1 .

A mutual fund is not

a.Company that manages an investment portfolio*
b. A portfolio of stocks, bonds and other securities
c.A pool of funds used to purchase securities on behalf of investors.
d.A collective investment vehicle.
2 . Unit capital of a MF scheme is Rs 20 million; the market value of the investments is Rs 55 million.
The No of units are! Million. The NAV is
a.Rs 20
b. Rs 75
c.Rs 55
d.Not possible to say.*
3 . Which of the following is untrue about the Automatic Reinvestment plan?
a.The plan allows for the automatic reinvestment of all income and capital gains
b. Automatic reinvestment allows for the accumulation of additional units of the fund.
c.The major benefit of the automatic reinvestment is the compounding of the returns.
d.The benefit of automatic reinvestment is often lost, if reinvestment is subject to a heavy load
4 . Constrains imposed by most of the funds on Cheque writing include
a.Requirement of minimum a/c balance after withdrawal
b. Specification of a minimum amount for which Cheque can be issued
c.Limit on the No of Cheque that are allowed to be issued in a month.
d.Both 1 & 2
5 . Which of the following is true about SWP?
a.It allows the investors to make Systematic withdrawal from his fund.
b. It is suitable for the investors seeking regular income
c.SWP is similar to monthly income plan.
d.Only A & B
6 . Choose the correct statement-Alternative Investment Plans offered by the fund allows investors
a.Freedom with respect to investing one time or at regular intervals
b. Making transfers to different schemes with the same fund family.
c.Receiving income at specified intervals or accumulating distributions.
d.All of above.
7 . The current market price of a 9% coupon bond when other bonds of similar maturities pay 11%
will be
a.Above Par
b. Below par
c.At Par
d.Will be unrelated to other bonds.
8 . Yield and price of a bond move
a.In opposite direction
b. Together in the same direction
c.In an unrelated fashion
d.In line with the inflation index
9 . 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 borrower.
b. A scheme must diversify its holdings and thus reduce po0rtfolio risk.
c.Investment grade ratings cannot be solely relied upon.
d.SEBI wants to leave some room for the investment in the non-investment grade securities by the scheme.
10 . Technical analysis tries to predict future movement of stock price by analyzing
a.The financial workings of a company
b. The stock price movements of a company
c.Both of the above
d.None of the above
11 . Which of the following is false?
a.ROI is a measure similar to total return with reinvestment of the distributions.
b. Total return with reinvestment of the distributions assumes reinvestment at NAV on the distribution date.
c.As a measure of the performance, Total Return with reinvestment of the distributions seeks to overcome
the shortcomings of simple total returns.
d.Because of its simplicity, simple Total Return is preferred in practice to total return with reinvestment of the
distributions.
12 . Returns can be annualized and compounded only if the scheme has completed
a.30 days
b. 12 Months
c.6 months
d.24 Months
13 . An equity scheme is 90 days old. To compute its yield, it can use
a.Absolute return
b. Simple annualized return
c.Compounded annualized return
d.Any of these
14 . Financial planning is
a.Investing funds to receive the highest rate of return possible.
b. Resorting to tax planning to keep taxes as low as possible.
c.Planning for retirement with the maximum income possible.
d.Process of solving the financial problems and reaching financial goals.
15 . Which of the following portfolio is most risky?
a.75% equity-25 % Debt
b. 40 %equity-60% debt.
c.60%equity – 40% debt
d.80% equity- 20% debt
16 . A criticism of rupee cost averaging is
a.Investment is for the same amount at regular intervals.
b. Over a period of time average per share price will be more then guessing the highs and lows.
c.It does not tell you when to buy, sell or switch from scheme to scheme
d.Rupee cost averaging has no serious shortcomings.
17 . If you maintain a flexible ratio of the asset allocation, would you
a.rebalance the debt/equity allocation periodically
b. rebalance the debt/equity allocation very frequently
c.generally avoiding the portfolio rebalancing.
d.keep fixed percentages of the equity and debt investments at all the time.
