401. An equity fund's age and size are irrelevant when selecting a fund for investment
c. True
d. False
👁Answer
Correct Answer: d. False
402. The charge to an investor at the time of he redeems his units from the fund is known as
e. recovery charge
f. repurchase load
g. redemption weight
h. exit load
👁Answer
Correct Answer: g. redemption weight
403. The load amount charged to a scheme over a period of time is called
g. entry load
h. exit load
i. deferred load
j. no-load
👁Answer
Correct Answer: i. deferred load
404. Contingent Deferred Sales Charge (CDSC)
g. is higher for investors who stay invested in the scheme longer
h. is lower for investors who stay invested in the scheme longer
i.is the same for all investors irrespective of how long they stay invested
j. is not allowed to be charged to mutual fund investors in India
👁Answer
Correct Answer: h. is lower for investors who stay invested in the scheme longer
405 A fund's declared NAV does not include loads
e. True
f. False
👁Answer
Correct Answer: e. True
406. Which of the following fund types are comparable
e. An aggressive equity fund and a money market mutual fund
f. A value fund and a government securities fund
g. A bond fund and a debt fund
h. A diversified equity fund and a debt fund
👁Answer
Correct Answer: g. A bond fund and a debt fund
407. Who is the primary guardian of unitholders' funds/assets
e. The AMC
f. The Trustees
g. The Registrars
h. The custodians
👁Answer
Correct Answer: g. The Registrars
408. In case of a fund merger or Take-over
g. High Court approval may not be necessary
h. SEBI approval is a must
i. all unitholders must be informed
j. all of the above
👁Answer
Correct Answer: j. all of the above
409. Units of a money market mutual fund can be issued to
a. individuals
b. banks
c. trusts
d. all of the above
👁Answer
Correct Answer: d. all of the above
410. Though Indian mutual funds have restrictions on borrowings (only20% of net assets and for six months only) which are to meet cash needs for redemption only, UTI is allowed to borrow within more relaxed norms
g. True
h. False
👁Answer
Correct Answer: g. True
411. An equity fund can be said to be concentrated when
e. when it invests in only in two or three stocks
f. when it invests in may companies of the same sector
g. when top ten holdings account for more than 50% of net assets invested
h. when top ten holdings account for more than 25% of net assets invested
👁Answer
Correct Answer: g. when top ten holdings account for more than 50% of net assets invested
412. The size of the market capitalisation of a fund's equity holdings is inversely proportional to the returns that
a. can be expected from the fund
b. level of risk assumed by the fund
c. state of the stock market
d. all of the above
👁Answer
Correct Answer: b. level of risk assumed by the fund
413. A steady holding of investments in an equity fund's portfolio indicates
e. long-term orientation
f. lower transaction costs
g. both the above
h. none of the above
👁Answer
Correct Answer: g. both the above
414. Ex-Mark of an equity fund measures its
e. performance
f. risk
g. both the above
h. none of the above
👁Answer
Correct Answer: e. performance
415. Beta of an equity fund measures its
y. performance
z. risk
a. both the above
b. none of the above
👁Answer
Correct Answer: z. risk
416. The best equity fund, relative to others, would have
e. higher Ex Marks, lower Beta and higher Gross Dividend Yield
f. higher Ex Marks, higher Beta and higher Gross Dividend Yield
g. lower Ex Marks, lower Beta and lower Gross Dividend Yield
h. lower Ex Marks, higher Beta and higher Gross Dividend Yield
👁Answer
Correct Answer: e. higher Ex Marks, lower Beta and higher Gross Dividend Yield
