Practice Questions for AMFI Test

1. A close-ended mutual fund has a c. an upper limit on its NAV

fixed: d. a fixed fund size
a. NAV
b. fund size 8. An investor in a close-ended mutual
c. rate of return fund can get his/her money back by
d. number of distributors selling his/her units:
a. back to the fund
2. The maximum load that a fund can b. to a special trust at NAV
charge is determined by the: c. on a stock exchange where the
a. AMC fund is listed
b. SEBI d. to the agent through which
c. AMFI he/she subscribed to the units of
d. distribution agents based on the fund
demand for the fund
9. The "load" charged to an investor in a
3. The amount required to buy 100 units mutual fund is
of a scheme having an entry load of a. entry fee
1.5% and NAV of Rs.20 is : b. cost of the paper on which the
a. Rs.2000 unit certificates are printed
b. Rs.2015 c. the fee the agent charges to the
c. Rs.1985 investor
d. Rs.2030 d. the expenses incurred by fund
managers for marketing a
4. A gilt fund is a special type of fund mutual fund scheme
that invests :
a. in very high quality equity only 10. A mutual fund is owned by
b. in instruments issued by a. the Govt. of India
companies with a sound track b. SEBI
record c. all its investors
c. in short-term securities d. AMFI
d. in government securities only
11. Units from an open-ended mutual
5. Of the following fund types, the fund are bought
highest risk is associated with a. on a stock exchange
a. Balanced Funds b. from the fund itself
b. Gilt Funds c. from AMFI
c. Equity Growth Funds d. from a stock broker
d. Debt Funds
12. A mutual fund is not
6. The NAV of a mutual fund : a. owned jointly by all investors
a. is always constant b. a company that manages
b. keeps going up at a steady rate investment portfolios of high
c. fluctuates with market price networth individuals
movements c. a pool of funds used to
d. cannot go down at all purchase securities on behalf of
investors
7. An open-ended mutual fund is one d. a collective investment vehicle
that has :
a. an option to invest in any kind 13. "Load" cannot be recovered
of security a. at the time of the investor's
b. units available for sale and entry into the fund
repurchase at all times b. as a fixed amount each year
Rishu Modi 1
 c. at the time the investor exits the b. Growth Funds
fund c. Debt/Income funds
d. from the fund's distribution d. Sector funds
agent
21. A Fixed Term Plan Series is
14. The most important advantage of a a. an open-ended fund
money market mutual fund is b. a close-ended fund
a. quick capital appreciation c. a fixed term bank deposit
b. high regular income d. a fixed term corporate bond
c. safety of principal
d. no loads 22. NAVs of equity funds are not
affected by
15. Some close-ended funds are quoted a. Stock market movements
at a discount to their NAV because b. Events affecting the
a. of high expense ratios industry/sector in which the
b. investors do not expect the fund has invested Happenings
current NAV to be sustained in in the companies in which the
future fund has invested
c. the repurchase price fixed by c. real estate prices
the fund in lower than the NAV
d. of the inherent risk involved in 23. The greatest potential for growth in
investing in such type of funds capital is offered by
a. debt funds
16. The NAV of each scheme should be b. gilt funds
updated on AMFI's website c. growth funds
a. every quarter d. balanced funds
b. every month
c. every hour 24. A Systematic Withdrawal Plan,
d. every day allows investors to get back the principal
amounts invested in addition to the
17. Debt funds target income on investment
a. low risk and stable income a. True
b. protection of principal b. False
c. high growth with risk
d. long term capital appreciation 25. Which of the following is untrue of
an automatic reinvestment plan?
18. In which of the following do debt a. The plan allows for automatic
funds not invest reinvestment of all income and
a. government debt instruments capital gains
b. corporate paper b. Automatic reinvestment allows
c. financial institutions' bonds for accumulation of additional
d. equity of private companies units of the fund
c. The major benefit of automatic
19. Which of the following risks do not reinvestment is compounding
affect a debt fund d. The benefit of automatic
a. default by issuer on payment of reinvestment is often lost on
interest or principal account of the heavy load
b. price fluctuations of the debt charge on the reinvestment
securities
c. share price movements 26. Constraints imposed by most funds
d. interest volatility on check writing are:
a. Account balance should not fall
20. Assured return or guaranteed below the minimum capital
monthly income plans are essentially required
a. Hybrid funds
Rishu Modi 2
 b. Checks issued must be for at
least the minimum amount 33. The Price/Earnings (P/E) Ratio is an
specified important measure of a company's
c. Number of checks per month anticipated performance. It is calculated
must not exceed a specified using:
number a. Market price and dividend
d. Both a & b above b. Market price and earning per
share
27. The performance of a fund is largely c. Market capitalisation and
measured by the success of dividend
a. the marketing function d. Market price and face value
b. the operations function
c. the portfolio market function 34. A company whose earnings are
d. none of the above strongly related to the state of economy
is known as
28. Generally invest in a. Economy stocks
a. unlisted b. Cyclical Stocks
b. market-traded c. Value Stocks
c. thinly traded d. Growth stocks
d. privately placed
35. A Growth stock refers to shares of a
29. Which of the following is not an company whose earnings are projected
equity instrument to grow at the normal market rates
a. preference shares a. True
b. equity warrants b. False
c. ordinary debentures
d. convertible debentures 36. Which of the following is generally
true for a growth stock
30. The drawback of an ordinary share is a. steady capita appreciation and
A. possibility of capital steady dividends yields
appreciation b. high capital appreciation and
B. ownership privilege of the high dividend yields
company c. high capital appreciation but
C. guaranteed dividend income low dividend yields
D. no guaranteed income or d. steady capital appreciation but
security high dividend yields

