amfi nism mutual fund distributors sample500questions-130326035146-phpapp02

8/12/2019 amfi nism mutual fund distributors sample500questions-130326035146-phpapp02

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Practice Questions for AMFI Test

1. A close-ended mutual fund has a fixed :a. NAVb. fund size

c. rate of return

d. number of distributors

2. The maximum load that a fund can charge is

determined by the :

a. AMCb. SEBI

c. AM!

d. distribution agents based on demand for the

fund

". The amount re#uired to buy 1$$ units of a scheme

ha%ing an entry load of 1.&' and NAV of (s.2$ is :

a. (s.2$$$

b. (s.2$1&c. (s.1)*&d. Rs.2030

+. A gilt fund is a s,ecial ty,e of fund that in%ests :

a. in %ery high #uality e#uity only

b. in instruments issued by com,anies ith a

sound trac recordc. in short-term securitiesd. in goern!ent securities on"#

&. /f the folloing fund ty,es0 the highest ris isassociated ith

a. alanced undsb. ilt undsc. E$uit# %ro&t' Funds

d. 3ebt unds

4. The NAV of a mutual fund:

a. is alays constantb. ee,s going u, at a steady ratec. f"uctuates &it' !ar(et )rice !oe!ents

d. cannot go don at all

5. An o,en-ended mutual fund is one that has:

a. an o,tion to in%est in any ind of security

b. units aai"ab"e for sa"e and re)urc'ase ata"" ti!es

c. an u,,er limit on its NAV

d. a fixed fund si6e

*. An in%estor in a close-ended mutual fund can gethis7her money bac by selling his7her units:

a. bac to the fund

b. to a s,ecial trust at NAV

c. on a stoc( e*c'ange &'ere t'e fund is

"isted

d. to the agent through hich he7she

subscribed to the units of the fund

). The 8load8 charged to an in%estor in a mutual fund

is

a. entry fee

b. cost of the ,a,er on hich the unitcertificates are ,rinted

c. the fee the agent charges to the in%estord. t'e e*)enses incurred b# fund !anagers

for !ar(eting a !utua" fund sc'e!e

1$. A mutual fund is oned by

a. the o%t. of !ndia

b. 9!

c. a"" its inestorsd. AM!

11. ;nits from an o,en-ended mutual fund are boughta. on a stoc exchangeb. fro! t'e fund itse"f

c. from AM!

d. from a stoc broer

12. A mutual fund is not

a. oned s entry into the

fundb. as a fixed amount each year

c. at the time the in%estor exits the fundd. fro! t'e fund+s distribution agent

1+. The most im,ortant ad%antage of a money maret

mutual fund is

a. #uic ca,ital a,,reciationb. high regular incomec. safet# of )rinci)a"

d. no loads

1&. 9ome close-ended funds are #uoted at a discountto their NAV because

a. of high ex,ense ratiosb. inestors do not e*)ect t'e current ,A-

to be sustained in future


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c. the re,urchase ,rice fixed by the fund in

loer than the NAV

d. of the inherent ris in%ol%ed in in%esting in

such ty,e of funds

14. The NAV of each scheme should be u,dated on

AM!>s ebsite

a. e%ery #uarterb. e%ery month

c. e%ery hourd. eer# da#

15. 3ebt funds target

a. lo ris and stable incomeb. )rotection of )rinci)a"

c. high groth ith risd. long term ca,ital a,,reciation

1*. !n hich of the folloing do debt funds not in%est

a. go%ernment debt instruments

b. cor,orate ,a,erc. financial institutions> bondsd. e$uit# of )riate co!)anies

1). ?hich of the folloing riss do not affect a debt

fund

a. default by issuer on ,ayment of interest or

,rinci,alb. ,rice fluctuations of the debt securitiesc. s'are )rice !oe!ents

d. interest %olatility

2$. Assured return or guaranteed monthly income

,lans are essentiallya. @ybrid funds

b. roth undsc. ebt/Inco!e funds

d. 9ector funds

21. A ixed Term lan 9eries isa. an o,en-ended fundb. a c"oseended fund

c. a fixed term ban de,osit

d. a fixed term cor,orate bond

22. NAVs of e#uity funds are not affected by

a. 9toc maret mo%ementsb. %ents affecting the industry7sector in hichthe fund has in%ested

c. @a,,enings in the com,anies in hich the

fund has in%estedd. rea" estate )rices

2". The greatest ,otential for groth in ca,ital is

offered bya. debt funds

b. gilt fundsc. gro&t' funds

d. balanced funds

2+. A 9ystematic ?ithdraal lan0 allos in%estors

to get bac the ,rinci,al amounts in%ested in addition

to the income on in%estmenta. True

b. alse

2&. ?hich of the folloing is untrue of an automatic

rein%estment ,lanBa. The ,lan allos for automatic rein%estment

of all income and ca,ital gains

b. Automatic rein%estment allos for

accumulation of additional units of the fundc. The ma


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. no guaranteed inco!e or securit#

"1. An oner of ,reference shares is gi%en hich of

the folloing rightsa. %oting rightsb. fi*ed diidend inco!e fro! )ostta*

)rofits

c. %oting rights and unlimited di%idend incomed. no guaranteed rights

"2. Maret ca,italisation of a com,any is calculated

by multi,lying the number of outstanding shares bya. (.1$

b. ace %alue of each sharec. urrent !ar(et a"ue of eac' s'are

d. di%idend yield

"". The rice7arnings 7D (atio is an im,ortant

measure of a com,any>s antici,ated ,erformance. !t is

calculated using:

a. Maret ,rice and di%idendb. Mar(et )rice and earning )er s'are

c. Maret ca,italisation and di%idend

d. Maret ,rice and face %alue

"+. A com,any hose earnings are strongly related to

the state of economy is non as

a. conomy stocsb. #c"ica" Stoc(s

c. Value 9tocs

d. roth stocs

"&. A roth stoc refers to shares of a com,any

hose earnings are ,ro


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a. To debt funds ith & year maturitiesb. A broadbased e$uit# fund &it' an IT

Sector Fund

c. A bond fund ith a bondd. A go%ernment securities fund ith a

go%ernment security

+5. An AMC must ex,lain ad%erse %ariation beteenex,ense estimates for the scheme on offer and actual

a. ex,enses for ,ast schemes in

b. financial nes,a,ersc. business c'anne"s on T-

d. offer document

e. AM! Nesletter

+*. !nformation on estimated ex,enses to be incurred

by a scheme is not found in the offer document0 butin brochures of the fund

a. Trueb. Fa"se

+). The offer document and ey information

memorandum contain financial information fora. all schemes of all mutual funds in the ca,ital

maretb. a"" sc'e!es "aunc'ed b# t'e )articu"ar

fund during t'e "ast 3 fisca" #ears

c. none of the schemes

d. com,anies in hich in%estment is ,ro,osed

&$. The functions and res,onsibilities of the s,onsor0AMC0 trustees and custodian of the mutual fund are

listed ina. offer docu!ent on"#

b. ey information memorandumc. both offer document and ey information

memorandumd. none of the abo%e

&1. !nformation about trusteeshi, fees is included inthe offer document but not in the ey information

memorandume. True

f. alse

&2. The folloing information about the constitution

of the mutual fund is found in both the offer

document and ey information memorandume. acti%ities of the s,onsor

f. summary of trust deed ,ro%isions

g. name and addresses of the board of trustees'. a"" of t'e aboe

&". The in%estment obs name im,lies that it ill in%est

,rimarily in a ,articular ty,e of security or in certain

industry7sector0 then it should in%est at least the

folloing ,ercentage of its total assets in theindicated ty,e of security7industry7sector

e. 1$$'

f. *$'g. 456

h. +$'

