MF Chapter 1

1.___________ is a vehicle to mobilize moneys from investors, to invest in different markets and
securities

Mutual funds

Bond

Shares

None of the above

2. Their primary motive of MF is to assist investors in earning an income or building their wealth.

True

False

3. The mutual funds can keep a check on the operations of the investee company and their corporate
governance and ethical standards.

True

False

4. The mutual fund industry offers livelihood to a large number of ____________.

Employees

Distributors

Registrars

All of the above

5. Mutual fund mobilizes different pools of money. Such pool of money is called______________.

Mutual fund trust

Mutual fund scheme

Mutual fund deed

None of the above

6. The number of units multiplied by its face value is the capital of the scheme called______________.

Share capital

Equity capital

Unit capital

None of the above

7. When investors purchases and sells investments and earn capital gains. These are
called____________

Valuation gain

Realized capital gain

Profit in mutual funds

Any of the above

8. Investments owned by the scheme may be quoted in the market at higher than the cost paid. Such
gains in values on securities held are called_________

Valuation gain

Realized capital gain

Profit in mutual funds

Any of the above

9.When the investment activity is profitable, the true worth of a unit goes _______: when there are
losses, the true worth of a unit goes ___________.

up, down

down,up

down,up

down,down

10. When a scheme is first made available for investment, it is called _____________.

Initial fund offer

New Fund Operation

New Fund Proposal

New fee operation

11. Mutual funds offering various Options, such as (a)dividend payout option (b) reinvestment options,
and (c) growth option.

A only

A,B only

A, B,C only

All of the above

12. The relative size of mutual fund companies is assessed by their ______________

Capital Invested

Promoter stake

Asset Under Management

All of the above

13. If the scheme has a positive profitability metric its AUM goes down a negative profitability metric
will pull it up.

True

False

14.____________ captures the impact of the profitability metric.

Investors

AUM

Sponsor

AMC

15.___________offer investors the opportunity to earn an income or build their wealth through
professional management.

Mutual Fund

Debt

Equity

None of the above

16. Advantage of the Mutual funds for investors are_______________

Professional management

Portfolio Diversification

Economies of scale

All of the above

17. Diversification helps reduce the risk in investment

True

False

18. The pooling of large sums of money from many investors makes it possible for the mutual fund it
possible for the mutual fund to engage___________

Professional Managers

Private Managers

Productive

None of the above

19. Investors in a mutual fund scheme cannot recover the value of the moneys invested, from the
mutual itself.

True

False

20. Mutual funds are liable to pay tax on the income they earn.

True or false

21. If the same income were to be earned by the investor directly, then tax may have to be paid in the
next financial year.

True

False

22.__________ Give investors the benefits of the deduction of the amount invested, from their income
that is liable to tax.
 Equity linked savings

Diversified equity fund

Equity income /dividend yield

Arbitrage funds

23. Who is the regulator of the Mutual fund?

SEBI

AUM

RBI

AMC

24. What is SIP?

Savings investment plan

Sound investment plan

Secure investment plan

Systematic investment plan

25. PMS refers to ___________

Profit management Scheme

Public management scheme

Portfolio management scheme

Position management scheme

26. _____________ are open for investors to enter or exit at any time even after the NFO.

Close ended funds

Open ended funds

Interval funds

All of the above

27. When existing investors buy additional units or new investors buy units of the open ended scheme,
it is called a sale transaction.
 True

False

28._____________ have a fixed maturity.

Close ended funds

Open ended funds

Interval funds

All of the above

29. Investors can buy units of a ______________ from the fund, only during its NFO.

Close ended funds

Open ended funds

Interval funds

All of the above

30. Interval funds combine features of both open ended and close ended schemes.

True

False

31. An interval scheme might become open-ended between ______________.

January 1 to 15 and June 1 to 15

January 1 to 15 and July 1 to 15

January 1 to 15 and April 1 to 15

February 1 to 15 and July 1 to 15

32. In which fund manager has the flexibility to choose the investment portfolio, within the broad
parameters of the investment objective of the scheme.

Open ended scheme

Close ended scheme

Actively managed funds

Passive funds

33.________________invest on the basis of a specified index, whose performance it seeks to track

Open ended scheme

Close ended scheme

Actively managed funds

Passive funds

34._____________ Schemes are also called index schemes.

Open ended scheme

Close ended scheme

Actively managed funds

Passive funds

35.____________ Fund schemes have low running costs.

Open ended scheme

Close ended scheme

Actively managed funds

Passive funds

36. Examples of Debt securities are_____________

Treasury Bills

Govt. Securities

Bonds

All of the above

37. Types of Debt Funds are_____________

Gilt funds

Diversified debt funds

Junk bond schemes

All of the above

38. _______invest in only treasury bills and government securities.

Gilt funds

Diversified debt funds

Junk bond schemes

Junk bond schemes

39. ____________ Fund do not have credit risk.

Gilt funds

Diversified debt funds

Diversified debt funds

Fixed maturity plans

40.______________ invest in a mix of government and non-government debt securities.

Gilt funds

Diversified debt funds

Junk bond schemes

Fixed maturity plans

41. __________ invest in companies that are of poor credit quality.

Gilt funds

Diversified debt funds

Junk bond schemes

Fixed maturity plans

42. High yield bond schemes is the another name of____________.

Gilt funds

Diversified debt funds

Junk bond schemes

Fixed maturity plans

43. ____________ are a kind of debt fund where the investment portfolio is closely aligned to the
maturity of the scheme.

Gilt funds

Diversified debt funds

Junk bond schemes

Fixed maturity plans

44. __________ invest largely in floating rate debt securities i.e. debt securities where the interest rate
payable by the issuer changes in line with the market.

Gilt funds

Diversified debt funds

Floating rate funds

Fixed maturity plans

45.___________ Money market schemes are a variant of debt schemes that invest only in debt
securities.

Gilt funds

Liquid schemes

Floating rate funds

Fixed maturity plans

46. In liquid scheme where the Investment in debt securities where the moneys will be repaid Within
_________days.

1.45

2.75

3.91

4.90
47. Types of Equity Funds are____________.

Diversified equity fund

Thematic funds

Sector funds

All of the above

48._________is a category of funds that invest in a diverse mix of securities that cut across sectors.

Diversified equity fund

Thematic funds

Sector funds

Arbitrage fund

49.__________ invest only in a specific sector.

Diversified equity fund

Thematic funds

Sector funds

Arbitrage fund

50.___________ is in line with an investment theme.

Diversified equity fund

Thematic funds

Sector funds

Arbitrage fund

51.__________offer tax benefits to investors.

Equity inked savings schemes

Thematic funds

Sector funds

Arbitrage fund
52. In which scheme to retain the Units for at least 3 years?

Equity inked savings schemes

Thematic funds

Sector funds

Arbitrage fund

53.___________invest in securities whose shares fluctuate less, and therefore, dividend represents a
larger proportion of the returns on those shares.

Equity inked savings schemes

Equity income / dividend yield schemes

Sector funds

Arbitrage fund

54.__________take contrary positions in different markets / securities, such that the risk is neutralized,
but a return is earned.

Equity inked savings schemes

Equity income / dividend yield schemes

Sector funds

Arbitrage fund

55.__________ seeks to declare a dividend every month.

Monthly Income Plan

Capital Protected Schemes

Equity inked savings schemes

None

56.__________are close -ended schemes,

Monthly Income Plan

Capital Protected Schemes

Equity inked savings schemes

None

57._________ is like an index fund that invests in gold.

Gold funds

Gold exchange traded funds

Gold sector funds

Any of the above

58.__________is the fund will invest in shares of companies engaged in gold mining and processing.

Gold fund

Gold exchange traded fund

Gold sector fund

Any of the above

59.Commodities, as an asset class, includes______.

