Professional Documents
Culture Documents
NISM V-A Questionnaire
NISM V-A Questionnaire
Quesitons
NISM VA
Examination
Practice Questions for AMFI Test
1. A close-ended Mutual Fund has A fixed :
a. NAV c. Rate of return
b. Fund Size d. Number of distributors
14. Some Close-ended funds are quoted at a Discount to their NAV because
a. Of high expense ratios c. The repurchase price fixed by the
fund in lower than the nav
b. Investors do not expect the current d. Of the inherent risk involved in
Nav to be sustained in future investing in such type of funds
15. The NAV of each scheme should be updated on AMFI's website
a. Every quarter c. Every hour
b. Every month d. Every day
22. A Systematic Withdrawal Plan, allows investors to get back the principal
amounts invested in addition to the income on investment
a. True b. False
23. Which of the following is untrue of an Automatic Reinvestment Plan?
a. The plan allows for automatic reinvestment c. The major benefit of automatic reinvestment is
of all income and capital gains compounding
b. Automatic reinvestment allows for d. The benefit of automatic reinvestment is
accumulation of additional units of the fund often lost on account of the heavy load
charge on the reinvestment
31. A Growth stock refers to shares of a company whose earnings are projected to
grow at the normal market rates
a. True b. False
37. A change in key personnel especially the fund manager of an AMC does not
necessitate a revision of the offer document
a. True b. False
38. If fresh litigation cases or adjudication proceedings are referred by SEBI
against the fund sponsors or a company associated with the sponsors, then the
offer document needs to be revised
a. True b. False
39. The offer document need not be revised if the management or the controlling
interest in the AMC change
a. True b. False
40. An AMC cannot explain adverse variations between expense estimates for
the scheme on offer and actual expenses for past schemes in
a. Financial newspapers c. The offer document
b. Business channels on tv d. AMFI newsletter
42. When comparing a fund's performance with that of its peer group, the
following cannot be compared
a. Two debt funds with 5-year maturities c. A bond fund with a bond
b. A broad-based equity fund with an d. A government securities fund with
it sector fund a government security
43. An AMC must explain adverse variation between expense estimates for the
scheme on offer and actual
a. Expenses for past schemes in d. Offer document
b. Financial newspapers e. AMFI newsletter
c. Business channels on tv
46. The functions and responsibilities of the sponsor, AMC, trustees and custodian
of the mutual fund are listed in
a. Offer document only c. Both offer document and key information
memorandum
b. Key information memorandum d. None of the above
47. Information about trusteeship fees is included in the offer document but not
in the key information memorandum
a. True b. False
48. The following information about the constitution of the mutual fund is found
in both the offer document and key information memorandum
a. Activities of the sponsor c. Name and addresses of the board of
trustees
b. Summary of trust deed provisions d. None of the above
49. The investment objectives of the fund an investor selects for investment
a. Are of no relevance c. Change with market movements
b. Should be the same as his own d. Change with change in the AMC's key
investment objectives personnel
50. The investment policies listed out in the offer document of a fund do not
include
a. The type of securities in which the c. Policy of diversification
scheme will invest principally
b. Asset allocation pattern d. The specific securities in which the
fund will invest
51. 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 at least the following
percentage of its total assets in the indicated type of security/industry/sector
a. 100% c. 65%
b. 80% d. 40%
52. 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
a. The offer document c. Both (a) and (b)
b. The key information memorandum d. None of the above
54. The minimum amount to be raised, and the maximum target amount
a. Are not known before the offer is concluded c. Are defined as per SEBI Regulations before
the offer is made
b. Can be decided based on investor response d. Are declared in newspaper advertisements
to the offer
55. 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
a. True b. False
56. Offer related information required to be listed in the offer document and key
information memorandum includes
a. Dates of opening, closing, earliest closing, c. Both the above
allotment and despatch of certificates
b. Procedure for transfer and transmission d. Neither of the above
of units
57. In the offer document, funds are required to make disclosures summarizing
associate transactions and their impact on the performance of the scheme for
the last
a. One fiscal year c. 3 fiscal years
b. 2 fiscal years d. 5 fiscal years
58. 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
a. True b. False
59. The following do not form a part of the investment procedure described in an
offer document
a. Various plans under the scheme c. Details of who can invest
(e.g. dividend reinvestment plant)
b. Minimum initial (and subsequent) investment d. Details of other competing mutual funds
61. SEBI restricts mutual fund investments in companies forming part of the same
group as the AMC. This is:
a. Not true c. Applied only to some mutual funds, not all
b. In the interest of investor protection d. Not favourable to investors at all
63. As a part of borrowing policy, the following need not be disclosed in an offer
document
a. Purpose and circumstances of borrowing c. Potential risk to AMC and unit-holders
b. Regulatory limits on borrowing d. Names of lenders
64. Mutual funds are allowed to borrow
a. Freely to meet their requirements c. Only to meet redemption demands
b. For investment purposes d. Not allowed at all
65. As a part of borrowing policy, the following need not be disclosed in an offer
document
a. Purpose and circumstances of borrowing c. Potential risk to AMC and unit-holders
b. Regulatory limits on borrowing d. Names of lenders
68. The fund need not describe its accounting policies in the offer document as
these are of no use to an investor
a. True b. False
73. The offer document for a scheme should describe how the NAV of the scheme
is to be computed
a. True b. False
74. An offer document contains an AMC's investor grievance's history for the past
a. One fiscal year c. 3 fiscal years
b. 2 fiscal years d. Six months
75. Any pending cases or penalties levied on the sponsors or AMC should be
disclosed in the offer document
a. True b. False
76. Who among the following are not eligible to invest in MF?
a. Indian companies c. Non-banking finance companies
b. Banks d. Foreign citizens
78. The most important link between Mutual Fund and Investors is
a. Government c. Fund distributors
b. SEBI d. AMFI
79. Are Overseas Corporate Bodies allowed to invest in Mutual Funds
a. No c. If Ministry of Finance approves
b. Yes d. If AMFI approves
82. Generally, which category of investors need advice for Investing in Mutual
Funds
a. Non Banking Finance Companies c. Foreign Institutional Investors
b. Insurance Companies d. Individuals
83. Most eligible investors of Mutual Funds can broadly be grouped into either
individual or institutional investors
a. True b. False
84. What document Mutual Fund distributors need to refer for finding out eligible
category of investors in a particular Mutual Fund Scheme
a. SEBI Regulations Manual c. Offer document
b. AMFI booklet d. RBI Guidelines
85. Mutual Fund agents/distributors are not allowed to sell Financial Products
other than Mutual Funds
a. True b. False
88. A copy of all changes in the offer document has to be filed with SEBI
a. True b. False
89. The legal responsibility for the accuracy of the statements made in the offer
document lies with
a. SEBI c. AMFI
b. The AMC d. The company law board
90. Though the offer document of a scheme is prepared as per SEBI Regulations
and is filed with SEBI, SEBI does not certify the accuracy or adequacy of the
document
a. True d. False
97. Risk arising from a scheme's investment objective/strategy and proposed asset
allocation is
a. Not present c. Specific to that scheme
b. Common to all schemes d. Not applicable to debt funds
98. In an assured returns scheme, if assurance is only for a limited period, it must
be stated in the offer document that there is no guarantee for sustaining the
assured return for the remaining duration of the scheme
a.True b. False
99. If the AMC is managing a fund for the first time, this information can be
found in
a. Newspapers c. AMFI Newsletter
b. SEBI d. Offer document
101. The due diligence certificate that must be submitted to SEBI along with the
draft offer document cannot be signed by
a. The managing director of the AMC c. The compliance officer
b. An executive director of the AMC d. Investor relations officer
102. A due diligence certificate does not certify that
a. The draft offer document forwarded to c. Disclosures made in the offer document are
SEBI is in accordance with SEBI regulations true, fair and adequate
b. All legal requirements connected with d. The amc guarantees a good performance
launching of the scheme have been complied with
103. Mutual Funds often use their own employees to mobilize funds from
a. Retail investors c. All investors
b. High Net worth individuals/institutional d. Foreign investors
investors
107. Sales practices are never mandated by regulators, but arise from convention
only
a. True b. False
112. Sub-brokers serve as agents of the principal broker and a mutual fund is not
answerable for their activities
a. True b. False
113. In India, Mutual fund agents' rate and services are at present defined by
a. SEBI rules c. AMFI rules
b. Stock exchange bye-laws d. Convention
119. An investor does not have recourse to his agent in case of errors, problems
or the quality of the investment
a. True b. False
121. All buy orders through an agent do not become valid till the fund accepts and
confirms the orders
a. True b. False
124. The AMFI code of ethics does not cover the following prescriptions
a. Adequate disclosures should be made c. Conflict of interest should be avoided in
to the investors dealings with directors or employees
b. Funds should be managed in accordance d. Each investment decision should be
with stated investment objectives approved by investors
125. Distribution and sales practices are only partly regulated by SEBI at present
a. True b. False
130. Net Asset Value (NAV) of a mutual fund scheme is defined as the schemes
a. Assets minus liabilities c. Assets minus liabilities per unit
b. Assets per unit d. None of the above
134. If a fund calculates NAV daily, it will include all the transaction concluded
up to
a. Last week c. Previous day
b. Last two days d. Today
135. For a open-ended fund,the repurchase price should not be lower than
a. NAV c. 93% of NAV
b. 95% of NAV d. 97% of NAV
136. For a close-ended fund, the repurchase price should not be lower than
a. NAV c. 93% of NAV
b. 95% of NAV d. 97% of NAV
138. Which of the following are not true for Equity Linked Savings Schemes?
a. Investors can claim an income tax rebate c. There are not specific restrictions on investment
objectives for the fund managers
b. There is a lock-in period before investment d. These funds cannot invest in equity
can be withdrawn
151. The fund sponsors should have a sound financial track record of
a. 7 years c. 5 years
b. 12 months d. 3 years
154. A change in the following key people does materially impact the performance
of the fund
a. Fund sponsors c. Fund Manager
b. Trustees of the fund d. Members of the AMFI Committee
155. To transfer the management of a scheme from one AMC to another, the
consent of the following is required
a. SEBI c. Both sebi and unit holders
b. Unit holders d. None of the above
156. As per SEBI's principles, the AMC and the Board of Trustees of a fund
should belong to the same sponsors
a. True b. False
160. The accounts and all other records of an AMC are filed with
a. AMFI c. Agents' Association
b. Registrar of Companies d. UTI
168. The rights of investors in a mutual fund scheme are laid down in
a. The offer document of that scheme c. Annual Reports
b. Quarterly Reports d. Marketing brochures
169. Unit holders of a mutual fund scheme do not have a right to
a. Proportionate ownership of the c. Dividend declared for other schemes
scheme's assets of the mutual funds
b. Dividend declared for that scheme d. Income declared under that scheme
172. If the Directors of an AMC commit fraud, Unit- holders investments' cannot
be protected by the Department of Company Affairs and the Company
Law Board
a. True b. False
174. Investor does not have the right to receive any interest from an AMC
if his redemption proceeds are not despatched within 10 working days
a. True b. False
177. The prospectus or Offer Document containing the details of new scheme
is first registered with the
a. AMFI c. Bombay Stock Exchange
b. SEBI d. Ministry of Finance
178. The offer document issued by mutual funds does not serve the purpose of
a. Announcing the scheme c. Inviting the the investors
b. Giving detailed information d. Giving the fund manager's investment
about the scheme outlook for the next quarter
181. SEBI does not require the following to be included in the offer document
issued by a mutual fund
a. Details of the sponsor and the amc c. Investors' Rights and Services
b. Description of the Scheme & investment d. Performance of other mutual funds
objective/strategy
182. 'Key Information Memorandum' is
a. An abridged version of the offer c. A sheet containing historical navs of other
document fund schemes
b. The memorandum & articles of d. Annual Report of the AMC
association of the amc
187. The offer document issued when an open-ended scheme is launched is valid
for all times, until amended
a. True b. False
202. When expecting a fall in market price, fund managers can reduce the loss
in portfolio value by
a. Speculating c. Using equity derivatives
b. Not buying and selling shares d. Giving TV interviews to improve sentiment
at all for some days
209. As per SEBI's requirements each scheme of a mutual fund should have a
different fund manager
a. True b. False
210. Debt securities bought at a discount to their face value are generally
a. Interest bearing c. Paying interest at a floating rate
b. Zero coupon bonds d. None of the above
213. In the wholesale debt market, the largest proportion of trading is seen in
a. Government Securities c. T-Bills
b. Corporate Bonds d. PSU Bonds
214. The largest proportion of trades done in the wholesale debt market is
accounted by
a. Mutual funds c. Indian banks
b. Foreign banks d. Financial institutions
219. Which of the following are not normally found in the portfolio
of a debt fund
a. Long-dated government securities c. Bonds issued by financial institutions
b. Corporate debentures d. Certificates of deposit issued by banks
220. Which of the following do not represent the amount an investor of a debt
security will be paid upon maturity?
a. Par value c. Fair value
b. Face value d. Redemption value
222. Which of the following do not apply to the term 'maturity' of a debt
security?