&4. or assured return schemes0 information about the

guarantor>s net orth hich sability to meet any shortfalls in the returns assured

under the scheme can be found in

e. the offer document

f. the ey information memorandumg. bot' 7a8 and 7b8

h. none of the abo%e

&5. The names and bacground of ey ,ersonnel ofthe AMC

e. need not be disclosed to in%estorsf. are of no rele%ance as they may changeg. are disc"osed in t'e offer docu!ent

h. are declared in nes,a,er ad%ertisements

&*. The minimum amount to be raised0 and the

maximum target amounte. are not non before the offer is concluded

f. can be decided based on in%estor res,onse to

the offerg. are defined as )er SEBI Regu"ations

before t'e offer is !ade

h. need not be disclosed in the offer document

&). The circumstances for refund of in%estment in theinitial offer and ,eriod ithin hich refund must be

carried out are not s,ecified in the offer document0

but only on the a,,lication

e. Truef. Fa"se

4$. /ffer related information re#uired to be listed in


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the offer document and ey information

memorandum includes

e. dates of o,ening0 closing0 earliest closing0

allotment and des,atch of certificatesf. ,rocedure for transfer and transmission of

units

g. both the abo%e'. neit'er of t'e aboe

41. !n the offer document0 funds are re#uired to mae

disclosures summari6ing associate transactions and

their im,act on the ,erformance of the scheme for thelast

e. one fiscal year

f. 2 fiscal yearsg. 3 fisca" #ears

h. & fiscal years

42. The circumstances under hich a scheme shall be

ound u, are to be described in the offer document at

the time of the initial launch of the scheme itselfe. True

f. alse

4". The folloing do not form a ,art of the

in%estment ,rocedure described in an offer document

e. %arious ,lans under the scheme e.g.

di%idend rein%estment ,lantDf. minimum initial and subse#uentD

in%estment

g. details of ho can in%est'. detai"s of ot'er co!)eting !utua" funds

4+. A scheme>s ,olicy on di%idends and distributione. is decided by the fund manager as ,er is

maret outloof. can be changed to suit the re#uirements of

the AMC

g. need not be consistent'. s'ou"d be disc"osed at t'e ti!e of initia"

"aunc'

4&. 9! restricts mutual fund in%estments in

com,anies forming ,art of the same grou, as theAMC. This is:

e. not true

f. in t'e interest of inestor )rotectiong. a,,lied only to some mutual funds0 not allh. not fa%ourable to in%estors at all

44. A disclosure should be made in the offer

document if an AMC has in%ested more than thefolloing ,ercentage of its net assets in grou,

com,anies

e. &$'f. +$'

g. 256

h. 1$'

45. Mutual funds are alloed to borroe. freely to meet their re#uirements

f. for in%estment ,ur,osesg. on"# to !eet rede!)tion de!ands

h. not alloed at all

4*. As a ,art of borroing ,olicy0 the folloing need

not be disclosed in an offer document

e. ,ur,ose and circumstances of borroingf. regulatory limits on borroing

g. ,otential ris to AMC and unit-holders'. na!es of "enders

4). Valuation norms for non-traded securities should

be disclosed

e. at the end of e%ery financial year

f. e%ery #uarter

g. in t'e offer docu!ent at t'e ti!e of"aunc' of t'e sc'e!e

h. should not be disclosed0 being confidential

information

5$. rocedure for redem,tion or re,urchase need not

e. be described in the offer document

f. include ho redem,tion or re,urchase ,riceof units ould be determined

g. include names of centres here redem,tion

can be effected'. indicate t'e rede!)tion or re)urc'ase

)rice as at t'e end of t'e current fisca"

#ear

51. The fund need not describe its accounting ,oliciesin the offer document as these are of no use to an

in%estor

e. Truef. Fa"se

52. The accounting ,olicies of a fund should be in

accordance ith

e. AAf. SEBI regu"ations

g. !CA! uidelines

h. American AA

5". Tax treatment of in%estments does not

e. form a section in the offer document

f. describe the tax elements a,,licable to

in%estors ho in%est in the fundg. form a section in the ey information

memorandum'. offer ta* adice to inestors


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5+. 3ocuments a%ailable to in%estors for ins,ection

do not include

c. Memorandum and Articles of Association ofAMC

d. consent of auditors and legal ad%isors

e. in%estment management re,ortsf. re)orts based on &'ic' actua"

inest!ents are !ade

5&. !n%estors> rights under a scheme are

e. uniform for all schemes of all fundsf. not definedg. "isted in t'e offer docu!ent

h. a%ailable ith stoc exchanges

54. The offer document for a scheme should describe

ho the NAV of the scheme is to be com,utede. True

f. alse

55. An offer document contains an AMC>s in%estor

grie%ance>s history for the ,ast

e. one fiscal yearf. 2 fiscal yearsg. 3 fisca" #ears

h. six months

5*. Any ,ending cases or ,enalties le%ied on the

s,onsors or AMC should be disclosed in the offer

documente. True

f. alse

5). ?ho among the folloing are not eligible to

in%est in Me. !ndian Com,anies

f. ans

g. Non aning inance Com,anies'. Foreign itizens

*$. N(!s are eligible to in%est in Mutual undsa. True

b. alse

*1. The most im,ortant lin beteen Mutual und

and !n%estors ise. o%ernmentf. 9!g. Fund distributors

h. AM!

*2. Are /%erseas Cor,orate odies alloed to in%est

in Mutual unds

e. Nof. 9es

g. if Ministry of inance a,,ro%es

h. if AM! a,,ro%es

*". ?ho among the folloing are not !nstitutional!n%estors

e. ansf. Resident Indiidua"s

g. ro%ident undsh. Non aning inance Com,anies

*+. !t is com,ulsory to use fund agents7intermediaries

for in%esting Mse. Truef. Fa"se

*&. enerally0 hich category of in%estors needad%ice for !n%esting in Mutual unds

c. Non aning inance Com,anies

d. !nsurance Com,anies

e. oreign !nstitutional !n%estors

f. Indiidua"s

*4. Most eligible in%estors of Mutual unds can

broadly be grou,ed into either indi%idual orinstitutional in%estors

e. True

f. alse

*5. Commission rates or loads a,,licable to big

in%estors and small in%estors are

e. samef. different

g. not charges to either

h. none of the abo%e

**. ?hat document Mutual und distributors need torefer for finding out eligible category of in%estors in a

,articular Mutual und 9chemee. 9! (egulations Manualf. AM! booletg. :ffer docu!ent

'. (! uidelines

*). As ,er AM! figures0 ho many agentsa,,roximately0 are there in !ndia selling Mutual

unds

e. &$$$$f. ;00000

g. 5&$$$

h. 1&$$$$

)$. ?hich Mutual und has ma


7/36

h. None of the abo%e

)1. Mutual und agents7distributors are not alloed

to sell inancial roducts other than Mutual undsc. Trued. Fa"se

)2. Are Mutual und agents7distributors in !ndiare#uired to ,ass any examination to #ualify to sell

