AMFI

Roots Institute of Financial Markets
RIFM
Practice Book
NISM-SERIES-V-A
MUTUAL FUND DISTRIBUTORS CERTIFICATION EXAMINATION

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Welcome to RIFM
Thanks for choosing RIFM as your guide to help you in CFP Certification.
Roots Institute of Financial Markets is an advanced research institute Promoted by Mrs. Deep
Shikha CFPCM. RIFM specializes in Financial Market Education and Services. RIFM is introducing
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Faculty and content team, RIFM

Our Team
Deep Shikha Malhotra CFPCM
 M.Com., B.Ed.
 AMFI Certified for Mutual Funds
 IRDA Certified for Life Insurance
 IRDA Certified for General Insurance
 PG Diploma in Human Resource Management
CA. Ravi Malhotra

 B.Com.
 FCA
 DISA (ICA)
 CERTIFIED FINANCIAL PLANNERCM
Vipin Sehgal CFPCM

 B.Com.
 NCFM Diploma in Capital Market (Dealers) Module
Neeraj Nagpal CFPCM

 B.Com.
NCFM Diploma in :
 Capital Market (Dealers) Module
 Derivatives Market (Dealers) Module
 Commodities Market Module
Kavita Malhotra
 B.Com.
Certification in following Modules of CFPCM Curriculum (FPSB India)
 Risk Analysis & Insurance Planning
 Retirement Planning & Employees Benefits
 Investment Planning
 Tax Planning & Estate Planning
 Advanced Financial Planning

INDEX
Unit Pages
1.CONCEPT AND ROLE OF MUTUAL FUND 1-7

2.FUND STRUCTURE AND CONSTITUENTS 8-12
3.LEGAL AND REGULATORY ENVIRONMENT 13-16
4.OFFER DOCUMENT 17-21
5.FUND DISTRIBUTION AND SALES PRACTICES 22-25
6.ACCOUNTING VALUATION AND TAXATION 26-32
7.INVESTOR SERVICES 33-36
8.RISK, RETURN AND PERFORMANCE OF FUNDS 37-40
9.SCHEME SELECTION 41-46
10.SELECTINGTHE RIGHT INVESTMENT PRODUCTS 47-50
FOR INVESTORS
11. HELPING INVESTORS WITH FINANCIAL PLANNING 51-54
12. RECOMMENDING MODEL PORTFOLIOS AND 55-56
FINANCIAL PLANS
SAMPLE PAPER 1
57-71
SAMPLE PAPER 2
72-86

Unit 1
CONCEPT AND ROLE OF MUTUAL FUND
1. Which of the following is not a Mutual Fund characteristic?
A. Diversified portfolio
B. Careful research and monitoring of the market
C. Substantial capital
D. Expertise in stock market
2. Choose the advantage of Mutual Funds
A. Small amount of investment

B. Professional management
C. Risk diversification
D. All of the above
3. UTI was the only capital market intermediary for the period :
A. 1964 to 1987
B. 1963 to 1988
C. 1964 to 1992
D. None of the above
4. Mutual Funds can be defined as
A. a link between the saving public and the capital markets

B. an active participant in promoting good corporate governance, investor protection
C. a participant that has brought in liquidity into the financial system
D. All of the above
5. The ownership of a Mutual Fund belongs to
A. Board of Trustees
B. Sponsor
C. AMC
D. Unit-holders
6. A Mutual Funds‟ investments are guided by
A. AMC
B. Board of Trustees
C. Investment objectives
D. Unit-holders
7. In USA, a mutual fund is constituted as
A. Trust
B. Investment company
C. Company
8. In India, a mutual fund is constituted as
A. Trust
B. Investment company
C. Company
35. Which of the following statements is true? 2
A. Open-end schemes have variable unit capital