a. The date on which the certificates c. The date of redemption
becomes old
b. The term of the bond d. The date on which the issuer has to
repay the amount
223. Call or put provisions are used to modify the fixed maturity of
debt securities
a. True b. False
231. It may not be possible to reinvest interest received at the same rate as
principal. This is known as
a. Reinvestment risk c. Interest-rate risk
b. Inflation risk d. Call risk
233. If a bond cannot be sold at a price near its value, it means that investment
in this bond has
a. High liquidity risk c. Low liquidity risk
b. High default risk d. Inflation risk
234. The additional yield required to account for the risk of default by the
borrower is known as
a. Yield plus c. Yield extra
b. Yield spread d. Yield premium
236. If 10-year government securities Neil 10% and a 10-Year fixed deposit in
a company yields 12%, the yield spread is
a. 12% c. 10%
b. 22% d. 2%
238. A bond with a coupon of 9% when interest rates for similar maturities are
11% will sell
a. Above par c. At par
b. Below par d. At a price unrelated to the prevailing
interest rate
242. Which of the following measures are not taken by SEBI for protecting
investors of mutual funds
a. Mandating minimum levels of c. Tracking the securities that each fund
diversification for mutual funds has invested in
b. Ensuring that the funds are not d. Ensuring that the funds are invested
used to favour a few companies in approved securities only
243. As per SEBI norms, a fund's investments, in the equity shares of any one
company are restricted to
a. 25% of NAV c. 50% of NAV
b. 10% of NAV d. 100% of NAV
244. A mutual fund manager is not allowed to sell short when he expects a
crash in the market
a. True b. False
245. In a mutual fund, having many schemes, al securities bought can be held
in a general account and transferred later to various schemes to attain
certain profit or loss objectives
a. True b. False
249. A mutual fund may transfer investments from one scheme to another
a. Not at all c. At cost price
b. At current market rates d. At a fixed premium over market rate
250. The Interest Rate Forecasting Unit of a debt fund is generally manned by
a. Technicians c. Economists & econometricians
b. Statisticians d. Accountants
251. AMCs need not maintain records in support of each investment decision
a. True b. False
252. When interest rates for similar maturities' bonds are 11%, bond with a 9%
coupon rate will sell
a. Above par c. At par
b. Below par d. At a price unrelated to the interest rates
for similar securities
253. The most suitable measure for a fund's performance does not depend
on the
a. Type of fund c. Financial market conditions
b. Investment objective of the fund d. Amount invested by investor
254. If the NAV of an open-ended fund was Rs.16 at the beginning of the year
and Rs.22 after 13 months, the annualized change in NAV is
a. 6.0% c. 40.6%
b. 34.6% d. 37.5%
255. Change in NAV as a measure of fund performance is more suitable for
a. Growth funds c. Funds with withdrawal plans
b. Income funds d. None of the above
256. The difference between NAV change and total return as measures of
fund performance is
a. None c. Total return does not take navs
into account
b. Total return takes dividend into d. Total return does not take the time
account while nav change does not period into account
257. The most suitable measure of fund performance for all fund types is
a. NAV Change c. Total Return with reinvestment
b. Total Return d. None of the above
260. While computing the Expense Ratio for a fund, brokerage commissions
on the fund's transactions are not included in the fund expenses
a. True b. False
273. Financial plans do not alter in any way the amount of tax an investor
pays as the tax is on his income
a. True b. False
274. Which of the following works with an investor on his overall financial
situation
a. Tax Advisor c. Insurance Agent
b. Financial Planner d. Financial Advisor
282. In financial planning, all responsibility ends with the financial planner
and the client has no responsibilities
a. True b. False
287. Which of the following lets an investor book profits in a rising market and
increase holdings in a falling market
a. Fixed Rates of Asset Allocation c. Investment without any asset allocation
plan
b. Flexible Ratio of Asset Allocation d. Buy and Hold Strategy
291. Which of the following entities can given loans against securities
a. UTI c. Mutual funds
b. Banks d. None of the above
292. Which of the following investment products do not give guarantee for
return or capital
a. Bank deposits c. National Savings Certificates (NSC)
b. Public provident fund (PPF) d. Units of a mutual fund
299. Which of the following is untrue for Public Provident Fund Schemes
a. The interest is tax-free c. Liquidity is rather low
b. Post-tax returns are attractive d. None of the above
301. Investing through mutual fund is a better option than investing directly
in the stock market because
a. Identifying stocks is a difficult c. Returned are guaranteed by
process mutual funds
b. Agents get commissions on mutual d. All of the above
fund investment
306. Gold and real estate are attractive investment options only in high
inflation economies
a. True b. False
307. Direct investment in stock market can be a better option than investing
through mutual funds if the investor
a. Wants better returns than those offered c. Has identified a bullish phase in the
by mutual funds stock market
b. Has large capital, knowledge and d. Wants to invest for the long term
resources for research
310. Greater returns come only from assuring higher risks, and a higher risk
portfolio guarantees higher returns
a. True b. False
311. The risk tolerance of an investors is independent of
a. His age c. The stock market movements
b. His income d. His job security
313. International funds invest in various and so are low risk funds
a. True b. False
315. By their very nature, growth funds are considered as high-risk funds
a. True b. False
318. As compared to a fund with fluctuating total returns, a fund with stable
positive earnings
a. Gives higher returns c. Gives lower returns
b. Is less risky d. Is more risky
319. "Risk" is equated with
a. Volatility of earnings c. The number of investors in a fund
b. Level of earnings d. The number of schemes of a fund family
324. A fund with a high beta coefficient gives greater returns in a rising market,
and is more risky in a falling market
a. True b. False
327. One of the most effective ways to invest through mutual funds is to
a. Develop a model portfolio c. Invest all the money in one
fund scheme
b. Buy a few units of every mutual d. Invest all the money in different
fund scheme available schemes of the same fund family
330. Once a financial advisor works out ideal Asset Allocation, it can be used
for all investors whom he/she advises
a. True b. False
331. Asset distribution among equity, debt and money market securities should
correspond to the investors' need for capital growth, income and liquidity
a. True b. False
341. Only if a specialty offshore fund has consistently given very good
performance, it can be considered for investment by a retiree
a. True b. False
342. Past performance should not be solely relied on for selecting a fund
a. True b. False
343. Between the past performance of a fund and its suitability for an investor,
past performance is more important
a. True b. False
345. The guideline issued by AMFI for intermediaries are known as...
a. AGNI c. AMFI
b. ACE d. None of above
346. The investment in MF portfolio are valued at
a. Face value of portfolio c. Market value of portfolio
b. Cost of investment d. Book value of portfolio
351. An investor invested Rs.100000/in a 370 day FMP and got Rs. 107750/-, what
is capital gain in this case?
a. 7750 c. Insufficient details
b. 750 d. 10% Plus surcharge or 20% after
index benefit
362. Time stamping needs to start with serial no 1 on every business day.
a. True b. False
368. In case of equity fund, if fund has higher allocation to cash in bullish
market the performance is likely to..
a. Be comparable to that of benchmark c. Better than benchmark return
index
b. Be worse than benchmark return d. cant say
372. While evaluating return for an index fund across a peer group, which of the
following is more important?
a. BETA Coefficient c. Tracking error
b. Past performance d. R-squared
377. A value fund is expected to have ________ exposure to front line stocks
a. Entire c. Half of it's
b. High d. Low
378. Index funds are safer because their NAV does not go down
a. True b. False
380. An investor seeking capital appreciation, having high risk tolerance and
long term horizon must invest in
a. Bonds c. Real-Estate
b. Bank FD d. PPF
383. An investor looking for capital appreciation, having a high risk tolerance
and long tem horizon must invest in
a. Bank FD c. Bonds
b. Equity d. Gold
385. In new pension scheme(NPS) Tier I account new pension scheme is called
pension account
a. True b. False
392. The fund sponsors should have a sound financial track record of
a. 7 years c. 12 months
b. 5 years d. 3 years
405. What of the following is not a reason for investor to prefer mutual fund
over Bank FD
a. Tax benefits c. Deposit insurance
b. Possibility of capital gain d. Investment convenience
408. All investor have similar requirements at similar stage in the life/wealth
cycle
a. True b. False
413. Equity investment through sip can be suggested for investor looking for
a. Long term growth c. Portfolio churning
b. Short term target d. Tax benefit
415. What type of bond fund carries least interest rate risk
a. Short term bonds c. Mid term Bonds
b. Long term Bonds d. All of above
419. The role of insurance is more critical for physical assets than financial assets
a. True b. False
420. When price of gold goes up a buyer of gold future contract see it's value
a. Go up c. Retain the same value
b. Go down d. None of above
424. If a fund seeks to grow in value overtime it can be said that it's investment
objective is
a. Capital appreciation c. Capital adequacy
b. Safety of capital d. Regular income
430. Person, other than Indian residents, should also comply with RBI guidelines
for investment in Indian mutual funds
a. True b. False
435. Other than Indian residents, rest have to also comply RBI regulations
a. True b. False
437. Function of OD is
a. Give detailed information about c. Gives Fund suggestion
scheme to investors
b. Give current NAV d. None of the above
438. What should be the Sector Fund Allocation for a single income family having
small investable surplus
a. 0% c. 50%
b. 70% d. 30%
444. Calculate the sales price of a unit when NAV is 15 and exit load 1%
a. 15 c. 15.15
b. 14.85 d. 15.5
445. If you get a cheque of 1 cr in a Gilt Fund at 2.30 pm, NAV date will be
a. NAV at 2.30pm c. Same day NAV
b. NAV at 3pm d. NAV of fund realization date
456. The information regarding Which category of investors can invest in MF,
is given in
a. Offer document c. MIN
b. SAI d. SIN
457. Who can not be the distributor of the AMC
a. IFA c. Employees of AMC
b. Bank d. All of the above
472. In NPS investors get choice of the asset class but don't get choice of
investment manager
a. True b. False
473. In case of online transaction, transaction time is applicable
a. Time shown in the computer c. Mid night
of investor
b. Time as web per web server d. Next day morning
474. If investors invest through demat can AMC asks for KYC requirement
a. True b. False
475. According to the asset allocation rule, equity exposure should be equal to
a. Age c. Age-100
b. 100-age d. 100%
483. If an investor wants full exposure of gold his investment should be into
a. Gold ETFs c. Shares of gold mining company
b. Physical gold d. All of the above
490. Which of the following is against the ethics & Code of conduct guide line
of AMFI
a. Churning investor's money c. Keeping the interest of all
to get better returns unit holders
b. All the associates of a distributor d. All of the above
should be amfi approved.
494. The insurance associated with new pension schemes are regulated by-
a. PFRDA + IRDA c. PFRDA
b. IRDA d. None of the above.
495. In India mutual funds are-
a. Govt. institutions c. Trust
b. Company d. NBFC
497. A schemes NAV value increases for the period of 2 yrs . it will show-
a. Absolute return c. Compounded annualized return
b. Simple return d. All of the above
498. In KIM it has been mentioned that the 65% investment will be in equity and
equity related instrument. this is called-
a. Policy of scheme c. Portfolio of scheme
b. Objective of scheme d. None of the above.
504. The expected return & yield of the scheme is mentioned in KIM
a. True b. False
506. If beta of a scheme is less than one the the fund is-
a. More risky compare to market c. Neither risky nor profitable.
b. Less risky compare to market d. Beta doesn't make any impact on
scheme performance
515. The NAV of a fund is 15 applicable exit load is 1%, purchase NAV would be-
a. 14.85 c. 15.25
b. 15 d. 15.65
521. For a customer holding units in demat , the AMC also requires to do his
KYC ?
a. True b. False
523. If client invest in liquid fund at 11.30 am and the fund gets cleared on the
same day which NAV the client gets ?
a. Next day NAV c. Same days closing NAV
b. Closing NAV of the day preceding d. Previous days closing NAV
next business day
525. The person with whom the units are pledged is known as
a. Pledger b. Pledgee
526. SEBI is sole regulatory authority for MF are answerable
a. True b. False
528 declaration?
a. 15 c. 10
b. 7 d. 30
531. The New Pension scheme is both regulated IRDA and PFRDA as it has an
insurance component ?
a. True b. False
532. Which is the fastest way of remitting funds on real time basis?
a. NEFT c. SWIFT
b. D/D d. RTGS
535. NFO other than ELSS can remain open for maximum _________
a. 7 days c. 21 days
b. 15 days d. 30 days
538. Within a category one can decide on investments based on Sharpe Ratio
a. True b. False
551. The young BPO executives should not be advised to invest in long term
schemes because of their lavish life style ?
a. True b. False
553. What is the applicable rate of STT in case of repurchase of Equity scheme?
a. 0.13% c. 0.02%
b. 0.33% d. 0.25%
554. Market value is 152 crore, Dividend accrued but not received= 8 crore,
liabilities = 2 crore Total no of outstanding units is 75 lakhs. What will be
the NAV of the scheme?
a. 200 c. 213.33
b. 210.67 d. None of above
567. When scheme is first launched and investor invests in MF... it is called
a. NFO c. Purchase
b. IPO d. Re-Purchase
571. Unaudited accounts of the scheme must be published in the news paper
a. Every 3 months c. Every 12 months
b. Every 6 months d. None of the above
572. An Investor Invests Rs 100000 in a 365 days FMP and got Rs 107750,
what would be capital gain in this case ?
a. 7750 c. Insufficient Data
b. 750 d. 1000
573. STT is charged on
a. Equity Share Trading c. Equity MF
b. Derivative Trading d. All of the Above
577. While evaluating return for an index fund across a peer group, which of
the following is more important
a. Beta Coefficient c. Tracking error
b. Past performance d. R-Squared
578. The fund sponsors should have a sound financial track record of
a. 12 months c. 5 Years
b. 3 Years d. 7 Years
579. Father wants his son to be a doctor and study will start after 5 years.
The current expense is 2500000. How to calculate the expense after 5 years
a. A = P + (1+r) ^ n -1 c. A = P / (1+r) ^ (1/n) -1
b. A = P x (1+r) ^ n d. A = P / (1+r) ^ n
580. Appropriate benchmark for G-sec fund
a. I-sec+ I -bex c. MIBOR
b. CRISIL liquid fund index d. CRISIL - MIP bladed index
584. Low PE compared with peer group or industry standard indicates that stock
is cheap.
a. True b. False
585. What would be the redemption value of a Unit if NAV is 15 and Exit load
is 1%
a. 15 c. 15.5
b. 14.85 d. 15.15
587. For a distribution channel, 60% of the employees should have AMFI
Registration Number
a. True b. False
588. Equity Fund's Risk relative to market is measured by
a. Tracking error c. Treynor
b. Sharpe's Ratio d. Beta
593. Mr A Holds 2000 Units, scheme declared 1:4 bonus. How many units will
Mr A Gets ?
