Professional Documents
Culture Documents
Chapter 1
Q.1 In India, the first mutual fund after UTI was launched by
1. Can bank mutual fund 3. SBI mutual fund
2. Morgan Stanley 4. LIC mutual fund
Q.2 A Mutual Fund is a
1. Collective investment vehicle for the 2. Company that accepts fixed deposits
purchase of securities on behalf of 3. Fund that issues bond and debentures
investors. 4. None of the above
Q.3 In India a mutual fund is a trust whereas in the USA it is
1. An investment company 3. A Society
2. A Trust 4. A Bank
Q.4 Which of the following statement is TRUE?
1. Growth and risk are associated with 3. Both 1 & 2
equity funds 4. None of the above
2. Stability is associated with debt funds
Q.5 Investment in an Equity Linked Savings Scheme (ELSS)
1. Entitles the investor to claim income 3. Automatically leads to investment in
tax rebate equity shares
2. Requires the investment to be locked 4. All of these
in for a period of 3 years
Q.6 Mutual funds should be recommended as
1. Investments to achieve long-term 3. Investments to take advantages from
goals stock market swings
2. A “get rich quick” investment option 4. All of these
Q.7 In India, the public sector mutual funds came
1. Before private sector funds & UTI 3. After SEBI Regulation 1996
2. After UTI but before SEBI regulation 4. After SEBI Regulation 1996 but before
1996 private sector funds
Q.8 Which one of the below is correct?
1. UTIMF was established by a special 3. UTIMF is not the first MF in India
act of parliament 4. UTIMF was set up by Reserve Bank of
2. UTIMF voluntarily accepted guidelines India
of SEBI
Q9 Who published “Making Mutual Funds Work for you- The Investors Guide”
1. AMFI 3. RBI
2. SEBI 4. AMCs
Q.10 A close ended mutual fund has a fixed
1. NAV 3. Rate of Return
2. Fund Size 4. Number of Distributors
Q.11 Ownership of unit holders in mutual funds is
1. Mutual 3. Mutual and Beneficial
2. Beneficial 4. None of the above
Q.12 Which of the following is most significant event during February 2003?
1. UTI Act repealed 3. UTI no longer has special legal status as a
2. UTI MF found trust established by Act of parliament.
4. All of the above
Q.13 The Board of Trustee of the UTI does not have nominees from
1. RBI 3. IDBI
2. LIC 4. The Bombay Stock Exchange (BSE)
Q.14 In the union budget 1999, which significant change was made?
1. Dividends were made tax free in the 3. Dividend distribution tax on all
hands of unit holders. schemes were removed.
2. Capital Gain taxes were abolished. 4. All of these
Q.15 A close ended scheme is quoted on the stock exchange at a discount to its NAV when
1. The markets are bearish 3. The assets of the fund are
2. Investors perceive that the fund will be undervalued
unable to maintain the NAV 4. None of the above
Q.16 AUM of Mutual Fund industry in year 2004-2005 was: (In crores)
1. 140000 3. 152000
2. 150000 4. 120000
Q.17 Which one is more diversified?
1. Fund A which invests in Shares in India 3. Both are equally diversified
2. Fund B which invests in shares in 4. Insufficient information
India and USA both
Q.18 Which of the following is not a specialty fund?
1. Sector fund 3. Foreign securities fund
2. Mid cap /small cap fund 4. Gilt fund
Q.19 Where do Gilt funds invest?
1. Shares 3. Dated securities
2. Debentures 4. All of the above
Q.20 Fixed Term plan series are:
1. Closed ended 3. Not listed on stock exchange
2. Generally short term in nature 4. All of the above
Q.21 Which of the following is not the right classification of funds?
1. Pension and Insurance Funds 3. Load and No load funds
2. Open ended and closed ended funds 4. Tax free and Tax exempt funds
Q.22 The emergence of Private Funds in Indian Mutual Fund industry came in which Phase of
Mutual Funds history?