417. When selecting equity funds for investing, those at the top of the performance rankings should be avoided
e. True
f. False
👁Answer
Correct Answer: e. True
418. A debt fund's age and size are not important when selecting a fund for investment
y. True
z. False
👁Answer
Correct Answer: y. True
419. Debt schemes are popular because
y. the Indian Stock Market is always going down
z. the returns are more predictable
a. most investors are always in debt
b. all of the above
👁Answer
Correct Answer: z. the returns are more predictable
420. Yield-to-maturity of a debt fund's portfolio is more important when the investment objective is
c. current income
d. total return
e. liquidity
f. all of the above
👁Answer
Correct Answer: d. total return
421. Compared to equity funds, income margins for debt funds are
e. narrow
f. higher
g. the same
h. almost nil
👁Answer
Correct Answer: e. narrow
422. Debt funds with long-term investments carry higher risk of capital loss
c. True
d. False
👁Answer
Correct Answer: c. True
423. The differerentiating factor among debt funds of comparable maturity and quality is
a. gross yields
b. costs
c. fund age
d. tenure of the fund manager
👁Answer
Correct Answer: a. gross yields
424. Distribution tax should be taken into account when computing net returns from
a. equity funds
b. debt funds
c. both the above
d. none of the above
👁Answer
Correct Answer: b. debt funds
425. All debt fund investors are exposed to risk of principal loss
e. True
f. False
👁Answer
Correct Answer: e. True
426. Running a money market mutual fund requires more of
c. credit analysis skills
d. equity analysis skills
e. patience
f. trading skills
👁Answer
Correct Answer: f. trading skills
427. Which is the most important in selecting debt fund for better return
e. past performance
f. level of interest rates
g. fund expertise
h. the securities in which it has invested
👁Answer
Correct Answer: g. fund expertise
428. Investors should be advised to avoid investing in a debt fund with a c. lower rated portfolio and higher expense ratio
d. higher rated portfolio and lower expense ratio
e. lower rated portfolio and lower expense ratio
f. lower rated portfolio and higher expense ratio
👁Answer
Correct Answer: d. higher rated portfolio and lower expense ratio
429. An ideal money market mutual fund must have
c. lower returns
d. lower expense ratio
e. low quality of investments
f. all the above
👁Answer
Correct Answer: d. lower expense ratio
430. Circumstances that might cause an investor to change the composition of his portfolio
u. cyclical changes in economy
v. unforeseen economic changes affecting the portfolio's preferred sectors
w. both the above
x. none of the above
👁Answer
Correct Answer: w. both the above
431. If a charitable trust approaches a distributor with an application for investment in a mutual fund, the distributor should
e. accept the application without wasting time
f. reject the application outright
g. refer to the offer document
h. accept the application as a direct application
👁Answer
Correct Answer: g. refer to the offer document
432. An application form for investment in a mutual fund is available with
c. the offer document
d. the abridged annual report
e. the key information memorandum
f. a bank challan
👁Answer
Correct Answer: e. the key information memorandum
433. An aggrieved unit-holder of a mutual fund can sue
g. the AMC
h. the trustees
i. the sponsor if returns have been guaranteed by them
j. none of the above
👁Answer
Correct Answer: i. the sponsor if returns have been guaranteed by them
434. As per SEBI regulations for valuation of investments held by mutual funds, a security is considered "non-traded" when it