Food crops like wheat and chana

Spices like pepper and turmeric

Fibres like cotton

All of the above

60.In India, mutual fund schemes are permitted to invest in commodities.

True

False

61._________is an example of a fund that invests in another fund.

International fund

Feeder fund

Commodity fund

None of the above

62. The number of mutual fund schemes in India is about:

100

500

800

2000

63. Open-ended schemes generally offer exit option to investors through a stock exchange

True

False

64. Sector funds invest in a diverse range of sectors

True

False

65. High yield bond schemes invest in junk bonds

True

False

66. Investment objectives are closely linked to ___________

Scheme

Option

Plan

SIP

Chapter 2

1.What is/are the Key features of a mutual fund?

It is established as a trust

It raises moneys through sale of units to the public

The units are sold under one or more schemes

All of the Above

2. Who has stipulated the legal structure of mutual funds?

AMFI

SEBI

AMC

Sponsors

3. Mutual funds are constituted as Trusts.

TRUE

FALSE

4.The mutual fund trust is created by one or more_____________, who are the main persons behind the
mutual fund business.

AMFI

SEBI

AMC

Sponsors

5.Who are the beneficiaries in the case of a mutual fund trust?

Sponsors

AMFI

Investors

All of the above

6. The operations of the mutual fund trust are governed by a __________________

SEBI

AMC

Trust Deed

Sponsors

7 .Day to day management of the Mutual Fund schemes is handled by an ____________

AMFI
SEBI

AMC

Sponsors

8. The AMC is appointed by the sponsor or the Trustees.

TRUE

FALSE

9. Who manages the schemes, custody of the assets of the scheme?

AMFI

SEBI

AMC

Sponsors

10. Custodian, who is appointed by the _________________

AMC

AMFI

SEBI

Trustees

11. The record of investors and their unit-holding may be maintained by the__________.

AMC

Trustee

Investor himself

Sponsors

12. The application to SEBI for registration of a mutual fund is made by the ___________

AMC

Trustee

Investor himself
Sponsor

13. ____________invests in the capital of the AMC.

Sponsors

Investor

AMC

Trustee

14. Sponsor should be carrying on business in financial services for ________years.

15. Sponsor should have positive net worth (share capital plus reserves minus accumulated losses) for
each of those ______ years.

14. The sponsor needs to have a minimum _________ share holding in the capital of the AMC.

35%

45%

40%

55

15. The sponsor will have to appoint at least ______trustees.

4
6

16. If a trustee company has been appointed, then that company would need to have at least ____
directors on the Board.

17. __________ of the asset management company need to be persons having adequate professional
experience in finance and financial services related field.

Investors

Directors

Sponsors

RTA

18. __________ of the directors of AMC should be independent directors.

35%

45%

50%

55%

19. The AMC needs to have a minimum net worth of Rs _______.

10 crore

5 crore

7 crore

2 crore

20. The AMC can charge any fees for the investment.

TRUE

FALSE
21. The appointment of an AMC can be terminated by a majority of the trustees, or by _______% of the
Unit-holders.

50

70

55

75

22. Who is responsible for overall investments of the fund?

Managing directors

Sponsors

CIO ( chief investment officer)

Fund manager

23. _______ assist the CIO.

Managing directors

Sponsors

CIO

Fund manager

24. Who is responsible for mobilizing money under the various schemes?

CIO

CMO ( chief marketing officer)

COO

Compliance officer

25. Who generally focus on large investors?

Direct Sales Team

Channel manger

Advertising & Sales Promotion Team

Compliance officer
26. Who manage the distributors?

Direct Sales Team

Channel manager

Advertising & Sales Promotion Team

Compliance officer

27. _________support the CMO.

Direct Sales Team

Channel manager

Advertising & Sales Promotion Team

Compliance officer

28. ________handles all operational issues.

CIO

CMO

COO ( chief operational officer)

Compliance officer

29. _________needs to ensure all the legal compliances.

Direct Sales Team

Channel manager

Advertising & Sales Promotion Team

Compliance officer

30. __________has custody of the assets of the fund.

Fund manager

Directors

Sponsor

The custodian
31. A custodial agreement is entered into between the AMC and the custodian.

True

False

32. All custodians need to register with____________

AMFI

SEBI

RBI

None of the above

33. ISCs refer to___________.

Investors service centers

Interest security centers

Intermediary security centers

Investment security centers

34. Who perform a useful role in handling the documentation of investors?

Fund mangers

Sponsors

Investor service centers

Directors

35. All RTAs need to register with__________.

AMFI

SEBI

RBI

None of the above

36. Sponsors are responsible for the audit of accounts.

True
False

37. Scheme auditor is appointed by the __________.

Fund manager

Directors

Sponsor

Trustees

38. The AMC auditor is appointed by the__________.

Fund manager

Directors

AMC

Trustees

39. __________performs the role of calculating the NAV,

Fund manager

Investor

Sponsor

Fund accountant

40. Collection bankers are appointed by the __________.

Fund manager

Directors

AMC

Trustees

41. The assets of the mutual fund are held by

AMC

Trustees

Custodian
Registrar

42. Fund accounting activity of a scheme is to be compulsorily outsourced.

True

False

43. AMC directors are appointed with the permission of Trustees

True

False

44. Most investor service centers are the offices of

Trustees

Registrar

Custodian

Fund Accountant

Chapter 3

1. _________regulates mutual funds, depositories, custodians and registrars & transfer agents in
the country.

RBI

SEBI

AMFI

All of the above

2. An updated and comprehensive list of circulars issued by SEBI can be found in the Mutual Funds
section of SEBI’s website www.sebi.gov.in.

True

False

3. RBI regulates the _________.

Debt market

Security market
Money market

None of the above

4. Mutual funds need to comply with RBI’s regulations regarding investment in the ____________.

Money Market

Investment from outside the country

Investments from people other than Indian residents

All of the above

5. Stock exchanges are regulated by ___________.

SEBI

RBI

Both of the above

6. What is the full form of SRO?

Self Regulatory Organizations

Statutory Regulatory Organization

Statutory Rules Organization

None of the above

7. Mutual funds in India have constituted a SRO for themselves?

True

False

8. The objectives of AMFI is/are___________.

To recommend and promote best business practices

To interact with the Securities and Exchange Board of India(SEBI)

To represent to the Government, Reserve Bank of India

All of the above

9. AGNI refers to ______________.

AMFI Guidelines & Norms for Investors

AMFI Guidelines & Norms for Intermediaries

AMFI Guidelines & Norms for Investments

None of the above

10. “To generate capital appreciation from a portfolio of predominantly equity related securities” is an
objective of _____________.

Diversify Equity Scheme

Diversify Debt Scheme

Balanced Scheme

None

11. To generate income by investing predominantly in a wide range of debt and money market
securities” is an objective of ________.

Diversify Equity Scheme

Diversify Debt Scheme

Balanced Scheme

None

12. A debt scheme would need to invest at least _________ in debt securities.

50%

55%

65%

45%

13. Schemes, other than ELSS, need to allot units or refund moneys within ________ business days of
closure of the NFO.

7
5

14. A statement of accounts shows __________.

Opening balance

Closing balance

Transaction during the period

All of the above

15. A unit certificate only mentions the number of units held by the investor.

True

False

16. Unit certificate is like a Balance Confirmation Certificate issued by the bank.

True

False

17. Unit certificates are____________.

Transferable

Non – transferable

Data insufficient

None of the above

18. NAV has to be published daily in at least ________ newspapers.

19. The investors can appoint ___________nominees.

Only one

Three
Up to three

Any of the above

20. In the event of delays in dispatching dividend warrants or redemption / repurchase cheques, the
AMC has to pay the unit-holder, interest at the rate of __________.

20% p.a.

15% p.a.

10% p.a.

25% p.a.

