Mutual Funds Distributo r Certification Examination v.Jun2010 Page 1 *T arak ki doe s not me an g uaran teed future returns Quick Wit – Chapter-wise Chapter 1 Concept & Role of Mutual Fund 1. The Number of Mutual Fund scheme in India is about: A. 100 B. 500 C. 800 D. 2000 2. Open- ended schemes generally offer exit option to investors through a stock exchange. A. True B. False 3. Sector funds invest in a diverse range of sectors. A. True B. False 4. High Yield bond schemes invest in junk bounds. A. True B. False 5. Investment objective is closely linked to: A. Scheme B. Option C. Plan D. SIP
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AMFI Practice Test
Series A
1) A mutual fund is nota) A company that manages an investment portfoliob) A portfolio of stocks, bonds and other securitiesc) A pool of funds used to purchase securities on behalf of investorsd) A collective investment vehicle
2) Which of the following is true? Some close end funds sell at a discount to their NAV, becausea) Of high expense ratiosb) Investors expect that current NAV cannot be sustained by future potentialc) The repurchase price fixed by the fund is lower than the NAVd) Of the inherent risk of closed end funds
3) If the exit load is 2% and the NAV is Rs. 10, then upon redemption of 1000 units, the investor will
4) Which of the following Mutual Funds was not set up within the Phase 2:1987-1993?a) Canbank Mutual Fundb) Kothari Pioneer Mutual Fundc) SBI Mutual Fundd) LIC Mutual Fund
5) Which of the following is not a benefit from a Mutual Fund?a) Investor has custody of securities where fund invests.b) Investor is able to diversify riskc) Investor can save costsd) Investor can get professional management to manage his money.
6) Which of the following has the lowest risk?a) Liquid Fund (MMMF)b) Gilt Fundc) Diversified debt fundd) Diversified equity fund
7) The current Mutual Fund Regulations from SEBI was introduced ina) 1992b) 1994c) 1996d) 1998
8) The sponsor of a mutual fund may be compared to:a) A director in a companyb) The chief executive of a companyc) The promoter of a companyd) An equity shareholder of a company
9) Issuing additional fresh units and redeeming the existing units of a mutual fund scheme is the role of:a) The custodianb) The transfer agentc) The trusteesd) The bankers
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10) The appointment of AMC for the Mutual Fund can be terminated bya) Majority of Directors of the Trusteeb) 50% of the Unitholdersc) 45% of the Unitholders
d) 60% of the Unitholders11) The Asset Management Company shall make investment decisions solely in the interest of
a) The Sponsorb) The Trusteec) The Unit Holdersd) Its Employees
12) Mutual funds in India are set up as aa) Companyb) Trustc) Partnershipd) Association of Person
13) Minimum number of independent directors on the board of asset management company is
a) 50%b) 25%c) 75%d) Two-thirds
14) Under the Indian Trusts Act, the interests of the unit-holders is safeguarded bya) A board of trusteesb) A trustee companyc) Eitherd) Neither
15) The asset management company is appointed bya) SEBIb) Unit holders
c) Sponsorsd) Trustee
16) Who needs to sign the trust deed with the trustee?a) Asset Management Companyb) Sponsorc) Custodiand) All of the above
17) Which of the following qualifies as a self-regulatory organization?a) SEBIb) RBIc) National Stock Exchanged) AMFI
18) Whose consent is required to approve change in fundamental attributes of a closed end scheme?a) 50% of the unit holdersb) 50% of the trusteesc) 75% of the unit-holdersd) None of the above
19) Which schedule of SEBI (Mutual Fund) regulations 1996 specifies the contents of the Trust Deed?a) Eleventh Scheduleb) Eighth Schedulec) First Scheduled) Third Schedule
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20) In case of a dispute, against whom can the Unitholders initiate legal proceedings?a) Trustb) Trusteec) AMC
d) None of the above21) Mutual Funds are regulated by
a) RBIb) AMFIc) SEBId) NSE
22) The body to which investors may address their complaints isa) SEBIb) RBIc) IRDAd) NSE
23) The first-time investor would be well-advised to refer to:
a) Detailed Offer Documentb) The Key Information Memorandum only.c) Either of the aboved) None of the above
24) Which of the following is true of the offer document?a) Investor gets all the information to evaluate the performance of the proposed schemeb) Investor gets useful information to evaluate the performance of the AMC’s past schemesc) Investor does not get any information on services he can expect from the fund.d) Investor will not be able to assess the risks of the proposed scheme based on the offer document
25) The Abridged Offer Document contains the address of the following:a) The Trustees of the Mutual Fundb) The Directors of the AMC
c) The Registrar and Transfer Agentsd) Options a & be) Options b & c
26) Validate the statement – The investor is not obliged to read the offer document before investing in unitsof a scheme.a) Completely trueb) Rarely truec) Completely falsed) Partly false
27) Offer documents have to be updated withina) One year from the date of Issueb) Two years from the date of issuec) Six months from the date of issued) None of these
28) The front page of the offer document containsa) Date of its publicationb) Name and type of the fundc) Major objectives of the fundd) a & b
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38) A closed-end equity fund has average weekly net assets of Rs. 200 crores. As per SEBI Regulations,the AMC can charge the fund with investment and advisory fee upto:a) Rs. 2.25 croresb) Rs. 2 crores
c) RS. 2.5 croresd) Rs. 3 crores
39) An investor purchased units in a mutual fund in 1995 for Rs. 75000. He sold the units in 1998 for Rs.125000. The cost inflation index for 1995 and 1998 are 281 (C) and 351(D) respectively. The capitalgains chargeable to tax are:a) 64,957b) 31,317c) 50,000d) 75,000
40) Income earned by a Mutual Fund registered with SEBI is exempt from Income-Tax as per sectiona) 10(23D)
b) 10(33)c) Total Income is taxable @ 33.2%d) 88
41) Unit capital of a mutual fund scheme is Rs. 20 million; the market value of its investments is Rs. 55million; The number of units is 1 million. The NAV isa) Rs. 20b) Rs. 75c) Rs. 55d) Not possible to say
42) Which of the following is untrue of the Automatic Reinvestment Plan?a) The plan allows for automatic reinvestment of all income and capital gains.b) Automatic reinvestment allows for the accumulation of additional units of the fundc) The major benefit of automatic reinvestment is the compounding of returnsd) The benefit of automatic reinvestment is often lost, if reinvestment is subject to a heavy load
43) Constraints imposed by most funds on check-writing include:a) Requirement of minimum account balance after withdrawalb) Specification of a minimum amount for which check can be issuedc) Limit on the number of checks that are allowed to be issued in a monthd) Both 1 and 2 above
44) Which of the following is true of Systematic Withdrawal Plan (SWP)?a) It allows investors to make Systematic withdrawal from his fundb) It is suitable for investors seeking regular incomec) SWP is similar to Monthly Income Pland) Only 1 & 2
45) Choose the correct Statement – Alternative Investment Plans offered by fund allows investors:a) Freedom with respect to investing one time or at regular intervalsb) Making transfers to different schemes with the same fund familyc) Receiving income at specified intervals or accumulating distributionsd) All the above
46) The current market price of a 9%—coupon bond, when other bonds of similar maturities pay 11% willbe:a) Above parb) Below parc) At pard) Will be unrelated to other bonds
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47) Yield and Price of a bond move:a) In opposite directionsb) Together in the same directionc) In an unrelated fashion
