Amfi Nism Mutual Fund Distributors Sample500questions-130326035146-Phpapp02

Practice Questions for AMFI Test
1. A close-ended mutual fund has a fixed :

a. NAV
b. fund size
c. rate of return
d. number of distributors
2. The maximum load that a fund can charge is
determined by the :
a. AMC
b. SEBI
c. AM!
d. distribution agents based on demand for the
fund
". The amount re#uired to buy 1$$ units of a scheme
ha%ing an entry load of 1.&' and NAV of (s.2$ is :
a. (s.2$$$
b. (s.2$1&
c. (s.1)*&
d. Rs.2030
+. A gilt fund is a s,ecial ty,e of fund that in%ests :
a. in %ery high #uality e#uity only
b. in instruments issued by com,anies -ith a
sound trac. record
c. in short-term securities
d. in goern!ent securities on"#
&. /f the follo-ing fund ty,es0 the highest ris. is
associated -ith
a. 1alanced unds
b. 2ilt unds
c. E$uit# %ro&t' Funds
d. 3ebt unds
4. The NAV of a mutual fund:
a. is al-ays constant
b. .ee,s going u, at a steady rate
c. f"uctuates &it' !ar(et )rice !oe!ents
d. cannot go do-n at all
5. An o,en-ended mutual fund is one that has:
a. an o,tion to in%est in any .ind of security
b. units aai"ab"e for sa"e and re)urc'ase at
a"" ti!es
c. an u,,er limit on its NAV
d. a fixed fund si6e
*. An in%estor in a close-ended mutual fund can get
his7her money bac. by selling his7her units:
a. bac. to the fund
b. to a s,ecial trust at NAV
c. on a stoc( e*c'ange &'ere t'e fund is
"isted
d. to the agent through -hich he7she
subscribed to the units of the fund
). The 8load8 charged to an in%estor in a mutual fund
is
a. entry fee
b. cost of the ,a,er on -hich the unit
certificates are ,rinted
c. the fee the agent charges to the in%estor
d. t'e e*)enses incurred b# fund !anagers
for !ar(eting a !utua" fund sc'e!e
1$. A mutual fund is o-ned by
a. the 2o%t. of !ndia
b. 9:1!
c. a"" its inestors
d. AM!
11. ;nits from an o,en-ended mutual fund are bought
a. on a stoc. exchange
b. fro! t'e fund itse"f
c. from AM!
d. from a stoc. bro.er
12. A mutual fund is not
a. o-ned <ointly by all in%estors
b. a co!)an# t'at !anages inest!ent
)ortfo"ios of 'ig' net&ort' indiidua"s
c. a ,ool of funds used to ,urchase securities
on behalf of in%estors
d. a collecti%e in%estment %ehicle
1". 8=oad8 cannot be reco%ered
a. at the time of the in%estor>s entry into the
fund
b. as a fixed amount each year
c. at the time the in%estor exits the fund
d. fro! t'e fund+s distribution agent
1+. The most im,ortant ad%antage of a money mar.et
mutual fund is
a. #uic. ca,ital a,,reciation
b. high regular income
c. safet# of )rinci)a"
d. no loads
1&. 9ome close-ended funds are #uoted at a discount
to their NAV because
a. of high ex,ense ratios
b. inestors do not e*)ect t'e current ,A-
to be sustained in future
c. the re,urchase ,rice fixed by the fund in
lo-er than the NAV
d. of the inherent ris. in%ol%ed in in%esting in
such ty,e of funds
14. The NAV of each scheme should be u,dated on
AM!>s -ebsite
a. e%ery #uarter
b. e%ery month
c. e%ery hour
d. eer# da#
15. 3ebt funds target
a. lo- ris. and stable income
b. )rotection of )rinci)a"
c. high gro-th -ith ris.
d. long term ca,ital a,,reciation
1*. !n -hich of the follo-ing do debt funds not in%est
a. go%ernment debt instruments
b. cor,orate ,a,er
c. financial institutions> bonds
d. e$uit# of )riate co!)anies
1). ?hich of the follo-ing ris.s do not affect a debt
fund
a. default by issuer on ,ayment of interest or
,rinci,al
b. ,rice fluctuations of the debt securities
c. s'are )rice !oe!ents
d. interest %olatility
2$. Assured return or guaranteed monthly income
,lans are essentially
a. @ybrid funds
b. 2ro-th unds
c. .ebt/Inco!e funds
d. 9ector funds
21. A ixed Term Alan 9eries is
a. an o,en-ended fund
b. a c"ose0ended fund
c. a fixed term ban. de,osit
d. a fixed term cor,orate bond
22. NAVs of e#uity funds are not affected by
a. 9toc. mar.et mo%ements
b. :%ents affecting the industry7sector in -hich
the fund has in%ested
c. @a,,enings in the com,anies in -hich the
fund has in%ested
d. rea" estate )rices
2". The greatest ,otential for gro-th in ca,ital is
offered by
a. debt funds
b. gilt funds
c. gro&t' funds
d. balanced funds
2+. A 9ystematic ?ithdra-al Alan0 allo-s in%estors
to get bac. the ,rinci,al amounts in%ested in addition
to the income on in%estment
a. True
b. alse
2&. ?hich of the follo-ing is untrue of an automatic
rein%estment ,lanB
a. The ,lan allo-s for automatic rein%estment
of all income and ca,ital gains
b. Automatic rein%estment allo-s for
accumulation of additional units of the fund
c. The ma<or benefit of automatic rein%estment
is com,ounding
d. T'e benefit of auto!atic reinest!ent is
often "ost on account of t'e 'ea# "oad
c'arge on t'e reinest!ent
24. Constraints im,osed by most funds on chec.
-riting are:
a. Account balance should not fall belo- the
minimum ca,ital re#uired
b. Chec.s issued must be for at least the
minimum amount s,ecified.
c. Number of chec.s ,er month must not
exceed a s,ecified number
d. Bot' a 1 b aboe
25. The ,erformance of a fund is largely measured by
the success of
a. the mar.eting function
b. the o,erations function
c. t'e )ortfo"io !ar(et function
d. none of the abo%e
2*. 2enerally in%est in
a. unlisted
b. !ar(et0traded
c. thinly traded
d. ,ri%ately ,laced
2). ?hich of the follo-ing is not an e#uity
instrument
a. ,reference shares
b. e#uity -arrants
c. ordinar# debentures
d. con%ertible debentures
"$. The dra-bac. of an ordinary share is
A. ,ossibility of ca,ital a,,reciation
1. o-nershi, ,ri%ilege of the com,any
C. guaranteed di%idend income
.. no guaranteed inco!e or securit#
"1. An o-ner of ,reference shares is gi%en -hich of
the follo-ing rights
a. %oting rights
b. fi*ed diidend inco!e fro! )ost0ta*
)rofits
c. %oting rights and unlimited di%idend income
d. no guaranteed rights
"2. Mar.et ca,italisation of a com,any is calculated
by multi,lying the number of outstanding shares by
a. (.1$
b. ace %alue of each share
c. 2urrent !ar(et a"ue of eac' s'are
d. di%idend yield
"". The Arice7:arnings CA7:D (atio is an im,ortant
measure of a com,any>s antici,ated ,erformance. !t is
calculated using:
a. Mar.et ,rice and di%idend
b. Mar(et )rice and earning )er s'are
c. Mar.et ca,italisation and di%idend
d. Mar.et ,rice and face %alue
"+. A com,any -hose earnings are strongly related to
the state of economy is .no-n as
a. :conomy stoc.s
b. 2#c"ica" Stoc(s
c. Value 9toc.s
d. 2ro-th stoc.s
"&. A 2ro-th stoc. refers to shares of a com,any
-hose earnings are ,ro<ected to gro- at the normal
mar.et rates
a. True
b. Fa"se
"4. ?hich of the follo-ing is generally true for a
gro-th stoc.B
a. steady ca,ita a,,reciation and steady
di%idends yields
b. high ca,ital a,,reciation and high di%idend
yields
c. 'ig' ca)ita" a))reciation but "o&
diidend #ie"ds
d. steady ca,ital a,,reciation but high di%idend
yields
"5. 9hares of com,anies -ith large ca,ital mar.et
ca,italisation
a. ha%e greater gro-th ,otential
b. are !ore "i$uid
c. are not a%ailable
"*. 3i%idend yield for a stoc. is
a. di%idend ,er share
b. di%idend ,er face %alue
c. diidend )er s'are to current !ar(et
)rice
"). Value stoc.s
a. 'ae 'ig' current diidend #ie"d
b. yield high gro-th in earnings
c. are currently under %alued
+$. A better ,erformance than the return on index is
gi%en by
a. ,assi%e fund manager
b. an actie fund !anager
c. all fund managers
d. non fund manager
+1. A change in .ey ,ersonnel es,ecially the fund
manager of an AMC does not necessitate a re%ision
of the offer document
a. True
b. Fa"se
+2. !f fresh litigation cases or ad<udication
,roceedings are referred by 9:1! against the fund
s,onsors or a com,any associated -ith the s,onsors0
then the offer document needs to be re%ised
a. True
b. alse
+". The offer document need not be re%ised if the
management or the controlling interest in the AMC
change
a. True
b. Fa"se
++. An AMC cannot ex,lain ad%erse %ariations
bet-een ex,ense estimates for the scheme on offer
and actual ex,enses for ,ast schemes in
a. financial ne-s,a,ers
b. business channels on TV
c. t'e offer docu!ent
d. AM! ne-sletter
+&. !nformation on estimated ex,enses to be incurred
by a scheme is not found in the offer document0 but
in brochures of the fund
a. True
b. Fa"se
+4. ?hen com,aring a fund>s ,erformance -ith that
of its ,eer grou,0 the follo-ing cannot be com,ared
a. T-o debt funds -ith & year maturities
b. A broad0based e$uit# fund &it' an IT
Sector Fund
c. A bond fund -ith a bond
d. A go%ernment securities fund -ith a
go%ernment security
+5. An AMC must ex,lain ad%erse %ariation bet-een
ex,ense estimates for the scheme on offer and actual
a. ex,enses for ,ast schemes in
b. financial ne-s,a,ers
c. business c'anne"s on T-
d. offer document
e. AM! Ne-sletter
+*. !nformation on estimated ex,enses to be incurred
by a scheme is not found in the offer document0 but
in brochures of the fund
a. True
b. Fa"se
+). The offer document and .ey information
memorandum contain financial information for
a. all schemes of all mutual funds in the ca,ital
mar.et
b. a"" sc'e!es "aunc'ed b# t'e )articu"ar
fund during t'e "ast 3 fisca" #ears
c. none of the schemes
d. com,anies in -hich in%estment is ,ro,osed
&$. The functions and res,onsibilities of the s,onsor0
AMC0 trustees and custodian of the mutual fund are
listed in
a. offer docu!ent on"#
b. .ey information memorandum
c. both offer document and .ey information
memorandum
&1. !nformation about trusteeshi, fees is included in
the offer document but not in the .ey information
memorandum
e. True
f. alse
&2. The follo-ing information about the constitution
of the mutual fund is found in both the offer
document and .ey information memorandum
e. acti%ities of the s,onsor
f. summary of trust deed ,ro%isions
g. name and addresses of the board of trustees
'. a"" of t'e aboe
&". The in%estment ob<ecti%es of the fund an in%estor
selects for in%estment
e. are of no rele%ance
f. s'ou"d be t'e sa!e as 'is o&n inest!ent
ob3ecties
g. change -ith mar.et mo%ements
h. change -ith change in the AMC>s .ey
,ersonnel
&+. The in%estment ,olicies listed out in the offer
document of a fund do not include
e. the ty,e of securities in -hich the scheme
-ill in%est ,rinci,ally
f. asset allocation ,attern
g. ,olicy of di%ersification
'. t'e s)ecific securities in &'ic' t'e fund
&i"" inest
&&. !f a scheme>s name im,lies that it -ill in%est
,rimarily in a ,articular ty,e of security or in certain
industry7sector0 then it should in%est at least the
follo-ing ,ercentage of its total assets in the
indicated ty,e of security7industry7sector
e. 1$$'
f. *$'
g. 456
h. +$'
&4. or assured return schemes0 information about the
guarantor>s net -orth -hich <ustifies the guarantor>s
ability to meet any shortfalls in the returns assured
under the scheme can be found in
e. the offer document
f. the .ey information memorandum
g. bot' 7a8 and 7b8
h. none of the abo%e
&5. The names and bac.ground of .ey ,ersonnel of
the AMC
e. need not be disclosed to in%estors
f. are of no rele%ance as they may change
g. are disc"osed in t'e offer docu!ent
h. are declared in ne-s,a,er ad%ertisements
&*. The minimum amount to be raised0 and the
maximum target amount
e. are not .no-n before the offer is concluded
f. can be decided based on in%estor res,onse to
the offer
g. are defined as )er SEBI Regu"ations
before t'e offer is !ade
h. need not be disclosed in the offer document
&). The circumstances for refund of in%estment in the
initial offer and ,eriod -ithin -hich refund must be
carried out are not s,ecified in the offer document0
but only on the a,,lication
e. True
f. Fa"se
4$. /ffer related information re#uired to be listed in
the offer document and .ey information
memorandum includes
e. dates of o,ening0 closing0 earliest closing0
allotment and des,atch of certificates
f. ,rocedure for transfer and transmission of
units
g. both the abo%e
'. neit'er of t'e aboe
41. !n the offer document0 funds are re#uired to ma.e
disclosures summari6ing associate transactions and
their im,act on the ,erformance of the scheme for the
last
e. one fiscal year
f. 2 fiscal years
g. 3 fisca" #ears
h. & fiscal years
42. The circumstances under -hich a scheme shall be
-ound u, are to be described in the offer document at
the time of the initial launch of the scheme itself
e. True
f. alse
4". The follo-ing do not form a ,art of the
in%estment ,rocedure described in an offer document
e. %arious ,lans under the scheme Ce.g.