31. An owner of preference shares is 37. Shares of companies with large

given which of the following rights capital market capitalisation
a. voting rights a. have greater growth potential
b. fixed dividend income from b. are more liquid
post-tax profits c. are not available
c. voting rights and unlimited d. none of the above
dividend income
d. no guaranteed rights 38. Dividend yield for a stock is
a. dividend per share
32. Market capitalisation of a company b. dividend per face value
is calculated by multiplying the number c. dividend per share to current
of outstanding shares by market price
a. R.10 d. none of the above
b. Face value of each share
c. Current market value of each 39. Value stocks
share a. have high current dividend
d. dividend yield yield
b. yield high growth in earnings
Rishu Modi 3
 c. are currently under valued c. A bond fund with a bond
d. none of the above d. A government securities fund
with a government security
40. A better performance than the return
on index is given by 47. An AMC must explain adverse
a. passive fund manager variation between expense estimates for
b. an active fund manager the scheme on offer and actual
c. all fund managers a. expenses for past schemes in
d. non fund manager b. financial newspapers
c. business channels on TV
41. A change in key personnel especially d. offer document
the fund manager of an AMC does not e. AMFI Newsletter
necessitate a revision of the offer 48. Information on estimated expenses to
document be incurred by a scheme is not found in
a. True the offer document, but in brochures of
b. False the fund
a. True
42. If fresh litigation cases or b. False
adjudication proceedings are referred by 49. The offer document and key
SEBI against the fund sponsors or a information memorandum contain
company associated with the sponsors, financial information for
then the offer document needs to be a. all schemes of all mutual funds
revised in the capital market
a. True b. all schemes launched by the
b. False particular fund during the last 3
fiscal years
43. The offer document need not be c. none of the schemes
revised if the management or the d. companies in which investment
controlling interest in the AMC change is proposed
a. True 50. The functions and responsibilities of
b. False the sponsor, AMC, trustees and
custodian of the mutual fund are listed in
44. An AMC cannot explain adverse a. offer document only
variations between expense estimates for b. key information memorandum
the scheme on offer and actual expenses c. both offer document and key
for past schemes in information memorandum
a. financial newspapers d. none of the above
b. business channels on TV 51. Information about trusteeship fees is
c. the offer document included in the offer document but not in
d. AMFI newsletter the key information memorandum
e. True
45. Information on estimated expenses to f. False
be incurred by a scheme is not found in
the offer document, but in brochures of 52. The following information about the
the fund constitution of the mutual fund is found
a. True in both the offer document and key
b. False information memorandum
e. activities of the sponsor
46. When comparing a fund's f. summary of trust deed
performance with that of its peer group, provisions
the following cannot be compared g. name and addresses of the
a. Two debt funds with 5 year board of trustees
maturities h. all of the above
b. A broad-based equity fund with
an IT Sector Fund
Rishu Modi 4
53. The investment objectives of the 58. The minimum amount to be raised,
fund an investor selects for investment and the maximum target amount
e. are of no relevance e. are not known before the offer
f. should be the same as his own is concluded
investment objectives f. can be decided based on
g. change with market movements investor response to the offer
h. change with change in the g. are defined as per SEBI
AMC's key personnel Regulations before the offer is
made
54. The investment policies listed out in h. need not be disclosed in the
the offer document of a fund do not offer document
include
e. the type of securities in which 59. The circumstances for refund of
the scheme will invest investment in the initial offer and period
principally within which refund must be carried out
f. asset allocation pattern are not specified in the offer document,
g. policy of diversification but only on the application
h. the specific securities in which e. True
the fund will invest f. False

55. If a scheme's name implies that it 60. Offer related information required to
will invest primarily in a particular type be listed in the offer document and key
of security or in certain industry/sector, information memorandum includes
then it should invest atleast the following e. dates of opening, closing,
percentage of its total assets in the earliest closing, allotment and
indicated type of security/industry/sector despatch of certificates
e. 100% f. procedure for transfer and
f. 80% transmission of units
g. 65% g. both the above
h. 40% h. neither of the above

