Nism & Market News: NISM - 500 Question Bank - VA Series

9/4/2018 NISM - 500 Question Bank - VA Series ~ NISM & MARKET NEWS
NISM & MARKET NEWS

National Institute Of Securities Markets
NISM - 500 Question Bank - VA Series

 Ravi Kumar  02:05  NISM - Question Bank  2 comments
Practice Questions for AMFI Test
1. A close-ended mutual fund has a fixed : 2. Gilt Funds

1. NAV
3. Equity Growth Funds
2. fund size
4. Debt Funds
3. rate of return
4. number of distributors 6. The NAV of a mutual fund:
1. is always constant
2. The maximum load that a fund can charge is 2. keeps going up at a steady rate
determined by the :
3. fluctuates with market price movements
1. AMC
2. SEBI 4. cannot go down at all
3. AMFI
7. An open-ended mutual fund is one that has:
4. distribution agents based on demand for the 1. an option to invest in any kind of security
fund
2. units available for sale and repurchase at all
3. The amount required to buy 100 units of a times
scheme having an entry load of 1.5% and NAV of 3. an upper limit on its NAV
Rs.20 is :
4. a fixed fund size
1. Rs.2000
2. Rs.2015 8. An investor in a close-ended mutual fund can
3. Rs.1985 get his/her money back by selling his/her units:
1. back to the fund
4. Rs.2030
2. to a special trust at NAV
4. A gilt fund is a special type of fund that invests : 3. on a stock exchange where the fund is listed
1. in very high quality equity only 4. to the agent through which he/she subscribed
2. in instruments issued by companies with a to the units of the fund
sound track record
3. in short-term securities 9. The "load" charged to an investor in a mutual
fund is
4. in government securities only 1. entry fee
2. cost of the paper on which the unit certificates
5. Of the following fund types, the highest risk is
associated with are printed
1. Balanced Funds 3. the fee the agent charges to the investor
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4. the expenses incurred by fund managers for 1. every quarter

marketing a mutual fund scheme
2. every month
10. A mutual fund is owned by 3. every hour

1. the Govt. of India 4. every day
2. SEBI
17. Debt funds target
3. all its investors
1. low risk and stable income
4. AMFI
2. protection of principal
11. Units from an open-ended mutual fund are 3. high growth with risk
bought
4. long term capital appreciation
1. on a stock exchange
2. from the fund itself 18. In which of the following do debt funds not
invest
3. from AMFI
1. government debt instruments
4. from a stock broker
2. corporate paper
12. A mutual fund is not 3. financial institutions' bonds
1. owned jointly by all investors 4. equity of private companies
2. a company that manages investment
portfolios of high networth individuals 19. Which of the following risks do not affect a
debt fund
3. a pool of funds used to purchase securities on
behalf of investors 1. default by issuer on payment of interest or
principal
4. a collective investment vehicle
2. price fluctuations of the debt securities
13. "Load" cannot be recovered 3. share price movements

1. at the time of the investor's entry into the fund 4. interest volatility
2. as a fixed amount each year
20. Assured return or guaranteed monthly income
3. at the time the investor exits the fund plans are essentially
4. from the fund's distribution agent 1. Hybrid funds
2. Growth Funds
14. The most important advantage of a money
market mutual fund is 3. Debt/Income funds
1. quick capital appreciation 4. Sector funds
2. high regular income
21. A Fixed Term Plan Series is
3. safety of principal
1. an open-ended fund
4. no loads
2. a close-ended fund
15. Some close-ended funds are quoted at a 3. a fixed term bank deposit
discount to their NAV because
4. a fixed term corporate bond
1. of high expense ratios
2. investors do not expect the current NAV to be 22. NAVs of equity funds are not affected by
sustained in future 1. Stock market movements
3. the repurchase price fixed by the fund in lower
2. Events affecting the industry/sector in which
than the NAV
the fund has invested
4. of the inherent risk involved in investing in
3. Happenings in the companies in which the
such type of funds
fund has invested
16. The NAV of each scheme should be updated 4. real estate prices
on AMFI's website
2. equity warrants
23. The greatest potential for growth in capital is
offered by 3. ordinary debentures
1. debt funds 4. convertible debentures
2. gilt funds
3. growth funds 30. The drawback of an ordinary share is
1. possibility of capital appreciation
4. balanced funds
2. ownership privilege of the company
24. A Systematic Withdrawal Plan, allows 3. guaranteed dividend income
investors to get back the principal amounts
invested in addition to the income on investment 4. no guaranteed income or security
1. True
31. An owner of preference shares is given which
2. False of the following rights
1. voting rights
25. Which of the following is untrue of an
automatic reinvestment plan? 2. fixed dividend income from post-tax profits
1. The plan allows for automatic reinvestment of 3. voting rights and unlimited dividend income
all income and capital gains
4. no guaranteed rights
2. Automatic reinvestment allows for
accumulation of additional units of the fund
32. Market capitalisation of a company is
3. The major benefit of automatic reinvestment calculated by multiplying the number of
is compounding outstanding shares by
4. The benefit of automatic reinvestment is 1. R.10
often lost on account of the heavy load 2. Face value of each share
charge on the reinvestment
3. Current market value of each share
26. Constraints imposed by most funds on check
writing are: 4. dividend yield
1. Account balance should not fall below the

minimum capital required 33. The Price/Earnings (P/E) Ratio is an important
measure of a company's anticipated performance.
2. Checks issued must be for at least the It is calculated using:
minimum amount specified. 1. Market price and dividend
3. Number of checks per month must not exceed
2. Market price and earning per share
a specified number
4. Both a & b above 3. Market capitalisation and dividend
4. Market price and face value
27. The performance of a fund is largely measured
by the success of 34. A company whose earnings are strongly
1. the marketing function related to the state of economy is known as
2. the operations function 1. Economy stocks
3. the portfolio market function 2. Cyclical Stocks
4. none of the above 3. Value Stocks

4. Growth stocks
28. Generally invest in
1. unlisted 35. A Growth stock refers to shares of a company
whose earnings are projected to grow at the
2. market-traded normal market rates
3. thinly traded 1. True
4. privately placed 2. False
29. Which of the following is not an equity 36. Which of the following is generally true for a
instrument growth stock?
1. preference shares
1. steady capita appreciation and steady management or the controlling interest in the
AMC change
dividends yields
1. True
2. high capital appreciation and high dividend
yields 2. False
3. high capital appreciation but low dividend
yields 44. An AMC cannot explain adverse variations
4. steady capital appreciation but high dividend between expense estimates for the scheme on
offer and actual expenses for past schemes in
yields
1. financial newspapers
37. Shares of companies with large capital market 2. business channels on TV
capitalisation
3. the offer document
1. have greater growth potential
4. AMFI newsletter
2. are more liquid
3. are not available 45. Information on estimated expenses to be
4. none of the above incurred by a scheme is not found in the offer
document, but in brochures of the fund
1. True
38. Dividend yield for a stock is
1. dividend per share 2. False
2. dividend per face value 46. When comparing a fund's performance with
3. dividend per share to current market price that of its peer group, the following cannot be
compared
4. none of the above 1. Two debt funds with 5 year maturities
2. A broad-based equity fund with an IT Sector
39. Value stocks
Fund
1. have high current dividend yield
3. A bond fund with a bond
2. yield high growth in earnings
4. A government securities fund with a
3. are currently under valued government security
4. none of the above
47. An AMC must explain adverse variation
between expense estimates for the scheme on
40. A better performance than the return on offer and actual
index is given by
1. expenses for past schemes in
1. passive fund manager
2. financial newspapers
2. an active fund manager
3. business channels on TV
3. all fund managers
4. offer document
4. non fund manager
5. AMFI Newsletter
41. A change in key personnel especially the fund 48. Information on estimated expenses to be
manager of an AMC does not necessitate a incurred by a scheme is not found in the offer
revision of the offer document document, but in brochures of the fund
1. True 1. True
2. False 2. False
49. The offer document and key information
42. If fresh litigation cases or adjudication memorandum contain financial information for
proceedings are referred by SEBI against the fund 1. all schemes of all mutual funds in the capital
sponsors or a company associated with the
sponsors, then the offer document needs to be market
revised 2. all schemes launched by the particular fund
1. True during the last 3 fiscal years
2. False 3. none of the schemes
4. companies in which investment is proposed
43. The offer document need not be revised if the
g j
50. The functions and responsibilities of the guarantor's ability to meet any shortfalls in the
sponsor, AMC, trustees and custodian of the returns assured under the scheme can be found in
mutual fund are listed in
5. the offer document
1. offer document only
6. the key information memorandum
2. key information memorandum
7. both (a) and (b)
3. both offer document and key information
memorandum 8. none of the above
57. The names and background of key personnel
51. Information about trusteeship fees is included of the AMC
in the offer document but not in the key
information memorandum 5. need not be disclosed to investors
5. True 6. are of no relevance as they may change
6. False 7. are disclosed in the offer document
8. are declared in newspaper advertisements
52. The following information about the
constitution of the mutual fund is found in both
the offer document and key information 58. The minimum amount to be raised, and the
memorandum maximum target amount
5. activities of the sponsor 5. are not known before the offer is concluded
6. summary of trust deed provisions 6. can be decided based on investor response to

the offer
7. name and addresses of the board of trustees
7. are defined as per SEBI Regulations before
8. all of the above the offer is made
8. need not be disclosed in the offer document
53. The investment objectives of the fund an
investor selects for investment
59. The circumstances for refund of investment in
5. are of no relevance the initial offer and period within which refund
must be carried out are not specified in the offer
6. should be the same as his own investment document, but only on the application
objectives
5. True
7. change with market movements
6. False
8. change with change in the AMC's key
personnel
60. Offer related information required to be listed
in the offer document and key information
54. The investment policies listed out in the offer memorandum includes
document of a fund do not include
5. dates of opening, closing, earliest closing,
5. the type of securities in which the scheme will allotment and despatch of certificates
invest principally
6. procedure for transfer and transmission of
6. asset allocation pattern units
7. policy of diversification 7. both the above
8. the specific securities in which the fund will 8. neither of the above
invest
61. In the offer document, funds are required to
55. If a scheme's name implies that it will invest make disclosures summarizing associate
primarily in a particular type of security or in transactions and their impact on the performance
certain industry/sector, then it should invest at of the scheme for the last
least the following percentage of its total assets in
the indicated type of security/industry/sector 5. one fiscal year
5. 100% 6. 2 fiscal years

8. 40%
62. The circumstances under which a scheme
shall be wound up are to be described in the offer
56. For assured return schemes, information document at the time of the initial launch of the
about the guarantor's net worth which justifies the scheme itself
5. True 8. names of lenders