d) In line with the inflation index48) SEBI places a limit on a scheme’s investment in “investment grade rated” debt instruments of a single
issuer, because:a) Even investment grade securities carry risks of default by borrowerb) A scheme must diversify its holdings and thus reduce portfolio riskc) Investment Grade ratings cannot be solely relied upond) SEBI wants to leave some for investment in “non-investment grade” securities by the scheme
49) Technical Analysis tries to predict future movement of stock price by analyzing:a) The financial workings of a Companyb) The stock price movements of a Companyc) Both of the aboved) None of the above
50) An investor purchased an open-end fund when its NAV was Rs. 20. 16 months later, its NAV stood atRs. 22. The percentage NAV change in the fund was:a) 8%b) 7%c) 7.5%d) 8.5%
51) A unit of open-end fund was purchased when its NAV was Rs. 20. At year-end its NAV was Rs. 22. Inthe interim period, the fund made a distribution of Rs. 4 per unit when its NAV was Rs. 21. What wasthe simple Total Return of the Fund?a) 25%b) 30%c) 20%d) 31%
52) Which of the following is false?a) ROI is a measure similar to Total Return with reinvestment of distributionsb) Total Return with reinvestment of distributions assumes reinvestment at NAV on the distribution
datec) As a measure of performance, Total Return with reinvestment of distributions seeks to overcome
the shortcomings of simple Total Returnd) Because of its simplicity, simple Total Return is preferred in practice to Total Return with
reinvestment of distribution53) Return can be annualized and compounded only if the Scheme has completed
a) 30 daysb) 12 monthsc) 6 months
d) 24 months
54) An equity scheme is 90 days old. To compute its yield, it can usea) Absolute returnb) Simple annualized returnc) Compounded annualized returnd) Any of these
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55) Financial Planning isa) Investing funds to receive the highest rate of return possibleb) Resorting to tax planning to keep taxes as low as possiblec) Planning for retirement with the maximum income possible.
d) Process of solving financial problems and reaching financial goals.56) Your client has won Rs. 1 crore in “Kaun Banega Crorepati”. What would your suggestion be?
a) Invest the entire amount without any delay in “old economy” stocks—since they are back in favourb) Invest the entire amount immediately in an Equity Index Fund—since the index is at a historic lowc) Invest in very safe liquid investment options and take the time needed to work out a financial pland) Invest immediately in IT stocks, since their valuations are now considered to be attractively low
57) Which one of the following portfolio is most risky?a) 75% Equity — 25% debtb) 40% Equity — 60% debtc) 60% Equity — 40% debtd) 80% Equity — 20% debt
58) The strategy advisable for an investor to maximize investment return in the long run is:
a) Buy and hold on to investments for a long timeb) Liquidate poorly performing investments from time to timec) Liquidate good performing investments from time to timed) Switch from poor performers to good performers
59) A criticism of rupee-cost averaging isa) Investment is for the same amount at regular intervalsb) Over a period of time, average per share price will be more than guessing the highs and lowsc) It does not tell you when to buy, sell or switch from one scheme to anotherd) Rupee cost averaging has no serious shortcomings
60) If you maintain a flexible ratio of asset allocation, would youa) Rebalance the Debt/Equity allocation periodically?b) Rebalance the Debt/Equity allocation very frequently?
c) Generally avoid portfolio rebalancing?d) Keep fixed percentages of equity and debt investments at all times?
61) SIP is best example ofa) Rupee Cost Averagingb) Value Averagingc) Buy & Holdd) None of the above
62) Direct investment in stock markets can be better option over investing through mutual funds if:a) The investor wants better returns than those offered by mutual fundsb) The investor has large capital, knowledge and resources for researchc) The investor has identified a bullish phase in the stock marketd) The investor wants to invest for the long run
63) An investor in need of regular income should not select:a) A bank depositb) A debt fundc) An equity growth fundd) PPF
64) Which of the following has the highest level of liquidity?a) Equityb) PPFc) Company fixed depositsd) Mutual Funds
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65) Which of the following should not be viewed primarily as an investment option?a) Mutual Fundsb) Equity sharesc) Life Insurance
d) None of the above66) An investor asks you in what order he should list the following schemes, going from the scheme with
the least risk to the one with the one with the highest risk — 1. A Balanced Fund, 2. A Stock IndexFund, 3. A Liquid (Money Market) Fund and 4. A Pharmaceuticals Sector Fund.a) 1, 2, 3, 4b) 1, 3, 4, 2c) 3, 1, 2, 4d) 2, 3, 1, 4
67) Ex-Marks (or R-Squared factors) of a fund measuresa) How much of a fund’s NAV movement is due to the market index movementb) How a fund’s NAV movement relates to the market index movementc) How much of a fluctuation has occurred in a fund’s NAV over a historical periodd) How many marks a Credit rating Agency accords to a fund
68) Which is better investment option whilst selecting an equity fund?a) Ex Marks – 75%, Beta – 0.9, Gross Dividend Yield – 8%b) Either a or cc) Ex Marks – 80%, Beta – 0.9, Gross Dividend Yield – 8%d) Ex Marks – 90%, Beta – 0.8, Gross Dividend Yield – 9%
69) What type of portfolio asset mix would recommend to your 55 year old client who plans to retire at age58? Choose a portfolio that is the closest match to the investor’s needs.a) 40% in Equity Schemes and 60% in Balanced Funds.b) 40% in Equity Schemes and 60% in Debt Fundsc) 20% in Equity Schemes, 20% in Liquid Funds and 60% in Debt Fundsd) 100% in Monthly Income Statements
70) For which of the following funds would you consider “average maturity” as an important factor inselecting the right one for the investor?a) A Debt Fundb) A Balanced Fundc) A Money Market or Liquid Fundd) Both ‘a’ and ‘b’ above
71) Which of the following Portfolios would you recommend to a recently retired Couple?a) 35% in Conservative Equity Funds, 25% in moderately aggressive equity, 40% in money market
funds.b) 30% in short term municipal funds, 35% long term municipal funds, 25% moderately aggressive
equity, 10% in emerging growth equityc) 50% in aggressive equity fund, 25% in high Yield bond funds and growth and income funds, 25% in
conservative money market funds
d) Either 2 or 372) AMFI Code of Conduct for Intermediaries
a) prohibits mutual fund distributors from accepting commissions from an investor who renew hisinvestment in a scheme
b) Prohibits them from rebating the commission back to such investorsc) Encourages them to refrain from rebating the commissions to such investors, but does not prohibitd) Prohibits them from rebating the commissions back to all investors
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AMFI Practice TestSeries B
1. Which of the following is generally true for a growth stock?a. Steady capital appreciation and steady dividends yieldsb. High capital appreciation and high dividend yieldsc. High capital appreciation but low dividend yieldsd. Steady capital appreciation but high dividend yields
2. A fund's declared NAV does not include loadsa. Trueb. False
3. All expenses and income accrued upto the valuation date shall be considered for valuation. Some minorexpenses need not be so accrued, provided their affect on the NAV is not more than:
a. 2%b. 1.5%
c. 0.5%d. 1%
4. When a scheme with assured returns is being launched, which of the following need not be published in theoffer document?
