1. A close-ended mutual fund has a fixed :
a. NAV
b. fund size
c. rate of return
d. number of distributors
👁Answer
Correct Answer: b. fund size
2. The maximum load that a fund can charge is determined by the :
a. AMC
b. SEBI
c. AMFI
d. distribution agents based on demand for the fund
👁Answer
Correct Answer: b. SEBI
3. The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 is :
a. Rs.2000
b. Rs.2015
c. Rs.1985
d. Rs.2030
👁Answer
Correct Answer: d. Rs.2030
4. A gilt fund is a special type of fund that invests :
a. in very high quality equity only
b. in instruments issued by companies with a sound track record
c. in short-term securities
d. in government securities only
👁Answer
Correct Answer: d. in government securities only
5. Of the following fund types, the highest risk is associated with
a. Balanced Funds
b. Gilt Funds
c. Equity Growth Funds
d. Debt Funds
👁Answer
Correct Answer: c. Equity Growth Funds
6. The NAV of a mutual fund:
a. is always constant
b. keeps going up at a steady rate
c. fluctuates with market price movements
d. cannot go down at all
👁Answer
Correct Answer: c. fluctuates with market price movements
7. An open-ended mutual fund is one that has:
a. an option to invest in any kind of security
b. units available for sale and repurchase at all times
c. an upper limit on its NAV
d. a fixed fund size
👁Answer
Correct Answer: b. units available for sale and repurchase at all times
8. An investor in a close-ended mutual fund can get his/her money back by selling his/her units:
a. back to the fund
b. to a special trust at NAV
c. on a stock exchange where the fund is listed
d. to the agent through which he/she subscribed to the units of the fund
👁Answer
Correct Answer: c. on a stock exchange where the fund is listed
9. The "load" charged to an investor in a mutual fund is
a. entry fee
b. cost of the paper on which the unit certificates are printed
c. the fee the agent charges to the investor
d. the expenses incurred by fund managers for marketing a mutual fund scheme
👁Answer
Correct Answer: d. the expenses incurred by fund managers for marketing a mutual fund scheme
10. A mutual fund is owned by
a. the Govt. of India
b. SEBI
c. all its investors
d. AMFI
👁Answer
Correct Answer: c. all its investors
11. Units from an open-ended mutual fund are bought
a. on a stock exchange
b. from the fund itself
c. from AMFI
d. from a stock broker
👁Answer
Correct Answer: b. from the fund itself
12. A mutual fund is not
a. owned jointly by all investors
b. a company that manages investment portfolios of high networth individuals
c. a pool of funds used to purchase securities on behalf of investors
d. a collective investment vehicle
👁Answer
Correct Answer: b. a company that manages investment
portfolios of high networth individuals
13. "Load" cannot be recovered
a. at the time of the investor's entry into the fund
b. as a fixed amount each year
c. at the time the investor exits the fund
d. from the fund's distribution agent
👁Answer
Correct Answer: d. from the fund's distribution agent
14. The most important advantage of a money market mutual fund is
a. quick capital appreciation
b. high regular income
c. safety of principal
d. no loads
👁Answer
Correct Answer: c. safety of principal
15. Some close-ended funds are quoted at a discount to their NAV because
a. of high expense ratios
b. investors do not expect the current NAV to be sustained in future
c. the repurchase price fixed by the fund in lower than the NAV
d. of the inherent risk involved in investing in such type of funds
👁Answer
Correct Answer: b. investors do not expect the current NAV to be sustained in future
16. The NAV of each scheme should be updated on AMFI's website
a. every quarter
b. every month
c. every hour
d. every day
👁Answer
Correct Answer: d. every day
17. Debt funds target
a. low risk and stable income
b. protection of principal
c. high growth with risk
d. long term capital appreciation
👁Answer
Correct Answer: b. protection of principal
18. In which of the following do debt funds not invest
a. government debt instruments
b. corporate paper
c. financial institutions' bonds
d. equity of private companies
👁Answer
Correct Answer: d. equity of private companies
19. Which of the following risks do not affect a debt fund
a. default by issuer on payment of interest or principal
b. price fluctuations of the debt securities
c. share price movements
d. interest volatility
👁Answer
Correct Answer: c. share price movements
20. Assured return or guaranteed monthly income plans are essentially
a. Hybrid funds
b. Growth Funds
c. Debt/Income funds
d. Sector funds
👁Answer
Correct Answer: c. Debt/Income funds
21. A Fixed Term Plan Series is
a. an open-ended fund
b. a close-ended fund
c. a fixed term bank deposit
d. a fixed term corporate bond
👁Answer
Correct Answer: b. a close-ended fund
22. NAVs of equity funds are not affected by
a. Stock market movements
b. Events affecting the industry/sector in which the fund has invested
c. Happenings in the companies in which the fund has invested
d. real estate prices
👁Answer
Correct Answer: d. real estate prices
23. The greatest potential for growth in capital is offered by
a. debt funds
b. gilt funds
c. growth funds
d. balanced funds
👁Answer
Correct Answer: c. growth funds
24. A Systematic Withdrawal Plan, allows investors to get back the principal amounts invested in addition to the income on investment