a. 400 c. 8000
b. 500 d. Depends on NAV
605. Financial Planning is just a process and so Financial Planner can use any
profile found in the web
a. True b. False
607. Investor should invest in MF with few offices as office expense is charged
to the fund
a. True b. False
614. He Should
a. Inform the Client c. Avoid telling as he may lose
the client
b. Avoid telling as client will d. Increase risk to generate higher
be disheartened return and meet the goal
618. Which of the distribution channel does not have wide branch network
a. Bank c. Broking company
b. Distribution House d. IFA
626. Debenture is physical asset because the paper has some value
a. True b. False
629. Childhood and transition are similar stage of LIFE cycle and WEALTH
cycle stage
a. True c. False
630. Investor with a long term investment horizon for growth are likely to
invest in
a. Equity Fund c. Income fund
b. ST Debt Fund d. Liquid fund
635. Investors in NPS can choose asset class but not fund managers
a. True b. False
636. Settlement responsibility in BSE / NSE Platform are with
a. AMC c. Stock Exchange
b. Clearing House Concerned d. Member
647. Annual report should announce the unclaimed amount and no. of investor
a. True b. False
653. For with-holding tax on income earned by NRI depends on nature of income,
nature investment and investor's country of domicile
a. True b. False
661. If market crashes after bull run which fund is more safer
a. Growth c. Sector
b. Value d. Theme
663. Net Avg asset of the scheme is 300cr and Investment transaction value for
the same is 1000 cr in a year. What is the avg holding period (months)?
a. 0.3 c. Insufficient Data
b. 0.36 d. 3.6
664. Mutual Fund transaction on stock exchange are governed by stock exchange
redressal system
a. True b. False
666. When scheme is first launched, AUM of the scheme would be nil
a. True b. False
667. An investor looking to select a hybrid fund with tax benefits must choose.
a. Conservative MIP c. Balance fund Debt oriented
b. Balance fund Equity b. Aggressive MIP
oriented
668. Encroachment risk is higher for
a. Land c. Gold
b. Building d. Art
673. 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.
a. 0.5 c. 0.4
b. 0.25 d. 0.1
681. Net asset Rs.500cr./ total transaction value is Rs. 1000 cr what is portfolio
turnover ratio
a. 0.5 c. 1
b. 2 d. Data insufficient
682. Avg net asset of scheme is 3000,total transaction of a scheme 10,000 what
is portfolio turnover ratio
a. 0.3 c. 3.33
b. 4 d. 5
683. Which of the following is true with respect to the automatic reinvestment
plan?
a. It allows the investor to reinvest c. Some funds allow the investor the invest
the amount of dividend the dividend in the other schemes also
b. It ensures that the investor reaps d. All of the above
the benefit of compounding
684. Which of the following is not true for Exchange Traded Funds (ETF)?
a. ETF combines the best features c. It offers the investors the benefit of
of open end and closed end flexibility of holding a single share as
well as the diversification and cost
efficiency of index
a. Its pricing is linked to the index b. ETFs recover heavy load from the
investors
686. Investor who wants long term exposure to gold should opt for
a. ETF Gold c. Gold Future
b. Gold Sector Fund d. Jewellery's
695. SEBI is responsible to develop a cadre of well trained agents and distributors
a. True b. False
702. Mr A holds 1200 units , scheme declares 1:3 bonus. How many units will
Mr A gets
a. 300 c. 3600
b. 400 d. Depends on NAV
706. The first ever mutual fund scheme in India was launched in
a. 1964 c. 1970
b. 1951 d. 1994
707. Investors buy units of open-ended funds during the continuous offer at the
a. NFO price c. Both
b. Market Price d. None of the above
708. The investment objective of which of these funds would be to seek capital
appreciation?
a. Dividend yield fund c. Liquid Fund
b. Growth Fund d. Income Fund
709. If we have a view that gold price will appreciate, which mutual fund scheme
should we invest in?
a. Gold sector c. Index fund
b. Gilt edged securities d. Gold ETF
714. The constituents of mutual fund are appointed with the approval of ..
a. Sponsor c. SEBI
b. Trustees d. AMC
715. The applicable guidelines for mutual funds are set out in SEBI (Mutual Fund)
regulation, 1996..
a. True b. False
716. AMFI code of ethics prescribes that mutual fund scheme portfolios
should be managed in interest of
a. Identified class of unit holder c. Retail individual
b. All classes of unit holders d. Institutional unit holders
717. Although AGNI is mandated. there are no penalties for breach of code of
conduct.
a. True b. False
721. For fund of fund NAV is to be updated on-line in the website of AMFI and
the mutual fund website..
a. Before 9 pm same day c. After 10 pm same day
b. Before 10 am following day d. Before 9 pm following day
722. Which of the following is not a mandatory services standard as per SEBI.
a. Periodic disclosure of the c. On-line purchase and sells
fund's holding of units
b. Periodic disclosure of AMC'c d. Dispatch of dividend within
accounts 30 days
725. NFO other than ELSS can remain open for _________
a. 15 days c. 45 days
b. 30 days d. Forever
726. Which of the following contain detail information on the portfolio
characteristics and operational features of a scheme?
a. Key Information of Memorandum c. Scheme information document
b. Statement of additional information d. Addendum
728. For fund of fund NAV is to be updated on-line in the website of AMFI and
the mutual fund website..
a. Before 9 pm same day c. After 10 pm same day
b. Before 10 am following day d. Before 9 pm following day
729. Which of the following is not a mandatory services standard as per SEBI.
a. Periodic disclosure of the c. On-line purchase and sells
fund's holding of units
b. Periodic disclosure of AMC'c d. Dispatch of dividend within
accounts 30 days
732. NFO other than ELSS can remain open for _________
a. 15 days c. 45 days
b. 30 days d. Forever
733. Which of the following contain detail information on the portfolio
characteristics and operational features of a scheme?
a. Key Information of Memorandum c. Scheme information document
b. Statement of additional information d. Addendum
742. AMFI code of ethics prescribes that mutual fund schemes portfolios should
be managed in the interest of
a. Identified special classes of c. Retail individual class
unit holders
b. All classes of unit holders d. None of above
746. Since NFO is a marketing decision ,CIO has limited role in deciding it's
structure
a. True b. False
753. Which funds have features of both open ended & close ended?
a. Interval Fund c. Sector Fund
b. Balance Fund d. Thematic Fund
754. Which approach is used by Fund managers for picking up the Value stocks.
a. Bottom up approach c. Both
b. Top down d. None of the above
755. Can liquid funds invest in short term bank fixed deposit?
a. Yes b. No
758. Childhood & transition phase is common in life cycle & wealth cycle?
a. True b. False
766. The difference between the yield on gilt and the yield on a non government
debt security is called its yield spread.
a. True b. False
770. AGNI is
a. Code of Conduct For c. Terms & Conditions
Intermediaries
b. Rules & Regulations d. Non of the above
775. Stock exchange brokers are permitted to distribute MF after passing the
certifying exam
a. True b. False
776. If the post tax rate of return on an investment is 8% and the inflation rate is
6% the real rate of return is
a. 2.00 Percentage c. 8.00 Percentage
b. 1.89 Percentage d. Non of the above
778. A client is investing Rs. 1 Cr. in gilt fund which day NAV he will get?
a. Same day closing NAV c. Previous day NAV
b. Next Day NAV d. NAV of the day when funds are
realized
781. Which id proof is not valid identity proof for KYC (individual)
a. Credit card c. Driving license
b. Address proof d. All of the above
782. For additional purchase
a. Only transaction slip to be c. Only cheque
filled
b. Transaction slip with purchase d. None of the above
cheque
785. Where the investor desires to hold MF unit in DMAT form the AMC will
still be required to Perform KYC to such investors
a. True b. False
786. Offer document enable investor to compare the of MF scheme with another
MF scheme
a. True b . False
790. Company has issued 10 core equity shares. It earns profit of Rs. 105 core on
which it has Paid tax of Rs. 5 core and distributed dividend of Rs 20 core.
What is EPS ?
a. 10 c. 12
b. 10.5 d. 11.5
792. Market price of which of the following investment instruments will fluctuates
more ?
a. Long Tenor debt c. Floating Rate Securities
b. Short tenor Debt d. Debentures
794. Which of the following is most unlikely to have a model portfolio with 20%
alloacation to sector fund?
a. Young Executive early in c. Investor in Distribution Phase
his career
b. Well Placed Mid Level d. Senior Executive with Well
Executive Settled Children
795. A distributor can be empaneled by AMC only if
a. Such distributor and its c. Such Distributor is registered
representative has/have cleared with Stock Exchange
certifying Exam
b. Such distributor is approved d. Approved by SEBI
by AMFI
798. According to Some studies Asset Allocations and Investment Policy can
better explain the portfolio performance as compared to Stock selection
and Investment Timimg?
a. True b. False
799. Which Of the following benefits of starting Health Inurance Policy early?
a. Higher Money Back after c. Both of the above
5 years
b. Protection against Insurance d. None Of the above
Company rejecting claim on the
ground of pre-existing illness
808. Which of the bond fund carries least amount of interest risk
a. Dynamic bond c. Income fund
b. G-sec fund d. Money market fund
809. Asset allocation must primarily based on
a. Investment needs c. Taxation needs
b. Insurance needs d. Financial goals
810. Faced with the financial difficulties a family is likely to do all this
except following
a. Move to a larger house in a c. Wifes starts working
better locality
b. Economise Expenses d. Husband takes additional
part time job
815. If a scheme is launched in the second six months of financial year the the
1st update of the SID is due within
a. Within 3 months of the end of c. Within 3 months from the end
the financial Year of the next financial year
b. IWith 3 months from the d. Within 6 months of the end
begining of Next financial year of the financial Year
816. Legally SAI is the part of SID
a. True b. False
817. Income tax allows setting of certain types of capital gain losses against
certain type of Income which of the following is true in case of such provision.
a. Capital losses can be offset c. Short term capital losses can be offset
again salary against dividend income for the year
In which the loss has occurred
b. Long term capital losses from equity d. Long term capital losses in equity
MF can Be offset against long term MF is not available for setting of
gain from property against business or Salary income
818. The __________ is the main driver of returns in a mutual fund scheme.
a. Return c. Portfolio
b. Profit of invested company d. None of the above
821. A ____________ fund maintains a portfolio that is in line with the passive
fund.
a. Active fund c. Equity fund
b. Index Fund d. Debt fund
822. Value investment style is an approach of picking up stocks which are valued
__________ , based on fundamental analysis.
a. Lower c. Medium
b. High d. A & B
823. Which is approach is also called stock picking.
a. Top – down Approach c. Either A & B
b. Bottom – up Approach d. None Of the above
824. If the proceeds on redemption are higher than the amount invested then it is
called __________ .
a. Capital Gain c. No Profit No Loss
b. Capital Loss d. None Of the above
825. Treasury Bills are short term debt instruments issued by the ____________
on behalf of the Government of India.
a. SEBI c. Central Government
b. Reserve Bank of India d. State Government
826. Commercial papers are short term Debt Securities issued by corporates.
a. True b. False
828. Higher the credit risk , lower is likely to be the yield on the debt security.
a. True b. False
834. To convert the demat units into physical from. This process is called
re-materialisation .
a. True b. False
840. SEBI has Facilitated buying and selling of mutual fund units through the
stock exchanges.
a. True b. False
842. In hoardings / posters, the statement , “ Mutual fund investments are subject
to market risks, read the offer document carefully before investing ” is to be
displayed at least _________ inches height .
a. 6 c. 5
b. 9 d. 8
843. If a scheme is launched in the first 6 months of the financial year then the
first update of the SID is due with in ________ months of the end of the
financial year .
a. 2 c. 5
b. 6 d. 3
844. No single investor shall account for more than 20% of the corpus of the
scheme/plans.
a. True b. False
845. The asset management company shall confirm that a due diligence certificate
is signed by the ____________ .
a. Compliance officer c. Managing Director
b. Chif executive officer d. Any of the above
846. In case of specifice request recived from investors, mutual funds shall provide
the account statement (SIP/STP) to the investor's within __________ working
days from the receipt of such request without any charges .
a. 5 c. 7
b. 10 d. 15
847. The mutual fund would update the current expense ratios on the website
within _________ working days mentioning the effective date of the change .
a. 5 c. 2
b. 7 d. 10
859. Loads and taxes may account for the difference between scheme return and
investor return
a. True b. False
865. Incase of NPS investor can choose which of the asset class of the following
a. Equity c. Government Securities
b. Corporate Debt d. All of the above
871. In case of the buying of the Gold Future Contract, entire value of the Gold
has to be paid
a. True b. False
873. Many investors invest money in Bank FD and not in Debt market because
a. Lack of Interest c. Lack of Money
b. Lack of awareness d. Lack of confidence
875. The primary objective of the Financial Planner is to make available the right
amount of money at the right time.