1. Phase 2 during the period 1987 to 1993 3. Phase 4 during the period 1996 to 1999
2. Phase 3 during the period 1993 to 1996 4. Phase 5 during the period 1999 to 2004
Q.23 Mutual fund can benefit from economics of scale because of
1. Portfolio diversification 3. Large volume of trades
2. Risk reduction 4. None of the above
Q.24 Which of the following is incorrect?
1. An equity fund would invest in ordinary shares, preference shares and warrants
2. A bond fund would mainly buy debt instruments
3. An index fund is indexed to inflation index
4. A sector fund invests in the shares of companies in a particular industry
Q.25 A money market fund usually invests in
1. Government treasury bills of less than one year maturity
2. 6-month certificates of deposits of banks
3. The inter bank call money market
4. All of these
Q.26 Mutual fund pay commission to their agents:
1. As an incentive for having brought in an investor
2. As compensation for his before and after sales service to the investor
3. To off set any direct expenses that they may incur on sale of units
4. All of the above
Q.27 Which of the following has the lowest risk?
1. Liquid Fund (MMMF) 3. Diversified Debt Fund
2. Gilt Fund 4. Diversified Equity Fund
Q.28 The current Mutual Fund Regulations from SEBI was introduced in
1. 1992 3. 1996
2. 1994 4. 1998
Q.29 Board of Trustees appoint Custodians for...
1. Making payment to bankers on behalf of the fund
2. Selling units of a mutual fund
3. Safekeeping of physical securities of the mutual fund or participating in any clearing system.
4. None of these
Q.30 Day to day investment management policies of a fund is determined by...
1. AMC 3. Investors
2. Trustees 4. Sponsors
Q.31 Shares, debentures, bonds, fixed deposits are the products normally issued by
1. Banks 3. Governments
2. Corporate 4. Mutual finds
Q.32 An investor in a close-ended fund can get his money back by selling his units:
1. Back to the fund 3. On a stock exchange where the fund is listed
2. Back to AMFI 4. To the agent who sold the units to the investor
Q.33 Small funds are...
1. Relatively easier to manage 3. Have limited holding
2. Achieve their objectives in more 4. All of these
focused manner
Q.34 Stock markets investments in the market directly offer some advantages except...
1. Potential for high returns 3. Low risk
2. Liquidity through trading on the stock 4. The opportunity to capitalize on stock
exchanges market fluctuations
Q.35 Which of the following was the first Mutual Fund in India after UTI
1. Can Bank Mutual Fund 3. LIC Mutual Fund
2. SBI Mutual Fund 5. Indian Bank Mutual Fund
Q.36 Which of the following Mutual Fund was set up after 1963 but before 1987?
1. SBI Mutual Fund 3. LIC Mutual Fund
2. Can Bank Mutual Fund 4. None of the above
Q.37 Which of the following is true about Closed ended Mutual Funds?
1. It has fixed number of units only 3. It has fixed no. of units & fixed Unit capital
2. It has fixed Unit Capital only 4. None of the above
Q.38 By What name is the Phase of year 2004 onwards of mutual fund industry known?
1. Growth and SEBI Regulation 3. Emergence of Large & uniform industry
2. Emergence of Private funds 4. Consolidation & growth
Q.39 In case of an open ended Mutual Fund , which is true
1. All the times units can be allotted 3. Unconditionally exits at all times
2. Allotment at the time of NFO only 4. All of the above
Q.10 In case of merger of two AMC, 75% of the unit holders have to approve the merger in case of
1. Open ended funds 3. Close ended funds
2. Both open and close ended funds 4. None of the above
Q.11 Who is the primary guardian of unit holders' funds/assets
1. The AMC 3. The Registrars
2. The Trustees 4. The custodians
Q.12 Which of the following is true about Sponsor of a mutual fund?
1. Sponsor can be distributor of Mutual fund 2. Sponsor can’t be a distributor of mutual fund
3. Sponsor can be a Trustee
The AMC 4. Sponsor can not be a custodian
Q 13. What is the full form of ARN ?
1. Agent Registration number.
2. AMFI Registration number.
3. AMFI reconciliation number.
4. Agent Reconciliation number.
Chapter 3
Q.1 When was SEBI founded?
1. 1990 3. 1992
2. 1991 4. 1994
Q.2 Which is a self – regulatory organization (SRO)?