21. Investors can choose to hold the Units in dematerialized form.

True

False

22. Unit-holders have the right to inspect key documents such as__________.

Trust Deed

Investment Management Agreement

Custodial Services Agreement

All of the above

23. Scheme-wise Annual Report, or an abridged summary has to be mailed to all unit-holders within
_____months of the close of the financial year.

24. The offer document has details of the number of complaints received and their disposal.

True

False
25. _________ of the Unit-holders (in practice, Unit-holding) can pass a resolution to wind-up a scheme.

75%

65%

50%

55%

26. If an investor feels that the trustees have not fulfilled their obligations, then he cannot file a suit
against the trustees for breach of trust.

True

False

27. A trust is a notional entity, and investors can sue the trust.

True

False

28. The principle of caveat emptor (let the buyer beware) applies to mutual fund investments.

True

False

29. AMC can recover investment management and advisory fees on management of these unclaimed
amounts, at a maximum rate of ___________..

0.10% p.a.

0.20% p.a.

0.50% p.a.

0.100% p.a.

30. If the investor claims the money after 3 years, then payment is based on the NAV __________.

At the end of 1 year

At the end of 3 years

At the end of 5 years

None of the above

31. Assets of the scheme are held by the ____________.

Trust

AMC

Custodian

Broker

32. A security was treated as wholly or partly non recoverable at the time of maturity or winding up of a
scheme.

True

False

33. PAN No. and KYC documentation are compulsory for mutual fund investments In micro-SIPs.

True

False

34. Investors need to give their __________along with the redemption request.

Bank account details

Fund Details

Both

None of the above

35. Mutual Fund Schemes shall be organized, operated, managed and their portfolios of securities
selected, in the interest of ______________.

All classes of unit holders

Sponsors

Directors of members

All of the above

36. Members in the conduct of their Asset Management business shall at all times___________.

Render high standards of service

Exercise due diligence

Exercise independent professional judgment

All of the above

37. Members shall disclose to unit holders____________.

Investment pattern

Portfolio details

Ratio of expenses to net assets

All of the above

38. Members shall not knowingly buy or sell securities for any of their schemes from or
to____________.

Any director, officer, or employee of the member

Any trustee or any director, officer, or employee of the Trustee Company

Both

None of the above

39. Members shall follow uniform performance reporting on the basis of total return.

True

False

40. AMFI means____________.

Association of Mutual Funds in India

Assets Mutual Fund In India

Assessment Mutual Fund in India

None of the above

41. “Member” means___________.

Member of AMC

The member of the Association of Mutual Funds in India

Both

None of the above

42. SEBI means______________.

Securities and Exchanges Board of Investor

Securities and Exchanges Board of Investment

Securities and Exchanges Board of India

None of the above

43 .A “Significant Unit holder” means any entity holding _________ or more of the total corpus of any
scheme managed by the member.

10%

5%

20%

15%

44. A “trustee” means ____________.

A member of the Board of Trustees

A director of the Trustee Company

Either A or B

Both of the above

45. A “Trustee Company” is a company incorporated as a Trustee Company and set up for the purpose
of managing a mutual fund.

True

False

46. SAI refers to____________.

Statement of additional information

Statement of assets information

Statement of assessment information

None of the above

47. KIM means_____________.

Key Information Management

Key Information Money

Key Information Memorandum

Key Information Market

48. SID should be read in conjunction with SAI and not in isolation.

True

False

49. It is not necessary for all employees engaged in sales and marketing should obtain AMFI
Certification.

True

False

50. The AMFI Code of Ethics sets out the standards of good practices to be followed by the Asset
Management Companies in their operations and in their dealings with____________________.

Investors

Intermediaries

Public

All of the above

51. _____________ is to be updated in the website of AMFI of the Mutual Fund.

NAV

Re purchase Price

Both of the above

None of the above

52. The investor/s can appoint a ___________who will be entitled to the Units in the event of the
demise of the investor/s.

Agent

Nominee
Any of the above

None

53. Redemption/re-purchase cheques would need to be dispatched to investors within _______working

days from the date of receipt of request.

15

10

20

54. Investment objective defines the broad investment charter

True

False

55. Statement of Account is to be sent to investors within ___ days of NFO closure

15

56. Within ___ days of dividend declaration, warrants will have to be sent to investors.

10

15

30

Chapter 4

1. Units in mutual fund scheme are offered to investors for the first time through a_____.

NFO

IPO

FPO
Any of the above

2. Who decides on a scheme to take to the market?

Trustees

AMC

CIO

CMO

3. Offer document needs to be approved by the _________.

Trustees

AMC

CIO

CMO

4. Who decides on a suitable time table for the NFO issue?

Trustees

AMC

CIO

CMO

5. SEBI launches its advertising and public relations campaigns to make investors aware of the NFO.

True

False

6. Close ended schemes have no Re-opening date.

True

False

7. NFOs other than ELSS can remain open for a maximum of _____ days.

10

15
20

35

8. In the case of NFO of allotment of units or refund of moneys should be done with in ___ business days
of the closure of the scheme.

10

9. Open ended schemes have to re-open for sale/re purchase with in ______ business days of the
allotment.

10

10. Mutual fund offer documents have ______ parts:

One

Two

Three

Four

11. What is SID?

Scheme Information Document

Statement Information Document

Status Information Document

Structure Information Document

12. _________ has statutory information about the mutual fund that is offering the scheme.

SID
SAI

Prospectus

All of the above

13. The offer documents in the market are vetted by _________.

SEBI

Sponsor

Director

AMC

14. SID available for viewing in SEBI’s website (www.sebi.gov.in) for __________ working days.

15

21

30

15. If a scheme is launched in the first 6 months of the financial year then the first update of the SID is
due with in ______months of the end of the financial year.

16. Contents of SAI are_________.

Condensed financial information

Rights of unit holders

Investment valuation norms

All of the above

17. Regular update of SAI is to be done by the end of _______months of every financial year.

2
6

18. Contents of KIM are_______

Plans and options under the scheme

Risk profile of scheme

Dividend policy

All of the above

19. Investment in Mutual Fund Units involves investment risks such as____________.

Trading volumes

Settlement risk

Liquidity risk

All of the above

20. The scheme/ plan shall have a minimum of _______ investors.

10

15

20

25

21. No single investor shall account for more than 20% of the corpus of the scheme/plans.

True

False

22. In the NFO there is a breach of the 25% limit by any investor over the quarter, a rebalancing period
of _________month would be allowed.

3
6

23. The Asset Management Company shall confirm that a Due Diligence Certificate is signed by the
_________.

Compliance officer

Chief executive officer

Managing Director

Any of the above

24. All legal requirements connected with the launching of the scheme as also the guidelines,
instructions, etc., issued by the__________.

SEBI

Government

AMC

Distributor

25. Investment in overseas securities shall be made in accordance with the requirements stipulated by
___and _______ from time to time.

SEBI

RBI

Both

None

26. The experience of the fund manager should include last _____ years experience.

10

27. In the balanced schemes all investment restrictions are to be disclosed.

True

False
28. Special Products available in the NFO are __________.

Systematic investment Plan

Systematic Transfer Plan

Systematic Withdrawal Plan

All of the above

29. The first Account Statement under SIP/STP shall be issued within _________working days of the
initial investment/transfer.

10

15

30. In case of specific request received from investors, Mutual Funds shall provide the account
statement (SIP/STP) to the investor’s within ____ working days from the receipt of such request without
any charges.

10

15

31. The dividend warrants shall be dispatched to the unit holders within ______ of the date of
declaration of the dividend.

40 days

60 days

30 days

45 days

32. The mutual fund shall publish a complete statement of the scheme portfolio and the unaudited
financial results, within ______month from the close of each half year.
2

33. The mutual fund would update the current expense ratios on the website within _____working days
mentioning the effective date of the change.

