Q.

1) "To generate income by investing predominantly in a wide range of debt and money
market securities" - this could be the investment objective of a _______________.

  Diversified debt scheme

Q.2) The principle of caveat emptor (let the buyer beware) applies to mutual fund investments
- True or False ?.

  True

Q.3) In a Contra Fund, the minimum investment in equity & equity related instruments shall
be___________of total assets..

  65 percent

Q.4) Mutual funds are not liable to pay tax on the income they earn..

  True

Q.5) The investment in MF portfolio are valued at _______...

  Market value of investment

Q.1) Passive funds are safe, as the NAV of such funds do not go down even when the
respective markets fall. State whether this is True or False..

  False

Section Name : Legal Structure of Mutual Funds in IndiaScore :

Q.1) The auditor appointed to audit the scheme accounts is the same as the auditor of the
AMC accounts - State True or False ?.

  False

Q.2) AMC directors are appointed with the permission of SEBI- True or False?.

  False

Q.1) As per SEBI Regulations, MF scheme should have atleast ___ Investors.

  20
 Q.2) Who has the responsibility of overseeing legal compliance in a mutual fund?.

  The Trustees

Section Name : Legal & Regulatory FrameworkScore :

Q.1) The unaudited accounts of the Mutual Fund schemes must be published once in every
six months ______.

  Both - on the AMC website and in a minimum of 2 newspapers

Q.2) SEBI approval is required for an AMC to appoint a distributor - True or False ?.

  False

Q.3) As per SEBl's mandate, AMCs has to put in place a due diligence process to regulate
distributors. Which of these mutual fund distributors would NOT be subjected to the due
diligence process?.

  AUM raised of Rs. 60 crore across industry in the non-institutional category

Q.1) While selling mutual fund products of the distributors' group/affiliate/associates, the

distributor shall make disclosure to the customer regarding the conflict of interest arising
from the distributor selling such products - True or False ?.

  True

Q.2) The full form of AGNI is___________________.

  AMFI Guidelines and Norms for Intermediaries

Q.3) Which of the below documents can be inspected by the unitholder?.

  Trust Deed

  Custodial Services Agreement

  Investment Management Agreement

  All of the above

Q.4) Mutual funds have to follow the regulations of the Reserve Bank of India (RBI) for
investments in____________..
  Money market

Q.5) Which of the following statements are true? A. If any market related news received by
employees is not approved by the concerned Intermediary?s Compliance Officer, then the
employer will be liable for the action. B. Investors receive allotment of mutual fund units of
open ended and closed end schemes in their demat account. C. Mutual fund/AMC is bound to
co-ordinate with the custodian to facilitate the allotment of mutual fund units. D. The scheme
related documents also have details of the number of complaints received and their
disposal..

  B&D are true

Q.6) Which of the following statement is false? A. Individual investor can't pledge Mutual
fund Units. B. AMFI disseminates information on Mutual Fund Industry and to undertake
studies and research directly. C. An account is treated as dormant if it is not operated for
more than 6 months. D. NAV of income funds is to be calculated upto 4 decimal places..

  A is false

Q.7) Which of the following statements are false? A. If investor does not get his redemption
in ten working days, then 15% interest is payable to him by AMC. B. Commission paid to
distributors who have more than 20 points of presence must be disclosed on the AMC
website. C. As per SEBI guidelines, minimum 20 investors are required in a scheme. D. 20%
exposure limit in derivatives is an example of Investment Policy..

  All are true

Section Name : Scheme Related InformationScore

Q.1) If an investor wants to get updated monthly performance and portfolio data on mutual
funds, which of the following documents should he read?.

  Fund Fact Sheet

Q.1) The trustees I AMC cannot make any change in the fundamental attributes of a scheme,
unless approval is received from ________.

  Unit holders

Q.2) Which of these is NOT included in the Key Information Memorandum (KIM) ?.

  Functions of the sponsor, trustee and AMC

 Q.3) Where is the information regarding investor service centers, minimum investment
amount, and how to make the purchases of mutual funds mentioned?.

  Key Information Memorandum (KIM)

Q.4) With respect to KIM - Key Information Memorandum, which of the following statement is
NOT true?.

