1. An investor pays money to purchase units in a mutual fund. After deducting the entry load, remaining money isa) Invested in a well-diversified portfolio of securities as per the investment objectiveb) Maintained in a bank as fixed depositc) Invested in land, building, plant and machinery required for the mutual fundd) Used to pay the management fee and other recurring expenses of the fundAns: a

2. Net Asset Value per unit means a) (Book value of assets liabilities)/Units outstanding,b) Unit capital / Units outstanding c) Net assets dividend by Initial number of units d) (Market value of assets Liabilities)/Units outstandingAns: d

3. When you place deposit with a bank, u becomea) borrower from the bankb) a lender to the bankc) a shareholder of the bankd) a unit holder in the bankAns:b

4. During new fund offer (NFO) Units open - ended fund are purchased froma) A Brokerb) The mutual Fund itselfc) A depository d) Stock ExchangeAns:b

5. Ownership of the mutual fund by the unit holders isa) Beneficial.b) Mutual and beneficial.c) Individuald) MutualAns:b

6. Directly investing in equity shares is better then investing in equity shares through a mutual fund because ofa) Tailor - made portfoliob) Absence of Distribution expensec) Control over costsd) All of the above.Ans:d

7. Mutual fund schemes in India follow accounting policies laid down bya) SEBIb) Institute of Chartered Accounts of Indiac) Indian Trust Act 1982d) Association of Mutual Funds in IndiaAns:a

8. The value of funds net assets is Rs. 1000.There are 100 units outstanding. Mr. Singh owns 3 units. The Value of his ownership isa) Rs.300b) Rs.30c) Rs.3d) Not Possible to calculate unless more information is givenAns:b9. A person who purchase debentures issued by a company is a lender to the company. An income fund invests in debentures issuedby a company. A unit holder of this income fund

a) Is a lender to the company" ..b) Is a share holder in that companyc) Has no relationship to that companyd) Is a creditor to that company Ans:c

10. Private sector was permitted to enter themutual fund industry in India in the yeara) 1993b) 1963c) 1987d) 1996Ans:a

11. In India the first mutual fund was established.a) before SEBI regulation 1996b) before UTI was established in1963c) after SEBIregulation 1996d) when public sector mutual funds were established in 1987Ans:a

12. The Assets under management in the Indian mutual fund industry as at end of financial year 2004-2005 was close toa) Rs 153 crb) Rs.1530crc) Rs.15300crd) Rs 153/000crAns: d13. Identify the Correct statements.a) Investing in a mutual fund is likely to be less risky compared to directly investing in the market.b) A mutual fund enables a small investor build a diversified portfolioc) Investment in a mutual fund offers more liquidity.d) All are correct.Ans:d

14. When you invest in an open-ended mutual fund scheme, which of the following decisions is fare not taken by you?a) Which share to buy and which share to sell?b) What prospective changes would be made to the load structure?

c) At what NA V you should exitd) The first two decisions.Ans:d

15. The correct description of a mutual fund isa) It is a companyb) It is a development financial institutionc) It is a financial intermediaryd) It is non-banking finance companyAns:c

16. The birth place of Mutual Funds isa) UKb) Japanc) Canadad) USAAns:d

17. Important development (s) that took place in the Indian mutual fund industry February 2003 was/werea) Repealing: of UTI Actb) Establishment of UTIMFc) Creation of level playing fieldd) all of the above.Ans:d

18. Distributors are required to abide by a code of conduct as prescribed by SEBI. This code is based ona) AGNIb) AMFIc) ARNd) ANMIAns:a

19. An open end fund a) is open for one-time sale of fixed number of unitsb) offers repurchase facility subject to certain obvious conditionsc) is always obliged to keep issuing new units at all timesd) offers repurcha~ facility unconditionally at all timesAns:d

20. A gilt fund is a special type of fund that investsa) in dated ~ties onlyb) in very high quality equity onlyc) Mainly in very high quality corporate bondsd) mainly in high qualitymoney market instrumentsAns:a

21. The period from 2004 onwards is known in the Indian mutual funds industry asa) Period of consolidationand growthb) Emergence of large and uniform industryc) Emergence of private funds

d) Entry of public sector funds.Ans : a

22. The union budget 1999 is considered important for the Indian mutual fund industry becausea) It made UTI at par with other mutual funds.b) It abolished the distinction between short - term capital gain and long - term capital gain for mutual fund unit holders.c) It exempted all mutual fund dividends from income tax in the hands of unit holdersd) It removed tax on capital gains and dividends in the hands of units holdersAns:c

23. The Second mutual fund in India was established bya) SBIb) Canara Bankc) Morgan Stanleyd) LIC Ans:a

24. Which is Correct?a) UTIMF was established by an Act of Parliamentb) UTIMF has voluntarily adopted SEBI Regulationsc) UTIMF launched US 64d) UTIMF was not the first mutual fund in IndiaAns:d

25. A person who analysis shares based on finances and operations of the company is known asa)Chartistb)Portfolio analystc)Technical Analystd)Fundamental AnalystAns: d

26. What is an "Equity Warrant"?a) It is nothing but an Equity share of a company b) It.is a debit instrument that offers fixed interest ratec) It is an instrument that gives the holder the right to purchaseequity shares in a company at fixed price in futured) None of the aboveAns: c

27. Which of the following SEBI restrictions applies to a scheme's investment in unlisted shares?a) A Close ended -ended scheme may invest a maximum of 10% of its NAV in unlisted sharesb) An open-end scheme may invest a maximum of 5% of its NAV in unlisted sharesc) (a)and (b)aboved) None of the aboveAns:c

28. How would you measure the performance of an Equity Index Fund?a) There is no need to benchmark an equity index fundb) By comparing it with return on Government securitiesc) By Comparing its performance with a money market mutual fundd) By comparing its performance with the Index it is designed to track

Ans:d

29. In an open-ended fund NA V per unit is Rs.11 Entry load is 2% An Investor invests Rs.110 she will geta) less then 10 unitsb) 10 unitsc) more than 10 unitsd) 11 unitsAns:a

30. Units from an open-ended mutual fund are bought froma) NSEb) AMFIc) SEBId) Agenciesappointedby theAMCAns:d

31. A bond with a coupon rate of 9% when current coupons for bonds of similar maturities are 11% will sell:a) At a price which is not related to interest rates for similar maturitiesb) Above face valuec) at face valued) below face valueAns:d

32. Distributors need to abide by rules and good conduct towards investors, becausea) AMFI code of conduct requires them to do sob) The AMC they represent requires them to do soc) Good conduct means good business for themd) For all of the above reasonsAns:d33. Insider trading means:a) Personal trading transaction done by anyone with knowledge of the fund decisions in the concerned securityb) Personal trading transaction done by an insider of the AMC /fundc) Personal trading transaction done by anyone associated with the fundd) Personal trading transaction done without prior approval of the AMCAns: a

34. Responsibility to ensure ethical behavior on part of all mutual fund participants finally rests ona) Fund Trusteesb) SEBIc) AMFId) DistributorsAns:a

35. Fund House ratings by CRISll.., can be used by distributorsa) to know CRISll..'s opinion on the fund management practices and over all management quality of an AMC / fund houseb) to know risk of default by the AMC / Fund housec) to evaluate the performance of the schemes managed by the AMC / FUND HOUSEd) to compare the performance of the schemes managed by different fund housesAns:a

36. Asset allocation of a portfolio should be reevaluated every time there is change in thea) Family size and requirementb) market conditionc) Job of the investord) All of the aboveAns:d

37. When would you review the financial plans of your client?a) Whenever the investor's personal circumstances of financial goals changeb) Whenever stock market prices fall sharplyc) Shortly before the filling of the Income Tax returns of your clientd) Each year at the time of the presentation of the Government budgetAns:a

38. A five-year deep discount bound would?a) Pay interest on a quarterly basisb) Pay interest on a yearly basisc) Be redeemed on maturity at the face value which is higher than the issue price with no payments in between'd) Would offer yield tax free incomeAns:c

39. Sharpe and Treynor rations are measures ofa) Average returnb) Riskc) risk adjusted returnd) beta of the portfolioAns:c

40. Jacob recommend of the following risk allocation for a low risk portfolio:a) 50% govt. Securities fund + 50% Money Market fundsb) 50% govt. Securities fund + 50% Index fundc) 50% govt. Securities fund + 50% international fundsd) 50% govt. Securities fund + 50% aggressive growth fundsAns:a

41. Which classification of mutual funds does not exist?a) Pension fund or provident fundb) Closed - end or open - endc) Load fund or no load fundd) Active fund or passive fund..Ans:a

42. Unit capital is found in thea) Liability side of scheme's balance sheetb) Asset side of the balance sheet c) Revenue accountd) Equalization accountAns:a

43. A sponsor of a mutual funda) can act as the distributor of the mutual fund .b) cannot act as the distributor of the mutual fundc) can act as the trustee of the mutual fundd) can act as the custodian of the mutual fundAns:a

44. To create investor awareness about mutual funds, a booklet titled "Making Mutual Fund Work for you - The Investors Guide" waspublished bya) SEBIb) AMFIc) Unit Trust of Indiad) Investor Education and Protection fundAns:b

45. Distributors will find the information on performance of a scheme as compare to its benchmark in thea) Key information Memorandumb) Offer Documentc) Fund Advertisementsd) All of the aboveAns:d

46. SEBI guidelines on personal investment and trading apply toa) AMC employees and fund trusteesb) Only AMC employeesc) Only fund trustee'sd) anyone concerned with the fundsAns:a47. The "Load" charged to an investor in a mutual fund goes to meet thea) Selling and distribution expensesb) expenses of AMFIc) Printing stationery and posting expensesd) marketing and sales promotion expensesAns:a

48. Which of the following statements is an adequate description of reality?a) When compared to gilt funds, securities in debt funds have higher risk of defaultb) Growth and risk are associated with equity fundsc) Debt fund have higher NAV fluctuation when compared to money markets fundsd) All these statements describe reality adequatelyAns:d49. Which of the following is true?a) A fund sponsor can contribute to the initial corpus of the trust

b) A fund sponsor can contribute to the capital of the AMCc) A fund sponsor can invest in his own fund's schemesd) All of the aboveAns:d

50. A unit holder purchased 200 units of a mutual fund at NA V of Rs.12, each. There was no entry load. The fund purchased securities worth Rs.2400 using this money. After one year the fund had 20,000 units. The value of unit holders holding in that mutual fund would bea) Rs.2400b) 1% of the value of fund's portfolio "at" the timec) 1% of the net assets of the fund at that timed) cannot say with the given dataAns:c

51. Which of the following is NOT a characteristic of mutual funda) Pooling of investmentsb) Market riskc) Uniform unit holder rightsd) Safety of principalAnd:d

52. Which of the following is incorrect?a) A value fund tries to seek out fundamentally sound companies whose shares are currently overpriced in the marketb) A balanced fund hold assets more or less in equal proportions between debt /money market securities and equitiesc) A growth fund would invest in the equity shares of c companies whose earning are expected to rise at an above average rated) A fund that invests only in ASEAN countries is an example of specialty fundAns:a

53. The annualized value of contingent differed sales charge woulda) Increase if the investor stays with the fund longer b) Remain content regardless of how long the investor stays with the fundc) Decrease if the investor stays with the fund longerd) None of the above. Ans: c54. Which is / are the characteristic(s)of fixed term plans noticed in the Indian mutual fund industry?a) Oose - endedb) Maturity shorter than one yearc) Not listed on stock exchanged) all of theseAns:d