10

34. Bonus units and units issued on reinvestment of dividends shall be subject to entry and exit load.

True

False

35. NFOs other than ELSS can be open for a maximum of:

7 days

10 days

15 days

30 days

36. Legally, SAI is part of the SID.

True

False

37. Offer documents of mutual fund schemes are approved by SEBI.

True

False

38. Application form is attached to_________.

SID
SAI

KIM

None of the above

39. KIM has to be updated every 6 months.

True

False

40. If a scheme is launched in the second 6 months of the financial year then the first update of the SID is due
within ________months of the end of the next financial year.

Chapter 5

1. Historically, individual agents would distribute units of ______________.

Unit trust of India

Insurance Policies

Government’s Small Savings Schemes

All of the above

2. UTI, LIC or other issuer of the investment product (often referred to in the market
as_______________.

Product manufacturers

Product Dealer

Investor

None of the above

3. IFAs stand for________________.

Individual Financial Advisors

Institutional Financial Advisors

Independent Financial Advisors

None of the above

4. Who are Non Bank Distributors_____________

Brokerages

Securities distribution companies

Non banking finance companies

All of the above

5. SEBI has facilitated buying and selling of mutual fund units through the stock exchanges.

True

False

6. Mutual fund transaction engines are__________.

NSE

BSE

Both

Either A & B

7. The Intermediaries can fulfill the customer needs_____________.

Personally

Through a team

With support of technology

All of the above

8. Close-ended schemes are required to be listed in a stock exchange.

True

False
9. ETFs are bought and sold in the stock exchange.

True

False

10. A fund may appoint a ____________as a distributor.

Individual bank

Non-banking finance company

Distribution company

Any of the above

11. SEBI has not prescribed a Certifying Examination, passing in which is compulsory for anyone who is
into selling of mutual funds.

True

False

12. Distributors/employees are exempted to pass the certifying Examination who is above of the age.

40years

45 years

50 years

55 years

13. After passing the examination, to sell the mutual fund the next stage is to register with AMFI.

True

False

14. ARN refers to__________.

Agent Registration Number

AMFI Registration Number

Application Registration Number

Account Registration Number

15. Institutions that are into distribution of mutual funds need to register with ________.

AMFI

AMC

SEBI

None

16. Before appointing a distributor AMC has to take permission from SEBI.

True

False

17.Investor Relations Team and Employees of Call centers who interacts with mutual fund investors has
no need to pass the mutual fund certifying examination prescribed by SEBI.

I.A.True

II.B.False

18. The basic details for Empanelment form require___________.

Personal Information of applicant

Business details

Bank details

All of the above

19. SEBI regulates the minimum or maximum commission that distributors can earn.

Yes

No

20. The trail commission is normally paid by the AMC on a ___________basis.

Monthly

Weekly

Quarterly

Daily
21. Trail commission is paid to the MF distributors for limited number of years.

True

False

22. ACE refers to____________.

AMFI Code of Ethics

AMFI Code of Enterprise

AMFI Code of Investor Education

None of the above

23. Distributors can claim commission on investments made through them by their clients.

True

False

24. The distributors have to disclose all the commissions payable to them for the different competing
schemes of various mutual funds from amongst which the scheme is being recommended to the
investor.

True

false

25. In hoardings / posters, the statement, “Mutual Fund investments are subject to market risks, read
the offer document carefully before investing”, is to be displayed in at least ________inches height.

26. In audio-visual media, the statement “Mutual Fund investments are subject to market risks, read the
offer document carefully before investing” should cover at least _______of the total screen space.

50%

60%

80%
100%

27. Advertisements for mutual funds can be done through __________.

Radio

Newspaper

Television

All the above

28. No commission is payable to distributor on their own investments.

True or false

29. Mutual Fund investments are prone to risks of fluctuation in NAV

True or False

30. Tombstone advertisements can only give basic information about___________.

Name of Mutual Fund & AMC

Scheme Name & classification

Logo or Trademark or corporate symbol

All the above

31. Product launch advertisements shall not be used only for launch and/or re-launch of schemes.

True or false

32. The information is prohibited in product launch advertisements_____________.

Comparisons with other Mutual Funds or schemes

Ranking by any ranking entity

Both of the above

None of the above

33. The dividends declared or paid shall also be mentioned in Rupees per unit along with the face value
of each unit of that scheme and the prevailing NAV at the time of declaration of the dividend is the
guidelines of______.
 Tombstone Advertisement

Performance Advertisement

Product launch advertisement

None of the above

34. Investors have very short investments horizon in__________.

Money market schemes

Cash and liquid schemes

Any of the above

Both of the above

35. The performance can be advertised by simple animalization of yields if a performance figure is
available for at least_________..

7 days

15 days

30 days

All of the above

36. Distribution taxes are excluded while calculating the returns, this fact shall not be disclosed in
performance advertisement.

True

False

37. Advertisements and/ or Sales Literature must not use rankings based on yield for a period
of________.

Less than 2 year

Less than 1 year

Less than 4 year

Less than 5 year

38. Stock exchange brokers are permitted to distribute mutual funds without the requirement of passing
the certifying test
 True

False

39. Trail commissions are linked to valuation of portfolio in the market

True or false

40. All advertisements containing performance information, advertising yield/return etc. shall also
disclose all the risk factors.

True or false

41. Any advertisement which discloses only the latest NAV, sale and/or repurchase price without any
reference to the corresponding past figures may disclose all the risk factors.

True

False

42. ‘Investors are advised to read the offer document before investing in the scheme.

True or False

43. Institutional distributors build reach through________.

Employees

Agents

Sub-brokers

Any of the above

44. The maximum initial commission that an AMC can pay to distributors is:

Nil

0.05%

1%

2%

45. The distributor can charge a fee from the investor.

True or False

Chapter 6
1. Net assets includes the amounts originally invested, the profits booked in the scheme, as well as
appreciation in the investment portfolio.

True

False

2. Net assets go up when the market prices of securities held in the portfolio go down, even if the
investments have not been sold.

True

False

3. NAV = Unit-holders’ Funds in the Scheme ÷ No. of Units.

True

False

4. The difference between the sale price and NAV is called___________.

Entry load

Exit Load

5. If the NAV of a scheme is Rs 11.00 per unit, and it was to charge exit load of 1%, the Re-purchase Price
would be ___________.

10.69

10.59

10.89

10.79

6. If the NAV of a Scheme is Rs 12.00 per unit and it were to charge exit load of 2% the repurchase price
would be _____________.

10.98

11.98

10.96

11.96

7. CDSC refers to____________.

Contingent Deferred Scheme Charge

Contingent Deferred Security Charge

Contingent Deferred Sales Charge

Contingent Deferred Selling Charge

8. With effect from August 2009, SEBI has banned entry loads.

True

False

9. Exit load structure need not to be the same for all unit-holders representing a portfolio.

True

False

10. Exit load is calculated on_______________.

Face value of unit

NAV of Unit

Purchase price of unit

Any of the above

11. Due to abolishing of entry load sales price can be higher than NAV.

True

False

12. Initial issue expenses are to be borne by____________.

Investor

Director

Sponsor

AMC

13. SEBI has banned Entry load on Mutual Fund Scheme on________________.

1st Aug 2008

1st Aug 2009

1st Aug 2007

None of the above

14. Deferred load is not applicable for newer schemes.

True

False

15. Interest on delayed payment to the unit holders can be charged to scheme.

Yes

No

16. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
equity schemes up to 100 crore.

2.50%

2.25%

2.00%

1.75%

17. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
Debt schemes up to 100 crore.

2.50%

2.25%

2.00%

1.75%

18. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
Debt schemes next 300 crore.

2.50%

2.25%

2.00%

1.75%
19. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
equity schemes next 300 crore.

2.50%

2.25%

2.00%

1.75%

20. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
equity schemes excess over Rs 700 crore.