a. True b. False
876. The third stage of the wealth cycle is
a. Accumulation c. Reaping
b. Transition d. Intergenerational transfer
877. In many health insurance policies, the customer has to bear the expenses
and that can get reimbursed from the Insurance company
a. True b. False
879. Many-------have made available the risk profiling tool on their web sites
a. AMCs c. Both
b. Research Houses d. None of this
882. Which are the aspects that affect the Risk profiling of the investors?
a. Family Information c. Personal Information
b. Financial Information d. All of the above
883. We have to do the registration of the mutual fund with the SEBI. Who gets
registration done
a. Trust c. Sponsor
b. R & T d. AMC
884. AMFI do the following activity
a. Publish NAV, AUM of the fund c. Manages money under
house and maintain and publish
industry data
b. Compute NAV d. None of the above
887. Once the asset allocation is decided, sharpe ratio can help us to select the
good debt and equity Schemes
a. True b. False
888. Once the asset allocation is decide, treynor ratio can help us to select the
good debt and equity schemes
a. True b. False
889. With the increase in the regular income from the job risk taking ability of
the investor _________
a. Remains the same c. Increases
b. Decreases d. Insufficient data
890. A repurchase comes in a GILT fund at 2.30 pm. Whats would be the NAV
available to the redemption
a. Closing NAV of Next c. Closing NAV of the day preceeding
Business Day the next business day
b. Closing NAV of the d. Closing NAV of the day preceeding
Application Day the Application date
892. An investor with interest to earn high return and willing to take high risk are
refferred to as
a. Cautious Investor c. Adventurous Investor
b. Conservative Investor d. Aggressive Investor
893. A person requires 1,00,000 rs for the specific goal after 3 years. If we want to
known what amount he needs to invest no to get the said amount at rate of
5%. which of the following formula needs to be used
a. 100000*(1+0.05)^3 c. 100000/(1+0.05)^3
b. 100000*(1+0.05)*3 d. 100000/(1+0.05)*3
894. For an Micro SIP which one of the following is not a valid photo ID proof
a. PAN proof c. Credit card with Photo ID
b. Debit card with photo ID d. Voter ID proof
895. The responsiblity to manage funds in the new pension scheme is with
a. PFRDA c. AMCs
b. Insurance Companies d. PFMs
896. Where you get the information in regards to the key personals involved in
an AMC
a. They are not published as it is not c. Available in SAI ( Statement of
very important for the investor Additonal Information )
b. They are published on the
website of the mutual Fund
900. The AMFI allots unique the ARN no which is valid for the period of three
years
a. True b. False
901. The following would not affect the trail commission to the advisor in mutual
Fund
a. Portfolio value going up with c. Change in the unit capital of
the increase in the market the the scheme
b. Investor making fresh purchase d. Investor redeeming the money
during the period during the period
904. Its is advisable for an average investor to do Tactical Asset allocation for
planning his retirement
a. True b. False
905. In case of sudden wealth which among the following is least advisable
a. Park the money in the liquid c. Start STP from liquid fund into
fund for a short time Equity Funds
b. Invest all money into equity d. Review the financial plan
at one go
906. Tactical asset allocation is suitable for seasoned investor with large
investible surpluses
a. True b. False
907. An application for re purchase in equity comes at 3.30. What would be the
applicable NAV
a. Closing NAV of Next Business c. Closing NAV of the day preceeding
Day the next business day
b. Closing NAV of the Application d. Closing NAV of the day preceeding the
Day Application date
908. In case there is a redemption from a NRI who have invested the money on a
non repatriable basis. The mutual would pay in dollors as redemption
a. True b. False
911. If the company have 10 cores if Issued shares. The profit it makes is 105 coree.
IT pays 5 crore as tax. Also pays 20 crore as dividend what is the EPS
a. 10 c. Not sufficient Data
b. 8 d. 5
912. An investor in the debt scheme who completely want to eliminate investment
in equity should invest in MIP
a. True b. False
913. The fund have an average asset of 300 crore. The portfolio turnover is
Rs 1000 crore. For how many months the investment are held for
a. 0.36 c. 3
b. 3.6 d. 0.25
914. The floating rate fund hold on to there value even if the interest rate are
fluctuating
a. True b. False
915. Performance of the fund is most sensitive to the expense ratio in which of the
following Fund
a. Liquid Fund c. ETF
b. Diversified Equity Fund d. Sector Fund
916. Who among the following are not distributor for Mutual Funds
a. National Distributors c. Branches of Reserve bank
of India
b. Branches of Public Sector d. Branches of Foreign Banks
Bank
917. Importance of credit rating agency is most important in
a. Equity Funds c. ETF
b. Secutised Debt
921. Tax consultant should not advice financial planning to his client
a. True b. False
929. Which of the following government secuity have leasr maturity period
a. CD c. T Bills
b. CP d. Gilt Scheme
931. Insurance is more important in case of Physical Asset Vis a Vis financial
Asset
a. True b. False
932. Which of the asset have the higest risk to be stolen
a. Real Estate c. Mutual Fund
b. GOLD d. Bank Balance
933. Most best way to decide the risk appetite of the person is to ask client that
“ how mush risk you are ready to take in the market”
a. True b. False
936. While construction of the portfolio the relative performance is done with
a. Peer Group c. Model Portfolio
b. Asset Alllocaton d. Tracking error
937. The balance funds based on flexible Asset Allication is lower riskier than
high yield debt fund
a. True b. False
941. Applicable NAV for the different scheme is as per the following time
a. Office time of AMC c. As per the time of stock
market
b. Office time of R&T d. Cut-Off time decided by SEBI
for various MF scheme
942. While empannel with the AMC, every distributor have to provide the
following
a. Correct and complete information c. Provide all information and document
that the AMC may ask for from time
to time
b. Commitment to abide by instruction d. All of the above
given as also statutory codes and
guideline
943. Transaction done of MF on the NSE NEAT and BSE Start the exchange
gurantee the settlement of Funds
a. True b. False
944. Low P/E ratio indicate that it is unlikely to replicate its past performance
a. True b. False
951. In case New Pension scheme how many PFM( Pesion Fund Managers) are
managing the money
a. 5 c. 3
b. 4 d. 6
952. In Lower Interest Rate Senario Debt Product of MF will Generate higher
return compared to Fixed Deposit.
a. True b. False
956. Code of Conduct for AMC Personnel & Trustees are mentioned in
a. Chapter II c. Schedule II
b. Chapter IV d. Schedule V ( 5th Schedule)
961. Before going to SEBI for approval of a Fund Launch AMC needs to
a. Take approval from Trustees c. Finalise the Launch Date
b. Print the application Form d. All of the above
962. Which of the Following Fund is most Sensitive to Expense Ratio
a. Liquid Fund c. Equity Fund
b. Index Fund d. Off shore Fund
964. Converting Units of a Mutual Fund from Demat Form to Physical & Vice
Versa is Possible
a. True b. False
967. Which of the following is not the scheme specific risk factor?
a. Risk arising from the c. No previous experience in
schemes objective managing a fund
b. Risk arising from the d. Movement in NAV because of
nondiversification the market movements.
968. A Financial Planner can use any of the Model Portfolio available on the Web
a. True b. False
973. In an rising Market scenario When Equity Price Moves upward, The
Dividend Yield
a. Remains same while c. Decreases with the rising Market
keeping Dividend rate same. keeping the dividend rate same.
b. Increases as with The Rising d. Impossible to explain in absence of data.
Rate keeping the dividend rate
Same
975. A Mutual Fund Equity portfolio reduces Risk if compared with an individual
Equity because
a. The diversification across the c. A Single stock carries both Systematic
Portfolio leads to averaging of risk. and higher Unsystematic risk unlike
Portfolio.
b. The stocks within portfolio may d. All of the above.
have negative correlation among them.
976. A Client wants to understand the Risk of his Portfolio, What are the
quantifiable numbers explained in Mutual Fund fact Sheet to explain them?
a. Standard Deviation c. Share Ratio
b. Beta d. All of the above.
977. A Bond Fund manager expects good Rally in Bond Market following
announcement of Gradual reduction in Fiscal deficit by Finance Minister.
What could be his inference?
a. The reduced fiscal deficit will c. The reduced fiscal deficit will reduced
reduced Government Bond the supply of Bond leading to surplus
Buying program. liquidity.
b. The reduced fiscal deficit will allow d. The reduced fiscal deficit will allow
fund manager to decide his own price. RBI to decide the Bond rate.
978. A Client with Low to medium risk appetite wants to invest for 2-3 year horizon,
what could be best suggestion?
a. He should invest in Sector c. He Should Buy Short term Bond Fund
Fund with 3 year. with matching duration.
b. He should be Index Fund with d. He should invest in Liquid for 2-3
3 Year Horizon. Year periods.
979. A Client wants to Plan his Retirement at the age of 60, while his present age is
25 and is married with 2 children. He has reasonable good Salary and no
other social responsibility.
a. He Should Start an SIP in an c. He should start an SIP in diversified
Aggressive Balanced Fund. Equity Fund.
b. He Should Start an SIP in index Fund d. He should start SIP in arbitrage Fund.
980. A Mutual Fund RM while marketing his Debt Scheme was insisting to invest
in a Long Duration debt Scheme, What actually he meant...
a. He is expecting a rise in c. He is expecting a rise in inflation.
Bond yield
b. He is expecting rise in d. He is expecting a rise in
Interest rate. Bond price.
981. Suppose A Dynamic debt Fund duration oscillates between 30 days to 8 years.
Given this objective if the Dynamic Fund these days is maintaining Duration
of 45 days. What does that meant?
a. The Dynamic Fund best reflect the c. The Dynamic Fund best reflect the
feature of Short Term Debt Fund. feature of arbitrage Fund.
b. The dynamic Fund best reflects the d. The Dynamic fund is long duration Bond
feature of Ultra Short Term Debt Fund. fund cannot have 45 days Duration.
982. The RM of a Fund House insisting upon the Beta as 1 to be the best sales
reason of his Fund? What he was referring to ...
a. The Fund he selling was a large c. The Fund he was referring to
cap diversified Fund. is Index Fund.
b. The Fund he was referring to d. The fund he was referring to is
was Micro Cap Fund. arbitrage Fund.
986. A Relation Ship Manager has no clue about Interest rate Movement. What
could be most risky recommendation?
a. He Should recommend c. He should recommend FMP.
Low duration Fund
b. He should recommend d. He should recommend
high Duration fund. Dynamic Fund.
987. Which among the following is not true about capital Protection fund?
a. These are mixture of Equity c. It assumes there is no default in
and Debt Portfolio. Debt instrument.
b. The earning of Debt portfolio d. Such Scheme Guarantee as per
hedges/ balances the optimum offer document.
erosion in Equity.
988. If arranged which among the following could best display Beta more than
one value?
a. Index Fund c. Sector Fund
b. Diversified Equity Fund d. Arbitrage Fund
991. In a Medium Term duration corporate Bond Scheme does not targets
returns through,
a. Likely decline in Interest Rate. c. Likely accrual from higher YTM.
b. Likely yield spread on Bond d. Likely capital appreciation from
portfolio. appreciating Yield.
992. If Two Bond portfolio A) and B) have same Duration but A) have higher
Yield than B), that implies...
a. A) Portfolio must be having high c. A) Portfolio has low Rated Bonds
rated security than B). than B).
b. A) Portfolio must be having more d. A) Portfolio holds more short term
cash than B) Paper than B)
993. A Bond portfolio invests only in call Money Market. What could be its YTM?
a. Not Possible to be ascertained. c. One day return of Call Money.
b. YTM of Call Money Market d. Both b) and C)
996. An equity Scheme with high SIP book Size have advantage of
a. Able to Invest in even c. Investing in all cycle of Equity
Low PE market. Market movement.
b. Investing Regularly. d. All of the Above.
997. Which among the following may not be a fair investment suggestion?
a. Value Averaging c. Systematic Transfer Plan.
b. Cost Averaging d. None of the Above
1001. In 2014, 10 Year Debt market Yield declined, what could be the possible
reason
a. RBI promised it will decrease c. This is a cyclical move; rate if
the Short term rate. gone up has to come down.
b. There was record FII investment d. When equity market soars, the
to the tune of 24 Billion $ dollar in debt. debt yield declines.
1003. Which variable explains the anticipated earning of a Bond holder in time to
come?
a. Current Yield c. Yield to Call
b. Yield to Maturity. d. None of the above.
1004. The Sensex at 27500 is at 20 PE for 2014 EPS. Given linear Growth of
economy, What is not true?
a. The SENSEX valuation of 27500 c. Both statement appear logical and
will at lower PE for forwarding near to truth.
income.
b. The SENSEX valuation of 27500 d. PE and EPS together cannot explain
is at even higher PE for trailing the valuation of present SENSEX.
Income.
1008. Which among the folowing not a part of Gilt Fund Portfolio
a. T Bill c. G Sec
b. CP d. SDL
1018. Which among the following can measure various risk associate with MF
investment
a. Standard Deviation c. Credit Spread
b. Beta d. All of the Above
1027. FMP is a
a. Cose ended scheme c. Passive managed Scheme
b. Debt Scheme d. All of the Above
1035. Which among the following offer tax Scheme under section 80 C
a. FMP c. ELSS
b. Liquid Fund d. Index Fund
1036. Which among the following is Passively Managed Fund
a. Index Fund c. Liquid Fund
b. Mid cap Fund d. Gilt Fund
1048. To become a Mutual Fund Distributor , One should pass which module of
NISm Exam.
a. NISm VIII c. Nism V
b. NISm VII d. Nism 1
1049. AMFI is a
a. Regulator c. Advisory Body
b. SRO d. None of the above
1054. The Short Term capital Gain for an equity portfolio should have investment
tenor of
a. 1 year c. Less than 1 year
b. 3 year d. Less than 3 year
1055. Which type of Mutual fund Scheme have the Indexation benefit attached for
its tax computation.
a. Equity Portfolio c. Debt Portfolio
b. Hybrid Portfolio d. All of the them
1056. Which among the following offer regular Operation and Services for MF
Investor
a. Depository c. Banker
b. Custodian d. R & T agent
1060. Which among the following can measure various risk associate with MF
investment
a. Standard Deviation c. Credit Spread
b. Beta d. All of the above.