55. Each unit holder of a mutual fund is

a) a creditor to that mutual fundb) .a debtor to that mutual fundc) a trustee of that mutual fundd) part owner of the assets of that mutual fundAns:d

56. Mutual funds offer the advance of portfolio diversification. This is best expressed by the statementa) do not keep all eggs in one basketb) one bird in hand is better than tow in the bushc) what goes up must come downd) risk and return always go hand in handAns:a

57. Fund A invests in shares of companies in India. Fund B invests in shares of companies in India and USA we can say thata) Definitely A is more diversified than Bb) Definitely A and B are welldiversifiedc) We need more information to identify which of them is better diversifiedd) Definitely B is more diversified than AAns:d

58. Value averaging means:a) Investing the same amount of funds regularlyb) Investing in one lump sum amountc) Keeping the target value of investment constant by investing the amount by which the investment value has gone downd) None of the aboveAns:c

59. A fund has to Beta of greater than 1.This means.a) The fund is more volatile than the marketb) The fund is as volatile as the market.c) The fund is less volatile than the marketd) None of the above.Ans:a

60. For a small investor in India, which of the following is expected to have a higher level of liquidly?a) Equity shares in an unlisted companyb) Debenture issued by a companyc) Unit of an open-ended MFd) Real estate.Ans:c

62. A close ended mutual fund has a fixeda) Market value of assets under managementb) Net asset value per unit.c) Unit capital and number of unitsd) Number of units.Ans:d

63. An open end scheme can change its fundamental attributes.a) by obtaining the consent of 75% of unit-holders at leastb) by allowing unit-holders to exit the scheme after six months without any exit load

c) by informing each unit-holder individually of the proposed change and by allowing units holders to exit the scheme without any exit loadd) After obtaining prior approval from SEBIAns:c

64. If an invest or failed to claim the redemption proceeds after 3 years of due date he has right to receive an amount equal toa) Prevailing NAVb) Face value of the unitc) Due date NAV plus interest @15% p.a.d) NAV at the end of three years after the due dateAns:d

65. Right to timely service includesa) the right to obtain information from trustees that may have adverse bearing on their investmentb) The right to nominate a person in whom all the beneficial ownership rights in the units will vest in the event of dethc) Right to receive dividend warrants in 30 days from the date of declarationd) Right to receive a copy of the annual financial statement of the fund.Ans:c

66. Yield curve is a graph that shows. a) Yields of various equities of various firmb) Yield from mutual funds.c) Yields of various bonds of various maturities using one set of bonds such as Govt Securityd) None of the aboveAns:c

67. A unit of an open-end fund was purchased when is NAV was Rs 40/-At year end, its NAV was Rs 44. The percentage annualized change in NAV IS.a) 12.00%b) 10.00%c) 25.00%d) 15.00%Ans:b

68. As per SEBI (Mutual Fund) Regulation, who acts as the protector of unit-holder's interest?a) Trusteesb) SEBIc) Ministry of Financed) Compliance officerAns:a69. A no load scheme of mutual fund has weekly average net assets of 200Cr it can charge maximum investment management fee ofa) 4Crb) 2.5 Crc) 2 Crd) 5 Cr

70 Units of mutual fund are short term capital assets ifa) They are held for not more then twelve months proceeding the date of transfer.b) They are held for less than twelve months proceeding the date of transfer.c) They are held for not more than three years proceeding the date of transfer.d) They are held for less than three years proceeding the date of transfer.Ans:a

71. An investor has opted for a Systematic Transfer Plan. This means.a) he can transfer on a periodic basis a specified amount from one scheme to anotherb) he is required to invest a fixed sum periodicallyc) the investment would provide the benefit of rupee cost averagingd) He can transfer on a periodic basis a specified amount from the scheme to his bank accountAns:a

72. Which of the following is NOT required to appear on the cover page of the offer document?a) Date new fund offer opensb) Date new fund offer closesc) Earliest closing date (if any) for the new fund offerd) Date on which approved by trustees.Ans:d

73. A mutual fund launched a new scheme. It issued 10 crores units. The offer document mentioned entry load of 2.25% of face value during the New Fund Offer period issue expenses were Rs 8 crores. How much of this is borne out of entry load?a) Rs. 2.25 Crb) Rs. 6 Crc) Rs 8 Crd) Rs 3.75 CrAns:a

74.A mutual fund launched a new scheme. It issued 10 crores units. The offer document mentioned entry load of 2.25% of face valueduring the new fund offer period. Issue expenses were Rs.8 crores. If initial issue expense is amortized over 5 years period. Whatwould be the opening NA V per unit if management fees and other recurring expenses are Zero? Assume that there are no fluctuations in value of underlying assets.a) 9.9998 7b) 10.0000 fc) 9.4000d) 9.775Ans:a

75. The full form of ARN is :a) AMFI's Registration Numberb) Agents Registration Numberc) Application Receipt Numberd) None of the AboveAns:a76. Who bears SIT in Funds case of Equity Mutuala) AMCb) Investorc) Trust

d) SponsorAns:b

77. What is Full Form of AGNI?a) Agents gross net Incomeb) AMFI Guidelines and Norms for Intermediariesc) ARMI's Geo Nuclear Injectord) None of the aboveAns:b78. A closed-end mutual fund has a fixed:a) NAVb) Tenurec) Rate of returnd) Number of distributorsAns:b

79. The limit on maximum entry or exit load that a fund can charge is determined by the :a) AMCb) SEBIc) AMPId) Agents based on demand for the fundAns:b

80. The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 isa) Rs.2000b) Rs.2015c) Rs.1985d) Rs.2030Ans:d

81. In a gilt fund the money is invested in:a) In very high quality equity onlyb) In instruments issued by companies with a sounci track recordc) In short-term secutitiesd) In government securities onlyAns:d

82. The highest risk is associated with with of the following kind of fundsa) Balanced Fundsb) GiltFundsc) Equity Growth Fundsd) Debt FundsAns:c83. The NAV of a mutual funda) Is always constantb) Keeps going up at a steady ratec) Fluctuates with market price movementsd) Cannot go down at allAns:c

84. An open-end mutual fund is one that has:

a) An option to invest in any kind of securityb) Units available for sale and repurchase at all timesc) An upper limit on its NAVd) A fixed fund sizeAns:b

85. An investor in a closed-end mutual fund can get money back before maturity by selling units:a) Back to the fundb) To a special trust at NAVc) On a stock exchange where the fund is listedd) To the agent through which he/she subscribed to the units of the fundAns:c

86. The "load" charged to an investor in a mutual fund isa) Entry feeb) Cost of the paper on which the unit certificates are printedc) The fee the agent charges to the investord) The expenses incurred for marketing and selling a mutual fund schemeAns:d

87. A mutual fund is owned bya) The Govt of Indiab) SEBIc) All its investorsd) AMFIAns:c

88. Units from an open-end bought froma) A stock exchangeb) The fund itselfc) AMPId) The Banks mutual fund areAns:b

89. A mutual fund is nota) Owned jointly by all investorsb) A company that manages investment portfolios of high net worth individualsc) A pool of funds used to purchase securities on behalf of investorsd) A collective investment vehicleAns:b

90. "Load" cannot be recovereda) At the time of the investor's entry into the fundb) As a fixed amount each yearc) At the time, the investor exits the fundd) From the fund's distribution agentAns:d

91. The most important attribute of a money market mutual fund isa) Quick capital appreciationb) High regular incomec) Safety of principal

d) No loadsAns:c

92. Some closed-end funds are quoted at a discount to their NAV becausea) Of high expense ratios.b) Investors do not expect the current NAV to be sustained in futurec) The repurchase price fixed by the fund in lower than the NAVd) Of the inherent risk involved in investing in such type of fundsAns:b

93. The NAV of each scheme should be updated on AMFI's websitea) Every quarterb) Every monthc) Every hourd) Every dayAns: d

94. Debt funds targeta) Low risk and stable incomeb) Protection of principalc) High growth with riskd) Long term capital appreciationAns:a

95. In which of the following investment is not made by debt fundsa) Government debt instrumentsb) Corporate paperc) Financial institutions' bondsd) Equity of private companiesAns:d

96. Which of the following risks do not affect a pure debt funda) Default by issuer on payment of interest or pimcipalb) Price fluctuations of the debt securitiesc) Share price movementsd) Interest volatilityAns:c

97. Assured return or guaranteed income plans are essentiallya) Hybrid fundsb) Growth Fundsc) Debt fundsd) Sector funds monthlyAns:c98. A Fixed Term Plan (FTP) or a Fixed Maturity Plan (FMP) isa) An open-end fundb) A closed-end fundc) A fixed term bank depositd) A fixed term corporate bondAns:b

99. NAVs of equity funds are not affected by

a) Stock market movementsb) Events affecting the industry/sector in which the fund has investedc) Happenings in the companies in which the fund has investedd) Real estate pricesAns:d

100. The highest potential for capital appreciation is offered bya) Debt fundsb) Gilt fundsc) Growth fundsd) Balanced fundsAns:c

101.Which of the following are not true for Equity Linked Savings Schemes?a) Investors can claim an income tax benefitb) There is a lock-in period before investment can be withdrawnc) There are not specific restrictions on investment objectives for the fund managersd) These funds cannot invest in shares of listed companiesAns:d

102. Which of the following is not true for Index Fundsa) These funds invests in the shares that constitute a specific indexb) The investment in shares is in the same proportion as in the indexc) These funds aim to minimise the tracking errord) These funds are not diversified Ans:d

103.A no-load fund is one in whicha) The entry load is not chargedb) The exit load is not chargedc) The entry load as well as exit load is not chargedd) The initial issue expenses are not charged to the investorAns:d

104. CDSC stands for:a) Contingent Deferred Sales Chargeb) Commission and Discounts Structure Committeec) Commonly Disclosed Commissiond) Compounded and Discounted Sales Commitment SalesAns: a

105. CDSC is a kind of : a) Entry loadb) Entry load, which varies with holding period of an investorc) Exit load, which varies with the holding period of an investord) None of the aboveAns:c

106. Which of the following is not true about a mutual funda) The mutual fund is owned by all the investorsb) Mutual fund gives a diversified portfolio to investorsc) The objectives of investors of a mutual fund are diverse

d) The mutual funds do not invest in real estateAns:c

107. Which of the following is not an advantage of a mutual funda) Professional management at lower costsb) Diversification of portfolioc) Liquidityd) None of the aboveAns:d108. Which of the following is not false about a mutual fund?a) Open ended funds can be sold in secondary marketb) Closed ended fund do not have a fixed tenurec) Open ended funds do not calculate their NAV on every business dayd) The NAV of a closed ended fund has to be calculated at least once in a weekAns:d

109. A mutual fund can benefit from economies of scale because ofa) Indirect Investmentb) Large volumes of tradec) Portfolio diversificationd) Fund managerAns:b

110. Who is the primary guardian of unit holders funds?a) The AMCb) The Sponsorc) The Trusteesd) The CustodiansAns:d

111. Which of the following is not applicable if the schemes of one mutual fund are taken over by another mutual funda) The schemes' offer documents have to be changed and updatedb) There is a change in the AMC of the schemes that are taken overc) There is a change in the sponsor of the schemes that are taken overd) The schemes have to wound up compulsorilyAns:d

112. Which of the following investment option does not give the benefit of compoundinga) Growth optionb) Dividend payout optionc) Dividend Reinvestment optiond) None of the aboveAns:b

113. The structure which is required to be followed by mutual funds in India is laid down bya) Financial Ministryb) Securities & Exchange Board of India (SEBI)c) Fund Sponsord) Association of Mutual Funds of India (AMFI)Ans:b .