di%idend rein%estment ,lantD
f. minimum initial Cand subse#uentD
in%estment
g. details of -ho can in%est
'. detai"s of ot'er co!)eting !utua" funds
4+. A scheme>s ,olicy on di%idends and distribution
e. is decided by the fund manager as ,er is
mar.et outloo.
f. can be changed to suit the re#uirements of
the AMC
g. need not be consistent
'. s'ou"d be disc"osed at t'e ti!e of initia"
"aunc'
4&. 9:1! restricts mutual fund in%estments in
com,anies forming ,art of the same grou, as the
AMC. This is:
e. not true
f. in t'e interest of inestor )rotection
g. a,,lied only to some mutual funds0 not all
h. not fa%ourable to in%estors at all
44. A disclosure should be made in the offer
document if an AMC has in%ested more than the
follo-ing ,ercentage of its net assets in grou,
com,anies
e. &$'
f. +$'
g. 256
h. 1$'
45. Mutual funds are allo-ed to borro-
e. freely to meet their re#uirements
f. for in%estment ,ur,oses
g. on"# to !eet rede!)tion de!ands
h. not allo-ed at all
4*. As a ,art of borro-ing ,olicy0 the follo-ing need
not be disclosed in an offer document
e. ,ur,ose and circumstances of borro-ing
f. regulatory limits on borro-ing
g. ,otential ris. to AMC and unit-holders
'. na!es of "enders
4). Valuation norms for non-traded securities should
be disclosed
e. at the end of e%ery financial year
f. e%ery #uarter
g. in t'e offer docu!ent at t'e ti!e of
"aunc' of t'e sc'e!e
h. should not be disclosed0 being confidential
information
5$. Arocedure for redem,tion or re,urchase need not
e. be described in the offer document
f. include ho- redem,tion or re,urchase ,rice
of units -ould be determined
g. include names of centres -here redem,tion
can be effected
'. indicate t'e rede!)tion or re)urc'ase
)rice as at t'e end of t'e current fisca"
#ear
51. The fund need not describe its accounting ,olicies
in the offer document as these are of no use to an
in%estor
e. True
f. Fa"se
52. The accounting ,olicies of a fund should be in
accordance -ith
e. 2AAA
f. SEBI regu"ations
g. !CA! 2uidelines
h. American 2AAA
5". Tax treatment of in%estments does not
e. form a section in the offer document
f. describe the tax elements a,,licable to
in%estors -ho in%est in the fund
g. form a section in the .ey information
memorandum
'. offer ta* adice to inestors
5+. 3ocuments a%ailable to in%estors for ins,ection
do not include
c. Memorandum and Articles of Association of
AMC
d. consent of auditors and legal ad%isors
e. in%estment management re,orts
f. re)orts based on &'ic' actua"
inest!ents are !ade
5&. !n%estors> rights under a scheme are
e. uniform for all schemes of all funds
f. not defined
g. "isted in t'e offer docu!ent
h. a%ailable -ith stoc. exchanges
54. The offer document for a scheme should describe
ho- the NAV of the scheme is to be com,uted
e. True
f. alse
55. An offer document contains an AMC>s in%estor
grie%ance>s history for the ,ast
e. one fiscal year
f. 2 fiscal years
g. 3 fisca" #ears
h. six months
5*. Any ,ending cases or ,enalties le%ied on the
s,onsors or AMC should be disclosed in the offer
document
e. True
f. alse
5). ?ho among the follo-ing are not eligible to
in%est in M
e. !ndian Com,anies
f. 1an.s
g. Non 1an.ing inance Com,anies
'. Foreign 2itizens
*$. N(!s are eligible to in%est in Mutual unds
a. True
b. alse
*1. The most im,ortant lin. bet-een Mutual und
and !n%estors is
e. 2o%ernment
f. 9:1!
g. Fund distributors
h. AM!
*2. Are /%erseas Cor,orate 1odies allo-ed to in%est
in Mutual unds
e. No
f. 9es
g. if Ministry of inance a,,ro%es
h. if AM! a,,ro%es
*". ?ho among the follo-ing are not !nstitutional
!n%estors
e. 1an.s
f. Resident Indiidua"s
g. Aro%ident unds
h. Non 1an.ing inance Com,anies
*+. !t is com,ulsory to use fund agents7intermediaries
for in%esting Ms
e. True
f. Fa"se
*&. 2enerally0 -hich category of in%estors need
ad%ice for !n%esting in Mutual unds
c. Non 1an.ing inance Com,anies
d. !nsurance Com,anies
e. oreign !nstitutional !n%estors
f. Indiidua"s
*4. Most eligible in%estors of Mutual unds can
broadly be grou,ed into either indi%idual or
institutional in%estors
e. True
f. alse
*5. Commission rates or loads a,,licable to big
in%estors and small in%estors are
e. same
f. different
g. not charges to either
**. ?hat document Mutual und distributors need to
refer for finding out eligible category of in%estors in a
,articular Mutual und 9cheme
e. 9:1! (egulations Manual
f. AM! boo.let
g. :ffer docu!ent
'. (1! 2uidelines
*). As ,er AM! figures0 ho- many agents
a,,roximately0 are there in !ndia selling Mutual
unds
e. &$$$$
f. ;00000
g. 5&$$$
h. 1&$$$$
)$. ?hich Mutual und has ma<ority of the agents
selling its Mutual und units in !ndia
e. =!C Mutual und
f. <TI Mutua" Fund
g. 91! Mutual und
h. None of the abo%e
)1. Mutual und agents7distributors are not allo-ed
to sell inancial Aroducts other than Mutual unds
c. True
d. Fa"se
)2. Are Mutual und agents7distributors in !ndia
re#uired to ,ass any examination to #ualify to sell
Mutual und ;nits
c. 9es= a test conducted b# AMFI
d. Ees0 a test conducted by 9:1!
e. No
f. a Aost 2raduate uni%ersity course
)". @o- many ma<or distributor Com,anies are there
in !ndia selling Mutual und units
c. a,,roximately )
d. a,,roximately 11
e. a))ro*i!ate"# ;0
f. a,,roximately 2&
)+. The offer document is not a legal document
e. True
f. Fa"se
)&. A co,y of all changes in the offer document has to
be filed -ith 9:1!
c. True
d. alse
)4. The legal res,onsibility for the accuracy of the
statements made in the offer document lies -ith
e. 9:1!
f. t'e AM2
g. AM!
h. the Com,any =a- 1oard
)5. Though the offer document of a scheme is
,re,ared as ,er 9:1! (egulations and is filed -ith
9:1!0 9:1! does not certify the accuracy or
ade#uacy of the document
f. True
g. alse
)*. The follo-ing need not be co%ered in a Fey
!nformation Memorandum
c. (is. actors
d. /,ening0 Closing and earliest Closing 3ate
of the offer
e. 3isclaimer Clause
f. Functions and res)onsibi"ities of t'e
s)onsor= trustees= AM2 and 2ustodian
res)onsibi"ities
)). The front ,age of an offer document need not
co%er
e. o,ening0 closing and earliest closing date of
the offer
f. disclaimer clause
g. "ega" and regu"ator co!)"iance
h. ,rice of units
1$$. A 8glossary8 of 3efined Terms must be included
in the offer document
e. True
f. alse
1$1. 9tandard ris. factors are not
g. mar.et dri%en
h. common to all schemes
i. of rele%ance to no%ice in%estors
3. ne& to a regu"ar inestor
1$2. The ris. of a scheme>s NAV mo%ing u, or do-n
on the basis of ca,ital mar.et mo%ements is a
standard ris. factor
i. True
<. alse
1$". Aast ,erformance of a s,onsor7AMC mutual
fund is not indicati%e of the future ,erformance of the
scheme. This is
i. not true
3. a standard ris( factor for a"" sc'e!es
.. a scheme-s,ecific ris. factor
l. a,,licable only to gilt funds
1$+. (is. arising from a scheme>s in%estment
ob<ecti%e7strategy and ,ro,osed asset allocation is
i. not ,resent
<. common to all schemes
(. s)ecific to t'at sc'e!e
l. not a,,licable to debt funds
1$&. !n an assured returns scheme0 if assurance is
only for a limited ,eriod0 it must be stated in the offer
document that there is no guarantee for sustaining the
assured return for the remaining duration of the
scheme
i. True
<. alse
1$4. !f the AMC is managing a fund for the first time0
this information can be found in
i. ne-s,a,ers
<. 9:1!
.. AM! Ne-sletter
". :ffer docu!ent
1$5. A com,liance officer
i. stands guarantee to t'e infor!ation
contained in t'e offer docu!ent
3. be"ongs to SEBI
.. cannot certify that the AMC>s legal and
,rocedural obligations are fulfilled
l. cannot be a,,ointed by the AMC
1$*. The due diligence certificate that must be
submitted to 9:1! along -ith the draft offer
document cannot be signed by
i. the managing director of the AMC
<. an executi%e director of the AMC
.. the com,liance officer
". Inestor re"ations officer
1$). A due diligence certificate does not certify that
g. the draft offer document for-arded to 9:1!
is in accordance -ith 9:1! regulations
h. all legal re#uirements connected -ith
launching of the scheme ha%e been com,lied
-ith
i. disclosures made in the offer document are
true0 fair and ade#uate
3. t'e AM2 guarantees a good )erfor!ance
11$. !n de%elo,ed countries0 an im,ortant Mutual
und mar.eting channel is through
i. !nsurance Com,anies
3. Ban(s
.. Non-1an.ing inance Com,anies
l. (etail 3istributors
111. :merging or ne- channel for
distributors7mar.eting of Mutual und in !ndia is
i. !nsurance Com,anies
3. Ban(s
.. Gualified Mutual und agents
l. 3irect 9ales agents of res,ecti%e mutual
funds
112. Mutual unds often use their o-n em,loyees to
mobilise funds from
g. retail in%estors
h. @igh Net-orth indi%iduals7institutional
in%estors
i. a"" inestors
<. foreign in%estors
11". (etail distribution channels are a critical element
in the distribution of mutual funds in !ndia
i. True
<. alse
11+. 89ales Aractices8 co%er the follo-ing areas
i. desirable mar.eting ,ractices
<. agents> res,onsibilities to the in%estor
.. ethical code of conduct
". a"" of t'e aboe
11&. The follo-ing are not termed as 8sales ,ractices8
i. agents commission
<. before-and after-sales ser%ice to in%estors
.. ad%ertising of schemes
". stoc( bro(ing
114. 9ales ,ractices are ne%er mandated by
regulators0 but arise from con%ention only
i. True
3. Fa"se
115. Agents are com,ensated by mutual funds
i. through salaries
3. t'roug' co!!issions
.. through an annual fee
l. not in cash but in .ind
11*. !n !ndia the minimum or maximum commissions
,ayable to distributors are not ,rescribed by la-0 but
are decided using the fund>s o-n discretion
i. True
<. alse
11). =o-est commissions are ,aid on
i. :#uity funds
<. tax benefit schemes of mutual funds
(. debt funds
l. long-term in%estments in mutual funds
12$. :xcess distribution ex,enses are to be borne by
the
i. AM2
<. unit holders
.. 9:1!
l. AM!
121. To co%er fund distribution ex,enses0 o,en ended
funds
g. charge a fee from agents
'. c'arge entr# and e*it "oads fro! inestors
i. create a reser%e
<. sell in%estments
122. Trail commission means ,aying
i. no commission at all
<. the entire commission u,-front
(. )art of t'e co!!ission u)0front and t'e
ba"ance in )'ases
l. the entire commission after fi%e years
12". 9ub-bro.ers ser%e as agents of the ,rinci,al
bro.er and a mutual fund is not ans-erable for their
acti%ities
i. True
<. alse
12+. !n !ndia0 Mutual fund agents> rate and ser%ices
are at ,resent defined by
g. 9:1! rules
h. stoc. exchange bye-la-s
i. AM! rules
3. conention
12&. Along -ith the a,,lication0 it is mandatory to
distribute
i. in%estment rebate
<. offer document
(. (e# infor!ation !e!orandu!
l. none of the abo%e
124. To sell funds effecti%ely0 an agent need not
g. be fully a-are of the im,ortant
characteristics of the scheme
h. .no- his7her client>s ris. ,rofile
i. gi%e after sales ser%ice
3. offer "arge inest!ent rebates
125. or in%estors to correctly com,are ,erformance
of different funds 9:1!>s ad%ertising codes include
i. uniform com,utation of yields
<. uniform ,resentations of di%idends
.. identical time ,eriods
". a"" of t'e aboe
12*. 9:1!>s ad%ertising code mandate that all
,erformance calculations in a fund>s ad%ertisement
should be based
g. ,A-
h. the N9: ifty !ndex
i. the 19: 9ensex
<. none of the abo%e
12). An agent>s a,,ointment by a fund
i. re#uires 9:1!>s a,,ro%al
<. is a lengthy and cumbersome ,rocess
.. is mandatorily ,receded by an AM! test
". does not re$uire an# a))roa"
1"$. An in%estor does not ha%e recourse to his agent
in case of errors0 ,roblems or the #uality of the
in%estment
c. True
d. alse
1"1. An agent can offer and sell a funds>s units at
i. any ,rice he chooses
<. a ,rice determined by com,etition among
agents
.. a ,rice based on demand for that fund>s units
". t'e )ub"ic offering )rice current"# in
effect
1"2. All buy orders through an agent do not become
%alid till the fund acce,ts and confirms the orders
i. True
<. alse
1"". ?hen an agent ,urchases0 offers or sells units0
ensuring com,liance -ith a,,licable regulations is
the res,onsibility of
i. the fund
3. t'e agent
.. AM!
l. 9:1!