B. Open end schemes can be listed in the stock market
C. Closed-end schemes can offer re-purchase facility
D. All the above
E. Only (a) and (c
36. Mutual funds are described as _____ in the SEBI Regulations, 1996
A. Companies
B. AMCs
C. Trusts
D. Agencies
37. Index Funds invest in stocks comprising indices
A. TRUE
B. FALSE
38. ---------- funds invest in equities in one or more foreign countries

A. Offshore Funds
B. Equity Funds
C. Sector Funds
D. Specialty Funds
39. . Fixed Term Plan series are (as per AMFI Workbook)
A. Close ended
B. Generally short term in nature
C. Not Listed On stock exchange
D. All of the above
40. To create investor awareness about mutual funds, a booklet titled “Making Mutual Fund

Work for you – The Investors Guide” was published by
A. SEBI
B. AMFI
C. Unit Trust of India
D. Investor Education and Protection fund
41. Which among the following replicate the returns of the specific index?
A. Income Funds
B. Sector Funds
C. Index Funds
D. Balanced Funds
E. All of above

Unit 1 Answer Sheet
1 C 24 A
2 D 25 C
3 A 26 B
4 D 27 D
5 D 28 B
6 C 29 B
7 B 30 D
8 A 31 A
9 C 32 A
10 D 33 D
11 C 34 B
12 C 35 E
13 B 36 C
14 B 37 A
15 D 38 A
16 C 39 D
17 B 40 B
18 B 41 C
19 A 42 B
20 B 43 B
21 B 44 D
22 B 45 A
23 A 46 C
47 C

Unit 4
OFFER DOCUMENT
19. Standard risk factors
A. Past performance of sponsor/AMC/MF is not indicative of the future

performance of the Trust
B. Risk arising from non-diversification
C. Assured return scheme, if assurance until maturity it must be stated
D. All of the above
20. The front page of an OD need not cover
A. Opening, closing and earliest closing date

B. Disclaimer clause
C. Legal and regulatory compliance
D. Price of units
21. A change in key personnel especially the fund manager of an AMC does not
necessitate a revision of the offer document
A. True
B. False
22. As per Second Schedule of SEBI (Mutual Fund Regulations, 1996) „Filing Fees for
Offer Document‟ is
A. Rs: 10,000
B. Rs: 15,000
C. Rs: 25,000
D. Rs: 50,000
23. An offer document contains an AMCs investor grievances history for the past
A. 1 fiscal year
B. 2 fiscal year
C. 3 fiscal year
D. Six months
24 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
25. Shortfalls in the case of assured returns schemes are met
A. By sponsors of such schemes

B. Only if the offer document specifically provided such a guarantee by a named
sponsor
C. The Government of India
D. AMFI
26. Unit-holders aggrieved by a Fund or AMC can get redressed from
A. Consumer Courts
B. SEBI
C. AMFI
D. RBI

Unit 4 Answer Sheet
1 C 16 C
2 D 17 A
3 A 18 D
4 B 19 D
5 C 20 C
6 B 21 B
7 A 22 C
8 E 23 C
9 D 24 D
10 C 25 B
11 D 26 B
12 D 27 D
13 E 28 B
14 D 29 D
15 D

Unit 7
INVESTOR SERVICES
9. Debt securities with less than 182 days to maturity are valued at
A. Face value
B. YTM basis
C. Accrual basis
D. Duration basis
10. A Systematic Withdrawal Plan, allows investors to get back the principal amounts
invested in addition to the income on investment
A. True
B. False
11. Constraints imposed by most funds on check writing are :
A. Account balance should not fall below the minimum capital required
B. Checks issued must be for at least the minimum amount specified
C. Number of checks per month must not exceed a specified number
D. Both a & b above
12. Which of the following is untrue of an automatic reinvestment plan ?
A. The plan allows for automatic reinvestment of all income and capital gains
B. Automatic reinvestment allows for accumulation of additional units of the fund
C. The major benefit of automatic reinvestment is compounding
D. The benefit of automatic reinvestment is often lost on account of the heavy load
charge on the reinvestment
13. The performance of a fund is largely measured by the success of
A. The marketing function