Mutual und ;nitsc. 9es= a test conducted b# AMFI

d. Ees0 a test conducted by 9!e. No

f. a ost raduate uni%ersity course

)". @o many mas NAV mo%ing u, or don

on the basis of ca,ital maret mo%ements is a

standard ris factori. True


8/36

1$5. A com,liance officeri. stands guarantee to t'e infor!ation

contained in t'e offer docu!ent

. be"ongs to SEBI

. cannot certify that the AMC>s legal and

,rocedural obligations are fulfilled

l. cannot be a,,ointed by the AMC

1$*. The due diligence certificate that must be

submitted to 9! along ith the draft offer

document cannot be signed byi. the managing director of the AMC

s on discretion

i. True


9/36


10/36


11/36

n. The in%estment in shares is in the same

,ro,ortion as in the index

o. These funds tae only the o%erall maret

ris). T'ese funds are not diersified

1&&. The structure hich is re#uired to be folloed

by mutual funds in !ndia is laid don by. inancial Ministry". Securities 1 E*c'ange Board of India

7SEBI8

m. und 9,onsorn. Association of Mutual unds of !ndia

AM!D

1&4. The oard of Trustees of a mutual fund:!. act as a )rotector of inestors+ interests

n. directly manage the ,ortfolio of securities

o. do not ha%e the right to dismiss the AMC

,. cannot su,er%ise and direct the oring of

the AMC

1&5. The AMC of a mutual fund cannot

m. undertae ad%isory ser%ices or financialconsulting

n. cannot in%est the funds in go%ernment ,a,ero. act as a trustee of !ore t'an one !utua"

fund

,. cannot in%est the funds in securities

1&*. The trust that manages a mutual fund is

a,,ointed bym. The inance Ministry

n. (..!o. SEBI

,. The s,onsor of that mutual fund

1&). The custodian of a mutual fund:(. is a))ointed for safe(ee)ing of securities

l. need not be an entity inde,endent of thes,onsors

m. not re#uired to be registered ith 9!

n. does not gi%e or recei%e deli%eries of

,hysical securities

14$. Transfer Agents of a mutual fund are not

res,onsible form. issuing and redeeming units of the mutualfund

n. u,dating in%estor records

o. ,re,aring transfer documents). inesting t'e funds in securities !ar(ets

141. 3istributors or agents!. can distribute seera" !utua" funds

si!u"taneous"#

n. cannot a,,oint sub-agents or sub-broers

o. should be only indi%iduals not com,anies or

bans

,. should not be an em,loyee or associate ofthe AMC

142. A transfer in the management of a close-ended

scheme does not re#uire the consent of. unit holders ith 5&' %oting rights

l. 9!

m. Trusteesn. AM

14". The fund s,onsor has to contribute

. nothing to the AMC

l. the total netorth of the AMC!. at"east ?06 of t'e AM+s net&ort'

n. exactly &$'

14+. The s,onsor of a mutual fund may be com,ared

tom. a director in a Com,any

n. the Chief xecuti%e of a Com,anyo. Pro!oter of a o!)an#

,. an e#uity shareholder in a Com,any

14&. !ssuing and redeeming units of a mutual fund is

the rolem. the custodiann. t'e transfer agent

o. the trustees

,. the baners

144. The fund s,onsors should ha%e a sound financialtrac record of

. 5 yearsl. 12 months

m. & yearsn. 3 #ears

145. The netorth of an asset management com,any

should be greater than

m. (s.1$$ Crores

n. can be decided by the 9,onsoro. s'ou"d be at"east Rs. ;0 rores at a""

ti!es

,. should be greater than (s.1$ Crores

14*. The AMC and directors are anserable to

. 9toc xchanges". T'e Board of Trustees

m. Agents and distributorsn. 9toc roers

14). The role of an AMC is to act as1. ,romoters


12/36

2. inest!ent !anagers

". distribution agents

+. regulators

15$. A change in the folloing ey ,eo,le does not

materially im,act the ,erformance of the fund

m. und s,onsors

n. Trustees of the fundo. Fund Manager

,. Members of the AM! Committee

151. To transfer the management of a scheme fromone AMC to another0 the consent of the folloing is

re#uired

. 9!

l. ;nit holders!. bot' SEBI and unit 'o"ders

n. none of the abo%e

152. As ,er 9!>s ,rinci,les0 the AMC and the

oard of Trustees of a fund should belong to thesame s,onsors

m. Truen. Fa"se

15". After ;T!0 the first mutual funds ere started by

. ,ri%ate sector bans". )ub"ic sector ban(s

m. financial institutions

n. non-baning finance com,anies

15+. The highest authority among the folloing is the. 9!

l. Com,any =a oardm. (!n. Ministr# of Finance

15&. The entity that 9! does not regulate is

m. share registrars

n. mutual fundso. stoc exchanges). nonban(ing finance co!)anies

154. The accounts and all other records of an AMCare filed ith

. AM!

". Registrar of o!)aniesm. Agents> Associationn. ;T!

155. A close-ended scheme of a mutual fund is not

go%erned bym. xchange (ules of the stoc exchange

here it is listed

n. =isting Agreement beteen the fund and thestoc exchange

o. guide"ines issued b# t'e Ministr# of

o!!erce

,. Com,anies Act ,ro%isions relating to

transactions in securities

15*. The entry of mutual funds in !ndia as initiated

by mutual funds set u, by

. ublic 9ector ansl. ri%ate 9ector mutual funds!.


13/36

m. its on members ith total cannot be ,rotected by the

3e,artment of Com,any Affairs and the Com,any=a oard

(. True

l. alse

1)&. The res,onsibilities of a unit-holder do notinclude:

i. Monitor his in%estments carefully


14/36

m. the on the date he has a,,lied for

redem,tion

n. 1&' belo the ,re%ailing NAV

2$1. After closure of the initial offer an o,en endedscheme0 on going sales and re,urchases must start

ithin

o. /ne ee). 30 da#s

#. +& days

r. 1*$ days

2$2. or scheme to be able to change its fundamentalattributes0 it must obtain the consent of

o. &$' of the unit holders

,. &$' of the trustees

#. 5&' of the unit holdersr. none of t'e aboe

2$". The ,ros,ectus or /ffer 3ocument containing

the details of ne scheme is first registered ith the

#. AM!r. SEBI

s. ombay 9toc xchange

t. Ministry of inance

2$+. The offer document issued by mutual funds does

not ser%e the ,ur,ose of

#. announcing the schemer. gi%ing detailed information about the

scheme

s. in%iting the the in%estorst. giing t'e fund !anager+s inest!ent

out"oo( for t'e ne*t $uarter

2$&. The ,ros,ectus of a close-ended fund is issued

o. e%ery year). on"# once at t'e ti!e of issue

#. e%ery #uarter

r. e%ery six months

2$4. undamental attributes of scheme

#. do not include the obs

a,,ro%al or noledges. inc"ude t'e ter!s of t'e sc'e!e

t. are not necessary for deciding hether to

in%est in the scheme or not

2$5. The offer document$. contains t'e ter!s of issue

r. gi%es no information rele%ant for maing an

in%estment decisions. is not the o,erating document describing the

scheme

t. cannot be called a reference document

2$*. 9! does not re#uire the folloing to be

included in the offer document issued by a mutual

fund#. details of the 9,onsor and the AMC

r. 3escri,tion of the 9cheme H in%estment

ob (ights and 9er%icest. Perfor!ance of ot'er !utua" funds

2$). >Fey !nformation Memorandum> iso. an abridged ersion of t'e offer docu!ent

,. the Memorandum H Articles of Association

of the AMC

#. a sheet containing historical NAVs of other

fund schemesr. Annual (e,ort of the AMC

21$. The offer document for a scheme remains %alid

e%en if

#. the AMC is reconstitutedr. entry or exit load are changeds. t'e sc'e!e+s ,A- c'anges