1"+. The terms of a,,ointment of a bro.er by a fund
are
g. laid do-n by 9:1!
h. laid do-n by AM!
i. not unifor! to a"" funds
1"&. The code of ethics for mutual funds ,ublished
by AM!
g. is mandatory
'. is in t'e for! of reco!!ended )ractices
i. is unfa%ourable to in%estors
<. does not co%er distribution and selling
,ractices
1"4. The AM! code of ethics does not co%er the
follo-ing ,rescri,tions
g. Ade#uate disclosures should be made to the
in%estors
h. unds should be managed in accordance
-ith stated in%estment ob<ecti%es
i. conflict of interest should be a%oided in
dealings -ith directors or em,loyees
3. eac' inest!ent decision s'ou"d be
a))roed b# inestors
1"5. 3istribution and sales ,ractices are only ,artly
regulated by 9:1! at ,resent
i. True
<. alse
1"*. ?hich of the follo-ing distribution channels is
,referred by ,ri%ate mutual funds
i. !ndi%idual Agents
3. 9mall 3istribution com,anies
(. estab"is'ed distribution co!)anies
". the !nternet
1"). ?hich of the follo-ing sales ,ractices is
,rescribed by regulation
i. AM! Code of :thics
3. SEBI Adertising
.. AM!>s Code for Agents
l. None of the abo%e
1+$. !n a mutual fund in%estors> subscri,tions are
accounted for as
i. liabilities
<. de,osits
(. unit ca)ita"
1+1. !n%estments made by a mutual fund on behalf of
in%estors are accounted as
e. assets
f. liabilities
g. ca,ital
1+2. =iabilities in the balance sheet of a mutual fund
are
g. in the form of long-term loans
'. strict"# s'ort ter! in nature
i. combination of long term and short term
<. not allo-ed as ,er regulations
1+". Net Asset Value CNAVD of a mutual fund scheme
is defined as the schemes
g. assets minus liabilities
h. assets ,er unit
i. assets !inus "iabi"ities )er unit
1++. The day on -hich NAV is calculated by a fund
is .no-n as
g. com,utation date
'. a"uation date
i. record date
<. boo. closure date
1+&. A funds NAV is affected by
e. Aurchase and sale of in%estment securities
f. %aluation of all in%estment securities held
g. units sold or redeemed
'. a"" of t'e aboe
1+4. ?hen com,uting NAV of fund 9:1! re#uires
accrual of ma<or ex,enses to be accounted
i. #uarterly
<. annually
(. on a da# to da# basis
l. -hen actually ,aid
1+5. !f a fund calculates NAV daily0 it -ill include all
the transaction concluded u, to
h. last -ee.
i. last t-o days
<. ,re%ious day
(. toda#
1+*. or a o,en-ended fund0the re,urchase ,rice
should not be lo-er than
g. NAV
h. )&' of NAV
i. >36 of ,A-
<. )5' of NAV
1+). or a close-ended fund0 the re,urchase ,rice
should not be lo-er than
i. NAV
3. >56 of ,A-
.. )"' of NAV
l. )5' of NAV
1&$. or a scheme that has a load0 the AMC can
change an in%estment management fee not exceeding
g. 1.&$'
h. 2.$$'
i. ;.256
<. $.&$'
1&1. !nitial ex,enses of launching schemes should
not exceed
.. 1&' of amount recei%ed
l. 1$' of amount raised
!. 46 of a!ount raised
n. &' of the amount raised
1&2. ?hich of the follo-ing ex,enses cannot be
charged to the scheme
.. Audit fees
l. costs related to in%estor communication
m. -inding costs for terminating the scheme
n. )ena"ties and fines for infraction of "a&s
1&". ?hich of the follo-ing are not true for :#uity
=in.ed 9a%ings 9chemesB
m. !n%estors can claim an income tax rebate
n. There is a loc.-in ,eriod before in%estment
can be -ithdra-n
o. There are not s,ecific restrictions on
in%estment ob<ecti%es for the fund managers
). T'ese funds cannot inest in e$uit#
1&+. ?hich of the follo-ing is not true for !ndex
unds
m. These funds in%ests in the shares that
constitute a s,ecific index
n. The in%estment in shares is in the same
,ro,ortion as in the index
o. These funds ta.e only the o%erall mar.et
ris.
). T'ese funds are not diersified
1&&. The structure -hich is re#uired to be follo-ed
by mutual funds in !ndia is laid do-n by
.. inancial Ministry
". Securities 1 E*c'ange Board of India
7SEBI8
m. und 9,onsor
n. Association of Mutual unds of !ndia
CAM!D
1&4. The 1oard of Trustees of a mutual fund:
!. act as a )rotector of inestors+ interests
n. directly manage the ,ortfolio of securities
o. do not ha%e the right to dismiss the AMC
,. cannot su,er%ise and direct the -or.ing of
the AMC
1&5. The AMC of a mutual fund cannot
m. underta.e ad%isory ser%ices or financial
consulting
n. cannot in%est the funds in go%ernment ,a,er
o. act as a trustee of !ore t'an one !utua"
fund
,. cannot in%est the funds in securities
1&*. The trust that manages a mutual fund is
a,,ointed by
m. The inance Ministry
n. (.1.!
o. SEBI
,. The s,onsor of that mutual fund
1&). The custodian of a mutual fund:
(. is a))ointed for safe(ee)ing of securities
l. need not be an entity inde,endent of the
s,onsors
m. not re#uired to be registered -ith 9:1!
n. does not gi%e or recei%e deli%eries of
,hysical securities
14$. Transfer Agents of a mutual fund are not
res,onsible for
m. issuing and redeeming units of the mutual
fund
n. u,dating in%estor records
o. ,re,aring transfer documents
). inesting t'e funds in securities !ar(ets
141. 3istributors or agents
!. can distribute seera" !utua" funds
si!u"taneous"#
n. cannot a,,oint sub-agents or sub-bro.ers
o. should be only indi%iduals not com,anies or
ban.s
,. should not be an em,loyee or associate of
the AMC
142. A transfer in the management of a close-ended
scheme does not re#uire the consent of
.. unit holders -ith 5&' %oting rights
l. 9:1!
m. Trustees
n. AM2
14". The fund s,onsor has to contribute
.. nothing to the AMC
l. the total net-orth of the AMC
!. at"east ?06 of t'e AM2+s net&ort'
n. exactly &$'
14+. The s,onsor of a mutual fund may be com,ared
to
m. a director in a Com,any
n. the Chief :xecuti%e of a Com,any
o. Pro!oter of a 2o!)an#
,. an e#uity shareholder in a Com,any
14&. !ssuing and redeeming units of a mutual fund is
the role
m. the custodian
n. t'e transfer agent
o. the trustees
,. the ban.ers
144. The fund s,onsors should ha%e a sound financial
trac. record of
.. 5 years
l. 12 months
m. & years
n. 3 #ears
145. The net-orth of an asset management com,any
should be greater than
m. (s.1$$ Crores
n. can be decided by the 9,onsor
o. s'ou"d be at"east Rs. ;0 2rores at a""
ti!es
,. should be greater than (s.1$ Crores
14*. The AMC and directors are ans-erable to
.. 9toc. :xchanges
". T'e Board of Trustees
m. Agents and distributors
n. 9toc. 1ro.ers
14). The role of an AMC is to act as
1. ,romoters
2. inest!ent !anagers
". distribution agents
+. regulators
15$. A change in the follo-ing .ey ,eo,le does not
materially im,act the ,erformance of the fund
m. und s,onsors
n. Trustees of the fund
o. Fund Manager
,. Members of the AM! Committee
151. To transfer the management of a scheme from
one AMC to another0 the consent of the follo-ing is
re#uired
.. 9:1!
l. ;nit holders
!. bot' SEBI and unit 'o"ders
n. none of the abo%e
152. As ,er 9:1!>s ,rinci,les0 the AMC and the
1oard of Trustees of a fund should belong to the
same s,onsors
m. True
n. Fa"se
15". After ;T!0 the first mutual funds -ere started by
.. ,ri%ate sector ban.s
". )ub"ic sector ban(s
m. financial institutions
n. non-ban.ing finance com,anies
15+. The highest authority among the follo-ing is the
.. 9:1!
l. Com,any =a- 1oard
m. (1!
n. Ministr# of Finance
15&. The entity that 9:1! does not regulate is
m. share registrars
n. mutual funds
o. stoc. exchanges
). non0ban(ing finance co!)anies
154. The accounts and all other records of an AMC
are filed -ith
.. AM!
". Registrar of 2o!)anies
m. Agents> Association
n. ;T!
155. A close-ended scheme of a mutual fund is not
go%erned by
m. :xchange (ules of the stoc. exchange
-here it is listed
n. =isting Agreement bet-een the fund and the
stoc. exchange
o. guide"ines issued b# t'e Ministr# of
2o!!erce
,. Com,anies Act ,ro%isions relating to
transactions in securities
15*. The entry of mutual funds in !ndia -as initiated
by mutual funds set u, by
.. Aublic 9ector 1an.s
l. Ari%ate 9ector mutual funds
!. <nit Trust of India
n. mutual funds set u, by insurance com,anies
15). or a close-ended scheme to change its
fundamental attributes0 it must obtain the consent of
m. &$' of unit holders
n. &$' of trustees
o. @56 of unit 'o"ders
,. none of the abo%e
1*$. The largest cor,us of in%estable funds in !ndia is
-ith
e. 1an.-o-ned mutual funds
f. Ari%ate 9ector mutual funds
g. <TI
h. !nsurance Com,anies
1*1. The 1oard of Trustees of the ;T! does not ha%e
nominees from
m. (1!
n. =!C
o. !31!
,. T'e Bo!ba# Stoc( E*c'ange 7BSED
1*2. ;T! Cannot ,ro%ide
.. cor,orate finance
". engage in rea" estate and )ro)ert#
dee"o)!ent business
m. ,ro%ide merchant ban.ing ser%ices
n. in%est in securities
1*". The 8Ca,ital8 of a scheme does not include
m. unit ca,ital
n. reser%es
o. borro-ing
). net&ort' of t'e AM2
1*+. ?hich of the follo-ing are 9elf (egulatory
/rganisations
.. 1ombay 9toc. :xchange
l. 9:1!
!. AMFI
n. (1!
1*&. A 9elf (egulatory /rganisation can regulate
.. all entities in the mar.et
". on"# its o&n !e!bers in a "i!ited &a#
m. its o-n members -ith total <urisdiction
n. no entity at all
1*4. The amount of authority en<oyed by a
;. se"f0regu"ator# organisation is defined b#
2. the a,ex regulatory authority
". com,any la- board
+. its o-n members
&. (1!
1*5. The role of AM! in the mutual funds industry is
not to
.. ,romote the interests of the unit holders
l. set a Code of :thics
!. regu"ate !utua" funds in
n. crease ,ublic a-areness of mutual funds in
the country
1**. The rights of in%estors in a mutual fund scheme
are laid do-n in
!. t'e :ffer .ocu!ent of t'at sc'e!e
n. Guarterly (e,orts
o. Annual (e,orts
). mar.eting brochures
1*). ;nit holders of a mutual fund scheme do not
ha%e a right to
m. ,ro,ortionate o-nershi, of the scheme>s
assets
n. di%idend declared for that scheme
o. di%idend declared for other schemes of the
mutual funds
). inco!e dec"ared under t'at sc'e!e
1)$. After di%idend declaration0 unit-holders are
entitled to recei%e di%idend -ithin
m. one -ee.
n. one !ont'
o. +2 days
,. six -ee.s
1)1. ;nit holders> right to information does not
include
i. obtaining from the trustees any information
ha%ing an ad%erse effect on their
in%estments
<. ins,ecting ma<or documents of a fund
.. recei%ing of a co,y of the annual financial
statements of that fund
". a))roing inest!ent decisions of t'e
fund
1)2. 9hortfalls in the case of assured returns schemes
are met
.. by s,onsors of such schemes
". on"# if t'e offer docu!ent s)ecifica""#
)roided suc' a guarantee b# a na!ed
s)onsor
m. the 2o%ernment of !ndia
n. AM!
1)". ;nit-holders aggrie%ed by a und or AMC can
get redressed from
.. Consumer Courts
". SEBI
m. AM!
n. (1!
1)+. !f the 3irectors of an AMC commit fraud0 ;nit-
holders in%estments> cannot be ,rotected by the
3e,artment of Com,any Affairs and the Com,any
=a- 1oard
(. True
l. alse
1)&. The res,onsibilities of a unit-holder do not
include:
i. Monitor his in%estments carefully
<. being a-are of information that affects his
in%estment in a ma<or -ay
.. carefully studying the offer document
". ta(ing decisions about &'ere t'e fund
!anagers s'ou"d inest
1)4. ;T!s scheme ;9-4+ falls under the ,ur%ie- of
9:1!
m. True
n. Fa"se
1)5. ;T! -as set u, by
l. 9:1!
m. AM!
n. A s)ecia" act
o. (1!
1)*. 1an. o-ned Mutual unds are su,er%ised by
.. 9:1!
l. (1!
!. 3oint"# b# SEBI 1 RBI
n. AM!