2.50%

2.25%

2.00%

1.75%

21. SEBI has stipulated _______% annual limits on recurring expenses (including management fees) for
debt schemes excess over Rs 700 crore.

2.50%

2.25%

1.50%

1.75

22. Management fees cannot exceed____________.

1.25% on the first Rs 100 crore of net assets of a scheme

1.50% on the first Rs 100 crore of net assets of a scheme

1.75% on the first Rs 100 crore of net assets of a scheme

2.00% on the first Rs 100 crore of net assets of a scheme

23. SEBI guidelines stipulate that dividends cannot be paid out of distributable reserves.

True

False
24. NAV is to be calculated up to ________ decimal places in the case of index funds, liquid funds and
other debt funds.

25. NAV for equity and balanced funds is to be calculated up to at least ______decimal places.

26. Debt securities that are not traded on the valuation date are valued on the basis of the yield matrix
prepared by an authorized valuation agency.

True

False

27. What is NPA?

New price Assets

Now price Assets

Numeric Price Assets

Nonperforming Assets

28. An independent value has to be appointed, Where an individual security that is not traded or thinly
traded, represents _________ of the net assets of a scheme.

More than 3%

More than 5%

Less than 5%

None of the above

29. Wealth tax is payable at the applicable rates on equity mutual fund units
True

False

30. Equity-oriented scheme is a mutual fund scheme where at least ______of the assets are invested in
equity shares of domestic companies.

50%

55%

60%

65%

31. The average of such value is taken for the ________ months in the financial year.

10

12

32. What will be the STT on purchase of equity shares in stock exchange in equity oriented schemes of
mutual funds?

0.125%

0.017%

0.150%

0.250%

33. What will be the STT on Sale of equity shares in stock exchange in equity oriented schemes of
mutual funds?

0.125%

0.017%

0.150%

0.250%

34. What will be the STT on Sale of futures & options in stock exchange in equity oriented schemes of
mutual funds?
 0.125%

0.017%

0.150%

0.250%

35. What will be the STT on investors in equity oriented Schemes of Mutual Fund on sale of the units in
stock exchange?

0.125%

0.017%

0.150%

0.250%

36. What will be the STT on investors in equity oriented Schemes of Mutual Fund on repurchase of the
units?

0.125%

0.017%

0.150%

0.250%

37. Ram purchased 20000 units of Rs 10 each of equity oriented schemes in stock exchange what will be
the STT?

Rs 200

Rs 250

Rs 150

Rs 150

38. Krishna purchased 500000 units of mutual fund out of these he sale 10000 units of Rs 10 each than
what will be the STT on sale of the units in stock exchange?

Rs. 200

Rs. 250

Rs 125
Rs 100

39. STT is not payable on transactions in debt or debt-oriented mutual fund units.

True

False

40. This additional tax on income distributed (referred to in the market as dividend distribution tax) is
not payable on dividend distributed by equity-oriented mutual fund schemes.

True

False

41. In the case of both, equity and debt schemes, the dividend would not be exempt from tax in the
hands of the investor.

True

False

42. Capital Gain is the difference between sale price and acquisition cost of the investment.

True

False

43. In mutual fund schemes (equity oriented) investor need to pay a tax on long term capital gain is
_________.

Nil

15%

20%

4%

44. Richa purchased 30000 units of Rs 10 each of Mutual funds then AMC repurchased the units. What
will be the STT paid by the investors on repurchase of units?

Rs 750

Rs 725

Rs 625

Rs 650
45. An investor whose income is above that prescribed for 20% taxation would end up bearing tax at

35%

25%

20%

30%

46. There is no TDS on the dividend distribution or re-purchase proceeds to resident investors.

True

False

47. An investor would pay capital gains tax at _____%, if the units were held for 1 year or less will
receive any dividend.

20%

25%

15%

4%

48. Capital loss, short term or long term, cannot be set off against _________ head of income.

Salaries

House property

Other sources

Any of the above

49. Long term capital loss can only be set off against__________.

Short term capital gain

Long term capital gain

Both A & B

Either A & B

50. Short term capital loss is to be set off against _____________.

Short term capital gain

 Long term capital gain

Both A & B

Either A & B

51. A potential tax avoidance approach, called dividend stripping,

True

False

52. Investments in mutual fund units are not exempt from Wealth Tax.

True

False

53. An Individual/HUF invest in Debt fund then the Tax Rate will be ____________% +surcharge
+education cess.

12.5%

10%

25%

15%

54. An investor invests in liquid schemes (debt oriented) then what will be the tax rate?

20%+Surcharge +education cess

10%+Surcharge +education cess

25%+Surcharge +education cess

None of the above

55. Net assets of a scheme is nothing but its investment portfolio

True

False

56. The difference between NAV and re-purchase price is

Entry Load

Exit Load
57. The difference between NAV and re-purchase price is

Entry Load

Exit Load

58. NAV of income funds is to be calculated up to ___ decimals

59. Securities Transaction Tax is applicable to Equity Schemes

True

False

Chapter 7

1. Who is Called “Karta”?

Individual

Investor of the Family

Member of the family

Head of the Family

2. Types of individual investor are ________________

Resident Indian

Adult Individuals

Above the age of 18

All of the above

3. What is PIO?

Persons of Indian origin

Price of Indian order

Persons of Investment origin

Price of Individual origin

4. What is OCI?

Overseas Citizenship of India

Overseas Condition of India

Both of the above

None of the above

5. What is NRI?

Non-Resident Indians

Now Resident Indians

New-Resident Indians

None-Resident Indians

6. What is FIl?

Foreign Institutional Investors

Foreign Individual Investors

Foreign Individual Investors

Foreign Institute Investors

7. International Multilateral Agencies approved by ________________

SEBI

Mutual Fund

AMC

Government of India

8. What is OCBS?

Overseas Corporate Bodies

Overseas Counter Bodies

 Over the Counter Business

Overseas Corporate Bodies

9. KYC is compulsory for all investments of Rs _________

49999 and above

50000 and below

50000 and above

60000 and above

10. Mutual fund investors need the __________ documents

Proof of Identity

Proof of Address

PAN Card

All of the above

11. Mutual funds have made an arrangement with _____________

NSDL

CDSL

SEBI

NCDEX

12. What is meaning of POS?

Price of Service

Points of Service

13. If investment is made by a minor, KYC requirements have to be complied with by the Guardian

True

False
14. Micro-SIP investment by ________ are exempted from the requirement of PAN card

Individuals

Minors

Sole-Proprietor

All of the above

15. Photo Identification documents are _________________

Voter Identity Card

Driving License

Photo Ration Card

All of the above

16. Relaxation in documentation requirements for micro-SIPs is not available for ______________

Individual

HUFs

NRI’s

Any one

17. Dematerialisation is a process whereby an investor’s holding of investments in physical form

(paper), is converted into a digital record.

True

False

18. The benefits of demat facility for mutual fund investors has increased, with _______________

National Stock Exchange

Bombay Stock Exchange

Both of the above

None of the Above

19. The demat facility is typically initiated by the mutual fund, which would tie up with a Depository.

True
 False

20. The investor’s benefits from a demat account are _________________

Less paperwork

Direct credit of bonus and rights units

Change of address or other details need to be given only to the Depository Participant

All of the above

21. To Convert the demat units into physical form. This process is called re-materialisation.

True

False

22. Application forms are available with offices of ________________

AMCs

Distributors

ISCs

All of the above

23. The investor have an investment account technically called “folio”

True

False

24. The investor needs to confirm that the investment is _________the minimum investment limit set
by the mutual fund for the scheme.

Above

Below

Either A & B

None

25. Once an investor has a folio with a mutual fund, subsequent investments with the same mutual fund
do not call for the full application form and documentation

True
 False

26. Mutual funds do not accept cash.

True

False

27. Cheques are signed by the banker, while DDs are signed by the account holder.

True

False

28. DD is not accepted only if the investor is from outside the location where the application form /
transaction slip is being submitted.