t. ne ,lans are added to existing schemes

211. The offer document has to be fully re%ised and

u,dated

#. e%ery six monthsr. once in t&o #ears

s. e%ery #uarter

t. e%ery month

212. An addendum gi%ing details of material change

in the offer document should be circulatedo. distributors7broers

,. unit holders$. SEBI

r. all of the abo%e

21". ?hich of the folloing is not true for offerdocuments of o,en-ended schemes

o. it is first issued at the time the scheme is

launched

,. it is registered ith 9!$. it 'as to be reised )eriodica""#

r. it need not be re%ised at all

21+. All im,ortant disclosures that the mutual fund isre#uired to mae0 by regulation0 are contained in the

offer document$. True

r. alse

21&. The offer document issued hen an o,en-ended

scheme is launched is %alid for all times0 untilamended


15/36

$. True

r. alse

214 The most im,ortant source of information for a,ros,ecti%e in%estor is

o. offer docu!ent

,. Annual (e,ort of the AMC

#. conomic Timesr. AM! Nesletter

215 The offer document need not be studied by an

in%estor before in%esting in a scheme#. Truer. Fa"se

21* The offer document is not a legal documento. True). Fa"se

21) !nitial issue ex,enses are charged to a scheme in

the first year itselfm. Truen. Fa"se

22$ 9cheme-ise annual re,ort of a mutual fund

need not be

#. sent to all unit-holders

r. forarded to 9!s. ,ublished as an ad%ertisementt. stoc( e*c'anges

221 Mutual funds %alue their in%estmentso. at ,urchase ,rice

). on a !ar(to!ar(et basis#. at ,ar

r. at boo %alue

222 !n%estors are totally exem,t from ,aying any tax

on the di%idend income they recei%e from mutual

fundso. True

,. alse

22" !ncome distributed to unit-holders by a debt fundis liable to di%idend distribution tax

o. True

). Fa"se

22+ A close-ended has a%erage eely net assets of

(s 2$$ crore.As ,er 9! regulations0 the AMC can

charge the fund ith in%estment and ad%isory fees

u,to:o. Rs 2.25 crore

,. (s 2.$$ crore

#. (s 2.&$ crorer. (s ".$$ crore

22& A ,assi%e fund manager$. researc'es stoc(s e*tensie"#

r. does not buy and sell stocs oftens. does not ha%e to go through the ,rocess of

stoc selection

t. does not ha%e to trac stocs

224 A fund manager managing an index fundo. 'as to (ee) fund e*)enses "o&

,. does not ha%e to research stocs

#. does not ha%e to balance his ,ortfolior. none of the abo%e

225 A groth manager loos for

#. high current incomer. under%alued stocss. aboe aerage earnings gro&t'

t. none of the abo%e

22* A %alue manager does not loo foro. stocs that are currently under%alued in the

maret

,. stocs hose orth ill be recognised bythe maret in the long term

$. 'ig' current #ie"d

r. long term ca,ital a,,reciation

22) rom an in%estor>s %ie,oint0 the most im,ortant

is

#. a fund>s in%estment styler. )erfor!ance of t'e fund

s. the fund manager>s s share ,rice

r. the com,any shares> trading %olumes. current maret sentimentt. t'e co!)an#+s regu"ator# eniron!ent

2"2. Guantitati%e analysis is more liely to be done

to e%aluate a ,articular sector or industry rather thanany s,ecific stoc

o. True

,. alse


16/36

2"". undamental analysis forms the basis to decide

#. hen to buy a gi%en sharer. &'et'er to bu# a gien s'are or not

s. hether to use technical analysis or

#uantitati%e analysis

t. hether the com,any>s factory can

ithstand earth#uaes

2"+. Technical analysis guides the decision on

o. hether to buy or sell). t'e rig't ti!e to bu# or se""

#. hether com,any>s technical ,ersonnel are

ade#uately #ualified

r. none of the abo%e

2"&. ?hich of the folloing is not an in%estment

,hiloso,hy

o. ca,italising on economic cycles

,. focusing on groth sectors

$. ca)ita"isationr. finding %alue stocs

2"4. ?hen ex,ecting a fall in maret ,rice0 fundmanagers can reduce the loss in ,ortfolio %alue by

. s,eculating

l. not buying and selling shares at all for some

days!. using e$uit# deriaties

n. gi%ing TV inter%ies to im,ro%e sentiment

2"5. #uity deri%ati%e instruments areo. shares

,. bonds$. contracts

r. notes

2"*. A futures contract allos one to buy or sell the

underlying shares0 but need not result in deli%ery$. True

r. alse

2"). 3eri%ati%es cannot be based on maret indices

#. Truer. Fa"se

2+$. !n a mutual fund0 the o%erall decisions onallocating money to ,articular industries7sectors aretaen by

#. e#uity analystsr. fund !anagers

s. security dealerst. trustees

2+1. Continuous tracing of the com,anies in hicha mutual fund has in%ested is done by

m. continuous tracing systemsn. e$uit# ana"#sts

o. trustees

,. security dealers

2+2. 9ecurity dealers of a mutual fund

o. guard the cabin of the fund manager). e*ecute bu# and se"" orders for t'e fund

#. decide hich shares to buy or sell


2+". As ,er 9!>s re#uirements each scheme of amutual fund should ha%e a different fund manager

o. True

,. alse

2++. 3ebt securities bought at a discount to their face

%alue are generally

m. interest bearingn. zero cou)on bonds

o. ,aying interest at a floating rate,. none of the abo%e

2+&. !n !ndia0 a large ,art of debt securities ,ayinterest on

m. a floating rate basis

n. a fixed rate ,lus a %ariable ,ortiono. a fi*ed rate

,. 6ero cou,on basis

2+4. The !ndian debt maret is largely holesale in

natureo. True

,. alse

2+5. !n the holesale debt maret0 the largest,ro,ortion of trading is seen in

;. %oern!ent Securities

2. Cor,orate onds

". T-ills+. 9; onds

2+*. The largest ,ro,ortion of trades done in the

holesale debt maret is accounted byo. mutual funds

,. foreign bans

$. Indian ban(sr. financial institutions

2+). Certificates of 3e,osits C3sD are issued by

o. (egional (ural ans

,. Cor,orates$. Sc'edu"ed co!!ercia" ban(s


2&$. Commercial a,er is issued by Cor,orate bodies


17/36

o. to !eet s'ortter! &or(ing ca)ita"

re$uire!ents

,. to finance the ac#uisition of long term

ca,ital assets#. to retire long term debt

r. to ,ay di%idend

2&1. o%ernment securities are issued through the

(!s. True

t. alse

2&2. The yield on Treasury ill T-illD usdetermined by

s. the o%ernment of !ndiat. auction

u. the 9tate o%ernments%. floating rate method

2&". ?hich of the folloing are not normally found

in the ,ortfolio of a debt fund

u. long-dated o%ernment 9ecurities%. Cor,orate debentures

. bonds issued by financial institutions*. certificates of de)osit issued b# ban(s

2&+. ?hich of the folloing do not re,resent the

amount an in%estor of a debt security ill be ,aid

u,on maturityu. ,ar %alue

%. face %alue

. fair %alue

x. redem,tion %alue

2&&. Cou,on of a debt security refers tos. a ,iece of ,a,er attached to the certificate

t. the return on in%estor ould earnu. t'e a!ount rate of interest )aid on )ar

a"ue of t'e bond

%. none of the abo%e

2&4. ?hich of the folloing do not a,,ly to the term

>maturity> of a debt securityB

u. the date on hich the certificates becomes

old%. the term of the bond&. t'e date of rede!)tion

x. the date on hich the issuer has to re,ay theamount

2&5. Call or ,ut ,ro%isions are used to modify the

fixed maturity of debt securitiesu. True

%. alse

2&*. A call ,ro%ision in a debt issue allos the issuerto

u. call out the names of the in%estors

%. redeem the debt on maturity

. extend the tenure of the debt*. redee! t'e debt before !aturit#

2&). A ,ut ,ro%ision in a debt issue allos

1. in%estor to ,ut aay the certificates in safe

de,osit %aults2. inestors to redee! debt )rior to

!aturit#

". issuers to redeem debt ,rior to maturity

+. in%estors to extend the tenure of debt

24$. Current yield relates interest on a security tou. its current !ar(et )rice

%. its face %alue. its fair %alue

x. the current ,rice of T-ills

241. To com,are bonds ith different cou,on rates0

maturities and ,rices0 in%estors ould use:u. current yield

%. technical analysis&. #ie"d to !aturit#

x. fundamental analysis

242. ?hen interest rates rise0 bond ,rices

1. also rise2. fa""

