stable positive earnings
bb. managing the risks of investing w. gives higher returns
cc. financing the client's investments x. is less risky
dd. none of the above y. gives lower returns
z. is more risky
366. Greater returns come only from assuring
higher risks, and a higher risk portfolio 375. "Risk" is equated with
guarantees higher returns w. volatility of earnings
w. True x. level of earnings
x. False y. the number of investors in a fund
z. the number of schemes of a fund family
367. The risk tolerance of an investors is
independent of 376. Volatility of an equity fund portfolio is
aa. his age independent of the
bb. his income aa. kind of stocks in the portfolio
cc. the stock market movements bb. degree of diversification of the portfolio
dd. his job security cc. fund manager's success at market
timing
368. A sector fund is a dd. number of investors in the scheme
aa. low risk fund
bb. moderate risk fund 377. Equity price risks are
cc. high risk fund y. company specific
dd. low-to-moderate risk fund z. market level
aa. sector specific
bb. all of the above
378. Diversification reduces 385. Asset Allocation is
aa. company specific risk aa. keeping certificates of the physical
bb. market level risk securities in proper places
cc. both of the above bb. allocation the available money to all the
dd. none of the above securities available
cc. allocating the right proportion of funds to
379. Which of the following is most risky? equity, debt and money market
y. Investing in a money market mutual securities
fund dd. none of the above
z. Investing in an index fund
aa. Short term investment in an equity fund 386. Once a financial advisor works out ideal
bb. Long term investment in an equity fund Asset Allocation, it can be used for all investors
whom he/she advises
380. A fund with a high beta coefficient gives aa. True
greater returns in a rising market, and is more bb. False
risky in a falling market
aa. True 387. Asset distribution among equity, debt and
bb. False money market securities should correspond to
the investors' need for capital growth, income
381. Which of the following is a disadvantage of and liquidity
Standard Deviation as a measure of risk u. True
q. Standard Deviation measures total risk, v. False
not just market risk
r. It is based on past returns, which does 388. The liquidity needs of an investor are met
not necessarily indicate further through
performance aa. Equity Funds
s. It is an independent number bb. Index Funds
t. All types of funds can be measured with cc. Money Market Funds
standard deviation dd. Sector Funds

382. The role of an agent is to 389. A retired person generally needs a greater
aa. point out the features and benefits of proportion of
various investments options aa. Debt funds
bb. help the investor develop the right bb. Equity funds
approach to investing cc. Money Market funds
cc. recommend some investment option dd. All of the above
available
dd. offer ad hoc advise whenever the 390. To satisfy a young investor's need for
investor has surplus money available growth, a greater proportion of investment
should be advised in
383. One of the most effective ways to invest aa. Gilt funds
through mutual funds is to bb. Income Funds
y. develop a model portfolio cc. Equity Growth funds
z. buy a few units of every mutual fund dd. Liquid funds
scheme available
aa. invest all the money in one fund scheme 391. A very high proportion of investment in all
bb. invest all the money in different types of equity funds is advisable for investors
schemes of the same fund family cc. in distribution phase
dd. in accumulation phase
384. Mutual fund should be advised to expect ee. in transition phase
cc. low post tax returns ff. who are wealth preserving affluent
dd. dramatic results individuals
ee. better returns than every other available
option 392. The transition phase of an investor's wealth
ff. only realistic wealth accumulation goals cycle is when
 y. the financial goals have been already and its suitability for an investor, past
met performance is more important
z. the investor has retired aa. True
aa. financial goals are approaching bb. False
bb. investor suddenly gets a windfall
400. Structural characterisations of an equity
393. A high proportion of investment in income fund include
funds is required by aa. costs of investing
aa. accumulating investors bb. the specific securities in which the fund
bb. affluent investors has invested
cc. investors in the inter-generational cc. the number of employees of the AMC
transfer phase dd. all of the above
dd. investors in the distribution phase 401. An equity fund's age and size are irrelevant
when selecting a fund for investment
394. Retired investors should cc. True
y. not draw down on their capital dd. False
z. not invest in securities which bear risk of
capital erosion 402. The charge to an investor at the time of he
aa. continue holding a major portion of their redeems his units from the fund is known as
holding in equity growth funds ee. recovery charge
bb. never invest in equity ff. repurchase load
gg. redemption weight
395. For older investors who want to transfer hh. exit load