18 . SIP is the best example of the
a.Rupee cost averaging
b. value averaging
c.Buy and hold
d.None of the above
19 . Direct investments in stock markets can be a better option over investing through mutual fund
if.
a.The investor wants better returns than those offered by mutual funds.
b. The investor has large capital, knowledge and resources for research
c.The investor has identified a bullish phase in the stock market.
d.The investor wants to invest for the long term.
20 . An investor in need of the regular income should not select
a.A bank deposit
b. A debt fund
c.An equity growth fund
d.PPF
21 . Which of the following has the highest level of liquidity?
a.Equity
b. PPF
c.Company fixed deposits
d.Mutual funds
22 . Which of the following should not be viewed primarily as an investment option?
a.Mutual funds
b. Equity shares
c.Life insurance
d.None of the above
23 . 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 highest risk – 1.Balanced Fund,2.A stock index fund,3.A liquid
(Money market fund),4.A pharma sector fund
a.1,2,3,4
b. 1,3,4,2
c.3,1,2,4
d.2,3,1,4
24 . Ex Marks (or R-squared factor) of a fund measures
a.How much of a fund’s NAV movement is due to the market index movement
b. How a fund’s NAV movement relates to the market index movement.
c.How much of a fluctuation has occurred in a fund’s NAV over a historical period
d.How many marks a credit rating agency accords to a fund.
25 . Which is a better investment option whilst selecting an equity fund?
a.Ex marks 75%, Beta-0.9, Gross dividend yield 8%
b. Ex marks 80%, Beta-0.9, Gross dividend yield 8%
c.Ex marks 90%, Beta-0.8, Gross dividend yield 9%
d.Either 1 Or 3
26 . Which of the following is true? Some close-ended funds sell at a discount to their NAV because
a.Of high expenses ratios
b. Investors expect that current NAV cannot be sustained by future potential.
c.The repurchase price fixed by the fund is lower than the NAV.
d.Of the inherent risk of closed end fund.
27 . If the entry load is 2% and the NAV is Rs 10, then the investor will have to pay for 1000 units.
a.Rs 15000
b. Rs8000
c.Rs12000
d.Rs10200
28 . Which of the following mutual funds was not set up within the phase 2 : 1987-1993?
a.Canbank Mutual Fund
b. Kothari Pioneer Mutual fund.
c.SBI Mutual fund
d. LIC Mutual fund
29 . 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 risk.
c.Investor can save costs.
d.Investor can get professional management to manage his money.
30 . Which of the following has the lowest risk?
a.Liquid Fund (MMMF)
b. Gilt funds
c.Diversified Debt fund.
d.Diversified Equity fund
31 . The Sponsor of a mutual fund may be compared to
a.A director in a company
b. The chief executive of the company
c.The promoter of a company
d.An equity shareholder of a company
32 . Issuing additional fresh units and redeeming the existing units of a mutual fund scheme is the
role of
a.The custodian
b. The transfer agents
c.The trustees
d.The bankers
33 . The appointment of the AMC for the mutual fund can be terminated by
a.Majority of directors of the trustees
b. 50% of the unit holders
c.45% of the Unitholders
d.60% of the unitholders
34 . The AMC shall make investment decisions solely in the interest of
a.The sponsor
b. The trustees
c.The unitholders
d.It’s Employees
35 . Mutual funds in India are set up as a
a.Company
b. Trust
c.Partnership
d.Association of persons
36 . Minimum No of the independent directors on the board of AMC is
d.Two thirds
37 . Under the India Trusts Act the interests of the unit holders is safe guarded by
a.A board of trustees
b. A trustee company
c.Either
d.Neither
38 . The AMC is appointed by
a.SEBI
b. Unitholders
c.Sponsor
d.Trustee
39 . Who needs to sign the trust deed with the trustee?
a.AMC
b. Sponsor
c.Custodian
d.All the above.