56. For assured return schemes, 61. In the offer document, funds are
information about the guarantor's net required to make disclosures
worth which justifies the guarantor's summarising associate transactions and
ability to meet any shortfalls in the their impact on the performance of the
returns assured under the scheme can be scheme for the last
found in e. one fiscal year
e. the offer document f. 2 fiscal years
f. the key information g. 3 fiscal years
memorandum h. 5 fiscal years
g. both (a) and (b)
h. none of the above 62. The circumstances under which a
scheme shall be wound up are to be
57. The names and background of key described in the offer document at the
personnel of the AMC time of the initial launch of the scheme
e. need not be disclosed to itself
investors e. True
f. are of no relevance as they may f. False
change
g. are disclosed in the offer 63. The following do not form a part of
document the investment procedure described in an
h. are declared in newspaper offer document
advertisements

Rishu Modi 5
 e. various plans under the scheme h. names of lenders
(e.g. dividend reinvestment
plant) 69. Valuation norms for non-traded
f. minimum initial (and securities should be disclosed
subsequent) investment e. at the end of every financial
g. details of who can invest year
h. details of other competing f. every quarter
mutual funds g. in the offer document at the
time of launch of the scheme
64. A scheme's policy on dividends and h. should not be disclosed, being
distribution confidential information
e. is decided by the fund manager
as per is market outlook 70. Procedure for redemption or
f. can be changed to suit the repurchase need not
requirements of the AMC e. be described in the offer
g. need not be consistent document
h. should be disclosed at the time f. include how redemption or
of initial launch repurchase price of units would
be determined
65. SEBI restricts mutual fund g. include names of centres where
investments in companies forming part redemption can be effected
of the same group as the AMC. This is: h. indicate the redemption or
e. not true repurchase price as at the end of
f. in the interest of investor the current fiscal year
protection
g. applied only to some mutual 71. The fund need not describe its
funds, not all accounting policies in the offer
h. not favourable to investors at document as these are of no use to an
all investor
e. True
66. A disclosure should be made in the f. False
offer document if an AMC has invested
more than the following percentage of its 72. The accounting policies of a fund
net assets in group companies should be in accordance with
e. 50% d. GAAP
f. 40% e. SEBI regulations
g. 25% f. ICAI Guidelines
h. 10% g. American GAAP

67. Mutual funds are allowed to borrow 73. Tax treatment of investments does
e. freely to meet their not
requirements e. form a section in the offer
f. for investment purposes document
g. only to meet redemption f. describe the tax elements
demands applicable to investors who
h. not allowed at all invest in the fund
g. form a section in the key
68. As a part of borrowing policy, the information memorandum
following need not be disclosed in an h. offer tax advice to investors
offer document
e. purpose and circumstances of 74. Documents available to investors for
borrowing inspection do not include
f. regulatory limits on borrowing c. Memorandum and Articles of
g. potential risk to AMC and unit- Association of AMC
holders
Rishu Modi 6
 d. consent of auditors and legal e. No
advisors f. Yes
e. investment management reports g. if Ministry of Finance approves
f. reports based on which actual h. if AMFI approves
investments are made
83. Who among the following are not
75. Investors' rights under a scheme are Institutional Investors
e. uniform for all schemes of all e. Banks
funds f. Resident Individuals
f. not defined g. Provident Funds
g. listed in the offer document h. Non Banking Finance
h. available with stock exchanges Companies

76. The offer document for a scheme 84. It is compulsory to use fund
should describe how the NAV of the agents/intermediaries for investing MFs
scheme is to be computed e. True
e. True f. False
f. False
85. Generally, which category of
77. An offer document contains an investors need advice for Investing in
AMC's investor grievance's history for Mutual Funds
the past c. Non Banking Finance
e. one fiscal year Companies
f. 2 fiscal years d. Insurance Companies
g. 3 fiscal years e. Foreign Institutional Investors
h. six months f. Individuals

78. Any pending cases or penalties 86. Most eligible investors of Mutual
levied on the sponsors or AMC should Funds can broadly be grouped into either
be disclosed in the offer document individual or institutional investors
e. True e. True
f. False f. False