their wealth
y. no financial planning is required 403. The load amount charged to a scheme over a
z. the right investment strategy depends period of time is called
upon who the beneficiaries are gg. entry load
aa. the right investment strategy depends hh. exit load
upon the state of the stock market ii. deferred load
bb. all the funds can be invested in jj. no-load
aggressive equity funds
404. Contingent Deferred Sales Charge (CDSC)
396. Investors who acquire sudden wealth gg. is higher for investors who stay invested in
w. can speculate with all the acquired the scheme longer
money in the stock markets hh. is lower for investors who stay invested in
x. should not use any of the new wealth to the scheme longer
invest in equity ii. is the same for all investors irrespective of
y. should take the effect of taxes into how long they stay invested
account jj. is not allowed to be charged to mutual fund
z. need not pay any taxes on the newly investors in India
acquired wealth as it is not a part of their
regular income 405 A fund's declared NAV does not include loads
ee. True
397. Only if a specialty offshore fund has ff. False
consistently given very good performance, it can
be considered for investment by a retiree 406. Which of the following fund types are
y. True comparable
z. False ee. An aggressive equity fund and a money
market mutual fund
398. Past performance should not be solely ff. A value fund and a government securities
relied on for selecting a fund fund
x. True gg. A bond fund and a debt fund
y. False hh. A diversified equity fund and a debt fund

399. Between the past performance of a fund 407. Who is the primary guardian of unitholders'
funds/assets
 ee. The AMC
ff. The Trustees 415. Beta of an equity fund measures its
gg. The Registrars y. performance
hh. The custodians z. risk
aa. both the above
408. In case of a fund merger or Take-over bb. none of the above
gg. High Court approval may not be necessary
hh. SEBI approval is a must 416. The best equity fund, relative to others, would
ii. all unitholders must be informed have
jj. all of the above ee. higher Ex Marks, lower Beta and higher
Gross Dividend Yield
409. Units of a money market mutual fund can be ff. higher Ex Marks, higher Beta and higher
issued to Gross Dividend Yield
aa. individuals gg. lower Ex Marks, lower Beta and lower
bb. banks Gross Dividend Yield
cc. trusts hh. lower Ex Marks, higher Beta and higher
dd. all of the above Gross Dividend Yield

410. Though Indian mutual funds have restrictions on
borrowings (only20% of net assets and for six
months only) which are to meet cash needs for
redemption only, UTI is allowed to borrow within
more relaxed norms
gg. True
hh. False
411. An equity fund can be said to be concentrated
when
ee. when it invests in only in two or three stocks
ff. when it invests in may companies of the
same sector
gg. when top ten holdings account for more than
50% of net assets invested
hh. when top ten holdings account for more than
25% of net assets invested
417. When selecting equity funds for investing, those
at the top of the performance rankings should be
avoided
ee. True
ff. False
418. A debt fund's age and size are not important
when selecting a fund for investment
y. True
z. False
419. Debt schemes are popular because
y. the Indian Stock Market is always going
down
z. the returns are more predictable
aa. most investors are always in debt
bb. all of the above

412. The size of the market capitalisation of a fund's 420. Yield-to-maturity of a debt fund's portfolio is
equity holdings is inversely proportional to the more important when the investment objective is
returns that cc. current income
aa. can be expected from the fund dd. total return
bb. level of risk assumed by the fund ee. liquidity
cc. state of the stock market ff. all of the above
dd. all of the above
421. Compared to equity funds, income margins for
413. A steady holding of investments in an equity debt funds are
fund's portfolio indicates ee. narrow
ee. long-term orientation ff. higher
ff. lower transaction costs gg. the same
gg. both the above hh. almost nil
hh. none of the above
422. Debt funds with long-term investments carry
414. Ex-Mark of an equity fund measures its higher risk of capital loss
ee. performance bb. True
ff. risk cc. False
gg. both the above
hh. none of the above
 w. both the above
423. The differerentiating factor among debt funds of x. none of the above
comparable maturity and quality is
aa. gross yields 431. If a charitable trust approaches a distributor with
bb. costs an application for investment in a mutual fund, the
cc. fund age distributor should
dd. tenure of the fund manager ee. accept the application without wasting time
ff. reject the application outright
424. Dstribution tax should be taken into into account gg. refer to the offer document
when computing net returns from hh. accept the application as a direct application
aa. equity funds
bb. debt funds 432. An application form for investment in a mutual
cc. both the above fund is available with
dd. none of the above cc. the offer document
dd. the abridged annual report
