101. Standard risk factors are not
g. market driven
h. common to all schemes
i. of relevance to novice investors
j. new to a regular investor
👁Answer
Correct Answer: j. new to a regular investor
102. The risk of a scheme's NAV moving up or down on the basis of capital market movements is a standard risk factor
i. True
j. False
👁Answer
Correct Answer: i. True
103. Past performance of a sponsor/AMC mutual fund is not indicative of the future performance of the scheme. This is
i. not true
j. a standard risk factor for all schemes
k. a scheme-specific risk factor
l. applicable only to gilt funds
👁Answer
Correct Answer: j. a standard risk factor for all schemes
104. Risk arising from a scheme's investment objective/strategy and proposed asset allocation is i. not present
j. common to all schemes
k. specific to that scheme
l. not applicable to debt funds
👁Answer
Correct Answer: k. specific to that scheme
105. In an assured returns scheme, if assurance is only for a limited period, it must be stated in the offer document that there is no guarantee for sustaining the assured return for the remaining duration of the scheme
i. True
j. False
👁Answer
Correct Answer: i. True
106. If the AMC is managing a fund for the first time, this information can be found in
i. newspapers
j. SEBI
k. AMFI Newsletter
l. Offer document
👁Answer
Correct Answer: l. Offer document
107. A compliance officer
i. stands guarantee to the information contained in the offer document
j. belongs to SEBI
k. cannot certify that the AMC's legal and procedural obligations are fulfilled
l. cannot be appointed by the AMC
👁Answer
Correct Answer: i. stands guarantee to the information contained in the offer document
108. The due diligence certificate that must be submitted to SEBI along with the draft offer document cannot be signed by
i. the managing director of the AMC
j. an executive director of the AMC
k. the compliance officer
l. Investor relations officer
👁Answer
Correct Answer: l. Investor relations officer
109. A due diligence certificate does not certify that
g. the draft offer document forwarded to SEBI is in accordance with SEBI regulations
h. all legal requirements connected with launching of the scheme have been complied with
i. disclosures made in the offer document are true, fair and adequate
j. the AMC guarantees a good performance
👁Answer
Correct Answer: j. the AMC guarantees a good performance
110. In developed countries, an important Mutual Fund marketing channel is through
i. Insurance Companies
j. Banks
k. Non-Banking Finance Companies
l. Retail Distributors
👁Answer
Correct Answer: j. Banks
111. Emerging or new channel for distributors/marketing of Mutual Fund in India is
i. Insurance Companies
j. Banks
k. Qualified Mutual Fund agents
l. Direct Sales agents of respective mutual funds
👁Answer
Correct Answer: j. Banks
112. Mutual Funds often use their own employees to mobilise funds from
g. retail investors
h. High Networth individuals/institutional investors
i. all investors
j. foreign investors
👁Answer
Correct Answer: i. all investors
113. Retail distribution channels are a critical element in the distribution of mutual funds in India
i. True
j. False
👁Answer
Correct Answer: i. True
114. "Sales Practices" cover the following areas
i. desirable marketing practices
j. agents' responsibilities to the investor
k. ethical code of conduct
l. all of the above
👁Answer
Correct Answer: l. all of the above
115. The following are not termed as "sales practices"
i. agents commission
j. before-and after-sales service to investors
k. advertising of schemes
l. stock broking
👁Answer
Correct Answer: l. stock broking
116. Sales practices are never mandated by regulators, but arise from convention only
i. True
j. False
👁Answer
Correct Answer: j. False
117. Agents are compensated by mutual funds
i. through salaries
j. through commissions
k. through an annual fee
l. not in cash but in kind
👁Answer
Correct Answer: j. through commissions
118. In India the minimum or maximum commissions payable to distributors are not prescribed by law, but are decided using the fund's own discretion
i. True
j. False
👁Answer
Correct Answer: i. True
119. Lowest commissions are paid on
i. Equity funds
j. tax benefit schemes of mutual funds
k. debt funds
l. long-term investments in mutual funds
👁Answer
Correct Answer: k. debt funds
120. Excess distribution expenses are to be borne by the
i. AMC
j. unit holders
k. SEBI
l. AMFI
👁Answer
Correct Answer: i. AMC