B. The operations function
C. The portfolio market function
14. Which of the following is true
A. SEBI does not allow the investor to pledge his mutual fund units on favour of
financial institutions
B. An investor cannot redeem his mutual fund holding in part
C. the frequency of investment offered for SIP varies from one fund to another
D. All of the above
15. An investor buys units in a fund that has given excellent returns in the past, but his
expectations are not met, as the fund does not perform well this year. The investor can .
A. Sue the AMC

B. Sue the Trustees
C. Sue the agent
16. Documents available to investors for inspection do not include (1 mark)
A. Memorandum and Articles of Association of AMC

B. Consent of auditors and legal advisors
C. Investment management reports
D. Reports based on which actual investments are made
17. A systematic withdrawal plan is ideal for investors who
A. Seek growth as the main objective

B. Wish to benefit from market fluctuations
C. Prefer a regular income stream
D. Not sure about themselves
18. Mutual funds can lend funds in the form of
A. Loans
B. Promissory notes
C. Securities

Answer Sheet Unit 7
1 D 12 D
2 B 13 C
3 B 14 C
4 C 15 C
5 C 16 C
6 B 17 C
7 B 18 C
8 D 19 D
9 C 20 B
10 A 21 D
11 D 22 B
23 A

Unit 10
SELECTINGTHE RIGHT INVESTMENT PRODUCTS
FOR INVESTORS
2. 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 a bond index
D. A government securities fund with a government security
3. Which of the following entities can give loans against securities
A. UTI
B. Banks
C. Mutual Funds
4. The difference between debenture and bond is: (2 marks)
A. Bonds are issued by corporations and debentures are issued by PSUs.

B. Bonds are unsecured and debentures are secured.
C. Bonds are backed by loans and debentures are backed by assets
D. None of the above.
5. Which of the following is not an advantage of bank deposits?
A. Liquidity
B. High perceived safety
C. Low entry price
D. High yield after tax
6. Which of the following do not provide a guarantee on capital?
A. PPF
B. NSC
C. Post office deposits
D. Units of mutual funds
7. Which of the following is not a characteristic of company fixed deposits
A. A higher rate of interest

B. Higher risk
C. Unfavorable effect of tax
D. Very high liquidity

8. Which of the following is the right comparison?
A. A long-term life insurance policy and long term bond

B. A bank FD with a Monthly Income Plan
C. A Monthly Income Plan with a monthly interest Fixed Deposit
9. The maturity period of RBI Relief Bonds is
A. 5 years
B. 6 years
C. 7 years
D. 8 years
10. The most important factor look for when investing in a corporate fixed deposit is the
A. Yield
B. Rate of interest
C. Credit rating of the deposit

Answer Sheet Unit 10
1 B 12 B
2 B 13 B
3 B 14 D
4 B 15 A
5 D 16 A
6 D 17 B
7 D 18 D
8 D 19 A
9 A 20 B
10 C 21 B
11 D 22 C

Unit 12
RECOMMENDING MODEL PORTFOLIOS AND
FINANCIAL PLANS
3. A wealth preserving affluent investor is likely to invest pre-dominantly in
A. Equity securities
B. Debt funds and fixed income securities
C. Money market
D. Real estate
4. In which type of schemes should an unmarried professional will invest
A. Scheme investing 80% in debt securities

B. 50% in equity funds and 50% in income funds
C. 90% in equity funds having a higher p/e ratio than the market
D. All the money in a balanced fund
5. A wealth creating affluent investor is likely to invest pre-dominantly in
A. diversified Equity securities

B. Debt funds and fixed income securities
C. Money market
D. Real estate
Answer Sheet Unit 12

1 A 3 B
2 A 4 C
5 A

Sample paper 1
1. A load means
A. An amount recovered from the registrar
B. An amount which is recovered from the investor
C. An amount paid to the broker by the fund
D. An amount paid by the fund to the regulator (SEBI)
2. YTM can also be defined as bond‟s