1. Office of the public trustee 3. SEBI
2. Stock exchange 4. AMFI
Q3 Mutual funds in India are required to follow the accounting policies laid down by:
1. AMFI 3. SEBI
2. RBI 4. All of the above
Q.4 The fundamental attributes can be changed in an open-ended scheme by following methods
1. Informing all unit holders individually and offering them exit without any load
2. Voting of 75% of the unit holders.
3. Paper Advertisement in daily newspaper
4. Both 1 and 3.
Q.5 AMFI was set up in 1995 with the objective to:
1. Promote the interests of mutual funds and unit-holders
2. Set ethical, commercial and professional standards in the industry
3. All of the above
4. None of the above
Q.6 Bank owned Mutual Funds are supervised by
1. SEBI 3. Jointly by SEBI & RBI
2. RBI 4. AMFI
Q.7 A Self Regulatory Organisation can regulate
1. All entities in the market 3. Its own members with total jurisdiction
2. Only its own members in a limited way 4. No entity at all
Q.8 The role of AMFI in the mutual funds industry is not to
1. Promote the interests of the unit holders 4. Increase public awareness of mutual funds
in the country
2. Set a Code of Ethics
3. Regulate mutual funds
Q.2 One of the following is NOT required to be disclosed in the offer document. Which one?
1. Details of Sponsor/Trustees 4. Description of the scheme and investment
2. Investors rights and services objective
3. Performance of the other Mutual Funds
Chapter 5
Q.1 A load means
1. An amount recovered from the registrar 3. An amount paid to the broker by the fund
4. An amount paid by the fund to the
2. An amount which is recovered from the regulator (SEBI)
investor
Q.2 AMFI code of Ethics broadly covers
1. Management of funds ought to be in the interest of the unit holder
2. Adequate disclosures by the fund ought to be made to the unit holders
3. Funds are urged to adopt to the professional selling practices
4. All of these
5. Only (1) & (2)
Q.3 If an investor failed to claim the redemption proceeds after 3 years of due date he has the right
to receive an amount equal to
1. Prevailing NAV 4. Zero.
2. Face value of the unit 5. Due date NAV plus interest @ 15% p.a.
3. NAV at end of 3 years after the due date
Q.4 One of the following is NOT an ethical practice for a good mutual fund agent which one
1. Promising a particular rate of return in a scheme
2. To discuss the financial and investment needs of the investor
3. To explain the returns obtained by similar schemes of other AMCs
4. To discuss with the investor the risks associated with the proposed investment
Q.5 Commission payable to agents by mutual fund is..
1. Based on the funds’ policy and discretion
2. Based on SEBI guidelines on agent commissions
3. Based on commissions paid by UTI to its agents
4. Based on Regulations of the RBI
Q.6 Which of the following sales practices is prescribed by regulation?
1. AMFI Code of Ethics 3. Mafia’s code of agents
2. SEBI Advertising Code 4. None of the above
Q.7 Some funds pay of the commission up-front and the balance in phases. This practice is called
1. Exit load 4. Trail commission
2. Discounting 5. Phased commissioning
3. Deferred contingent sales charge
Q.8 One of the following statements cannot be considered as the fundamental attribute of a
scheme. Which one?
1. The scheme is an Income-oriented scheme
2. The scheme is open-end in nature
3. Details on listing, repurchase and redemption of units
4. The address and contact details of the registrars and custodians
Q.9 For a person to become an agent of a mutual fund, he must...
1. Have passed class 12 exams
2. Obtain approval from the main broker of the fund
3. Be a university graduate
4. Meet the requirements laid down by the concerned AMC
Q.10 The jurisdiction for resolving legal disputes concerning mutual funds is
1. Given in the offer document/ key information memorandum
2. Stated in the major stock exchanges
3. Decided by company law board
4. Decided by the BSE/NSE
Q.11 As on March 2002, in India a person can be appointed as an agent of a mutual fund if he
1. Passes the AMFI test
2. Signs an agreement with a fund on non- judicial stamp paper
3. Both (1) and (2)
4. has the knowledge about mutual funds
Q.12 Who cannot invest in a mutual fund in India?