121. To cover fund distribution expenses, open ended funds
g. charge a fee from agents
h. charge entry and exit loads from investors
i. create a reserve
j. sell investments
👁Answer
Correct Answer: h. charge entry and exit loads from investors
122. Trail commission means paying
i. no commission at all
j. the entire commission up-front
k. part of the commission up-front and the balance in phases
l. the entire commission after five years
👁Answer
Correct Answer: k. part of the commission up-front and the balance in phases
123. Sub-brokers serve as agents of the principal broker and a mutual fund is not answerable for their activities
i. True
j. False
👁Answer
Correct Answer: i. True
124. In India, Mutual fund agents' rate and services are at present defined by
g. SEBI rules
h. stock exchange bye-laws
i. AMFI rules
j. convention
👁Answer
Correct Answer: j. convention
125. Along with the application, it is mandatory to distribute
i. investment rebate
j. offer document
k. key information memorandum
l. none of the above
👁Answer
Correct Answer: k. key information memorandum
126. To sell funds effectively, an agent need not
g. be fully aware of the important characteristics of the scheme
h. know his/her client's risk profile
i. give after sales service
j. offer large investment rebates
👁Answer
Correct Answer: j. offer large investment rebates
127. For investors to correctly compare performance of different funds SEBI's advertising codes include
i. uniform computation of yields
j. uniform presentations of dividends
k. identical time periods
l. all of the above
👁Answer
Correct Answer: l. all of the above
128. SEBI's advertising code mandate that all performance calculations in a fund's advertisement should be based
g. NAV
h. the NSE Fifty Index
i. the BSE Sensex
j. none of the above
👁Answer
Correct Answer: g. NAV
129. An agent's appointment by a fund
i. requires SEBI's approval
j. is a lengthy and cumbersome process
k. is mandatorily preceded by an AMFI
l. does not require any approval
👁Answer
Correct Answer: l. does not require any approval
130. An investor does not have recourse to his agent in case of errors, problems or the quality of the investment
c. True
d. False
👁Answer
Correct Answer: c. True
131. An agent can offer and sell a funds's units at
i. any price he chooses
j. a price determined by competition among agents
k. a price based on demand for that fund's units
l. the public offering price currently in effect
👁Answer
Correct Answer: l. the public offering price currently in effect
132. All buy orders through an agent do not become valid till the fund accepts and confirms the orders
i. True
j. False
👁Answer
Correct Answer: i. True
133. When an agent purchases, offers or sells units, ensuring compliance with applicable regulations is the responsibility of
i. the fund
j. the agent
k. AMFI
l. SEBI
👁Answer
Correct Answer: j. the agent
134. The terms of appointment of a broker by a fund are
g. laid down by SEBI
h. laid down by AMFI
i. not uniform to all funds
j. none of the above
👁Answer
Correct Answer: i. not uniform to all funds
135. The code of ethics for mutual funds published by AMFI
g. is mandatory
h. is in the form of recommended practices
i. is unfavourable to investors
j. does not cover distribution and selling practices
👁Answer
Correct Answer: h. is in the form of recommended practices
136. The AMFI code of ethics does not cover the following prescriptions
g. Adequate disclosures should be made to the investors
h. Funds should be managed in accordance with stated investment objectives
i. conflict of interest should be avoided in dealings with directors or employees
j. each investment decision should be approved by investors
👁Answer
Correct Answer: j. each investment decision should be approved by investors
137. Distribution and sales practices are only partly regulated by SEBI at present
i. True
j. False
👁Answer
Correct Answer: i. True
138. Which of the following distribution channels is preferred by private mutual funds
i. Individual Agents
j. Small Distribution companies
k. established distribution companies
l. the Internet
👁Answer
Correct Answer: k. established distribution companies
139. Which of the following sales practices is prescribed by regulation
i. AMFI Code of Ethics
j. SEBI Advertising
k. AMFI's Code for Agents
l. None of the above
👁Answer
Correct Answer: j. SEBI Advertising
140. In a mutual fund investors' subscriptions are accounted for as
i. liabilities
j. deposits
k. unit capital
l. none of the above
👁Answer