". are not affected

+. fluctuate either u, or don

24". Eield cur%e is also non as

s. Cur%e of !nterestt. Ter! Structure of Interest Rates

u. Cur%e that yields%. none of the abo%e

24+. An im,ortant indicator of ex,ected trends in

interest rates iss. The conomic Times

t. the 9ensexu. t'e 9ie"d ure

%. the Chief Minister>s 9,eech

24&. !t may not be ,ossible to rein%est interest

recei%ed at the same rate as ,rinci,al. This is nonass. reinest!ent ris(

t. inflation ris

u. interest-rate ris

%. call ris

244. A bond>s rating indicates its

s. rein%estment rist. defau"t ris(


18/36


19/36

2*". A mutual fund may transfer in%estments from

one scheme to another

u. not at all. at current !ar(et rates

. at cost ,rice

x. at a fixed ,remium o%er maret rate

2*+. !nterest (ate (is for an !ndian debt fund can be

reduced by using

s. utures

t. /,tionsu. Interest Rate S&a)s


2*&. The !nterest (ate orecasting ;nit of a debtfund is generally manned by

s. technicians

t. statisticiansu. econo!ists 1 econo!etricians

%. accountants

2*4. AMCs need not maintain records in su,,ort of

each in%estment decisiono. True). Fa"se

2*5. ?hen interest rates for similar maturities> bondsare 11'0 bond ith a )' cou,on rate ill sell

s. abo%e ,art. be"o& )ar

u. at ,ar%. at a ,rice unrelated to the interest rates for

similar securities

2**. The most suitable measure for a fund>s,erformance does not de,end on the

s. ty,e of fundt. in%estment obs

,erformance is defined by a fund>s$. tota" e*)enses and aerage net assets

r. total ex,enses and total assetss. a%erage ex,enses and a%erage net assets

t. none of the abo%e

2)&. ?hile com,uting the x,ense (atio for a fund0broerage commissions on the fund>s transactions are

not included in the fund ex,enses#. True

r. alse

2)4. The x,ense (atio is not of utmost im,ortance

in case of

#. 3ebt fundr. !ndex funds. E$uit# fund

t. ond fund

2)5. The x,ense (atio is not affected by

,. fund si6e

#. a%erage account si6er. ,ortfolio com,ositions. stoc( !ar(et conditions

2)*. The !ncome (atio as a measure of a fund>s

,erformance is defined by the fund>ss. total income and total assetst. net inest!ent inco!e and net assets

u. total income and net assets%. none of the abo%e


20/36

2)). The !ncome (atio is more suitable for

e%aluating the ,erformance of

s. #uity undst. roth undsu. Regu"ar Inco!e Funds

%. !ndex unds

"$$. ortfolio turno%er rate of a fund measure the

s. si6e of the fund>s ,ortfoliot. a!ount of bu#ing and se""ing done b# t'e

fund

u. the a%erage number of units sold by the fund

in one day


"$1. A high turno%er rate for a fund indicatesu. high transaction costs

%. greater efficiency

. high returns to the in%estor

x. a rising maret

"$2. Turno%er rates ould be most rele%ant to

analyse the ,erformance of

. e#uity fundsx. groth funds

y. debt funds

6. %alue funds

"$". Transaction costs include

y. all ex,enses related to trading

6. all ex,enes charged to the fund

aa. distribution ex,ensesbb. none of the abo%e

"$+. ?hich of the folloing are not included in

Transaction costsBy. broerage commissions

6. stam, duty on transfers

aa. custodians fees

bb. agent commissions

"$&. ?hich of the folloing transaction costs are not

#uantified in the offer document

. broerage commissionsx. dealer s,reads

y. custodian>s fees

6. registrar>s fees

"$4. The si6e of a fund has no bearing on its

,erformance

y. True

6. alse

"$5. As ,er 9!0 mutual funds can borro for short

term to the extent of. total net assets

x. &$' of net assets

y. 2&' of net assets

6. 2$' of net assets

"$*. ?hich of the folloing is of no rele%ance in

e%aluating a fund>s ,erformance

y. The ,erformance of the stoc maret as a

hole6. The ,erformance of other mutual funds

aa. The returns gi%en by other com,arable

financial ,roducts

bb. The change in holesale ,rice index

"$). The choice of an a,,ro,riate benchmar for

e%aluating a fund>s ,erformance de,ends on

s. the fund managert. the in%estment ob


21/36

y. As a measure of ,erformance0 Total (eturn

ith (ein%estment of distribution sees to

o%ercome the shortcomings of sim,le Total

(eturn6. ecause of its sim,licity0 sim,le Total

(eturn is ,referred in ,ractice to Total

(eturn ith (ein%estment of distribution

"1&. The basis of genuine in%estment ad%ice should

be

1. the current maret situation

2. the agent commissions ,aid by differentfunds

". financial ,lanning to suit the in%estor>s

situation

+. ,lanning to com,lete the agent>s annualtargets

"14. inancial goals do not include

. buying a home

x. inning a s,orts gold medaly. ,lanning for retirement

6. sa%ing for child>s education

"15. inancial ,lanning allos a ,erson

. to become a billionaire

x. to achie%e financial goals through ,ro,er

management of financesy. to in%est in foreign countries

6. none of the abo%e

"1*. inancial ,lans do not alter in any ay theamount of tax an in%estor ,ays as the tax is on his

incomeu. True

%. alse

"1). ?hich of the folloing ors ith an in%estor

on his o%erall financial situation

s. Tax Ad%isort. inancial lanner

u. !nsurance Agent

%. inancial Ad%isor

"2$. A financial ,lanner taes res,onsibility for the

financial ell-being of his7her clients

y. True6. alse

"21. inancial ,lanners and their clients should focus

on

. allocating funds to asset classes e.g. debt0e#uity etc.D

x. allocating funds to indi%idual securities

y. tracing stocs hich they feel ha%e,otential


"22. ?ithin an asset class0 hich indi%idual security

to in%est in should be decided byu. the financial ,lanner

%. the in%estor himself

. a ,rofessional fund manager

x. an obs ,rofile and goals

t. recommending a,,ro,riate asset allocationu. monitoring financial ,lanning

recommendations

%. all of the abo%e

"2+. inancial ,lanning is rele%ant only for high

netorth indi%iduals

u. True

%. alse

"2&. inancial ,lanning does or for older clients

y. True

6. alse

"24 inancial ,lanning is ,rimarily tax ,lanning

. True

x. alse

"25 !n financial ,lanning0 all res,onsibility ends ith

the financial ,lanner and the client has no

res,onsibilitiesy. True

6. alse

"2* The constraint on financial ,lanning due toinsufficient in%estable resources can be remedied to

some extent by

u. decreasing the standard of li%ing

%. disci,lining children. disci,lined monthly budgeting

x. none of the abo%e

"2) !n the groth o,tion offered by mutual funds0 thenumber of units held by an in%estor increases because