425. All debt fund investors are exposed to risk of ee. the key information memorandum
principal loss ff. a bank challan
ee. True
ff. False 433. An aggrieved unit-holder of a mutual fund can
sue
426. Running a money market mutual fund requires gg. the AMC
more of hh. the trustees
cc. credit analysis skills ii. the sponsor if returns have been guaranteed
dd. equity analysis skills by them
ee. patience jj. none of the above
ff. trading skills
434. As per SEBI regulations for valuation of
427. Which is the most important in selecting debt investments held by mutual funds, a security is
fund for better return considered "non-traded" when it
ee. past performance ee. has not been traded for 60 days prior to
ff. level of interest rates valuation
gg. fund expertise ff. has not been traded for 30 days prior to
hh. the securities in which it has invested valuation
gg. is not listed on any stock exchange
428. Investors should be advised to avoid investing in hh. is held by the mutual fund without buying or
a debt fund with a selling
cc. lower rated portfolio and higher expense
ratio 435. An Ex-Mark of 100% is possible for
dd. higher rated portfolio and lower expense cc. a growth fund
ratio dd. an aggressive growth fund
ee. lower rated portfolio and lower expense ee. an index fund
ratio ff. a balanced fund
ff. lower rated portfolio and higher expense
ratio 436. A trail commission is justified when
w. an investor cancels his investment
429. An ideal money market mutual fund must have x. the investor redeems his investment in a
cc. lower returns very short time
dd. lower expense ratio y. an agent invests his own money, not that of
ee. low quality of investments a client
ff. all the above z. an agent sells many mutual funds

430. Circumstances that might cause an investor to 437. Of the following, which type of fund would
change the composition of his portfolio have a higher P/E multiple in comparison to the
u. cyclical changes in economy average market multiple
v. unforeseen economic changes affecting the ee. A Value Fund
portfolio's preferred sectors ff. A Growth Fund
 gg. An Index Fund
hh. Could be any of the above three, one cannot 444. A fund that charges a load is better than a no-
generalise load fund
cc. True
438. Which of the following is not true as per SEBI dd. False
Regulations for Debt Funds?
ee. Investment in rated debt securities of a 445. An AMC can approach investors either directly
single issuer should not exceed 15% of or with the help of
NAV aa. individual agents
ff. Total investment in unrated debt securities bb. banks and non-banking finance companies
of a single issuer should not exceed 25% of cc. distribution companies
NAV dd. all of the above
gg. Total investment in unrated debt securities
below investment grade should not exceed 446. Which of the following is true for Equity Linked
25% of NAV Savings Scheme (ELSS)
hh. Total investment in rated debt securities aa. A tax rebate is available to investors in these
below investment grade should not exceed schemes
25% of NAV bb. The investment has to be locked in for 3
years
439. A Money Market Mutual Fund is most likely to cc. The minimum amount for investment is
invest in fixed
ee. Corporate Bonds dd. All of the above
ff. Equity Shares
gg. Government Securities with maturity less 447. A prospective investor
than 1 year z. has the same status as a unit-holder of a fund
hh. All of the above aa. can sue the AMC/trustee
bb. has no legal recourse
440. Of the following, which would be suitable for a cc. all of the above
retiree with a modest risk appetite
gg. Value Fund 448. An investor can assess the performance of his
hh. Diversified Equity Fund mutual fund by comparing it with the performance of
ii. Growth Fund cc. other mutual fund of the same type
jj. Balanced Fund dd. the stock market
ee. other financial products
441. A high portfolio turnover for a fund indicates ff. all of the above
cc. that the fund is active
dd. higher transaction costs 449. Unrated securities in the portfolio of a mutual
ee. both the above fund are not to be valued
ff. none of the above ee. True
ff. False
442. Unit Trust of India's US-64 Scheme
ee. is listed on stock exchanges 450. An exit load guarantees a higher return
ff. has a fixed price for sale and repurchase aa. True
gg. has its sale and repurchase price declared bb. False
periodicaly by UTI 451 Bonds held in the portfolio of a mutual fund are
hh. has its price determined by market forces valued at yield to maturity
ee. True
443. The Indian debt market ff. False
cc. is Wholesale in nature
dd. comprises large players like financial 452 The Valuation of non-traded equity shares is
institutions and banks done at the trading price 30 days prior to valuation
ee. witnesses large scale trading in government date
securities ii. True
ff. all of the above jj. False
 kk. Rs.1000
453 If a unit-holder does not agree to the merger of ll. none of the above
his fund with another, he has not exit option
kk. True 461. When a scheme with assured returns is being
ll. False launched, which of the following need not be
published in the offer document?