a. True
b. False
👁Answer
Correct Answer: a. True
25. Which of the following is untrue of an automatic reinvestment plan?
a. The plan allows for automatic reinvestment of all income and capital gains
b. Automatic reinvestment allows for accumulation of additional units of the fund
c. The major benefit of automatic reinvestment is compounding
d. The benefit of automatic reinvestment is often lost on account of the heavy load charge on the reinvestment
👁Answer
Correct Answer: d. The benefit of automatic reinvestment is often lost on account of the heavy
load charge on the reinvestment
26. Constraints imposed by most funds on check writing are:
a. Account balance should not fall below the minimum capital required
b. Checks issued must be for at least the minimum amount specified.
c. Number of checks per month must not exceed a specified number
d. Both a & b above
👁Answer
Correct Answer: d. Both a & b above
27. The performance of a fund is largely measured by the success of
a. the marketing function
b. the operations function
c. the portfolio market function
d. none of the above
👁Answer
Correct Answer: c. the portfolio market function
28. Generally invest in
a. unlisted
b. market-traded
c. thinly traded
d. privately placed
👁Answer
Correct Answer: b. market-traded
29. Which of the following is not an equity instrument
a. preference shares
b. equity warrants
c. ordinary debentures
d. convertible debentures
👁Answer
Correct Answer: c. ordinary debentures
30. The drawback of an ordinary share is
A. possibility of capital appreciation
B. ownership privilege of the company
C. guaranteed dividend income
D. no guaranteed income or security
👁Answer
Correct Answer: D. no guaranteed income or security
31. An owner of preference shares is given which of the following rights
a. voting rights
b. fixed dividend income from post-tax profits
c. voting rights and unlimited dividend income
d. no guaranteed rights
👁Answer
Correct Answer: b. fixed dividend income from post-tax profits
32. Market capitalisation of a company is calculated
by multiplying the number of outstanding shares by
a. R.10
b. Face value of each share
c. Current market value of each share
d. dividend yield
👁Answer
Correct Answer: c. Current market value of each share
33. The Price/Earnings (P/E) Ratio is an important measure of a company's anticipated performance. It is calculated using:
a. Market price and dividend
b. Market price and earning per share
c. Market capitalisation and dividend
d. Market price and face value
👁Answer
Correct Answer: b. Market price and earning per share
34. A company whose earnings are strongly related to the state of economy is known as
a. Economy stocks
b. Cyclical Stocks
c. Value Stocks
d. Growth stocks
👁Answer
Correct Answer: b. Cyclical Stocks
35. A Growth stock refers to shares of a company whose earnings are projected to grow at the normal market rates
a. True
b. False
👁Answer
Correct Answer: b. False
36. Which of the following is generally true for a growth stock?
a. steady capita appreciation and steady dividends yields
b. high capital appreciation and high dividend yields
c. high capital appreciation but low dividend yields
d. steady capital appreciation but high dividend yields
👁Answer
Correct Answer: c. high capital appreciation but low dividend yields
37. Shares of companies with large capital market capitalisation
a. have greater growth potential
b. are more liquid
c. are not available
d. none of the above
👁Answer
Correct Answer: >b. are more liquid
38. Dividend yield for a stock is
a. dividend per share
b. dividend per face value
c. dividend per share to current market price
d. none of the above
👁Answer
Correct Answer: c. dividend per share to current market price
39. Value stocks
a. have high current dividend yield
b. yield high growth in earnings
c. are currently under valued
d. none of the above
👁Answer
Correct Answer: a. have high current dividend yield
40. A better performance than the return on index is given by
a. passive fund manager
b. an active fund manager
c. all fund managers
d. non fund manager
👁Answer
Correct Answer: b. an active fund manager
41. A change in key personnel especially the fund manager of an AMC does not necessitate a revision of the offer document
a. True
b. False
👁Answer
Correct Answer: b. False
42. 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
a. True
b. False
👁Answer
Correct Answer: a. True
43. The offer document need not be revised if the management or the controlling interest in the AMC change
a. True
b. False
👁Answer
Correct Answer: b. False
44. An AMC cannot explain adverse variations between expense estimates for the scheme on offer and actual expenses for past schemes in
a. financial newspapers
b. business channels on TV
c. the offer document
d. AMFI newsletter
👁Answer
Correct Answer: c. the offer document
45. Information on estimated expenses to be incurred by a scheme is not found in the offer document, but in brochures of the fund
a. True
b. False
👁Answer
Correct Answer: b. False
46. When comparing a fund's performance with that of its peer group, the following cannot be compared
a. Two debt funds with 5 year maturities
b. A broad-based equity fund with an IT Sector Fund
c. A bond fund with a bond
d. A government securities fund with a government security
👁Answer
Correct Answer: b. A broad-based equity fund with an IT Sector Fund
47. An AMC must explain adverse variation between expense estimates for the scheme on offer and actual
a. expenses for past schemes in
b. financial newspapers
c. business channels on TV
d. offer document
e. AMFI Newsletter
👁Answer
Correct Answer: c. business channels on TV
48. Information on estimated expenses to be incurred by a scheme is not found in the offer document, but in brochures of the fund
a. True
b. False
👁Answer
Correct Answer: b. False
49. The offer document and key information memorandum contain financial information for
a. all schemes of all mutual funds in the capital market
b. all schemes launched by the particular fund during the last 3 fiscal years
c. none of the schemes
👁Answer
Correct Answer: b. all schemes launched by the particular fund during the last 3 fiscal years
d. companies in which investment is proposed
50. The functions and responsibilities of the sponsor, AMC, trustees and custodian of the mutual fund are listed in
a. offer document only
b. key information memorandum
c. both offer document and key information memorandum
d. none of the above
👁Answer
Correct Answer: a. offer document only
51. Information about trusteeship fees is included in the offer document but not in the key information memorandum
e.True
f.False
👁Answer
Correct Answer: e.True
52. The following information about the constitution of the mutual fund is found in both the offer document and key information memorandum
e. activities of the sponsor
f. summary of trust deed provisions
g. name and addresses of the board of trustees
h. all of the above
👁Answer
Correct Answer: h. all of the above
53. The investment objectives of the fund an investor selects for investment
e. are of no relevance
f. should be the same as his own investment objectives
g. change with market movements
h. change with change in the AMC's key personnel
👁Answer
Correct Answer: f. should be the same as his own investment objectives
54. The investment policies listed out in the offer document of a fund do not include
e. the type of securities in which the scheme will invest principally
f. asset allocation pattern
g. policy of diversification
h. the specific securities in which the fund will invest
👁Answer
Correct Answer: h. the specific securities in which the fund will invest