114. The Board of Trustees of a mutual fund: e) Act as a protector of investors interestsf) Directly manage the portfolio of securitiesg) Do not have the right to dismiss the AMCh) Cannot supervise and direct the working of the AMCAns:a

115. The AMC of a mutual fund cannota) Undertake advisory services or financial consultingb) Invest the funds in government paperc) Indulge in an activity not related to financial servicesd) Invest the funds in listed securitiesAns:c

116. The board of trustees which manages a mutual fund is appointed bya) The Finance Ministryb) The RBIc) SEBId) The sponsor of that mutual fundAns:d

117. The custodian of a mutual fund:a) Is appointed for safekeeping of securitiesb) Need not be an entity independent of the sponsorsc) Is not required to be registered with SEBI.d) Does not give or receive deliveries of physical securitiesAns:a118. Transfer Agents of a mutual fund are not responsible fora) Issuing and redeeming units of the mutual fundb) Updating investor recordsc) Preparing transfer documentsd) Investing the funds in securities markets ."..'Ans:d

119. The fund sponsor has to contributea) Nothing to the AMCb) The total networth of the AMCc) AtIeast 40% of the AMC's networthd) Exactly 50%Ans:c

120. In India, Mutual Funds are formed asa) A public limited companyb) A trustc) A private limited companyd) A societyAns:b

121. Issuing and redeeming units of a mutual fund is the rolea) The custodianb) The registrar & transfer agentc) The trustees

d) The bankersAns:b

122. The fund sponsors should financial track record ofa) 7 yearsb) 12 monthsc) 5 yearsd) 3 years Ans:c

123. The networth of an asset management companya) Should be greater than Rs.100 Croresb) Can be decided by the Sponsorc) Should be Rs. 10 Crotes at all timesd) Should be atIeast Rs. 10 Crores at all timesAns:d

124. The agreement between the Trustees and the AMC is known asa) Trust Deedb) Investment Management Agreementc) Agreement to manage Portfoliod) AMC appointment letterAns:d

125. The regulations which govern the working of mutual funds in India isa) SEBI Act , 1992b) Companies Act, 1956c) Income Tax Act, 1961d) SEBI (Mutual Funds) Regulations, 1996Ans:d

126. The highest authority among the following)is thea) SEBIb) Company Law Boardc) RBId) Ministry of FinanceAns:d

127. The entity that SEBI does not regulate isa) Share registrarsb) Mutual fundsc) Stock exchangesd) Non-banking finance companiesAns:d

128. AMC has to me its anntlal statements witha) Association of Mutual Funds in India (AMFI)b) Registrar of Companies (RoC)c) Agents' Associationd) UTIAns:b

129. A closed-end scheme is not governed bya) Exchange Rules of the stock exchange where it is listedb) Listing Agreement between the fund and the stock exchange ..c) Guidelines issued by the Minstry of Commerced) Provisions of Companies Act, 1956 relating to transactions in securitiesAns: c

130. The largest corpus of in vestible funds in India is witha) Bank-owned mutual fundsb) Private Sector mutual fundsc) UTId) Insurance CompaniesAns:c

131. The Board of Trustees of the UTI does not have nominees froma) RBIb) LICc) IDBId) The Bombay Stock Exchange (BSE)Ans:d

132. UTI Cannota) Provide corporate financeb) Engage in real estate and property development businessc) Provide merchant banking servicesd) Invest in securitiesAns:b

133. The "Capital" of a scheme does not includea) Unit capitalb) Reservesc) Borrowingd) Networth of the AMCAns:d

134. Which of the following is an SRO (Self Regulatory Organization)a) NSEb) SEBIc) AMFId) RBIAns:a

135. A Self Regulatory Organization cana) Regulate all entities in the marketb) Regulate only its own members in a limited wayc) Regulate its own members with total jurisdictiond) Regulate no oneAns:b

136. The amount of authority enjoyed by a self regulatory organization is defined bya) The apex regulatory authorityb) Company law board

c) Its own membersd) RBIAns:a

137. The role of AMFI in the mutual funds industry is not toa) Promote the interests of the unitholdersb) Set a Code of Ethicsc) Regulate mutual fundsd) Increase public awareness of mutual funds in the countryAns:c

138. The rights of investors in a mutual fundscheme are laid down in ..a) The Offer Document of that schemeb) Quarterly Reportsc) Annual Reportsd) Marketing brochuresAns:a

139. Unit holders of a scheme do not have the right toa) Proportionate ownership scheme's assetsb) Dividend declared for that schemec) Dividend declared for other schemes of the mutual fundd) All of the aboveAns:c

140. After dividend declaration, unit-holders are entitled to receive dividend within a period ofa) One weekb) 3D-daysc) 42-daysd) Six weeksAns:b

141. Unit holders' right to information does not includea) Obtaining from the trustees any information having an adverse effect on their investmentsb) Inspecting major documents of a fundc) Receiving of a copy of the annual financial statements of that fundd) Approving investment decisions of the fundAns:d

142. Unit-holders aggreived by a mutual fund or an AMC can get redressed froma) Consumer Courtsb) SEBIc) AMFId) RBIAns:b

143. The responsibilities of a unit-holder do not include:

a) Monitoring his investments carefullyb) Being aware of information that affects his investment in a major wayc) Carefully studying the offer documentd) Taking decisions about where the fund managers should investAns:d

144. UTI was set up bya) SEBIb) AMFIc) A special actd) RBIAns: c

145. Investors have the right to receive interest from the AMC if redemption proceeds are not despatched within a period of :a) A monthb) 14 daysc) 14 working daysd) 10 working daysAns:d

146. After closure of the initial offer an open ended scheme, on going sales and repurchases must start withina) One weekb) 30 daysc) 45 daysd) 180 daysAns:b

147. The prospectus or Offer Document containing the details of a new scheme is first registered with thea) AMFIb) SEBIc) Bombay Stock Exchanged) Ministry of FinanceAns:b

148. The offer document issued by mutual funds does not serve the purpose ofa) Announcing the launch of the schemeb) Giving detailed information about the schemec) Explaining the risk factors of the schemed) Giving the fund manager's investment outlook for the next quarterAns:d

149. The offer document of a closed-end fund is issueda) Every yearb) Only once at the time of issuec) Every quarterd) Every six monthsAns:b

150. Which of the following is true about the '" Fundamental attributes of a scheme

a) Investment objectives of a scheme is not a fundamental attributeb) They can be changed after informing investors and taking approval from SEBI and trusteesc) Offer document need not be updated after change in fundamental attribute of a schemed) All are falseAns:b

151. SEBI does not require the following to be included in the offer document issued by a mutual funda) Details of the Sponsor and the AMCb) Description of the Scheme & investment objective/strategy c) Investors' Rights and Servicesd) Performance of other mutual fundsAns:d

152. 'Key Information Memorandum' isa) An abridged version of the offer documentb) The Memorandum & Articles of Association of the AMCc) A sheet containing historical NAVs of other schemes of the same mutual fundd) Annual Report of the AMCAns:a

153. The offer document for a scheme remains valid even ifa) The AMC is reconstitutedb) Entry or exit loads are changedc) The scheme's NA V changesd) New plans are added to existing schemesAns: c

154. The offer document of an open ended fund has to be fully revised and updateda) Every six monthsb) Once in two yearsc) Every quarterd) Every monthAns:b

155. An addendum giving details of material change in the offer document should be circulated toa) Distributors/brokersb) Unit holdersc) SEBId) All of the aboveAns:d

156.Which of the following is not true for offer documents of open-end schemesa) It is first issued at the time the scheme is launchedb) It is registered with SEBIc) It has to be revised every monthd) It contains all important disclosures that a mutual fund is required to makeAns:c

157. The most important source of information for a prospective investor in mutual fund isa) Offer documentb) Annual Report of the AMC

c) Economic Timesd) AMFI NewsletterAns:a158. Which the following is not falsea) The offer document need not be studied by an investor before investing in a schemeb) The offer document is not a legal documentc) A change in key personnel of the AMC does not necessitate a revision of the offer documentd) If fresh litigation cases or adjudication proceedings are referred by SEBI against the fund sponsors or a company associated with the sponsors, then the offer document needs to be revised Ans: d

159. The legal responsibility for the accuracy of the statements made in the offer document lies witha) SEBIb) AMCc) AMFId) Company Law BoardAns:b

160. The following need not be covered in a Key Information Memoranduma) Risk Factorsb) Opening and earliest Closing Date of the initial offerc) Disclaimer Claused) Functions and responsibilities of the sponsor, trustees, AMC and Custodion responsibilitiesAns: d

161. The front page of an offer document need not covera) Opening, closing and earliest closing date of the offerb) Disclaimer clausec) Legal and regulator complianced) Price of unitsAns: c

162. Standard risk ractors are the onea) Which are uniformly applicable for any mutual fund scheme –b) Different for different schemes c) Which are made by a "standards" committeed) None of the aboveAns: a

163. The risk of a scheme's NAV moving up or down on the basis of capital market movements isa) An investment attributeb) Scheme specific riskc) Standard riskd) Credit riskAns:c

164. Past performance of a sponsor/AMC mutual fund is not indicative of the future performance of the scheme. This isa) Not trueb) A standard risk factor for all schemesc) A scheme-specific risk factord) Applicable only to gilt funds

Ans:b

165. Risk arising from objective/strategy allocation isa) Not a risk at allb) Common to all schemesc) Speicific to that schemed) Not applicable to debt fundsAns:c

166. If the AMC is managing a fund for the first time, this information can be found ina) Newspapersb) SEBIc) AMFI Newsletterd) Offer documentAns:d

167. A compliance officera) Certifies that the information information contained in the offer document is true and fairb) Belongs to SEBIc) Cannot certify that the AMC's legal and procedural obligations are fulfilledd) Cannot be appointed by the AMCAns:a

168. The due diligence certificate that must be submitted to SEBI along with the draft offer document is generally signed by thea) Trusteesb) Sponsorc) Compliance officerd) Chair-person of SEBIAns: c

169. A due diligence certificate does not certify thata) The draft offer document forwarded to SEBI is in accordance with SEBI regulationsb) All legal requirements connected with launching of the scheme have been complied withc) Disclosures made in the offer document are true, fair and adequate d) The AMC guarantees a good performanceAns:d

170. Information on estimated expenses to be incurred by a scheme is not found in the offer documenta) This is trueb) This is falsec) This depends on the mutual fundd) This depends on TrusteesAns:b

171. The functions and duties of the sponsor, AMC, trustees and custodian of the mutual fund are listed ina) Offer document onlyb) Key information memorandum onlyc) Both offer document and key information memorandum d) None of the above

Ans: a

172. The following information about the constitution of the mutual fund is found in the offer documenta) Activities of the sponsorb) Summary of trust deed provisionsc) Name and addresses of the board of trusteesd) All of the aboveAns:d