  KIM has to be provided only if the investors ask for it

Q.5) The Key Information Memorandum (KIM) is an abridged version of which of these

documents?.

  Scheme related documents

Section Name : Fund Distribution and channel management practicesScore

Q.1) Mutual Fund distributors receive commission on investments made by their clients as

well as on the investments they make for themselves in their own name - State True or
False ?.

  False

Q.2) Which of the following options form the basis of appointment of a Mutual Fund
distributor ?.

  An agreement between the AMC and the Distributor

Q.1) ________ is responsible for settlement of Mutual Fund transactions which are executed
on the Stock Exchanges..

  AMC

Q.2) To maintain neutrality, all AMC's have same commission structure with respect to
commissions payable to distributors - State True or False ?.

  False

Q.3) An investor purchases through a distributor 5000 units of a mutual fund scheme at a
NAV of Rs 25. The current NAV of the scheme is Rs 43. What will be the trail commission for
today if the trail commission rate is 1% per annum..

  Rs. 5.8904
 Q.4) The amount which is paid to the distributor at the time the money is invested in a
scheme is called __________.

  Upfront Commission

Q.5) In which of the following cases is the transaction charge to be paid to the mutual fund
distributor, deducted from the gross investment of the investor?.

  When the investor purchases mutual fund units worth Rs 10000 through a mutual fund distributor

Q.6) As per SEBI rules, commissions cannot be paid to______________..

  Investors

Section Name : Net asset Value, total expense ratio and pricing of
unitsScore :
Q.1) Mutual funds are allowed to charge differential exit loads based on the amount of
investment..

  False

Q.2) Which of the following statement is true? A. The gold held by a gold exchange traded
fund scheme shall be valued at price of gold as per LMBA. B. A scheme can show better
profits by delaying payments. C. Net Assets are the unit holders? funds in the scheme. D.
Higher NAV is a result of lower dividend..

  C is true

Q.1) The expenses which can be charged by an Asset Management Company to a Mutual

Fund scheme are limited by _____.

  SEBI

Q.2) As per the Principles of fair valuation of mutual funds, the valuation of the securities
shall be ________.

  reflective of the realizable value of the securities

Q.3) Identify the false statement(s). A. When an investor wants to redeem from a scheme, the
distributor must suggest redemption from the scheme with the maximum exit load B. The
mutual fund distributors can ignore the impact of exit load at the time of repurchase.

  Both statements A and B are false

 Q.4) Expenses incurred to launch a new fund can be charged to the fund - True or False ?.

  False

Q.5) Which of these statement(s) is / are TRUE ? A. The Asset Management Company (AMC)
is not accountable for the procedures for detecting incorrect valuation B. It is mandatory for
the AMC to disclose the valuation policy.

  Only B is true

Q.6) To know how well a mutual fund scheme is performing, it has to be compared to a pre-
defined _____.

  Benchmark

Q.7) Investments owned by the scheme may be quoted in the market at higher than the cost
paid. Such gains in values on securities held are called______________..

  valuation gains

Q.8) Which of the following statements are false? A. As per the fair valuation principles laid
out by SEBI, it is mandatory to disclose the valuation policy in SID. B. Returns of Gold ETF
and gold sector funds are likely to be similar. C. AMC shall not charge investment and
advisory fees on the segregated portfolio. D. In earlier regime, NAV is calculated after
providing for dividend and dividend distribution tax..

  A&B are false

Section Name : TaxationScore :

Q.1) Which of these statement(s) is/are FALSE?.

  As the purchase and re-purchase is done with the mutual fund, the investor does not have to pay
any capital gain tax

Q.2) The dividend received by a Mutual Fund investor will be taxed at a rate of 12.5% - True or
False ?.

  False

Q.3) There is no Tax Deducted at Source (TDS) on dividend payments or re-purchase

payments of Mutual Funds for Indian investors - True or False ?.
  False

Q.1) Long term capital gains is NOT taxed in which of these funds? a. Balanced Advantage
Funds b. Balanced Funds c. Diversified Equity Funds.