A. IRR
B. Coupon rate
C. Current yield
D. Duration
3. Shortfall in the case of assured returns schemes are met

A. By the Custodian
B. By the SEBI
C. By AMFI
D. By the person‟s entity guaranteeing the return as per the offer document
4. Who is responsible for filing details of the fund‟s portfolio with SEBI
A. Registrar of the fund
B. Fund trustee
C. Custodian
D. The Fund manager
5. A Mutual Fund is supervised by

A. The AMC
B. The Sponsor
C. A Board of Trustees or A Trustee Company
D. Registrar
6. Unit holders can not sue the trust as

A. trust is established by the sponsor with approval from SEBI
B. they are not distinct from the trust
C. trust is not a legal entity
D. the funds are managed by the AMC
7. The NAV of XYZ equity scheme is Rs. 10.50 on 3rd September 2002, if the fund charges
0.25% as the exit load, what would be the repurchase price for the investor ?
A. 7.8750
B. 13.1250
C. 10.000
D. 10.4737
8. Investment in an Equity Linked Savings Scheme (ELSS)

A. Entitles the investor to claim income tax rebate

B. Requires the investment to be locked in for a period of 3 years
C. Automatically leads to investment in equity shares
D. All of these
80. Bank owned mutual funds are regulated by :

A. RBI
B. SEBI
C. RBI & SEBI
D. Respective parent banks
81. Which is a self – regulatory organization ?

A. Office of the public trustee
B. Stock exchange
C. SEBI
D. AMBI
82. In case of AMC fails to resolve a complaint, a mutual fund investor can address his
complain
A. RBI
B. The Consumer Court
C. SEBI
83. Offer Document of a mutual fund may be issued by

A. The Asset Management Company / Sponsor
B. The Treasurer
C. The Registrar
D. SEBI
84. An investors wants to invest in a particular mutual fund. He has the right
A. To ask the AMC for a detailed Offer Document or Key Information Memorandum
before investments
B. To ask the AMFI for a detailed Offer document
C. To ask SEBI for a detailed Offer Document
D. To ask the Custodian for Key information Memorandum
85. A review of the Offer Document of a Mutual Fund helps an investor to

A. Assess funds objectives
B. Get information on the schemes, its investment objective and terms of issue
C. Get all the relevant facts about the fund before making the investment
D. All of the above
86. Which classes of investors are NOT allowed to invest in mutual funds in India ?
A. Non-Resident Indians
B. Foreign Institutional Investors
C. Trusts and Charitable Institutions
D. Foreign Citizens

87. Who is answerable for the activities of a sub-broker selling a mutual fund ?
A. Asset Management Company
B. Trustees
C. SEBI
D. Mutual Fund Agent who engaged him
E. None of these
88. In India mutual funds agent‟s role is codified in

A. AMFI‟s Regulations for Mutual Fund Agents
B. SEBI‟s mutual fund regulations
C. Association of Financial Sellers‟ Code
D. None of these
89. In case of open ended schemes, initial issue expenses are written off over a period not
exceeding
A. 10 years
B. 20 years
C. 15 years
D. 3 years

Answer Sheet Sample Paper 1
1 B 26 B 51 A 76 C
2 A 27 D 52 A 77 D
3 D 28 D 53 D 78 C
4 D 29 C 54 C 79 D
5 C 30 D 55 C 80 C
6 B 31 A 56 B 81 B
7 D 32 A 57 C 82 C
8 D 33 D 58 D 83 A
9 C 34 D 59 D 84 A
10 E 35 A 60 D 85 D
11 C 36 A 61 C 86 D
12 E 37 B 62 D 87 D
13 A 38 D 63 D 88 D
14 D 39 D 64 D 89 D
15 A 40 D 65 B 90 E
16 C 41 B 66 A 91 C
17 A 42 D 67 A 92 C
18 A 43 D 68 B 93 B
19 D 44 D 69 D 94 A
20 C 45 A 70 A 95 D
21 C 46 E 71 A 96 D
22 B 47 D 72 A 97 D
23 A 48 D 73 A 98 B
24 A 49 B 74 A 99 C
25 D 50 D 75 C 100 A