True

False

29. When the NRI receives money in his bank account in India, the banker issue a _____________

FIRC

FRIC

FICR

FCIR

30. RTGS refers to _______________

Real Time Growth Settlement

Real Time Gross Settlement

Real Technique Gross Settlement

Real Technique Growth Settlement

31. NEFT refers to _______________

National Electronic Funds Transfer

National Electronic Future Transfer

National Electronic Finance Transfer

Nationwide Electronic Fund Transfer

32. SWIFT transfer means for transfers from abroad.

True

False

33. _______________ Standing Instructions are a convenient form of investment in a SIP.

Electronic Convenient Service

Electronic Clearing Service

Easy Clearing Service

Easy Clearing Service

34. The bank accepts ‘Standing Instructions’ also called ‘Direct Debit.

True

False

35. When investor and mutual fund have an account with the same bank, then ECS is used

True

False

36. What is ASBA ______________

Application Supported by Blocked Account

Application Supported by Blocked Acknowledgement

Application Supported by Blocked Amount

None of the above

37. Entry Load permitted by regulation

True

False

38. What is POAs?

Point of Acceptance

Points of applications
Price of Acceptance

None of the above

39. NSE’s platform is called NEAT MFSS

True

False

40. BSE’s platform is BSE StAR Mutual Funds Platform

True

False

41. NSE & BSE platforms are open from ________ am to _______ pm on every working day

8.30 am to 2.30 pm

9.00 am to 3.00 pm

10.00 am to 3.30 pm

9.30 am to 4.00 pm

42. The options of mutual funds schemes are ________________

Dividend Payout

Growth

Dividend Re-investment Options

All of the above

43. When a dividend is paid, the NAV of the units falls to that extent.

True

False

44. In Mutual Fund Scheme if the Constant amount is Regularly invest then it is called _____________

SIP

SWP

STP
 Any of the above

45. In Mutual Fund Scheme if the Constant amount is withdrawn and simultaneously invested then it is
called _____________

SIP

SWP

STP

Any of the above

46. In Mutual Fund Scheme if the Constant amount is transfer between one or more schemes then it is
called _____________

SIP

SWP

STP

Any of the above

47. Fundamental analysis is a evaluation of the strength of the company’s price-volume charts.

True

False

48. In a top-down approach, “sector allocation precedes stock selection”.

True

False

49. Which of the following is a truly international asset class

Real Estate

Equity

Debt

Gold

50. Loads and taxes may account for the difference between scheme returns and investor returns.

True
 False

51. The most appropriate measure of returns for a scheme in existence for several years is:

Simple Return

Dividend Return

Annualised Return

CAGR

52. Risk can be measured by

Variance

Standard Deviation

Beta

Any of the above

Chapter 8

1. The __________ is the main driver of returns in a mutual fund scheme.

Return

Profit

Portfolio

None of the above

2. Fundamental Analysis entails review of the company’s fundamentals __________

Financial statements

Quality of management

Competitive position

All of the above

3. Earnings per Share (EPS) = Net profit before tax ÷ No. of equity shares

True

False
4. ________ Ratio indicates how much investors in the share market are prepared to pay (to become
owners of the company), in relation to the company’s earnings

Earnings per Share

Price to Earnings Ratio

Book Value per Share

Price to Book Value

5. Which ratio tells the investors how much profit the company earned for each equity share that they
own?

Earnings per Share

Price to Earnings Ratio

Book Value per Share

Price to Book Value

6. A ________ Fund maintains a portfolio that is in line with the Passive Fund

Active fund

Index it mirrors.

Equity fund

Debt Fund

7. _____ Ratio indicates of how much each share is worth, as per the company’s own books of accounts.

Earnings per Share

Price to Earnings Ratio

Book Value per Share

Price to Book Value

8. ___________ Ratio indicates that how much the share market is prepared to pay for each share of
the company, as compared to its book value.

Earnings per Share

Price to Earnings Ratio

Book Value per Share

 Price to Book Value

9. It is generally agreed that longer term investment decisions are best taken through a fundamental
analysis approach, while technical analysis comes in handy for shorter term speculative decisions

True

False

10. Investment styles are ______________

Growth

Value

Both of the above

None of the above

11. Growth investment style entails investing in _________ growth stocks.

Low

High

Medium

A&B

12. Value investment style is an approach of picking up stocks which are valued _______, based on
fundamental analysis.

Lower

High

Medium

A&B

13. Value stocks tend to be longer term investments, at times beyond ______ years.

Two

Three

Four

Five
14. High Valuation’ is the equivalent of ‘high share price’.

True

False

15. Portfolio Building approach are __________

Top down

Bottom Up

Both of the above

None of the above

16. In a top down approach, the portfolio manager decides how to distribute the investible corpus
between ___________

Countries and Sectors

Countries, Cities

Sectors, Cities

All of the above

17. Which is approach is also called stock picking.

Top-down Approach

Bottom-Up Approach

Either A & B

None of the above

18. Top down approach maximizes the chance of being stuck with large exposure to a poor sector.

True

False

19. __________ is also called tenor.

Pre-specified frequency

Pre-specified period

Pre-specified Amount
 Pre-Specified Interest

20. Debt securities that are to mature within two year are called money market securities

True

False

21. “The return that an investor earns or is likely to earn on a debt security is called its yield”.

True

False

22. If the proceeds on redemption are higher than the amount invested then it is called ___________

Capital Gain

Capital Loss

No Profit No Loss

None of the above

23. Debt securities may be issued by _______________

Central Government

State Governments

Banks

All of the above

24. Securities issued by the __________ are called Government Securities or G-Sec or Gilt

Banks

Government

Financial Institutions

All of the above

25. Treasury Bills are short term debt instruments issued by the ___________ on behalf of the
Government of India.

SEBI

Reserve Bank of India

 Central Government

State Government

26. Certificates of Deposit are issued by Banks for ____________ years.

91 days to 1 year

1 to 3 years

3 to 5 years

99 days to 3 years

27. Certificates of Deposit are issued by Financial Institutions for __________ years.

91 days to 1 year

1 to 3 years

3 to 5 years

99 days to 3 years

28. Commercial Papers are short-term Securities.

True

False

29. Commercial Papers are short term securities issued by _____________

Banks

Government

Financial Institutions

Companies

30. Commercial Papers are short-term securities issued for up to _______ years.

2 years

1 year

3 years

5 years
31. Who tend to issue bonds?

Governments

Public Sector Companies

Both of the above

Either A & B

32. The yield on Gilt is generally the Highest in the market.

True

False

33. The difference between the yield on Gilt and the yield on a non-Government Debt security is called
its yield Spread.

True

False

34. The possibility of a non-government issuer defaulting on a debt security i.e. its credit risk, is
measured by Credit Rating companies

True

False

35. Credit Rating companies are like ___________________

CRISIL

ICRA

CARE and FITCH

All of the above

36. Higher the credit risk, lower is likely to be the yield on the debt security.

True

False

37. The interest rate payable on a debt security may be specified as a fixed rate is ____________

5%
 7%

6%

9%

38. The returns in a debt portfolio are largely driven by interest rates and yield spreads.

True

False

39. If the yields in the market go down, the debt securities will their lose value.

True

False

40. A security of longer maturity would fluctuate a lot more, as compared to short tenor securities.

True

False

41. In a floater, when yields in the market go up, the issuer pays ____________

Lower Interest

Higher Interest

No Interest

Any of the above

42. Investment in debt security of a company would result in ________________

Credit Rating will decline

Credit rating will improve

Non change

None of the above

43. The value of gold in India depends on ______________

The international price of gold

The exchange rate for converting the currency into Indian rupees
 Any duties on the import of gold

All of the above

44. Which of the following are factors of real estate?

Economic scenario

Infrastructure development

Interest Rates

All of the above

45. Infrastructure development and Real Estate has ____________ relation.

Direct

Inverse

Neutral

None of the above

46. Which of the following is Simple Return?

Later Value - Initial Value *100/ Initial Value

Simple return *12 (Period of Simple return (in months))

LV1/n -1

IV

None of the above

47. Which of the following is Annualized Return?

Later Value - Initial Value *100

Initial Value

Simple return *12

Period of Simple return (in months)

LV1/n -1

IV
None of the above

48. Which of the following is Compounded Return?

Later Value - Initial Value *100

Initial Value

Simple return *12

Period of Simple return (in months)

LV1/n -1

IV

None of the above

49. Whenever a dividend is paid ______________ is to be considered.

Simple

Annualised

Compounded

Any of the above

50. This calculation is based on an assumption that the dividend would be re-invested in the same
scheme at the cum-dividend NAV.