  Capital gains from all types of MF are taxed subject to certain conditions

Q.2) As per the provisions of the Income Tax Act - Short term capital loss is to be set off
against short term capital gain or long term capital gain - True or False ?.

  True

Q.3) Dividend Distribution Tax (DDT) on Equity oriented mutual fund schemes for Corporate
Investors is _____.

  NIL Tax

Q.4) In which of these funds is Securities Transaction Tax (STT) not charged?.

  Fixed Maturity Plans (FMPs)

Q.5) Which of the statement is true with respect to the applicability of TDS in the case of
capital gains from mutual fund units?.

  TDS is not applicable on capital gains for resident individuals but is applicable for Non-Resident
Individuals (NRI)

Q.6) Mr. X has invested Rs. 3,00,000 in a 370-day FMP and on maturity he received Rs.
3,25,000. What is the capital gain in this transaction?.

  Rs. 25000

Q.7) Redemption from which of the following mutual fund schemes would attract Securities
Transaction Tax (STT) for an investor?.

  Multi-cap mutual fund

Q.8) In case of indexation, the purchase price is adjusted as follows.

  Actual cost of acquisition X [CII in the year of sale / CII in the year of purchase]

Q.9) Which of following is true?.

  GST on fees paid on investment management and advisory fees shall be charged to the scheme in
addition to the overall limits specified as per the Total Expense Ratio (TER) provisions

  GST on all the fees other than investment and advisory fees shall be charged to the scheme within
the maximum limit of TER.

  GST on exit load, if any, shall be deducted from the exit load and the net amount shall be credited to
the scheme

  All of the Above

Section Name : Investor ServicesScore :

Q.1) Dormant investors are those investors who have not transacted during the previous
_________months..

  6

Q.2) Relaxation in documentation requirements for micro SIPs is not available for ____.

  Hindu Undivided Family

Q.3) Tax Deferral is a key feature of ______________.

  Growth Option

Q.4) When a dividend is paid, the NAV of the units__________ to that extent.

  falls

Q.5) Which of the following statement is true? A. Time stamping is not done of non-financial
transactions. B. Permanent Account Number (PAN) Card with photograph is mandatory for all
mutual fund applicants. C. Investors residing in the state of Sikkim are not exempted from
producing PAN Card. D. e-KYC service launched by UIDAI has also been accepted as a valid
process for KYC verification..

  D is true

Q.1) Foreign investors can invest in equity schemes of MFs registered with SEBI after
completing KYC process - State True or False ?.
  True

Q.2) Investments in mutual fund are allowed using ____.

  Any of the above

Q.3) What are the benefits of Dematerialisation? A. No inconvenience of safekeeping paper

certificates B. Reduction in paper work C. Auto credit of bonus units etc..

  All A, B and C

Q.4) Which of these investors is allowed to do a nomination?.

  Only Individual Investors

Q.5) An investor gives a local cheque of Rs 3 crore for investment in the Gilt scheme at 11.30
am. What would be the applicable NAV for this investment?.

  The NAV of the business day on which the funds are available for utilization

Section Name : Return, Risk & Performance of FundsScore :

Q.1) Identify the TRUE statements a. MF scheme with a beta of less than 1 is less risky than
market b. Diversified stock index has a beta of 1 c. Unsystematic risk is measured by its beta.

  a and b are true

Q.2) Smita is a young investor and her parents advice her to invest in fixed deposits of banks
so that these funds can be used for her retirement. If Smita follows her parents advice, what
risk does she face?.

  There is a risk of low returns

Q.3) ____ is a Non-Diversifiable risk.

  Systematic Risk

Q.1) What is the purpose of Credit enhancement in case of securitised Transaction?.

  Higher Credit Quality

 Q.2) Return from a fund is 9% and the risk free rate is 5%, the Standard deviation is 3 & Beta
is 1.6. What will be the numerator for calculating the Sharpe ratio?.

  4

Q.3) Which of the below is used to measure risk-adjusted performance ?.

  Sharpe Ratio

Q.4) Which of the following scheme categories would be considered the least risky in terms
of credit risk?.