a. Means of fulfilling the guaranteeb. Information for all schemes launched by the fund in the pastc. Comparison with other mutual fundsd. Investment objective
5. NAV of a fund is 14, Exit Load is 1.5%. Calculate the price at which the investor will be able toredeem 500 units.
6. The NAV of each scheme should be updated on AMFI's websitea. Every quarterb. Every monthc. Every hourd. Every day
7. NAV of a scheme is 20. Exit Load is 1.5%. What will be the price at which the investor will be able to sellunits?8. Which of the following would you suggest if your client suddenly wins Rs. 1 cr in a game show?
a. Invest the whole amount in equity directlyb. Invest half in equity mutual funds and the other half in debt mutual fundsc. Invest in a money market mutual fund till the time he decides on the use of the moneyd. Spend, gift and invest as per his wish
9. Which of the following are not true for ELSS?a. Investor can claim an income tax benefitb. There is a lock-in period before investment can be withdrawnc. There are no specific restrictions on investment objectives for the fund managersd. These funds cannot invest in shares of listed companies
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10. The prospectus of the OD containing the details of a new scheme is first registered witha. AMFIa. SEBIb. BSE
c. Ministry of Finance
11. A no-load fund is one in which?a. Entry load is not chargedb. Exit load in not chargedc. Entry load as well as exit load is not chargedd. The initial issue expenses are not charged to the investor
12. If the NAV of an open-ended 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%
13. A Mutual fund can benefit from economies of scale because of:a. Indirect investmentb. Large volumes of tradec. Portfolio diversificationd. Fund manager
14. The structure, which is required to be followed by mutual funds in India, is laid down by:a. Finance ministryb. SEBIc. Fund Sponsord. AMFI
15. The Board of trustees of a mutual funda. Act as a protector of investor’s interestb. Directly manage the portfolio of securitiesc. Do not have the right to dismiss the AMCd. Cannot supervise and direct the working of the AMC
16. The fund sponsor has to contribute:a. Nothing to the AMCb. The total Net Worth of the AMCc. At least 40% of the AMC’s net worthd. Exactly 50% of the net worth of AMC
17. Special Privileges of erstwhile UTI include
a. Assured return schemesb. Guaranteesc. Ability to take/make loansd. All of the above
18. The most important factor to look for when investing in a corporate fixed deposit is thea. Yieldb. Rate of interestc. Credit rating of the depositd. None of the above
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19. Risk arising from a scheme’s investment objective/strategy and proposed asset allocation isa. Not a risk at allb. Common to all schemesc. Specific to that scheme
d. Not applicable to debt funds
20. The role of AMFI in the MF industry is not to:a. Promote the interest of the unit holdersb. Set a code of ethicsc. Regulate mutual fundsd. Increase public awareness of MFs in the country
21. Loads are recovereda. From agents and distributorsb. As a fixed amount each yearc. At the time of investor’s entry or exitd. None of the above
22. Which of the following is true about the fundamental attributes of a scheme?a. Investment objectives of a scheme are not a fundamental attributeb. These can be changed after informing investors and taking approval from SEBI and Trusteesc. OD need not be updated after change in fundamental attributes of a schemed. All are false
23. Investments made by mutual fund on behalf of investors are accounted asa. Assetsb. Liabilitiesc. Capitald. None of the above
24. The NAV of an Open-ended scheme is 15. What can be the maximum entry load charged to the investor?a. 2.25% of 10b. 2.25% of 15c. 7% of 15 Nild. 7% of 10
25. A high portfolio turnover for a fund indicatesa. That the fund is activeb. Higher transaction costc. Both of the aboved. None of the above
26. Which of the following is not an equity instrument?
a. Preference sharesb. Equity warrantsc. Ordinary debenturesd. Convertible debentures
27. Retired investors shoulda. Not draw down on their capitalb. Not invest in securities which bear risk of capital erosionc. Continue holding some proportion of their holdings in equity growth fundsd. Never invest in equity
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28. The code of conduct may be put in place by:a. AMFIb. Board of Trusteesc. Directors of AMC
d. All of the above
29. The expense ratio is not affected by:a. Fund sizeb. Average account sizec. Portfolio compositiond. Stock market conditions
30. Which of the following transaction cost are not quantified in the offer document?a. Brokerage commissionb. Dealer spreadc. Custodian feed. Registrar fee
31. 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 companiesd. None of the above
32. The liquidity needs of an investor are met througha. Equity fundsb. Index fundsc. Money market fundsd. Sector funds
33. Which of the following is not false about a mutual fund
a. Open ended funds can be sold in secondary marketsb. Close ended funds do not have a fixed tenurec. Open ended funds do not calculate their NAV on every business dayd. The NAV of a close ended fund has to be calculated at least once in a week
34. An investor 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 ratio
35. A self-regulatory organization cana. Regulate all entities in the market
b. Regulate only its own members in a limited wayc. Regulate its own members with total jurisdictiond. Regulate no one
36. Systematic Withdrawal Plan allows investors to get back the principal amounts invested in addition to theincome on investment
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37. UTI was set up bya. SEBIb. AMFIc. A special Act
d. RBI
38. Constraints imposed by most funds on check writing area. 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 above
39. 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 rights
40. Market capitalisation 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 yield
41. Shares of companies with large capital market capitalisationa. Have greater growth potentialb. Are more liquidc. Are not availabled. None of the above
42. In case of a fund scheme merger or take-over
a. High court approval may not be necessaryb. SEBI approval is a mustc. All unit holders must be informedd. All of the above
43. What is the statistics used in validating Beta?a. Standard deviationb. Betac. Ex-marksd. Sharpe ratio
44. As a financial planner, which of the following would you suggest for a person who can take a moderate risk?a. Aggressive growth fund
b. Aggressive equity fundc. Diversified equity fundd. Sectoral fund
45. A growth fund manager would apply the following strategies:a. Invest in those companies that would give more returns than the average returns in the industry.b. Invest in companies having a large equity base.c. Invest in companies coming out with new “Initial public offers’d. All of the above
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46. An active style of portfolio management includes the following:a. Application of ‘Systematic transfer plan’ in various schemes of a fund.b. Undertake macroeconomic analysis to determine profitable investment trends.c. Invest in companies with high market capitalization
d. All of the above.