6. False
69. Valuation norms for non-traded securities
should be disclosed
63. The following do not form a part of the
investment procedure described in an offer 5. at the end of every financial year
document
6. every quarter
5. various plans under the scheme (e.g. dividend
reinvestment plant) 7. in the offer document at the time of launch of
the scheme
6. minimum initial (and subsequent) investment
8. should not be disclosed, being confidential
7. details of who can invest information
8. details of other competing mutual funds
70. Procedure for redemption or repurchase need
not
64. A scheme's policy on dividends and
distribution 5. be described in the offer document
5. is decided by the fund manager as per is 6. include how redemption or repurchase price of
market outlook units would be determined
6. can be changed to suit the requirements of the 7. include names of centres where redemption
AMC can be effected
7. need not be consistent 8. indicate the redemption or repurchase price
as at the end of the current fiscal year
8. should be disclosed at the time of initial
launch
71. The fund need not describe its accounting
policies in the offer document as these are of no
65. SEBI restricts mutual fund investments in use to an investor
companies forming part of the same group as the
AMC. This is: 5. True
5. not true 6. False
6. in the interest of investor protection
72. The accounting policies of a fund should be in
7. applied only to some mutual funds, not all accordance with
8. not favourable to investors at all 5. GAAP
6. SEBI regulations
66. A disclosure should be made in the offer
document if an AMC has invested more than the 7. ICAI Guidelines
following percentage of its net assets in group
companies 8. American GAAP
5. 50%
73. Tax treatment of investments does not
6. 40%
5. form a section in the offer document
7. 25%
6. describe the tax elements applicable to
8. 10% investors who invest in the fund
7. form a section in the key information
67. Mutual funds are allowed to borrow memorandum
5. freely to meet their requirements 8. offer tax advice to investors
6. for investment purposes
74. Documents available to investors for
7. only to meet redemption demands inspection do not include
8. not allowed at all 3. Memorandum and Articles of Association of
AMC
68. As a part of borrowing policy, the following 4. consent of auditors and legal advisors
need not be disclosed in an offer document
5. investment management reports
5. purpose and circumstances of borrowing
6. reports based on which actual investments
6. regulatory limits on borrowing are made
7. potential risk to AMC and unit-holders
8. if AMFI approves
75. Investors' rights under a scheme are
5. uniform for all schemes of all funds
83. Who among the following are not Institutional
6. not defined Investors
7. listed in the offer document 5. Banks
8. available with stock exchanges 6. Resident Individuals

7. Provident Funds
76. The offer document for a scheme should 8. Non Banking Finance Companies
describe how the NAV of the scheme is to be
computed
5. True 84. It is compulsory to use fund
agents/intermediaries for investing MFs
6. False 5. True
6. False
77. An offer document contains an AMC's investor
grievance's history for the past
5. one fiscal year 85. Generally, which category of investors need
advice for Investing in Mutual Funds
6. 2 fiscal years 3. Non Banking Finance Companies
7. 3 fiscal years 4. Insurance Companies
8. six months 5. Foreign Institutional Investors
6. Individuals
78. Any pending cases or penalties levied on the
sponsors or AMC should be disclosed in the offer
document 86. Most eligible investors of Mutual Funds can
5. True broadly be grouped into either individual or
institutional investors
6. False 5. True
6. False
79. Who among the following are not eligible to
invest in MF
5. Indian Companies 87. Commission rates or loads applicable to big
investors and small investors are
6. Banks 5. same
7. Non Banking Finance Companies 6. different
8. Foreign Citizens 7. not charges to either
80. NRIs are eligible to invest in Mutual Funds
1. True
88. What document Mutual Fund distributors
2. False need to refer for finding out eligible category of
investors in a particular Mutual Fund Scheme
81. The most important link between Mutual Fund 5. SEBI Regulations Manual
and Investors is 6. AMFI booklet
5. Government
7. Offer document
6. SEBI 8. RBI Guidelines
7. Fund distributors
8. AMFI 89. As per AMFI figures, how many agents
approximately, are there in India selling Mutual
Funds
82. Are Overseas Corporate Bodies allowed to 5. 50000
invest in Mutual Funds
5. No 6. 100000
6. Yes 7. 75000
7. if Ministry of Finance approves 8. 150000
7. False
90. Which Mutual Fund has majority of the agents
selling its Mutual Fund units in India
5. LIC Mutual Fund 98. The following need not be covered in a Key
Information Memorandum
6. UTI Mutual Fund 3. Risk Factors
7. SBI Mutual Fund 4. Opening, Closing and earliest Closing Date of
8. None of the above the offer
5. Disclaimer Clause
91. Mutual Fund agents/distributors are not 6. Functions and responsibilities of the sponsor,
allowed to sell Financial Products other than
Mutual Funds trustees, AMC and Custodian responsibilities
3. True
99. The front page of an offer document need not
4. False cover
5. opening, closing and earliest closing date of
92. Are Mutual Fund agents/distributors in India the offer
required to pass any examination to qualify to sell 6. disclaimer clause
Mutual Fund Units
3. Yes, a test conducted by AMFI 7. legal and regulator compliance
4. Yes, a test conducted by SEBI 8. price of units
5. No
100. A "glossary" of Defined Terms must be
6. a Post Graduate university course included in the offer document
5. True
93. How many major distributor Companies are 6. False
there in India selling Mutual Fund units
3. approximately 9
4. approximately 11 101. Standard risk factors are not
5. approximately 10 7. market driven
6. approximately 25 8. common to all schemes

9. of relevance to novice investors
94. The offer document is not a legal document 10. new to a regular investor
5. True
6. False 102. The risk of a scheme's NAV moving up or
down on the basis of capital market movements is
a standard risk factor
95. A copy of all changes in the offer document 9. True
has to be filed with SEBI
3. True 10. False
4. False
103. Past performance of a sponsor/AMC mutual
fund is not indicative of the future performance of
96. The legal responsibility for the accuracy of the the scheme. This is
statements made in the offer document lies with 9. not true
5. SEBI
10. a standard risk factor for all schemes
6. the AMC
11. a scheme-specific risk factor
7. AMFI
12. applicable only to gilt funds
8. the Company Law Board
104. Risk arising from a scheme's investment
97. Though the offer document of a scheme is objective/strategy and proposed asset allocation is
prepared as per SEBI Regulations and is filed with 9. not present
SEBI, SEBI does not certify the accuracy or
adequacy of the document 10. common to all schemes
6. True 11. specific to that scheme
12. not applicable to debt funds

111. Emerging or new channel for
distributors/marketing of Mutual Fund in India is
105. In an assured returns scheme, if assurance is 9. Insurance Companies
only for a limited period, it must be stated in the
offer document that there is no guarantee for 10. Banks
sustaining the assured return for the remaining
duration of the scheme 11. Qualified Mutual Fund agents
9. True 12. Direct Sales agents of respective mutual funds
10. False
112. Mutual Funds often use their own employees
106. If the AMC is managing a fund for the first to mobilise funds from
time, this information can be found in 7. retail investors
9. newspapers 8. High Networth individuals/institutional
10. SEBI investors
11. AMFI Newsletter 9. all investors
12. Offer document 10. foreign investors
107. A compliance officer 113. Retail distribution channels are a critical

element in the distribution of mutual funds in
9. stands guarantee to the information India
contained in the offer document 9. True
10. belongs to SEBI 10. False
11. cannot certify that the AMC's legal and
procedural obligations are fulfilled 114. "Sales Practices" cover the following areas
12. cannot be appointed by the AMC 9. desirable marketing practices
10. agents' responsibilities to the investor
108. The due diligence certificate that must be
submitted to SEBI along with the draft offer 11. ethical code of conduct
document cannot be signed by
12. all of the above
9. the managing director of the AMC
10. an executive director of the AMC 115. The following are not termed as "sales
11. the compliance officer practices"
9. agents commission
12. Investor relations officer
10. before-and after-sales service to investors
109. A due diligence certificate does not certify 11. advertising of schemes
that
12. stock broking
7. the draft offer document forwarded to SEBI is
in accordance with SEBI regulations
116. Sales practices are never mandated by
8. all legal requirements connected with regulators, but arise from convention only
launching of the scheme have been complied
with 9. True
9. disclosures made in the offer document are 10. False
true, fair and adequate
10. the AMC guarantees a good performance 117. Agents are compensated by mutual funds
9. through salaries
110. In developed countries, an important Mutual 10. through commissions
Fund marketing channel is through
9. Insurance Companies 11. through an annual fee
10. Banks 12. not in cash but in kind
11. Non-Banking Finance Companies

118. In India the minimum or maximum
12. Retail Distributors commissions payable to distributors are not
prescribed by law, but are decided using the fund's
own discretion
9. True 12. none of the above

10. False
126. To sell funds effectively, an agent need not
119. Lowest commissions are paid on 7. be fully aware of the important characteristics
of the scheme
9. Equity funds
8. know his/her client's risk profile
10. tax benefit schemes of mutual funds
9. give after sales service
11. debt funds
10. offer large investment rebates
12. long-term investments in mutual funds
127. For investors to correctly compare

120. Excess distribution expenses are to be borne performance of different funds SEBI's advertising
by the codes include
9. AMC 9. uniform computation of yields
10. unit holders 10. uniform presentations of dividends
11. SEBI 11. identical time periods
12. AMFI 12. all of the above
121. To cover fund distribution expenses, open 128. SEBI's advertising code mandate that all
ended funds performance calculations in a fund's
7. charge a fee from agents advertisement should be based
7. NAV
8. charge entry and exit loads from investors
8. the NSE Fifty Index
9. create a reserve
9. the BSE Sensex
10. sell investments
122. Trail commission means paying
9. no commission at all 129. An agent's appointment by a fund
9. requires SEBI's approval
10. the entire commission up-front
10. is a lengthy and cumbersome process
11. part of the commission up-front and the
balance in phases 11. is mandatorily preceded by an AMFI test
12. the entire commission after five years 12. does not require any approval
123. Sub-brokers serve as agents of the principal 130. An investor does not have recourse to his
broker and a mutual fund is not answerable for agent in case of errors, problems or the quality of
their activities the investment
9. True 3. True
10. False 4. False
124. In India, Mutual fund agents' rate and services 131. An agent can offer and sell a funds's units at
are at present defined by
9. any price he chooses
7. SEBI rules
10. a price determined by competition among
8. stock exchange bye-laws agents
9. AMFI rules 11. a price based on demand for that fund's units
10. convention 12. the public offering price currently in effect
125. Along with the application, it is mandatory to 132. All buy orders through an agent do not
distribute become valid till the fund accepts and confirms
9. investment rebate the orders
9. True
10. offer document
10. False
11. key information memorandum
11. AMFI's Code for Agents