79. Who among the following are not 87. Commission rates or loads applicable
eligible to invest in MF to big investors and small investors are
e. Indian Companies e. same
f. Banks f. different
g. Non Banking Finance g. not charges to either
Companies h. none of the above
h. Foreign Citizens
88. What document Mutual Fund
80. NRIs are eligible to invest in Mutual distributors need to refer for finding out
Funds eligible category of investors in a
a. True particular Mutual Fund Scheme
b. False e. SEBI Regulations Manual
f. AMFI booklet
81. The most important link between g. Offer document
Mutual Fund and Investors is h. RBI Guidelines
e. Government
f. SEBI 89. As per AMFI figures, how many
g. Fund distributors agents approximately, are there in India
h. AMFI selling Mutual Funds
e. 50000
82. Are Overseas Corporate Bodies f. 100000
allowed to invest in Mutual Funds g. 75000
Rishu Modi 7
 h. 150000 SEBI does not certify the accuracy or
adequacy of the document
90. Which Mutual Fund has majority of f. True
the agents selling its Mutual Fund units g. False
in India
e. LIC Mutual Fund 98. The following need not be covered in
f. UTI Mutual Fund a Key Information Memorandum
g. SBI Mutual Fund c. Risk Factors
h. None of the above d. Opening, Closing and earliest
Closing Date of the offer
91. Mutual Fund agents/distributors are e. Disclaimer Clause
not allowed to sell Financial Products f. Functions and responsibilities
other than Mutual Funds of the sponsor, trustees, AMC
c. True and Custodian responsibilities
d. False
99. The front page of an offer document
92. Are Mutual Fund agents/distributors need not cover
in India required to pass any e. opening, closing and earliest
examination to qualify to sell Mutual closing date of the offer
Fund Units f. disclaimer clause
c. Yes, a test conducted by AMFI g. legal and regulator compliance
d. Yes, a test conducted by SEBI h. price of units
e. No
f. a Post Graduate university 100. A "glossary" of Defined Terms
course must be included in the offer document
e. True
93. How many major distributor f. False
Companies are there in India selling
Mutual Fund units
c. approximately 9 101. Standard risk factors are not
d. approximately 11 g. market driven
e. approximately 10 h. common to all schemes
f. approximately 25 i. of relevance to novice investors
j. new to a regular investor
94. The offer document is not a legal
document 102. The risk of a scheme's NAV
e. True moving up or down on the basis of
f. False capital market movements is a standard
risk factor
95. A copy of all changes in the offer i. True
document has to be filed with SEBI j. False
c. True
d. False 103. Past performance of a
sponsor/AMC mutual fund is not
96. The legal responsibility for the indicative of the future performance of
accuracy of the statements made in the the scheme. This is
offer document lies with i. not true
e. SEBI j. a standard risk factor for all
f. the AMC schemes
g. AMFI k. a scheme-specific risk factor
h. the Company Law Board l. applicable only to gilt funds

97. Though the offer document of a 104. Risk arising from a scheme's
scheme is prepared as per SEBI investment objective/strategy and
Regulations and is filed with SEBI, proposed asset allocation is
Rishu Modi 8
 i. not present i. disclosures made in the offer
j. common to all schemes document are true, fair and
k. specific to that scheme adequate
l. not applicable to debt funds j. the AMC guarantees a good
performance
105. In an assured returns scheme, if
assurance is only for a limited period, it 110. In developed countries, an
must be stated in the offer document that important Mutual Fund marketing
there is no guarantee for sustaining the channel is through
assured return for the remaining duration i. Insurance Companies
of the scheme j. Banks
i. True k. Non-Banking Finance
j. False Companies
l. Retail Distributors
106. If the AMC is managing a fund for
the first time, this information can be 111. Emerging or new channel for
found in distributors/marketing of Mutual Fund in
i. newspapers India is
j. SEBI i. Insurance Companies
k. AMFI Newsletter j. Banks
l. Offer document k. Qualified Mutual Fund agents
l. Direct Sales agents of
107. A compliance officer respective mutual funds
i. stands guarantee to the
information contained in the 112. Mutual Funds often use their own
offer document employees to mobilise funds from
j. belongs to SEBI g. retail investors
k. cannot certify that the AMC's h. High Networth
legal and procedural obligations individuals/institutional
are fulfilled investors
l. cannot be appointed by the i. all investors
AMC j. foreign investors

108. The due diligence certificate that 113. Retail distribution channels are a
must be submitted to SEBI along with critical element in the distribution of
the draft offer document cannot be mutual funds in India
signed by i. True
i. the managing director of the j. False
AMC
j. an executive director of the 114. "Sales Practices" cover the
AMC following areas
k. the compliance officer i. desirable marketing practices
l. Investor relations officer j. agents' responsibilities to the
investor
109. A due diligence certificate does not k. ethical code of conduct
certify that l. all of the above
g. the draft offer document
forwarded to SEBI is in 115. The following are not termed as
accordance with SEBI "sales practices"
regulations i. agents commission
h. all legal requirements j. before-and after-sales service to
connected with launching of the investors
scheme have been complied k. advertising of schemes
with l. stock broking