55. If a scheme's name implies that it will invest primarily in a particular type of security or in certain industry/sector, then it should invest at least the following percentage of its total assets in the indicated type of security/industry/sector
e. 100%
f. 80%
g. 65%
h. 40%
👁Answer
Correct Answer: g. 65%
56. For assured return schemes, information about the guarantor's net worth which justifies the guarantor's ability to meet any shortfalls in the returns assured under the scheme can be found in
e.the offer document
f. the key information memorandum
g. both (a) and (b)
h. none of the above
👁Answer
Correct Answer: g. both (a) and (b)
57. The names and background of key personnel of the AMC
e.need not be disclosed to investors
f. are of no relevance as they may change
g. are disclosed in the offer document
h. are declared in newspaper advertisements
👁Answer
Correct Answer: g. are disclosed in the offer document
58. The minimum amount to be raised, and the maximum target amount
e. are not known before the offer is concluded
f. can be decided based on investor response to the offer
g. are defined as per SEBI Regulations before the offer is made
h. need not be disclosed in the offer document
👁Answer
Correct Answer: g. are defined as per SEBI Regulations before the offer is made
59. The circumstances for refund of investment in the initial offer and period within which refund must be carried out are not specified in the offer document, but only on the application
e.True
f. False
👁Answer
Correct Answer: f. False
60. Offer related information required to be listed in the offer document and key information memorandum includes
e. dates of opening, closing, earliest closing, allotment and despatch of certificates
f. procedure for transfer and transmission of units
g. both the above
h. neither of the above
👁Answer
Correct Answer: h. neither of the above
61. In the offer document, funds are required to make disclosures summarizing associate transactions and their impact on the performance of the scheme for the last
e. one fiscal year
f. 2 fiscal years
g. 3 fiscal years
h. 5 fiscal years
👁Answer
Correct Answer: g. 3 fiscal years
62. The circumstances under which a scheme shall be wound up are to be described in the offer document at the time of the initial launch of the scheme itself
e.True
f. False
👁Answer
Correct Answer: e.True
63. The following do not form a part of the investment procedure described in an offer document
e. various plans under the scheme (e.g. dividend reinvestment plant)
f. minimum initial (and subsequent) investment
g. details of who can invest
h. details of other competing mutual funds
👁Answer
Correct Answer: h. details of other competing mutual funds
64. A scheme's policy on dividends and distribution
e. is decided by the fund manager as per is market outlook
f. can be changed to suit the requirements of the AMC
g. need not be consistent
h. should be disclosed at the time of initial launch
👁Answer
Correct Answer: h. should be disclosed at the time of initial launch
65. SEBI restricts mutual fund investments in companies forming part of the same group as the AMC. This is:
e. not true
f. in the interest of investor protection
g. applied only to some mutual funds, not all h. not favourable to investors at all
👁Answer
Correct Answer: f. in the interest of investor protection
66. A disclosure should be made in the offer
document if an AMC has invested more than the following percentage of its net assets in group companies
e. 50%
f. 40%
g. 25%
h. 10%
👁Answer
Correct Answer: g. 25%
67. Mutual funds are allowed to borrow
e. freely to meet their requirements
f. for investment purposes
g. only to meet redemption demands
h. not allowed at all
👁Answer
Correct Answer: g. only to meet redemption demands
68. As a part of borrowing policy, the following need not be disclosed in an offer document
e. purpose and circumstances of borrowing
f. regulatory limits on borrowing
g. potential risk to AMC and unit-holders
h. names of lenders
👁Answer
Correct Answer: h. names of lenders
69. Valuation norms for non-traded securities should be disclosed
e.at the end of every financial year
f. every quarter
g. in the offer document at the time of launch of the scheme
h. should not be disclosed, being confidential information
👁Answer
Correct Answer: g. in the offer document at the time of launch of the scheme
70. Procedure for redemption or repurchase need not
e. be described in the offer document
f. include how redemption or repurchase price of units would be determined
g. include names of centres where redemption can be effected
h. indicate the redemption or repurchase price as at the end of the current fiscal year
👁Answer
Correct Answer: h. indicate the redemption or repurchase price as at the end of the current
fiscal year
71. The fund need not describe its accounting policies in the offer document as these are of no use to an investor
e.True
f. False
👁Answer
Correct Answer: f. False
72. The accounting policies of a fund should be in accordance with
e.GAAP
f. SEBI regulations
g. ICAI Guidelines
h. American GAAP
👁Answer
Correct Answer: f. SEBI regulations
73. Tax treatment of investments does not
e. form a section in the offer document
f. describe the tax elements applicable to investors who invest in the fund
g. form a section in the key information memorandum
h. offer tax advice to investors