1062. Which among the following not a part of Gilt Fund Portfolio
a. T Bill c. G Sec
b. CP d. SDL
1069. FMP is a
a. Close ended scheme c. Passive managed Scheme
b. Debt Scheme d. All of the above
1071. Which among the following offer tax Scheme under section 80 C
a. FMP c. ELSS
b. Liquid Fund d. Index Fund
1084. Gilts Funds invest only in Treasury Bills and Govt. Securtities.
a. Yes b. No
1085. MIP seeks to deliver dividend every month and the same in assured.
a. True b. False
1086. ETF are open ended funds that trades in Stock Exchange
a. True b. False
1107. The Short Term capital Gain for an equity portfolio should have investment
tenor of
a. 1 year c. Less than 1 year
b. 3 year d. Less than 3 year
1108. Which type of Mutual fund Scheme have the Indexation benefit attached for
its tax computation.
a. Equity Portfolio c. Debt Portfolio
b. Hybrid Portfolio d. All of the them
1109. Which among the following offer regular Operation and Services for MF
Investor
a. Depository c. Banker
b. Custodian d. R & T agent
1111. Even thought investment in Mutual Funds are subject to market risks, an
investor invests in an equity fund after reading the risk factors etc. Due to a
fall in the stock markets the value of the fund goes down drastically. The
investor ______.
a. Can get some remedy if he c. Cannot get any remedy
appeals to SEBI from the AMC
b. Can get some remedy if he d. Can get some remedy if he
appeals to AMC appeals to AMFI
1112. An investor gives a cheque of Rs 2 lacs for investing in a ELSS scheme at
2.30 pm at a Mutual Fund office. The NAV of which day will be applicable
to him ?
a. NAV of the same day c. NAV of the day on which funds
will be available
b. NAV of the next business day d. None of the above
1114. Which of the following is true with respect to Growth Option in Mutual
Fund schemes?
a. Dividend Distribution Tax c. Units rise or fall depending on
is applicable the scheme's performance
b. The change in NAV captures d. The NAV falls as and when
the scheme performance dividend is declared
1115. For calculating Capital Gains, investment in mutual funds for less then 1
year is considered as _______
a. Long Term c. Short Term
b. Medium Term d. Ultra Short Term
1116. Mutual funds are constituted as ______and therefore, they are governed by
the __________.
a. Companies, Indian Companies c. Trusts, Indian Trusts Act
Act
b. NGOs, NGO Act d. Investment Agencies, SEBI
Act
1120. Different investors have different investment needs and objectives. This is
the reason Mutual Fund offer different ________.
a. Plans c. Schemes
b. Options d. Time horizons.
1122. A investors wishes to invest in debt mutual funds but wants high liquidity
- should he invest in Fixed Maturity Plans ?
a. Yes b. No
1124. Nomination facility is not available to investors holding the Mutual Fund
units jointly - True or False?
a. True b. False
1125. As per SEBI regulations, every application form is to be accompanied by
_____________.
a. Key Information Memorandum c. Addendum
(KIM)
b. Scheme Information Document d. Statement of Additional
(SID) Information
1130. Gilt funds and diversified debt funds should figure prominently in the
portfolio of_________ .
a. Employed with small children c. Young married with no children
b. Old couple with no family support d. None of the above
1131. An investor in an active fund bears a ________ cost for the fund
management, and takes a ________ risk.
a. Higher, Lower c. Higher, Higher
b. Lower, Lower d. Lower, Higher
1132. Of the below options, what is FALSE with respect to Arbitrage Funds?
a. Arbitrage Funds have c. Arbitrage Funds invest in both
Basis Risks Spot and Futures Market
b. Arbitrage Funds invest d. Arbitrage Funds are more riskier
in Equity Markets than Sectoral Funds
1134. A Mutual Fund scheme gave an annualised return of 9.86% and the
annualised Standard Deviation of the fund is 3.47. The current risk free
return is 8.63%. Calculate the Sharpe Ratio.
a. 0.63 c. 0.48
b. 0.55 d. 0.35
1139. After payment of dividend the NAV comes down even in the Dividend
Reinvestment option - True or False ?
a. True b. False
1140. Open-ended schemes, except ELSS, have to re-open for ongoing sale /
re-purchase within ______ business days of allotment.
a. 3 c. 10
b. 5 d. 12
1141. The Stock Exchanges which provide facilities for Mutual Fund trading also
do the functions of Mutual Fund RTAs. - True or False ?
a. True b. False
1142. You have to construct a model portfolio for your client - which amongst the
following factors will you consider ?
a. Clients Employment status c. The size of portfolio
b. Clients Risk Profile d. All of above
1143. You are a mutual fund advisor. To whom would you advise investment of
more than 70 % of their funds in debt funds?
a. A 33-year-old well employed c. Elderly couple with no children
with one son
b. A 45-year-old Executive Manager d. Young man working with Glaxo
of a company who has 2 children
1144. The Transaction Slips are used by __________.
a. First time investors of Mutual c. Relatives of Existing Investors
Funds
b. NFO Investors d. Existing Investors
1145. In Liquid funds, simple annualized return method is used to show the
returns because ___________.
a. Its a simpler way to calculate and c. The return is calculated over smaller
investors understand it easily time horizons
b. The investment made is fixed for d. The amount invested is usually small
30 - 90 - 180 days
1150. Prediction of equity markets in the short run is easier than in the long run
- True or False?
a. True b. False
1151. The floating rate debt securities tend to hold their value, despite changes in
yield in the debt market - True or False?
a. True b. False
1152. A Mutual Fund scheme is known to distribute dividends from time to time.
Such MF can be used as a source of ___________.
a. Good Capital Appreciation c. Safety of Capital
b. Regular Income d. Tax Planning
1155. Young Age, Good Steady Job, an Adventurous streak etc are some qualities
of an investor who takes risks in investments - True or False?
a. True b. False
1157. A Mutual Fund scheme has a portfolio of shares whose beta is less than 1.
This indicates that the scheme is ___________.
a. Very Very risk compared to c. Less risky than the market
the market
b. Some what risky than d. Equally risky as the market
the market
1158. Mutual funds can accept cash to the tune of Rs _________ from small
investors.
a. Rs 5000 c. Rs 50000
b. Rs 20000 d. No cash can be accepted
1161. Exchange Traded Funds-ETF Gold regularly invest in good gold mining
companies - True or False?
a. True b. False
1162. The National Pension System (NPS) offers a wider portfolio choice than
Mutual Funds - True or False?
a. True b. False
1163. The amount which is paid to the distributor at the time the money is
invested in a scheme is called __________.
a. Trail Commission c. Rebate
b. Upfront Commission d. Fund Incentive
1165. 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?
a. True b. False
1166. Which of the following should NOT be included in the Key Information
Memorandum?
a. The risks associated with c. The opening - closing dates
the scheme of the NFO
b. The functions of Trustees d. Minimum investments required
and AMC and the cutoff time.
1167. Tier II account of the National Pension System is called the _________.
a. Savings Account b. Pension Account
1168. Which one of the below mentioned document is not required for KYC
process?
a. PAN Card c. Income Proof
b. Address Proof d. Identity Proof
1169. There are no penalties for breach of code of conduct as mandated by AGNI
- True or False?
a. True b. False
1170. The ______________ is the phase when the earning years usually starts.
a. Young Unmarried c. Married with one child
b. Young Married d. During graduation
1175. Post the New Fund Offer, investors who wishes to buy units need to pay
______.
a. The NFO price plus inflation rate c. A price linked to the inflation
index
b. The same price as NFO d. A price that is linked to its NAV.
1176. Mr. Deven gives his investment application form to the distributor at 10 am.
The distributor then goes to the Mutual Fund office and submits this
application at 1 pm. What is the time stamping time for this investment?
a. 10:00 AM b. 1:00 PM
1181. ELSS schemes should contain the least amount of Ill Liquid Investments
- True or False ?
a. True b. False
1182. Which of the following options form the basis of appointment of a Mutual
Fund distributor ?
a. An agreement between the c. Power of Attorney from
AMC and the Distributor the AMC
b. Approval from SEBI d. An agreement with AMFI
1183. After deciding the model portfolio, Sharpe Ratio is used for finalizing the
schemes of Equity and Debt - True or False ?
a. True b. False
1184. Mutual funds/AMCs shall disclose portfolio (along with ISIN) as on the last
day of the month for all their schemes on their respective website on or
before the______ of the succeeding month
a. 3rd working day c. 10th working day
b. 7th working day d. 15th working day
1188. Investments in Mutual Funds can be done only through a AMFI authorized
MF distributors - True or False ?
a. True b. False
1189. Foreign nationals can invest in Indian mutual funds - True or False ?
a. True b. False
1190. Many AMCs, distribution houses and mutual fund research houses offer free
tools in their website which can be used for evaluating a funds performance
- True or False ?
a. True b. False
1191. Mr. Shah gives a local cheque at 4.30 pm of Rs 10 lacs at a Mutual Fund
office for investing in a Gilt Fund. Of which day will the NAV be applicable
to him ?
a. NAV of the same day c. NAV of the day on which the
funds will be available
b. NAV of the next business day d. None of the above
1192. AMC directors are appointed with the permission of SEBI - True or False?
a. True b. False
1193. Minors are not legally eligible to contract, so for investing in Mutual Funds
they _________.
a. Have to become 18 years c. Can invest only in long term
before investing capital gain funds
b. Can invest thro' their guardians d. Can invest in specific 'minors
only' mutual funds
1194. Due to the popularity of cash less health insurance policies the liquidity
needs of the investors have reduced - True or False
a. True b. False
1195. Investments owned by the scheme may be quoted in the market at higher
than the cost paid and these gains are called as __________.
a. Valuation Gains c. Notional Gains
b. Booked Gains d. Notional Losses
1196. Dividend Distribution Tax (DDT) on debt-oriented mutual fund schemes for
Corporate Investors is ____ + Surcharge + Education Cess
a. 15% c. 35%
b. 30% d. 0%
1197. At what rate is the Securities Transaction Tax charged on sale of units of
debt oriented mutual fund in a stock exchange ?
a. 0.01% c. 0.13%
b. 0.10% d. 0%
1200. A person wishes to avail of a loan. For which of the below options he cannot
get a loan ?
a. To start a Pharma factory c. To buy a high priced lottery ticket
b. To buy a car of value above d. To buy a house in a Union Territory
Rs 20 lacs
1201. Investments in Mutual Funds are subject to market risks and therefore do not
provide any guarantee of Capital Growth / Protection - True or False ?
a. True b. False
1202. Loads and taxes pull the investor's returns below that earned by the Scheme
- True or False ?
a. True b. False
1204. Investments in mutual fund units attract Wealth Tax if the investments are
over Rs 5 lacs - True or False ?
a. True b. False
1206. If you are expecting interest rates (yields) to rise in the markets. Where
would you invest your money considering this forecast ?
a. Long Terms Debt Funds c. Equity Funds
b. Short Term Debt Funds d. Banking Sector Funds
1209. A Mutual Fund investor can file a case against the ________ for breach of
trust.
a. Mutual Fund c. Stock Exchange
b. Trustees d. No, a MF investor cannot
file a suit.
1213. Mutual funds in India are governed by SEBI (Mutual Fund) Regulations,
1996 -True or False?
a. True b. False
1219. Every trust has beneficiaries and in the case of a “Mutual Fund Trust” the
beneficiaries are _____________.
a. The Sponsors of the AMC c. The Chairperson and Managing
Director of the AMC
b. The Trustees of the AMC d. The investors who invest in various
schemes of the mutual fund
1226. The __________ executes the function of issuance and redemption of units
of a Mutual Fund.
a. Banker c. Transfer agent
b. Custodian d. Depositories
1228. The principal of caveat emptor ( let the buyer beware) applies to mutual
fund investments –True or False?
a. True b. False
1229. As per SEBI rules, an AMC can manage the schemes of more than one
Mutual Fund –True or False
a. True b. False
1230. The investors of Mutual Fund cannot sue the “trust” because
________________.
a. The funds are managed by the c. Members of the trust are usually
AMC and not the trust very trusted people
b. The trust is notional entity d. All of the above
1231. Which of the statement is not true with respect to objectives of AMFI?
a. To represent to the Government, c. To circulate information on Mutual
Reserve Bank of India and other Fund Industry and to undertake studies
bodies on all matters relating to the and research directly and/or in association
Mutual Fund Industry. with other bodies
b. To regulate the Mutual Fund d. To develop a cadre of well – trained
Industry Agent distributors
1232. Anyone who is aggrieved by a ruling of SEBI, can file an appeal with
________
a. Company Law board c. Ministry of Finance
b. Office of the public trustee d. All of the above
1233. Mutual funds are constituted as ___ and therefore, they are governed by
the ____.
a. Companies, Indian Companies Act c. Trusts, Indian Trusts Act
b. NGOs, NGO Act d. Investment Agencies, SEBI Act
1234. A Mutual Fund investor can file a case against the _________ for breach of
trust.
a. Mutual Fund c. Stock Exchange
b. Trustees d. No, a MF investor cannot file a suit
1237. Mutual funds allow investor/s to appoint upto ____nominees, who will be
entitled to the units in the event of the demise of the investor/s.
a. 1 c. 4
b. 3 d. Any number
1239. Unit holders do not have proportionate right to the beneficial ownership of
the assets of the mutual fund schemes they invest in- True or False?
a. True b. False
1240. Mutual fund has to publish a complete statement of the scheme of the
scheme portfolio and the unaudited financial results within______ from the
close of each half year.
a. 1 month c. 6 months
b. 3 months d. 9 months
1241. Debt oriented, close ended / interval, schemes/plans need to disclose their
portfolio in their website every month by the ______ working day of the
succeeding month.
a. 1 st c. 10 th
b. 3 rd d. 15 th
1242. Scheme wise Annual report should be mailed to all unit holders within
______ months of the close of the financial year.
a. 1 st c. 10 th
b. 3 rd d. 15 th
1243. Which of the following statements are true with respect to documentation
required from a Mutual fund investor?
a. PAN No. is compulsory c. There are some exceptions to PAN no
& KYC documentation in case of
micro-SIPs.
b. KYC documentation is compulsory d. All of the above
1244. The investor can claim his moneys from the scheme within ______ years,
based on____________.
a. 3 years, NAV at the end of the c. After 3 years, prevailing NAV
time period
b. 3 years, prevailing NAV d. All of above
1247. The detail regarding the key personnel of an AMC (especially fund
managers) is found in____________.
a. OD c. AMFI Guide
b. SID d. MF Advertisements
1248. Which of the below statement information needs to be disclosed to the
Mutual Fund investors?
a. The Annual Report of the AMC c. The AMFI guidelines for AMC
b. Scheme Portfolio d. The Names of Fund Managers
1249. The past performance of any scheme shall not be provided or advertised if
the scheme has been in existence for less than______ year.
a. Two c. Half
b. One d. Three
1252. NFO'S for ELSS schemes can remain open for ______days.
a. 45 days c. 20 days
b. 30 days d. 15 days
1253. Post the NFO (New Fund Offer),when the scheme is open for investment, the
investors have to pay
a. A price that is linked to the c. A price that may or may not be
Inflation Index linked to NAV
b. A price that is linked to NAV d. None of the above
1254. NFOs (except ELSS AND RGESS) can be open for a maximum of _____.
a. 30 days c. 15 days
b. 20 days d. 10 days
1261. Which of the following options form the basis of appointment of a Mutual
Fund distributor?