40 . Which of the following qualifies as a Self Regulatory Organisation?
a.SEBI
b. RBI
c.NSE
d.AMFI
41 . Whose consent is required to approve a change in the fundamental attributes of a close end
scheme?
a.50% of the unitholders
b. 50% of the trustees
c.75% of the unit holders
d.None of the above
42 . Which schedule of SEBI (Mutual Fund) regulations 1996 specifies the contents of the trust deed?
a.Eleventh schedule
b. Eighth Schedule
c.First Schedule
d.Third schedule
43 . In the case of a dispute, against whom can the unit holders initiate the legal proceedings?
a.Trust
b. Trustees
c.AMC
d.None of the above
44 . Mutual funds are regulated by
a.RBI
b. AMFI
c.SEBI
d.NSE
45 . The first time investor would be well advised to refer to
a.Detailed offer documents
b. The Key Information Memorandum only
c.Either of the above
d.None of the above
46 . Which of the following is true of the offer document?
a.Investor gets all the informations to evaluate the performance of the proposed scheme.
b. Investor gets useful information to evaluate the performance of the AMC’s past schemes.
c.Investor does not get any information on the 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
47 . The abridged offer document contains the address of the following
a.The trustees of the mutual fund
b. The directors of the AMC
c.The Registrars and Transfer agents.
d.A & B
48 . Validate the statement – The investor is not obligated to read the offer document before
investing in units of a scheme.
a.Completely true
b. Rarely true
c.Completely False
d.Partly false
49 . Offer documents have to be updated within
a.One year from the date of issue
b. Two years from the date of issue
c.Six months from the date of the issue.
d.None of these
50 . The front page of the offer document contains
a.Date of its publication
b. Name and type of the fund.
c.Major objectives of the fund
d.A & B
51 . To A prospective investor the reliable source of pertinent information about a scheme is
a.Financial Press
b. Offer document
c.AMFI website
d.Advice from the distributor
52 . Which of the following distribution channels is preferred by private mutual funds?
a.Individual distributor
b. Small distribution companies
c.Established distribution companies
d.The internet
53 . Which of the following sales practices is prescribed by regulation?
a.AMFI code of ethics
b. SEBI advertising code
c.AMFI’s code for agents
d.None of the above
54 . Risk factors may not be mentioned in
a.Product launch advertisement
b. Tombstone advertisement
c.Performance advertisement
d.All of the above advertisements
55 . An NRI hold units in a mutual fund. What should he do with his holding if he takes up a foreign
citizenship?
a.He redeems
b. He continues
c.he transfers the units to his mother, who resides in India
d.None of the above
56 . Which is the most appropriate position under MF regulations?
a.Buyer beware
b. Buyer is always right
c.Seller is always right
d.Seller is guilty unless proved right
57 . According to SEBI’s code for mutual fund advertisement, for fund that have been in existence
for more then a year, annualized returns have to be furnished for
a. 1 yr, 3 yr, 5 yr, and since launch
b. 1 yr, 5 yr, and since launch
c.1 yr, 3 yr, and since launch
d.1 yr, 3 yr, and 5 yr
58 . An Open-end fund with 10000 units outstanding had the following items in its balance
sheet:,Investments at market value Rs. 100000,Other assets Rs. 20000,Current liabilities Rs.
25000,Calculate the fund’s NAV per unit.
a.Rs.9.5
b. Rs.12
c.Rs.10
d.Rs.14.5
59 . A closed-end equity fund has average weekly net assets of Rs. 200 crores. As per SEBI’s
regulations, the AMC can charge the fund with investment and advisory fees upto.
a.Rs.2.25 crores
b. Rs.2 crores
c.Rs.2.5 crores
d.Rs. 3 crores
60 . Income earned by a mutual fund registered with SEBI is exempt from Income –Tax as per
section
a.10(23D)
b. 10(33)
c.Total income is taxable @ 33.2%
61 . MF regulations prescribes
a.The minimum commission to the distributor
b. The maximum commission to the distributor
c.The minimum as well as maximum commission to the distributor
d.Neither the minimum nor the maximum commission to the distributor