1)). !n%estor does not ha%e the right to recei%e any
interest from an AMC if his redem,tion ,roceeds are
not des,atched -ithin 1$ -or.ing days
m. True
n. Fa"se
2$$. !f an in%estor failed to claim his redem,tion
,roceeds -ithin " years0 he can claim the ,roceeds at
(. Par
l. Are%ailing NAV
m. the on the date he has a,,lied for
redem,tion
n. 1&' belo- the ,re%ailing NAV
2$1. After closure of the initial offer an o,en ended
scheme0 on going sales and re,urchases must start
-ithin
o. /ne -ee.
). 30 da#s
#. +& days
r. 1*$ days
2$2. or scheme to be able to change its fundamental
attributes0 it must obtain the consent of
o. &$' of the unit holders
,. &$' of the trustees
#. 5&' of the unit holders
r. none of t'e aboe
2$". The ,ros,ectus or /ffer 3ocument containing
the details of ne- scheme is first registered -ith the
#. AM!
r. SEBI
s. 1ombay 9toc. :xchange
t. Ministry of inance
2$+. The offer document issued by mutual funds does
not ser%e the ,ur,ose of
#. announcing the scheme
r. gi%ing detailed information about the
scheme
s. in%iting the the in%estors
t. giing t'e fund !anager+s inest!ent
out"oo( for t'e ne*t $uarter
2$&. The ,ros,ectus of a close-ended fund is issued
o. e%ery year
). on"# once at t'e ti!e of issue
#. e%ery #uarter
r. e%ery six months
2$4. undamental attributes of scheme
#. do not include the ob<ecti%e of the scheme
r. can be changed -ithout the in%estor>s
a,,ro%al or .no-ledge
s. inc"ude t'e ter!s of t'e sc'e!e
t. are not necessary for deciding -hether to
in%est in the scheme or not
2$5. The offer document
$. contains t'e ter!s of issue
r. gi%es no information rele%ant for ma.ing an
in%estment decision
s. is not the o,erating document describing the
scheme
t. cannot be called a reference document
2$*. 9:1! does not re#uire the follo-ing to be
included in the offer document issued by a mutual
fund
#. details of the 9,onsor and the AMC
r. 3escri,tion of the 9cheme H in%estment
ob<ecti%e7strategy
s. !n%estors> (ights and 9er%ices
t. Perfor!ance of ot'er !utua" funds
2$). >Fey !nformation Memorandum> is
o. an abridged ersion of t'e offer docu!ent
,. the Memorandum H Articles of Association
of the AMC
#. a sheet containing historical NAVs of other
fund schemes
r. Annual (e,ort of the AMC
21$. The offer document for a scheme remains %alid
e%en if
#. the AMC is reconstituted
r. entry or exit load are changed
s. t'e sc'e!e+s ,A- c'anges
t. ne- ,lans are added to existing schemes
211. The offer document has to be fully re%ised and
u,dated
#. e%ery six months
r. once in t&o #ears
s. e%ery #uarter
t. e%ery month
212. An addendum gi%ing details of material change
in the offer document should be circulated
o. distributors7bro.ers
,. unit holders
$. SEBI
r. all of the abo%e
21". ?hich of the follo-ing is not true for offer
documents of o,en-ended schemes
o. it is first issued at the time the scheme is
launched
,. it is registered -ith 9:1!
$. it 'as to be reised )eriodica""#
r. it need not be re%ised at all
21+. All im,ortant disclosures that the mutual fund is
re#uired to ma.e0 by regulation0 are contained in the
offer document
$. True
r. alse
21&. The offer document issued -hen an o,en-ended
scheme is launched is %alid for all times0 until
amended
$. True
r. alse
214 The most im,ortant source of information for a
,ros,ecti%e in%estor is
o. offer docu!ent
,. Annual (e,ort of the AMC
#. :conomic Times
r. AM! Ne-sletter
215 The offer document need not be studied by an
in%estor before in%esting in a scheme
#. True
r. Fa"se
21* The offer document is not a legal document
o. True
). Fa"se
21) !nitial issue ex,enses are charged to a scheme in
the first year itself
m. True
n. Fa"se
22$ 9cheme--ise annual re,ort of a mutual fund
need not be
#. sent to all unit-holders
r. for-arded to 9:1!
s. ,ublished as an ad%ertisement
t. stoc( e*c'anges
221 Mutual funds %alue their in%estments
o. at ,urchase ,rice
). on a !ar(0to0!ar(et basis
#. at ,ar
r. at boo. %alue
222 !n%estors are totally exem,t from ,aying any tax
on the di%idend income they recei%e from mutual
funds
o. True
,. alse
22" !ncome distributed to unit-holders by a debt fund
is liable to di%idend distribution tax
o. True
). Fa"se
22+ A close-ended has a%erage -ee.ly net assets of
(s 2$$ crore.As ,er 9:1! regulations0 the AMC can
charge the fund -ith in%estment and ad%isory fees
u,to:
o. Rs 2.25 crore
,. (s 2.$$ crore
#. (s 2.&$ crore
r. (s ".$$ crore
22& A ,assi%e fund manager
$. researc'es stoc(s e*tensie"#
r. does not buy and sell stoc.s often
s. does not ha%e to go through the ,rocess of
stoc. selection
t. does not ha%e to trac. stoc.s
224 A fund manager managing an index fund
o. 'as to (ee) fund e*)enses "o&
,. does not ha%e to research stoc.s
#. does not ha%e to balance his ,ortfolio
r. none of the abo%e
225 A gro-th manager loo.s for
#. high current income
r. under%alued stoc.s
s. aboe aerage earnings gro&t'
t. none of the abo%e
22* A %alue manager does not loo. for
o. stoc.s that are currently under%alued in the
mar.et
,. stoc.s -hose -orth -ill be recognised by
the mar.et in the long term
$. 'ig' current #ie"d
r. long term ca,ital a,,reciation
22) rom an in%estor>s %ie-,oint0 the most im,ortant
is
#. a fund>s in%estment style
r. )erfor!ance of t'e fund
s. the fund manager>s <udgement
2"$ undamental analysis in%ol%es
i. chec.ing the foundations of the com,any>s
factory building
3. researc' into t'e o)erations and finances
of t'e co!)an#
.. studying the com,any>s share ,rices
2"1. ?hich of the follo-ing is not considered for
technical analysis
#. historical data on the com,any>s share ,rice
r. the com,any shares> trading %olume
s. current mar.et sentiment
t. t'e co!)an#+s regu"ator# eniron!ent
2"2. Guantitati%e analysis is more li.ely to be done
to e%aluate a ,articular sector or industry rather than
any s,ecific stoc.
o. True
,. alse
2"". undamental analysis forms the basis to decide
#. -hen to buy a gi%en share
r. &'et'er to bu# a gien s'are or not
s. -hether to use technical analysis or
#uantitati%e analysis
t. -hether the com,any>s factory can
-ithstand earth#ua.es
2"+. Technical analysis guides the decision on
o. -hether to buy or sell
). t'e rig't ti!e to bu# or se""
#. -hether com,any>s technical ,ersonnel are
ade#uately #ualified
2"&. ?hich of the follo-ing is not an in%estment
,hiloso,hy
o. ca,italising on economic cycles
,. focusing on gro-th sectors
$. ca)ita"isation
r. finding %alue stoc.s
2"4. ?hen ex,ecting a fall in mar.et ,rice0 fund
managers can reduce the loss in ,ortfolio %alue by
.. s,eculating
l. not buying and selling shares at all for some
days
!. using e$uit# deriaties
n. gi%ing TV inter%ie-s to im,ro%e sentiment
2"5. :#uity deri%ati%e instruments are
o. shares
,. bonds
$. contracts
r. notes
2"*. A futures contract allo-s one to buy or sell the
underlying shares0 but need not result in deli%ery
$. True
r. alse
2"). 3eri%ati%es cannot be based on mar.et indices
#. True
r. Fa"se
2+$. !n a mutual fund0 the o%erall decisions on
allocating money to ,articular industries7sectors are
ta.en by
#. e#uity analysts
r. fund !anagers
s. security dealers
t. trustees
2+1. Continuous trac.ing of the com,anies in -hich
a mutual fund has in%ested is done by
m. continuous trac.ing systems
n. e$uit# ana"#sts
o. trustees
,. security dealers
2+2. 9ecurity dealers of a mutual fund
o. guard the cabin of the fund manager
). e*ecute bu# and se"" orders for t'e fund
#. decide -hich shares to buy or sell
2+". As ,er 9:1!>s re#uirements each scheme of a
mutual fund should ha%e a different fund manager
o. True
,. alse
2++. 3ebt securities bought at a discount to their face
%alue are generally
m. interest bearing
n. zero cou)on bonds
o. ,aying interest at a floating rate
,. none of the abo%e
2+&. !n !ndia0 a large ,art of debt securities ,ay
interest on
m. a floating rate basis
n. a fixed rate ,lus a %ariable ,ortion
o. a fi*ed rate
,. 6ero cou,on basis
2+4. The !ndian debt mar.et is largely -holesale in
nature
o. True
,. alse
2+5. !n the -holesale debt mar.et0 the largest
,ro,ortion of trading is seen in
;. %oern!ent Securities
2. Cor,orate 1onds
". T-1ills
+. A9; 1onds
2+*. The largest ,ro,ortion of trades done in the
-holesale debt mar.et is accounted by
o. mutual funds
,. foreign ban.s
$. Indian ban(s
r. financial institutions
2+). Certificates of 3e,osits CC3sD are issued by
o. (egional (ural 1an.s
,. Cor,orates
$. Sc'edu"ed co!!ercia" ban(s
2&$. Commercial Aa,er is issued by Cor,orate bodies
o. to !eet s'ort0ter! &or(ing ca)ita"
re$uire!ents
,. to finance the ac#uisition of long term
ca,ital assets
#. to retire long term debt
r. to ,ay di%idend
2&1. 2o%ernment securities are issued through the
(1!
s. True
t. alse
2&2. The yield on Treasury 1ill CT-1illD us
determined by
s. the 2o%ernment of !ndia
t. auction
u. the 9tate 2o%ernments
%. floating rate method
2&". ?hich of the follo-ing are not normally found
in the ,ortfolio of a debt fund
u. long-dated 2o%ernment 9ecurities
%. Cor,orate debentures
-. bonds issued by financial institutions
*. certificates of de)osit issued b# ban(s
2&+. ?hich of the follo-ing do not re,resent the
amount an in%estor of a debt security -ill be ,aid
u,on maturity
u. ,ar %alue
%. face %alue
-. fair %alue
x. redem,tion %alue
2&&. Cou,on of a debt security refers to
s. a ,iece of ,a,er attached to the certificate
t. the return on in%estor -ould earn
u. t'e a!ount rate of interest )aid on )ar
a"ue of t'e bond
%. none of the abo%e
2&4. ?hich of the follo-ing do not a,,ly to the term
>maturity> of a debt securityB
u. the date on -hich the certificates becomes
old
%. the term of the bond
&. t'e date of rede!)tion
x. the date on -hich the issuer has to re,ay the
amount
2&5. Call or ,ut ,ro%isions are used to modify the
fixed maturity of debt securities
u. True
%. alse
2&*. A call ,ro%ision in a debt issue allo-s the issuer
to
u. call out the names of the in%estors
%. redeem the debt on maturity
-. extend the tenure of the debt
*. redee! t'e debt before !aturit#
2&). A ,ut ,ro%ision in a debt issue allo-s
1. in%estor to ,ut a-ay the certificates in safe
de,osit %aults
2. inestors to redee! debt )rior to
!aturit#
". issuers to redeem debt ,rior to maturity
+. in%estors to extend the tenure of debt
24$. Current yield relates interest on a security to
u. its current !ar(et )rice
%. its face %alue
-. its fair %alue
x. the current ,rice of T-1ills
241. To com,are bonds -ith different cou,on rates0
maturities and ,rices0 in%estors -ould use:
u. current yield
%. technical analysis
&. #ie"d to !aturit#
x. fundamental analysis
242. ?hen interest rates rise0 bond ,rices
1. also rise
2. fa""
". are not affected
+. fluctuate either u, or do-n
24". Eield cur%e is also .no-n as
s. Cur%e of !nterest
t. Ter! Structure of Interest Rates
u. Cur%e that yields
24+. An im,ortant indicator of ex,ected trends in
interest rates is
s. The :conomic Times
t. the 9ensex
u. t'e 9ie"d 2ure
%. the Chief Minister>s 9,eech
24&. !t may not be ,ossible to rein%est interest
recei%ed at the same rate as ,rinci,al. This is .no-n
as
s. reinest!ent ris(
t. inflation ris.
u. interest-rate ris.
%. call ris.
244. A bond>s rating indicates its
s. rein%estment ris.
t. defau"t ris(
u. inflation ris.
%. interest-rate ris.
245. !f a bond cannot be sold at a ,rice near its %alue0
it means that in%estment in this bond has
s. high li#uidity ris.
t. 'ig' defau"t ris(
u. lo- li#uidity ris.
%. inflation ris.