1. Provident funds 4. Non-resident Indians
2. Non – banking finance companies 5. Overseas corporate bodies
3. Foreign citizens
Q.13 The AMFI code of ethics does not cover the following prescriptions
1. Adequate disclosures should be made to the investors
2. Funds should be managed in accordance with stated investment objectives
3. Conflict of interest should be avoided in dealings with directors or employees
4. Each investment decision should be approved by investors
Q.14 Contingent Deferred Sales Charge (CDSC)
1. Is higher for investors who stay invested in the scheme longer
2. Is lower for investors who stay invested in the scheme longer
3. Is the same for all investors irrespective of how long they stay invested
4. Is not allowed to be charged to mutual fund investors in India
Q.15 SEBI guidelines for agents includes
1. Agents can sell products of a single mutual fund
2. Agents can sell products of mutual funds with whom he has entered into agreements
3. Agents could be only individuals
4. None of the above
Q.16 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
1. Sue the AMC 3. Sue the agent
2. Sue the Trustees 4. None of the above
Q.13 Which of the following SEBI restrictions applies to a scheme’s investment in unlisted shares ?
1. A closed-end scheme may invest a maximum of 10% of its NAV in unlisted shares
2. An Open-end scheme may invest a maximum of 5% of its NAV in unlisted shares
3. (1) & (2) above
4. None of these
Q.14 As per SEBI, Non-Performing assets (NPA) of a mutual fund can be defined as...
1. An equity which is trading below its par value
2. An equity share which is yet to be listed on the stock exchange
3. A debt security on which either interest or the principle or both amounts are due but not received for
one quarter after the due date
4. None of these
Q.15 An investor purchased units in an approved mutual fund on Juanuary’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
gains taxes paid by him without the benefit of indexation (ignore taxation).
1. Rs.20, 000.00 3. Zero
2. Rs.40, 000.00 4. Depends on the investor’s tax bracket
Q.16 An open-end fund with 10000 units outstanding had the following items in its balance sheet:
Investments at market value Rs. 100000/- Other assets Rs. 20000/-
Current Liabilies Rs. 25000/- Calculate the fund’s NAV per unit.
1. Rs. 9.50 3. Rs. 10
2. Rs. 12 4. Rs. 14.50
Q.17 Liabilities in the balance sheet of a mutual fund are
1. In the form of long-term loans 3. Combination of long term and short term
2. Strictly short term in nature 4. Not allowed as per regulations
Q.18 A funds NAV is affected by
1. Purchase & sale of investment securities 3. Units sold or redeemed
2. Valuation of all investment securities held 4. All of the above
Q.19 Which of the following expenses cannot be charged to the scheme
1. Audit fees 3. Winding costs for terminating the scheme
2. Costs related to investor communication 4. Penalties and fines for infraction of laws
Q.20 As per SEBI guidelines, a security is to be treated as untraded when
1. Security is never traded on stock exchange 3. Security is not traded for 60 days
2. Security is not traded for 30 days 4. None of the above
Q,21 NAV is
1. Book value/ no of outstanding units 3. Net asset/ outstanding units
2. Net value / initial allotted units 4. None
Q.22 An investor invested 200 units at Rs. 12 . What will be the value of the asset after 1 year if the
outstanding units at the end is 20000 units?
1. 2400 3. Insufficient Information
2. 1% of value of 20000 units 4. Book value of the asset / 20,000 units
Q.23 10 crore units were allotted. Initial Issue expenses of Rs. 8 cr. Entry load 2.25%, no other
expenses were incurred, there is no change in value of underlying assets, what will be NAV at
time of reopening if the expenses is to be write off within 5 years
1. 10 3. 9.40
2. 9.775 4. 10.225
Q.24 Entry load is used for meeting
1. Distribution Expenses 3. None of the Above
2. Marketing & Promotion 4. both
Q25. STT ( Securities Transaction Tax) is borne by which of the following
1. AMC
2. Trust
3. Investor
4. None of the above
Chapter 7
Q.1 Which of the following is TRUE of an automatic reinvestment (or a growth) plan?