Correct Answer: k. unit capital
141. Investments made by a mutual fund on behalf of investors are accounted as
e. assets
f. liabilities
g. capital
h. none of the above
👁Answer
Correct Answer: e. assets
142. Liabilities in the balance sheet of a mutual fund are
g. in the form of long-term loans
h. strictly short term in nature
i. combination of long term and short term
j. not allowed as per regulations
👁Answer
Correct Answer: h. strictly short term in nature
143. Net Asset Value (NAV) of a mutual fund scheme is defined as the schemes
g. assets minus liabilities
h. assets per unit
i. assets minus liabilities per unit
j. none of the above
👁Answer
Correct Answer: i. assets minus liabilities per unit
144. The day on which NAV is calculated by a fund is known as
g. computation date
h. valuation date
i. record date
j. book closure date
👁Answer
Correct Answer: h. valuation date
145. A funds NAV is affected by
e. Purchase and sale of investment securities
f. valuation of all investment securities held
g. units sold or redeemed
h. all of the above
👁Answer
Correct Answer: h. all of the above
146. When computing NAV of fund SEBI requires accrual of major expenses to be accounted
i. quarterly
j. annually
k. on a day to day basis
l. when actually paid
👁Answer
Correct Answer: k. on a day to day basis
147. If a fund calculates NAV daily, it will include all the transaction concluded up to
h. last week
i. last two days
j. previous day
k. today
👁Answer
Correct Answer: k. today
148. For a open-ended fund,the repurchase price should not be lower than
g. NAV
h. 95% of NAV
i. 93% of NAV
j. 97% of NAV
👁Answer
Correct Answer: i. 93% of NAV
149. For a close-ended fund, the repurchase price should not be lower than
i. NAV
j. 95% of NAV
k. 93% of NAV
l. 97% of NAV
👁Answer
Correct Answer: j. 95% of NAV
150. For a scheme that has a load, the AMC can change an investment management fee not exceeding
g. 1.50%
h. 2.00%
i. 1.25%
j. 0.50%
👁Answer
Correct Answer: i. 1.25%
151. Initial expenses of launching schemes should not exceed
k. 15% of amount received
l. 10% of amount raised
m. 6% of amount raised
n. 5% of the amount raised
👁Answer
Correct Answer: m. 6% of amount raised
152. Which of the following expenses cannot be charged to the scheme
k. Audit fees
l. costs related to investor communication
m. winding costs for terminating the scheme
n. penalties and fines for infraction of laws
👁Answer
Correct Answer: n. penalties and fines for infraction of laws
153. Which of the following are not true for Equity Linked Savings Schemes?
m. Investors can claim an income tax rebate
n. There is a lock-in period before investment can be withdrawn
o. There are not specific restrictions on investment objectives for the fund managers
p. These funds cannot invest in equity
👁Answer
Correct Answer: p. These funds cannot invest in equity
154. Which of the following is not true for Index Funds
m. These funds invests in the shares that constitute a specific index
n. The investment in shares is in the same proportion as in the index
o. These funds take only the overall market risk
p. These funds are not diversified
👁Answer
Correct Answer: p. These funds are not diversified
155. The structure which is required to be followed by mutual funds in India is laid down by
k. Financial Ministry
l. Securities & Exchange Board of India (SEBI)
m. Fund Sponsor
n. Association of Mutual Funds of India (AMFI)
👁Answer
Correct Answer: l. Securities & Exchange Board of India (SEBI)
156. The Board of Trustees of a mutual fund:
m. act as a protector of investors' interests
n. directly manage the portfolio of securities
o. do not have the right to dismiss the AMC
p. cannot supervise and direct the working of the AMC
👁Answer
Correct Answer: b. fund size
157. The AMC of a mutual fund cannot
m. undertake advisory services or financial consulting
n. cannot invest the funds in government paper
o. act as a trustee of more than one mutual fund
p. cannot invest the funds in securities
👁Answer
Correct Answer: o. act as a trustee of more than one mutual fund
158. The trust that manages a mutual fund is appointed by
m. The Finance Ministry
n. R.B.I
o. SEBI
p. The sponsor of that mutual fund
👁Answer
Correct Answer: o. SEBI
159. The custodian of a mutual fund:
k. is appointed for safekeeping of securities
l. need not be an entity independent of the sponsors
m. not required to be registered with SEBI
n. does not give or receive deliveries of physical securities
👁Answer
Correct Answer: k. is appointed for safekeeping of securities