  Gilt fund

Q.5) Identify the TRUE statement(s) a) In an Assured Return scheme, if the scheme is not able
to pay the assured return amount then the guarantor has to pay the same b) Investor returns
might vary from the scheme returns on account of choices regarding investment schedule c)
The returns published in a mutual fund advertisement factor the entry or exit load, as may be
applicable..

  a' and 'b' are true

Q.6) State True or False - Gilt schemes have more risks than liquid schemes as their NAV
fluctuates more due to changes in the yield market..

  True

Q.7) Which of the debt fund carries least amount of interest risk..

  Liquid Fund

Section Name : Mutual Fund Scheme PerformanceScore :

Q.1) Once it is finalized, a mutual fund scheme's benchmark cannot be changed at a later

date.' State whether the statement is True or False..

  False

Q.1) Which of these statement(s) is/are FALSE with respect to Benchmarks? A) Portfolio

concentration is an important factor while selecting a benchmark for an equity mutual fund
B) Choice of investment universe is not an important factor while selecting an appropriate
benchmark for debt mutual funds.
  Only B is false

Q.2) Which is the most appropriate measure of evaluating how closely an index fund is
tracking its benchmark?.

  Tracking error

Q.3) What would be the most appropriate benchmark for a short term debt scheme ?.

  1 year T-Bill

Q.4) _______________investment style involves buying stocks that are valued lower as per
the fundamental analysis..

  Value

Q.5) A person wants to create a synthetic index. Guide him as to in which of these categories
the weightage of equity index would be the lowest?.

  Conservative hybrid fund

Q.6) ___________ takes into account all dividends generated from the basket of constituents
that make up the index in addition to the capital gains..

  Total return index

Q.7) Which of the following cannot be considered for the purpose of selecting a scheme's
benchmark?.

  Scheme's past returns

Q.8) Which of the following statements are true? A. A synthetic index is a blend of indices. B.
Within a category, one can decide on investments based on Sharpe Ratio. C. Difference
between scheme's actual return and optimal return for it's risk is Beta. D. The tracking error
has to be high for a consistently out-performing fund..

  A&B are true

Section Name : Mutual Fund Scheme SelectionScore :

Q.1) Which is the ideal investment class for an investor who wishes to hedge against inflation
and has a long term perspective ?.


  Gold

Q.2) Gold ETF's cannot be bought by retail investors - True or False ?.

  False

Q.3) Which of the following statement is true? A. The investment portfolio is created based
on Market Views of Fund Manager. B. Value Fund means in the initial phases of a bull run,
funds tend to offer good returns. C. Indian Investor in US $ based fund benefits when US
Dollar becomes strong. D. A distributor cannot appeal to AMFI..

  C is true

Q.1) Mutual Funds gives more investment options as compared to National Pension Scheme -
State True or False ?.

  True

Q.2) While making a Comprehensive Financial Plan ___________.

  High time commitment is required both from the client and planner

Q.3) What is the NAV if the value of stocks in a Mutual Fund scheme is Rs 100 cr, Value of
Bonds is Rs 10 cr, Value of Money Market Instruments is Rs 25 cr, Dividend Accrued but not
received is Rs 3 cr and Fees payable is Rs 5 cr. The number of outstanding units is 75 lacs..

  177.33

Q.4) Mr. A has a small business and will generally need more allocation to liquid funds than
Mr. B, who is a senior manager with a multinational company. - State True or False?.

  True

Section Name : Investment LandscapeScore

Q.1) Which of these is a physical asset?.

  Real estate

Q.2) Asset allocation must primarily match ______.

  Investment needs

Q.3) An investor chooses a mutual fund scheme based on whether

his/her_______________matches with that of the scheme..

  Investment objective

Q.1) Higher the Capital Base, _________the Risk Appetite..

  Higher

Q.2) Risk Appetite is influenced by which financial factor(s) ?.

  Both 1 and 2

Q.3) The asset allocation that is worked out for an investor based on risk profiling is called
____________.

  Strategic Asset Allocation

Q.4) What is real rate of return?.

  Return that the investor gets after adjusting inflation

Q.5) What is the 'Goal-Based approach to Financial Planning' focused on?.

  An investment plan which is focused on a specific goal