24*. The additional yield re#uired to account for the
ris. of default by the borro-er is .no-n as
#. yield ,lus
r. #ie"d s)read
s. yield extra
t. yield ,remium
24). A high credit rating does not mean
o. 'ig' #ie"d s)read
,. high ,ercei%ed safety
#. lo- yield s,read
r. lo- ris. ,remium
25$. !f 1$-year go%ernment securities Neil 1$' and a
1$-Eear fixed de,osit in a com,any yields 12'0 the
yield s,read is
u. 12'
%. 22'
-. 1$'
*. 26
251. The 8duration8 of an interest-bearing bond is
s. longer than its maturity
t. "ess t'an its !aturit#
u. e#ual to its maturity
%. the #uality of ,a,er used for the certificate
252. A bond -ith a cou,on of )' -hen interest rates
for similar maturities are 11' -ill sell
#. abo%e ,ar
r. be"o& )ar
s. at ,ar
t. at a ,rice unrelated to the ,re%ailing interest
rate
25". Changes in foreign exchange rates ha%e no
bearing on interest rates
#. True
r. Fa"se
25+. !nflation and interest rates are in%ersely
,ro,ortional
s. True
t. Fa"se
25&. !n%estment ,olicies of a mutual fund are
determined by
u. the fund manager
. t'e AM2 !anage!ent
-. the mar.eting de,artment based on -hat
distributors -ant
x. the in%estors
254. ?hich of the follo-ing measures are not ta.en
by 9:1! for ,rotecting in%estors of mutual funds
s. mandating minimum le%els of
di%ersification for mutual funds
t. ensuring that the funds are not used to
fa%our a fe- com,anies
u. trac(ing t'e securities t'at eac' fund 'as
inested in
%. ensuring that the funds are in%ested in
a,,ro%ed securities only
255. As ,er 9:1! norms0 a fund>s in%estments0 in the
e#uity shares of any one com,any are restricted to
u. 2&' of NAV
. ;06 of ,A-
-. &$' of NAV
x. 1$$' of NAV
25*. A mutual fund manager is not allo-ed to sell
short -hen he ex,ects a crash in the mar.et
s. True
t. alse
25). !n a mutual fund0 ha%ing many schemes0 al
securities bought can be held in a general account and
transferred later to %arious schemes to attain certain
,rofit or loss ob<ecti%es
u. True
. Fa"se
2*$. A mutual fund may in%est in short-term de,osits
of scheduled commercial ban.s
!. True
n. alse
2*1. Mutual funds are allo-ed to lend
u. loans
. securities
-. ,hysical assets
x. none of the abo%e
2*2. !n case of listed securities of grou, com,anies
of the s,onsor0 mutual fund is not allo-ed to in%est
$. 256 of its net assets
r. 1$' of its net assets
s. at all
t. I&' of net assets
2*". A mutual fund may transfer in%estments from
one scheme to another
u. not at all
. at current !ar(et rates
-. at cost ,rice
x. at a fixed ,remium o%er mar.et rate
2*+. !nterest (ate (is. for an !ndian debt fund can be
reduced by using
s. utures
t. /,tions
u. Interest Rate S&a)s
2*&. The !nterest (ate orecasting ;nit of a debt
fund is generally manned by
s. technicians
t. statisticians
u. econo!ists 1 econo!etricians
%. accountants
2*4. AMCs need not maintain records in su,,ort of
each in%estment decision
o. True
). Fa"se
2*5. ?hen interest rates for similar maturities> bonds
are 11'0 bond -ith a )' cou,on rate -ill sell
s. abo%e ,ar
t. be"o& )ar
u. at ,ar
%. at a ,rice unrelated to the interest rates for
similar securities
2**. The most suitable measure for a fund>s
,erformance does not de,end on the
s. ty,e of fund
t. in%estment ob<ecti%e of the fund
u. financial mar.et conditions
. a!ount inested b# inestor
2*). !f the NAV of an o,en-ended fund -as (s.14 at
the beginning of the year and (s.22 after 1" months0
the annualised change in NAV is
s. 4.$'
t. "+.4'
u. ?0.46
%. "5.&'
2)$. Change in NAV as a measure of fund
,erformance is more suitable for
u. gro&t' funds
%. income funds
-. funds -ith -ithdra-al ,lans
2)1. The difference bet-een NAV change and total
return as measures of fund ,erformance is
#. none
r. tota" return ta(es diidend into account
&'i"e ,A- c'ange does not
s. total return does not ta.e NAVs into account
t. total return does not ta.e the time ,eriod
into account
2)2. The most suitable measure of fund ,erformance
for all fund ty,es is
s. NAV Change
t. Total (eturn
u. Tota" Return &it' reinest!ent
2)". The ex,ense ratio used for measuring fund
,erformance is an indicator of
#. ,roduct mar.et condition
r. gro-th in the economy
s. ,re%alent mar.et ,ractices
t. t'e fund+s efficienc#
2)+. The :x,ense (atio as a measure of a fund>s
,erformance is defined by a fund>s
$. tota" e*)enses and aerage net assets
r. total ex,enses and total assets
s. a%erage ex,enses and a%erage net assets
2)&. ?hile com,uting the :x,ense (atio for a fund0
bro.erage commissions on the fund>s transactions are
not included in the fund ex,enses
#. True
r. alse
2)4. The :x,ense (atio is not of utmost im,ortance
in case of
#. 3ebt fund
r. !ndex fund
s. E$uit# fund
t. 1ond fund
2)5. The :x,ense (atio is not affected by
,. fund si6e
#. a%erage account si6e
r. ,ortfolio com,osition
s. stoc( !ar(et conditions
2)*. The !ncome (atio as a measure of a fund>s
,erformance is defined by the fund>s
s. total income and total assets
t. net inest!ent inco!e and net assets
u. total income and net assets
2)). The !ncome (atio is more suitable for
e%aluating the ,erformance of
s. :#uity unds
t. 2ro-th unds
u. Regu"ar Inco!e Funds
%. !ndex unds
"$$. Aortfolio turno%er rate of a fund measure the
s. si6e of the fund>s ,ortfolio
t. a!ount of bu#ing and se""ing done b# t'e
fund
u. the a%erage number of units sold by the fund
in one day
"$1. A high turno%er rate for a fund indicates
u. high transaction costs
%. greater efficiency
-. high returns to the in%estor
x. a rising mar.et
"$2. Turno%er rates -ould be most rele%ant to
analyse the ,erformance of
-. e#uity funds
x. gro-th funds
y. debt funds
6. %alue funds
"$". Transaction costs include
y. all ex,enses related to trading
6. all ex,enes charged to the fund
aa. distribution ex,enses
bb. none of the abo%e
"$+. ?hich of the follo-ing are not included in
Transaction costsB
y. bro.erage commissions
6. stam, duty on transfers
aa. custodians fees
bb. agent commissions
"$&. ?hich of the follo-ing transaction costs are not
#uantified in the offer document
-. bro.erage commissions
x. dealer s,reads
y. custodian>s fees
6. registrar>s fees
"$4. The si6e of a fund has no bearing on its
,erformance
y. True
6. alse
"$5. As ,er 9:1!0 mutual funds can borro- for short
term to the extent of
-. total net assets
x. &$' of net assets
y. 2&' of net assets
6. 2$' of net assets
"$*. ?hich of the follo-ing is of no rele%ance in
e%aluating a fund>s ,erformance
y. The ,erformance of the stoc. mar.et as a
-hole
6. The ,erformance of other mutual funds
aa. The returns gi%en by other com,arable
financial ,roducts
bb. The change in -holesale ,rice index
"$). The choice of an a,,ro,riate benchmar. for
e%aluating a fund>s ,erformance de,ends on
s. the fund manager
t. the in%estment ob<ecti%e of the fund
u. 9:1!
%. AM!
"1$. An acti%ely managed e#uity fund ex,ects to
y. be able to beat the benchmar.s
6. earn the same returns as the benchmar.
aa. ha%e no benchmar.s
bb. under,erform -hen com,ared -ith the
benchmar.
"11. or e%aluating funds0 the ,referred benchmar.
-ould be the
y. 19: 9ensex
6. 9HA CNJ Nifty
aa. 19: 2$$
bb. 9HA CNJ 9ectoral !ndices
"12. To e%aluate a close-ended debt-fund0 a suitable
benchmar. -ould be
s. 19: 9ensex
t. !-9ec>s !-1:J
u. interest on ban. fixed de,osits of similar
maturity
%. 9HA CNJ 3efty
"1". ?hen com,aring ,erformance of t-o funds0 the
follo-ing need not be similar
-. (is. ,rofiles
x. !n%estment ob<ecti%es
y. und si6e
6. und managers
"1+. ?hich of the follo-ing is falseB
-. (/! is a measure similar to Total (eturn
-ith (ein%estment of distribution
x. Total (eturn -ith (ein%estment of
distributions assumes rein%estment at NAV
on the distribution date
y. As a measure of ,erformance0 Total (eturn
-ith (ein%estment of distribution see.s to
o%ercome the shortcomings of sim,le Total
(eturn
6. 1ecause of its sim,licity0 sim,le Total
(eturn is ,referred in ,ractice to Total
(eturn -ith (ein%estment of distribution
"1&. The basis of genuine in%estment ad%ice should
be
1. the current mar.et situation
2. the agent commissions ,aid by different
funds
". financial ,lanning to suit the in%estor>s
situation
+. ,lanning to com,lete the agent>s annual
targets
"14. inancial goals do not include
-. buying a home
x. -inning a s,orts gold medal
y. ,lanning for retirement
6. sa%ing for child>s education
"15. inancial ,lanning allo-s a ,erson
-. to become a billionaire
x. to achie%e financial goals through ,ro,er
management of finances
y. to in%est in foreign countries
6. none of the abo%e
"1*. inancial ,lans do not alter in any -ay the
amount of tax an in%estor ,ays as the tax is on his
income
u. True
%. alse
"1). ?hich of the follo-ing -or.s -ith an in%estor
on his o%erall financial situation
s. Tax Ad%isor
t. inancial Alanner
u. !nsurance Agent
%. inancial Ad%isor
"2$. A financial ,lanner ta.es res,onsibility for the
financial -ell-being of his7her clients
y. True
6. alse
"21. inancial ,lanners and their clients should focus
on
-. allocating funds to asset classes Ce.g. debt0
e#uity etc.D
x. allocating funds to indi%idual securities
y. trac.ing stoc.s -hich they feel ha%e
,otential
"22. ?ithin an asset class0 -hich indi%idual security
to in%est in should be decided by
u. the financial ,lanner
%. the in%estor himself
-. a ,rofessional fund manager
x. an ob<ecti%e ad%isor
"2". inancial Alanning com,rises
s. defining a client>s ,rofile and goals
t. recommending a,,ro,riate asset allocation
u. monitoring financial ,lanning
recommendations
%. all of the abo%e
"2+. inancial ,lanning is rele%ant only for high
net-orth indi%iduals
u. True
%. alse
"2&. inancial ,lanning does -or. for older clients
y. True
6. alse
"24 inancial ,lanning is ,rimarily tax ,lanning
-. True
x. alse
"25 !n financial ,lanning0 all res,onsibility ends -ith
the financial ,lanner and the client has no
res,onsibilities
y. True
6. alse
"2* The constraint on financial ,lanning due to
insufficient in%estable resources can be remedied to
some extent by
u. decreasing the standard of li%ing
%. disci,lining children
-. disci,lined monthly budgeting
"2) !n the gro-th o,tion offered by mutual funds0 the
number of units held by an in%estor increases because
of
-. gro-th in net asset %alue i.e. ca,ital
a,,reciation
x. rein%estment of di%idend -hich is li.e
com,ounding
y. interest recei%ed on the fund>s assets
""$ To maximise returns on in%estment0 once an
in%estor buys into a fund0 he7she should hold on to it
no matter -hat ha,,ens
o. True
,. alse
""1 !f an in%estor .ee,s in%esting a fixed amount at
regular inter%als0 the a%erage cost of his ,urchases
-ill al-ays be less than if he ma.es in%estment at
irregular ,eriods
y. True
6. alse
""2. ?hich of the follo-ing lets an in%estor boo.
,rofits in a rising mar.et and increase holdings in a
falling mar.et
u. ixed (ates of Asset Allocation
%. lexible (atio of Asset Allocation
-. !n%estment -ithout any asset allocation ,lan
x. 1uy and @old 9trategy
""". A lexible (atio of Asset Allocation means
y. continuously changing the ratio of %arious
assets in the ,ortfolio
6. not doing any re-balancing and letting the
,rofits run
aa. acti%e s-itching
""+. The strategy ad%isable for an in%estor to
maximise in%estment return in the long run is
-. buy and hold on to in%estments for a long
time
x. li#uidate ,oorly ,erforming in%estments
from time to time
y. li#uidate good ,erforming in%estments fro
time to time
6. s-itch from ,oor ,erformers to good
,erformers
""&. A criticism of ru,ee-cost a%eraging is
-. !n%estment is for the same amount at regular
inter%als
x. /%er a ,eriod of time0 the a%erage ,urchase
,rice -ill -or. out higher than if one tries to
guess the mar.et highs and lo-s
y. !t does not tell you -hen to buy0 sell or
s-itch from one scheme to another
6. (u,ee cost a%eraging has no serious
shortcomings
""4. !n !ndia0 indi%idual in%estors do not ha%e direct
access to
#. ca,ital mar.et instruments
r. real estate
s. bullion
t. money mar.et instruments
""5. ?hich of the follo-ing entities can gi%en loans
against securities
-. ;T!
x. 1an.s
y. Mutual funds
""*. ?hich of the follo-ing in%estment ,roducts do
not gi%e guarantee for return or ca,ital
&. 1an. de,osits
*. Aubic ,ro%ident fund CAAD
#. National 9a%ings Certificates CN9CD
z. ;nits of a mutual fund
""). The biggest ad%antage of in%estment in gold is
-. @igh returns
x. @igh a,,reciation in %alue
y. =o- Aurchase ,rice
6. @edge against inflation
"+$. The biggest disad%antage of in%estment in real
estate is
y. =ess ,otential for ca,ital a,,reciation
6. @igh ,urchase ,rice
aa. 3e,reciation in %alue as time ,asses
bb. Value gets eroded due to inflation
"+1. ?hich of the follo-ing is not an ad%antage of
ban. de,ositsB
u. =i#uidity
%. @igh ,ercei%ed safety
-. =o- entry ,rice
x. @igh yield after tax
"+2. =isting of shares at a stoc. exchange ensures
-. guaranteed returns
x. long term ca,ital a,,reciation
y. lo- ris.