a. An agreement with AMFI. c. Power of Attorney from the AMC
b. An approval from SEBI d. An agreement between the AMC
and the Distributor
1263. The maximum commission payable to a Mutual Fund distributor on his own
investment is __________
a. 1% c. 2.50%
b. 1.50% d. NIL
1265. What are the “ Net Assets” of a Fund if the market value of portfolio is
Rs.2000 crores and the current liabilities are Rs.500 crores?
a. Rs 2500crores c. Rs 1500crores
b. Rs 2000crores d. Rs 500 crores
1268. While calculating profits the principle of ____________is used, which means
that all the expenses that relate to a period need to be considered,
irrespective of whether or not the expense has been paid.
a. Accrual system c. Deferred payment system
b. Double entry system d. None of the above
1269. The process whereby an investor can convert his holding of investments
from physical form (paper) to digital record is called ___________________
a. KYC c. Auto debit process
b. Dematerialization d. None of the above
1270. Investors applying for subscription in NFO using ASBA mode have to pay
______.
a. 75% of subscription money in advance c. 25% of subscription money in advance
and balance on allotment of units and balance on allotment of units
b. 50% of subscription money in advance d. Only on allotment of units
and balance on allotment of units
1271. The NAV of a Mutual Fund scheme is Rs. 25 and the Exit Load is 1%.What
will be the sale price of this scheme?
a. Rs 24.75 c. Rs25.25
b. Rs 25 d. Rs27
1274. Which of the below investments can be used for tax benefits?
a. Investments in ELSS Funds c. Both a and b
b. PPF d. None of the above
1275. Does investment in mutual fund units attract Wealth Tax if the investments
are over Rs 5lacs-True or False?
a. True b. False
1278. If a unit holder does a repurchase, the final redemption price is _________.
a. The NAV c. NAV - Exit Load
b. NAV - Entry Load d. NAV + Exit Load
1279. On which items is there is no Tax Deducted at Source (TDS) for Indian
investors?
a. Dividend payments c. Both A and B
b. Re-purchase payments of d. None of the above
Mutual funds
1280. Calculate the Absolute Return for a Mutual Fund investor if he bought units
at NAV 20 and sold at NAV 40 after two years?
a. 100% c. 25%
b. 50% d. Insufficient Data
1281. When Investments owned by the scheme are cited in the market at higher
than the cost price, these gains are called as_____________.
a. Valuation Gains c. Opportunity Gains
b. Notional Gains d. Booked Gains
1282. What type of Capital gain offer benefits of Indexation benefit to investor?
a. Short term capital gain in Equity c. Short term capital gain in debt
b. Long Term capital Gain in Equity d. Long Term capital Gain in Debt
1283. Mutual fund Scheme pay DDT (Dividend distribution tax ) to Govt
a. On Equity Scheme c. On both the Schems
b. On debt Schemes d. Not applicable any more now
1286. The market value of investment of a Mutual Fund scheme is Rs 650 crores
and the total liabilities are Rs 34 crores. The number of unites of face value
10 are 40 crores. What is the NAV of this scheme?
a. 14.35 c. 16.25
b. 15.40 d. 17.10
1287. Distribution Expenses in excess of what is specified by SEBI has to be borne
by___________.
a. Unit holders c. AMC
b. AMFI d. Fund Manager
1288. The Market Value of a scheme is Rs 345 cores. Dividend accrued but not
received is Rs 25 core. The Expenses payable are Rs 13 core. The total
number of outstanding units is 260 Lakhs. What is the NAV of the scheme?
a. 127.69 c. 145.62
b. 137.31 d. 132.69
1289. A Mutual Fund scheme has equity shares of Infosys in its portfolio. Which
of the following prices will be considered for calculation of NAV?
a. The closing price of Infosys shares c. The Average trading price on Regional
on Regional Stock Exchanges on the Stock Exchanges on the day of
day of calculation of NAV calculation of NAV
b. The closing price of Infosys on d. The Average trading price on BSE/ NSE
BSE/ NSE on the day of calculation on the day of calculation of NAV
of NAV
1290. In case of joint holding under the 'either or survivor' option, who has to be
KYC compliant?
a. Only the First holder c. Both the joint holders
b. Only the Second holder d. None of the above
1291. In which of the following cases is PAN CARD mandatory for investor when
they invest in a Mutual Fund scheme?
a. Below Rs.20000/- c. Above Rs.50000/-
b. Between Rs.20000/- d. All of the above
- Rs.50000/
1292. Mr. Ratan wishes to do additional purchases in his Mutual Fund scheme.
Can he give a post dated cheque? Is this acceptable?
a. Yes b. No
1293. Does an investor need to get a “No Objection Certificate (NOC)” from his
old distributor if he wishes to change to a new distributor?
a. True b. False
1294. If there are 3 unit holders who jointly hold mutual fund units, the
redemption proceeds will be paid to __________.
a. The first holder c. To the Nominee
b. Equally to all the holders d. As per % stated by all joint
holders in the declaration
1295. When Mutual fund scheme pays any dividend or redemption money to the
investors, the AUM ______________
a. Increases c. Does not change
b. Decreases
1297. The mode of payment used for Investments in mutual fund can be
____________.
a. Auto debit facility c. ASBA
b. Cheque/ DD d. Any of the above
1298. The Micro SIP route is not available to __________for investment in Mutual
Funds.
a. Corporates c. Persons of Indian Origin (PIO)
residing abroad
b. HUF d. All of the above
1299. Institutional Mutual Fund Distributors build their client base through
___________.
a. Sub brokers c. Agents
b. Employees at their branch offices d. All of the above
1300. When the unit holder gives his money to buy units of Mutual Fund then he
______
a. Can decide what securities or c. Has voting rights for what securities
investments the scheme would buy or investments the scheme can invest
b. Cannot decide what securities or d. None of the above
investments the scheme would buy
1303. The amount paid to the distributor for getting investors to invest in mutual
fund scheme is called______________.
a. Trail Commission c. Incentive voucher
b. Upfront Commission d. Fund Rebate
1307. ___________ style is an approach of picking up stocks, for less than their
intrinsic value or stocks that have high dividend yields, based on
fundamental analysis.
a. Growth investing c. Bottom up approach
b. Value Investing d. Top Down Approach
1309. What forms a basis for selection of better schemes in Index Funds?
a. Tracking Error c. 5year Managers past record
b. Fund Managers past record d. All of the above
1317. Simple annualized return method is used to measure Liquid Funds returns
because ____________.
a. The investment made is for fixed c. The return is calculated over smaller
tenure of 30-90-180 days time horizons
b. The amount invested is usually small d. It's a simple way of calculation and
investors understand it easily
1324. The unique feature about “Growth Option” in Mutual Fund schemes is that
______
a. Units rise or fall depending on c. The change in NAV captures the
the schemes performance scheme performance
b. Dividend Distribution Tax is d. The NAV falls as and when
applicable dividend is declared
1328. As Dividends are distributed by Mutual Fund schemes time and again,
therefore MF can be used as a source of _________________.
a. Good Capital Appreciation c. Retirement planning
b. Regular Income d. Tax Planning
1333. In the National Pension System, which type of option has withdrawal
facilities?
a. TIER 1 c. Both A and B
b. TIER 2 d. None of the above
1343. Mr.& Mrs Agarwal desire to make their son a doctor. This is an example of
_______
a. Financial Planning c. Asset allocation
b. Setting Financial Goals d. Aspirations
1349. _____________ approach studies all the financial goals of an investor taken
together, and then the investment strategies are worked out based on the
results derived.
a. Tactical Financial Planning c. Strategic financial planning
b. Comprehensive Financial planning d. Goal Oriented Financial Planning
1351. The interest received from a Bank Fixed Deposit is fully taxable –True or
False?
a. Fully taxable c. Exempted from tax
b. Taxable upto a limit of Rs.10000/- d. Taxable up to a limit of Rs.50000/-
1352. While selecting amongst the various dividend options in a Mutual Fund
scheme, taxation and liquidity needs are major deciding factors for
____________
a. Growth option c. Dividend re-investment option
b. Dividend payout d. All of the above
1357. An investor in a debt scheme gives utmost importance to the following aspects
of portfolio___________
a. Maturity term of the securities c. Stock selection & sector
in portfolio selection
b. Weighted Average Maturity d. Number of securities
1358. Gilt funds and diversified debt funds should figure prominently in portfolio
of _____.
a. Employed with small children c. Young married with no children
b. Old couple with no family support d. None of the above
1366. The asset allocation planned for an investor based on risk profiling is called
_____.
a. Strategic Asset Allocation c. Tactical Asset Allocation
b. Fixed Asset Allocation d. Flexible Asset Allocation
1369. People capable of taking more risk with their investments and bear losses,
if any, have__
a. A Daring and adventurous psyche c. Multi- Skilled and qualified professionals
b. Regular source of income with d. All of the above
enough surplus funds to invest
1370. While constructing a model portfolio for an investor, which amongst the
following factors should be considered?
a. Clients Employment status c. The size of portfolio
b. Clients Risk Profile d. All of the above
1371. Mutual fund advisor can advise more than 70% of funds investment in
debt funds to_____
a. A 33 year old well employed c. Elderly couple with no children
with TCS with no kids
b. A 45 year old Executive Manager d. All of the above
of TCS with young kids
1372. The__________ is the phase when the earning years usually start.
a. Young Unmarried c. Married with older children
b. Young unemployed d. During graduation
1375. Mutual Fund scheme having feature of both close ended and open ended
scheme would most closely associated with
a. Interval Fund c. Fund of Fund
b.Hybrid Funds d. Exchange traded Fund
1378. Can an Investor loose more Money than what he has invested in Mutual
Fund?
a. No b. Yes
1380. Among the Scheme classification, Can the Gold Funds and Gold Sector
funds be considered as same one?
a. False b. True
1381. Which among the following is not able to describe a Thematic Fund?
a. Thematic Scheme may have more c. Thematic Fund is more diversified than
than one Sector Exposure. Sector Fund.
b. Thematic Fund is less diversified d. Thematic Fund is like Index Fund.
than Diversified Fund.
1382. Which among the following is False about Exchange traded fund?
a. Such Scheme is available for trading c. These are managed actively.
like Share on Stock Exchange.
b. An Investor can buy or sale at any d. These scheme trade with an underlying
time and on any working day from Benchmark like Nifty or Commodity
Exchange. like Gold.
1383. Which among the following is not a feature of Index Fund?
a. It targets a return in line with c. These are passively managed Fund.
Bench Mark performance.
b. Any excess performance will be d. AMC charges higher fee for
termed as tracking error. managing such technical scheme.
1384. Indian domestic Mutual Fund Scheme can invest in Commodity Market?
a. True b. False
1386. Which among the following does not reflect the nature of fixed maturity
Plan?
a. These are close ended Fund. c. They primarily invest in high quality
or Investment grade debt papers.
b. Investor horizon in these scheme d. These are special type of Hybrid Funds.
matches with the Scheme horizon.
1388. As per SEBI (Mutual Fund) Regulation, who acts as the protector of
unit-holder's interest?
a. Trustees c. Ministry of Finance
b. SEBI d. Compliance officer
1389. To choose an appropriate benchmark for a scheme, all of the following are
required except
a. The composition and size c. Historical data of fund performance
of the portfolio
b. The investment objective d. The nature of investments
1391. Which among the following is true about Exchange traded Fund?
a. It is like an open ended Index Open c. One can also buy ETF through another
that is traded on Stock Exchange. open ended fund called feeder Fund.
b. Market maker facilitates buying and d. All of the Above
selling of larger volume of units at
Exchange.
1392. Junk Bonds are part of those portfolios that invest in high Yielding and
poorly rated Bond Papers?
a. True b. False
1394. The Minimum Net worth required for AMC to Start an AMC business.
a. 50 Cr c. 10 Cr
b. 5 Cr d. 100 Cr
1395. Which among the following is true?
a. Day to Day management of the c. Sponsor appoints Trustee
Scheme is handled by AMC.
b. Sponsor needs to have minimum d. All of the Above
40% share in Capital of AMC.
1399. Which among the following is not the function of the Board of trustee?
a. It protects the Investor interest. c. It can terminate the appointment of AMC
by majority subject to approval of SEBI.
b. Handles Fund management. d. They perform variety of due diligence
activity on AMC.
1405. Which among the following is true for custodian of a mutual fund?
a. Is appointed for safekeeping of securities d. Does give or receive deliveries
of physical securities
b. Needed to be an entity independent e. All of the Above
of the sponsors
c. Is required to be registered with SEBI.
1416. Most of the Service related solution and after sales support to the Investor
are provided through
a. AMC office c. Distributor
b. Custodian d. Registrar and Transfer Agent.
1419. AMFI has framed Guideline called AGNI, Which among the following is
true?
a. It is set of Guideline to be followed c. It focuses on financial Planning while
by distributor, agents and broker. ensuring advisor to follow correct selling.
b. It aims at to ensure protection d. All of the Above.
of client interest.
1420. For ongoing transaction (Other than NFO) statement of account should be
sent to the Investor before
a. 2 Working days c. 30 working days.
b. 10 working days d. Once in a quarter.
1421. NAV and repurchase price of a Mutual fund Scheme (Except FOF schemes)
Should be updated on Website of AMFI and Mutual Fund before ………
a. 7 PM Same day c. 9 PM Same Day
b. 8 PM Same day d. 10 PM Same Day
1422. AMC pays an Interest at the rate of..... For any delay in despatching
dividend warrants/ redemption cheques beyond the stipulated Time Period.
a. 12%. c. 15%
b. Bank rate d. Case to case Basis.
1424. For NFO application other than ELSS, the process of refund of allotment
(Statement of Account) are completed within
a. 5 Business day c. 2 Week
b. 10 Business Day d. None of the Above.
