Professional Documents
Culture Documents
Series C
2. Fund merger involving 2 or more schemes of different AMCs requires consent of unit
holders with X% voting rights. X is:
a. 50
b. 100
c. 51
d. 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 reduction
b. Mutual Funds help in doubling investment
c. Both the above
d. None of the above
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 cr
b. 3.75 cr
c. 2.25 cr
d. 8 cr
7. A young couple has 2 incomes and 2 children. Jacob’s recommendation to them would
be:
a. 100% equity funds
b. 10% money market, 50-60% aggressive equity and 30-40% conservative bond
funds
c. 25% debt 75% equity growth funds
d. 80% debt and 20% equity funds
8. Role of the custodian is:
a. Managing the fund’s distribution channel
b. Making investments on behalf of the Fund Managers
c. 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 in NAV is:
a. 9%
b. 5.56%
c. 9.09%
d. 6.06%
11. In the offer document “unit & offer” describes the nature and significant attributes of
the units under offer. Which of the following is not covered under this:
a. Minimum amount to be raised
b. Period under which refund should be carried out
c. Circumstances under which refund may take place
d. Maximum target amount to be raised
13. Only one of the following is required to pass the AMFI examination:
a. Trustees
b. Officers of SEBI working in the Mutual Fund department
c. Employees in a call center dealing with mutual fund investors
d. Fund managers
14. An investor claims that the PPF is a superior instrument to Mutual Funds. An argument
to defend investment in a Mutual Fund over PPF is:
a. Mutual Fund will surely yield a better return than PPF
b. A mutual fund offers the potential for higher income and capital appreciation
c. The capital investment is safer in a Mutual Fund
d. 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 Currency
b. Need not take individual permission as RBI has granted general permission in this
regard
c. The investor has to apply to RBI seeking permission as he will be paying in foreign
currency
d. Cannot apply as it is open to Indian residents only
16. The cut-off time for redemption request kept by an AMC is 3:00 pm. An application for
redemption received at 3:01pm
a. Redemption will be based on next day NAV but no exit load will be charged
b. Redemption will be based on next day NAV
c. Applicant will be asked to resubmit the request 10 am the next day
d. The same day NAV will apply since the gap is less than 30 minutes from cut-off time
18. Where would you place a 53 years old executive planning to retire at age 60?
a. Sudden wealth stage
b. Reaping stage
c. Accumulation stage
d. Transition stage
19. The OD should indicate the management of the fund. The management doesn’t
include:
a. Name of trustees
b. Name of the Fund Manager
c. Business experience of the key personnel of the AMC
d. Registration number of the custodian
21. OD must contain information about unit holder transaction expenses. Which of the
following is not an item under this?
a. Repurchase load
b. Initial issue expenses
c. Max sales load
d. Switchover 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 2
b. Rs 1.50
c. Rs. 0.50
d. Rs. 1
24. Fund manager with investment philosophy of growth investing, looks for:
a. Companies with above average profits and growth in earnings
b. Companies with large equity base
c. Companies which are likely to go for public issue
d. All of the above
25. “Making mutual funds work for you – the investor’s guide” was published by:
a. SEBI
b. AMFI
c. 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 trustee
b. Annual report of AMFI
c. Annual report of SEBI
d. Financial statement of the UTI AMC
27. As per investment company institute, AMFI equivalent in the US, corporate bond funds
have higher risk than:
a. Money Market funds
b. Index funds
c. Aggressive funds
d. Growth funds
28. MF can invest in unlisted securities within SEBI approved limits, including:
a. Unlisted company’s shares
b. Units of venture capital funds
c. Both the above
d. None of the above
29. A grandfather wants to make an investment for a newborn grandson. Which is the most
suitable investment?
a. Index funds
b. Income funds
c. Money market funds
d. Gilt funds
30. The ratio which divides risk premium by Standard Deviation is:
a. Sharpe Ratio
b. Treynor Ratio
c. Bogle Ratio
d. Jensen Ratio
31. The following is not required on the cover page of the OD?
a. Date on which approved by trustees
b. Earliest closing date for New Fund Offer
c. Date the NFO closes
d. Date the NFO opens
32. The NAV of a fund is 35. Entry load is 1.75% and Exit Load is 0.50%. How many units
should Ms Monica redeem to withdraw Rs. 50,000/-?
33. NAV of a fund is 48. Entry Load is 2.25% and Exit Load is 1%. Calculate the price at which
the investor will be able to purchase 2000 units.
35. The valuation norm for non-investment grade, performing assets is done:
a. On YTM basis using the Crisil valuation methodology
b. On YTM basis with 25% discount
c. At 25% discount to face value
d. At face value
40. An investor can assess the performance of his mutual fund by comparing it with the
performance of
a. Other mutual fund of the same type
b. The stock market
c. Other financial products
d. 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
on
a. The fund manager
b. The investment objective of the fund
c. SEBI
d. AMFI
43. 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 bond index
d. A government securities fund with a government security
49. Direct investment in stock market can be a better option than investing through
mutual funds if the investor
a. Wants better returns than those offered by mutual funds
b. Has large capital, knowledge and resource for research
c. Has identified a bullish phase in the stock market
d. Wants to invest for the long term
57.Equity Linked Savings Scheme does not have which of the following features?
a. It entitles the unit holder to tax benefits
b. The investment is locked in for 3 years
c. A minimum stated level of investments is made in equity and equity related
instruments
d. None of the above
60.SEBI does not require the following to be included in the offer document issued by a
mutual fund
a. Details of the Sponsor and the AMC
b. Description of the Scheme & investment objective/strategy
c. Investors’ Rights and Services
d. Performance of other mutual funds
61.Mutual funds do not justify the need for paying commission to agents when the investors
skip out of the scheme before a specified period. In India this practice is adopted by
a. Agents voluntarily paying back the commission to the Mutual fund
b. Trail commission is not paid to the agents
c. None of the above
d. The whole of commission is paid to the agents
62.Distributors or agents
a. Can distribute several mutual funds simultaneously
b. Cannot appoint sub-agents or sub-brokers
c. Should be only individuals not companies or banks
d. Should not be an employee or associate of the AMC
63.The AMFI code of ethics does not cover the following prescriptions
a. Adequate disclosures should be made to the investors
b. Funds should be managed in accordance with stated investment objectives
c. Conflict of interest should be avoided in dealings with directors or employees
d. Each investment decision should be approved by investors
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
67.As per SEBI, mutual funds can borrow for short term to the extend of
a. Total net assets
b. 50% of net assets
c. 25% of net assets
d. 20% of net assets
70.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 28 Crores. What is the NAV?
a. Rs. 30.19
b. Rs. 24.98
c. Rs. 32.15
d. Rs. 40.49
ANSWERS
1 a 31 a 61 d
2 d 32 1,435.75 62 b
3 a 33 98,160 63 d
4 b 34 d 64 b
5 a 35 a 65 d
6 a 36 b 66 c
7 b 37 b 67 d
8 d 38 b 68 a
9 d 39 a 69 b
10 b 40 d 70 b
11 d 41 b 71 b
12 b 42 b 72 d
13 c 43 b 73 a
14 b 44 b 74 c
15 b 45 b 75 b
16 b 46 d
17 a 47 d
18 d 48 b
19 d 49 b
20 d 50 b
21 b 51 b
22 a 52 b
23 b 53 b
24 a 54 c
25 b 55 d
26 a 56 c
27 a 57 d
28 a 58 a
29 a 59 c
30 a 60 a