6. high li#uidity
"+". The rate of interest ,aid by a com,any on
debentures issued by it de,ends on
u. the stoc. mar.et situation
%. 9:1! guidelines
-. the com,any>s credit rating
x. the amount of money being raised
"++. ?hich of the follo-ing is not a characteristic of
com,any fixed de,osits
u. A higher rate of interest
%. higher ris.
-. unfa%ourable effect of tax
x. %ery high li#uidity
"+&. ?hich of the follo-ing is untrue for Aublic
Aro%ident und 9chemes
s. The interest is tax-free
t. Aost-tax returns are attracti%e
u. =i#uidity is rather lo-
"+4. !ndira Vi.as Aatra is an in%estment ,roduct
,o,ular -ith
u. rural in%estors
%. in%estors in high tax brac.et
-. urban in%estors
x. ris. ta.ing in%estors
"+5. inance Acts of 2$$$ and 2$$1 ha%e reduced
tax-free interest on Aublic Aro%ident und to
t. 12'
u. 1$.&'
%. )'
-. 11'
"+* Most indi%iduals in%est in life insurance ,olicies
for
-. ris. ,rotection
x. tax benefits
y. easy li#uidity
6. high returns
"+). Annual contribution to Aublic Aro%ident und
should be
-. (s.1$$$$
x. bet-een 1$$ and (s.4$$$
y. bet-een (s.4$$ and (s.1$$$
"&$. The current yield on !ndira Vi.as Aatra -or.s
out to
-. 1$.&'
x. 11'
y. 1$'
6. )'
351. The tenure of an Indira Vikas Patra is
y. 7 years
z. 6 years
aa. 5 years
bb. 3 years
352. The maturity period of RI Re!ief onds is
aa. 5 years
bb. 6 years
"". 7 years
dd. # years
353. The annua! yie!d on RI Re!ief onds is
"". $.5%
dd. $.5% before ta&
ee. #.5% before ta&
ff. #.5% after ta&
35'. Indi(idua! in(estors do not norma!!y in(est
in )o(ernment *e"urities be"ause
"". indi(idua! in(estors re not a!!o+ed to
in(est in )o(ernment *e"urities
dd. the amount re,uired for in(estment is
(ery !ar-e
ee. safety of prin"ipa! is not -uaranteed
ff. none of the abo(e
355. The amount an insuran"e "ompany +ou!d
pay to the nominee if a po!i"yho!der died is
kno+n as the
aa. premium
bb. sum assured
"". fa"e (a!ue
dd. rea! (a!ue
356. .i(idends distributed by mutua! funds are
aa. ta&ed at sour"e
bb. ta&ed in the hands of the in(estors
"". are sub/e"t to "apita! -ains ta&
dd. are ta&0free in the hands of the in(estor
357. In(estin- throu-h mutua! fund is a better
option than in(estin- dire"t!y in the sto"k market
be"ause
identifyin- sto"ks is a diffi"u!t pro"ess
a-ents -et "ommissions on mutua! fund in(estment
returned are -uaranteed by mutua! funds
a!! of the abo(e
35#. 1 sma!! in(estor "an bui!d a di(ersified
portfo!io by
aa. buyin- one share ea"h of a!! !isted
"ompanies
bb. in(estin- in a mutua! fund
"". borro+in- enou-h money to buy shares
of +e!!0mana-ed "ompanies
dd. none of the abo(e
35$. 2hi"h of the fo!!o+in- is not an ad(anta-e
of mutua! fund in(estment o(er dire"t in(estment
"". 3i-her !i,uidity
dd. 4o+er transa"tion "osts
ee. )reater "on(enien"e
ff. -uaranteed returns
365. There is no "ontra"tua! -uarantee for
repayment of prin"ipa! or interest to an in(estor
in
+. bank deposit
&. debt fund
y. se"ured debentures
z. a!! of the abo(e
361. 2hi"h of the fo!!o+in- debt in(estments is
not rated
"". 6orporate onds
dd. 6ommer"ia! Paper
ee. 6ompany .eposit
ff. .ebt 7und
362. )o!d and rea! estate are attra"ti(e
in(estment options on!y in hi-h inf!ation
e"onomies
"". True
dd. 7a!se
363. .ire"t in(estment in sto"k market "an be a
better option than in(estin- throu-h mutua!
funds if the in(estor
+. +ants better returns than those offered
by mutua! funds
&. has !ar-e "apita!8 kno+!ed-e and
resour"es for resear"h
y. has identified a bu!!ish phase in the
sto"k market
z. +ants to in(est for the !on- term
36'. .e"idin- on strate-ies su"h as !on-0term
"ompoundin-8 "ost a(era-in-8 (a!ue a(era-in-8
a"ti(e s+it"hin-8 a!! depend on the
aa. sto"k market situation on date
bb. amount of money to be in(ested
"". in(estor9s risk to!eran"e
dd. phase throu-h +hi"h the e"onomy is
passin-
365. 7inan"ia! P!annin- in(o!(es
aa. studyin- finan"ia! mana-ement
bb. mana-in- the risks of in(estin-
"". finan"in- the "!ient9s in(estments
366. )reater returns "ome on!y from assurin-
hi-her risks8 and a hi-her risk portfo!io
-uarantees hi-her returns
+. True
&. 7a!se
367. The risk to!eran"e of an in(estors is
independent of
aa. his a-e
bb. his in"ome
"". the sto"k market mo(ements
dd. his /ob se"urity
36#. 1 se"tor fund is a
aa. !o+ risk fund
bb. moderate risk fund
"". hi-h risk fund
dd. !o+0to0moderate risk fund
36$. Internationa! funds in(est in (arious and so
are !o+ risk funds
+. True
&. 7a!se
375. In(estment in -o!d is a hed-e a-ainst
inf!ation but in(estment in a pre"ious meta! fund
fa!!s in the hi-h risk "ate-ory
+. True
&. 7a!se
371. y their (ery nature8 -ro+th funds are
"onsidered as hi-h risk funds
aa. True
bb. 7a!se
372. *hort Term bond funds are
aa. !o+ risk funds
bb. moderate risk funds
"". hi-h risk
dd. of the abo(e dependin- on the market
373. The risk !e(e! of "ommodity funds is
y. hi-h risk "ate-ory
z. determined by the "ommodity pri"e
mo(ements
aa. "annot be spe"ified
bb. !o+ risk "ate-ory
37'. 1s "ompared to a fund +ith f!u"tuatin- tota!
returns8 a fund +ith stab!e positi(e earnin-s
+. -i(es hi-her returns
&. is !ess risky
y. -i(es !o+er returns
z. is more risky
375. :Risk: is e,uated +ith
+. (o!ati!ity of earnin-s
&. !e(e! of earnin-s
y. the number of in(estors in a fund
z. the number of s"hemes of a fund fami!y
376. Vo!ati!ity of an e,uity fund portfo!io is
independent of the
aa. kind of sto"ks in the portfo!io
bb. de-ree of di(ersifi"ation of the portfo!io
"". fund mana-er9s su""ess at market
timin-
dd. number of in(estors in the s"heme
377. ;,uity pri"e risks are
y. "ompany spe"ifi"
z. market !e(e!
aa. se"tor spe"ifi"
bb. a!! of the abo(e
37#. .i(ersifi"ation redu"es
aa. "ompany spe"ifi" risk
bb. market !e(e! risk
"". both of the abo(e
37$. 2hi"h of the fo!!o+in- is most risky<
y. In(estin- in a money market mutua!
fund
z. In(estin- in an inde& fund
aa. *hort term in(estment in an e,uity fund
bb. 4on- term in(estment in an e,uity fund
3#5. 1 fund +ith a hi-h beta "oeffi"ient -i(es
-reater returns in a risin- market8 and is more
risky in a fa!!in- market
aa. True
bb. 7a!se
3#1. 2hi"h of the fo!!o+in- is a disad(anta-e of
*tandard .e(iation as a measure of risk
,. *tandard .e(iation measures tota! risk8
not /ust market risk
r. It is based on past returns8 +hi"h does
not ne"essari!y indi"ate further
performan"e
s. It is an independent number
t. 1!! types of funds "an be measured +ith
standard de(iation
3#2. The ro!e of an a-ent is to
aa. point out the features and benefits of
(arious in(estments options
bb. he!p the in(estor de(e!op the ri-ht
approa"h to in(estin-
"". re"ommend some in(estment option
a(ai!ab!e
dd. offer ad ho" ad(ise +hene(er the
in(estor has surp!us money a(ai!ab!e
3#3. =ne of the most effe"ti(e +ays to in(est
throu-h mutua! funds is to
y. de(e!op a mode! portfo!io
z. buy a fe+ units of e(ery mutua! fund
s"heme a(ai!ab!e
aa. in(est a!! the money in one fund s"heme
bb. in(est a!! the money in different
s"hemes of the same fund fami!y
3#'. >utua! fund shou!d be ad(ised to e&pe"t
"". !o+ post ta& returns
dd. dramati" resu!ts
ee. better returns than e(ery other a(ai!ab!e
option
ff. on!y rea!isti" +ea!th a""umu!ation -oa!s
3#5. 1sset 1!!o"ation is
aa. keepin- "ertifi"ates of the physi"a!
se"urities in proper p!a"es
bb. a!!o"ation the a(ai!ab!e money to a!! the
se"urities a(ai!ab!e
"". a!!o"atin- the ri-ht proportion of funds to
e,uity8 debt and money market
se"urities
3#6. =n"e a finan"ia! ad(isor +orks out idea!
1sset 1!!o"ation8 it "an be used for a!! in(estors
+hom he?she ad(ises
aa. True
bb. 7a!se
3#7. 1sset distribution amon- e,uity8 debt and
money market se"urities shou!d "orrespond to
the in(estors9 need for "apita! -ro+th8 in"ome
and !i,uidity
u. True
(. 7a!se
3##. The !i,uidity needs of an in(estor are met
throu-h
aa. ;,uity 7unds
bb. Inde& 7unds
"". >oney >arket 7unds
dd. *e"tor 7unds
3#$. 1 retired person -enera!!y needs a -reater
proportion of
aa. .ebt funds
bb. ;,uity funds
cc. >oney >arket funds
dd. 1!! of the abo(e
3$5. To satisfy a youn- in(estor9s need for
-ro+th8 a -reater proportion of in(estment
shou!d be ad(ised in
aa. )i!t funds
bb. In"ome 7unds
"". ;,uity )ro+th funds
dd. 4i,uid funds
3$1. 1 (ery hi-h proportion of in(estment in a!!
types of e,uity funds is ad(isab!e for in(estors
"". in distribution phase
dd. in a""umu!ation phase
ee. in transition phase
ff. +ho are +ea!th preser(in- aff!uent
indi(idua!s
3$2. The transition phase of an in(estor9s +ea!th
"y"!e is +hen
y. the finan"ia! -oa!s ha(e been a!ready
met
z. the in(estor has retired
aa. finan"ia! -oa!s are approa"hin-
bb. in(estor sudden!y -ets a +indfa!!
3$3. 1 hi-h proportion of in(estment in in"ome
funds is re,uired by
aa. a""umu!atin- in(estors
bb. aff!uent in(estors
"". in(estors in the inter0-enerationa!
transfer phase
dd. in(estors in the distribution phase
3$'. Retired in(estors shou!d
y. not dra+ do+n on their "apita!