Rishu Modi 9
 i. True
116. Sales practices are never mandated j. False
by regulators, but arise from convention
only 124. In India, Mutual fund agents' rate
i. True and services are at present defined by
j. False g. SEBI rules
h. stock exchange bye-laws
117. Agents are compensated by mutual i. AMFI rules
funds j. convention
i. through salaries
j. through commissions 125. Along with the application, it is
k. through an annual fee mandatory to distribute
l. not in cash but in kind i. investment rebate
j. offer document
118. In India the minimum or maximum k. key information memorandum
commissions payable to distributors are l. none of the above
not prescribed by law, but are decided
using the fund's own discretion 126. To sell funds effectively, an agent
i. True need not
j. False g. be fully aware of the important
characteristics of the scheme
119. Lowest commissions are paid on h. know his/her client's risk
i. Equity funds profile
j. tax benefit schemes of mutual i. give after sales service
funds j. offer large investment rebates
k. debt funds
l. long-term investments in 127. For investors to correctly compare
mutual funds performance of different funds SEBI's
advertising codes include
120. Excess distribution expenses are to i. uniform computation of yields
be borne by the j. uniform presentations of
i. AMC dividends
j. unit holders k. identical time periods
k. SEBI l. all of the above
l. AMFI
128. SEBI's advertising code mandate
121. To cover fund distribution that all performance calculations in a
expenses, open ended funds fund's advertisement should be based
g. charge a fee from agents g. NAV
h. charge entry and exit loads h. the NSE Fifty Index
from investors i. the BSE Sensex
i. create a reserve j. none of the above
j. sell investments
129. An agent's appointment by a fund
122. Trail commission means paying i. requires SEBI's approval
h. no commission at all j. is a lengthy and cumbersome
i. the entire commission up-front process
j. part of the commission up-front k. is mandatorily preceded by an
and the balance in phases AMFI test
k. the entire commission after five l. does not require any approval
years
130. An investor does not have recourse
123. Sub-brokers serve as agents of the to his agent in case of errors, problems
principal broker and a mutual fund is not or the quality of the investment
answerable for their activities c. True
Rishu Modi 10
 d. False j. each investment decision
should be approved by
131. An agent can offer and sell a investors
funds's units at
i. any price he chooses 137. Distribution and sales practices are
j. a price determined by only partly regulated by SEBI at present
competition among agents i. True
k. a price based on demand for j. False
that fund's units
l. the public offering price 138. Which of the following distribution
currently in effect channels is preferred by private mutual
funds
132. All buy orders through an agent do i. Individual Agents
not become valid till the fund accepts j. Small Distribution companies
and confirms the orders k. established distribution
i. True companies
j. False l. the Internet

133. When an agent purchases, offers or 139. Which of the following sales
sells units, ensuring compliance with practices is prescribed by regulation
applicable regulations is the i. AMFI Code of Ethics
responsibility of j. SEBI Advertising
i. the fund k. AMFI's Code for Agents
j. the agent l. None of the above
k. AMFI
l. SEBI 140. In a mutual fund investors'
subscriptions are accounted for as
134. The terms of appointment of a i. liabilities
broker by a fund are j. deposits
g. laid down by SEBI k. unit capital
h. laid down by AMFI l. none of the above
i. not uniform to all funds
j. none of the above 141. Investments made by a mutual fund
on behalf of investors are accounted as
135. The code of ethics for mutual funds e. assets
published by AMFI f. liabilities
g. is mandatory g. capital
h. is in the form of recommended h. none of the above
practices
i. is unfavourable to investors 142. Liabilities in the balance sheet of a
j. does not cover distribution and mutual fund are
selling practices g. in the form of long-term loans
h. strictly short term in nature
136. The AMFI code of ethics does not i. combination of long term and
cover the following prescriptions short term
g. Adequate disclosures should be j. not allowed as per regulations
made to the investors
h. Funds should be managed in 143. Net Asset Value (NAV) of a mutual
accordance with stated fund scheme is defined as the schemes
investment objectives g. assets minus liabilities
i. conflict of interest should be h. assets per unit
avoided in dealings with i. assets minus liabilities per unit
directors or employees j. none of the above