47. What would be the maximum initial issue expenses charged from the investors, if the amount mobilizedfrom a mutual fund NFO is Rs. 50 crore?
48. When interest rates for similar maturities bonds are 11.5%, bond with a 8% coupon rate will become:a. More attractiveb. Less attractivec. At pard. The price is unrelated to the interest rates for similar securities.
49. What would be a suitable benchmark to evaluate a closed-end debt fund?a. BSE Sensexb. I-sec’s Si-bexc. Crisil Composite Bond Fund Indexd. S & P CNX Nifty
50. Financial planning involves the achievement of following objectives:a. Buying a homeb. Purchase of a new carc. Planning for retirementd. All of the above
51. What is Bogle’s suggestion regarding the ‘rule of thumb’ for asset allocation?a. 50% equity and 50% debtb. 60% equity and 40% debtc. An investor’s allocation to debt should be equal to his age.d. Investor should not do any re-balancing of his/her portfolio.
52. What should be the recommended portfolio for an investor who is risk averse in his transition phase?a. Higher allocation to equity fundsb. Higher allocation to debt instrumentsc. Investments only in equityd. He should not invest anywhere
53. Which of the following is true?
a. SEBI does not allow the investor to pledge his mutual fund units in favor of a financial institutionb. An investor cannot redeem his mutual fund holding in part.c. The frequency of investment offered for SIP varies from one fund to another.d. All of the above
54. What is the proof that the investor has invested in mutual fund units?a. The investors receive units commensurate with the investment made.b. Investors get an account statement, showing their holdings and their price.c. The receipt of money acts as the proofd. None of the above
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55. What is the maximum time given to the Asset management company to give their reply after theobservations made by SEBI to a new fund scheme filed with it?
a. 2 monthsb. 3 months
c. 4 monthsd. 6 months
56. How would you convince a first-time investor who is risk-averse to invest in mutual funds in comparison to abank deposit?
a. Mutual funds is the right choice to grow your wealth at a fast paceb. Mutual fund has the likelihood of giving more growth than the bank deposit as the investment is in a
diversified portfolio of securities.c. Investment in Mutual fund doubles your money in 3 years.d. All of the above
57. Bogle’s suggestion for debt is based on:a. Ageb. Wealth
c. Family sized. None
58. Govt. securities are valued for computing NAV by:a. AMFIb. RBIc. SEBId. MOF
59. Who cannot distribute mutual funds in India?a. Regional officeb. SEBIc. Post Office
d. Foreign Banke. PSU Bank
60. Who cannot distribute mutual funds in India?a. Directors of AMCb. Trusteec. Employee of AMCd. Sponsor
61. Who cannot distribute mutual funds in India?a. RBIb. PSU Bank
c. Foreign Bankd. All of the above
62. An important part of transaction cost is:a. Stamp dutyb. Custodian feec. Registrar feed. Commission
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63. Best option for power of compounding is:a. 12% yearlyb. 6% half-yearlyc. 3% quarterly
d. 1% monthly
64. For tax implication computation, a client shoulda. Read the ODb. Consult tax consultantc. AMC will take cared. Clarify with IT Dept
65. Who registers the mutual fund with the SEBI?a. AMCb. Trusteec. Sponsord. Investment manager
66. A client’s financial plan should not be reviewed whena. The client has just retiredb. The client has just been divorced at age 40c. The client feels he has attained his financial goalsd. The client’s mutual fund portfolio shows appreciation
67. NAV means:a. (Market Value of Assets – Liabilities) / number of units outstandingb. (Book Value of Assets – Liabilities) / number of units outstandingc. Unit capital / number of units outstandingd. Net assets / initial number of units
68. If an investor needs income, he should select funds with:
a. Low expense ratiob. High expense ratioc. Low current yieldd. High current yield
69. When interest rate rises, bond pricea. Is not affectedb. Fluctuates up or downc. Also risesd. Falls
70. The AMFI is governed by:a. RBI
b. Ministry of Financec. A board of directors elected from among members of AMFId. SEBI
71. A fund that charges a load is better than a no-load funda. Trueb. False
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72. Documents available to investors for inspection do not includea. Memorandum and Articles of Association of AMCb. Consent of auditors and legal advisorsc. Investment management reports
d. Reports based on which actual investments are made
73. A passive fund has the following featurea. A passive fund tracks the indexb. A passive fund matches the performance if the indexc. A passive fund selects the stocks that are present in the indexd. All of the above
74. Where do Gilt Funds Invest?a. Sharesb. Debenturesc. Dated Securitiesd. None of the above
75. Which of the following Mutual Fund was setup after 1963 but before 1987?a. SBI Mutual Fundb. Can Bank Mutual Fundc. LIC Mutual Fundd. None of the above
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AMFI Practice Test
Series C
1. Insider trading means:
a. Personal trading transactions done by anyone associated with a Mutual Fundb. Personal transaction done by anyone with knowledge of the fund decision in the securityc. Personal trading transaction without prior approval of the AMCd. Personal trading transaction done by an insider of an AMC/Fund
2. Fund merger involving 2 or more schemes of different AMCs requires consent of unit holders with X%voting rights. X is:a. 50b. 100c. 51d. 75