133. When an agent purchases, offers or sells
units, ensuring compliance with applicable 12. None of the above
regulations is the responsibility of
9. the fund 140. In a mutual fund investors' subscriptions are
10. the agent accounted for as
9. liabilities
11. AMFI
10. deposits
12. SEBI
11. unit capital
134. The terms of appointment of a broker by a 12. none of the above
fund are
7. laid down by SEBI 141. Investments made by a mutual fund on
8. laid down by AMFI behalf of investors are accounted as
5. assets
9. not uniform to all funds
6. liabilities
7. capital
135. The code of ethics for mutual funds published 8. none of the above
by AMFI
7. is mandatory 142. Liabilities in the balance sheet of a mutual
8. is in the form of recommended practices fund are
7. in the form of long-term loans
9. is unfavourable to investors
8. strictly short term in nature
10. does not cover distribution and selling
practices 9. combination of long term and short term
10. not allowed as per regulations
136. The AMFI code of ethics does not cover the
following prescriptions
143. Net Asset Value (NAV) of a mutual fund
7. Adequate disclosures should be made to the scheme is defined as the schemes
investors
7. assets minus liabilities
8. Funds should be managed in accordance with
stated investment objectives 8. assets per unit
9. conflict of interest should be avoided in 9. assets minus liabilities per unit
dealings with directors or employees 10. none of the above
10. each investment decision should be approved
by investors
144. The day on which NAV is calculated by a fund
is known as
137. Distribution and sales practices are only partly
regulated by SEBI at present 7. computation date
9. True 8. valuation date
10. False 9. record date

10. book closure date
138. Which of the following distribution channels
is preferred by private mutual funds
145. A funds NAV is affected by
9. Individual Agents
5. Purchase and sale of investment securities
10. Small Distribution companies
6. valuation of all investment securities held
11. established distribution companies
7. units sold or redeemed
12. the Internet
8. all of the above
139. Which of the following sales practices is

prescribed by regulation 146. When computing NAV of fund SEBI requires
accrual of major expenses to be accounted
9. AMFI Code of Ethics
9. quarterly
10. SEBI Advertising
10. annually 13. Investors can claim an income tax rebate

11. on a day to day basis 14. There is a lock-in period before investment
12. when actually paid can be withdrawn
15. There are not specific restrictions on
investment objectives for the fund managers
147. If a fund calculates NAV daily, it will include all
the transaction concluded up to 16. These funds cannot invest in equity
8. last week
154. Which of the following is not true for Index
9. last two days Funds
10. previous day 13. These funds invests in the shares that
11. today constitute a specific index
14. The investment in shares is in the same
148. For a open-ended fund,the repurchase price proportion as in the index
should not be lower than 15. These funds take only the overall market risk
7. NAV 16. These funds are not diversified
8. 95% of NAV
9. 93% of NAV 155. The structure which is required to be followed
by mutual funds in India is laid down by
10. 97% of NAV 11. Financial Ministry
12. Securities & Exchange Board of India (SEBI)
149. For a close-ended fund, the repurchase price
should not be lower than 13. Fund Sponsor
9. NAV 14. Association of Mutual Funds of India (AMFI)
10. 95% of NAV
11. 93% of NAV 156. The Board of Trustees of a mutual fund:
13. act as a protector of investors' interests
12. 97% of NAV
14. directly manage the portfolio of securities
150. For a scheme that has a load, the AMC can 15. do not have the right to dismiss the AMC
change an investment management fee not
exceeding 16. cannot supervise and direct the working of the
7. 1.50% AMC
8. 2.00% 157. The AMC of a mutual fund cannot

9. 1.25% 13. undertake advisory services or financial
10. 0.50% consulting
14. cannot invest the funds in government paper
151. Initial expenses of launching schemes should
not exceed 15. act as a trustee of more than one mutual fund
11. 15% of amount received 16. cannot invest the funds in securities
12. 10% of amount raised
13. 6% of amount raised 158. The trust that manages a mutual fund is
appointed by
14. 5% of the amount raised 13. The Finance Ministry
14. R.B.I
152. Which of the following expenses cannot be
charged to the scheme 15. SEBI
11. Audit fees 16. The sponsor of that mutual fund
12. costs related to investor communication
13. winding costs for terminating the scheme 159. The custodian of a mutual fund:
11. is appointed for safekeeping of securities
14. penalties and fines for infraction of laws
12. need not be an entity independent of the
153. Which of the following are not true for Equity sponsors
Linked Savings Schemes? 13. not required to be registered with SEBI
14. does not give or receive deliveries of physical 11. 7 years

securities
12. 12 months
160. Transfer Agents of a mutual fund are not 13. 5 years
responsible for
14. 3 years
13. issuing and redeeming units of the mutual
fund
167. The networth of an asset management
14. updating investor records company should be greater than
15. preparing transfer documents 13. Rs.100 Crores
16. investing the funds in securities markets 14. can be decided by the Sponsor
15. should be atleast Rs. 10 Crores at all times
161. Distributors or agents
16. should be greater than Rs.10 Crores
13. can distribute several mutual funds
simultaneously
168. The AMC and directors are answerable to
14. cannot appoint sub-agents or sub-brokers
11. Stock Exchanges
15. should be only individuals not companies or
12. The Board of Trustees
banks
16. should not be an employee or associate of the 13. Agents and distributors
AMC 14. Stock Brokers
162. A transfer in the management of a close- 169. The role of an AMC is to act as
ended scheme does not require the consent of
11. unit holders with 75% voting rights 1. promoters
2. investment managers
12. SEBI
13. Trustees 3. distribution agents
4. regulators
14. AMC
170. A change in the following key people does

163. The fund sponsor has to contribute not materially impact the performance of the
11. nothing to the AMC fund
12. the total networth of the AMC 13. Fund sponsors
13. atleast 40% of the AMC's networth 14. Trustees of the fund
14. exactly 50% 15. Fund Manager

16. Members of the AMFI Committee
164. The sponsor of a mutual fund may be
compared to 171. To transfer the management of a scheme
13. a director in a Company from one AMC to another, the consent of the
following is required
14. the Chief Executive of a Company
11. SEBI
15. Promoter of a Company
12. Unit holders
16. an equity shareholder in a Company
13. both SEBI and unit holders
165. Issuing and redeeming units of a mutual fund 14. none of the above
is the role
13. the custodian 172. As per SEBI's principles, the AMC and the
Board of Trustees of a fund should belong to the
14. the transfer agent same sponsors
15. the trustees 13. True
16. the bankers 14. False
166. The fund sponsors should have a sound 173. After UTI, the first mutual funds were started
financial track record of by
11. private sector banks 16. none of the above

12. public sector banks
180. The largest corpus of investable funds in
13. financial institutions India is with
14. non-banking finance companies 5. Bank-owned mutual funds
6. Private Sector mutual funds
174. The highest authority among the following is
the 7. UTI
11. SEBI 8. Insurance Companies
12. Company Law Board
181. The Board of Trustees of the UTI does not
13. RBI have nominees from
14. Ministry of Finance 13. RBI
14. LIC
175. The entity that SEBI does not regulate is
15. IDBI
13. share registrars
16. The Bombay Stock Exchange (BSE)
14. mutual funds
15. stock exchanges 182. UTI Cannot provide
16. non-banking finance companies 11. corporate finance
12. engage in real estate and property
176. The accounts and all other records of an AMC development business
are filed with
13. provide merchant banking services
11. AMFI
14. invest in securities
12. Registrar of Companies
13. Agents' Association 183. The "Capital" of a scheme does not include
14. UTI 13. unit capital
14. reserves
177. A close-ended scheme of a mutual fund is
not governed by 15. borrowing
13. Exchange Rules of the stock exchange where it 16. networth of the AMC
is listed
14. Listing Agreement between the fund and the 184. Which of the following are Self Regulatory
stock exchange Organisations
15. guidelines issued by the Ministry of 11. Bombay Stock Exchange
Commerce 12. SEBI
16. Companies Act provisions relating to
13. AMFI
transactions in securities
14. RBI
178. The entry of mutual funds in India was
initiated by mutual funds set up by 185. A Self Regulatory Organisation can regulate
11. Public Sector Banks 11. all entities in the market
12. Private Sector mutual funds 12. only its own members in a limited way
13. Unit Trust of India 13. its own members with total jurisdiction
14. mutual funds set up by insurance companies 14. no entity at all
179. For a close-ended scheme to change its 186. The amount of authority enjoyed by a
fundamental attributes, it must obtain the
consent of 1. self-regulatory organisation is defined by
13. 50% of unit holders 2. the apex regulatory authority
14. 50% of trustees 3. company law board
15. 75% of unit holders
4. its own members 14. AMFI

5. RBI
193. Unit-holders aggrieved by a Fund or AMC can
get redressed from
187. The role of AMFI in the mutual funds industry
is not to 11. Consumer Courts
11. promote the interests of the unit holders 12. SEBI
12. set a Code of Ethics 13. AMFI
13. regulate mutual funds in 14. RBI
14. crease public awareness of mutual funds in the
country 194. If the Directors of an AMC commit fraud,
Unit-holders investments' cannot be protected by
the Department of Company Affairs and the
188. The rights of investors in a mutual fund Company Law Board
scheme are laid down in
11. True
13. the Offer Document of that scheme
12. False
14. Quarterly Reports
15. Annual Reports 195. The responsibilities of a unit-holder do not
include:
16. marketing brochures
9. Monitor his investments carefully
189. Unit holders of a mutual fund scheme do not 10. being aware of information that affects his
have a right to investment in a major way
13. proportionate ownership of the scheme's 11. carefully studying the offer document
assets
12. taking decisions about where the fund
14. dividend declared for that scheme managers should invest
15. dividend declared for other schemes of the
mutual funds 196. UTIs scheme US-64 falls under the purview
of SEBI
16. income declared under that scheme
13. True
190. After dividend declaration, unit-holders are 14. False
entitled to receive dividend within
13. one week 197. UTI was set up by
14. one month 12. SEBI
15. 42 days 13. AMFI
16. six weeks 14. A special act
15. RBI
191. Unit holders' right to information does not
include
198. Bank owned Mutual Funds are supervised by
9. obtaining from the trustees any information
having an adverse effect on their investments 11. SEBI
10. inspecting major documents of a fund 12. RBI
11. receiving of a copy of the annual financial 13. jointly by SEBI & RBI
statements of that fund 14. AMFI
12. approving investment decisions of the fund
199. Investor does not have the right to receive
192. Shortfalls in the case of assured returns any interest from an AMC if his redemption
schemes are met proceeds are not despatched within 10 working
days
11. by sponsors of such schemes
13. True
12. only if the offer document specifically
provided such a guarantee by a named 14. False
sponsor
13. the Government of India 200. If an investor failed to claim his redemption
proceeds within 3 years, he can claim the 19. include the terms of the scheme
proceeds at
11. Par 20. are not necessary for deciding whether to
invest in the scheme or not
12. Prevailing NAV
13. the on the date he has applied for redemption 207. The offer document
14. 15% below the prevailing NAV 17. contains the terms of issue
18. gives no information relevant for making an
201. After closure of the initial offer an open
ended scheme, on going sales and repurchases investment decision
must start within 19. is not the operating document describing the
15. One week scheme
16. 30 days 20. cannot be called a reference document
17. 45 days
208. SEBI does not require the following to be
18. 180 days included in the offer document issued by a
mutual fund
202. For scheme to be able to change its 17. details of the Sponsor and the AMC
fundamental attributes, it must obtain the 18. Description of the Scheme & investment
consent of
objective/strategy
15. 50% of the unit holders
19. Investors' Rights and Services
16. 50% of the trustees
20. Performance of other mutual funds
17. 75% of the unit holders
18. none of the above 209. 'Key Information Memorandum' is
15. an abridged version of the offer document
203. The prospectus or Offer Document 16. the Memorandum & Articles of Association of
containing the details of new scheme is first
registered with the the AMC
17. AMFI 17. a sheet containing historical NAVs of other
fund schemes
18. SEBI
18. Annual Report of the AMC
19. Bombay Stock Exchange
20. Ministry of Finance 210. The offer document for a scheme remains
valid even if
204. The offer document issued by mutual funds 17. the AMC is reconstituted
does not serve the purpose of 18. entry or exit load are changed
17. announcing the scheme
19. the scheme's NAV changes
18. giving detailed information about the scheme
20. new plans are added to existing schemes
19. inviting the the investors
20. giving the fund manager's investment outlook 211. The offer document has to be fully revised
for the next quarter and updated
17. every six months
205. The prospectus of a close-ended fund is 18. once in two years
issued
15. every year 19. every quarter
16. only once at the time of issue 20. every month
17. every quarter