454. The most important factor look for when ii. Means of fulfilling the guarantee
investing in a corporate fixed deposit is the jj. Information for all schemes launched by the
kk. yield fund in the past
ll. rate of interest kk. comparison with other mutual funds
mm. credit rating of the deposit ll. Investment objective
nn. none of the above
462. Mutual fund units can be distributed by
455. The most important reason for an investor to ee. trustees of the fund
prefer a bank deposit to a mutual fund is ff. the AMC
gg. the credit worthiness of the bank gg. Non-banking finance companies
hh. because the bank does not invest in hh. banks
securities
ii. that the bank offers a guarantee 463. A debt fund distributes 10% dividend. How
jj. all of the above much tax does the investor have to pay on this
dividend?
456. A deep discount bond ii. 10%
ii. is always sold at a discount to its issue price jj. 12%
jj. bears interest annually kk. 20%
kk. is redeemed at a price much higher than ll. None
issue price
ll. bears interest at varying interests 464. A debt fund distributes a 10% dividend. How
much tax does the fund have to pay?
457. A mutual fund in India is a ii. 10%
ii. body corporate jj. 12%
jj. company kk. 10.2%
kk. trust ll. None
ll. an asset management company
465. How many scrips is the NIFTY constitutes of
458. When selling a mutual fund, a good agent would cc. 40
never dd. 100
kk. describe the past performance of the scheme ee. 30
ll. compare the fund with other mutual funds ff. none of the above
mm. assure a rate of return
nn. compare the fund with other financial 466. Which of the following is the first step in
products financial planning
ii. Asset Allocation
459. An investor buys one unit of a fund at an NAV jj. Selection of fund
of Rs.20. He receives a dividend of Rs.3 when the kk. Studying the features of a scheme
NAV is Rs.21. The unit is redeemed at an NAV of ll. None of the above
Rs.22. Total Return is
ee. 25.71% 467. Why should one buy an insurance policy?
ff. Rs.27.51 gg. It gives high current returns
gg. 21.27% hh. It gives good capital appreciation over its
hh. Rs.21.75 term
ii. It should be bought due to the need for
460. A fund sells 100 units of face value Rs.10/- at an insurance and not as an investment
NAV of Rs.12.25. How much would be credited to jj. All of the above
unit capital?
ii. Rs.1225 468. SEBI Regulations for Mutual Funds were
jj. Rs.225 formulated in
 aa. 1992
bb. 1993 476. A disadvantage suffered by mutual fund investor
cc. 1995 is that he has no control over the costs of investing
dd. 1996 gg. True
hh. False
469. Expenses incurred by a fund for printing of Key
Information Memorandum can be amortised over 477. Which of the following statements about UTI is
cc. 10 Yrs untrue
dd. 5 Yrs ii. It was set up in 1963
ee. 15 Yrs jj. It was formed by RBI
ff. Cannot be amortised kk. It was established by an act of Parliament
ll. It was not given a monopoly status
470. A mutual funds' investments are guided by the
gg. AMC 478. Which scheme has the largest investor base?
hh. Board of Trustees gg. ULIP
ii. Investment Objectives hh. UTI Mastershare
jj. Unit holders ii. US-64
jj. SBI Magnum
471. UTI was the only mutual fund for the period
ii. 1984 to 1988 479. Which was the first diversified equity
jj. 1963 to 1988 investment scheme in India
kk. 1964 to 1992 gg. SBI Magnum
ll. none of the above hh. UTI Mastershare
ii. MEP-91
472. Investors who follow the fixed Asset Allocation jj. Mastergain-92
approach
dd. maintain balance in their portfolio by 480. The private sector was granted permission to
liquidating a part of the position in the asset enter the mutual fund industry in
class which has given higher return and y. 1992
reinvesting in the other asset class which has z. 1993
lower return aa. 1998
ee. are not disciplined bb. 1995
ff. increase their equity position when equity
prices tend to climb 481. The first non-UTI mutual fund was
gg. none of the above ii. SBI MF
jj. LIC MF
473. An investor should not invest in a mutual fund if kk. Canbank MF
ee. his capital base is large ll. Indian Bank MF
ff. he is able to carry out detailed investment
research and monitor the stock market 482. The organisation responsible for a
gg. both the above comprehensive set of regulations for all mutual funds
hh. none of the above in India is
gg. RBI
474. Mutual fund can benefit from economies of hh. SEBI
scale because of ii. AMFI
ee. portfolio diversification jj. SHCIL
ff. risk reduction
gg. large volume of trades 483. The 1999 Union Government Budget helped the
hh. none of the above Mutual Fund industry by
kk. regulating the industry practices
475. Which of the following is a disadvantage ll. exempting all mutual fund dividends in the
suffered by a mutual fund investor? hands of investors from income tax
gg. High liquidity mm. approving the code of ethics
hh. diversification formulated by AMFI
ii. no tailor made portfolio nn. doing away with all regulations for mutual
jj. low investment funds

484. During the period 1992-99, the mobilisation of
funds by the mutual fund industry was about
ii. 5% - 6% of gross domestic savings
jj. 2% - 4% of gross domestic savings
kk. 7% - 10% of gross domestic savings
ll. 25% - 40% of gross domestic savings
485. Which of the following about Public Providend
Fund (PPF) are untrue
gg. 50% of the balance of the 4th year can be
withdrawn in the 7th year
hh. The interest is tax free
ii. The rate of interest is 12% p.a.