173. The investment objectives of a mutual fund schemea) Are of no relevance to the investorb) Should be the same as his own investment objectivesc) Change with market movem~ntsd) Change with change in the AMC's key personnelAns:b

174. The investment policies listed out in the offer document of a fund do not includea) The type of securities in which the scheme will invest principallyb) Asset allocation patternc) Policy of diversificationd) The specific securities in which the fund will investAns:d

175. For assured return schemes, information about the guarntor's net worth which justifies the guarantor's ability to meet any hortfalls in the returns assured under the scheme can be found ina) The offer documentb) The key information memorandumc) Both a) and b)d) None of the aboveAns:c176. The names and background of key personnel of the AMCa) Need not be disclosed to investorsb) Are of no relevance as they may change c) Are disclosed in the offer documentd) Are declared in newspaper advertisementsAns:c

177. Offer related information required to be listed in the offer document and key information memorandum includesa) Dates of allotment and despatch of certificatesb) Procedure for transfer transmission of unitsc) Both the above d) Neither of the aboveAns:d

178. In the offer document, funds are required to make disclosures regarding the financial results of the sponsor for thea) Last one financial yearb) First 2 financial yearsc) Last 3 financial year,sd) Last 2 calender years

Ans:c

179. The following does not form a part of the investment procedure described in an offer documenta) Various plans under the scheme (e.g. dividend reinvestment plan)b) Minimum initial (and subsequent) investmentc) Details of who can invest d) Details of other competing mutual fundsAns:d

180. A scheme's policy on dividends and distributiona) Is decided by the fund manager as per the market outlookb) Can be changed to suit the requirements of the AMCc) Need not be consistentd) Should be disclosed at the time of initial launchAns:d

181. SEBI restricts mutual fund investments in companies forming part of the same group as the AMC. This is:a) Falseb) In the interest of investor protectionc) Applied only to some mutual funds, not alld) Not favourable to investors at allAns:b

182. As a part of borrowing policy, the following need not be disclosed in an offer documenta) Purpose and circumstances of borrowingb) Regulatory limits on borrowingc) Rotential risk to AMC and unitholdersd) Names of lendersAns:d

183. Valuation norms for non-traded securities should be discloseda) At the end of every financial yearb) Every quarterc) In the offer document at the time of launch of the schemed) Should not be disclosed, being confidential informationAns:c

184. Procedure for redemtption or repurchase need nota) Be described in the offer documentb) Include how redemption or repurchase price of units would be determinedc) Include names of centres where redemption can be effectedd) Indicate the redemption or repurchase price as at the end of the current fiscal yearAns:d

185. Tax treatment of investments does nota) Form a section in the offer documentb) Describe the tax elements applicable to investors who invest in the fundc) Form a section in the key information memorandumd) Offer tax advice to investorsAns:d

186. Documents available to investors for inspection do not includea) Memorandum and Articles of Association of AMCb) Trust Deedc) Final Accounts of the AMCd) Reports based on which actual investments are madeAns:d

187. Who among the following is not eligible to invest in MF in Indiaa) Indian Companiesb) Banksc) Individualsd) Foreign CitizensAns:d

188. Which of the following is not true:a) Companies can invest in mutual fund schemesb) Registered societies can invest in mutual fund schemesc) NRI can not invest in mutual fundd) HUF can invest in mutual fundAns:c

189. The most important link between Mutual Fund and Investors isa) Governmentb) SEBIc) Fund distributorsd) AMFIAns: c

190. Who among the following are Institutional Investorsa) Banksb) Resident Individualsc) Provident Fundsd) Non Banking Finance Companies Ans:b

191.Which of the following is true regarding mutual fund agents/intermediariesa) It is compulsory for to mutual funds agent/intermediaryb) Agents have to be registered with AMFIc) Only males are allowed to be agentsd) Agents can pass back the commissions to investors invest in throughAns:b

192.Generally, which category of investors are less aware about mutual funds and hence, need more advicea) Non Banking Finance Companiesb) Insurance Companiesc) Foreign InstitutionalInvestorsd) IndividualsAns:d

193.Which of the following document a Mutual Fund distributor needs to refer to find out eligible category of investors in a particular

Mutual Fund Schemea) SEBI Regulations Manualb) AMFI bookletc) Offer documentd) RBI GuidelinesAns:c

194. Mutual Fund agents/distributors are not allowed toa) Sell financial products other than mutual fundsb) Sell schemes of more than one mutual fundc) Pass back the commissions earned to the investorsd) Work anywhere elseAns:c

195.Emerging or new channel for marketing ofMutual Fund in India isa) Insurance Companiesb) Banksc) Qualified Mutual Fund agentsd) Direct Sales agents of respective mutual fundsAns:b196.The following are not termed practices"a) Agents commissionb) Before-and after-sales investorsc) Advertising of schemesd) Stock broking "sales service toAns:d

197. Agents are compensated by mutual fundsa) Through salariesb) Through commissionsc) Through an annual feed) Not in cash but in kindAns:b

198.In India the minimum or maximum commissions payable to distributors is decided bya) Distributorsb) AMCc) SEBId) Trustees of the mutual fundsAns:a

199. Excess distribution expenses are to be borne by thea) AMCb) unit holder`sc) SEBId) AMFIAns:a

200. Trail commission means payinga) No commission at all , ",b) The entire commission up-frontc) Commission in phases during the holding period of investor

d) The entire commission after five yearsAns: c

201. Along with the application form ,it is mandatory to attacha) Investment rebateb) Offer documentc) Key information memorandumd) None of the aboveAns: c

202. To sell funds effetively, an agent need nota) Be fully aware of the important characterstics of the schemeb) Know hiw/her client's risk profilec) Give after sales serviced) Offer large investment rebatesAns:d

203. For investors to correctly compare performance of different funds SEBI's advertising codes includea) Uniform computation of yieldsb) Uniform presentations of dividendsc) Identical time periodsd) All of the aboveAns:d

204. SEBI's advertising code mandate that performance calculations in a fund's advertisement should be based ona) The NAVb) The NSE Fifty Indexc) The BSESensexd) None of the aboveAns:a

205. An agent can offer and sell a funds's units ata) Any price he choosesb) A price determined by competition among agentsc) A price based on demand for that fund's unitsd) The public offering price currently in effectAns:d

206. The terms of appointment of a broker by a fund area) Laid down by SEBIb) Laid down by AMFIc) Not uniform to all fundsd) None of the aboveAns: c

207. The code of ethics for mutual funds published by AMFIa) Is mandatoryb) Is in the form of recommended practicesc) Is unfavourable to investorsd) Does not cover distribution and selling practices

Ans:b

208. Which of the following distribution channels is preferred by private mutual fundsa) Individual Agentsb) Small Distribution companiesc) Established distribution companiesd) The internetAns:c

209. Which of the following sales prescribed by regulationa) AMFI Code of Ethicsb) SEBI Advertisingc) AMFI's Code for Agentsd) None of the above practices isAns:b

210. In a mutual fund investors' subscriptions"8.re accounted for asa) Liabilitiesb) Depositsc) Unit capitald) None of the aboveAns:c

211. Investments made by a mutual fund on behalf. of investors are accounted asa) Assetsb) Liabilitiesc) Capitald) None of the aboveAns:a

212. Liabilities in the balance sheet of a mutual fund area) In the form of long-term loansb) Strictly short term in naturec) Combination of long term and short termd) Not allowed as per regulationsAns:b

213. Net Asset Value (NAV) of a mutual fund scheme is defined asa) Assets minus liabilitiesb) Assets per unitc) Assets minus liabilities per unitd) None of the aboveAns:c

214. The day on which NAVis calculated by a fund is known asa) Computation dateb) Valuation datec) Record dated) Book closure dateAns:b

215. A funds NAV is affected by

a) Purchase and sale of investment securitiesb) Valuation of all investment securities heldc) Accrual of income or expensed) All of the aboveAns:d

216. When computing NA V of fund SEBI requires accrual of major expenses to be accounteda) Quarterlyb) Annuallyc) On a day to day basisd) When actually paidAns:c

217. If a mutual fund calculates NA V daily, it will include all the transaction concluded up toa) Last weekb) Last two daysc) Previous dayd) That dayAns:d

218. For a open-end fund, the repurchase price should not be lower thana) NAVb) 95% of NAVc) 93% of NAVd) 97% of NAVAns:c

219. For a closed-end fund, the repurchase price should not be lower thana) NA Vb) 95%ofNAVc) 93% ofNAVd) 97% ofNAVAns:b

220. For a open-end fund, the sale price should not bea) Higher than NAVb) Higher than 107% of NAV c) Lower than 107% of Repurchase priced) Equal to NAVAns:b

221. For a no-load fund, the AMC can change an investment management fee not exceedinga) 3.50%b) 4.0Q%c) 2.25%d) 0.50%Ans: c

222. The NAV of Scheme is 50.What can be the maximum entry load charged to the investora) Rs.2.25b) Rs.3.30c) Rs. 3.50

d) Rs.7.00Ans:c

223. Which of the following expenses cannot be charged to the schemea) Audit feesb) Costs related communicationc) Winding costs for terminating the schemed) Penalties and fines for infraction of laws to investorAns:d

224. For an open ended scheme, initial issue expensesa) Can be amortised over a period of 10 yearsb) Can be amortised over a period not exceeding 5 yearsc) Can not be recovered from investorsd) Can be amortised over the life of the schemeAns:b225. For a closed end scheme, initial issue expensesa) Can be amortised over a period of 10 yearsb) Can be amortised over a period not exceeding 5 yearsc) Can not be recovered from investors d) Can be amortised over the life of the schemeAns:d

226. Scheme-wise annual report of a mutual fund need not bea) Sent to all unit-holdersb) Forwarded to SEBIc) Published as an advertisementd) Stock exchangesAns:d

227. Mutual funds have to value their investmentsa) At purchase priceb) On a mark-to-market basisc) At pard) At book valueAns:b

228. A closed-end has average weekly net assets of s 200 crore.As per SEBI regulations, the AMC can charge the fund with investment and advisory fees upto:a) Rs 2.25 croreb) Rs 2.00 crorec) Rs 2.50 crored) Rs 3.00 croreAns: a

229. For a open ended scheme, the repurchase price can not bea) Lower than 93% of the NA Vb) Lower than 93% of the Sale pricec) Both (a) and (b)d) None of the aboveAns:c

230. Profit and loss on sale of securities of a mutual fund has to be calculated on the basis ofa) LIFO Methodb ) Average Cost Methodc) FIFO methodd) Any of the aboveAns:b

231. Which of the following is not true above dividends of a mutual funda) Dividends are taxfree in the hands of investorsb) Debt mutual funds have to pay dividend distribution taxc) Dividends can be paid out of unrealized profits of the mutual fundsd) Equity mutual funds do not have to pay dividend distribution taxAns:c

232. The maximum amount of initial issue expenses that can be recovered from the investors is limited toa) Rs. 10 Croresb) 2.25%ofNAVc) 6% of the amount mobilized during NFOd) UnlimitedAns:c

233. Mutual funds have to value their investments a) At purchase priceb) On a mark-to-market basisc) At pard) At book valueAns:b