Rishu Modi 11
 151. Initial expenses of launching
144. The day on which NAV is schemes should not exceed
calculated by a fund is known as k. 15% of amount received
g. computation date l. 10% of amount raised
h. valuation date m. 6% of amount raised
i. record date n. 5% of the amount raised
j. book closure date
152. Which of the following expenses
145. A funds NAV is affected by cannot be charged to the scheme
e. Purchase and sale of investment k. Audit fees
securities l. costs related to investor
f. valuation of all investment communication
securities held m. winding costs for terminating
g. units sold or redeemed the scheme
h. all of the above n. penalties and fines for
infraction of laws
146. When computing NAV of fund
SEBI requires accrual of major expenses 153. Which of the following are not true
to be accounted for Equity Linked Savings Schemes?
i. quarterly m. Investors can claim an income
j. annually tax rebate
k. on a day to day basis n. There is a lock-in period before
l. when actually paid investment can be withdrawn
o. There are not specific
147. If a fund calculates NAV daily, it restrictions on investment
will include all the transaction concluded objectives for the fund
up to managers
h. last week p. These funds cannot invest in
i. last two days equity
j. previous day
k. today 154. Which of the following is not true
for Index Funds
148. For a open-ended fund,the m. These funds invests in the
repurchase price should not be lower shares that constitute a specific
than index
g. NAV n. The investment in shares is in
h. 95% of NAV the same proportion as in the
i. 93% of NAV index
j. 97% of NAV o. These funds take only the
overall market risk
149. For a close-ended fund, the p. These funds are not diversified
repurchase price should not be lower
than 155. The structure which is required to
i. NAV be followed by mutual funds in India is
j. 95% of NAV laid down by
k. 93% of NAV k. Financial Ministry
l. 97% of NAV l. Securities & Exchange Board
of India (SEBI)
150. For a scheme that has a load, the m. Fund Sponsor
AMC can change an investment n. Association of Mutual Funds of
management fee not exceeding India (AMFI)
g. 1.50%
h. 2.00% 156. The Board of Trustees of a mutual
i. 1.25% fund:
j. 0.50%
Rishu Modi 12
 m. act as a protector of investors'
interests 162. A transfer in the management of a
n. directly manage the portfolio of close-ended scheme does not require the
securities consent of
o. do not have the right to dismiss k. unit holders with 75% voting
the AMC rights
p. cannot supervise and direct the l. SEBI
working of the AMC m. Trustees
n. AMC
157. The AMC of a mutual fund cannot
m. undertake advisory services or 163. The fund sponsor has to contribute
financial consulting k. nothing to the AMC
n. cannot invest the funds in l. the total networth of the AMC
government paper m. atleast 40% of the AMC's
o. act as a trustee of more than networth
one mutual fund n. exactly 50%
p. cannot invest the funds in
securities 164. The sponsor of a mutual fund may
be compared to
158. The trust that manages a mutual m. a director in a Company
fund is appointed by n. the Chief Executive of a
m. The Finance Ministry Company
n. R.B.I o. Promoter of a Company
o. SEBI p. an equity shareholder in a
p. The sponsor of that mutual fund Company

159. The custodian of a mutual fund: 165. Issuing and redeeming units of a
k. is appointed for safekeeping of mutual fund is the role
securities m. the custodian
l. need not be an entity n. the transfer agent
independent of the sponsors o. the trustees
m. not required to be registered p. the bankers
with SEBI
n. does not give or receive 166. The fund sponsors should have a
deliveries of physical securities sound financial track record of
k. 7 years
160. Transfer Agents of a mutual fund l. 12 months
are not responsible for m. 5 years
m. issuing and redeeming units of n. 3 years
the mutual fund
n. updating investor records 167. The networth of an asset
o. preparing transfer documents management company should be greater
p. investing the funds in securities than
markets m. Rs.100 Crores
n. can be decided by the Sponsor
161. Distributors or agents o. should be atleast Rs. 10 Crores
m. can distribute several mutual at all times
funds simultaneously p. should be greater than Rs.10
n. cannot appoint sub-agents or Crores
sub-brokers
o. should be only individuals not 168. The AMC and directors are
companies or banks answerable to
p. should not be an employee or k. Stock Exchanges
associate of the AMC l. The Board of Trustees
m. Agents and distributors
Rishu Modi 13
 n. Stock Brokers l. Registrar of Companies
m. Agents' Association
169. The role of an AMC is to act as n. UTI
1. promoters
2. investment managers 177. A close-ended scheme of a mutual
3. distribution agents fund is not governed by
4. regulators m. Exchange Rules of the stock
exchange where it is listed
170. A change in the following key n. Listing Agreement between the
people does not materially impact the fund and the stock exchange
performance of the fund o. guidelines issued by the
m. Fund sponsors Ministry of Commerce
n. Trustees of the fund p. Companies Act provisions
o. Fund Manager relating to transactions in
p. Members of the AMFI securities
Committee
178. The entry of mutual funds in India
171. To transfer the management of a was initiated by mutual funds set up by
scheme from one AMC to another, the k. Public Sector Banks
consent of the following is required l. Private Sector mutual funds
k. SEBI m. Unit Trust of India
l. Unit holders n. mutual funds set up by
m. both SEBI and unit holders insurance companies
n. none of the above
179. For a close-ended scheme to change
172. As per SEBI's principles, the AMC its fundamental attributes, it must obtain
and the Board of Trustees of a fund the consent of
should belong to the same sponsors m. 50% of unit holders
l. True n. 50% of trustees
m. False o. 75% of unit holders
p. none of the above
173. After UTI, the first mutual funds
were started by 180. The largest corpus of investable
k. private sector banks funds in India is with
l. public sector banks e. Bank-owned mutual funds
m. financial institutions f. Private Sector mutual funds
n. non-banking finance companies g. UTI
h. Insurance Companies
174. The highest authority among the
following is the 181. The Board of Trustees of the UTI
k. SEBI does not have nominees from
l. Company Law Board m. RBI
m. RBI n. LIC
n. Ministry of Finance o. IDBI
p. The Bombay Stock Exchange
175. The entity that SEBI does not (BSE)
regulate is
m. share registrars 182. UTI Cannot provide
n. mutual funds k. corporate finance
o. stock exchanges l. engage in real estate and
p. non-banking finance companies property development business
m. provide merchant banking
176. The accounts and all other records services
of an AMC are filed with n. invest in securities
k. AMFI
Rishu Modi 14
 n. dividend declared for that
183. The "Capital" of a scheme does not scheme
include o. dividend declared for other
m. unit capital schemes of the mutual funds
n. reserves p. income declared under that
o. borrowing scheme
p. networth of the AMC
190. After dividend declaration, unit-
184. Which of the following are Self holders are entitled to receive dividend
Regulatory Organisations within
k. Bombay Stock Exchange m. one week
l. SEBI n. one month
m. AMFI o. 42 days
n. RBI p. six weeks