1429. If Investor, who has not collected his Dividend / Redemption cheque, if he
comes back to claim the proceeds within a period of 3 years, he gets the
payment based on …….
a. Prevailing NAV i.e adding the Income c. Prevailing NAV of the Scheme.
earned in Money Market on the
unclaimed.
b. No change. Same Amount is Paid. d. Prevailing Bank rate along with
original unclaimed Amount.
1430. An entity holding 5 % or more of the total corpus of any mutual fund
scheme are called …………..
a. HNI- High Net worth Investor c. Investor
b. Significant Unit Holders d. None of the Above
1431. Investors have the right to receive interest from the AMC if redemption
proceeds are not despatched within a period of :
a. A month c. 14 working days
b. 14 days d. 10 working days
1432. The fund sponsors should be in the Business of Financial Services for
a. 7 years c. 5 years
b. 12 months d. 3 years
1433. The agreement between the Trustees and the AMC is known as
a. Trust Deed c. Agreement to manage Portfolio
b. Investment Management Agreement d. AMC appointment letter
1434. Sponsor are expected to have earn profit after providing for depreciation
and Interest for at least.... out 5 years under consideration.
a. One financial year c. 3 financial years
b. 2 financial years d. 2 calendar years
1439. AMC deploy the unclaimed dividend and Redemption amount in Money
Market. And he can charge up ..... as Investment management fee for this
corpse.
a. 0.5 P.A c. 2.5% P.A
b. 1 % P.A d. He cannot charge
1440. Unit holder can hold their units
a. In the form of Unit certificate. c. In the form of Electronic units through
D mat Account.
b. In the form of Statement of Account d. All of the above.
1450. For Any fundamental change in Scheme attributes, AMC needs to publish
a. In Television c. In an English daily newspaper having
Nationwide circulation and in a news
paper published in the language of the
region where the head office of the Mutual
fund is located.
b. In any local newspaper where d. No need for advertisement.
the head of AMC is situated
1452. The Draft SID is available for observation on SEBI`s websites for
a. 7 Working Days c. 21 working days
b. 15 Working days d. 30 Working days
1453. Which of the following is not valid information in SAI?
a. Investment valuation and accounting norms. c. Contact information of service providers.
b. Profiles of Key personnel. d. Data of opening and closing number
of investor complaint for previous
2 financial years.
1454. When an investor of an open ended Mutual Fund scheme holds 25% or
more of the corpus of the scheme, the maximum time limit an AMC is
granted to balance the portfolio as per Statutory regulation
a. 1 Month c. 1 month normal times plus 15 days
notice period thereafter.
b. 15 days d. No time limit allowed.
1455. The function and responsibility of the sponsor, AMC, trustee and custodian
of the Mutual Fund are explained in
a. Statement of Additional c. Both SAI and KIM
Information. (SAI)
b. Key information Memorandum d. Scheme information document
(KIM)
1456. A prospective investor who has not invested in the Mutual Fund Scheme,
can he legally sue AMC/Trustee for any Mutual Fund related issue?
a. Yes b. No
1457. Portfolio of a Mutual Fund Scheme of Mutual Fund is uploaded on its web
site on every 3rd of succeeding month.
a. True b. False
1458. Mutual Fund Scheme SID the risk factor are explained in two parts.
a. Standard Risk and Scheme c. Active Risk and Passive Risk
Specific Risk
b. Systematic Risk and Non d. Top down Risk and Bottom
systematic Risk up Risk
1459. The Scheme Plan shall have minimum 20 Investor and no investor can hold
more than 25% of Holding of the corpus of the Scheme?
a. True b. False
1460. As per AGNI, The practice of rebating i.e sharing part of commission earned
by distributor is banned.
a. True b. False
1461. NSE Platform called NEAT-MFSS and BSE platform called BSE-STAR
offer its services to Mutual fund investor for making convenient transaction
a. True b. False
1463. Which among following explains the fundamental attribute of the offer
document?
a. Types of Scheme c. Terms of Issue
b. Investment objective d. All of the above
1464. Mutual Fund /AMC have to make disclosure of their unaudited financial
result every
a. Monthly c. Half Yearly
b. Quarterly d. Yearly
1465. The statutory disclaimer “Mutual fund is subject to market risk “in visual
mode should be advertised as ...
a. Covering 10% of the display is c. Either of the above
in white background.
b. Displayed in back letter of at d. Both of the above.
least 8 inches height in white background.
1466. Which among the following is true with regards to SEBI regulation on
commission with regard to distributor?
a. SEBI regulation does not speak c. Anything above the expense structure
about minimum or maximum shall be borne by the AMC.
commission limit.
b. Commission should be from within d. All of the above..
the laid out expense structure.
1467. SEBI advertisement code states, annualized return for a scheme which is in
existence for more than a year can be displayed as
a. 1 yr, 3 yr , 5 yr and since launch. c. 1 yr, 3 yr and since launch
b. 1 yr, 5 yr and since launch. d. 1 yr, 3 yr and 5 yr.
1468. New SEBI provision states that upfront commission to distributor is paid by
a. AMC c. AMC has discretion to pay
or not to pay.
b. Investor Directly d. It depends upon Scheme.
1470. SEBI advertising code prohibits a distributor from advertising any publicity
material other than that provided by the AMC or pre approved by the AMC.
a. True b. False
1474. The New SEBI guidelines entitles a Distributor to claim upfront commission
directly from the investor
a. True b. False
1475. Which among the following has emerged as newer distribution channel for
marketing Mutual Fund Scheme?
a. Internet c. Both of the above.
b. Stock Exchange d. Distribution Channel.
1476. Distributor cannot claim commission on the investment made in his name?
a. True b. False
1477. In money market schemes of Mutual Fund, where investment horizon are
extremely short, performance of the Scheme can be advertised using simple
annualization of yield for the performance period
a. 7 Days c. 30 Days
b. 15 Days d. All of the above
1478. For Product like Fixed Maturity Plan, Can Mutual Fund indicate
prospective Scheme Portfolio or Indicative Scheme Yield?
a. Yes b. No
1479. The maximum initial commission that an AMC can pay to distributor is
a. 1.5% c. 0.5%
b. 1% d. Nil
1480. SEBI has mandated disclosure of commission by AMC for the distributor
having
a. Multiple point of presence c. Receipt of Commission over Rs 50
exceeding 20. lac in a year from one AMC.
b. Receipt of commission of over d. All of the Above.
1 Cr from industry in Year.
1483. The new SEBI provision states that the Initial issue expense of Mutual fund
scheme shall be borne by ….
a. Investor c. AMC
b. Sponsor d. There cannot be any initial
issue expense.
1485. All expense and income accrued up to valuation date are considered for
valuation except for some minor expenses accrual if they do not affect the
Scheme NAV over
a. 2% c. 0.5%
b. 1.5% d. 1%
1486. Which among the following is true?
a. The definition of Long Term for c. Both a and b.
Equity Scheme portfolio is beyond
1 Year.
b. The definition of Long Term for a d. None of the Above
Debt Scheme Portfolio is beyond
3 Year.
1488. Equity share which are not traded or thinly traded in an equity portfolio
are valued on the basis of …..
a. Book Value. c. Valuation of peer group
companies.
b. Earnings per share. d. All of the above.
1496. If a Equity Scheme NAV is Rs 15. And the applicable exit Load is 2%, what
would be the Redemption price.
a. 14.70 c. 15.00
b. 15.30 d. 14.85
1501. What are the options available with Mutual Fund Investor within a Scheme?
a. Growth Option c. Dividend Payment.
b. Dividend reinvestment option. d. All of the above.
1502. An Investor under Debt Scheme Who wants cash at regular interval should
apply for option
a. Daily Dividend pay-out plan. c. Systematic Transfer Plan
b. Monthly dividend pay-out plan. d. Systematic Withdrawal plan.
1503. Which among the following Document are available to investor for
inspection?
a. Memorandum and articles of c. Investment management report.
association of the AMC.
b. Consent of auditor and legal advisor. d. All of the Above.
1504. In a dividend re-investment option of a mutual fund scheme, the new units
are reinvested at
a. Cum dividend NAV c. It varies Scheme to Scheme.
b. Ex dividend NAV d. It is allotted on face value.
1506. Which of the following is true about systematic withdrawal plan (SWP).
a. It assists the Investor who needs c. SWP is paid to Investor even if
regular cash out flow from the Scheme. Scheme NAV has declined.
b. Scheme redeems desired units to pay d. All of the Above.
the SWP amount to Investors.
1507. SIP works on the Rupee cost averaging. However A short coming of rupee
-cost averaging is
a. Investor invest regularly and c. It does not inform an investor when
periodically same amount. to buy, sell or switch from one scheme
to another
b. Over a period of time, the d. Rupee cost averaging has no
average purchase price will serious shortcomings
work out lower than the highest
Price the Scheme.
1512. “Who can invest” section in the offer document is most important for
a. For a Regular Investor Who c. AMFI to know who can invest.
invests MF since long.
b. SEBI to know who are eligible d. A first time investor in Mutual
to invest. Fund, Who does not know about his
eligibility of investing.
1514. If Investment is being made on behalf of Minor Child, the KYC needs to be
processed for
a. Minor Child c. School Teach who issue
Age certificate.
b. Guardian and donor both. d. Not required to be processed.
1515. If investment is being made on behalf of Power of attorney, The KYC shall
be processed for
a. Investor c. Both a) and b)
b. Person holding Power of attorney d. Both Investor, POA as well
as Nominee also.
1516. In the event of change in address or any other information, Mutual Fund
investor needs to fill up KYC update request only once which updates his
record at all Mutual Fund house.
a. True b. False
1517. For purchasing units in an Scheme, Investor can make Remittance in bank
account of Mutual Fund using
a. NEFT c. SWIFT
b. RTGS d. All the above
1520. Cut off time for Processing of Sales and Repurchase of Equity and Debt
Scheme is
a. 12 O clock c. 3 PM
b. 2 PM d. It varies as per Schemes.
1521. The conditions of Trigger in Mutual Fund Portfolio may vary from scheme
to Scheme?
a. True b. False
1522. …………. Stock performances are better than the Growth rate of Economy.
At the same time the Stock decline fast when market falls.
a. Value c. Index Stock
b. Growth d. Thematic Stocks.
1526. While expecting a increase in Interest Rate, Debt Fund manager does
a. Reduces the Debt portfolio c. May convert investment
Duration substantially. into cash
b. May add floating rate instrument. d. All of the above
1530. Investor fined difference between Scheme return and investor return. The
reason that lead to such difference may be..
a. Loads c. Both of the above.
b. Taxes d. Never ever.
1534. The general Risk of a Scheme NAV moving up or down on the basis of
capital market movement can be best attributed to
a. An investment risk c. Standard Risk
b. Scheme specific risk. d. Credit Risk.
1535. Which among the following is true?
a. Portfolio diversification leads to c. Systematic risk of an equity
minimization on non systematic Risk. portfolio is measured by Beta.
b. Index Fund has Beta equals to 1. d. All of the Above.
1536. In a floater debt instrument, when the market yield goes up, the issuer
………
a. Allow the same rate to continue. c. Re-set Payment at higher Interest.
b. Re-set payment at lower interest. d. Floater instrument bond incur
value Loss.
1537. There is relationship between Bond Yield and Bond Value. Which among
the following is true?
a. There is a Inverse relationship c. When Interest Rate decreases,
between yield and value of debt Bond Price increases.
security.
b. When Interest Rate increases, d. All of the Above.
Bond price decreases.
1543. An investor in a closed-end mutual fund can get liquidate his holding before
maturity through selling Units at
a. Back to the fund c. On a stock exchange where
the fund is listed
b. To the trustee at NAV d. To the Banker at the prevailing
NAV.
1546. Debt is a lending and Borrowing Exercise. When We place deposit with a
bank, We are
a. Borrower from the bank c. Shareholder of the bank
b. A lender to the bank d. Owner of the Bank proportionately.
1547. Past performance of a sponsor/AMC mutual fund is not indicative of the
future performance of the scheme. This is
a. No, performance does c. A scheme-specific risk factor
follow a pattern.
b. A standard risk factor d. It is a SEBI statement to
for all schemes caution the Investor.
1548. Which among the following Scheme offers highest potential for capital
appreciation is offered by
a. Liquid Fund c. Growth funds
b. Gilt funds d. Balanced funds
1553. A person who analysis shares based on Published statement on finances and
operations of the company is known as
a. Chartist c. Technical Analyst
b. Fundamental Analyst d. Quantitative Analyst
1554. Beta of an equity fund measures its
a. Performance c. Risk adjusted return
b. Risk d. All of the above
1562. If the NA V of a scheme grows from Rs. 10 to Rs. 40 in two years, what is the
compounded annual growth rate?
a. 10% c. 58.74%
b. 100% d. 48.74%
1563. If Scheme Return is 16%, Risk free Return is 8% and Standard Deviation
of the Portfolio is 4, what is Sharpe Ratio...
a. 1 c. 2.5
b. 2 d. 8
1564. If Scheme Return is 24%, Risk free Return is 8% and Standard Deviation
of the Portfolio is 16, what is Sharpe Ratio...
a. 1 c. 2.5
b. 2 d. 8
1565. The NAV of a close ended scheme when listed at Stock exchange are found
to be quoted ………….
a. At a premium to NAV c. At par
b. At a discount to NAV d. Either of the above.
1570. A debt fund investor should give more attention to …………. Before
selecting a debt scheme?
a. Fund house reputation c. Scheme Performance
and track record.
b. Portfolio Composition. d. Weighted average maturity.
1572. A close ended Scheme is quoted on the Stock exchange at discount to its
NAV when …..
a. The market Are bearish. c. The asset of the fund is
undervalued.
b. Investor perceive that the fund d. None of the above.
will be unable to maintain the NAV
1573. The maximum exit load that could be charged to investor as per SEBI
regulation is …………
a. 5% c. 7%
b. 1% d. 2%
1575. An investor buys units in a fund that has given excellent return in the past,
but his expectation are not met. As the fund does not perform well this year,
the Investor can
a. Sue the AMC c. Sue the agent/ distributor
b. Sue the trustee d. None of the above.