234. If the average annual assets of a equity mutual fund scheme are Rs.1,000 Crore, then what will be the maximum amount of annual recurring expenses chargeable as per SEBI guidelines:a) Rs. 6 Crb) Rs. 20.50 Crc) Rs. 23.25 Crd) As per actualAns:b235. As per SEBI (Mutual Fund) Regulations ,1996 an asset shall be classified as NPA ifa) Interest warrant bounces twiceb) The issuer refuses to repay interest c) If the interest/installment becomes overdue for a period of 180 daysd) If the interest/installment becomes overdue for a period of one quarterAns:d

236. Which of the following is not a treatment of NPAa) Accrual of income 0 NPA has to be stoppedb) Income accrued but not received on the asset classified as NP A has to be providedc) NAV has to be reduced by 1%d) Provision has to be made for the principal due in a graded mannerAns:c

237. Listed equity shares are to be valued at:a) The average price of the share in NSE

b) The lowest price of the day in BSEc) Cost price or current market price whichever is lowerd) The last traded price in the stock exchange where the security is principally tradedAns:d

238. As per SEBI regulations for valu~t4>n of investments held by mutual funds, a security is considered "non-traded" when ita) Has not been traded for 60 days prior to valuationb) Has not been traded for 30 days prior to valuationc) Is not listed on any stock exchanged) Is held by the mutual fund without buying or sellingAns:b

239. A Systematic Withdrawal Plan (SWP) allows investorsa) To invest a fixed amount at regular intervalsb) To withdraw a fixed amount at regular intervalsc) To save taxd) To get compound returnsAns:b

240. Which of the following is untrue of an automatic reinvestment plan?a) The plan allows for automatic reinvestment of all income and capital gainsb) Automatic reinvestment allows for accumulation of additional units of the fundc) The major benefit of automatic reinvestment is compounding d) Its benefit is often lost on account of the heavy load charge on the reinvestmentAns: d

241. Constraints imposed by most funds on check writing are:a) Account balance should not fall below the minimum capital requiredb) Checks issued must be for at least the minimum amount specifiedc) Number of checks per month must not exceed a specified numberd) Both a & b aboveAns:d

242. The investor is given which of the following as proof of purchasea) Unit certificatesb) An account statementc) A pass bookd) None of the aboveAns:b

243. The maximum number of joint holders can be:a) 2b) 3c) 4d) UnlimitedAns:b

244. In case of joint holding, on redemption, the proceeds are paid to thea) Nomineeb) Last holderc) First holder

d) As per the request of all the holdersAns:c

245. Each investor is mandatory required to give details of which of the following in his application forma) Nomineeb) E-mail Addressc) Bank Accountd) PANAns:c

246. It is compulsory to quote PAN numbera) If the investor has PANb) If the investment is Rs. 1 Lac or morec) If the investment is Rs. 50000 or mored) If the investor is liable to pay tax in that yearAns: c

247. Systematic Investment plan has the following advantagea) Investor can start investments with amounts as low as Rs. 500 or Rs. 1000 per monthb) Investor gets the habbit of investingc) Investor reaps the benefits of Rupee Cost Averagingd) All of the aboveAns:d

248. If an investor switches from one scheme to another scheme within the same mutual funda) No load will be chargedb) Only entry load will be charged in the new schemec) Only exit load will be charged in the old schemed) Depends on AMC and varies between different AMCAns: d

249. Systematic Transfer Plan allows investors toa) Transfer amount from one mutual fund to another mutual fund at regular intervalsb) Transfer amount from one scheme to another with in the same mutual fundc) Transfer amount from one scheme to his bank accountd) Transfer dividends of one scheme to anotherAns:c

250. Which of the following is true about Systematic Investment Plana) SIP does not give the benefit of rupee cost averagingb) STP in one scheme can be effectively used to get the benefit of SIP in another schemec) SIP tells an investor when to invest and when to exit from a schemed) All are falseAns:b

251. Which of the following is not an equity instrumenta) Preference sharesb) Equity warrantsc) Ordinary debenturesd) Convertible debenturesAns:c

252. The drawback of an ordinary share isa) Possibility of capital appreciationb) Ownership privilege of the companyc) Dividend incomed) No guaranteed income or securityAns:d

253. An owner of preference shares is given which of the following rightsa) Voting rightsb) Fixed dividend income from post-tax profitsc) Voting rights and unlimited dividend incomed) No guaranteed rightsAns:b

254. Market capitalization of a company is calculated by multiplying the number of outstanding shares bya) Rs. 10b) Face value of each sharec) Current market value of each shared) Dividend yieldAns:c

255. The Price Earnings (PIE) Ratio is calculated using:a) Market price and dividendb) Market price and earning per sharec) Market capitalisation and dividendd) Market price and face valueAns:b

256. A company whose earnings are strongly related to the state of economy is known asa) Economy stocksb) Cyclical Stocksc) Value Stocksd) Growth stocksAns:b

257. Which of the following is generally true for a growth stocka) Steady capital appreciation and steady dividends yieldsb) High capital appreciation and high dividend yieldsc) High capital appreciation and low dividend yieldsd) Steady capital appreciation and high dividend yieldsAns:c

258. Shares of companies with large capital market capitalizationa) Have greater growth potentialb) Are more liquidc) Are not availabled) None of the aboveAns:b

259. Dividend yield for a stock is

a) Dividend per shareb) Dividend per face valuec) Dividend per share market priced)None of the above to currentAns:c

260. Value stocksa) Have high current dividend yieldb) Yield high growth in earningsc) Are currently under valuedd) None of the aboveAns:c

261. To generate better return than the return on index is the abjecive ofa) Passive fund managerb) An active fund managerc) All fund managersd) Non-fund managerAns:b

262. A passive fund managera) Researches stocks extensivelyb) Does not buy and sell stocks oftenc) Does not have to go through the process of stock selectiond) Does not have to track stocksAns: c

263. A fund manager managing an index funda) Has to keep fund expenses lowb) Has to research stocksc) Does not have to balance his portfoliod) None of the aboveAns:a

264. A growth manager looks fora) High current incomeb) Undervalued stocksc) Above average earnings growthd) None of the aboveAns: c

265. Fundamental analysis involvesa) Checking the foundations of the company's factory buildingb) Research into the operations and finances of the company c) Studying the company's share pricesd) None of the aboveAns:b

266. Which of the following is not considered for technical analysisa) Historical data on the company's share priceb) The company shares' trading volumec) Current market sentiment

d) The company's regulatory environmentAns:d

267. Fundamental analysis forms the basis to decidea) When to buy a given share b) Whether to buy a given share or not c) Whether to use technical analysis or quantitative analysisd) Whether the company's factory can withstand earthquakesAns:b

268. Technical analysis guides the decision ona) Whether to buy or sellb) The right time to buy or sellc) Whether company's technical personnel are adequately qualifiedd) None of the aboveAns:b

269. Which of the following is not an investment philosophya) Capitalising on economic cyclesb) Focussing on growth sectorsc) Market capitalisationd) Finding value stocksAns:c270. When expecting a fall in market price, fund managers can reduce the loss in portfolio value bya) Speculatingb) Not buying and selling shares at all for some daysc) Using equity derivativesd) Giving TV interviews to improve sentimentAns:c

271. Equity derivative instruments area) Sharesb) Bondsc) Contractsd) NotesAns:c

272. In a mutual fund, the overall decision on allocating money to particular industries/sectors are taken bya) Equity analystsb) Fund managersc) Security dealer d) Trustees Ans:b

273. Continuous tracking of the companies in which a mutual fund has invested is done bya) Continuous tracking systemsb) Equity analystsc) Trusteesd) Security dealersAns:b

274. Security dealers of a mutual fund a) Guard the cabin of the fund managerb) Execute buy and sell orders for the fundc) Decide which shares to buy or selld) None of the aboveAns:b275. Debt seurities bought at a discount to their face value are generally "a) Interest bearingb) Zero coupon bondsc) Paying interest at a floating rated) None of the aboveAns:b

276. The largest proportion of trades done in the wholesale debt market is accounted bya) Mutual fundsb) Foreign banksc) Indian banksd) Financial institutionsAns:c

277. Certificates of Deposits (CDs) are issued bya) Regional Rural Banksb) Corporatesc) Scheduled commercial banksd) None of the aboveAns:c

278. Commercial Paper is issued by Corporate bodiesa) To meet short-term working capital requirementsb) To finance the acquisition of long term capital assetsc) To retire long term debtd) To pay dividendAns:a

279. The yield on Treasury Bill (T-Bill) is determined bya) The Government of Indiab) Auctionc) The State Governmentsd) Floating rate methodAns:b

280. Coupon of a debt security refers toa) A piece of paper attached to the certificate b) The return on investor would earnc) The rate of interest paid on par valueof the bondd) None of the aboveAns: c

281. A call provision in a debt issue allows the issuer toa) Call out the names of the investors

b) Redeem the debt on maturityc) Extend the tenure of the debtd) Redeem the debt before maturityAns:d

282. A put provison in a debt issue allowsa) Investor to put away the certificates in safe deposit vaultsb) Investors to redeem debt prior to maturityc) Issuers to redeem debt prior to maturityd) Investors to extend the tenure of debtAns:b

283. Current yeild relates interest on a security toa) Its current market priceb) Its face valuec) Its fair valued) The current price of T-BillsAns:a

284. To compare bonds with different coupon rates, maturities and prices, investors would use:a) Current yieldb) Technical analysisc) Yield to maturityd) Fundamental analyisAns: c285. When interest rates rise, prices of existing bonds a) Also riseb) Fallc) Are not affectedd) Fluctuate either up or downAns:b

286. Yield curve is also known asa) Curve of Interestb) Term Structure of Interest Ratesc) Curve that yieldsd) None of the aboveAns:b

287. An important indicator of expected trends in interest rates isa) The Economic Timesb) The Sensexc) The Yield Curved) The Chief Minister's SpeechAns: c

288. It may not be possible to reinvest interest received at the same rate as principal. This is known asa) Reinvestment riskb) Inflation riskc) Interest-rate riskd) Call risk

Ans: a

289. A bond's rating indicates itsa) Reinvestment riskb) Credi~ riskc) Inflation riskd) Interest-rate riskAns:b

290. If a bond cannot be sold at a price near its value, it means that investment in this bond hasa) High liquidity riskb) High default riskc) Low liquidity riskd) Inflation riskAns:a

291. The additional yield required to account for the risk of default by the borrower is known asa) Yield plusb) Yield spreadc) Yield extrad) Yield premiumAns:b

292. A high credit rating does not meana) High yield spreadb) High perceived safetyc) Low yield spreadd) Low risk premiumAns:a

293. If 10-year government securities yields 10% and a 10-Year fixed deposit in a company yields 12%, the yield spread isa) 12%b) 22%c) 10%d) 2%Ans:d

294. The "duration" of a coupon-bearing bond isa) Longer than its maturityb) Less than its maturityc) Equal to its maturityd) The quality of paper used for the certificateAns:b

295. An accurate measure of the sensitivity of a debt portfolio to changes in interest rate is thea) Yield curveb) Credit rating of each securityc) Duration of the portfoliod) Current yield Ans: c

296. For an open ended scheme, investment in unlisted sharesa) Can not be lower than 10% of net assetsb) Should be equal to investment is listed sharesc) Can not exceed 5% of net assetsd) Can not exceed 10% of net assetsAns: c