e. has not been traded for 60 days prior to valuation
f. has not been traded for 30 days prior to valuation
g. is not listed on any stock exchange
h. is held by the mutual fund without buying or selling
👁Answer
Correct Answer: f. has not been traded for 30 days prior to valuation
435. An Ex-Mark of 100% is possible for
c. a growth fund
d. an aggressive growth fund
e. an index fund
f. a balanced fund
👁Answer
Correct Answer: e. an index fund
436. A trail commission is justified when
w. an investor cancels his investment
x. the investor redeems his investment in a very short time
y. an agent invests his own money, not that of a client
z. an agent sells many mutual funds
👁Answer
Correct Answer: x. the investor redeems his investment
in a very short time
437. Of the following, which type of fund would have a higher P/E multiple in comparison to the average market multiple
e. A Value Fund
f. A Growth Fund
g. An Index Fund
h. Could be any of the above three, one cannot generalise
👁Answer
Correct Answer: f. A Growth Fund
438. Which of the following is not true as per SEBI Regulations for Debt Funds?
e. Investment in rated debt securities of a single issuer should not exceed 15% of NAV
f. Total investment in unrated debt securities of a single issuer should not exceed 25% of NAV
g. Total investment in unrated debt securities below investment grade should not exceed 25% of NAV
h. Total investment in rated debt securities below investment grade should not exceed 25% of NAV
👁Answer
Correct Answer: f. Total investment in unrated debt securities of a single issuer should not
exceed 25% of NAV
439. A Money Market Mutual Fund is most likely to invest in
e. Corporate Bonds
f. Equity Shares
g. Government Securities with maturity less than 1 year
h. All of the above
👁Answer
Correct Answer: g. Government Securities with maturity less than 1 year
440. Of the following, which would be suitable for a retiree with a modest risk appetite
g. Value Fund
h. Diversified Equity Fund
i. Growth Fund
j. Balanced Fund
👁Answer
Correct Answer: j. Balanced Fund
441. A high portfolio turnover for a fund indicates
c. that the fund is active
d. higher transaction costs
e. both the above
f. none of the above
👁Answer
Correct Answer: e. both the above
442. Unit Trust of India's US-64 Scheme
e. is listed on stock exchanges
f. has a fixed price for sale and repurchase
g. has its sale and repurchase price declared periodicaly by UTI
h. has its price determined by market forces
👁Answer
Correct Answer: g. has its sale and repurchase price declared periodicaly by UTI
443. The Indian debt market
c. is Wholesale in nature
d. comprises large players like financial institutions and banks
e. witnesses large scale trading in government securities
f. all of the above
👁Answer
Correct Answer: f. all of the above
444. A fund that charges a load is better than a no load fund
c. True
d. False
👁Answer
Correct Answer: d. False
445. An AMC can approach investors either directly or with the help of
a. individual agents
b. banks and non-banking finance companies
c. distribution companies
d. all of the above
👁Answer
Correct Answer: d. all of the above
446. Which of the following is true for Equity Linked Savings Scheme (ELSS)
a. A tax rebate is available to investors in these schemes
b. The investment has to be locked in for 3 years
c. The minimum amount for investment is fixed
d. All of the above
👁Answer
Correct Answer: d. All of the above
447. A prospective investor
z. has the same status as a unit-holder of a fund
a. can sue the AMC/trustee
b. has no legal recourse
c. all of the above
👁Answer
Correct Answer: z. has the same status as a unit-holder of a fund
448. An investor can assess the performance of his mutual fund by comparing it with the performance of
c. other mutual fund of the same type
d. the stock market
e. other financial products
f. all of the above
👁Answer
Correct Answer: f. all of the above
449. Unrated securities in the portfolio of a mutual fund are not to be valued
e. True
f. False
👁Answer
Correct Answer: f. False
450. An exit load guarantees a higher return
a. True
b. False
👁Answer
Correct Answer: b. False
451 Bonds held in the portfolio of a mutual fund are valued at yield to maturity
e. True
f. False
👁Answer
Correct Answer: e. True
452 The Valuation of non-traded equity shares is done at the trading price 30 days prior to valuation date
i.True
j. False
👁Answer
Correct Answer: j. False
453 If a unit-holder does not agree to the merger of his fund with another, he has not exit option
k. True
l. False
👁Answer
Correct Answer: l. False
454. The most important factor look for when investing in a corporate fixed deposit is the
k. yield
l. rate of interest
m. credit rating of the deposit
n. none of the above
👁Answer
Correct Answer: n. none of the above
455. The most important reason for an investor to prefer a bank deposit to a mutual fund is
g. the credit worthiness of the bank
h. because the bank does not invest in securities
i.that the bank offers a guarantee
j. all of the above
👁Answer
Correct Answer: g. the credit worthiness of the bank
456. A deep discount bond
i. is always sold at a discount to its issue price
j. bears interest annually
k. is redeemed at a price much higher than issue price
l. bears interest at varying interests
👁Answer
Correct Answer: k. is redeemed at a price much higher than issue price
457. A mutual fund in India is a
i. body corporate
j. company
k. trust
l. an asset management company
👁Answer
Correct Answer: k. trust
458. When selling a mutual fund, a good agent would never
k. describe the past performance of the scheme
l. compare the fund with other mutual funds
m. assure a rate of return
n. compare the fund with other financial products
👁Answer
Correct Answer: m. assure a rate of return
459. An investor buys one unit of a fund at an NAV of Rs.20. He receives a dividend of Rs.3 when the NAV is Rs.21. The unit is redeemed at an NAV of Rs.22. Total Return is
e. 25.71%
f. Rs.27.51
g. 21.27%
h. Rs.21.75
👁Answer
Correct Answer: e. 25.71%
460. A fund sells 100 units of face value Rs.10/- at an NAV of Rs.12.25. How much would be credited to unit capital?
i.Rs.1225
j. Rs.225
k. Rs.1000
l. none of the above
👁Answer
Correct Answer: k. Rs.1000
461. When a scheme with assured returns is being launched, which of the following need not be published in the offer document?