3. What makes mutual fund the single most important financial instrument as a financial planner?
a. Mutual Funds help in portfolio diversification and risk reductionb. Mutual Funds help in doubling investmentc. Both the aboved. None of the above
4. Select which of the following is an example of unethical behaviour?a. Fund distributor buying shares that he knows are part of the fund portfolio recommended to
investorsb. Fund employee buying shares that he knows the fund has decided to buyc. Fund trustee owning a share portfolio of his ownd. Fund manager buying shares in his own name
5. A mutual fund launches a new scheme. 10 crore units are issued. An entry load of 2.25% of the face
value during the New Fund Offer period is mentioned in the Offer Document. Issue expenses are 8 cr.How much of this would be borne by the scheme?a. 6 crb. 3.75 crc. 2.25 crd. 8 cr
6. Which of the following is true?a. KIM is abridged offer documentb. OD is abridged shareholder agreementc. KIM is abridged Investment Management Agreementd. OD is abridged KIM
7. What is the portfolio recommended for Young Married Single Income Family with 2 School-going Kids
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8. Role of the custodian is:a. Managing the fund’s distribution channelb. Making investments on behalf of the Fund Managersc. Handling payment of investments with bankers
d. Safe keeping of securities or participating in the clearing system on behalf of the mutual fund
9. A person enters a fund at NAV of 22. 18 months later the NAV is 24. The annualized percent change inNAV is:a. 9%b. 5.56%c. 9.09%d. 6.06%
10. During the reaping phase the investor looks to:a. Building wealthb. Cashing outc. Transferring wealthd. All of the above
11. In the offer document “unit & offer” describes the nature and significant attributes of the units underoffer. Which of the following is not covered under this:a. Minimum amount to be raisedb. Period under which refund should be carried outc. Circumstances under which refund may take placed. Maximum target amount to be raised
12. A mutual fund is:a. A partnershipb. A pass through vehiclec. A private trustd. An association of persons
13. Only one of the following is required to pass the AMFI examination:a. Trusteesb. Officers of SEBI working in the Mutual Fund departmentc. Employees in a call center dealing with mutual fund investorsd. Fund managers
14. An investor claims that the PPF is a superior instrument to Mutual Funds. An argument to defendinvestment in a Mutual Fund over PPF is:a. Mutual Fund will surely yield a better return than PPFb. A mutual fund offers the potential for higher income and capital appreciationc. The capital investment is safer in a Mutual Fundd. A Mutual Fund investment is less volatile
15. An NRI wishes to invest in a Mutual Fund. Which of the following is true?a. He cannot apply has he will be paying in Foreign Currencyb. Need not take individual permission as RBI has granted general permission in this regardc. The investor has to apply to RBI seeking permission as he will be paying in foreign currencyd. Cannot apply as it is open to Indian residents only
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16. The cut-off time for redemption request kept by an AMC is 3:00 pm. An application for redemptionreceived at 3:01pma. Redemption will be based on next day NAV but no exit load will be chargedb. Redemption will be based on next day NAV
c. Applicant will be asked to resubmit the request 10 am the next dayd. The same day NAV will apply since the gap is less than 30 minutes from cut-off time
17. Duration of a bond means the percent change in:a. Price with change in yieldb. Price as a result of stock market fluctuationsc. Price with change in coupon rated. None of the above
18. Where would you place a 53 years old executive planning to retire at age 60?a. Sudden wealth stageb. Reaping stagec. Accumulation staged. Transition stage
19. The OD should indicate the management of the fund. The management doesn’t include:a. Name of trusteesb. Name of the Fund Managerc. Business experience of the key personnel of the AMCd. Registration number of the custodian
20. Small funds:a. Are relatively easier to manageb. Achieve their objectives in a more focused mannerc. Have limited holding of securitiesd. All of the above
21. OD must contain information about unit holder transaction expenses. Which of the following is not an
item under this?a. Repurchase loadb. Initial issue expensesc. Max sales loadd. Switchover load
22. An open ended scheme can change its fundamental attributes:a. By allowing unit holders to exit scheme after 6 months without exit loadb. After obtaining prior approval from SEBIc. By obtaining consent of 75% of unit holdersd. Informing each unit holder individually and allowing exit without exit load
23. The total net assets of a fund scheme increased from 100 cr to 120 cr. Of this, 5 cr was unrealized gain.
The number of units is 10 cr. The maximum dividend per unit the scheme can declare is:a. Rs 2b. Rs 1.50c. Rs. 0.50d. Rs. 1
24. Fund manager with investment philosophy of growth investing, looks for:a. Companies with above average profits and growth in earningsb. Companies with large equity basec. Companies which are likely to go for public issued. All of the above
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25. “Making mutual funds work for you – the investor’s guide” was published by:a. SEBIb. AMFIc. UTI
d. Investor Education and Protection Fund
26. An Investor invested in the UTI Money market Mutual Fund. To see the relevant financial statements,she should read:a. Financial statement of the schemes managed by UTI trusteeb. Annual report of AMFIc. Annual report of SEBId. Financial statement of the UTI AMC
27. As per investment company institute, AMFI equivalent in the US, corporate bond funds have higher riskthan:a. Money Market fundsb. Index fundsc. Aggressive funds
d. Growth funds
28. MF can invest in unlisted securities within SEBI approved limits, including:a. Unlisted company’s sharesb. Units of venture capital fundsc. Both the aboved. None of the above
29. A grandfather wants to make an investment for a newborn grandson. Which is the most suitableinvestment?a. Index fundsb. Income fundsc. Money market funds
d. Gilt funds
30. The ratio which divides risk premium by Standard Deviation is:a. Sharpe Ratiob. Treynor Ratioc. Bogle Ratiod. Jensen Ratio
31. The following is not required on the cover page of the OD?a. Date on which approved by trusteesb. Earliest closing date for New Fund Offerc. Date the NFO closesd. Date the NFO opens
