1. What are Mutual Funds (MFs)?

Mutual fund is a vehicle to mobilize money from investors, to invest in different markets and
securities, in line with the investment objectives agreed upon, between the mutual fund and the
investors. In other words, through investment in a mutual fund, an investor can get access to
markets that may otherwise be unavailable to them and avail of the professional fund
management services offered by an asset management company.
Their primary role is to assist investors in earning an income or building their wealth, by
participating in the opportunities available in various securities and markets.

2. Name any 3 types of MFs.

Equity Mutual Fund/ Debt Mutual Fund/ Balanced Mutual Fund

3. What are Equity Mutual Funds?

Mutual Funds which have their major asset allocation i.e. atleast 65% of the funds of Mutual
Fund are invested in purchase of equity & equity related securities.
Their major objective is long term growth through capital appreciation
Refer page no. 25 for more details

4. What are Debt Mutual Funds?

Mutual Funds which have their major asset allocation invested in purchase of debt securities.
That is the investments will be in debt or fixed income securities.
Their major objective is regular income generation.
Refer page no. 23 for more details

Note: Debt MFs are less risky when compared to Equity MFs

5. Give advantages and disadvantages of Mutual Funds

Refer Page No. 16 to 20

6. What is Open Ended, Close Ended & Interval Funds?

Refer Page No 20 & 21. Learn only the definitions

7. What is STT?
Refer page no. 150. Learn only the definition and the percentage of STT and its full form.

8. What are Short Term Capital Gains?

Refer page no. 151

9. What are Long Term Capital Gains?

Refer page no. 151

10. What is Equity Linked Savings Schemes (ELSS)?

 Refer page no. 26

11. What is Hybrid or Balanced Funds?

Refer page no. 27

12. What is Capital Protected Fund?

Refer page no. 27 & 28

13. What is NFO?

New Fund Offer
Refer page no. 72

14. What is SIP?

Systematic Investment Plan
Refer page No. 189 to 192

15. What is SWP?

Systematic Withdrawal Plan
Refer page no. 189 to 192

16. What is STP?

Systematic Transfer Plan
Refer page no. 189 to 192

17. Who regulates the Mutual Funds in India?

SEBI (i.e. Securities & Exchange Board of India) & also some rules are given by RBI too.

18. What is AMFI?

Association of Mutual Funds of India. It is a representative of Mutual Funds in front of SEBI

19. How do Mutual Funds Operate?

Refer page no. 15 & 16

20. What is Sharpe Ratio?

It gives the amount of return which the fund will give for every unit of total risk taken by the
fund. Look for its formula on Internet

21. What is Treynor Ratio?

It gives the amount of return which the fund will give for every unit of market risk taken by the
fund. Look for its formula on internet

22. What is Beta?

 It is a risk measure, which gives the sensitivity of the security with respect to the volatility in the
market.
Beta represents market risk or systematic risk.

23. What is NAV?

Net Asset Value. It is the per unit value of the Mutual Fund. It is calculated by dividing the total
value of the assets under management of the fund by the no. of units issued by the fund.

24. What is Exit Load?

The charges levied at the time when the investor is selling units of the fund i.e. exiting from the
fund.

25. What are the TAX rules with respect to Mutual Funds?
Refer below pics and learn all the values mentioned in the paragraphs