True

False

51. As per SEBI Mutual funds are not permitted to promise any returns.

True

False

52. Assured returns schemes call for a guarantor who need not to be named in the offer document.

True

False

53. Past performance of the Sponsor / AMC / Mutual Fund guarantee future performance of the
scheme”
True

False

54. NAV is calculated as _________________

Net Assets divided by number of units

Net annual yield divided by number of shares

Net worth divided by number of shares

None of the above

55. A mutual fund scheme cannot borrow more than 10% of its net assets.

True

False

56. The borrowing by a mutual fund cannot be for more than 6 months.

True

False

57. The borrowing is permitted only to meet the cash flow needs of investor servicing viz.
______________

Dividend payments

Re-purchase payments

Both A & B

Only B

58. Which of the following are derivative ________________

Forwards

Futures

Options and Swaps

All of the above

59. Mutual funds are permitted to use derivatives for which of the following purpose a. Hedging b. Re-
Balancing c. Leveraging d. Further investment
 a,b, & c

b&c

a&b

c,a & d

60. The liquidity pressures force the scheme to sell assets _________their intrinsic value

Below

Above

Equal

None

61. Every scheme should have at least ________ investors

15

20

25

30

62. ________ Funds are a variation of sector funds.

Thematic funds

Mid cap funds

Contra funds

Dividend yield funds

63. ___________ Funds invest in mid cap stocks, which are less liquid and less researched in the market,
than the frontline stocks

Thematic funds

Mid cap funds

Contra funds

Dividend yield funds

64. ___________ Funds take positions that are contrary to the market.
Thematic funds

Mid cap funds

Contra funds

Dividend yield funds

65. _____________funds invest in shares whose prices fluctuate less, but offer attractive returns in the
form of dividend.

Thematic funds

Mid cap funds

Contra funds

Dividend yield funds

66. The basis risk in an arbitrage fund – the risk that both cash and F&O position on a company can be
reversed at the same time.

True

False

67. Liquid schemes, which invest in securities of up to 91 days maturity, have the ______risk amongst all
kinds of schemes.

Higher

Lowest

Zero

None of the above

68. This risky category of mutual fund scheme is not offered by Indian mutual Fund.

True

False

69. The diversified stock index has a _________

Beta of 1

Beta is more than 1

Beta less than 1

Perfectly 0

70. Benchmarks are constructed by stock exchanges

Credit rating agencies

Securities research houses

Financial publications

Any of the above

71. Gaps between the scheme performance, and that of the benchmark, are called tracking errors.

True

False

72. Diversified index are like ___________

BSE Sensex

S&P CNX Nifty

BSE 200

All of the above

73. Sectoral indices are like ________________

BSE Bankex

BSE FMCG

CNX Infrastructure Index

All of the above

74. Companies with market capitalization between Rs 1,500 crore to Rs 10,000 crore can be taken as
mid cap stocks.

True

False

75. In the case of Sensex BSE Sensex and S&P CNX Nifty are calculated based on ____ large companies.

30

40
50

60

76. In the case of Nifty BSE Sensex and S&P CNX Nifty are calculated based on _ large companies.

30

40

50

60

77. Arbitrage funds take opposite positions in the cash and F&O markets

True

False

78. The benchmark for debt (and balanced schemes) should be developed by research and rating
agencies Recommended by AMFI.

True

False

79. What is MIBOR?

Mumbai Inter-Bank Offered Rate

Money Inter-Bank Offered Rate

Mutual Inter-Bank Offered Rate

Multiple Inter-Bank Offered Rate

80. Si-Bex indices are for __________ years

1 to 3 years

3 to 7 years

More than 7 years

More than 10 years

81. Mi-Bex indices are for __________ years

1 to 3 years
3 to 7 years

More than 7 years

More than 10 years

82. Li-Bex indices are for __________ years.

1 to 3 years

3 to 7 years

More than 7 years

More than 10 years

83. Liquid schemes invest in securities of less than ______ days maturity

99

97

93

91

84. Short term money market benchmark are like __________

NSE’s MIBOR

CRISIL LiquiFEX

Both

None

85. Gilt funds invest only in Government securities.

True

False

86. _____ fund invest in a mix of debt and equity

Balanced Funds

Gilt Funds

Real Estate Funds

International Funds

87. T-Bill index is a good measure of this risk-free return.

True

False

88. The difference between the two returns i.e. Rs – Rf is called _______________

Risk free Return

Risk Premium

Risk Taken

None of the above

89. Sharpe Ratio is calculated as (Rs minus Rf) ÷ Standard Deviation

True

False

90. Treynor Ratio is thus calculated as: (Rs minus Rf) ÷ Beta

True

False

91. The Beta of the market, by definition is _______

Chapter 9

1. Mutual funds are a vehicle that helps an investor take exposure to asset classes,

Equity

Debt

Gold and real estate

All of the above

2. As a structured approach, the sequence of decision making is as follows:

Step 1 – Deciding on the scheme category

Step 2 – Selecting a scheme within the category

Step 3 – Selecting the right option within the scheme

A,B,C

B,C, A

3. Investing in equities with a horizon below _________years can be dangerous.

4. Index funds are passive funds.

True

False

5. An investor in a ___________fund is bearing a higher cost for the fund management, and a higher
risk.

Active

Passive

Both

None

6. If the bench mark index goes down, then the NAV of the index fund will go up.

True

False
7. If the investor has a long enough horizon, then his investment will do well in line with the overall
market.

True

False

8. A holder of units in a close-ended scheme will need counter-party in the stock exchange in order to be
able to purchase his units and recover its value.

True

False

9. The price of units of a closed-end scheme in the stock exchange tends to be _________ than the NAV.

Higher

Lower

Equal

None

10. There is no limit to this discount in close ended scheme.

True

False

11. In an actively managed diversified fund, the fund manager performs the role of ensuring ________
exposure to the better performing sectors.

Higher

Lower

Equal

None

12. Investors who are comfortable with risk can invest in _________.

Large cap funds

Mid cap funds

Balanced funds

Sector funds
13. When industry scenario is difficult, the resource strengths of_________ front-line stocks help them
survive.

Mid cap funds

Small cap funds

Large cap funds

None of the above

14. As the growth stocks get fully valued, value funds tend to perform_________.

Good

Worse

Better

Any of the above

15. Portfolio Turnover Ratio is calculated as Value of Purchase and Sale of Securities during a period
divided by the average size of net assets of the scheme during the period.

True

False

16. Debts funds are less risky than equity funds.

True

False

17. MIP has an element of equity in its portfolio.

True

False

18. ________is ideal when the investor’s investment horizon is in synch with the maturity of the
scheme, and the investor is looking for a predictable return that is superior to what is available in a fixed
deposit.

Debt funds

FMP

MIP
Any of the above

19. __________invest in a mix of government securities (which are safer) and non-government
securities.