32. The NAV of a fund is 35. Exit Load is 0.50%. How many units should Ms Monica redeem to withdraw Rs.50,000/-?
33. NAV of a fund is 48. Exit Load is 1%. Calculate the price at which the investor will be able to purchase 2000units.
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34. Which of the following expenses cannot be charged to the schemea. Audit feesb. Costs related to investor communicationc. Winding costs for terminating the scheme
d. Penalties and fines for infraction of laws
35. The valuation norm for non-investment grade, performing assets is done:a. On YTM basis using the Crisil valuation methodologyb. On YTM basis with 25% discountc. At 25% discount to face valued. At face value
36. 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 information
37. As per SEBI guidelines, a security is to be treated as untraded whena. Security is never traded on stock exchangeb. Security is not traded for 30 daysc. Security is not traded for 60 daysd. None of the above
38. Ex-marks with 100% could be for the following fund:a. Growth fundb. Index fundc. Value fundd. Balanced fund
39. A high turnover rate for a fund indicates
a. High transaction costsb. Greater efficiencyc. High returns to the investord. A rising market
40. An investor can assess the performance of his mutual fund by comparing it with the performance ofa. Other mutual fund of the same typeb. The stock marketc. Other financial productsd. All of the above
41. If the NAV of an open-ended fund was Rs. 16 at the beginning of the year and Rs.22 after 13 months,the annualized change in NAV is
a. 6.0%b. 34.6%c. 40.6%d. 37.5%
42. The choice of an appropriate benchmark for evaluating a fund’s performance depends ona. The fund managerb. The investment objective of the fundc. SEBId. AMFI
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43. 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 bond index
d. A government securities fund with a government security
44. Which of the following is false?a. ROI is a measure similar to Total Return with Reinvestment of distributionb. Total Return with Reinvestment of distributions assumes reinvestment at NAV on the distribution
datec. As a measure of performance, Total Return with Reinvestment of distribution seeks to overcome
the shortcomings of simple Total Returnd. Because of its simplicity, simply Total Return is preferred in practice to Total Return with
Reinvestment of distribution
45. Financial planning allows a persona. To become a billionaireb. To achieve financial goals through proper management of finances
c. To invest in foreign countriesd. None of the above
46. Financial Planning comprisesa. Defining a client’s profile and goalsb. Recommending appropriate asset allocationc. Monitoring financial planning recommendationsd. All of the above
47. Financial planning does not includea. Enabling investors to define financial goalsb. Assessing the investors risk and return requirementsc. Recommending an appropriate asset allocation
d. Selecting securities that will be included in the investor’s portfolio
48. A small investor can build a diversified portfolio bya. Buying one share each of the listed companiesb. Investing in a mutual fundc. Borrowing enough money to buy shares of well-managed companiesd. None of the above
49. Direct investment in stock market can be a better option than investing through mutual funds if theinvestora. Wants better returns than those offered by mutual fundsb. Has large capital, knowledge and resource for researchc. Has identified a bullish phase in the stock market
d. Wants to invest for the long term
50. The reason for popularity of Indira Vikas Patra wasa. Rural investorsb. Investors in high tax bracketc. Urban investorsd. Investors who want to protect their identity
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51. Most individuals invest in life Insurance policies fora. Risk protectionb. Tax benefitsc. Easy liquidity
d. High returns
52. Which of the following about PPF is false?a. Investments have to be made from taxable income of the relevant year.b. Investments once made cannot be withdrawn until maturity.c. Both interest and principal are tax free in the year of withdrawald. Investments enjoy tax benefits under Section 80c of the IT Act.
53. The difference between debenture and bond is:a. Bonds are issued by corporations and debentures are issued by PSUs.b. Bonds are unsecured and debentures are secured.c. Bonds are backed by loans and debentures are backed by assetsd. None of the above
54. A criticism of rupee-cost averaging isa. Investment is for the same amount at regular intervalsb. Over a period of time, the average purchase price will work out lower than if one ties to guess the
market highs and lowsc. It does not tell you when to buy, sell or switch from one scheme to anotherd. Rupee cost averaging has no serious shortcomings
55. A high proportion of investment in income funds is required bya. Accumulating investorsb. Affluent investorsc. Investors in the inter-generational transfer phase
d. Investors in the distribution phase
56. Mutual fund can benefit from economics of scale because ofa. Portfolio diversificationb. Risk reductionc. Large volume of tradesd. None of the above
57. Equity Linked Savings Scheme does not have which of the following features?a. It entitles the unit holder to tax benefitsb. The investment is locked in for 3 yearsc. A minimum stated level of investments is made in equity and equity related instrumentsd. None of the above
58. The Custodian of a mutual fund:a. Is appointed for safekeeping of securitiesb. Need not be an entity independent of the sponsorsc. Not required to be receive deliveries with SEBId. Does not give or receive deliveries of physical securities
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59. As per SEBI guidelines, a due diligence certificate is nota. Signed by a Compliance Officer of the mutual fundb. A certificate that all legal formalities of a scheme are completedc. Attached to Annual report
d. A part of offer document
60. 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/strategyc. Investors’ Rights and Servicesd. Performance of other mutual funds
61. Mutual funds do not justify the need for paying commission to agents when the investors skip out of thescheme before a specified period. In India this practice is adopted bya. Agents voluntarily paying back the commission to the Mutual fundb. Trail commission is not paid to the agentsc. None of the aboved. The whole of commission is paid to the agents
62. Distributors or agentsa. Can distribute several mutual funds simultaneouslyb. Cannot appoint sub-agents or sub-brokersc. Should be only individuals not companies or banksd. Should not be an employee or associate of the AMC
63. The AMFI code of ethics does not cover the following prescriptionsa. Adequate disclosures should be made to the investorsb. Funds should be managed in accordance with stated investment objectivesc. Conflict of interest should be avoided in dealings with directors or employeesd. Each investment decision should be approved by investors
64. Contingent Deferred Sales Charge (CDSC)a. Is higher for investors who stay invested in the scheme longerb. Is lower for investors who stay invested in the scheme longerc. Is the same for all investors irrespective of how long they stay investedd. Is not allowed to be charged to mutual fund investors in India.
65. A Debt fund distributes 10% dividend. How much tax does the investor have to pay on this dividend?a. 10%b. 12%c. 20%d. None
66. A value manger does not look for
a. Stocks that are currently undervalued in the marketb. Stocks whose worth will be recognized by the market in the long termc. High current yieldd. Long term capital appreciation
67. As per SEBI, mutual funds can borrow for short term to the extend ofa. Total net assetsb. 50% of net assetsc. 25% of net assetsd. 20% of net assets
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68. A mutual fund is not allowed to invest in the sponsor company,a. > 25% of its net assetsb. > 10% of its net assetsc. Not at all
d. > 5% of net assets
69. Liabilities in the balance 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 regulations
70. A fund’s investments at market value total Rs. 700 crores, Total liabilities stand at Rs. 50 lacs and thenumber of units outstanding is 28 Crores. What is the NAV?a. Rs. 30.19b. Rs. 24.98c. Rs. 32.15d. Rs. 40.49
71. For valuation of traded securities, which of the following is not true?a. The security is valued at the last quoted priceb. The security is valued on the basis of earnings capitalizationc. Making to market is appliedd. If the security has not been traded on valuation date, the trading price on any previous date may be
used, provided that date is not more than 30 days prior to valuation date.