Sample paper 2
9. Value averaging means
A. Keeping the target value of investment constant by investing the amount by

which the investment value has gone down
B. Investing the same amount of funds regularly
C. Investing in one lump sum amount
D. None of these
10. Fixed ratio of asset allocation means
A. Investing the same amount every month

B. Means not doing any rebalancing
C. It is a relatively aggressive approach for managing investment
D. Balancing is maintained by liquidating a part of the position in the asset class
with higher return reinvesting in the other asset with lower return
11. A five year deep discount bond would
A. Pay interest on a yearly basis

B. Pay interest on a quarterly basis
C. Be redeemed on maturity at the face value which is higher than the
issue price with no payment in between
D. Offer yield tax free
12. As a general rule, the longer the duration of a debt fund portfolio, the greater the risk of
fluctuations in the portfolio value
A. The less risky it is

B. The more attractive it is in terms of upside potential
C. The less attractive it is in terms of return
D. Both (a) and (c)
13. In developing a fund portfolio for any investor, the following steps are involved. The
order in which these steps are to be followed is
A. Asset allocation, sector distribution, selection of fund managers & scheme

B. Sector distribution, asset allocation, selection of fund managers & schemes
C. Selection of fund managers/schemes, sector distribution and asset allocation
D. Sector distribution, selection of fund managers, asset allocation and schemes
14. As per you if you were to follow benjamin graham‟s advice, which of the following asset
allocations will you recommend to a 25 year old mba, recently recruited by Hindustan
lever?
A. 100% equity funds

B. 90% in debt funds
C. 80% in equity funds and 20% in debt funds
D. 50% in equity funds and 50% in bond and money market funds
15. A retired executive with a moderate risk appetite should be advised to invest in
A. Aggressive equity sector funds

B. Diversified equity funds
C. Aggressive growth funds
D. He should not invest anywhere
16. An investor wants to invest for a period of one year. Which of the following debt funds
will you recommend as the best investment?
A. A fund with an expense ratio of 1.2% and no entry load

B. A fund with an expense ratio of 1.1% and entry load of 0.10%
C. A fund with an expense ratio of 1.05% and entry load of 0.15%
D. A fund with an expense ratio of 1% and entry load of 0.20%
17. calculate the NAV of a mutual fund scheme given the following :
Size of the scheme: rs. 300 crore
Face value of the unit: rs. 10/- per unit
Number of outstanding units: rs. 15 crore
Market value of the investments: rs. 540 Crores
A. Rs. 36
B. Rs. 10.00
C. Rs. 15.00
D. Insufficient data
18. An investor purchased units in an approved mutual fund on January 01, 1998, for rs. 4,
00,000.00 he sold the units on December 15, 1999 for rs. 6,00,000.00 calculate the
capital gain taxes paid by him without the benefit of indexation (ignore taxation)
A. Rs. 20000.00
B. Rs. 40000.00
C. Zero
D. Depends on the investors tax bracket
19. Calculate the current yield on a gsec with a par value of rs. 1000/- coupon of 10% and
market price of rs. 1010/-
A. 10%
B. 9.9%
C. 10.1%
D. 11%
20. An open end fund was purchased when the NAV was rs. 21. 12 months later, its NAV
was rs. 23/- the annualized percent NAV change is
A. 6.96%
B. 9.52%
C. 7.62%
D. Insufficient data
21. Review of the offer document of a mutual fund helps an investor to
A. Assess funds objective

B. Get information on the scheme, its investment objective and terms of issue
C. Get all relevant facts about the fund before making the investment
D. All of these
22. Which statement is wrong
A. Every type of mutual fund has a unique risk profile that is determined by
its portfolio
B. An open end fund is one that units available for sale or repurchase at
nav
C. An open end fund is not obliged to keep selling/issuing new units at all
times
D. An open-end fund may have a lock in period
23. The jurisdiction for resolving legal disputes concerning mutual funds is
A. Given in the offer document / key information memorandum