1. The growth plan allows for the automatic reinvestment of all income and capital gains
2. Automatic reinvestment allows for accumulation of additional units of the fund.
3. The major benefit of automatic reinvestment is compounding
4. An investor who subscribes to the growth option under a scheme can later change to a dividend
option
1.
5. Automatic
All of theseReinvestment Plans
Q.2 2. Systematic
A Systematic Withdrawal Plans
Investment Plan. 4. All of these
3.
1. Systematic
Requires the investor to invest a fixed sum periodically 5. None of these
Transfer Plans
2. Enforces saving in a disciplined and phased manner
Q6. 3.
What is difference
Provides between
the benefit SIP and
of Rupee CostVAP ?
Averaging
1.
4. SIP
All ofisthese
systematic investment and VAP is Value averaging plan.
2. No Relation at all.
Q.3 3. A
VAPsystematic withdrawal
is modified version ofplan
SIPisthat
idealallows
for: the investors flexibility with respect to amount and
1. frequency
Investors with growth as the main investment objective
of investment.
2. Investors
4. who wish investment
SIP is systematic to benefit from
andmarket
VAP isfluctuations
withdrawl plan.
3. Investors
Chapter 8 who prefer a regular income stream
Q.1 4. Up
Investors
to what who are not
extent sure about
unlisted equitythemselves
shares can be held in an Equity fund?
Q.4 1. 10%
Mutual fund inEnded
in Closed India do not offer
fund 3. Both a and b
2. 5% in open ended fund 4. None of the above.
Q.2 An interest-bearing bond with a higher coupon rate will have
1. Lower duration 3. Can not be determined
2. Higher duration 4. Insufficient information to answer
Q.3 Value stocks are shares in companies........
1. In mature industries 4. Over valued stocks
2. Expected to yield low growth in earnings 5. Which have high P/E ratio
3. (1) and (2)
Q.4 A five year deep discount bond would
1. Pay interest on a yearly basis 3. Be redeemed on maturity at the face value
2. Pay interest on a quarterly basis which is higher that the issue price with no
payment in between.
4. Offer yield tax free
Q.5 What is the objective of an aggressive growth fund
1. Aggressive growth funds target at high capital appreciation and may adopt speculative strategies
2. Aggressive growth funds try to invest less in equity shares
3. Aggressive growth funds strive for stability as much as growth
4. Aggressive growth funds invest primarily in blue chip stocks
Q.6 YTM can also be defined as bonds
1. IRR 3. Current yield
2. Coupon rate 4. Duration
Q.7 Calculate the current yield on a G.Sec with at par value of Rs. 1000, coupon of 11% and market
price of Rs. 1010.
1. 11.20% 3. 11.21%
2. 10.89% 4. 12.20%
Q.8 The current market price of a 9% coupon bond, when other bonds of similar maturities pay
11% , will be
1. Above par 3. At par
2. Below par 4. Will be unrelated to other bonds
Q.9 What is the most important factor that one should consider before investing in a company
fixed deposit?
1. Interest rate on the deposit 3. Its credit rating
2. Assets against which the fixed deposit is 4. All of these
secured 5. (1) and (3)
Q.10 A debt portfolio is always exposed to
1. Interest rate risk 3. Equity price risk
2. Re-investment risk 4. (1) and (2)
Q.11 An index fund managers tries
1. To beat the market by superior stock selection
2. To beat the market by superior market timing
3. To beat the market by superior asset allocation
4. None of these
Q.12 Which of the following instruments would be the most volatile when interest rates fluctuate?
1. ICICI / IDBI bonds listed on the NSE 3. An equity mutual fund
2. PPF 4. A balanced fund
Q.5 Which of the following strategies is an example of the combined approach of Rupee Cost and
Value Averaging?