72. For evaluating sectoral funds, the preferred benchmark would be thea. BSE Sensexb. S&P CNX Niftyc. BSE 200
d. S&P CNX Sectoral Indices
73. The Expense Ratio as a measure of a fund’s performance is defined asa. Total expenses and average net assetsb. Total expenses and total assetc. Average expenses and average net assetsd. None of the above
74. Within an asset class, which individual security to invest in should be decided bya. The financial plannerb. The investor himselfc. A professional fund manager
d. An objective advisor
75. Flexible asset allocation meansa. Continuously changing the ratio of various assets in the portfoliob. Not doing any re-balancing and letting the profits runc. Active switchingd. None of the above
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AMFI Practice TestSeries D
Q1. Which of the following is not a role of mutual funds?a. Livelihood for a large number of employees and distributorsb. Promoting overall economic developmentc. Helping investors speculate and earn large returnsd. Help build the capital markets
Q2. Suggested portfolio for a couple in their 60s with no family supporta. 35% diversified equity, 15% gold ETF, 15% Gilt, 15% Diversified Debt and 20% Liquidb. 50% diversified equity, 20% gold ETF, 10% Gilt, 15% Diversified Debt and 5% Liquidc. 15% diversified equity, 10% gold ETF, 30% Gilt, 30% Diversified Debt and 15% Liquidd. 35% diversified equity, 10% Sector, 15% gold ETF, 30% Diversified Debt and 10% Liquid
Q3. Diversification meansa. A bird in hand is better than 2 in the bush
b. The devil you know is better than the devil you don’tc. Don’t put all your eggs in one basketd. Save for the rainy day
Q4. Who among the following is not allowed to invest in MFs in India?a. Non Resident Indiab. Foreign nationalsc. Other Mutual Funds registered in Indiad. Religious and charitable trusts
Q5. Which of the following is not a regulatory body in India?a. SEBIb. RBI
c. AMFId. IRDA
Q6. Which of the following are permissible investments for mutual funds in India?a. International equityb. Commoditiesc. Real estated. Only b and c
Q7. Which of the following is not a pre-requisite for a sponsor?a. Earned profit in 3 out of previous 5 yearsb. Latest net worth more than capital contributed to AMCc. Been in financial services business for at least 7 years
d. Needs min 40% shareholding of the capital of AMC
Q8. The advantage that MFs offer over FDs is:a. Higher return potentialb. Higher returns in a falling interest regimec. Tax benefitsd. Switchese. All the above
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Q9. Which of the following is true about ETFs?a. open-ended index funds traded on the stock exchangeb. Market makers quote buying and selling prices at all timesc. Investors buy and sell at market prices
d. ETFs are more cost effective than normal index fundse. All the above
Q10. “To generate income by investing predominantly in a wide range of debt and money market securities” isan example of a scheme’s:a. Investment objectiveb. Investment policyc. Investment strategyd. Investment regulation
Q11. A suggested strategy in case of an investor has a windfall gain:a. Invest in long term equity to maximize returnsb. Invest in fixed deposit for a year and take the decision laterc. Invest in a liquid scheme and then start an STP into an equity scheme
d. Invest 50% in real estate and balance 50% in bank deposits
Q12. Which of the following is a parameter for debt fund selection?a. Regular income yield portfoliob. Fund agec. Scheme running expensesd. Ranking and ratinge. All the above
Q13. Which of the following is correct?1. Stocks of gold companies move in tandem with gold prices2. Stocks of gold companies may rise or decline faster than gold pricesa. Only 1
b. Only 2c. Bothd. Neither
Q14. Select the correct statementa. RTA appointment is not compulsoryb. Auditors of AMC accounts can be the same as auditors of scheme accountc. Both are correctd. Neither is correct
Q15. Which of the following is true about gold fundsa. Gold ETF NAV moves in line with gold prices
b. Gold Sector Fund NAV moves in line with gold pricesc. Both are correctd. Neither is correct
Q16. Comment on the risk appetite of a person with a steady job?a. better risk appetiteb. Lower risk appetitec. Depends on extent of loansd. Depends on number of dependents
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Q17. The following is not a stage in wealth cycle of an individuala. Distribution stageb. Transition Stagec. Farming stage
d. Accumulation stage
Q18. The following is not prescribed as part of 6-step financial planning process prescribed by FPSB, USA:a. Analyze and evaluate client’s financial statusb. Help clients segregate active and passive incomec. Develop and present financial planning considerations and/or optionsd. Implement the financial planning recommendations
Q19. Select the correct statementa. AGNI applies to distributors of mutual fundsb. ACE applies to employees of AMCc. Both are correctd. Neither is correct
Q20. Which of the following is true for mutual funds in India?a. Refunds must be sent within 5 business days of closure of NFOb. Statement of account must be sent within 5 business days of closure of NFOc. Both are correctd. Neither is correct
Q21. Due diligence certificate is signed by thea. Board of Trusteesb. CEO of the AMCc. Security Analystd. Compliance Officer
Q22. What is the role of the custodian?
a. Maintain records of investors and unit-holdingb. Manage day to day affairs of the schemesc. Safekeeping of assets of the schemed. None of the above
Q23. Which of the following is true for selecting a debt fund?1. In a declining interest rate scenario, it is sensible to go with long-term debt funds2. In a rising interest rate scenario, it is safer to go with short-term funds.a. Only 1b. Only 2c. Bothd. Neither
Q24. Which of the following is true for NFOs?a. NFO can remain open for a maximum of 15 daysb. Allotment of units must be done within 15 days of closurec. Open-ended funds open for repurchase within 15 days of the allotmentd. All the above
Q25. The following is not a KYC document.a. Identity Proofb. Income Proofc.PAN Cardd. Address Proof
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Q26. An investor claims proceeds 1 year after maturity. Which of the following is payable?a. Payment based on prevailing NAVb. Payment based on NAV at maturityc. Payment based on NAV at the end of 3 years
d. No claim is payable since the money is deposited in investor education fund
Q27. Which of the following may be an indicator of unsteady investment style?a. Fund Sizeb. Frequent subscription and redemption by investorsc. Fluctuation in market prices of portfolio securitiesd. Frequent buying and selling of securities
Q28. Where can one find info about list of eligible investors?a. KIMb. ‘Who can invest’ section of the ODc. ‘Investor Rights’ in ODd. SAI
Q29. Which of the following is true about ELSS schemes?a. 3 year lock-in periodb. Tax benefit under section 80cc. Guarantee of superior performance than diversified equityd. Only a and b above
Q30. “Because all swans you have seen are white, it does not mean that black swans do not exist” suggestsa. Black swan population is decreasing rapidlyb. Ignorance is blissc. Abnormal events may be rare but bring unknown and large amount of riskd. The devil you know is better than the devil you don’t
Q31. Select the correct statement.
a. Fundamental analysis helps in making long term investment decisionsb. Technical analysis is useful for short-term speculative calls
c. Technical analysts are also called chartists
d. All the above
Q32. Which of the following is true of investor rights?
a. Scheme can be would up by a resolution passed by unit-holders
b. Investors can file a suit against trustees
c. Investors can sue the trust
d. Only a, b and c above
e. All the above
Q33. Which of the following is correct?