z. not in(est in se"urities +hi"h bear risk of
"apita! erosion
aa. "ontinue ho!din- a ma/or portion of their
ho!din- in e,uity -ro+th funds
bb. ne(er in(est in e,uity
3$5. 7or o!der in(estors +ho +ant to transfer
their +ea!th
y. no finan"ia! p!annin- is re,uired
z. the ri-ht in(estment strate-y depends
upon +ho the benefi"iaries are
aa. the ri-ht in(estment strate-y depends
upon the state of the sto"k market
bb. a!! the funds "an be in(ested in
a--ressi(e e,uity funds
3$6. In(estors +ho a",uire sudden +ea!th
+. "an spe"u!ate +ith a!! the a",uired
money in the sto"k markets
&. shou!d not use any of the ne+ +ea!th to
in(est in e,uity
y. shou!d take the effe"t of ta&es into
a""ount
z. need not pay any ta&es on the ne+!y
a",uired +ea!th as it is not a part of their
re-u!ar in"ome
3$7. =n!y if a spe"ia!ty offshore fund has
"onsistent!y -i(en (ery -ood performan"e8 it "an
be "onsidered for in(estment by a retiree
y. True
z. 7a!se
3$#. Past performan"e shou!d not be so!e!y
re!ied on for se!e"tin- a fund
&. True
y. 7a!se
3$$. et+een the past performan"e of a fund
and its suitabi!ity for an in(estor8 past
performan"e is more important
aa. True
bb. 7a!se
'55. *tru"tura! "hara"terisations of an e,uity
fund in"!ude
aa. "osts of in(estin-
bb. the spe"ifi" se"urities in +hi"h the fund
has in(ested
"". the number of emp!oyees of the 1>6
dd. a!! of the abo(e
+$1. An e#uity fund>s age and si6e are irrele%ant
-hen selecting a fund for in%estment
cc. True
dd. alse
+$2. The charge to an in%estor at the time of he
redeems his units from the fund is .no-n as
ee. reco%ery charge
ff. re,urchase load
gg. redem,tion -eight
hh. exit load
+$". The load amount charged to a scheme o%er a
,eriod of time is called
gg. entry load
hh. exit load
ii. deferred load
<<. no-load
+$+. Contingent 3eferred 9ales Charge CC39CD
gg. is higher for in%estors -ho stay in%ested in
the scheme longer
hh. is lo-er for in%estors -ho stay in%ested in
the scheme longer
ii. is the same for all in%estors irres,ecti%e of
ho- long they stay in%ested
<<. is not allo-ed to be charged to mutual fund
in%estors in !ndia
+$& A fund>s declared NAV does not include loads
ee. True
ff. alse
+$4. ?hich of the follo-ing fund ty,es are
com,arable
ee. An aggressi%e e#uity fund and a money
mar.et mutual fund
ff. A %alue fund and a go%ernment securities
fund
gg. A bond fund and a debt fund
hh. A di%ersified e#uity fund and a debt fund
+$5. ?ho is the ,rimary guardian of unitholders>
funds7assets
ee. The AMC
ff. The Trustees
gg. The (egistrars
hh. The custodians
+$*. !n case of a fund merger or Ta.e-o%er
gg. @igh Court a,,ro%al may not be necessary
hh. 9:1! a,,ro%al is a must
ii. all unitholders must be informed
<<. all of the abo%e
+$). ;nits of a money mar.et mutual fund can be
issued to
aa. indi%iduals
bb. ban.s
cc. trusts
dd. all of the abo%e
+1$. Though !ndian mutual funds ha%e restrictions on
borro-ings Conly2$' of net assets and for six
months onlyD -hich are to meet cash needs for
redem,tion only0 ;T! is allo-ed to borro- -ithin
more relaxed norms
gg. True
hh. alse
+11. An e#uity fund can be said to be concentrated
-hen
ee. -hen it in%ests in only in t-o or three stoc.s
ff. -hen it in%ests in may com,anies of the
same sector
gg. -hen to, ten holdings account for more than
&$' of net assets in%ested
hh. -hen to, ten holdings account for more than
2&' of net assets in%ested
+12. The si6e of the mar.et ca,italisation of a fund>s
e#uity holdings is in%ersely ,ro,ortional to the
returns that
aa. can be ex,ected from the fund
bb. le%el of ris. assumed by the fund
cc. state of the stoc. mar.et
+1". A steady holding of in%estments in an e#uity
fund>s ,ortfolio indicates
ee. long-term orientation
ff. lo-er transaction costs
gg. both the abo%e
hh. none of the abo%e
+1+. :x-Mar. of an e#uity fund measures its
ee. ,erformance
ff. ris.
gg. both the abo%e
+1&. 1eta of an e#uity fund measures its
y. ,erformance
6. ris.
aa. both the abo%e
+14. The best e#uity fund0 relati%e to others0 -ould
ha%e
ee. higher :x Mar.s0 lo-er 1eta and higher
2ross 3i%idend Eield
ff. higher :x Mar.s0 higher 1eta and higher
gg. lo-er :x Mar.s0 lo-er 1eta and lo-er
hh. lo-er :x Mar.s0 higher 1eta and higher
+15. ?hen selecting e#uity funds for in%esting0 those
at the to, of the ,erformance ran.ings should be
a%oided
ee. True
ff. alse
+1*. A debt fund>s age and si6e are not im,ortant
-hen selecting a fund for in%estment
y. True
6. alse
+1). 3ebt schemes are ,o,ular because
y. the !ndian 9toc. Mar.et is al-ays going
do-n
6. the returns are more ,redictable
aa. most in%estors are al-ays in debt
bb. all of the abo%e
+2$. Eield-to-maturity of a debt fund>s ,ortfolio is
more im,ortant -hen the in%estment ob<ecti%e is
cc. current income
dd. total return
ee. li#uidity
ff. all of the abo%e
+21. Com,ared to e#uity funds0 income margins for
debt funds are
ee. narro-
ff. higher
gg. the same
hh. almost nil
+22. 3ebt funds -ith long-term in%estments carry
higher ris. of ca,ital loss
cc. True
dd. alse
+2". The differerentiating factor among debt funds of
com,arable maturity and #uality is
aa. gross yields
bb. costs
cc. fund age
dd. tenure of the fund manager
+2+. 3istribution tax should be ta.en into into
account -hen com,uting net returns from
aa. e#uity funds
bb. debt funds
cc. both the abo%e
dd. none of the abo%e
+2&. All debt fund in%estors are ex,osed to ris. of
,rinci,al loss
ee. True
ff. alse
+24. (unning a money mar.et mutual fund re#uires
more of
cc. credit analysis s.ills
dd. e#uity analysis s.ills
ee. ,atience
ff. trading s.ills
+25. ?hich is the most im,ortant in selecting debt
fund for better return
ee. ,ast ,erformance
ff. le%el of interest rates
gg. fund ex,ertise
hh. the securities in -hich it has in%ested
+2*. !n%estors should be ad%ised to a%oid in%esting in
a debt fund -ith a
cc. lo-er rated ,ortfolio and higher ex,ense
ratio
dd. higher rated ,ortfolio and lo-er ex,ense
ratio
ee. lo-er rated ,ortfolio and lo-er ex,ense
ratio
ff. lo-er rated ,ortfolio and higher ex,ense
ratio
+2). An ideal money mar.et mutual fund must ha%e
cc. lo-er returns
dd. lo-er ex,ense ratio
ee. lo- #uality of in%estments
ff. all the abo%e
+"$. Circumstances that might cause an in%estor to
change the com,osition of his ,ortfolio
u. cyclical changes in economy
%. unforeseen economic changes affecting the
,ortfolio>s ,referred sectors
-. both the abo%e
+"1. !f a charitable trust a,,roaches a distributor -ith
an a,,lication for in%estment in a mutual fund0 the
distributor should
ee. acce,t the a,,lication -ithout -asting time
ff. re<ect the a,,lication outright
gg. refer to the offer document
hh. acce,t the a,,lication as a direct a,,lication
+"2. An a,,lication form for in%estment in a mutual
fund is a%ailable -ith
cc. the offer document
dd. the abridged annual re,ort
ee. the .ey information memorandum
ff. a ban. challan
+"". An aggrie%ed unit-holder of a mutual fund can
sue
gg. the AMC
hh. the trustees
ii. the s,onsor if returns ha%e been guaranteed
by them
<<. none of the abo%e
+"+. As ,er 9:1! regulations for %aluation of
in%estments held by mutual funds0 a security is
considered 8non-traded8 -hen it
ee. has not been traded for 4$ days ,rior to
%aluation
ff. has not been traded for "$ days ,rior to
%aluation
gg. is not listed on any stoc. exchange
hh. is held by the mutual fund -ithout buying or
selling
+"&. An :x-Mar. of 1$$' is ,ossible for
cc. a gro-th fund
dd. an aggressi%e gro-th fund
ee. an index fund
ff. a balanced fund
+"4. A trail commission is <ustified -hen
-. an in%estor cancels his in%estment
x. the in%estor redeems his in%estment in a
%ery short time
y. an agent in%ests his o-n money0 not that of a
client
6. an agent sells many mutual funds
+"5. /f the follo-ing0 -hich ty,e of fund -ould
ha%e a higher A7: multi,le in com,arison to the
a%erage mar.et multi,le
ee. A Value und
ff. A 2ro-th und
gg. An !ndex und
hh. Could be any of the abo%e three0 one cannot
generalise
+"*. ?hich of the follo-ing is not true as ,er 9:1!
(egulations for 3ebt undsB
ee. !n%estment in rated debt securities of a
single issuer should not exceed 1&' of NAV
ff. Total in%estment in unrated debt securities
of a single issuer should not exceed 2&' of
NAV
gg. Total in%estment in unrated debt securities
belo- in%estment grade should not exceed
2&' of NAV
''. Total in%estment in rated debt securities
belo- in%estment grade should not exceed
2&' of NAV
+"). A Money Mar.et Mutual und is most li.ely to
in%est in
ee. Cor,orate 1onds
ff. :#uity 9hares
gg. 2o%ernment 9ecurities -ith maturity less
than 1 year
hh. All of the abo%e
++$. /f the follo-ing0 -hich -ould be suitable for a
retiree -ith a modest ris. a,,etite
gg. Value und
hh. 3i%ersified :#uity und
ii. 2ro-th und
<<. 1alanced und
++1. A high ,ortfolio turno%er for a fund indicates
cc. that the fund is acti%e
dd. higher transaction costs
ee. both the abo%e
ff. none of the abo%e
++2. ;nit Trust of !ndia>s ;9-4+ 9cheme
ee. is listed on stoc. exchanges
ff. has a fixed ,rice for sale and re,urchase
gg. has its sale and re,urchase ,rice declared
,eriodicaly by ;T!
hh. has its ,rice determined by mar.et forces
++". The !ndian debt mar.et
cc. is ?holesale in nature
dd. com,rises large ,layers li.e financial
institutions and ban.s
ee. -itnesses large scale trading in go%ernment
securities
+++. A fund that charges a load is better than a no-
load fund
cc. True
dd. alse
++&. An AMC can a,,roach in%estors either directly
or -ith the hel, of
aa. indi%idual agents
bb. ban.s and non-ban.ing finance com,anies
cc. distribution com,anies
++4. ?hich of the follo-ing is true for :#uity =in.ed
9a%ings 9cheme C:=99D
aa. A tax rebate is a%ailable to in%estors in these
schemes
bb. The in%estment has to be loc.ed in for "
years
cc. The minimum amount for in%estment is
fixed
dd. All of the abo%e
++5. A ,ros,ecti%e in%estor
6. has the same status as a unit-holder of a fund
aa. can sue the AMC7trustee
bb. has no legal recourse
cc. all of the abo%e
++*. An in%estor can assess the ,erformance of his
mutual fund by com,aring it -ith the ,erformance of
cc. other mutual fund of the same ty,e
dd. the stoc. mar.et
ee. other financial ,roducts
++). ;nrated securities in the ,ortfolio of a mutual
fund are not to be %alued
ee. True
ff. alse
+&$. An exit load guarantees a higher return
aa. True
bb. alse
+&1 1onds held in the ,ortfolio of a mutual fund are
%alued at yield to maturity
ee. True
ff. alse
+&2 The Valuation of non-traded e#uity shares is
done at the trading ,rice "$ days ,rior to %aluation
date
ii. True
<<. alse
+&" !f a unit-holder does not agree to the merger of
his fund -ith another0 he has not exit o,tion
... True
ll. alse
+&+. The most im,ortant factor loo. for -hen
in%esting in a cor,orate fixed de,osit is the
... yield
ll. rate of interest
mm. credit rating of the de,osit
nn. none of the abo%e
+&&. The most im,ortant reason for an in%estor to
,refer a ban. de,osit to a mutual fund is
gg. the credit -orthiness of the ban.
hh. because the ban. does not in%est in
securities
ii. that the ban. offers a guarantee
<<. all of the abo%e
+&4. A dee, discount bond
ii. is al-ays sold at a discount to its issue ,rice
<<. bears interest annually
... is redeemed at a ,rice much higher than
issue ,rice
ll. bears interest at %arying interests
+&5. A mutual fund in !ndia is a
ii. body cor,orate
<<. com,any
... trust
ll. an asset management com,any
+&*. ?hen selling a mutual fund0 a good agent -ould
ne%er
... describe the ,ast ,erformance of the scheme
ll. com,are the fund -ith other mutual funds
mm. assure a rate of return
nn. com,are the fund -ith other financial
,roducts
+&). An in%estor buys one unit of a fund at an NAV
of (s.2$. @e recei%es a di%idend of (s." -hen the
NAV is (s.21. The unit is redeemed at an NAV of
(s.22. Total (eturn is
ee. 2&.51'
ff. (s.25.&1
gg. 21.25'
hh. (s.21.5&
+4$. A fund sells 1$$ units of face %alue (s.1$7- at an
NAV of (s.12.2&. @o- much -ould be credited to
unit ca,italB
ii. (s.122&
<<. (s.22&
... (s.1$$$
ll. none of the abo%e
+41. ?hen a scheme -ith assured returns is being
launched0 -hich of the follo-ing need not be
,ublished in the offer documentB
ii. Means of fulfilling the guarantee
<<. !nformation for all schemes launched by the
fund in the ,ast
... com,arison -ith other mutual funds
ll. !n%estment ob<ecti%e
+42. Mutual fund units can be distributed by
ee. trustees of the fund
ff. the AMC
gg. Non-ban.ing finance com,anies
hh. ban.s
+4". A debt fund distributes 1$' di%idend. @o-
much tax does the in%estor ha%e to ,ay on this
di%idendB
ii. 1$'
<<. 12'
... 2$'
ll. None
+4+. A debt fund distributes a 1$' di%idend. @o-
much tax does the fund ha%e to ,ayB
ii. 1$'
<<. 12'
... 1$.2'
ll. None
+4&. @o- many scri,s is the N!TE constitutes of
cc. +$
dd. 1$$
ee. "$
ff. none of the abo%e
+44. ?hich of the follo-ing is the first ste, in
financial ,lanning
ii. Asset Allocation
<<. 9election of fund
... 9tudying the features of a scheme
ll. None of the abo%e
+45. ?hy should one buy an insurance ,olicyB
gg. !t gi%es high current returns
hh. !t gi%es good ca,ital a,,reciation o%er its
term
ii. !t should be bought due to the need for
insurance and not as an in%estment
<<. All of the abo%e
+4*. 9:1! (egulations for Mutual unds -ere
formulated in
aa. 1))2
bb. 1))"
cc. 1))&
dd. 1))4
+4). :x,enses incurred by a fund for ,rinting of Fey
!nformation Memorandum can be amortised o%er
cc. 1$ Ers
dd. & Ers
ee. 1& Ers
ff. Cannot be amortised
+5$. A mutual funds> in%estments are guided by the
gg. AMC
hh. 1oard of Trustees
ii. !n%estment /b<ecti%es
<<. ;nit holders
+51. ;T! -as the only mutual fund for the ,eriod
ii. 1)*+ to 1)**
<<. 1)4" to 1)**
... 1)4+ to 1))2
ll. none of the abo%e
+52. !n%estors -ho follo- the fixed Asset Allocation
a,,roach
ee. maintain balance in their ,ortfolio by
li#uidating a ,art of the ,osition in the asset
class -hich has gi%en higher return and
rein%esting in the other asset class -hich has
lo-er return
ff. are not disci,lined
gg. increase their e#uity ,osition -hen e#uity
,rices tend to climb
+5". An in%estor should not in%est in a mutual fund if
ee. his ca,ital base is large
ff. he is able to carry out detailed in%estment
research and monitor the stoc. mar.et
gg. both the abo%e
+5+. Mutual fund can benefit from economies of
scale because of
ee. ,ortfolio di%ersification
ff. ris. reduction
gg. large %olume of trades
+5&. ?hich of the follo-ing is a disad%antage
suffered by a mutual fund in%estorB
gg. @igh li#uidity
hh. di%ersification
ii. no tailor made ,ortfolio
<<. lo- in%estment
+54. A disad%antage suffered by mutual fund in%estor
is that he has no control o%er the costs of in%esting
gg. True
hh. alse
+55. ?hich of the follo-ing statements about ;T! is
untrue
ii. !t -as set u, in 1)4"
<<. !t -as formed by (1!