jj. contributions upto Rs.60000 are eligible for
tax rebate
486. A close-ended scheme is quoted on the stock
exchange at a discount to its NAV when
aa. the markets are bearish
bb. investors perceive that the fund will be
unable to maintain the NAV
cc. the assets of the fund are undervalued
dd. none of the above
487. Which of the following is a fundamental
attribute of a mutual fund scheme
ii. The names and addresses of the registrars
and custodians
jj. The nature of the scheme being income
bearing
kk. The specified stocks in the scheme's
portfolio
ll. The name and address of the compliance
officer
488. Offer Document of a mutual fund is
ii. required by investors
jj. required by the AMC for its own reference
kk. required as per SEBI regulations
ll. not mandatory as per SEBI
489. The units of a scheme being sold and
repurchases as per the procedure laid down is one of
the fundamental attributes of a scheme
ii. True
jj. False
490. The steps involved in the selection of an equity
fund for investment are
kk. sector selection, asset classification,
selection of fund managers and schemes
ll. sector selection, selection of fund managers
and schemes, asset classification
mm. asset classification, sector
selection, selection of fund managers and
schemes
nn. selection of fund managers and schemes,
sector selection, asset classification
491. Compounding of interest is best explained by a
gg. balanced fund
hh. growth fund
ii. value fund
jj. income fund
492. From whom can a unit-holder seek redressal if
his complaint is not entertained by the mutual fund
ii. AMC
jj. Board of Trustees
kk. SEBI
ll. RBI
493. An investor wishes to switch between a money
market mutual fund and an equity fund. What would
you advise him?
gg. It would be better to stick to one type of
fund, the one that meets his investment
objective.
hh. He should keep switching parts of his
investment from the equity fund to the
money market fund as the market rises and
switch back to the equity fund when the
market falls
ii. He should switch from the money market
fund to the equity fund in a rising market
and switch back to money market fund when
the market falls
jj. none of the above
494. For choosing an appropriate benchmark to
measure a scheme's performance, all of the following
are required except
ee. the composition and size of the portfolio
ff. the investment objective
gg. historical data of fund performance
hh. the nature of investments
495. Which of the following characterise the fund
that a risk averse investor should choose
ee. Gross dividend yield 15% Beta 1.5, Ex-
Marks 90
ff. Gross dividend Neil 10%, Beta 1, Ex-Marks
70
gg. Gross dividend yield 11%, Beta 0.9, Ex-
Marks 80
hh. Gross dividend yield 12%, Beta 1.2, Ex-
Marks 80
 hh. 50% in equity funds and 50% in income
496. A mainstream diversified debt fund is most funds
affected by ii. 90% in equity funds having a higher P/E
ee. reinvestment risk Ratio than the market
ff. liquidity risk jj. all the money in a balanced fund
gg. interest rate risk
hh. default risk 499. An investor buys units in a fund that has given
excellent returns in the past, but his expectations are
497. If yields fall, a debt fund manager will do all of not met as the fund does not perform well this year.
the following except The investor can
dd. sell short maturity securities and buy long gg. sue the AMC
maturity securities hh. sue the Trustees
ee. see that the fund's average duration becomes ii. sue the agent
longer than the market's average duration jj. none of the above
ff. sell long duration securities and buy short
duration securities 500. A fund's investments at market value total
gg. sell high coupon securities and buy low Rs.700 crores, Total liabilities stand at Rs.50 lacs and
coupon securities the number of units outstanding is Rs.28 Crores.
What is the NAV
498. In which type of schemes should an unmarried cc. Rs.30.19
professional working HLL invest dd. Rs.24.98
gg. Scheme investing 80% in debt securities ee. Rs.32.15
ff. Rs.40.49
 Answers to Practice Question for AMFI Test

For answers, contact Prof Ravi Agarwal.