a. Unit Certificate is like a pass book detailing account balances
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Q34. Which of the following is correct?
a. SIP works on the principle of Rupee Cost Averaging
b. In case of debt schemes, re-purchase is preferable over dividends
c. Both are correct
d. Neither is correct
Q35. Which of the following is true about FMPs
a. Money is accepted only during NFO
b. Invest in securities with maturity coinciding with maturity of the scheme
c. Comparable to investments in fixed deposits
d. All the above
e. Only a and b above
Q36. Which of the following is true?
a. In floaters, issuer pays higher interest when market yields go up
b. Of interest rates are expected to fall, exposure to long term fixed debt is recommendedc. Long term securities fluctuate more than short term ones
d. All the above
Q37. Which of the following is not true?
a. Passive funds have lower running expenses than active funds
b. Active funds are designed to mirror the performance of an index
c. Investors expect better performance from an active fund
d. Active fund managers have flexibility to choose investment portfolio
Q38. Which of the following is not true about open (or close) ended schemes?
a. Entry and exit permitted at any time
b. No fixed maturityc. Unit capital changes
d. Investors can buy units from the stock exchange
Q39. Which of the following is not a scheme selection principle for equity schemes?
a. Time horizon
b. Fund size
c. Portfolio turnover
d. Market capitalization of stocks
e. None of the above
Q40. 20:25 Rule states that
a. Scheme must have max 20% holding by one investor and min 25 investors in any schemeb. Scheme must have max 25% holding by one investor and min 20 investors in any schemec. Scheme must have max 20% holding in any one security and min 25 securities in any schemed. Scheme must have max 25% holding in any one security and min 20 securities in any scheme
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Q41. Select the correct statement1. Higher the credit risk - higher the likely yield2. Higher the rating - lower the likely yield.a. Only 1 is correct
b. Only 2 is correctc. Both are correctd. Neither is correct
Q42. Which of the following is not a factor for benchmark selection in an equity fund?a. Scheme typeb. Choice of investment universec. Choice of portfolio concentrationd. Underlying exposuree. None of the above
Q43. Which of the following is true for leveraging by mutual funds?a. Mutual fund scheme cannot borrow more than 20% of its assets
b. Borrowing cannot be for more than 6 monthsc. Borrowing is permitted to meet the cash flow needs of investor servicing viz. dividend payment or re-purchase paymentsd. All the above
Q44. Which of the following is not true about growth Investinga. Investing in frontline stocksb. Identifying companies whose growth potential has not been recognized by the marketc. Identifying companies with above average return potentiald. Identifying stocks with generally higher valuations
Q45. Which of the following is true for benchmarks?a. should be aligned to the investment objective
b. Should be calculated by an independent agency in a transparent manner and published regularlyc. Usually created by stock exchanges, credit rating agencies, security research houses or financialpublicationsd. All the above
Q46. Which of the following is true for NAV?a. Higher the interest, dividend and capital gains, higher the NAVb. Higher the appreciation in investment portfolio, higher the NAVc. Lower the expenses, higher the NAVd. All the above
Q47. SEBI Advertising Code stipulates thata. Schemes cannot offer any indicative yield
b. Ranking of schemes must be based on compounded annualized yieldc. Ranking of non-liquid schemes must be based on yields for a period of at least one yeard. All the above
Q48. Which of the following cannot be a basis for filing legal proceedings against an MF scheme?a. Change in fundamental attributesb. Lack of awareness about disclosures in OD because it is a lengthy documentc. Inaccurate disclosure in ODd. None of the above
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Q58. Which of the following is false about the Offer Document?a. OD has two parts – the SID and SAIb. SAI is relevant for all schemes of a mutual fundc. SID is a scheme-specific document
d. OD is approved by SEBI
Q59. Modified Duration is a better measure of interest rate sensitivity than Weighted Average Maturity.a. Trueb. False.
Q60. Select the correct statementa. Trustee company is exempt from taxb. Mutual fund is liable to corporate taxc. dividend distribution tax is applicable to equity schemesd. STT is payable only in equity funds
Q61. Which of the following is an example of a synthetic index?a. NSE Nifty
b. CRISIL BalanCEXc. 65% BSE Sensex plus 35% I-Bexd. CRISIL Debt Hybrid Index - 75:25
Q62. Cut-off timings are not applicable toa. Liquid Schemesb. Equity Schemes on re-opening after the NFOc. NFO and International Purchasesd. None of the above
Q63. Which of the following is a benefit of ASBA?a. Money moves out of account only on allotmentb. Exact amount of money is transferred from the account
c. Transactions above 50,000 are compulsoryd. Only a & b above
Q64. Which of the following is not a feature of zero coupon security?a. Issued at a discount to the face valueb. No interest is paid during the termc. The face value is paid on maturityd. has tenor of upto 1 year
Q65. Which of the following is true for Dividend Re-investment option?a. Dividend Distribution tax is not applicableb. NAV declinesc. Dividend is received in the bank account
d. The number of units remains the same
Q66. What is the prescribed cut-off in case of sale for other than liquid schemes more than 1 cra. Closing NAV of the next business dayb. Closing NAV of date the application is receivedc. Closing NAV of the day the funds are available for utilizationd. Closing NAV of the day preceding the next business day
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Q67. Which of the following true for set-off of capital gains?a. ST Capital losses can be set off against LT capital gainsb. ST Capital losses can be set off against ST capital gainsc. LT Capital losses can be set off against LT capital gains
d. All are true
Q68. Which of the following is a not permitted as an expense charged to a scheme?a. Advertising and commissionsb. Depreciation on fixed assetsc. Depository feed. Service tax
Q69. Which of the following is true?a. KIM is to be updated at least once a yearb. SAI is to be updated at end of 3 months of every financial yearc. SID is updated within 6 months of each financial yeard. All the abovee. Only a and b above
Q70. The profitability metric does not include:a. Realized capital gains and lossesb. Valuation gains and lossesc. Interest and dividend incomed. AMC’s expenses
Q71. Which of the following is true?a. The AMC is bound by the acts of the distributorsb. The distributor is bound by the acts of its agents/sub-brokersc. Both are correctd. Neither is correct
Q72. Which of the following measures sensitivity of returns?a. Standard Deviationb. Betac. Alphad. Variance
Q73. Select the correct statement1. Beta of an index fund is 12. Stocks with beta more than 1 fall more than the market
A. Only 1 is correct
B. Only 2 is correctC. Both are correctD. Both are incorrect
Q74. Which of the following is true?a. Capital Guarantee funds with non-sovereign debt investment carry credit riskb. Liquid schemes carry portfolio concentration riskc. Junk bond schemes invest in securities of poor credit qualityd. All the above