212. An addendum giving details of material
18. every six months change in the offer document should be
circulated
206. Fundamental attributes of scheme 15. distributors/brokers
17. do not include the objective of the scheme 16. unit holders
18. can be changed without the investor's 17. SEBI
approval or knowledge

221 Mutual funds value their investments
15. at purchase price
213. Which of the following is not true for offer
documents of open-ended schemes 16. on a mark-to-market basis
15. it is first issued at the time the scheme is 17. at par
launched
16. it is registered with SEBI 18. at book value
17. it has to be revised periodically

222 Investors are totally exempt from paying any
18. it need not be revised at all tax on the dividend income they receive from
mutual funds
15. True
214. All important disclosures that the mutual
fund is required to make, by regulation, are 16. False
contained in the offer document
17. True 223 Income distributed to unit-holders by a debt
18. False fund is liable to dividend distribution tax
15. True
215. The offer document issued when an open- 16. False
ended scheme is launched is valid for all times,
until amended
17. True 224 A close-ended has average weekly net assets
of Rs 200 crore.As per SEBI regulations, the AMC
18. False can charge the fund with investment and advisory
fees upto:
15. Rs 2.25 crore
216 The most important source of information for
a prospective investor is 16. Rs 2.00 crore
15. offer document 17. Rs 2.50 crore
16. Annual Report of the AMC 18. Rs 3.00 crore
17. Economic Times
18. AMFI Newsletter 225 A passive fund manager
17. researches stocks extensively
217 The offer document need not be studied by 18. does not buy and sell stocks often
an investor before investing in a scheme
17. True 19. does not have to go through the process of
stock selection
18. False 20. does not have to track stocks
218 The offer document is not a legal document 226 A fund manager managing an index fund
15. True 15. has to keep fund expenses low
16. False 16. does not have to research stocks
219 Initial issue expenses are charged to a scheme 17. does not have to balance his portfolio
in the first year itself 18. none of the above
13. True
14. False 227 A growth manager looks for
17. high current income
220 Scheme-wise annual report of a mutual fund 18. undervalued stocks
need not be
17. sent to all unit-holders 19. above average earnings growth
18. forwarded to SEBI 20. none of the above
19. published as an advertisement

228 A value manager does not look for
20. stock exchanges 15. stocks that are currently undervalued in the
market
16. stocks whose worth will be recognised by the philosophy

market in the long term 15. capitalising on economic cycles
17. high current yield 16. focusing on growth sectors
18. long term capital appreciation 17. capitalisation
18. finding value stocks
229 From an investor's viewpoint, the most
important is
17. a fund's investment style 236. When expecting a fall in market price, fund
managers can reduce the loss in portfolio value by
18. performance of the fund 11. speculating
19. the fund manager's judgement 12. not buying and selling shares at all for some
20. none of the above days
13. using equity derivatives
230 Fundamental analysis involves 14. giving TV interviews to improve sentiment
9. checking the foundations of the company's
factory building 237. Equity derivative instruments are
10. research into the operations and finances of 15. shares
the company
16. bonds
11. studying the company's share prices
17. contracts
18. notes
231. Which of the following is not considered for
technical analysis 238. A futures contract allows one to buy or sell
17. historical data on the company's share price the underlying shares, but need not result in
delivery
18. the company shares' trading volume 17. True
19. current market sentiment 18. False
20. the company's regulatory environment
239. Derivatives cannot be based on market
indices
232. Quantitative analysis is more likely to be
done to evaluate a particular sector or industry 17. True
rather than any specific stock
18. False
15. True
16. False 240. In a mutual fund, the overall decisions on
allocating money to particular industries/sectors
233. Fundamental analysis forms the basis to are taken by
decide 17. equity analysts
17. when to buy a given share 18. fund managers
18. whether to buy a given share or not 19. security dealers
19. whether to use technical analysis or 20. trustees
quantitative analysis
20. whether the company's factory can withstand 241. Continuous tracking of the companies in
earthquakes which a mutual fund has invested is done by
13. continuous tracking systems
234. Technical analysis guides the decision on
14. equity analysts
15. whether to buy or sell
15. trustees
16. the right time to buy or sell
16. security dealers
17. whether company's technical personnel are
adequately qualified
242. Security dealers of a mutual fund
15. guard the cabin of the fund manager
235. Which of the following is not an investment 16. execute buy and sell orders for the fund
17. decide which shares to buy or sell

250. Commercial Paper is issued by Corporate
18. none of the above bodies
15. to meet short-term working capital
243. As per SEBI's requirements each scheme of a requirements
mutual fund should have a different fund 16. to finance the acquisition of long term capital
manager
assets
15. True
17. to retire long term debt
16. False
18. to pay dividend
244. Debt securities bought at a discount to their 251. Government securities are issued through the
face value are generally RBI
13. interest bearing 19. True
14. zero coupon bonds 20. False
15. paying interest at a floating rate

252. The yield on Treasury Bill (T-Bill) us
16. none of the above determined by
19. the Government of India
245. In India, a large part of debt securities pay 20. auction
interest on
13. a floating rate basis 21. the State Governments
14. a fixed rate plus a variable portion 22. floating rate method
15. a fixed rate

253. Which of the following are not normally
16. zero coupon basis found in the portfolio of a debt fund
21. long-dated Government Securities
246. The Indian debt market is largely wholesale 22. Corporate debentures
in nature
15. True 23. bonds issued by financial institutions
16. False 24. certificates of deposit issued by banks
247. In the wholesale debt market, the largest 254. Which of the following do not represent the
proportion of trading is seen in amount an investor of a debt security will be paid
upon maturity
1. Government Securities
21. par value
2. Corporate Bonds
22. face value
3. T-Bills
23. fair value
4. PSU Bonds
24. redemption value
248. The largest proportion of trades done in the

wholesale debt market is accounted by 255. Coupon of a debt security refers to
15. mutual funds 19. a piece of paper attached to the certificate
16. foreign banks 20. the return on investor would earn
17. Indian banks 21. the amount rate of interest paid on par value
of the bond
18. financial institutions
249. Certificates of Deposits (CDs) are issued by

256. Which of the following do not apply to the
15. Regional Rural Banks term 'maturity' of a debt security?
16. Corporates 21. the date on which the certificates becomes old
17. Scheduled commercial banks 22. the term of the bond
18. none of the above 23. the date of redemption
24. the date on which the issuer has to repay the

264. An important indicator of expected trends in
amount interest rates is
19. The Economic Times
257. Call or put provisions are used to modify the
fixed maturity of debt securities 20. the Sensex
21. True
21. the Yield Curve
22. False 22. the Chief Minister's Speech
258. A call provision in a debt issue allows the 265. It may not be possible to reinvest interest
issuer to received at the same rate as principal. This is
21. call out the names of the investors known as
22. redeem the debt on maturity 19. reinvestment risk
23. extend the tenure of the debt 20. inflation risk
24. redeem the debt before maturity 21. interest-rate risk

22. call risk
259. A put provision in a debt issue allows
1. investor to put away the certificates in safe 266. A bond's rating indicates its
deposit vaults 19. reinvestment risk
2. investors to redeem debt prior to maturity 20. default risk
3. issuers to redeem debt prior to maturity 21. inflation risk
4. investors to extend the tenure of debt
22. interest-rate risk
260. Current yield relates interest on a security to 267. If a bond cannot be sold at a price near its
21. its current market price value, it means that investment in this bond has
22. its face value 19. high liquidity risk
23. its fair value 20. high default risk
24. the current price of T-Bills 21. low liquidity risk

22. inflation risk
261. To compare bonds with different coupon
rates, maturities and prices, investors would use: 268. The additional yield required to account for
21. current yield the risk of default by the borrower is known as
22. technical analysis 17. yield plus
23. yield to maturity 18. yield spread
24. fundamental analysis 19. yield extra

20. yield premium
262. When interest rates rise, bond prices
1. also rise 269. A high credit rating does not mean
2. fall 15. high yield spread
3. are not affected 16. high perceived safety
4. fluctuate either up or down 17. low yield spread

18. low risk premium
263. Yield curve is also known as
19. Curve of Interest 270. If 10-year government securities Neil 10%
and a 10-Year fixed deposit in a company yields
20. Term Structure of Interest Rates 12%, the yield spread is
21. Curve that yields 21. 12%
22. none of the above 22. 22%
23. 10%
24. 2% 23. 50% of NAV

24. 100% of NAV
271. The "duration" of an interest-bearing bond is
19. longer than its maturity 278. A mutual fund manager is not allowed to sell
short when he expects a crash in the market
20. less than its maturity
19. True
21. equal to its maturity
20. False
22. the quality of paper used for the certificate
279. In a mutual fund, having many schemes, al
272. A bond with a coupon of 9% when interest securities bought can be held in a general account
rates for similar maturities are 11% will sell and transferred later to various schemes to attain
17. above par certain profit or loss objectives
21. True
18. below par
22. False
19. at par
20. at a price unrelated to the prevailing interest 280. A mutual fund may invest in short-term
rate deposits of scheduled commercial banks
13. True
273. Changes in foreign exchange rates have no
bearing on interest rates 14. False
17. True
281. Mutual funds are allowed to lend
18. False
21. loans
274. Inflation and interest rates are inversely 22. securities
proportional
23. physical assets
19. True
20. False
282. In case of listed securities of group