👁Answer
Correct Answer: h. offer tax advice to investors
74. Documents available to investors for inspection do not include
c. Memorandum and Articles of Association of AMC
d. consent of auditors and legal advisors
e. investment management reports
f. reports based on which actual investments are made
👁Answer
Correct Answer: f. reports based on which actual investments are made
75. Investors' rights under a scheme are
e. uniform for all schemes of all funds
f. not defined
g. listed in the offer document
h. available with stock exchanges
👁Answer
Correct Answer: g. listed in the offer document
76. The offer document for a scheme should describe how the NAV of the scheme is to be computed
e. True
f. False
👁Answer
Correct Answer: e. True
77. An offer document contains an AMC's investor grievance's history for the past
e. one fiscal year
f. 2 fiscal years
g. 3 fiscal years
h. six months
👁Answer
Correct Answer: g. 3 fiscal years
78. Any pending cases or penalties levied on the sponsors or AMC should be disclosed in the offer document
e. True
f. False
👁Answer
Correct Answer: e. True
79. Who among the following are not eligible to invest in MF
e. Indian Companies
f. Banks
g. Non Banking Finance Companies
h. Foreign Citizens
👁Answer
Correct Answer: h. Foreign Citizens
80. NRIs are eligible to invest in Mutual Funds
a. True
b. False
👁Answer
Correct Answer: a. True
81. The most important link between Mutual Fund and Investors is
e. Government
f. SEBI
g. Fund distributors
h. AMFI
👁Answer
Correct Answer: g. Fund distributors
82. Are Overseas Corporate Bodies allowed to invest in Mutual Funds
e. No
f. Yes
g. if Ministry of Finance approves
h. if AMFI approves
👁Answer
Correct Answer: f. Yes
83. Who among the following are not Institutional Investors
e. Banks
f. Resident Individuals
g. Provident Funds
h. Non Banking Finance Companies
👁Answer
Correct Answer: f. Resident Individuals
84. It is compulsory to use fund agents/intermediaries for investing MFs
e. True
f. False
👁Answer
Correct Answer: f. False
85. Generally, which category of investors need advice for Investing in Mutual Funds v c. Non Banking Finance Companies
d. Insurance Companies
e. Foreign Institutional Investors
f. Individuals
👁Answer
Correct Answer: f. Individuals
86. Most eligible investors of Mutual Funds can broadly be grouped into either individual or institutional investors
e. True
f. False
👁Answer
Correct Answer: e. True
87. Commission rates or loads applicable to big investors and small investors are
e. same
f. different
g. not charges to either
h. none of the above
👁Answer
Correct Answer: f. different
88. What document Mutual Fund distributors need to refer for finding out eligible category of investors in a particular Mutual Fund Scheme
e. SEBI Regulations Manual
f. AMFI booklet
g. Offer document
h. RBI Guidelines
👁Answer
Correct Answer: g. Offer document
89. As per AMFI figures, how many agents approximately, are there in India selling Mutual Funds
e. 50000
f. 100000
g. 75000
h. 150000
👁Answer
Correct Answer: f. 100000
90. Which Mutual Fund has majority of the agents selling its Mutual Fund units in India
e. LIC Mutual Fund
f. UTI Mutual Fund
g. SBI Mutual Fund
h. None of the above
👁Answer
Correct Answer: f. UTI Mutual Fund
91. Mutual Fund agents/distributors are not allowed to sell Financial Products other than Mutual Funds
c. True
d. False
👁Answer
Correct Answer: d. False
92. Are Mutual Fund agents/distributors in India required to pass any examination to qualify to sell Mutual Fund Units
c. Yes, a test conducted by AMFI
d. Yes, a test conducted by SEBI
e. No
f. a Post Graduate university course
👁Answer
Correct Answer: c. Yes, a test conducted by AMFI
93. How many major distributor Companies are there in India selling Mutual Fund units
c. approximately 9
d. approximately 11
e. approximately 10
f. approximately 25
👁Answer
Correct Answer: e. approximately 10
94. The offer document is not a legal document
e. True
f. False
👁Answer
Correct Answer: f. False
95. A copy of all changes in the offer document has to be filed with SEBI
c. True
d. False
👁Answer
Correct Answer: c. True
96. The legal responsibility for the accuracy of the statements made in the offer document lies with
e. SEBI
f. the AMC
g. AMFI
h. the Company Law Board
👁Answer
Correct Answer: f. the AMC
97. Though the offer document of a scheme is prepared as per SEBI Regulations and is filed with SEBI, SEBI does not certify the accuracy or adequacy of the document
f. True
g. False
👁Answer
Correct Answer: f. True
98. The following need not be covered in a Key Information Memorandum
c. Risk Factors
d. Opening, Closing and earliest Closing Date of the offer
e. Disclaimer Clause
f. Functions and responsibilities of the sponsor, trustees, AMC and Custodian responsibilities
👁Answer
Correct Answer: f. Functions and responsibilities of the sponsor, trustees, AMC and Custodian
responsibilities
99. The front page of an offer document need not cover
e. opening, closing and earliest closing date of the offer
f. disclaimer clause
g. legal and regulator compliance
h. price of units
👁Answer
Correct Answer: g. legal and regulator compliance
100. A "glossary" of Defined Terms must be included in the offer document
e. True
f. False
👁Answer
Correct Answer: e. True
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