1. When the investor sets a target value for his investments in an Equity fund
2. When the investor invests a fixed sum each month in a Liquid Fund
3. When the investor invests regularly in a Liquid Fund
4. When the investor invests regularly in a Liquid Fund , sets a target for an Equity Fund, then invests
more in Equity Fund if its value declines and books profits when its value exceeds the target value
Q.6 The strategy advisable for an investor to maximize investment return in the long run is:
1. Buy and hold on to investments for a long time
2. Liquidate poorly performing investments from time to time
3. Liquidate good performing investments from time to time
4. Switch from poor performers to good performers
Q.8 While deciding on an asset allocation strategy, the investor must consider ………
1. The stage of his life 3. The purpose of making investment
2. His risk appetite 4. All of these
Q.9 Which of the following is the best investment option for the purpose of getting the maximum
benefits of compounding?
1. 12% interest paid yearly 3. 3% interest paid every quarter
2. 6% interest paid every 6 months 4. 1% interest paid monthly
Q.10 Asset allocation of a portfolio should be re-evaluated every time there is change in the...
(1) Family size and requirement (3) Dramatic change in the market condition
(2) Job of the investor (4) All of these
Chapter 12
Q.1 Which Product category should be the core foundation of a financial plan?
1. Equities 3. Mutual Fund
2. Gold 4. None of these
Q.4 Which of the following does not generally guarantee return or capital?
1. Bank Deposit 3. Units of Mutual fund
2. PPF 4. NSC
Q.5 While choosing between a bank deposit and a debt income fund, the investor must consider
1. Credit rating of bank 3. His investment objective and risk appetite
2. Quality of the mutual fund assets 4. All of these
Q.6 An investor asks you in what order he should list the following schemes, going from the
scheme with the least risk to the one with the highest risk – 1. Balanced Fund, 2. A Stock Index
Fund, 3. A Liquid Fund, 4. A IT Sector Fund.
1. 1,2,3,4 3. 3,1,2,4
2. 1,3,4,2 4. 2,3,1,4
Chapter 14
Q.1 As per Jacob’s recommendation low risk fund portfolio is likely to have.
1. 50% invested in Government Securities Funds and 50% invested in Money Market funds
2. An equal split between Government Securities Funds, Growth Funds and Index Funds
3. Equal investments in Aggressive Growth Funds, Value Funds, Sector Funds and Debt Fund
4. A mix of Balanced and Growth
Q.2 For which of the following would you consider “ average maturity” as an important factor in
selecting the right one for the investor ?
1. A debt fund 3. A money market or liquid fund
2. A balanced fund 4. Both a and b above
Q.3 A very high proportion of investment in all types of equity funds is advisable for investors
1. In distribution phase 3. In transition phase
2. In accumulation phase 4. Who are wealth preserving affluent
individuals
Q.4 For older investors who want to transfer their wealth
1. No financial planning is required
2. The right investment strategy depends upon who the beneficiaries are
3. The right investment strategy depends upon the state of the stock market
4. All the funds can be invested in aggressive equity funds
Q.5 Which of the following is recommended by Jacob for a Low Risk portfolio ?
1. 50 % Growth and Income fund + 50% Money Market fund
2. 50% Growth funds + 50% index fund
3. 50% Government Securities fund + 50% Money Market fund
4. 50% Sector Funds + 50 % Money Market fund
1. Buying and selling securities ahead of doing the same transaction for the fund.
2. Buying and selling securities on the basis of privileged information available to the fund by persons
who are insiders to the company.
Chapter 15 of the above
3. Both
4. None of the above
Q.1 Code of ethics should be followed by distributors as:
Q.4 The detailed version of SEBI circular regarding code of conduct for distributors given by AMFI
is known as:
1. Ethics code 2. AGNI
2. Front running 4. None of the Above
Thank You
And
POINTS to remember
1. Indira Vikas PAtra is preferred because you don’t have to disclose your identity to purchase
that. Now it is becoming popular in urban markets.
2. Debt Funds are exposed to Interest rate risk, Reinvestment Risk, Call risk, Default Risk,
Inflation risk and Liquidity risk.
3. Expense ratio is ratio of Total expenses to Net assets. It is indicators of funds efficiency and
cost effectiveness. Most important in case of debt funds.
4. Fixed Asset Allocation and Flexible Asset Allocation.
5. AGNI – Amfi Guidelines and norms for intermediaries.
6. FIIs can invest in Mutual funds in India after taking approval from FIPB and RBI.