of

. groth in net asset %alue i.e. ca,itala,,reciationx. rein%estment of di%idend hich is lie

com,ounding

y. interest recei%ed on the fund>s assets


""$ To maximise returns on in%estment0 once an

in%estor buys into a fund0 he7she should hold on to itno matter hat ha,,ens


22/36

o. True

,. alse

""1 !f an in%estor ee,s in%esting a fixed amount atregular inter%als0 the a%erage cost of his ,urchases

ill alays be less than if he maes in%estment at

irregular ,eriods

y. True6. alse

""2. ?hich of the folloing lets an in%estor boo

,rofits in a rising maret and increase holdings in afalling maret

u. ixed (ates of Asset Allocation

%. lexible (atio of Asset Allocation

. !n%estment ithout any asset allocation ,lanx. uy and @old 9trategy

""". A lexible (atio of Asset Allocation means

y. continuously changing the ratio of %arious

assets in the ,ortfolio6. not doing any re-balancing and letting the

,rofits run

aa. acti%e sitchingbb. none of the abo%e

""+. The strategy ad%isable for an in%estor to

maximise in%estment return in the long run is. buy and hold on to in%estments for a long

time

x. li#uidate ,oorly ,erforming in%estments

from time to timey. li#uidate good ,erforming in%estments fro

time to time6. sitch from ,oor ,erformers to good

,erformers

""&. A criticism of ru,ee-cost a%eraging is

. !n%estment is for the same amount at regular

inter%alsx. /%er a ,eriod of time0 the a%erage ,urchase

,rice ill or out higher than if one tries to

guess the maret highs and los

y. !t does not tell you hen to buy0 sell orsitch from one scheme to another

6. (u,ee cost a%eraging has no serious

shortcomings

""4. !n !ndia0 indi%idual in%estors do not ha%e direct

access to

#. ca,ital maret instruments

r. real estates. bullion

t. money maret instruments

""5. ?hich of the folloing entities can gi%en loans

against securities

. ;T!x. ans

y. Mutual funds


""*. ?hich of the folloing in%estment ,roducts do

not gi%e guarantee for return or ca,ital&. an de,osits*. ubic ,ro%ident fund D#. National 9a%ings Certificates N9CDz. ;nits of a mutual fund

""). The biggest ad%antage of in%estment in gold is. @igh returns

x. @igh a,,reciation in %alue

y. =o urchase ,rice

6. @edge against inflation

"+$. The biggest disad%antage of in%estment in real

estate is

y. =ess ,otential for ca,ital a,,reciation6. @igh ,urchase ,rice

aa. 3e,reciation in %alue as time ,asses

bb. Value gets eroded due to inflation

"+1. ?hich of the folloing is not an ad%antage of

ban de,ositsB

u. =i#uidity

%. @igh ,ercei%ed safety. =o entry ,rice

x. @igh yield after tax

"+2. =isting of shares at a stoc exchange ensures. guaranteed returns

x. long term ca,ital a,,reciation

y. lo ris

6. high li#uidity

"+". The rate of interest ,aid by a com,any on

debentures issued by it de,ends on

u. the stoc maret situation%. 9! guidelines

. the com,any>s credit rating

x. the amount of money being raised

"++. ?hich of the folloing is not a characteristic of

com,any fixed de,osits

u. A higher rate of interest

%. higher ris. unfa%ourable effect of tax

x. %ery high li#uidity


23/36

"+&. ?hich of the folloing is untrue for ublic

ro%ident und 9chemes

s. The interest is tax-freet. ost-tax returns are attracti%e

u. =i#uidity is rather lo


"+4. !ndira Vias atra is an in%estment ,roduct

,o,ular ith

u. rural in%estors

%. in%estors in high tax bracet. urban in%estors

x. ris taing in%estors

"+5. inance Acts of 2$$$ and 2$$1 ha%e reducedtax-free interest on ublic ro%ident und to

t. 12'

u. 1$.&'

%. )'

. 11'

"+* Most indi%iduals in%est in life insurance ,olicies

for. ris ,rotection

x. tax benefits

y. easy li#uidity

6. high returns

"+). Annual contribution to ublic ro%ident und

should be

. (s.1$$$$x. beteen 1$$ and (s.4$$$

y. beteen (s.4$$ and (s.1$$$6. none of the abo%e

"&$. The current yield on !ndira Vias atra ors

out to

. 1$.&'

x. 11'y. 1$'

6. )'

351. The tenure of an Indira Vikas Patra isy. 7 yearsz. 6 yearsaa. 5 years

bb. 3 years

352. The maturity period of RI Re!ief onds isaa. 5 yearsbb. 6 years"". 7 yearsdd. # years

353. The annua! yie!d on RI Re!ief onds is"". $.5%

dd. $.5% before ta&ee. #.5% before ta&ff. #.5% after ta&

35'. Indi(idua! in(estors do not norma!!y in(estin )o(ernment *e"urities be"ause

"". indi(idua! in(estors re not a!!o+ed toin(est in )o(ernment *e"urities

dd. the amount re,uired for in(estment is(ery !ar-e

ee. safety of prin"ipa! is not -uaranteedff. none of the abo(e

355. The amount an insuran"e "ompany +ou!dpay to the nominee if a po!i"yho!der died iskno+n as the

aa. premiumbb. sum assured"". fa"e (a!uedd. rea! (a!ue

356. i(idends distributed by mutua! funds areaa. ta&ed at sour"ebb. ta&ed in the hands of the in(estors"". are sub/e"t to "apita! -ains ta&dd. are ta&0free in the hands of the in(estor

357. In(estin- throu-h mutua! fund is a betteroption than in(estin- dire"t!y in the sto"k marketbe"auseidentifyin- sto"ks is a diffi"u!t pro"essa-ents -et "ommissions on mutua! fund in(estmentreturned are -uaranteed by mutua! funds

a!! of the abo(e

35#. sma!! in(estor "an bui!d a di(ersifiedportfo!io by

aa. buyin- one share ea"h of a!! !isted"ompanies

bb. in(estin- in a mutua! fund"". borro+in- enou-h money to buy shares

of +e!!0mana-ed "ompaniesdd. none of the abo(e

35$. hi"h of the fo!!o+in- is not an ad(anta-eof mutua! fund in(estment o(er dire"t in(estment

"". i-her !i,uiditydd. 4o+er transa"tion "ostsee. )reater "on(enien"eff. -uaranteed returns

36. There is no "ontra"tua! -uarantee forrepayment of prin"ipa! or interest to an in(estorin

+. bank deposit&. debt fund


24/36

y. se"ured debenturesz. a!! of the abo(e

361. hi"h of the fo!!o+in- debt in(estments isnot rated

"". orporate ondsdd. ommer"ia! Paperee. ompany epositff. ebt und

362. )o!d and rea! estate are attra"ti(ein(estment options on!y in hi-h inf!atione"onomies

"". Truedd. a!se

363. ire"t in(estment in sto"k market "an be abetter option than in(estin- throu-h mutua!funds if the in(estor

+. +ants better returns than those offered

by mutua! funds&. has !ar-e "apita!8 kno+!ed-e and

resour"es for resear"hy. has identified a bu!!ish phase in the

sto"k marketz. +ants to in(est for the !on- term

36'. e"idin- on strate-ies su"h as !on-0term"ompoundin-8 "ost a(era-in-8 (a!ue a(era-in-8a"ti(e s+it"hin-8 a!! depend on the

aa. sto"k market situation on datebb. amount of money to be in(ested"". in(estor9s risk to!eran"e

dd. phase throu-h +hi"h the e"onomy ispassin-

365. inan"ia! P!annin- in(o!(esaa. studyin- finan"ia! mana-ementbb. mana-in- the risks of in(estin-"". finan"in- the "!ient9s in(estmentsdd. none of the abo(e