275. Investment policies of a mutual fund are companies of the sponsor, mutual fund is not
determined by allowed to invest
21. the fund manager 17. 25% of its net assets
22. the AMC management 18. 10% of its net assets
23. the marketing department based on what 19. at all
distributors want
20. >5% of net assets
24. the investors
283. A mutual fund may transfer investments
276. Which of the following measures are not from one scheme to another
taken by SEBI for protecting investors of mutual
funds 21. not at all
19. mandating minimum levels of diversification 22. at current market rates
for mutual funds 23. at cost price
20. ensuring that the funds are not used to favour
a few companies 24. at a fixed premium over market rate
21. tracking the securities that each fund has

invested in 284. Interest Rate Risk for an Indian debt fund can
be reduced by using
22. ensuring that the funds are invested in
19. Futures
approved securities only
20. Options
277. As per SEBI norms, a fund's investments, in 21. Interest Rate Swaps
the equity shares of any one company are
restricted to 22. none of the above
21. 25% of NAV
22. 10% of NAV 285. The Interest Rate Forecasting Unit of a debt
fund is generally manned by
19. technicians
292. The most suitable measure of fund
20. statisticians performance for all fund types is
21. economists & econometricians 19. NAV Change
22. accountants 20. Total Return

21. Total Return with reinvestment
286. AMCs need not maintain records in support 22. none of the above
of each investment decision
15. True
293. The expense ratio used for measuring fund
16. False performance is an indicator of
17. product market condition
287. When interest rates for similar maturities' 18. growth in the economy
bonds are 11%, bond with a 9% coupon rate will
sell 19. prevalent market practices
19. above par 20. the fund's efficiency
20. below par
21. at par 294. The Expense Ratio as a measure of a fund's
performance is defined by a fund's
22. at a price unrelated to the interest rates for 17. total expenses and average net assets
similar securities
18. total expenses and total assets
288. The most suitable measure for a fund's 19. average expenses and average net assets
performance does not depend on the
19. type of fund 20. none of the above
20. investment objective of the fund

295. While computing the Expense Ratio for a
21. financial market conditions fund, brokerage commissions on the fund's
transactions are not included in the fund
22. amount invested by investor expenses
17. True
289. If the NAV of an open-ended fund was Rs.16 18. False
at the beginning of the year and Rs.22 after 13
months, the annualised change in NAV is
19. 6.0% 296. The Expense Ratio is not of utmost
importance in case of
20. 34.6% 17. Debt fund
21. 40.6% 18. Index fund
22. 37.5% 19. Equity fund
20. Bond fund
290. Change in NAV as a measure of fund
performance is more suitable for
21. growth funds 297. The Expense Ratio is not affected by
22. income funds 16. fund size

17. average account size
23. funds with withdrawal plans
24. none of the above 18. portfolio composition
19. stock market conditions
291. The difference between NAV change and
total return as measures of fund performance is 298. The Income Ratio as a measure of a fund's
17. none performance is defined by the fund's
19. total income and total assets
18. total return takes dividend into account while
NAV change does not 20. net investment income and net assets
19. total return does not take NAVs into account 21. total income and net assets
20. total return does not take the time period into 22. none of the above
account
26. registrar's fees

299. The Income Ratio is more suitable for
evaluating the performance of
19. Equity Funds 306. The size of a fund has no bearing on its
performance
20. Growth Funds 25. True
21. Regular Income Funds 26. False
22. Index Funds
307. As per SEBI, mutual funds can borrow for
300. Portfolio turnover rate of a fund measure short term to the extent of
the 23. total net assets
19. size of the fund's portfolio 24. 50% of net assets
20. amount of buying and selling done by the 25. 25% of net assets
fund
26. 20% of net assets
21. the average number of units sold by the fund
in one day
308. Which of the following is of no relevance in
22. none of the above evaluating a fund's performance
25. The performance of the stock market as a
301. A high turnover rate for a fund indicates whole
21. high transaction costs 26. The performance of other mutual funds
22. greater efficiency 27. The returns given by other comparable
23. high returns to the investor financial products
24. a rising market 28. The change in wholesale price index
302. Turnover rates would be most relevant to 309. The choice of an appropriate benchmark for
analyse the performance of evaluating a fund's performance depends on
23. equity funds 19. the fund manager
24. growth funds 20. the investment objective of the fund
25. debt funds 21. SEBI
26. value funds 22. AMFI
303. Transaction costs include 310. An actively managed equity fund expects to
25. all expenses related to trading 25. be able to beat the benchmarks
26. all expenes charged to the fund 26. earn the same returns as the benchmark
27. distribution expenses 27. have no benchmarks
28. none of the above 28. underperform when compared with the
benchmark
304. Which of the following are not included in 311. For evaluating funds, the preferred benchmark
Transaction costs? would be the
25. brokerage commissions 25. BSE Sensex
26. stamp duty on transfers 26. S&P CNX Nifty
27. custodians fees 27. BSE 200
28. agent commissions 28. S&P CNX Sectoral Indices
305. Which of the following transaction costs are 312. To evaluate a close-ended debt-fund, a
not quantified in the offer document suitable benchmark would be
23. brokerage commissions 19. BSE Sensex
24. dealer spreads 20. I-Sec's I-BEX
25. custodian's fees
21. interest on bank fixed deposits of similar 22. False

maturity
22. S&P CNX Defty 319. Which of the following works with an investor
on his overall financial situation
313. When comparing performance of two funds, 19. Tax Advisor
the following need not be similar
20. Financial Planner
23. Risk profiles
21. Insurance Agent
24. Investment objectives
22. Financial Advisor
25. Fund size
26. Fund managers 320. A financial planner takes responsibility for
the financial well-being of his/her clients
314. Which of the following is false? 25. True
23. ROI is a measure similar to Total Return with 26. False
Reinvestment of distribution
24. Total Return with Reinvestment of 321. Financial planners and their clients should
distributions assumes reinvestment at NAV on focus on
the distribution date 23. allocating funds to asset classes (e.g. debt,
25. As a measure of performance, Total Return equity etc.)
with Reinvestment of distribution seeks to 24. allocating funds to individual securities
overcome the shortcomings of simple Total
Return 25. tracking stocks which they feel have potential
26. Because of its simplicity, simple Total Return 26. none of the above
is preferred in practice to Total Return with
Reinvestment of distribution
322. Within an asset class, which individual
security to invest in should be decided by
315. The basis of genuine investment advice
should be 21. the financial planner
1. the current market situation 22. the investor himself
2. the agent commissions paid by different funds 23. a professional fund manager
3. financial planning to suit the investor's 24. an objective advisor
situation
4. planning to complete the agent's annual 323. Financial Planning comprises
targets
19. defining a client's profile and goals
316. Financial goals do not include 20. recommending appropriate asset allocation
23. buying a home 21. monitoring financial planning
24. winning a sports gold medal recommendations
25. planning for retirement
26. saving for child's education 324. Financial planning is relevant only for high
networth individuals
317. Financial planning allows a person 21. True
23. to become a billionaire 22. False
24. to achieve financial goals through proper
management of finances 325. Financial planning does work for older clients
25. to invest in foreign countries 25. True
26. none of the above 26. False
318. Financial plans do not alter in any way the 326 Financial planning is primarily tax planning
amount of tax an investor pays as the tax is on his
income 23. True
21. True 24. False

327 In financial planning, all responsibility ends
with the financial planner and the client has no
responsibilities 334. The strategy advisable for an investor to
25. True maximise investment return in the long run is
23. buy and hold on to investments for a long
26. False
time
24. liquidate poorly performing investments from
328 The constraint on financial planning due to
insufficient investable resources can be remedied time to time
to some extent by 25. liquidate good performing investments fro
21. decreasing the standard of living time to time
22. disciplining children 26. switch from poor performers to good

performers
23. disciplined monthly budgeting
24. none of the above 335. A criticism of rupee-cost averaging is
23. Investment is for the same amount at regular
329 In the growth option offered by mutual funds, intervals
the number of units held by an investor increases 24. Over a period of time, the average purchase
because of
price will work out higher than if one tries to
23. growth in net asset value i.e. capital guess the market highs and lows
appreciation 25. It does not tell you when to buy, sell or switch
24. reinvestment of dividend which is like from one scheme to another
compounding 26. Rupee cost averaging has no serious
25. interest received on the fund's assets shortcomings
336. In India, individual investors do not have
direct access to
330 To maximise returns on investment, once an 17. capital market instruments
investor buys into a fund, he/she should hold on
to it no matter what happens 18. real estate
15. True 19. bullion
16. False
20. money market instruments
331 If an investor keeps investing a fixed amount

at regular intervals, the average cost of his 337. Which of the following entities can given
purchases will always be less than if he makes loans against securities
investment at irregular periods 23. UTI
25. True 24. Banks
26. False 25. Mutual funds
332. Which of the following lets an investor book
profits in a rising market and increase holdings in a
falling market 338. Which of the following investment products
21. Fixed Rates of Asset Allocation do not give guarantee for return or capital
23. Bank deposits
22. Flexible Ratio of Asset Allocation
24. Pubic provident fund (PPF)
23. Investment without any asset allocation plan
25. National Savings Certificates (NSC)
24. Buy and Hold Strategy
26. Units of a mutual fund
333. A Flexible Ratio of Asset Allocation means
25. continuously changing the ratio of various 339. The biggest advantage of investment in gold
is
assets in the portfolio
23. High returns
26. not doing any re-balancing and letting the
profits run 24. High appreciation in value
27. active switching 25. Low Purchase price
26. Hedge against inflation 23. urban investors

24. risk taking investors
340. The biggest disadvantage of investment in
real estate is
347. Finance Acts of 2000 and 2001 have
25. Less potential for capital appreciation reduced tax-free interest on Public Provident
Fund to
26. High purchase price
20. 12%
27. Depreciation in value as time passes
21. 10.5%
28. Value gets eroded due to inflation
22. 9%
341. Which of the following is not an advantage of 23. 11%
bank deposits?
21. Liquidity 348 Most individuals invest in life insurance
policies for
22. High perceived safety
23. risk protection
23. Low entry price
24. tax benefits
24. High yield after tax
25. easy liquidity
342. Listing of shares at a stock exchange ensures 26. high returns
23. guaranteed returns
349. Annual contribution to Public Provident Fund
24. long term capital appreciation should be
25. low risk 23. Rs.10000
26. high liquidity 24. between 100 and Rs.6000
25. between Rs.600 and Rs.1000
343. The rate of interest paid by a company on
debentures issued by it depends on 26. none of the above
21. the stock market situation
350. The current yield on Indira Vikas Patra works
22. SEBI guidelines out to
23. the company's credit rating 23. 10.5%
24. the amount of money being raised 24. 11%
25. 10%
344. Which of the following is not a characteristic
of company fixed deposits 26. 9%
21. A higher rate of interest 351. The tenure of an Indira Vikas Patra is
22. higher risk 25. 7 years
23. unfavourable effect of tax 26. 6 years
24. very high liquidity 27. 5 years
28. 3 years
345. Which of the following is untrue for Public
Provident Fund Schemes
352. The maturity period of RBI Relief Bonds is
19. The interest is tax-free
27. 5 years
20. Post-tax returns are attractive
28. 6 years
21. Liquidity is rather low
29. 7 years
30. 8 years
346. Indira Vikas Patra is an investment product
popular with 353. The annual yield on RBI Relief Bonds is
21. rural investors 29. 9.5%
22. investors in high tax bracket 30. 9.5% before tax
31. 8.5% before tax