160. Transfer Agents of a mutual fund are not responsible for
m. issuing and redeeming units of the mutual fund
n. updating investor records
o. preparing transfer documents
p. investing the funds in securities markets
👁Answer
Correct Answer: p. investing the funds in securities markets
161. Distributors or agents
m. can distribute several mutual funds simultaneously
n. cannot appoint sub-agents or sub-brokers
o. should be only individuals not companies or banks
p. should not be an employee or associate of the AMC
👁Answer
Correct Answer: m. can distribute several mutual funds simultaneously
162. A transfer in the management of a close-ended scheme does not require the consent of
k. unit holders with 75% voting rights
l. SEBI
m. Trustees
n. AMC
👁Answer
Correct Answer: n. AMC
163. The fund sponsor has to contribute
k. nothing to the AMC
l. the total networth of the AMC
m. atleast 40% of the AMC's networth
n. exactly 50%
👁Answer
Correct Answer: m. atleast 40% of the AMC's networth
164. The sponsor of a mutual fund may be compared to
m. a director in a Company
n. the Chief Executive of a Company
o. Promoter of a Company
p. an equity shareholder in a Company
👁Answer
Correct Answer: o. Promoter of a Company
165. Issuing and redeeming units of a mutual fund is the role
m. the custodian
n. the transfer agent
o. the trustees
p. the bankers
👁Answer
Correct Answer: n. the transfer agent
166. The fund sponsors should have a sound financial track record of
k. 7 years
l. 12 months
m. 5 years
n. 3 years
👁Answer
Correct Answer: n. 3 years
167. The networth of an asset management company should be greater than
m. Rs.100 Crores
n. can be decided by the Sponsor
o. should be atleast Rs. 10 Crores at all times
p. should be greater than Rs.10 Crores
👁Answer
Correct Answer: o. should be atleast Rs. 10 Crores at all times
168. The AMC and directors are answerable to
k. Stock Exchanges
l. The Board of Trustees
m. Agents and distributors
n. Stock Brokers
👁Answer
Correct Answer: l. The Board of Trustees
169. The role of an AMC is to act as
1. promoters
2. investment managers
3. distribution agents
4. regulators
👁Answer
Correct Answer: 2. investment managers
170. A change in the following key people does not materially impact the performance of the fund
m. Fund sponsors
n. Trustees of the fund
o. Fund Manager
p. Members of the AMFI Committee
👁Answer
Correct Answer: o. Fund Manager
171. To transfer the management of a scheme from one AMC to another, the consent of the following is required
k. SEBI
l. Unit holders
m. both SEBI and unit holders
n. none of the above
👁Answer
Correct Answer: m. both SEBI and unit holders
172. As per SEBI's principles, the AMC and the Board of Trustees of a fund should belong to the same sponsors
m. True
n. False
👁Answer
Correct Answer: n. False
173. After UTI, the first mutual funds were started by
k. private sector banks
l. public sector banks
m. financial institutions
n. non-banking finance companies
👁Answer
Correct Answer: l. public sector banks
174. The highest authority among the following is the
k. SEBI
l. Company Law Board
m. RBI
n. Ministry of Finance
👁Answer
Correct Answer: n. Ministry of Finance
175. The entity that SEBI does not regulate is
m. share registrars
n. mutual funds
o. stock exchanges
p. non-banking finance companies
👁Answer
Correct Answer: p. non-banking finance companies
176. The accounts and all other records of an AMC are filed with
k. AMFI
l. Registrar of Companies
m. Agents' Association
n. UTI
👁Answer
Correct Answer: l. Registrar of Companies
177. A close-ended scheme of a mutual fund is not governed by
m. Exchange Rules of the stock exchange where it is listed
n. Listing Agreement between the fund and the stock exchange
o. guidelines issued by the Ministry of Commerce
p. Companies Act provisions relating to transactions in securities
👁Answer
Correct Answer: o. guidelines issued by the Ministry of Commerce
178. The entry of mutual funds in India was initiated by mutual funds set up by
k. Public Sector Banks
l. Private Sector mutual funds
m. Unit Trust of India
n. mutual funds set up by insurance companies
👁Answer
Correct Answer: m. Unit Trust of India
179. For a close-ended scheme to change its fundamental attributes, it must obtain the consent of
m. 50% of unit holders
n. 50% of trustees
o. 75% of unit holders
p. none of the above
👁Answer
Correct Answer: o. 75% of unit holders
180. The largest corpus of investable funds in India is with
e. Bank-owned mutual funds