B. Stated in the major stock exchanges
C. Decided by company law board
D. Decided by the BSE/NSE

89. Mutual funds should be recommended …..
A. Investments to achieve long term goals
B. A “get rich quick” investment option
C. Investment to take advantage from stock market swings
D. All of these
90. Beta of an equity fund measured the market risk of the fund. The equity of this number
is indicated by
A. Trey nor Ratio
B. ExMarks (R-Squared)
C. Standard Deviation
D. Sharpe Ratio
91. 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 much of a fund‟s NAV movement is due to expenses
C. How much of a fund‟s NAV movement is due to change in rating
D. How much of a fund‟s NAV movement is due to historical reasons
92. NAV ( Net Asset Value ) of a mutual fund schemes, given the following
Size of the Scheme Rs. 100 Crore
Face Value of the unit Rs 10 per Unit
Number of outstanding units Rs. 10 Crore
Market value of the investments Rs. 180 Crore
A. Rs. 18
B. Rs. 10
C. Rs. 100
D. Insufficient Data
93. An investor purchases units in an approved mutual fund on January 1, 1998 for Rs.
5,00,000. He sold the units on December 15, 1999 for Rs. 7,50,000. Calculate the
capital gain taxes paid by him without the benefit of indexation ( ignore surcharges )
A. Rs. 25,000/-
B. Rs. 50,000/-
C. Zero
D. Depends on the investor‟s tax bracket
94. Calculate the current yield on a G-sec with a par value of Rs. 1000, coupon of 10% and
market price of Rs. 1020.
A. 0%
B. 8%
C. 10.2%
D. 11%
98. In India, the public sector mutual funds came ……

A. Before private sector funds and UTI
B. After UTI but before SEBI Regulation 1996

C. After SEBI Regulation 1996
D. After SEBI Regulation 1996 but before private sector funds
99. Which of the following statements is TRUE ?

A. Growth and risk are associated with equity funds
B. Stability is associated with debt funds
C. Both 1 & 2
D. None of these
100. Value funds invest in ……….

A. Shares that are undervalued today
B. Shares of companies that practice value-based management
C. Shares have high market value
D. Risky shares
E. Shares recommended by Value Research

Answer Sheet Sample Paper 2
1 C 26 C 51 C 76 A
2 D 27 C 52 A 77 D
3 C 28 D 53 C 78 D
4 D 29 C 54 A 79 B
5 B 30 C 55 B 80 B
6 B 31 A 56 B 81 D
7 C 32 A 57 D 82 D
8 D 33 C 58 B 83 A
9 A 34 D 59 D 84 D
10 D 35 B 60 A 85 D
11 C 36 A 61 C 86 A
12 B&C 37 B 62 D 87 D
13 A 38 A 63 A 88 A
14 C 39 C 64 D 89 A
15 B 40 E 65 C 90 B
16 A 41 D 66 B 91 A
17 A 42 D 67 A 92 A
18 A 43 D 68 D 93 A
19 B 44 A 69 D 94 B
20 B 45 B 70 D 95 B
21 D 46 A 71 B 96 B
22 B 47 D 72 C 97 A
23 A 48 B 73 A 98 B
24 A 49 C 74 5 99 C
25 C 50 B 75 A 100 A

Roots Institute of Financial Markets (RIFM)
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No person should act on the basis of the material contained in the publication without considering and taking
professional advice.