360. There is no contractual guarantee for
32. 8.5% after tax repayment of principal or interest to an investor
in
354. Individual investors do not normally invest 23. bank deposit
in Government Securities because 24. debt fund
29. individual investors re not allowed to invest
25. secured debentures
in Government Securities
30. the amount required for investment is very 26. all of the above
large
31. safety of principal is not guaranteed 361. Which of the following debt investments is
not rated
32. none of the above 29. Corporate Bonds
30. Commercial Paper
355. The amount an insurance company would
pay to the nominee if a policyholder died is 31. Company Deposit
known as the
27. premium 32. Debt Fund
28. sum assured 362. Gold and real estate are attractive
29. face value investment options only in high inflation
economies
30. real value 29. True
30. False
356. Dividends distributed by mutual funds are
27. taxed at source
363. Direct investment in stock market can be a
28. taxed in the hands of the investors better option than investing through mutual
funds if the investor
29. are subject to capital gains tax
23. wants better returns than those offered by
30. are tax-free in the hands of the investor mutual funds
24. has large capital, knowledge and resources
357. Investing through mutual fund is a better for research
option than investing directly in the stock
market because 25. has identified a bullish phase in the stock
market
identifying stocks is a difficult process 26. wants to invest for the long term
agents get commissions on mutual fund investme
returned are guaranteed by mutual funds 364. Deciding on strategies such as long-term
all of the above compounding, cost averaging, value averaging,
active switching, all depend on the
27. stock market situation on date
358. A small investor can build a diversified
portfolio by 28. amount of money to be invested
27. buying one share each of all listed 29. investor's risk tolerance
companies
30. phase through which the economy is
28. investing in a mutual fund passing
29. borrowing enough money to buy shares of
well-managed companies 365. Financial Planning involves
30. none of the above 27. studying financial management
28. managing the risks of investing
359. Which of the following is not an advantage
of mutual fund investment over direct 29. financing the client's investments
investment
29. Higher liquidity
30. Lower transaction costs 366. Greater returns come only from assuring
higher risks, and a higher risk portfolio
31. Greater convenience guarantees higher returns
32. guaranteed returns 23. True
24. False 25. gives lower returns

26. is more risky
367. The risk tolerance of an investors is
independent of
375. "Risk" is equated with
27. his age
23. volatility of earnings
28. his income
24. level of earnings
29. the stock market movements
25. the number of investors in a fund
30. his job security
26. the number of schemes of a fund family
368. A sector fund is a

376. Volatility of an equity fund portfolio is
27. low risk fund independent of the
28. moderate risk fund 27. kind of stocks in the portfolio
29. high risk fund 28. degree of diversification of the portfolio
30. low-to-moderate risk fund 29. fund manager's success at market timing
30. number of investors in the scheme
369. International funds invest in various and
so are low risk funds
377. Equity price risks are
23. True
25. company specific
24. False
26. market level
370. Investment in gold is a hedge against 27. sector specific

inflation but investment in a precious metal
fund falls in the high risk category 28. all of the above
23. True
378. Diversification reduces
24. False
27. company specific risk
371. By their very nature, growth funds are 28. market level risk
considered as high risk funds 29. both of the above
27. True
28. False
379. Which of the following is most risky?
372. Short Term bond funds are 25. Investing in a money market mutual fund
27. low risk funds
26. Investing in an index fund
28. moderate risk funds
27. Short term investment in an equity fund
29. high risk
28. Long term investment in an equity fund
30. of the above depending on the market
380. A fund with a high beta coefficient gives
373. The risk level of commodity funds is greater returns in a rising market, and is more
risky in a falling market
25. high risk category
27. True
26. determined by the commodity price
movements 28. False
27. cannot be specified
381. Which of the following is a disadvantage
28. low risk category of Standard Deviation as a measure of risk
17. Standard Deviation measures total risk, not
374. As compared to a fund with fluctuating just market risk
total returns, a fund with stable positive
earnings 18. It is based on past returns, which does not
necessarily indicate further performance
23. gives higher returns
19. It is an independent number
24. is less risky
20. All types of funds can be measured with 27. Equity Funds
standard deviation
28. Index Funds
382. The role of an agent is to 29. Money Market Funds
27. point out the features and benefits of 30. Sector Funds
various investments options
28. help the investor develop the right approach 389. A retired person generally needs a greater
to investing proportion of
29. recommend some investment option 27. Debt funds
available 28. Equity funds
30. offer ad hoc advise whenever the investor
29. Money Market funds
has surplus money available
30. All of the above
383. One of the most effective ways to invest
through mutual funds is to 390. To satisfy a young investor's need for
25. develop a model portfolio growth, a greater proportion of investment
should be advised in
26. buy a few units of every mutual fund
27. Gilt funds
scheme available
27. invest all the money in one fund scheme 28. Income Funds
28. invest all the money in different schemes of 29. Equity Growth funds
the same fund family 30. Liquid funds
384. Mutual fund should be advised to expect 391. A very high proportion of investment in all
29. low post tax returns types of equity funds is advisable for investors
30. dramatic results 29. in distribution phase
31. better returns than every other available 30. in accumulation phase
option 31. in transition phase
32. only realistic wealth accumulation goals 32. who are wealth preserving affluent
individuals
385. Asset Allocation is
27. keeping certificates of the physical 392. The transition phase of an investor's
securities in proper places wealth cycle is when
28. allocation the available money to all the 25. the financial goals have been already met
securities available 26. the investor has retired
29. allocating the right proportion of funds to 27. financial goals are approaching
equity, debt and money market securities
30. none of the above 28. investor suddenly gets a windfall
386. Once a financial advisor works out ideal 393. A high proportion of investment in income
Asset Allocation, it can be used for all investors funds is required by
whom he/she advises 27. accumulating investors
27. True 28. affluent investors
28. False 29. investors in the inter-generational transfer
phase
387. Asset distribution among equity, debt and 30. investors in the distribution phase
money market securities should correspond to
the investors' need for capital growth, income
and liquidity 394. Retired investors should
21. True 25. not draw down on their capital
22. False 26. not invest in securities which bear risk of
capital erosion
388. The liquidity needs of an investor are met 27. continue holding a major portion of their
through holding in equity growth funds
28. never invest in equity redeems his units from the fund is known as
31. recovery charge
395. For older investors who want to transfer 32. repurchase load
their wealth
25. no financial planning is required 33. redemption weight
26. the right investment strategy depends upon 34. exit load
who the beneficiaries are
27. the right investment strategy depends upon 403. The load amount charged to a scheme over
a period of time is called
the state of the stock market
33. entry load
28. all the funds can be invested in aggressive
equity funds 34. exit load
35. deferred load
396. Investors who acquire sudden wealth
36. no-load
23. can speculate with all the acquired money in
the stock markets
404. Contingent Deferred Sales Charge (CDSC)
24. should not use any of the new wealth to
invest in equity 33. is higher for investors who stay invested in the
scheme longer
25. should take the effect of taxes into account
34. is lower for investors who stay invested in the
26. need not pay any taxes on the newly scheme longer
acquired wealth as it is not a part of their
regular income 35. is the same for all investors irrespective of how
long they stay invested
397. Only if a specialty offshore fund has 36. is not allowed to be charged to mutual fund
consistently given very good performance, it investors in India
can be considered for investment by a retiree
25. True 405 A fund's declared NAV does not include loads
26. False 31. True
32. False
398. Past performance should not be solely
relied on for selecting a fund
406. Which of the following fund types are
24. True comparable
25. False 31. An aggressive equity fund and a money
market mutual fund
399. Between the past performance of a fund 32. A value fund and a government securities fund
and its suitability for an investor, past
performance is more important 33. A bond fund and a debt fund
27. True 34. A diversified equity fund and a debt fund
28. False
407. Who is the primary guardian of unitholders'
funds/assets
400. Structural characterisations of an equity
fund include 31. The AMC
27. costs of investing 32. The Trustees
28. the specific securities in which the fund has 33. The Registrars
invested 34. The custodians
29. the number of employees of the AMC
30. all of the above 408. In case of a fund merger or Take-over
401. An equity fund's age and size are irrelevant 33. High Court approval may not be necessary
when selecting a fund for investment
34. SEBI approval is a must
29. True
35. all unitholders must be informed
30. False
402. The charge to an investor at the time of he

409. Units of a money market mutual fund can
y
be issued to 28. none of the above
27. individuals
28. banks 416. The best equity fund, relative to others,
would have
29. trusts 31. higher Ex Marks, lower Beta and higher Gross
30. all of the above Dividend Yield
32. higher Ex Marks, higher Beta and higher Gross
410. Though Indian mutual funds have restrictions Dividend Yield
on borrowings (only20% of net assets and for six 33. lower Ex Marks, lower Beta and lower Gross
months only) which are to meet cash needs for
redemption only, UTI is allowed to borrow within Dividend Yield
more relaxed norms 34. lower Ex Marks, higher Beta and higher Gross
33. True Dividend Yield
34. False
417. When selecting equity funds for investing,
those at the top of the performance rankings
411. An equity fund can be said to be concentrated should be avoided
when 31. True
31. when it invests in only in two or three stocks
32. False
32. when it invests in may companies of the same
sector 418. A debt fund's age and size are not important
33. when top ten holdings account for more than when selecting a fund for investment
50% of net assets invested 25. True
34. when top ten holdings account for more than 26. False
25% of net assets invested
412. The size of the market capitalisation of a 419. Debt schemes are popular because
fund's equity holdings is inversely proportional to 25. the Indian Stock Market is always going down
the returns that
26. the returns are more predictable
27. can be expected from the fund
27. most investors are always in debt
28. level of risk assumed by the fund
29. state of the stock market
30. all of the above 420. Yield-to-maturity of a debt fund's portfolio is
more important when the investment objective is
413. A steady holding of investments in an equity 29. current income
fund's portfolio indicates
30. total return
31. long-term orientation
31. liquidity
32. lower transaction costs
33. both the above
34. none of the above 421. Compared to equity funds, income margins
for debt funds are
414. Ex-Mark of an equity fund measures its 31. narrow
31. performance 32. higher
32. risk 33. the same
33. both the above 34. almost nil
422. Debt funds with long-term investments carry
415. Beta of an equity fund measures its higher risk of capital loss
25. performance 29. True
26. risk 30. False
27. both the above