366. )reater returns "ome on!y from assurin-hi-her risks8 and a hi-her risk portfo!io-uarantees hi-her returns

+. True

&. a!se

367. The risk to!eran"e of an in(estors isindependent of

aa. his a-ebb. his in"ome"". the sto"k market mo(ementsdd. his /ob se"urity

36#. se"tor fund is a

aa. !o+ risk fundbb. moderate risk fund"". hi-h risk funddd. !o+0to0moderate risk fund

36$. Internationa! funds in(est in (arious and soare !o+ risk funds

+. True&. a!se

37. In(estment in -o!d is a hed-e a-ainstinf!ation but in(estment in a pre"ious meta! fundfa!!s in the hi-h risk "ate-ory

+. True&. a!se

371. y their (ery nature8 -ro+th funds are"onsidered as hi-h risk funds

aa. Truebb. a!se

372. *hort Term bond funds areaa. !o+ risk fundsbb. moderate risk funds"". hi-h riskdd. of the abo(e dependin- on the market

373. The risk !e(e! of "ommodity funds isy. hi-h risk "ate-oryz. determined by the "ommodity pri"e

mo(ementsaa. "annot be spe"ifiedbb. !o+ risk "ate-ory

37'. s "ompared to a fund +ith f!u"tuatin- tota!returns8 a fund +ith stab!e positi(e earnin-s

+. -i(es hi-her returns&. is !ess riskyy. -i(es !o+er returnsz. is more risky

375. :Risk: is e,uated +ith+. (o!ati!ity of earnin-s&. !e(e! of earnin-sy. the number of in(estors in a fundz. the number of s"hemes of a fund fami!y

376. Vo!ati!ity of an e,uity fund portfo!io isindependent of the

aa. kind of sto"ks in the portfo!iobb. de-ree of di(ersifi"ation of the portfo!io"". fund mana-er9s su""ess at market

timin-dd. number of in(estors in the s"heme

377. ;,uity pri"e risks are


25/36


26/36

ff. +ho are +ea!th preser(in- aff!uentindi(idua!s

3$2. The transition phase of an in(estor9s +ea!th"y"!e is +hen

y. the finan"ia! -oa!s ha(e been a!readymet

z. the in(estor has retiredaa. finan"ia! -oa!s are approa"hin-bb. in(estor sudden!y -ets a +indfa!!

3$3. hi-h proportion of in(estment in in"omefunds is re,uired by

aa. a""umu!atin- in(estorsbb. aff!uent in(estors"". in(estors in the inter0-enerationa!

transfer phasedd. in(estors in the distribution phase

3$'. Retired in(estors shou!d

y. not dra+ do+n on their "apita!z. not in(est in se"urities +hi"h bear risk of

"apita! erosionaa. "ontinue ho!din- a ma/or portion of their

ho!din- in e,uity -ro+th fundsbb. ne(er in(est in e,uity

3$5. or o!der in(estors +ho +ant to transfertheir +ea!th

y. no finan"ia! p!annin- is re,uiredz. the ri-ht in(estment strate-y depends

upon +ho the benefi"iaries areaa. the ri-ht in(estment strate-y depends

upon the state of the sto"k marketbb. a!! the funds "an be in(ested in

a--ressi(e e,uity funds

3$6. In(estors +ho a",uire sudden +ea!th+. "an spe"u!ate +ith a!! the a",uired

money in the sto"k markets&. shou!d not use any of the ne+ +ea!th to

in(est in e,uityy. shou!d take the effe"t of ta&es into

a""ountz. need not pay any ta&es on the ne+!y

a",uired +ea!th as it is not a part of their

re-u!ar in"ome

3$7. =n!y if a spe"ia!ty offshore fund has"onsistent!y -i(en (ery -ood performan"e8 it "anbe "onsidered for in(estment by a retiree

y. Truez. a!se

3$#. Past performan"e shou!d not be so!e!yre!ied on for se!e"tin- a fund

&. Truey. a!se

3$$. et+een the past performan"e of a fundand its suitabi!ity for an in(estor8 pastperforman"e is more important

aa. Truebb. a!se

'. *tru"tura! "hara"terisations of an e,uityfund in"!ude

aa. "osts of in(estin-bb. the spe"ifi" se"urities in +hi"h the fund

has in(ested"". the number of emp!oyees of the >dd. a!! of the abo(e

+$1. An e#uity fund>s age and si6e are irrele%ant

hen selecting a fund for in%estment

cc. True

dd. alse

+$2. The charge to an in%estor at the time of he

redeems his units from the fund is non as

ee. reco%ery chargeff. re,urchase load

gg. redem,tion eight

hh. exit load

+$". The load amount charged to a scheme o%er a

,eriod of time is called

gg. entry load

hh. exit loadii. deferred load


27/36

hh. A di%ersified e#uity fund and a debt fund

+$5. ?ho is the ,rimary guardian of unitholders>

funds7assetsee. The AMC

ff. The Trustees

gg. The (egistrars

hh. The custodians

+$*. !n case of a fund merger or Tae-o%er

gg. @igh Court a,,ro%al may not be necessary

hh. 9! a,,ro%al is a mustii. all unitholders must be informed


28/36

cc. True

dd. alse

+2". The differerentiating factor among debt funds ofcom,arable maturity and #uality is

aa. gross yields

bb. costs

cc. fund agedd. tenure of the fund manager

+2+. 3istribution tax should be taen into into

account hen com,uting net returns fromaa. e#uity funds

bb. debt funds

cc. both the abo%e

dd. none of the abo%e

+2&. All debt fund in%estors are ex,osed to ris of

,rinci,al loss

ee. True

ff. alse

+24. (unning a money maret mutual fund re#uires

more ofcc. credit analysis sills

dd. e#uity analysis sills

ee. ,atience

ff. trading sills

+25. ?hich is the most im,ortant in selecting debt

fund for better return

ee. ,ast ,erformanceff. le%el of interest rates

gg. fund ex,ertisehh. the securities in hich it has in%ested

+2*. !n%estors should be ad%ised to a%oid in%esting in

a debt fund ith a

cc. loer rated ,ortfolio and higher ex,ense

ratiodd. higher rated ,ortfolio and loer ex,ense

ratio

ee. loer rated ,ortfolio and loer ex,ense

ratioff. loer rated ,ortfolio and higher ex,ense

ratio

+2). An ideal money maret mutual fund must ha%ecc. loer returns

dd. loer ex,ense ratio

ee. lo #uality of in%estments

ff. all the abo%e

+"$. Circumstances that might cause an in%estor to

change the com,osition of his ,ortfoliou. cyclical changes in economy

%. unforeseen economic changes affecting the

,ortfolio>s ,referred sectors

. both the abo%e

x. none of the abo%e

+"1. !f a charitable trust a,,roaches a distributor ith

an a,,lication for in%estment in a mutual fund0 the

distributor shouldee. acce,t the a,,lication ithout asting time

ff. re


29/36

ee. A Value und

ff. A roth und

gg. An !ndex und

hh. Could be any of the abo%e three0 one cannotgeneralise

+"*. ?hich of the folloing is not true as ,er 9!