i.Means of fulfilling the guarantee
j. Information for all schemes launched by the fund in the past
k. comparison with other mutual funds
l. Investment objective
👁Answer
Correct Answer: k. comparison with other mutual funds
462. Mutual fund units can be distributed by e. trustees of the fund
f. the AMC
g. Non-banking finance companies
h. banks
👁Answer
Correct Answer: h. banks
463. A debt fund distributes 10% dividend. How much tax does the investor have to pay on this dividend?
i.10%
j. 12%
k. 20%
l. None
👁Answer
Correct Answer: l. None
464. A debt fund distributes a 10% dividend. How much tax does the fund have to pay?
i.10%
j. 12%
k. 10.2%
l. None
👁Answer
Correct Answer: k. 10.2%
465. How many scrips is the NIFTY constitutes of
c. 40
d. 100
e. 30
f. none of the above
👁Answer
Correct Answer: f. none of the above
466. Which of the following is the first step in financial planning
i.Asset Allocation
j. Selection of fund
k. Studying the features of a scheme
i.Asset Allocation
👁Answer
Correct Answer: i. True
467. Why should one buy an insurance policy?
g. It gives high current returns
h. It gives good capital appreciation over its term
i.It should be bought due to the need for insurance and not as an investment
j. All of the above
👁Answer
Correct Answer: i.It should be bought due to the need for insurance and not as an investment
468. SEBI Regulations for Mutual Funds were formulated in
a. 1992
b. 1993
c. 1995
d. 1996
👁Answer
Correct Answer: d. 1996
469. Expenses incurred by a fund for printing of Key Information Memorandum can be amortised over
c. 10 Yrs
d. 5 Yrs
e. 15 Yrs
f. Cannot be amortised
👁Answer
Correct Answer: f. Cannot be amortised
470. A mutual funds' investments are guided by the
g. AMC
h. Board of Trustees
i. Investment Objectives
j. Unit holders
👁Answer
Correct Answer: i. Investment Objectives
471. UTI was the only mutual fund for the period
i. 1984 to 1988
j. 1963 to 1988
k. 1964 to 1992
l. none of the above
👁Answer
Correct Answer: j. 1963 to 1988
472. Investors who follow the fixed Asset Allocation approach
e. maintain balance in their portfolio by liquidating a part of the position in the asset class which has given higher return and reinvesting in the other asset class which has lower return
f. are not disciplined
g. increase their equity position when equity prices tend to climb
h. none of the above
👁Answer
Correct Answer: e. maintain balance in their portfolio by liquidating a part of the position
in the asset class which has given higher return and reinvesting in the other
asset class which has lower return
473. An investor should not invest in a mutual fund if
e. his capital base is large
f. he is able to carry out detailed investment research and monitor the stock market
g. both the above
h. none of the above
👁Answer
Correct Answer: g. both the above
474. Mutual fund can benefit from economies of scale because of
e. portfolio diversification
f. risk reduction
g. large volume of trades
h. none of the above
👁Answer
Correct Answer: g. large volume of trades
475. Which of the following is a disadvantage suffered by a mutual fund investor?
g. High liquidity
h. diversification
i. no tailor made portfolio
j. low investment
👁Answer
Correct Answer: i. no tailor made portfolio
476. A disadvantage suffered by mutual fund investor is that he has no control over the costs of investing
g. True
h. False
👁Answer
Correct Answer: g. True
477. Which of the following statements about UTI is untrue
i.It was set up in 1963
j. It was formed by RBI
k. It was established by an act of Parliament
l. It was not given a monopoly status
👁Answer
Correct Answer: l. It was not given a monopoly status
478. Which scheme has the largest investor base?
g. ULIP
h. UTI Mastershare
i. US-64
j. SBI Magnum
👁Answer
Correct Answer: i. US-64
479. Which was the first diversified equity investment scheme in India
g. SBI Magnum
h. UTI Mastershare
i. MEP-91
j. Mastergain-92
👁Answer
Correct Answer: h. UTI Mastershare
480. The private sector was granted permission to enter the mutual fund industry in
y. 1992
z. 1993
a. 1998
b. 1995
👁Answer
Correct Answer: z. 1993
481. The first non-UTI mutual fund was
i. SBI MF
j. LIC MF
k. Canbank MF
l. Indian Bank MF
👁Answer
Correct Answer: i. SBI MF
482. The organisation responsible for a comprehensive set of regulations for all mutual funds in India is
g. RBI
h. SEBI
i. AMFI
j. SHCIL
👁Answer
Correct Answer: h. SEBI
483. The 1999 Union Government Budget helped the Mutual Fund industry by
k. regulating the industry practices
l. exempting all mutual fund dividends in the hands of investors from income tax
m. approving the code of ethics formulated by AMFI
n. doing away with all regulations for mutual funds
👁Answer
Correct Answer: l. exempting all mutual fund dividends in the hands of investors from income
tax
484. During the period 1992-99, the mobilisation of funds by the mutual fund industry was about
i. 5% - 6% of gross domestic savings
j. 2% - 4% of gross domestic savings
k. 7% - 10% of gross domestic savings
l. 25% - 40% of gross domestic savings
👁Answer
Correct Answer: i. 5% - 6% of gross domestic savings
485. Which of the following about Public Providend Fund (PPF) are untrue
g. 50% of the balance of the 4th year can be withdrawn in the 7th year
h. The interest is tax free
i. The rate of interest is 12% p.a.
j. contributions upto Rs.60000 are eligible for tax rebate
👁Answer
Correct Answer: i. The rate of interest is 12% p.a.