423. The differerentiating factor among debt
funds of comparable maturity and quality is
27. gross yields 22. unforeseen economic changes affecting the

portfolio's preferred sectors
28. costs
23. both the above
29. fund age
30. tenure of the fund manager
431. If a charitable trust approaches a distributor
424. Dstribution tax should be taken into into with an application for investment in a mutual
account when computing net returns from fund, the distributor should
27. equity funds 31. accept the application without wasting time
28. debt funds 32. reject the application outright
29. both the above 33. refer to the offer document
30. none of the above 34. accept the application as a direct application
425. All debt fund investors are exposed to risk of 432. An application form for investment in a
principal loss mutual fund is available with
31. True 29. the offer document
32. False 30. the abridged annual report
31. the key information memorandum
426. Running a money market mutual fund
requires more of 32. a bank challan
29. credit analysis skills
433. An aggrieved unit-holder of a mutual fund
30. equity analysis skills can sue
31. patience 33. the AMC
32. trading skills 34. the trustees
35. the sponsor if returns have been guaranteed
427. Which is the most important in selecting by them
debt fund for better return
31. past performance
32. level of interest rates 434. As per SEBI regulations for valuation of
33. fund expertise investments held by mutual funds, a security is
considered "non-traded" when it
34. the securities in which it has invested 31. has not been traded for 60 days prior to
valuation
428. Investors should be advised to avoid 32. has not been traded for 30 days prior to
investing in a debt fund with a
valuation
29. lower rated portfolio and higher expense ratio
33. is not listed on any stock exchange
30. higher rated portfolio and lower expense ratio
34. is held by the mutual fund without buying or
31. lower rated portfolio and lower expense ratio selling
32. lower rated portfolio and higher expense ratio
435. An Ex-Mark of 100% is possible for
429. An ideal money market mutual fund must 29. a growth fund
have 30. an aggressive growth fund
29. lower returns
31. an index fund
30. lower expense ratio
32. a balanced fund
31. low quality of investments
32. all the above 436. A trail commission is justified when
23. an investor cancels his investment
430. Circumstances that might cause an investor 24. the investor redeems his investment in a very
to change the composition of his portfolio
short time
21. cyclical changes in economy
25. an agent invests his own money, not that of a 33. has its sale and repurchase price declared
client periodicaly by UTI
26. an agent sells many mutual funds 34. has its price determined by market forces
437. Of the following, which type of fund would 443. The Indian debt market
have a higher P/E multiple in comparison to the
average market multiple 29. is Wholesale in nature
31. A Value Fund 30. comprises large players like financial
institutions and banks
32. A Growth Fund
31. witnesses large scale trading in government
33. An Index Fund securities
34. Could be any of the above three, one cannot 32. all of the above
generalise
444. A fund that charges a load is better than a
438. Which of the following is not true as per SEBI no-load fund
Regulations for Debt Funds?
29. True
31. Investment in rated debt securities of a single
issuer should not exceed 15% of NAV 30. False
32. Total investment in unrated debt securities of
a single issuer should not exceed 25% of NAV 445. An AMC can approach investors either
directly or with the help of
33. Total investment in unrated debt securities
27. individual agents
below investment grade should not exceed
25% of NAV 28. banks and non-banking finance companies
34. Total investment in rated debt securities below 29. distribution companies
investment grade should not exceed 25% of
NAV 30. all of the above
439. A Money Market Mutual Fund is most likely 446. Which of the following is true for Equity
to invest in Linked Savings Scheme (ELSS)
31. Corporate Bonds 27. A tax rebate is available to investors in these
32. Equity Shares schemes
28. The investment has to be locked in for 3 years
33. Government Securities with maturity less than
1 year 29. The minimum amount for investment is fixed
34. All of the above 30. All of the above
440. Of the following, which would be suitable for 447. A prospective investor
a retiree with a modest risk appetite
26. has the same status as a unit-holder of a fund
33. Value Fund
27. can sue the AMC/trustee
34. Diversified Equity Fund
28. has no legal recourse
35. Growth Fund
36. Balanced Fund
448. An investor can assess the performance of

441. A high portfolio turnover for a fund indicates his mutual fund by comparing it with the
29. that the fund is active performance of
29. other mutual fund of the same type
30. higher transaction costs
30. the stock market
31. both the above
31. other financial products
442. Unit Trust of India's US-64 Scheme
31. is listed on stock exchanges 449. Unrated securities in the portfolio of a
mutual fund are not to be valued
32. has a fixed price for sale and repurchase 31. True
g g g
32. False would never
37. describe the past performance of the scheme
450. An exit load guarantees a higher return 38. compare the fund with other mutual funds
27. True 39. assure a rate of return
28. False 40. compare the fund with other financial
451 Bonds held in the portfolio of a mutual fund products
are valued at yield to maturity
31. True 459. An investor buys one unit of a fund at an
NAV of Rs.20. He receives a dividend of Rs.3
32. False when the NAV is Rs.21. The unit is redeemed at an
NAV of Rs.22. Total Return is
452 The Valuation of non-traded equity shares is 31. 25.71%
done at the trading price 30 days prior to
valuation date 32. Rs.27.51
35. True 33. 21.27%
36. False 34. Rs.21.75
453 If a unit-holder does not agree to the merger 460. A fund sells 100 units of face value Rs.10/-
of his fund with another, he has not exit option at an NAV of Rs.12.25. How much would be
credited to unit capital?
37. True
35. Rs.1225
38. False
36. Rs.225
454. The most important factor look for when 37. Rs.1000
investing in a corporate fixed deposit is the
37. yield
38. rate of interest 461. When a scheme with assured returns is being
launched, which of the following need not be
39. credit rating of the deposit published in the offer document?
40. none of the above 35. Means of fulfilling the guarantee
36. Information for all schemes launched by the
455. The most important reason for an investor to fund in the past
prefer a bank deposit to a mutual fund is
37. comparison with other mutual funds
33. the credit worthiness of the bank
38. Investment objective
34. because the bank does not invest in securities
35. that the bank offers a guarantee 462. Mutual fund units can be distributed by
36. all of the above 31. trustees of the fund
32. the AMC
456. A deep discount bond
33. Non-banking finance companies
35. is always sold at a discount to its issue price
34. banks
36. bears interest annually
37. is redeemed at a price much higher than issue 463. A debt fund distributes 10% dividend. How
price much tax does the investor have to pay on this
38. bears interest at varying interests dividend?
35. 10%
457. A mutual fund in India is a 36. 12%
35. body corporate 37. 20%
36. company 38. None
37. trust
38. an asset management company 464. A debt fund distributes a 10% dividend. How
much tax does the fund have to pay?
35. 10%
458. When selling a mutual fund, a good agent
36. 12% 35. 1984 to 1988

37. 10.2% 36. 1963 to 1988
38. None 37. 1964 to 1992
465. How many scrips is the NIFTY constitutes of
29. 40 472. Investors who follow the fixed Asset
Allocation approach
30. 100
31. maintain balance in their portfolio by
31. 30 liquidating a part of the position in the asset
32. none of the above class which has given higher return and
reinvesting in the other asset class which has
lower return
466. Which of the following is the first step in 32. are not disciplined
financial planning
35. Asset Allocation 33. increase their equity position when equity
prices tend to climb
36. Selection of fund
37. Studying the features of a scheme
38. None of the above 473. An investor should not invest in a mutual
fund if
467. Why should one buy an insurance policy? 31. his capital base is large
33. It gives high current returns 32. he is able to carry out detailed investment
research and monitor the stock market
34. It gives good capital appreciation over its term
33. both the above
35. It should be bought due to the need for
insurance and not as an investment 34. none of the above
36. All of the above

474. Mutual fund can benefit from economies of
scale because of
468. SEBI Regulations for Mutual Funds were 31. portfolio diversification
formulated in
27. 1992 32. risk reduction
28. 1993 33. large volume of trades
29. 1995 34. none of the above
30. 1996
475. Which of the following is a disadvantage
suffered by a mutual fund investor?
469. Expenses incurred by a fund for printing of 33. High liquidity
Key Information Memorandum can be amortised
over 34. diversification
29. 10 Yrs
35. no tailor made portfolio
30. 5 Yrs
36. low investment
31. 15 Yrs
32. Cannot be amortised 476. A disadvantage suffered by mutual fund
investor is that he has no control over the costs of
investing
470. A mutual funds' investments are guided by 33. True
the
33. AMC 34. False
34. Board of Trustees

477. Which of the following statements about UTI
35. Investment Objectives is untrue
36. Unit holders 35. It was set up in 1963
36. It was formed by RBI
471. UTI was the only mutual fund for the period 37. It was established by an act of Parliament
38. It was not given a monopoly status 36. 2% - 4% of gross domestic savings
37. 7% - 10% of gross domestic savings
478. Which scheme has the largest investor base?
38. 25% - 40% of gross domestic savings
33. ULIP
34. UTI Mastershare 485. Which of the following about Public
Providend Fund (PPF) are untrue
35. US-64
33. 50% of the balance of the 4th year can be
36. SBI Magnum withdrawn in the 7th year
34. The interest is tax free
479. Which was the first diversified equity
investment scheme in India 35. The rate of interest is 12% p.a.
33. SBI Magnum 36. contributions upto Rs.60000 are eligible for
34. UTI Mastershare tax rebate
35. MEP-91 486. A close-ended scheme is quoted on the