(egulations for 3ebt undsBee. !n%estment in rated debt securities of a

single issuer should not exceed 1&' of NAVff. Total in%estment in unrated debt securities

of a single issuer should not exceed 2&' ofNAV

gg. Total in%estment in unrated debt securities

belo in%estment grade should not exceed

2&' of NAV''. Total in%estment in rated debt securities

belo in%estment grade should not exceed

2&' of NAV

+"). A Money Maret Mutual und is most liely toin%est in

ee. Cor,orate onds

ff. #uity 9haresgg. o%ernment 9ecurities ith maturity less

than 1 year

hh. All of the abo%e

++$. /f the folloing0 hich ould be suitable for a

retiree ith a modest ris a,,etite

gg. Value und

hh. 3i%ersified #uity undii. roth und


30/36


31/36

aa. 1))2

bb. 1))"

cc. 1))&

dd. 1))4

+4). x,enses incurred by a fund for ,rinting of Fey

!nformation Memorandum can be amortised o%er

cc. 1$ Ersdd. & Ers

ee. 1& Ers

ff. Cannot be amortised

+5$. A mutual funds> in%estments are guided by the

gg. AMC

hh. oard of Trustees

ii. !n%estment /b


32/36

+*+. 3uring the ,eriod 1))2-))0 the mobilisation of

funds by the mutual fund industry as about

ii. &' - 4' of gross domestic sa%ings


33/36

+)4. A mainstream di%ersified debt fund is most

affected by

ee. rein%estment risff. li#uidity ris

gg. interest rate ris

hh. default ris

+)5. !f yields fall0 a debt fund manager ill do all of

the folloing exce,t

dd. sell short maturity securities and buy long

maturity securitiesee. see that the fund>s a%erage duration becomes

longer than the maret>s a%erage duration

ff. sell long duration securities and buy short

duration securitiesgg. sell high cou,on securities and buy lo

cou,on securities

+)*. !n hich ty,e of schemes should an unmarried

,rofessional oring @== in%estgg. 9cheme in%esting *$' in debt securities

hh. &$' in e#uity funds and &$' in income

funds

ii. )$' in e#uity funds ha%ing a higher 7

(atio than the maret


34/36

Answers to Practice Question

@.Ao

ns @. Ao ns @. Ao ns @. Ao ns @. Ao ns

1 b 51 a 11 d 151 " 21 b2 b 52 d 12 a 152 d 22 d

3 d 53 b 13 b 153 d 23 b' d 5' d 1' " 15' d 2' d

5 " 55 " 15 a 155 b 25 b

6 " 56 " 16 d 156 a 26 "

7 b 57 " 17 a 157 " 27 a

# " 5# " 1# d 15# d 2# d$ d 5$ b 1$ d 15$ a 2$ a

1 " 6 d 11 b 16 d 21 "

11 b 61 " 111 b 161 a 211 b

12 b 62 a 112 " 162 d 212 d

13 d 63 d 113 a 163 " 213 d

1' " 6' d 11' d 16' " 21' a

15 b 65 b 115 d 165 b 215 a16 d 66 " 116 b 166 d 216 a

17 b 67 " 117 b 167 " 217 b

1# d 6# d 11# a 16# b 21# b

1$ " 6$ " 11$ " 16$ b 21$ b

2 " 7 d 12 a 17 d 22 d

21 b 71 b 121 b 171 " 221 b

22 d 72 b 122 " 172 b 222 a

23 " 73 d 123 a 173 b 223 b

2' a 7' d 12' d 17' d 22' a

25 d 75 " 125 " 175 d 225 "

26 d 76 a 126 d 176 b 226 a

27 " 77 " 127 d 177 " 227 "

2# b 7# a 12# a 17# " 22# "

2$ " 7$ d 12$ d 17$ " 22$ b

3 d # a 13 a 1# " 23 b

31 b #1 " 131 d 1#1 d 231 d

32 " #2 b 132 a 1#2 b 232 a

33 b #3 b 133 b 1#3 d 233 b

3' b #' b 13' " 1#' " 23' b

35 b #5 d 135 b 1#5 b 235 "

36 " #6 a 136 d 1#6 a 236 "

37 b #7 b 137 a 1#7 " 237 "

3# " ## " 13# " 1## a 23# a3$ a #$ b 13$ b 1#$ d 23$ b

' b $ b 1' " 1$ b 2' b'1 b $1 b 1'1 a 1$1 d 2'1 b

'2 a $2 " 1'2 b 1$2 b 2'2 b

'3 b $3 " 1'3 " 1$3 b 2'3 a

'' " $' b 1'' b 1$' a 2'' b

'5 b $5 a 1'5 d 1$5 d 2'5 "

'6 b $6 b 1'6 " 1$6 b 2'6 a

'7 " $7 a 1'7 d 1$7 " 2'7 a

'# b $# d 1'# " 1$# " 2'# "


35/36

'$ $$ " 1'$ b 1$$ b 2'$ "

5 1 a 15 " 2 a 25 a

Answers to Practice Question for AMFI Test

Q. No

A

n

s

Q. No

A

n

s

Q. No

A

n

s

Q. No

A

n

s

Q. No

A

n

s251 a 31 a 351 b '1 b '51 a252 b 32 a 352 a '2 " '52 b253 d 33 a 353 d '3 " '53 b25' " 3' d 35' b '' b '5' "255 " 35 b 355 b '5 a '55 a256 a 36 b 356 d '6 " '56 "257 a 37 d 357 a '7 " '57 "25# d 3# d 35# b '# d '5# "25$ b 3$ b 35$ d '$ d '5$ a26 a 31 a 36 b '1 a '6 "261 " 311 d 361 d '11 " '61 "262 b 312 " 362 a '12 b '62 d

263 b 313 d 363 b '13 " '63 d26' " 31' d 36' " '1' a '6' "265 a 315 " 365 b '15 b '65 d266 b 316 b 366 b '16 a '66 a267 a 317 b 367 " '17 a '67 "26# b 31# b 36# " '1# a '6# d26$ a 31$ b 36$ b '1$ b '6$ b27 d 32 a 37 a '2 b '7 "271 b 321 a 371 b '21 a '71 b272 b 322 " 372 b '22 a '72 a273 b 323 d 373 a '23 a '73 "27' b 32' b 37' b '2' b '7' "275 b 325 a 375 a '25 a '75 "276 " 326 b 376 d '26 d '76 a277 b 327 b 377 d '27 " '77 d27# a 32# " 37# a '2# a '7# "27$ b 32$ b 37$ " '2$ b '7$ b2# a 33 b 3# a '3 " '# b2#1 b 331 a 3#1 b '31 " '#1 a2#2 a 332 a 3#2 b '32 " '#2 b2#3 b 333 b 3#3 a '33 " '#3 b2#' " 33' d 3#' d '3' b '#' a2#5 " 335 " 3#5 " '35 " '#5 "2#6 b 336 d 3#6 b '36 b '#6 b2#7 b 337 b 3#7 a '37 b '#7 b2## d 33# d 3## " '3# b '## "2#$ " 33$ d 3#$ a '3$ " '#$ a

2$ a 3' b 3$ " '' d '$ "2$1 b 3'1 s 3$1 b ''1 " '$1 b2$2 " 3'2 d 3$2 " ''2 " '$2 "2$3 d 3'3 " 3$3 d ''3 d '$3 b2$' a 3'' d 3$' b ''' b '$' "2$5 a 3'5 d 3$5 b ''5 d '$5 "2$6 " 3'6 " 3$6 " ''6 d '$6 "2$7 d 3'7 b 3$7 b ''7 a '$7 "2$# b 3'# b 3$# a ''# d '$# "


36/36

2$$ " 3'$ b 3$$ b ''$ b '$$ d3 b 35 a ' b '5 b 5 b

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