f. Private Sector mutual funds
g. UTI
h. Insurance Companies
👁Answer
Correct Answer: g. UTI
181. The Board of Trustees of the UTI does not have nominees from
m. RBI
n. LIC
o. IDBI
p. The Bombay Stock Exchange (BSE)
👁Answer
Correct Answer: p. The Bombay Stock Exchange (BSE)
182. UTI Cannot provide
k. corporate finance
l. engage in real estate and property development business
m. provide merchant banking services
n. invest in securities
👁Answer
Correct Answer: l. engage in real estate and property development business
183. The "Capital" of a scheme does not include
m. unit capital
n. reserves
o. borrowing
p. networth of the AMC
👁Answer
Correct Answer: p. networth of the AMC
184. Which of the following are Self Regulatory Organisations
SEBI
k. Bombay Stock Exchange
l.SEBI
m. AMFI
n. RBI
👁Answer
Correct Answer: m. AMFI
185. A Self Regulatory Organisation can regulate
k. all entities in the market
l. only its own members in a limited way
m. its own members with total jurisdiction
n. no entity at all
👁Answer
Correct Answer: l. only its own members in a limited way
186. The amount of authority enjoyed by a
1. self-regulatory organisation is defined by
2. the apex regulatory authority
3. company law board
4. its own members
5. RBI
👁Answer
Correct Answer: 1. self-regulatory organisation is defined by
187. The role of AMFI in the mutual funds industry is not to
k. promote the interests of the unit holders
l. set a Code of Ethics
m. regulate mutual funds
n. crease public awareness of mutual funds in the country
👁Answer
Correct Answer: m. regulate mutual funds
188. The rights of investors in a mutual fund scheme are laid down in
m. the Offer Document of that scheme
n. Quarterly Reports
o. Annual Reports
p. marketing brochures
👁Answer
Correct Answer: m. the Offer Document of that scheme
189. Unit holders of a mutual fund scheme do not have a right to
m. proportionate ownership of the scheme's assets
n. dividend declared for that scheme
o. dividend declared for other schemes of the mutual funds
p. income declared under that scheme
👁Answer
Correct Answer: p. income declared under that scheme
190. After dividend declaration, unit-holders are entitled to receive dividend within
m. one week
n. one month
o. 42 days
p. six weeks
👁Answer
Correct Answer: n. one month
191. Unit holders' right to information does not include
i.obtaining from the trustees any information having an adverse effect on their investments
j. inspecting major documents of a fund
k. receiving of a copy of the annual financial statements of that fund
l. approving investment decisions of the fund
👁Answer
Correct Answer: l. approving investment decisions of the fund
192. Shortfalls in the case of assured returns schemes are met
k. by sponsors of such schemes
l.only if the offer document specifically provided such a guarantee by a named sponsor
m. the Government of India
n. AMFI
👁Answer
Correct Answer: l.only if the offer document specifically provided such a guarantee by a named
sponsor
193. Unit-holders aggrieved by a Fund or AMC can get redressed from
k. Consumer Courts
l. SEBI
m. AMFI
n. RBI
👁Answer
Correct Answer: l. SEBI
194. If the Directors of an AMC commit fraud, Unit holders investments' cannot be protected by the Department of Company Affairs and the Company Law Board
k. True
l. False
👁Answer
Correct Answer: k. True
195. The responsibilities of a unit-holder do not include:
i. Monitor his investments carefully
j. being aware of information that affects his investment in a major way
k. carefully studying the offer document
l. taking decisions about where the fund managers should invest
👁Answer
Correct Answer: l. taking decisions about where the fund managers should invest
196. UTIs scheme US-64 falls under the purview of SEBI
m. True
n. False
👁Answer
Correct Answer: n. False
197. UTI was set up by
l. SEBI
m. AMFI
n. A special act
o. RBI
👁Answer
Correct Answer: n. A special act
198. Bank owned Mutual Funds are supervised by
k. SEBI
l. RBI
m. jointly by SEBI & RBI
n. AMFI
👁Answer
Correct Answer: m. jointly by SEBI & RBI
199. Investor does not have the right to receive any interest from an AMC if his redemption proceeds are not despatched within 10 working days
m. True
n. False
👁Answer
Correct Answer: n. False
200. If an investor failed to claim his redemption proceeds within 3 years, he can claim the proceeds at
k. Par
l. Prevailing NAV
m. the on the date he has applied for redemption
n. 15% below the prevailing NAV
👁Answer
Correct Answer: k. Par