Gilt funds

Regular debt funds

Money market funds

Diversified debt funds

20. A __________scheme that manages its credit risk well can generate superior returns, as compared
to a Gilt Fund.

Diversified mutual funds

Gilt funds

Regular debt funds

Money market funds

21. Shorter term debt securities fluctuate more than longer term debt securities.

True

False

22. __________are subject to the risk of fluctuations in NAV.

Gilt funds

Regular debt funds

Money market funds

Diversified debt funds

23. ____________may be taxed as a debt scheme or an equity scheme depending on the scheme’s
investment portfolio.

liquid schemes

Diversified schemes

Balanced schemes

None of the above

24. A large proportion of fully-valued front-line stocks in the portfolio of a value fund is indicative of the
fund manager not being true to the promised investment style.

True

False

25. Some other parameters that are considered while selecting schemes within a category
are____________.

Fund age

Tracking error

Scheme running expenses

All of the above

26. Quarterly performance ranking of schemes over a period of time shows that the best ranking fund in
a quarter is not necessarily the best ranking fund in the next quarter.

True

False

27. Re-purchase transactions in equity schemes are subject to ___________.

DTT

STT

IT

All of the above

28. ________ can take care of any need for a regular income.

STP

SWP

BOTH

None of the above

29. Equity markets are more predictable in the long term than the short.

True

False
30. Arbitrage funds are meant to give better equity risk exposure.

True

False

31. The comparable for a liquid scheme is___________.

Equity scheme

Balanced Scheme

Gilt Fund

Savings Bank account

32. Which of the following aspects of portfolio would an investor in a debt scheme give most
importance?

Sector selection

Stock selection

Weighted Average Maturity

Number of securities in portfolio

33. Mutual fund ranking and rating amount to the same.

True

False

Chapter 10

1. An investor who buys ________________can touches and feels them.

Land

Shares

Debentures

All of the above

2. Financial assets have value and can be touched, felt and used.

True

False
3. Shares, debentures, fixed deposits, bank accounts and mutual fund schemes are all examples of
physical assets

True

False

4. In which account can withdrawn the amount any time?

Fixed deposit

Bank account

Demat Account

Mutual Fund

5. In which type of assets investor draws psychological comfort?

Financial assets

Physical assets

6. Theft or fire or flood, have no impact on the entitlement of the investor to a physical asset.

True

False

7. Money invested in financial assets can be productive for the economy.

True

False

8. The company, whose shares are bought, can invest the money in a project, which can
boost___________.

Production

Jobs

National income

All of the above

9. NCDEX refers to_____________.

National contract exchange

National currency exchange

National commodity exchange

National conversion exchange

10. MCX refers to _____________.

Multi commodity exchange

Multinational commodity exchange

Mutual commodity exchange

Multiple commodity exchange

11. When an investor buys a gold futures contract, the entire value of the contract is need to be paid.

True

False

12. ____________ is an open-ended scheme with no fixed maturity.

Gold future contract

Gold PTF

Gold FDT

Gold ETF

13. _____________are exempted from Wealth Tax.

Gold Deposit Schemes

Mutual fund

Either A & B

Both

14. Real estate is a _______________.

Liquid market

Illiquid market

15. Investment in financial assets as well as gold can be converted into money quickly.
True

False

16. _______________is not a standardized product.

Share

Mutual fund

Real estate

Debentures

17. When property is let out, there can be a risk that the lessee may lay his own claim to
the________________.

Ownership risk

Credit risk

Either A & B

Both of the above

18. Several investors are comfortable only in placing money in bank deposits; they do not invest in debt
schemes, partly because of ________________.

Lack of interest

Lack of awareness

Lack of money

Lack of time

19. Mutual fund debt schemes are superior to bank deposits in some respects.

True

False

20. With a ___________, the depositor can never earn a return higher than the interest rate promised.

Bank deposit

Mutual Fund

Both A & B
None of the above

21. In a ____________ no return is guaranteed.

Bank deposit

Mutual fund

Both A & B

None of the above

22. Interest earned in a bank deposit is taxable each year.

True

False

23. PFRDA refers to ______________.

Private Funds Regulatory and Development Authority

Provision Funds Regulatory and Development Authority

Pension Funds Regulatory and Development Authority

None of the above

24. PRAN means________________.

Personal Refund A/C Number

Personal Resale A/C Number

Personal Regular A/C Number

Personal Retirement A/C Number

25. More than 50% of the wealth of Indians is held in physical assets

True

False

26. Gold Futures are superior to ETF Gold as a vehicle for life-long investment in gold.

True or False

27. As regards wealth tax, ETF Gold is superior to physical gold.

True

False

28. The New Pension Scheme is regulated by

SEBI

IRDA

PFRDA

AMFI

29. An investor under the new pension scheme can choose which of the following asset classes

Equities

Corporate debt

Government Securities

Any of the above

30. Pension A/C is pre requisite for opening a Saving A/c.

True

False

31. In Tier 1 account of NPS is withdrawable.

True

False

32. In Tier II account of NPS is withdraw able.

True

False

Chapter 11

1. The objective of financial planning is to ensure that the right amount of money is available at the right
time to meet the various financial goals of the investor.

True

False
2. Financial Planners help the investors___________.

To decide on the optimal source of borrowing

Tax planning

Planning for contingencies

All of the above

3. The comprehensive Financial plan captures the estimated _________from various sources, and
estimated ______for various financial goals.

Outflow & Inflow

Inflow & Outflow

4. The _______commitment needs to be viewed as an investment in a long term relationship.

Value

Safety

Time

Interest

5. The fourth stage of life cycle is____________.

Young Unmarried

Married with young children

Pre retirement

Married with older children

6. What is the right age to start investing in equity?

Pre retirement

Married with young children

Young Unmarried

Retirement

7. To start a health insurance policy earlier and not having to make a claim against it for a few years is
the best antidote to the possibility of insurance companies rejecting future insurance claims
called__________.
Pre existing illness

Existing illness

Illness

None of the above

8. In many policies, the policy holder has to bear the expense first and then claim re-imbursement from
the insurer.

True

False

9. The third stage of wealth cycle is__________.

Accumulation

Transition

Reaping

Inter generational transfer

10. Which phase cover the lifecycle stage from young married to pre- retirement?

Accumulation

Transition

Reaping

Inter generational transfer

11. At which phase the investor starts thinking about orderly transfer of wealth to the next generation in
the event of death.

Accumulation

Transition

Reaping

Inter generational transfer

12. Which stage is the parallel of retirement phase in the life cycle?

Accumulation
Transition

Reaping

Inter generational transfer

13. ______________is the example of sudden wealth?

Winning lotteries

Unusual high capital

Unexpected inheritance of wealth

All of the above

14. Financial Planning tools help only in estimating the cash flow requirements.

True

False

15. Today’s costs can be translated into future requirement of funds using the formula:

A=P x(1+ i)n

A=P /(1+ i)n

P=A x(1+ i)n

P=A /(1+ i)n

16. Providing funds fro a daughter’s marriage is an example of _______.

Goal oriented financial plan

Comprehensive financial plan

Financial goal

None of the above

17. According to Certified Financial Planner- Board of Standards (USA), the first stage in financial
planning is _________.

Analyze and evaluate client’s financial status

Establish and define the client’s planner relationship

Gather client data, define client goals

Develop and present financial planning recommendations and / or options

18. Investor can get into long term investment commitments in_________.

Distribution Phase

Transition Phase

Inter-generational Phase

Accumulation Phase

19. Distribution phase of wealth cycle is not a parallel of retirement phase of life cycle.

True

False

20. __________approach help understand the investor better.

Lifecycle

Wealth cycle

Both A & B

Either A & B

21. Which stage is also known as Distribution phase of wealth cycle?

Accumulation

Transition

Reaping

Inter generational transfer