297. Investment policies of a mutual fund are determined bya) The fund managerb) The AMC managementc) The marketing department based on what distributors wantd) The investorsAns:b298. Which of the following measures are not taken by SEBI for protecting investors of mutual fundsa) Mandating minimum levels of diversification for mutual fundsb) Ensuring that the funds are not used to favour a few companiesc) Tracking the securities that each fund has invested ind) Ensuring that the funds are invested in approved securities onlyAns:c

299. As per SEBI norms, a fund's investments, in the equity shares of anyone company are restricted toa) 25% of Net Assetsb) 10% of Net Assetsc) 50% of Net Assetsd) 100% of Net AssetsAns:b

300. Mutual funds are allowed to lenda) Loansb) Securitiesc) Physical assetsd) None of the aboveAns:b

301. In case of listed securities of group companies of the sponsor, mutual fund is not allowed to invest more thana) 25% of its net assetsb) 10% of its net assetsc) At alld) 5% of net assetsAns: a

302. A mutual fund may transfer investments from one scheme to anothera) Not at allb) At current market ratesc) At cost priced) At a fixed premium over market rateAns:b

303. Interest Rate Risk for an Indian debt fund can be reduced by usinga) Futuresb) Optionsc) Interest Rate Swapsd) None of the aboveAns: c304. When interest rates for similar maturities' bonds are 11%, bond with a 9% coupon rate will sella) Above parb) Below parc) At pard) At a price unrelated to the interest rates for similar securitiesAns:b305.Inter scheme transfers are allowed by SEBI, provideda) Such transfers happen on delivery basis at market pricesb) Such transfer do not result in significantly altering the investment objectives of the schemes c) Such transfer is not of illiquid securities, as defined in the valuation.normsd) All the above conditions are satisfiedAns:d

306. The Indian debt market is largelya) Wholesale in natureb) Retail in naturec) Dominated by NRIsd) All of the aboveAns:a

307. Which of the following is true regarding borrowing powers of a mutual funda) A mutual fund can not borrow at allb) A mutual fund can borrow only up to 20% of net assetsc) A mutual fund can borrow for a maximum period of one yeard) A mutual fund can borrow for investment purposesAns:b

308. If the duration of a bond is 4 years, and the yield increases by 1%, then the bond price willa) Not changeb) Increase by nearly 2%c) Increase by nearly 4%d) Decrease by nearly 2%Ans:d

309. If the NAV of an open-end fund increased from Rs.16 to Rs.20 in 6 months, the absolute return isa) 6.00%b) 34.60%c) 25.00%d) 37.50%Ans:c

310. Change in NAVas a measure of fund performance is more suitable for

a) Growth fundsb) Income fundsc) Funds with withdrawal plansd) None of the aboveAns:a

311. The difference between change in NAV method and total return as measures of fund performance isa) Noneb) Total return method takes dividend into account while change in NAV does notc) Total return method does not take NAVs into accountd) Total return method does not take the time period into accountAns:b

312. The most suitable measure performance for all fund types isa) NAV Changeb) Total Returnc) Total Return with reinvestment method d) None of the above of fund dividendAns:c

313. The expense ratio used for measuring fund performance is an indicator ofa) Product market conditionb) Growth in the economyc) Prevalent market practicesd) The fund's efficiencyAns:d314. The Expense Ratio as a measure of a fund's performance is defined by a fund's <'.a) Total expenses and average net assetsb) Total expenses and total assetsc) Average expenses and average net assetsd) None of the aboveAns: a

315. While computing the Expense Ratio for a fund, the transaction cost for buying and selling securities are not included in the fundexpenses becausea) These are not borne by investorsb) As per accounting policies, these are capitalized and are not shown as expenses at allc) AMC wants to show lower expense ratiosd) The statement is not correctAns:b

316. The Expense Ratio is of least importance in which of the followinga) Debt fundb) Index fundc) Equity fundd) Liquid fundAns:c

317. The Expense Ratio is not affected bya) Fund size

b ) Average account sizec) Portfolio compositiond) Stock market conditionsAns:d

318. The Income Ratio as a measure of a fund's performance is defined by the fund'sa) Total income and total assetsb) Net investment income and net assetsc) Total income and net assetsd) None of the aboveAns:b319. The Income Ratio is more suitable for evaluating the performance ofa) Equity Fundsb) Growth Fundsc) Regular Income Fundsd) Index Funds Ans:c

320. Portfolio turnover rate refers toa) Ratio of sales to the net assets of the fundb) Ratio of purchases to the net assets of the fundc) Ratio of sales or purchases( which ever is lower) to net assets of the fundd) Ratio of sales or purchases( which ever is higher) to net assets of the fundAns:c

321. Portfolio turnover rate of a fund measures thea) Size of the fund's portfoliob) Amount of buying and selling done by the fundc) The average number of units sold by the fund in one dayd) None of the aboveAns:b

322. A high turnover rate for a fund indicatesa) High transaction costsb) Greater efficiencyc) High returns to the investord) A rising marketAns:a

323.Turnover rates would be most relevant to analyze the performance ofa) Equity fundsb) Index fundsc) Debt fundsd) Value funds most relevant toAns: a

324. Transaction costs includea) All expenses related to purchase and sale of securitiesb) All expenses charged to the fundc) Distribution expensesd) None of the aboveAns: a

325.Which of the following are not included in Transaction costs?a) Brokerage/commissionsb) Stamp duty on transfersc) Agent commissionsd) None of the aboveAns:c326. Which of the following transaction costs are not quantified in the offer documenta) Brokerge commissionsb) Dealer spreadsc) Custodian's feesd) Registrar's feesAns:b

327. As per SEBI, mutual funds can borrow for short term to the extent ofa) Total net assetsb) 50% of net assetsc) 25% of net assetsd) 20% of net assets Ans:d

328. On 1 Ian ,05 NAV was Rs. 20/-.On 1 April,04 fund declared dividend of 12%.On 31 Dec,04 NA V was Rs. 22.80. What is the return as per total return method.a) 20%b) 40%c) 12%d) 18%Ans: a

329. The choice of an appropriate benchmark for evaluating a fund's performance depends ona) The fund managerb) The investment objective and the asset allocation pattern of the fundc) SEBId) AMFIAns:b

330.An actively managed equity fund expects toa) Be able to beat the benchmark returnsb) Earn the same returns as the benchmarkc) Have no benchmarksd) Under perform when compared with the benchmarkAns:a

331.To evaluate a closed-end debt-fund, a suitable benchmark would bea) BSE Sensexb) I-Sec's I-BEXc) Interest on bank fixed deposits of similar maturityd) S&P CNX DeftyAns:c

332.When comparing performance of two funds, the following need not be similara) Risk profiles

b) Investment objectivesc) Fund sized) Fund managersAns: d333. Which of the following is false? c' "a) ROI is a measure similar to Total Return with Dividend Reinvestmentb) Total Return with Dividend Reinvestment assumes reinvestment at NAV on the dividend distribution datec) As a measure of performance, Total Return with Dividend Reinvestment. seeks to overcome the shortcomings of simple Total returnd) Because of its simplicity, simple Total Return is preferred in practice to Total Return with Dividend ReinvestmentAns:d

334. To choose an appropriate benchmark for a scheme, all of the following are required excepta) The composition and size of the portfoliob) The investment objectivec) Historical data of fund performanced) The nature of investmentsAns: c

335. When comparing a fund's performance with that of its peer group, the following cannot be compareda) Two debt funds with 5 year maturitiesb) A broad-based equity fund with an IT Sector Fundc) a bond fund with a bondd) A government securities fund with a government securityAns:b

336. Which of the following is true about returnsa) Relative returns are important than absolute returns for mutual fundsb) Historical average is a good proxy for expected returnsc) Risk arises when actual returns are different from expected returnsd) All of the aboveAns:d

337. Standard deviation is a measure ofa) Market riskb) Total riskc) Credit riskd) Re-investment riskAns:b

338. Beta co-eficient is a measure ofa) Market riskb) Total riskc) Credit riskd) Re-investment riskAns:a

339. When comparing fund performance with peer group fundsa) The age of funds should be same

b) The AMCs should have same net worthc) Size and composition of the portfolios should be comparabled) All of the aboveAns:c

340. Which of the following is not a SEBI regulation on returnsa) Standard measurements have to be used for computation of returnsb) Returns for a period of less than 1 year have to be annualizedc) Returns for 1,3 and 5 years, or since inception which ever is later is to be providedd) CAGR to be used for funds which are more than 1 year oldAns:b

341. The Income Ratio as a measure of a fund's performance is defined by the fund'sa) Total income and total assetsb) Net investment income and net assetsc) Total income and net assetsd) None of the aboveAns:b

342. On 1 Jan ,04 NAV was Rs. 12/-. On 1 April,04 fund declared dividend of 14% which was reinvested at the ex-dividend NAV of Rs.l4/-, On 31 Dec,04 NAV was Rs. 20. What is the return as per total return with dividend reinvestment methoda) 75%b) 25.33%c) 83.33%d) 93.33%Ans: c

343. If the NA V of a scheme grows from Rs. 10 to Rs. 40 in three years, what is the compounded annual growth rate?a) 10%b) 100%c) 58.74%d) 48.74%Ans:c

344. NAV of a fund increased from Rs.12 to Rs.15 in six months. What is the annualized rate of return as per Change in NAV method?a) 25%b) 100%c) 50%d) 75%Ans:c

345. Assets under management of a fund at the end of year are 125 Cr. The Average Net assets of the fund are Rs. 100 cr and the total expenses of the fund in that year are Rs. 2.5 Cr. What is the expense ratio?a) 2.00%b) 2.50%c) 1.25%d) 25.00%Ans:b

346. If there is an entry load in a scheme, the investors return .a) Will increase to the extent of loadb) Will not change because there will not be any exit loadc) Will reduce to the extent of loadd) None of the aboveAns:c

347. The rule of 72 is used toa) Calculate entry load of a schemeb) Calculate the period in which an investment will double at a given rate of returnc) Calculate the rate at which money will grow to double in a given periodd) both b and cAns:d

348. The major sources of return to an investor from investment in mutual funds area) Interest and capital appreciationb) Dividend and rentc) Dividend and capital appreciationd) DividendAns:c

349. Which of the following is of no relevance in evaluating a fund's performancea) The performance of the stock market as a wholeb) The performance of other mutual fundsc) The returns given by other comparable financial productsd) The change in wholesale price indexAns:d

350. The basis of genuine investment advice should bea) The current market situationb) The agent commissions paid by different funds .c) Financial planning to suit the investor's needsd) Planning to complete the agent's annual targetsAns: c

351. Financial goals do not includea) Buying a homeb) Winning a sports gold medalc) Planning for retirementd) Saving for child's educationAns:b

352. Financial planning helps a persona) To become a billionaireb) To achieve financial goals through proper management of financesc) To invest in foreign countriesd) None of the above

Ans:b

353. Which of the following works with an investor on his overall financial situationa) Tax Advisorb) Financial Plannerc) Insurance Agentd) Financial AdvisorAns:b

354. Financial planners and their clients shouldfocus ona) Allocating funds to asset classesbased on objectives (e.g. debt, equityetc.)b) Allocating funds to individualsecuritiesc) Tracking stocks which they feel havepotentiald) None of the aboveAns:a355. Within an asset class, which individual security to invest in should be decided bya) The financial plannerb) The investor himselfc) A professional fund managerd) An objective advisorAns: c