1588. Mutual Fund ranking and Mutual Fund Scheme rating could be considered
one
a. True b. False
1589. While choosing between a Bank deposit and a debt income fund, a investor
must consider …?
a. Credit rating of a bank. c. His investment objectivity
and risk appetite.
b. Quality of a Mutual Fund scheme. d. All of these.
1591. Gold and real estate are attractive investment option only in high inflation
economies?
a. True b. False
1592. The new pension scheme do not offer equity investment product?
a. True b. False
1596. Which among the following are associated with Investment in Gold?
a. Gold ETF c. Gold Future
b. Gold Sector Fund d. All of the Above
1598. A investor should consider before choosing between, Fixed Deposit in Bank
and Mutual Fund Debt Scheme
a. Bank offer taxable Interest with TDS. c. Mutual Fund debt free offer tax
efficient Long Term Capital gain.
b. Mutual Fund debt Scheme Offer d. All of the Above
Tax free Dividend.
1601. Despite India having high Savings to GDP ratio, more than 50% of wealth
of Indian is held in Physical form?
a. True b. False
1604. GOLD ETF remains listed at Stock exchange. Investor can buy or redeem
their units through Stock Exchange directly.
a. True b. False
1605. The savings account Tier II, of NPS is a withdrawal account. But can be
operated only after having an active Tier I Pension account?
a. True b. False
1608. A 60 year old investor who is employed and earning well, can be said to be in
a. Accumulation phase c. Reaping/ Distribution stage
b. Transition stage d. Inter generational wealth
transfer stage.
1609. An investor who gets sudden wealth should ideally invest the sum
immediately into..
a. Stock exchange c. Diversified equity scheme
of Mutual Fund.
b. Bank fixed deposit d. Liquid Scheme of Mutual Fund.
1611. Person must learn the habit of saving from Young unmarried stage itself
a. True b. False
1612. When an investor keeps investing a fixed amount at regular interval what is
also termed as SIP, the average cost of acquisition of units will always be less
than the highest price
a. True c. False
1621. The transition phase of an investor's wealth cycle is achieved when the
a. Financial goals have been c. Financial goals are approaching
already met
b. The investor has retired d. Investor suddenly gets a windfall
1628. The Strategy advisable for an investor to maximize return in the long run is
a. Buy and hold on to investment c. Liquidate good performing
for a long time. investment from time to time.
b. Liquidate poorly performing d. Switch from poor performers to
investment from time to time. Good performers.
1634. What is the portfolio you will recommend to a Young couple with two
income and two children?
a. 10% Money Market, 30% Aggressive c. 60% Equity, 30% Money Market,
equity, 25% diversified equity, 35% 10% Debt.
bond Fund
b. 40 % aggressive equity, 30% Money d. 70% Bond Fund, 30% equity Fund.
Market, 30 % Bond fund.
1636. You have just won a huge sum in Lottery, what should you ideal allocation
be?
a. Invest in Government bonds as c. Consider the impact of Tax.
risk is low.
b. Invest in Money Market Fund and d. Both c and b.
decide over the next few days.
1637. The objective of Asset allocation is Risk management?
a. True b. False
1638. The Asset allocation which is based on Investor risk appetite and Investment
Objective is
a. Tactical Asset allocation c. Flexible Asset allocation
b. Fixed asset allocation d. Strategic Asset Allocation.
Bullet Points
1. Mutual Fund invests its unit holder money in capital market through various
Schemes to generate income (Dividend) and growth (Capital Appreciation).
3. The relative size of Mutual Fund Company among its peer is assessed by the
asset under the Management (AUM).
4. The diversified equity fund invests in diverse mix of Equity that cut across the
sector.
5. Thematic Funds are broader based than a Sector fund. In other word Thematic
Fund is more diversified than Sector Fund.
6. Interval fund combines the feature of both open ended and close ended fund.
7. Fixed maturity plan are kind of debt fund where the investment horizon of
Investor is closely aligned to the maturity of the scheme.
8. There are few disadvantages with Mutual Fund. These are, lack of portfolio
customization, No control on Cost and overload of scheme and scheme variant.
9. Mutual Fund can benefit from economies of scale because of large volume of
Trade. That means Investment through Mutual Fund are less expensive than
direct investment into capital market.
10. SEBI regulates Mutual Fund. Yet Bank Owned Mutual Fund, (that is where
Sponsor are Bank) is jointly supervised by SEBI and RBI.
11. The investor in a Mutual Fund Scheme cannot bear a loss higher than the
amount invested by him.
12. Equity Linked saving schemes offers tax benefits to its investor.
13. Dividend yield scheme invest in share that fluctuate less and maintains a track
record of high Dividend payout. And hence dividend represents significant part
of return on these shares.
14. The custodian of a Mutual Fund is appointed by Trustee. The primary job of
custodian to keep record of Security of Mutual Fund Schemes. They are
regulated by SEBI.
15. Capital protected schemes are close ended Hybrid Scheme (Where Investment
is made in Equity and Debt). The Portfolio of the scheme is structured in such
a way that investor get their principle back.
16. Exchange traded fund are open ended fund that is traded in stock exchange.
They follow the Value /price of their underline. They offer real time NAV to
their Investor.
17. The Sponsor Who creates the Structure of Mutual fund through Trust and
AMC needs to maintain 40% share holding in the capital of the AMC.
18. The custody of the assets of the Scheme rest with custodian who is appointed
by the trustee. While the assets are managed by AMC, it is kept with
Custodian. This works as check and balance and thus protects the interest of
Investor.
19. AMFI is not a SRO. It is an Industry advisory body to assist SEBI in
Regulating and formulating Rules. A Self Regulatory organization can regulate
only its member in a Limited Way.
21. The directors on the Board of AMC are appointed with prior approval from
trustee. The 50% of the director of the AMC should be Independent from any
association with Sponsor or Trustee..
22. AMFI issue advisory to maintain ethical and highest standard in Mutual Fund
Industry. It has issued two guidelines – a) AMFI code of ethics, it sets the
standard of good practices for AMC b) AMFI- code of conduct for
Intermediary, It sets the guidelines for distributor and Market intermediary.
23. The Scheme name should represent the asset class or sector of Investment it is
intended for. At least 65% of the Scheme corpus should be invested in the
kinds of the Security/ Sector implied by the Scheme name.
24. Statement of account needs to be sent to the Investor within 5 days of the
closure of the NFO other than ELSS and RGESS.
27. Contingent deferred Sales charge is an exit load. It is staggered with time.
CDSC is lower who stay invested in a scheme for longer period.
28. AMC needs to update the NAV and repurchase price in two News Papers.
29. The appointment of the AMC for the Mutual Fund can be terminated by the
majority of the trustee or 75% of the Unit Holder.
30. PAN no and KYC documentation is compulsory for the Mutual Fund
Investment. However requirement of PAN No is exempted for Micro SIP. But
Still Investor (for Micro SIP) has to get KYC done through simpler set of
documentation.
31. Investor can maintain 5 Bank details in their Folio. He can also nominate 3
person as his Nominee in his folio.
32. An Investor is a beneficiary in trust. And hence he can sue Mutual Fund trust.
Still if he feels, Trustee has not fulfilled the obligation; Investor can file breach
of Trust case against the Trustee.
33. NFO other than ELSS and RGESS in general can remain open for maximum
period of 15 days.
34. Mutual Fund Documents have two Parts SID (Scheme information document)
and SAI (Statement of additional Information.) Though the two parts are
legally only one document.
35. KIM is the summary of SID and SAI. It must be attached with application
form.
36. Apart from Individual and Stock Broker, the distributions of Schemes are
conducted through Institutional channel. They build their reach through
employee agents and Sub brokers.
37. SEBI does not speak on maximum or minimum commission. It only speaks
about maximum expense that a scheme can charge. Commission should be
paid within the overall limit of expense. There is no upfront commission
payable to the distributor. Distributors are expected to charge upfront
commission from Investor directly. AMC pay trail commission for the period
the investment has been held in the scheme.
39. Net assets are the unit holder Fund in the scheme.
40. A scheme cannot show better payment by delaying dividend payment and
other expense. As NAV calculation follows Accrual method of accounting.
Where expense and Income both are booked upfront.
41. SEBI has banned the entry Load from Mutual Fund Scheme. However there is
exit Load. Difference between NAV and repurchase price is called exit load.
42. A Mutual Fund must despatch Dividend Warrant within 30 days of the
declaration of the dividend and redemption cheque within 10 to the Investor.
The AMC is liable to pay compensation @15% per annum on the amount
involved in both the case for the delayed period to the Investor. Such penalty
payments are charged from AMC accounts not the Scheme accounts.
44. The investor can choose to hold units in dematerialized form. It is mandatory
in case investor wishes to trade on exchange and take service benefit of Stock
exchange route.
45. Equity investment can have two methods of Stock picking. Growth and Value.
High P/E multiple of a fund in comparison to average market multiple could
be of Growth Fund. And Low P/E multiple could be a Value Fund.
47. Dividend in Mutual Fund Scheme can be paid out of distributable reserves
only.
48. Investment in equity Scheme for a period less than one year is treated as short
term investment.
50. Investments in Mutual Fund units are exempted from wealth Tax.
53. Mutual Fund Scheme generally offer three option under it scheme. Dividend
payout, Dividend reinvestment and Growth.
54. Units in Mutual Fund are purchased and sold through application of NAV. The
Time Stamping is a mechanism to ensure that the cut off timing is strictly
followed in awarding NAV to the transaction.
55. A separate transaction slip mentioning details of Scheme and folio duly signed
by the investor is a valid document for redemption process.
56. Fund manager may follow different security analysis while constructing his
investment portfolio. Fundamental Analysis and Technical Analysis.
58. Equity fund manager can have two investment strategies while choosing
Equity stock. Growth Stock or Value Stock Picking.
59. Growth investment style leads to selection of high P/E growth Stock. The
growth rates of such companies are generally higher than the average
economic growth rate. Value investment style is an approach of picking stocks
which are valued lower based on their fundamental analysis. These are
generally available at Low P/E multiple.
60. In medium to long duration Debt portfolio`s of Mutual Fund scheme, the
return are largely driven by the interest rate and yields spread.
61. The difference in the Yield (Return) between a Government bond and
Corporate Bond of similar maturity is called yield Spread.
62. The Scheme return can be calculated by three ways. Simple return, Simple
annualize and Compounded annual growth Rate (CAGR). The CAGR is
accepted as calculation of all return for unit held beyond one year.
63. A Bond rating indicates its associated default Risk. Poorer the rating weaker
the Bond and higher the yield it will offer. Poorest qualities of Bonds are called
Junk Bond.
64. The Interest rate and Bond Price are inversely proportional. When Interest
Rate rises, Bond Price fall. And when interest rate declines, bond price rises.
65. A security which is not traded regularly or whose closing price are not
available for NAV calculation, are called thinly traded security. The valuation
formula of such security is based on earning per share of the company, book
value, and the valuation of similar share in the market (Peer Group).
66. Debt Securities that are not traded on the valuation date are valued as per the
approved yield matrix prepared by SEBI approved valuer. The yield matrixes
consider the different credit rating of peer debt security to compare and derive
the yield of thinly traded security.
68. The Investment objective and benchmark are decided at the time of launch of
Scheme through Offer document. The choice of an appropriate benchmark for
evaluating a fund`s performance depends on the investment objective of the
fund.
69. Schemes performances are compared in respect to its underlying Benchmark.
Scheme outperforming benchmark consistently over a period is called a better
performing Scheme. The ability of fund manager to outperform Benchmark is
measured by Alpha. All funds may have alpha except Index Fund. Index fund
Manager is not expected to beat the Benchmark. He mirrors the Index and
tries to replicate the Index performance. Any deviation positive or negative by
Index fund Manager from its benchmark is termed as tracking error.
71. When Beta of a Scheme is one, It represents risk neutral feature. Index Fund
have Beta =1. Aggressive funds have beta more than 1 and defensive funds
have beta less than 1.
72. Scheme return and Investor return are never same. Loads and taxes pull the
Investor return below what is earned by the Scheme.
73. Systematic Investment plan (SIP) is based on Rupee cost averaging. Investors
under SIP always invest at average price less than the highest price of the
Scheme. Similarly Systematic Withdrawal plan (SWP) is ideal for Investor
who prefers a Regular Income stream.
74. Minimising risk is a priority for any Investor while approaching capital
market. Asset diversification of is the approach through which one can spread
ones investment among multiple asset classes to diversify the underlying risk.
75. Arbitrages try to locate profit when a security is prices differently in two
markets at a given point of time. It is ambiguity in price discovery. Arbitrage
fund are meant to lock a better risk adjusted return in relation to a Liquid
fund.
76. A Balance Scheme or hybrid fund offers exposure to both debt and Equity.
77. Tracking error in an index fund is the basis of selecting a better Index scheme.
Lower the tracking error, better the Schemes is.
78. Among the three option under a Scheme, as such dividend payout, dividend
reinvestment and growth, a Investor need to prioritize his taxation and
liquidity requirement before deciding his Scheme option.
79. Gold Linked or other Mutual Fund Scheme is exempted from wealth Tax.
81. Strategic asset allocation is a long term strategy, where asset allocation across
equity and debt follows a consistency. For example, one should hold debt in
proportion to the age he belongs. Higher the age higher should be debt in his
portfolio.
82. Tactical asset allocation is based on the calls in relation to the likely behaviour
of the Market. A investor with higher investible surplus and speculative
behaviour favours tactical asset allocation
84. Systematic Risk is also called Market Risk. This cannot be diversified.
85. The Non systematic Risk or diversifiable risk can be minimized by investing in
a portfolio.
87. Share Ratio and Treynor Ratio measures risk adjusted return of the Portfolio.
88. Alpha measures the ability of Fund manager to create extra return over and
above the benchmark.
89. Deviation in the return between an index fund and benchmark is called
tracking error.
90. High Portfolio turnover ratio leads to higher risk and cost. It is especially
important in case of Liquid and debt Fund.
91. R Square of a Portfolio states the extent of alignment between portfolio and
the benchmark. Hence the Index fund R square should e be 1.