... !t -as established by an act of Aarliament
ll. !t -as not gi%en a mono,oly status
+5*. ?hich scheme has the largest in%estor baseB
gg. ;=!A
hh. ;T! Mastershare
ii. ;9-4+
<<. 91! Magnum
+5). ?hich -as the first di%ersified e#uity
in%estment scheme in !ndia
gg. 91! Magnum
hh. ;T! Mastershare
ii. M:A-)1
<<. Mastergain-)2
+*$. The ,ri%ate sector -as granted ,ermission to
enter the mutual fund industry in
y. 1))2
6. 1))"
aa. 1))*
bb. 1))&
+*1. The first non-;T! mutual fund -as
ii. 91! M
<<. =!C M
... Canban. M
ll. !ndian 1an. M
+*2. The organisation res,onsible for a
com,rehensi%e set of regulations for all mutual funds
in !ndia is
gg. (1!
hh. 9:1!
ii. AM!
<<. 9@C!=
+*". The 1))) ;nion 2o%ernment 1udget hel,ed the
Mutual und industry by
... regulating the industry ,ractices
ll. exem,ting all mutual fund di%idends in the
hands of in%estors from income tax
mm. a,,ro%ing the code of ethics
formulated by AM!
nn. doing a-ay -ith all regulations for mutual
funds
+*+. 3uring the ,eriod 1))2-))0 the mobilisation of
funds by the mutual fund industry -as about
ii. &' - 4' of gross domestic sa%ings
<<. 2' - +' of gross domestic sa%ings
... 5' - 1$' of gross domestic sa%ings
ll. 2&' - +$' of gross domestic sa%ings
+*&. ?hich of the follo-ing about Aublic Aro%idend
und CAAD are untrue
gg. &$' of the balance of the +th year can be
-ithdra-n in the 5th year
hh. The interest is tax free
ii. The rate of interest is 12' ,.a.
<<. contributions u,to (s.4$$$$ are eligible for
tax rebate
+*4. A close-ended scheme is #uoted on the stoc.
exchange at a discount to its NAV -hen
aa. the mar.ets are bearish
bb. in%estors ,ercei%e that the fund -ill be
unable to maintain the NAV
cc. the assets of the fund are under%alued
dd. none of the abo%e
+*5. ?hich of the follo-ing is a fundamental
attribute of a mutual fund scheme
ii. The names and addresses of the registrars
and custodians
<<. The nature of the scheme being income
bearing
... The s,ecified stoc.s in the scheme>s
,ortfolio
ll. The name and address of the com,liance
officer
+**. /ffer 3ocument of a mutual fund is
ii. re#uired by in%estors
33. re#uired by the AMC for its o-n reference
((. re#uired as ,er 9:1! regulations
"". not mandatory as ,er 9:1!
+*). The units of a scheme being sold and
re,urchases as ,er the ,rocedure laid do-n is one of
the fundamental attributes of a scheme
ii. True
<<. alse
+)$. The ste,s in%ol%ed in the selection of an e#uity
fund for in%estment are
... sector selection0 asset classification0
selection of fund managers and schemes
ll. sector selection0 selection of fund managers
and schemes0 asset classification
mm. asset classification0 sector
selection0 selection of fund managers and
schemes
nn. selection of fund managers and schemes0
sector selection0 asset classification
+)1. Com,ounding of interest is best ex,lained by a
gg. balanced fund
hh. gro-th fund
ii. %alue fund
<<. income fund
+)2. rom -hom can a unit-holder see. redressal if
his com,laint is not entertained by the mutual fund
ii. AMC
<<. 1oard of Trustees
... 9:1!
ll. (1!
+)". An in%estor -ishes to s-itch bet-een a money
mar.et mutual fund and an e#uity fund. ?hat -ould
you ad%ise himB
gg. !t -ould be better to stic. to one ty,e of
fund0 the one that meets his in%estment
ob<ecti%e.
hh. @e should .ee, s-itching ,arts of his
in%estment from the e#uity fund to the
money mar.et fund as the mar.et rises and
s-itch bac. to the e#uity fund -hen the
mar.et falls
ii. @e should s-itch from the money mar.et
fund to the e#uity fund in a rising mar.et
and s-itch bac. to money mar.et fund -hen
the mar.et falls
+)+. or choosing an a,,ro,riate benchmar. to
measure a scheme>s ,erformance0 all of the follo-ing
are re#uired exce,t
ee. the com,osition and si6e of the ,ortfolio
ff. the in%estment ob<ecti%e
gg. historical data of fund ,erformance
hh. the nature of in%estments
+)&. ?hich of the follo-ing characterise the fund
that a ris. a%erse in%estor should choose
ee. 2ross di%idend yield 1&' 1eta 1.&0 :x-
Mar.s )$
ff. 2ross di%idend Neil 1$'0 1eta 10 :x-Mar.s
5$
gg. 2ross di%idend yield 11'0 1eta $.)0 :x-
Mar.s *$
hh. 2ross di%idend yield 12'0 1eta 1.20 :x-
Mar.s *$
+)4. A mainstream di%ersified debt fund is most
affected by
ee. rein%estment ris.
ff. li#uidity ris.
gg. interest rate ris.
hh. default ris.
+)5. !f yields fall0 a debt fund manager -ill do all of
the follo-ing exce,t
dd. sell short maturity securities and buy long
maturity securities
ee. see that the fund>s a%erage duration becomes
longer than the mar.et>s a%erage duration
ff. sell long duration securities and buy short
duration securities
gg. sell high cou,on securities and buy lo-
cou,on securities
+)*. !n -hich ty,e of schemes should an unmarried
,rofessional -or.ing @== in%est
gg. 9cheme in%esting *$' in debt securities
hh. &$' in e#uity funds and &$' in income
funds
ii. )$' in e#uity funds ha%ing a higher A7:
(atio than the mar.et
<<. all the money in a balanced fund
+)). An in%estor buys units in a fund that has gi%en
excellent returns in the ,ast0 but his ex,ectations are
not met as the fund does not ,erform -ell this year.
The in%estor can
gg. sue the AMC
hh. sue the Trustees
ii. sue the agent
&$$. A fund>s in%estments at mar.et %alue total
(s.5$$ crores0 Total liabilities stand at (s.&$ lacs and
the number of units outstanding is (s.2* Crores.
?hat is the NAV
cc. (s."$.1)
dd. (s.2+.)*
ee. (s."2.1&
ff. (s.+$.+)
Answers to Practice Question
@.
Ao
1ns @. Ao 1ns @. Ao 1ns @. Ao 1ns @. Ao 1ns
1 b 51 a 151 d 151 " 251 b
2 b 52 d 152 a 152 d 252 d
3 d 53 b 153 b 153 d 253 b
' d 5' d 15' " 15' d 25' d
5 " 55 " 155 a 155 b 255 b
6 " 56 " 156 d 156 a 256 "
7 b 57 " 157 a 157 " 257 a
# " 5# " 15# d 15# d 25# d
$ d 5$ b 15$ d 15$ a 25$ a
15 " 65 d 115 b 165 d 215 "
11 b 61 " 111 b 161 a 211 b
12 b 62 a 112 " 162 d 212 d
13 d 63 d 113 a 163 " 213 d
1' " 6' d 11' d 16' " 21' a
15 b 65 b 115 d 165 b 215 a
16 d 66 " 116 b 166 d 216 a
17 b 67 " 117 b 167 " 217 b
1# d 6# d 11# a 16# b 21# b
1$ " 6$ " 11$ " 16$ b 21$ b
25 " 75 d 125 a 175 d 225 d
21 b 71 b 121 b 171 " 221 b
22 d 72 b 122 " 172 b 222 a
23 " 73 d 123 a 173 b 223 b
2' a 7' d 12' d 17' d 22' a
25 d 75 " 125 " 175 d 225 "
26 d 76 a 126 d 176 b 226 a
27 " 77 " 127 d 177 " 227 "
2# b 7# a 12# a 17# " 22# "
2$ " 7$ d 12$ d 17$ " 22$ b
35 d #5 a 135 a 1#5 " 235 b
31 b #1 " 131 d 1#1 d 231 d
32 " #2 b 132 a 1#2 b 232 a
33 b #3 b 133 b 1#3 d 233 b
3' b #' b 13' " 1#' " 23' b
35 b #5 d 135 b 1#5 b 235 "
36 " #6 a 136 d 1#6 a 236 "
37 b #7 b 137 a 1#7 " 237 "
3# " ## " 13# " 1## a 23# a
3$ a #$ b 13$ b 1#$ d 23$ b
'5 b $5 b 1'5 " 1$5 b 2'5 b
'1 b $1 b 1'1 a 1$1 d 2'1 b
'2 a $2 " 1'2 b 1$2 b 2'2 b
'3 b $3 " 1'3 " 1$3 b 2'3 a
'' " $' b 1'' b 1$' a 2'' b
'5 b $5 a 1'5 d 1$5 d 2'5 "
'6 b $6 b 1'6 " 1$6 b 2'6 a
'7 " $7 a 1'7 d 1$7 " 2'7 a
'# b $# d 1'# " 1$# " 2'# "
'$ $$ " 1'$ b 1$$ b 2'$ "
55 1 155 a 155 " 255 a 255 a
Answers to Practice Question for AMFI Test
Q. No
A
n
s
Q. No
A
n
s
Q. No
A
n
s
Q. No
A
n
s
Q. No
A
n
s
251 a 351 a 351 b '51 b '51 a
252 b 352 a 352 a '52 " '52 b
253 d 353 a 353 d '53 " '53 b
25' " 35' d 35' b '5' b '5' "
255 " 355 b 355 b '55 a '55 a
256 a 356 b 356 d '56 " '56 "
257 a 357 d 357 a '57 " '57 "
25# d 35# d 35# b '5# d '5# "
25$ b 35$ b 35$ d '5$ d '5$ a
265 a 315 a 365 b '15 a '65 "
261 " 311 d 361 d '11 " '61 "
262 b 312 " 362 a '12 b '62 d
263 b 313 d 363 b '13 " '63 d
26' " 31' d 36' " '1' a '6' "
265 a 315 " 365 b '15 b '65 d
266 b 316 b 366 b '16 a '66 a
267 a 317 b 367 " '17 a '67 "
26# b 31# b 36# " '1# a '6# d
26$ a 31$ b 36$ b '1$ b '6$ b
275 d 325 a 375 a '25 b '75 "
271 b 321 a 371 b '21 a '71 b
272 b 322 " 372 b '22 a '72 a
273 b 323 d 373 a '23 a '73 "
27' b 32' b 37' b '2' b '7' "
275 b 325 a 375 a '25 a '75 "
276 " 326 b 376 d '26 d '76 a
277 b 327 b 377 d '27 " '77 d
27# a 32# " 37# a '2# a '7# "
27$ b 32$ b 37$ " '2$ b '7$ b
2#5 a 335 b 3#5 a '35 " '#5 b
2#1 b 331 a 3#1 b '31 " '#1 a
2#2 a 332 a 3#2 b '32 " '#2 b
2#3 b 333 b 3#3 a '33 " '#3 b
2#' " 33' d 3#' d '3' b '#' a
2#5 " 335 " 3#5 " '35 " '#5 "
2#6 b 336 d 3#6 b '36 b '#6 b
2#7 b 337 b 3#7 a '37 b '#7 b
2## d 33# d 3## " '3# b '## "
2#$ " 33$ d 3#$ a '3$ " '#$ a
2$5 a 3'5 b 3$5 " ''5 d '$5 "
2$1 b 3'1 s 3$1 b ''1 " '$1 b
2$2 " 3'2 d 3$2 " ''2 " '$2 "
2$3 d 3'3 " 3$3 d ''3 d '$3 b
2$' a 3'' d 3$' b ''' b '$' "
2$5 a 3'5 d 3$5 b ''5 d '$5 "
2$6 " 3'6 " 3$6 " ''6 d '$6 "
2$7 d 3'7 b 3$7 b ''7 a '$7 "
2$# b 3'# b 3$# a ''# d '$# "
2$$ " 3'$ b 3$$ b ''$ b '$$ d
355 b 355 a '55 b '55 b 555 b

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Practice Questions for AMFI Test

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

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