356. Financial Planning comprisesa) Defining a client's profile and goalsb) Recommending appropriate asset allocationc) Monitoring financial recommendationsd) All of the aboveAns:d

357. Financial planning is relevant fora) High networth individualsb) Older clientsc) Tax and estate planningd) All of the aboveAns:b

358. The constraint on financial planning due to insufficient resources can be remedied to some extent bya) Decreasing the standard of livingb) Disciplining childrenc) Disciplined monthly budgetingd) None of the above

359. In the dividend reinvestment option "the number of units held by an investor increases because ofa) Growth in net asset value i.e. capital appreciationb) Reinvestment of dividend which is like compoundingc) Interest received on the fund's assetsd) None of the aboveAns:b

360. Which of the following lets an investor book profits in a rising market and increase holdings in a falling marketa) Fixed Ratio of Asset Allocationb) Flexible Ratio of Asset Allocationc) Investment without any asset allocation pland) Buy and Hold StrategyAns:a

361. A Flexible Ratio of Asset Allocation meansa) Continuously changing the ratio of various assets in the portfoliob) Not doing any re-balancing and letting the profits runc) Activeswitchingd) None of the aboveAns:b

362. The strategy advisable for an investor to maximize investment return in the long run isa) Buy and hold on to investments for a long timeb) Liquidate poorly performing investments from time to timec) Liquidate good performing investments fro time to timed) Switch from poor performers to good performersAns:d

363. A criticism of rupee-cost averaging is a) Investment is for the same amount at regular intervalsb) Over a period of time, the average purchase price will work out higher than if one tries to guess the market highs and lowsc) It does not inform an investor when to buy, sell or switch from one scheme to anotherd) Rupee cost averaging has no serious shortcomingsAns: c

364. In India, individual investors do not have direct access toa) Capital market instrumentsb) Real estatec) Bulliond) Money market instrumentsAns: d

365. Which of the following represent indirect investments?a) Investment in a mutual fundb) Investment in sharesc) Inestment in bank depositd) Investment in post office schemesAns:a

366. Which of the following investment products do not give guarantee for return or capitala) Bank depositsb) Pubic provident fund (PPF)c) National Savings Certificates (NSC)d) Units of a mutual fundAns: d

367. The biggest advantage of investment in gold isa) High returnsb) High appreciation in valuec) Low Purchase priced) Hedge against inflationAns:d

368. The biggest disadvantage of investment in real estate isa) Less potential appreciationb) High purchase pricec) Depreciation in value as time passesd) Value gets eroded due to inflation for capitalAns:b

369. Which of the following is not an advantage of bank deposits?a) Liquidityb) High perceived safetyc) Low entry priced) High yield after taxAns:d

370. Listing of shares at a stock exchange ensuresa) Guaranteed returnsb) Long term capital appreciationc) Low riskd) High liquidityAns:d

371. The rate of interest paid by a company on debentures issued by it depends ona) The stock market situationb) SEBI guidelinesc) The company's credit ratingd) The amount of money being raiedAns: c

372. Which of the following is not a characteristic of company fixed depositsa) A higher rate of interestb) Higher riskc) Unfavourable effect of taxd) Very high liquidityAns:d

373. Which of the following is untrue for Public Provident Fund Schemesa) The interest is tax-free

b) Post-tax returns are attractivec) Liquidity is rather lowd) None of the aboveAns:d @dira Vikas Patra is an investment product popular witha) Rural investorsb) Investors in high tax bracketc) Urban investorsd) Risk taking investorsAns:c

375. Annual contribution to Public Provident Fund should bea) Rs.10000b) Between 100 and Rs.60000c) Between Rs.600 and Rs.1000d) None of the aboveAns:b

376. The maturity period of RBI Relief Bonds isa) 5 yearsb) 6 yearsc) 7 yearsd) 8 yearsAns:a

377. The amount an insurance company would pay to the nominee if a policyholder died is known as thea) Premiumb) Sum assuredc) Face valued) Real valueAns:b

378. Most individuals invest in life insurance policies fora) Rrisk protectionb) Tax benefitsc) Easy liquidityd) High returns C' ..Ans:b

379. Dividends distributed by mutual funds area) Taxed at sourceb) Taxed in the hands of the investorsc) Subject to capital gains taxd) Tax-free in the hands of the investorAns: d

380. Investing through mutual fund is a better option than investing directly in the stock market becausea) Identifying stocks is a difficult processb) Agents get commissions on mutual fund investment

c) Returned are guaranteed by mutual fundsd) All of the aboveAns:a

381. A small investor can build a diversified portfolio bya) Buying one share each of all listed companiesb) Investing in a mutual fundc) Borrowing enough money to buy shares of well-managed companies d) None of the aboveAns:b

382. Which of the following is not an advantage of mutual fund investment over direct investmenta) Higher liquidityb) Lower transaction costsc) Greater convenienced) Guaranteed returnsAns:d

383. There is no contractual guarantee for repayment of principal or interest to an investor ina) Bank depositb) Debt fundc) Secured debenturesd) All of the aboveAns:b

384. Which of the following debt investments is not rateda) Corporate Bondsb) Commercial Paperc) Company Depositd) Debt mutual fundAns:d

385. Direct investment in stock market can be a better option than investing through mutual funds if the investora) Wants better returns than those offered by mutual fundsb) Has large capital, knowledge an resources for researchc) Has identified a bullish phase in the stock marketd) Wants to invest for the long termAns:b

386. Deciding on strategies such as cost averaging, value averaging, active switching, all depend on thea) Stock market situation on dateb) Amount of money to be investedc) Investor's risk toleranced) Phase through which the economy is passingAns: c

387. Greater returns come only from assuring higher risks, and a higher risk portfolio guarantees higher returnsa) True b) False

c) -d) - Ans:b

388. The risk tolerance of an investors is independent ofa) His ageb) His incomec) The stock market movementsd) His job securityAns:c

389. A sectoral fund is aa) Low risk fundb) Moderate risk fundc) High risk fundd) Low-to-moderate risk fundAns:c390. International funds invest in various countries therefore they are low risk fundsa) Trueb) Falsec)d) -Ans:b

391. Short Term bond funds area) Low risk fundsb) Moderate risk fundsc) High riskd) None of the aboveAns:b

392. As compared to a fund with fluctuating total returns, a fund with stable positive earningsa) Gives higher returnsb) Is less riskyc) Gives lower returnsd) Is more riskyAns:b

393. "Risk" is equated witha) Volatility of earningsb) Level of earningsc) The number of investors in a fundd) The number of schemes of a fund familyAns:a

394. Volatility of an equity fund portfolio is independent of thea) Kind of stocks in the portfoliob) Degree of diversification of the portfolioc) Fund manager's success at market timingd) Number of investors in the schemeAns:d

395. Equity price risks area) Company specificb) Market levelc) Sector specificd) All of the aboveAns:d396. Diversification reducesa) Company specific riskb) Market riskc) Both of the aboved) None of the aboveAns:a

397. Which of the following is most risky?a) Investing in a money market mutual fundb) Investing in an index fundc) Short term investment in an equity fundd) Long term investment in an equity fundAns:c

398. A fund with a high beta coefficient gives greater returns in a rising market, and is more risky in a falling marketa) Trueb) Falsec) -d) -Ans:a

399. Which of the following is a disadvantage of Standard Deviation as a measure of riska) Standard Deviation measures total risk, not just market risk b) It is based on past returns, which does not necessarily indicate further performancec) It is an independent numberd) All types of funds can be measured with standard deviationAns:b

400. The role of an advisor is toa) Point out the features and benefits of various investments optionsb) Help the investor develop the right approach to investingc) Recommend some investment option availabled) Offer adhoc advise whenever the investor has surplus money availableAns:b

401. One of the most effective ways to invest through mutual funds is toa) Develop a model portfolio b) Buy a few units of every mutual fund scheme availablec) Invest all the money in one fund schemed) Invest all the money in different schemes of the same fund familyAns:a

402. Mutual fund investors should be advised to expect

a) Low post tax returnsb) Dramatic resultsc) Better returns than available optiond) Only realistic wealth accumulation goals every otherAns:d

403. Asset Allocation isa) Keeping certificates of the physical securities in proper placesb) Allocation the available money to all the securities availablec) Allocating the right proportion of funds to equity, debt and money market securitiesd) None of the aboveAns:c

404. Once a financial advisor works out ideal Asset Allocation, it can be used for all his investorsa) Trueb) Falsec) -d) -Ans:b

405. The liquidity needs of an investor througha) Equity Fundsb) Index Fundsc) Money Market Fundsd) Sector Funds are metAns:c

406. A retired person generally needs a greater proportiona) Debt fundsb) Equity fundsc) Money Market fundsd) All of the above " ..Ans:a

407. To satisfy a young investor's need for growth,a greater proportion of investment should be advised ina) Gilt fundsb) Income Fundsc) Equity Growth fundsd) Liquid fundsAns:c

408. A very high proportion of investment in all types of equity funds is advisable for investorsa) In distribution phaseb) In accumulation phasec) In transition phased) Who are wealth preserving affluent individualsAns:b

409. The transition phase of an investor's wealth cycle is when thea) Financial goals have been already metb) The investor has retired

c) Financial goals are approachingd) Investor suddenly gets a windfallAns:c

410. A high proportion of investment in income funds is required bya) Accumulating investorsb) Affluent investorsc) Investors in the inter-generational transfer phased) Investors in the distribution phaseAns:d

411. Retired investors shoulda) Not draw down on their capitalb) Not invest in securities which bear risk of capital erosionc) Continue holding some portion of their holding in equity growth fundsd) Never invest in equityAns:b

412.For older investors who want to transfer their wealtha) No financial planning is requiredb) The right investment strategy depends upon who the beneficiaries arec) The right investment strategy depends upon the state of the stock marketd) All the funds can be invested in aggressive equity fundsAns:b

413. Investors who acquire sudden wealtha) Can speculate with all the acquire, money in the stock marketsb) Should not use any of the new wealth to invest in equityc) Should take the effect of taxes into accountd) Need not pay any taxes on the newly acquired wealth as it is not a part of their regular incomeAns:c

414. Among the following, which is more important for an investora) Size of the fundb) Funds suitability for an investorc) Past performance of the fundd) Fund ManagerAns:b

415. Structural characterization of an equity fund includea) Costs of investing b) The specific securities in which the fund has investedc) The number of employees of the AMCd) All of the aboveAns:b

416. An equity fund can be said to be concentrated whena) When it invests in only in two or three stocksb) When it invests in may companies of the same sectorc) When top ten holdings account for more than 50% of net assets investedd) When top ten holdings account for more than 25% of net assets investedAns:c

417. The size of the market capitalization of a fund's equity holdings is inversely proportional to thea) Returns that can be expected from the fundb) Level of risk assumed by the fundc) State of the stock marketd) All of the aboveAns:b

418. A steady holding of investments in an equity fund's portfolio indicatesa) Long-term orientationb) Lower transaction costsc) Both the aboved) None of the aboveAns:c