Helpful Books from RIFM
NCFM Modules Practice Books (about 500 Questions per Module)
Cost Rs. 600 Per Module
1. FINANCIAL MARKETS : A BEGINNERS MODULE
2. SECURITIES MARKET (BASIC) MODULE
3. CAPITAL MARKET (DEALERS) MODULE
4. DERIVATIVES MARKET (DEALERS) MODULE
5. COMMODITIES MARKET MODULE
6. INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
7. OPTION TRADING STRATEGIES
NISM Modules Practice Books (about 500 Questions per Module)

1. MUTUAL FUND DISTRIBUTORS CERTIFICATION EXAMINATION
2. CURRENCY DERIVATIVES CERTIFICATION EXAMINATION
CFP Certification Modules ---Study Notes (Detailed Study notes as per FPSB
syllabus) Cost Rs. 1000 Per Module
1. INTRODUCTION TO FINANCIAL PLANNING
2. INVESTMENT PLANNING
3. RISK ANALYSIS OF FINANCIAL PLANNING
4. RETIREMENT PLANNING
5. TAX PLANNING
CFP Certification Modules ---Practice Books (about 800 Questions per Module)
1. INTRODUCTION TO FINANCIAL PLANNING
2. INVESTMENT PLANNING
3. RISK ANALYSIS OF FINANCIAL PLANNING
4. RETIREMENT PLANNING
5. TAX PLANNING
Advance Financial Planning Module---

Practice Book & Study Notes (Cost Rs. 5000/-)
Roots (RIFM)
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Dal Road. Mahavir132103
Dal Road. Panipat. 132103 Haryana.
Haryana.
Ph.99961-55000, 0180-2663049 email: info@rifmindia.cominfo@rifmindia.com
Ph.99961-55000, 0180-2663049 email:
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Wish you Luck……………

Faculty and content team, RIFM

Roots Institute of Financial Markets

CA. Ravi Malhotra

Vipin Sehgal CFPCM

Neeraj Nagpal CFPCM

Roots Institute of Financial Markets

1.CONCEPT AND ROLE OF MUTUAL FUND 1-7

Roots Institute of Financial Markets

1. Which of the following is not a Mutual Fund characteristic?

2. Choose the advantage of Mutual Funds

A. Small amount of investment

4. Mutual Funds can be defined as

A. a link between the saving public and the capital markets

5. The ownership of a Mutual Fund belongs to

6. A Mutual Funds‟ investments are guided by

7. In USA, a mutual fund is constituted as

8. In India, a mutual fund is constituted as

35. Which of the following statements is true? 2

A. Open-end schemes have variable unit capital

37. Index Funds invest in stocks comprising indices

38. ---------- funds invest in equities in one or more foreign countries

Roots Institute of Financial Markets

Roots Institute of Financial Markets

Roots Institute of Financial Markets

19. Standard risk factors

A. Past performance of sponsor/AMC/MF is not indicative of the future

20. The front page of an OD need not cover

A. Opening, closing and earliest closing date

A. Details of the Sponsor and the AMC

Roots Institute of Financial Markets

25. Shortfalls in the case of assured returns schemes are met

A. By sponsors of such schemes

26. Unit-holders aggrieved by a Fund or AMC can get redressed from

Roots Institute of Financial Markets

Roots Institute of Financial Markets

11. Constraints imposed by most funds on check writing are :

12. Which of the following is untrue of an automatic reinvestment plan ?

13. The performance of a fund is largely measured by the success of

A. The marketing function

14. Which of the following is true

A. Sue the AMC

16. Documents available to investors for inspection do not include (1 mark)

A. Memorandum and Articles of Association of AMC

17. A systematic withdrawal plan is ideal for investors who

A. Seek growth as the main objective

18. Mutual funds can lend funds in the form of

Roots Institute of Financial Markets

Roots Institute of Financial Markets

A. Two debt funds with 5 year maturities

3. Which of the following entities can give loans against securities

4. The difference between debenture and bond is: (2 marks)

A. Bonds are issued by corporations and debentures are issued by PSUs.

5. Which of the following is not an advantage of bank deposits?

6. Which of the following do not provide a guarantee on capital?

7. Which of the following is not a characteristic of company fixed deposits

A. A higher rate of interest

Roots Institute of Financial Markets

A. A long-term life insurance policy and long term bond

9. The maturity period of RBI Relief Bonds is