486. A close-ended scheme is quoted on the stock exchange at a discount to its NAV when
a. the markets are bearish
b. investors perceive that the fund will be unable to maintain the NAV
c. the assets of the fund are undervalued
d. none of the above
👁Answer
Correct Answer: b. investors perceive that the fund will be unable to maintain the NAV
487. Which of the following is a fundamental attribute of a mutual fund scheme
i. The names and addresses of the registrars and custodians
j. The nature of the scheme being income bearing
k. The specified stocks in the scheme's portfolio
l. The name and address of the compliance officer
👁Answer
Correct Answer: j. The nature of the scheme being income bearing
488. Offer Document of a mutual fund is
i. required by investors
j. required by the AMC for its own reference
k. required as per SEBI regulations
l. not mandatory as per SEBI
👁Answer
Correct Answer: k. required as per SEBI regulations
489. The units of a scheme being sold and repurchases as per the procedure laid down is one of the fundamental attributes of a scheme
i. True
j. False
👁Answer
Correct Answer: i. True
490. The steps involved in the selection of an equity fund for investment are
k. sector selection, asset classification, selection of fund managers and schemes
l. sector selection, selection of fund managers and schemes, asset classification
m.asset classification, sector selection, selection of fund managers and schemes
n. selection of fund managers and schemes, sector selection, asset classification
👁Answer
Correct Answer: m.asset classification, sector selection, selection of fund managers and
schemes
491. Compounding of interest is best explained by a
g. balanced fund
h. growth fund
i. value fund
j. income fund
👁Answer
Correct Answer: h. growth fund
492. From whom can a unit-holder seek redressal if his complaint is not entertained by the mutual fund
i. AMC
j. Board of Trustees
k. SEBI
l. RBI
👁Answer
Correct Answer: k. SEBI
493. An investor wishes to switch between a money market mutual fund and an equity fund. What would you advise him?
g. It would be better to stick to one type of fund, the one that meets his investment objective.
h. He should keep switching parts of his investment from the equity fund to the money market fund as the market rises and switch back to the equity fund when the market falls
i.He should switch from the money market fund to the equity fund in a rising market and switch back to money market fund when the market falls
j. none of the above
👁Answer
Correct Answer: h. He should keep switching parts of his investment from the equity fund to
the money market fund as the market rises and switch back to the equity fund
when the market falls
494. For choosing an appropriate benchmark to measure a scheme's performance, all of the following are required except
e. the composition and size of the portfolio
f. the investment objective
g. historical data of fund performance
h. the nature of investments
👁Answer
Correct Answer: g. historical data of fund performance
495. Which of the following characterise the fund that a risk averse investor should choose
e. Gross dividend yield 15% Beta 1.5, Ex Marks 90
f. Gross dividend Neil 10%, Beta 1, Ex-Marks 70
g. Gross dividend yield 11%, Beta 0.9, Ex Marks 80
h. Gross dividend yield 12%, Beta 1.2, Ex Marks 80
👁Answer
Correct Answer: g. Gross dividend yield 11%, Beta 0.9, Ex Marks 80
496. A mainstream diversified debt fund is most affected by
e. reinvestment risk
f. liquidity risk
g. interest rate risk
h. default risk
👁Answer
Correct Answer: g. interest rate risk
497. If yields fall, a debt fund manager will do all of the following except
d. sell short maturity securities and buy long maturity securities
e. see that the fund's average duration becomes longer than the market's average duration
f. sell long duration securities and buy short duration securities
g. sell high coupon securities and buy low coupon securities
👁Answer
Correct Answer: f. sell long duration securities and buy short duration securities
498. In which type of schemes should an unmarried professional working HLL invest
g. Scheme investing 80% in debt securities
h. 50% in equity funds and 50% in income funds
i.90% in equity funds having a higher P/E Ratio than the market
j. all the money in a balanced fund
👁Answer
Correct Answer: i.90% in equity funds having a higher P/E Ratio than the market
499. An investor buys units in a fund that has given excellent returns in the past, but his expectations are not met as the fund does not perform well this year. The investor can
g. sue the AMC
h. sue the Trustees
i. sue the agent
j. none of the above
👁Answer
Correct Answer: j. none of the above
500. A fund's investments at market value total Rs.700 crores, Total liabilities stand at Rs.50 lacs and the number of units outstanding is Rs.28 Crores. What is the NAV
c. Rs.30.19
d. Rs.24.98
e. Rs.32.15
f. Rs.40.49
👁Answer
Correct Answer: f. Rs.40.49