419. Ex-Marks of an equity fund measures itsa) Performanceb) Riskc) Both the aboved) None of the aboveAns:a

420. Beta of an equity fund measures itsa) Performanceb) Riskc) Both the aboved) None of the aboveAns:b

421. The best equity fund, relative to others, would havea) Higher Ex Marks, lower Beta and higher Gross Dividend Yieldb) Higher Ex Marks, higher Beta and higher Gross Dividend Yieldc) Lower Ex Marks, lower Beta and lower Gross Dividend Yieldd) Lower Ex Marks, higher Beta and higher Gross Dividend YieldAns:a

422. Debt schemes are popular becausea) The Indian Stock Market is always going downb) The returns are more predictablec) Most investors are always in debtd) All of the aboveAns:b

423. Yield-to-maturity of a debt fund's portfolio gives an indication ofa) Current incomeb) Total returnc) Liquidityd) All of the aboveAns:b

424. Compared to equity funds, income margins for debt funds area) Narrow

b) Higherc) The samed) Almost nilAns:a

425. The differentiating factor among debt funds of comparable maturity and quality isa) Gross yieldsb) Costsc) Fund aged) Tenure of the fund managerAns:a

426. As per current regulations, dividend distribution tax should be taken into in to account when computing net returns froma) Equity fundsb) Debt fundsc) Both the aboved) None of the aboveAns:b

427. Running a money market mutual fund requires more ofa) Credit analysis skillsb) Equity analysis skillsc) Patienced) Trading skills Ans:d

428. Investors should be advised to avoid investing in a debt fund with aa) Lower rated portfolio and higher expense ratiob) Higher rated portfolio and lower expense ratioc) Lower rated portfolio and lower expense ratiod) Higher rated portfolio and higher expense ratioAns:a

429. An ideal money market mutual fund must havea) Lower returnsb) Lower expense ratioc) Low quality of investmentsd) All the aboveAns:b

430. Circumstances that might cause an investor to change the composition of his portfolioa) Cyclical changes in economyb) Unforeseen economic change affecting the portfolio's preferred sectorsc) Both the aboved) None of the aboveAns:c

431. If a charitable trust approaches a distribute for investment in a mutual fund, the distributor shoulda) Accept the application without wasting timeb) Reject the application outright

c) Refer to the offer documentd) Accept the application as a direct applicationAns:c

432. An application form for investment in a mutual fund is available along witha) The offer documentb) The abridged annual reportc) The key information memorandumd) A bank challanAns:c

433. An Ex-Mark of 100% is possible fora) A growth fundb) An aggressive growth fundc) An index fundd) A balanced fundAns: c

434. Of the following, which type of fund would have a higher PIE multiple in comparison to the average market multiplea) A Value Fundb) A Growth Fundc) An Index Fundd) Could be any of the above three, one cannot generalizeAns:b

435. Which of the following is not true as per SEBI Regulations?a) Investment in rated debt securities of a single issuer should not exceed 15% of net assetsb) Total investment in unrated debt securities of a single issuer should not exceed 25% of net assetsc) Total investment in unrated debt securities below investment grade should not exceed 25% of NA Vd) Total investment in rated debt securities below investment grade should not exceed 25% of net assetsAns:b

436. A Money Market Mutual Fund is most likely to invest ina) Corporate Bondsb) Equity Sharesc) Government Securities with maturity less than 1 yeard) All of the aboveAns:c

437. Of the following, which would be more suitable for a retiree with a modest risk appetitea) Value Fundb) Diversified Equity Fundc) Growth Fundd) Balanced FundAns: d

438. As per Bogle, asset allocation for younger investors in accumulation phase phase should bea) 20% equity; 80% debt

b) 70% equity; 30% debtc) 50% equity; 50% debtd) d 80% equity; 20% debtAns:d

439. Which of the following is true for Equity Linked Savings Scheme (ELSS)a) A tax rebate is available to investors in these schemesb) The investment has to be locked in for 3 yearsc) The minimum amount for availing tax rebate is fixedd) All of the aboveAns:d

440. The most important factor look for when investing in a corporate fixed deposit is thea) Yieldb) Rate of interestc) Credit rating of the depositd) None of the aboveAns:c

441. The most important reason for an investor to prefer a bank deposit to a mutual fund isa) The creditworthiness of the bankb) Because the bank does not invest in securitiesc) That the bank offers a guaranteed) All of the aboveAns:a

442. When selling a mutual fund, a good agent would nevera) Describe the past performance of the schemeb) Compare the fund with other mutual fundsc) Assure a rate of returnd) Compare the fund with other financial productsAns: c

443. Which of the following is the first step in financial planninga) Asset Allocationb) Selection of fundc) Studying the features of a schemed) Setting up financial objectivesAns: d

444. Why should one buy an insurance policy?a) It gives high current returnsb) It gives good capital appreciation over its termc) It should be bought due to the need for insurance and not as an investmentd) All of the aboveAns: c

445. Investors who follow the fixed Asset Allocation approacha) Maintain balance in their portfolio by liquidating some investments from the asset class which has given higher return and reinvesting in the other asset class which has lower returnb) Are not disciplinedc) Increase their equity position when equity prices tend to climb

d) None of the aboveAns: a

446. An investor should not invest in a mutual fund ifa) He expects a customized portfoliob) He is able to carry out detailed investment research and monitor the stock marketc) Both the aboved) None of the aboveAns:c 447.As per Bogle, asset allocation for older investors in accumulation phase should be a) 30% equity; 70% debtb) 40% equity; 60% debtc) 50% equity; 50% debtd) 70% equity; 30% debtAns:d

448. From whom can a unit-holder seek redressal if his compalint is not entertained by the mutual funda) AMCb) Board of Trusteesc) SEBId) RBIAns: c

449. An investor wishes to switch between a money market mutual fund and an equity fund. What would you advise him?a) It would be better to stick to one type of fund, the one that meets his investment objective.b) He should keep switching parts of his investment from the equity fund to the money market fund as the market rises and switch back to the equity fund when the market fallsc) He should switch from the money market fund to the equity fund in a rising market and switch back to money market fund when themarket fallsd) none of the aboveAns:b

450. Which of the following characterize the fund that a risk averse investor should choosea) Gross dividend yield 15% Beta 1.5,Ex-Marks 90b) Gross dividend yeidl 10%, Beta 1,Ex-Marks 70c) Gross dividend yeild 11%, Beta 0.9,Ex-Marks 80d) Gross dividend yield 12%, Beta '''1Ex-Marks 80Ans:c

451. A mainstream diversified debt fund is most affected bya) Re-investment riskb) Liquidity riskc) Interest rate riskd) Default riskAns:c

452. If yield is expected to fall, a debt fund manager will do all of the following excepta) Sell short maturity securities and buy long maturity securitiesb) See that the fund's average duration becomes longer than the market's average duration

c) Sell long duration securities and buy short duration securitiesd) Sell high coupon securities and buy low coupon securitiesAns:c

453. In which type of schemes should an unmarried professional working in HLL investa) Scheme investing 80% in debt securitiesb) 50% in equity funds and 50% in income fundsc) At least 75% in equity funds having a higher PIE Ratio than the marketd) All the money in a balanced fundAns:c

454. As per Bogle, asset allocation for younger investors in distribution phase should bea) 80% equity; 20% debtb) 60% equity; 40% debtc) 50% equity; 50% debtd) d 100% equity; 0% debtAns:b

455. One of your friends who has invested in a mutual fund is about to get Australian citizenship. What would you advise?a) He should transfer the investment to his relativeb) He should get RBI approval for continuingc) He can continue to hold as PIO are allowed to invest in mutual funds in Indiad) He should immediately redeem his investment since foreign citizens are not eligible investorsAns:c456. Which of the following is not a part of life cycle stage of an investora) Childhood stageb) College stagec) Pre-retirement staged) Post-retirement stageAns:b457. In which of the following the investor may need income from their investment and can not save furthera) Transition stageb) Accumulation stagec) Reaping staged) None of the aboveAns:c

458. A wealth creating affluent investor is likely to invest ina) Equity instruments and equity mutual fundsb) Goldc) Fixed depositsd) Debt funds or fixed income securities.Ans:a

459. Which of the following would you suggest if your client suddenly wins Rs 1 Cr in a Game show .a) Invest whole amount in equity directlyb) Invest half in equity mutual funds and the other half in debt mutual fundsc) Invest in money market mutual fund till the time he decides on the use of the moneyd) Spend, gift and invest as per his wish

Ans:c

460. Which of the following will result in higher percentage of equity than in debt during bullish phase of the equity marketsa) Fixed Asset Allocationb) Flexible Asset Allocationc) both a & bd) neither a nor bAns:b

461. Which of the following is not a step to develop a model portfolio for an investora) Develop goalsb) Discuss with clients relativesc) Determine asset allocationd) Determine sector distributionAns:b

462. As per Bogle, asset allocation for older investors in distribution phase should bea) 20% equity; 80% debtb) 40% equity; 60% debtc) 50% equity; 50% debtd) 0% equity; 100% debtAns:c

463. Which of the following is not a case of sudden wealth surge stagea) Your client wins Rs. 1 Cr in lotteryb) Your client receives property and other assets worth 5 Cr as inheritance from his unclec) Your clients gets a yearly bonus of Rs. 5 lacd) All of the aboveAns:c

464. A wealth preserving affluent investor is likely to invest ina) Direct Equityb) Real Estatec) Growth fundsd) Debt funds or fixed income securitiesAns:d

465. Which of the following is false about fixed asset allocationa) It means maintaining the same ratio between various components of the portfoliob) It involves rebalancing the portfolio in a disciplined manner c) It means that the portfolio would never be rebalancedd) It involves periodic review and returning to the original allocationAns:c

466. Which of the following is not a relevant criteria to select an equity funda) Percentage of cash in portfoliob) Concentration of portfolioc) Market capitalization of the fundd) The interest rate environmentAns:d

467. Which of the following is not true about the buy and hold strategya) It is preferred by a many investorsb) It does not involve rebalancingc) It is very beneficial as investors may exit from poor performers and invest in better onesd) All of the aboveAns:c

468. Which of the following is not a relevant criteria to select a debt funda) Expense Ratiob) Total returnc) Credit qualityd) Beta Ans:d

469. Which of the following is true about an equity fund selectiona) Fund with higher percentage in cash should be selectedb) Funds with low market capitalization have more liquidityc) Track record of fund managers is not importantd) Funds with higher x-marks are more diversified and have lower riskAns:d

470. To reduce interest rate risk a debt mutual fund investor should invest ina) Funds having higher yields b) Funds having lower average maturityc) Funds having higher average maturityd) Funds with lower expense ratioAns:b

471. Which of the following is an important criteria to select a money market funda) Portfolio turnoverb) Duration of the fundc) The expense ratiod) All of the aboveAns:d

472. Which of the following is true about Jacob's Model Portfolio for investors in accumulation phasea) Investment in diversified equity should be around15% -30%b) Investment in income and gilt funds should be around 65% - 80%c) Investment in liquid funds should be around 5%d) None of the aboveAns:d

473. Which of the following is true about Jacob's Model Portfolio for investors in distribution phasea) Investment in diversified equity should be around 15% -30%b) Investment in income and gilt funds should be around 15% -30%c) Investment in liquid funds should be around 15% -30 %d) None of the aboveAns:a

474. Which of the following would you recommend to Mr. Sharma who wants to invest Rs. 3 lac for three months

a) Bank Fixed Depositb) A Debt fund having duration of 3 yearsc) A Liquid Fundd) A Balanced FundAns:c