36. Mastergain-92 stock exchange at a discount to its NAV when
27. the markets are bearish
480. The private sector was granted permission to 28. investors perceive that the fund will be unable
enter the mutual fund industry in to maintain the NAV
25. 1992 29. the assets of the fund are undervalued
26. 1993 30. none of the above
27. 1998
28. 1995 487. Which of the following is a fundamental
attribute of a mutual fund scheme
35. The names and addresses of the registrars and
481. The first non-UTI mutual fund was
custodians
35. SBI MF
36. The nature of the scheme being income
36. LIC MF bearing
37. Canbank MF 37. The specified stocks in the scheme's portfolio
38. Indian Bank MF 38. The name and address of the compliance
officer
482. The organisation responsible for a
comprehensive set of regulations for all mutual 488. Offer Document of a mutual fund is
funds in India is 35. required by investors
33. RBI
36. required by the AMC for its own reference
34. SEBI
37. required as per SEBI regulations
35. AMFI
38. not mandatory as per SEBI
36. SHCIL
489. The units of a scheme being sold and
483. The 1999 Union Government Budget helped repurchases as per the procedure laid down is one
the Mutual Fund industry by of the fundamental attributes of a scheme
37. regulating the industry practices 35. True
38. exempting all mutual fund dividends in the 36. False

hands of investors from income tax
39. approving the code of ethics formulated by 490. The steps involved in the selection of an
AMFI equity fund for investment are
40. doing away with all regulations for mutual 37. sector selection, asset classification, selection
funds of fund managers and schemes
38. sector selection, selection of fund managers
484. During the period 1992-99, the mobilisation and schemes, asset classification
of funds by the mutual fund industry was about 39. asset classification, sector selection, selection
35. 5% - 6% of gross domestic savings of fund managers and schemes
40. selection of fund managers and schemes, 34. Gross dividend yield 12%, Beta 1.2, Ex-Marks
sector selection, asset classification 80
491. Compounding of interest is best explained by 496. A mainstream diversified debt fund is most
a affected by
33. balanced fund 31. reinvestment risk
34. growth fund 32. liquidity risk
35. value fund 33. interest rate risk
36. income fund 34. default risk
492. From whom can a unit-holder seek redressal 497. If yields fall, a debt fund manager will do all
if his complaint is not entertained by the mutual of the following except
fund
30. sell short maturity securities and buy long
35. AMC maturity securities
36. Board of Trustees 31. see that the fund's average duration becomes
longer than the market's average duration
37. SEBI
32. sell long duration securities and buy short
38. RBI duration securities
33. sell high coupon securities and buy low
493. An investor wishes to switch between a coupon securities
money market mutual fund and an equity fund.
What would you advise him?
498. In which type of schemes should an
33. It would be better to stick to one type of fund, unmarried professional working HLL invest
the one that meets his investment objective.
33. Scheme investing 80% in debt securities
34. He should keep switching parts of his
investment from the equity fund to the 34. 50% in equity funds and 50% in income
money market fund as the market rises and funds
switch back to the equity fund when the 35. 90% in equity funds having a higher P/E Ratio
market falls
than the market
35. He should switch from the money market fund
to the equity fund in a rising market and switch 36. all the money in a balanced fund
back to money market fund when the market
falls 499. An investor buys units in a fund that has
36. none of the above given excellent returns in the past, but his
expectations are not met as the fund does not
perform well this year. The investor can
494. For choosing an appropriate benchmark to
measure a scheme's performance, all of the 33. sue the AMC
following are required except 34. sue the Trustees
31. the composition and size of the portfolio
35. sue the agent
32. the investment objective
33. historical data of fund performance
34. the nature of investments 500. A fund's investments at market value total
Rs.700 crores, Total liabilities stand at Rs.50 lacs
and the number of units outstanding is Rs.28
495. Which of the following characterise the fund Crores. What is the NAV
that a risk averse investor should choose
29. Rs.30.19
31. Gross dividend yield 15% Beta 1.5, Ex-Marks
90 30. Rs.24.98
32. Gross dividend Neil 10%, Beta 1, Ex-Marks 70 31. Rs.32.15
33. Gross dividend yield 11%, Beta 0.9, Ex-Marks 32. Rs.40.49
80
Answers to Practice Question
Q. Ans Q. No Ans Q. No Ans Q. No Ans Q. No Ans

No
1 b 51 a 101 d 151 c 201 b
2 b 52 d 102 a 152 d 202 d
3 d 53 b 103 b 153 d 203 b
4 d 54 d 104 c 154 d 204 d
5 c 55 c 105 a 155 b 205 b
6 c 56 c 106 d 156 a 206 c
7 b 57 c 107 a 157 c 207 a
8 c 58 c 108 d 158 d 208 d
9 d 59 b 109 d 159 a 209 a
10 c 60 d 110 b 160 d 210 c
11 b 61 c 111 b 161 a 211 b
12 b 62 a 112 c 162 d 212 d
13 d 63 d 113 a 163 c 213 d
14 c 64 d 114 d 164 c 214 a
15 b 65 b 115 d 165 b 215 a
16 d 66 c 116 b 166 d 216 a
17 b 67 c 117 b 167 c 217 b
18 d 68 d 118 a 168 b 218 b
19 c 69 c 119 c 169 b 219 b
20 c 70 d 120 a 170 d 220 d
21 b 71 b 121 b 171 c 221 b
22 d 72 b 122 c 172 b 222 a
23 c 73 d 123 a 173 b 223 b
24 a 74 d 124 d 174 d 224 a
25 d 75 c 125 c 175 d 225 c
26 d 76 a 126 d 176 b 226 a
27 c 77 c 127 d 177 c 227 c
28 b 78 a 128 a 178 c 228 c

29 c 79 d 129 d 179 c 229 b
30 d 80 a 130 a 180 c 230 b
31 b 81 c 131 d 181 d 231 d
32 c 82 b 132 a 182 b 232 a
33 b 83 b 133 b 183 d 233 b
34 b 84 b 134 c 184 c 234 b
35 b 85 d 135 b 185 b 235 c
36 c 86 a 136 d 186 a 236 c
37 b 87 b 137 a 187 c 237 c
38 c 88 c 138 c 188 a 238 a
39 a 89 b 139 b 189 d 239 b
40 b 90 b 140 c 190 b 240 b
41 b 91 b 141 a 191 d 241 b
42 a 92 c 142 b 192 b 242 b
43 b 93 c 143 c 193 b 243 a
44 c 94 b 144 b 194 a 244 b
45 b 95 a 145 d 195 d 245 c
46 b 96 b 146 c 196 b 246 a
47 c 97 a 147 d 197 c 247 a
48 b 98 d 148 c 198 c 248 c
49 B 99 c 149 b 199 b 249 c
50 A 100 a 150 c 200 a 250 a
Answers to Practice Question for AMFI Test
An An An An
Q. No Q. No Q. No Q. No Q. No Ans
s s s s
251 a 301 a 351 b 401 b 451 a
252 b 302 a 352 a 402 c 452 b
253 d 303 a 353 d 403 c 453 b
254 c 304 d 354 b 404 b 454 c
255 c 305 b 355 b 405 a 455 a
256 a 306 b 356 d 406 c 456 c
257 a 307 d 357 a 407 c 457 c
258 d 308 d 358 b 408 d 458 c
259 b 309 b 359 d 409 d 459 a
260 a 310 a 360 b 410 a 460 c
261 c 311 d 361 d 411 c 461 c
262 b 312 c 362 a 412 b 462 d
263 b 313 d 363 b 413 c 463 d
264 c 314 d 364 c 414 a 464 c
265 a 315 c 365 b 415 b 465 d
266 b 316 b 366 b 416 a 466 a
267 a 317 b 367 c 417 a 467 c
268 b 318 b 368 c 418 a 468 d
269 a 319 b 369 b 419 b 469 b
270 d 320 a 370 a 420 b 470 c
271 b 321 a 371 b 421 a 471 b

272 b 322 c 372 b 422 a 472 a
273 b 323 d 373 a 423 a 473 c
274 b 324 b 374 b 424 b 474 c
275 b 325 a 375 a 425 a 475 c
276 c 326 b 376 d 426 d 476 a
277 b 327 b 377 d 427 c 477 d
278 a 328 c 378 a 428 a 478 c
279 b 329 b 379 c 429 b 479 b
280 a 330 b 380 a 430 c 480 b
281 b 331 a 381 b 431 c 481 a
282 a 332 a 382 b 432 c 482 b
283 b 333 b 383 a 433 c 483 b
284 c 334 d 384 d 434 b 484 a
285 c 335 c 385 c 435 c 485 c
286 b 336 d 386 b 436 b 486 b
287 b 337 b 387 a 437 b 487 b
288 d 338 d 388 c 438 b 488 c
289 c 339 d 389 a 439 c 489 a
290 a 340 b 390 c 440 d 490 c
291 b 341 s 391 b 441 c 491 b
292 c 342 d 392 c 442 c 492 c
293 d 343 c 393 d 443 d 493 b
294 a 344 d 394 b 444 b 494 c
295 a 345 d 395 b 445 d 495 c
296 c 346 c 396 c 446 d 496 c
297 d 347 b 397 b 447 a 497 c
298 b 348 b 398 a 448 d 498 c
299 c 349 b 399 b 449 b 499 d
300 b 350 a 400 b 450 b 500 b
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9/4/2018 NISM - 500 Question Bank - VA Series ~ NISM & MARKET NEWS

NISM & MARKET NEWS

NISM - 500 Question Bank - VA Series

1. A close-ended mutual fund has a fixed : 2. Gilt Funds

1. Balanced Funds 3. the fee the agent charges to the investor

4. the expenses incurred by fund managers for 1. every quarter

10. A mutual fund is owned by 3. every hour

13. "Load" cannot be recovered 3. share price movements

1. Account balance should not fall below the

3. the portfolio market function 2. Cyclical Stocks

4. none of the above 3. Value Stocks

4. privately placed 2. False

6. summary of trust deed provisions 6. can be decided based on investor response to

6. 80% 7. 3 fiscal years

5. True 8. names of lenders

7. listed in the offer document 5. Banks

8. available with stock exchanges 6. Resident Individuals

7. if Ministry of Finance approves 8. 150000

4. Yes, a test conducted by SEBI 8. price of units

5. approximately 10 7. market driven

6. approximately 25 8. common to all schemes

12. not applicable to debt funds

11. AMFI Newsletter 9. all investors

12. Offer document 10. foreign investors

107. A compliance officer 113. Retail distribution channels are a critical

10. Banks 12. not in cash but in kind

11. Non-Banking Finance Companies

9. True 12. none of the above

127. For investors to correctly compare

11. AMFI's Code for Agents

9. True 8. valuation date

10. False 9. record date

139. Which of the following sales practices is

10. annually 13. Investors can claim an income tax rebate

8. 2.00% 157. The AMC of a mutual fund cannot

14. does not give or receive deliveries of physical 11. 7 years

170. A change in the following key people does

14. exactly 50% 15. Fund Manager

11. private sector banks 16. none of the above

4. its own members 14. AMFI

16. only once at the time of issue 20. every month

17. every quarter

18. all of the above

17. it has to be revised periodically

18. forwarded to SEBI 20. none of the above

19. published as an advertisement

16. stocks whose worth will be recognised by the philosophy

17. decide which shares to buy or sell

14. zero coupon bonds 20. False

15. paying interest at a floating rate

15. a fixed rate

16. False 24. certificates of deposit issued by banks

248. The largest proportion of trades done in the

16. foreign banks 20. the return on investor would earn

249. Certificates of Deposits (CDs) are issued by

24. the date on which the issuer has to repay the

23. extend the tenure of the debt 20. inflation risk

24. redeem the debt before maturity 21. interest-rate risk

23. its fair value 20. high default risk

24. the current price of T-Bills 21. low liquidity risk

23. yield to maturity 18. yield spread

24. fundamental analysis 19. yield extra

3. are not affected 16. high perceived safety