185. A Self Regulatory Organisation can 191. Unit holders' right to information
regulate does not include
k. all entities in the market i. obtaining from the trustees any
l. only its own members in a information having an adverse
limited way effect on their investments
m. its own members with total j. inspecting major documents of
jurisdiction a fund
n. no entity at all k. receiving of a copy of the
annual financial statements of
186. The amount of authority enjoyed by that fund
a l. approving investment decisions
1. self-regulatory organisation is of the fund
defined by
2. the apex regulatory authority 192. Shortfalls in the case of assured
3. company law board returns schemes are met
4. its own members k. by sponsors of such schemes
5. RBI l. only if the offer document
specifically provided such a
187. The role of AMFI in the mutual guarantee by a named sponsor
funds industry is not to m. the Government of India
k. promote the interests of the unit n. AMFI
holders
l. set a Code of Ethics 193. Unit-holders aggrieved by a Fund
m. regulate mutual funds or AMC can get redressed from
n. increase public awareness of k. Consumer Courts
mutual funds in the country l. SEBI
m. AMFI
188. The rights of investors in a mutual n. RBI
fund scheme are laid down in
m. the Offer Document of that 194. If the Directors of an AMC commit
scheme fraud, Unit-holders investments' cannot
n. Quarterly Reports be protected by the Department of
o. Annual Reports Company Affairs and the Company Law
p. marketing brochures Board
k. True
189. Unit holders of a mutual fund l. False
scheme do not have a right to
m. proportionate ownership of the 195. The responsibilities of a unit-holder
scheme's assets do not include:

Rishu Modi 15
 i. Monitor his investments o. 50% of the unit holders
carefully p. 50% of the trustees
j. being aware of information that q. 75% of the unit holders
affects his investment in a r. none of the above
major way
k. carefully studying the offer 203. The prospectus or Offer Document
document containing the details of new scheme is
l. taking decisions about where first registered with the
the fund managers should q. AMFI
invest r. SEBI
s. Bombay Stock Exchange
196. UTIs scheme US-64 falls under the t. Ministry of Finance
purview of SEBI
m. True 204. The offer document issued by
n. False mutual funds does not serve the purpose
of
197. UTI was set up by q. announcing the scheme
l. SEBI r. giving detailed information
m. AMFI about the scheme
n. A special act s. inviting the the investors
o. RBI t. giving the fund manager's
investment outlook for the next
198. Bank owned Mutual Funds are quarter
supervised by
k. SEBI 205. The prospectus of a close-ended
l. RBI fund is issued
m. jointly by SEBI & RBI o. every year
n. AMFI p. only once at the time of issue
q. every quarter
199. Investor does not have the right to r. every six months
receive any interest from an AMC if his
redemption proceeds are not despatched 206. Fundamental attributes of scheme
within 10 working days q. do not include the objective of
m. True the scheme
n. False r. can be changed without the
investor's approval or
200. If an investor failed to claim his knowledge
redemption proceeds within 3 years, he s. include the terms of the scheme
can claim the proceeds at t. are not necessary for deciding
k. Par whether to invest in the scheme
l. Prevailing NAV or not
m. the on the date he has applied
for redemption 207. The offer document
n. 15% below the prevailing NAV q. contains the terms of issue
201. After closure of the initial offer an r. gives no information relevant
open ended scheme, on going sales and for making an investment
repurchases must start within decision
o. One week s. is not the operating document
p. 30 days describing the scheme
q. 45 days t. cannot be called a reference
r. 180 days document

202. For scheme to be able to change its 208. SEBI does not require the following
fundamental attributes, it must obtain the to be included in the offer document
consent of issued by a mutual fund
Rishu Modi 16
 q. details of the Sponsor and the
AMC 215. The offer document issued when an
r. Description of the Scheme & open-ended scheme is launched is valid
investment objective/strategy for all times, until amended
s. Investors' Rights and Services q. True
t. Performance of other mutual r. False
funds
216 The most important source of
209. 'Key Information Memorandum' is information for a prospective investor is
o. an abridged version of the offer o. offer document
document p. Annual Report of the AMC
p. the Memorandum & Articles of q. Economic Times
Association of the AMC r. AMFI Newsletter
q. a sheet containing historical
NAVs of other fund schemes 217 The offer document need not be
r. Annual Report of the AMC studied by an investor before investing
in a scheme
210. The offer document for a scheme q. True
remains valid even if r. False
q. the AMC is reconstituted
r. entry or exit load are changed 218 The offer document is not a legal
s. the scheme's NAV changes document
t. new plans are added to existing o. True
schemes p. False

211. The offer document has to be fully 219 Initial issue expenses are charged to
revised and updated a scheme in the first year itself
q. every six months m. True
r. once in two years n. False
s. every quarter
t. every month 220 Scheme-wise annual report of a
mutual fund need not be
212. An addendum giving details of q. sent to all unit-holders
material change in the offer document r. forwarded to SEBI
should be circulated s. published as an advertisement
o. distributors/brokers t. stock exchanges
p. unit holders
q. SEBI 221 Mutual funds value their
r. all of the above investments
o. at purchase price
213. Which of the following is not true p. on a mark-to-market basis
for offer documents of open-ended q. at par
schemes r. at book value
o. it is first issued at the time the
scheme is launched 222 Investors are totally exempt from
p. it is registered with SEBI paying any tax on the dividend income
q. it has to be revised periodically they receive from mutual funds
r. it need not be revised at all n. True
o. False
214. All important disclosures that the
mutual fund is required to make, by 223 Income distributed to unit-holders
regulation, are contained in the offer by a debt fund is liable to dividend
document distribution tax
q. True o. True
r. False p. False
Rishu Modi 17
 k. studying the company's share
224 A close-ended has average weekly prices
net assets of Rs 200 crore.As per SEBI l. none of the above
regulations, the AMC can charge the
fund with investment and advisory fees 231. Which of the following is not
upto: considered for technical analysis
o. Rs 2.25 crore q. historical data on the company's
p. Rs 2.00 crore share price
q. Rs 2.50 crore r. the company shares' trading
r. Rs 3.00 crore volume
s. current market sentiment
225 A passive fund manager t. the company's regulatory
q. researches stocks extensively environment
r. does not buy and sell stocks
often 232. Quantitative analysis is more likely
s. does not have to go through the to be done to evaluate a particular sector
process of stock selection or industry rather than any specific stock
t. does not have to track stocks o. True
p. False
226 A fund manager managing an index
fund 233. Fundamental analysis forms the
o. has to keep fund expenses low basis to decide
p. does not have to research stocks q. when to buy a given share
q. does not have to balance his r. whether to buy a given share or
portfolio not
r. none of the above s. whether to use technical
analysis or quantitative analysis
227 A growth manager looks for t. whether the company's factory
q. high current income can withstand earthquakes
r. undervalued stocks
s. above average earnings growth 234. Technical analysis guides the
t. none of the above decision on
o. whether to buy or sell
228 A value manager does not look for p. the right time to buy or sell
o. stocks that are currently q. whether company's technical
undervalued in the market personnel are adequately
p. stocks whose worth will be qualified
recognised by the market in the r. none of the above
long term
q. high current yield 235. Which of the following is not an
r. long term capital appreciation investment philosophy
o. capitalising on economic cycles
229 From an investor's viewpoint, the p. focusing on growth sectors
most important is q. capitalisation
q. a fund's investment style r. finding value stocks
r. performance of the fund
s. the fund manager's judgement 236. When expecting a fall in market
t. none of the above price, fund managers can reduce the loss
in portfolio value by
230 Fundamental analysis involves k. speculating
i. checking the foundations of the l. not buying and selling shares at
company's factory building all for some days
j. research into the operations and m. using equity derivatives
finances of the company n. giving TV interviews to
improve sentiment
Rishu Modi 18
237. Equity derivative instruments are 245. In India, a large part of debt
o. shares securities pay interest on
p. bonds m. a floating rate basis
q. contracts n. a fixed rate plus a variable
r. notes portion
o. a fixed rate
238. A futures contract allows one to p. zero coupon basis
buy or sell the underlying shares, but
need not result in delivery 246. The Indian debt market is largely
q. True wholesale in nature
r. False o. True
p. False
239. Derivatives cannot be based on
market indices 247. In the wholesale debt market, the
q. True largest proportion of trading is seen in
r. False 1. Government Securities
2. Corporate Bonds
240. In a mutual fund, the overall 3. T-Bills
decisions on allocating money to 4. PSU Bonds
particular industries/sectors are taken by
q. equity analysts 248. The largest proportion of trades
r. fund managers done in the wholesale debt market is
s. security dealers accounted by
t. trustees o. mutual funds
p. foreign banks
241. Continuous tracking of the q. Indian banks
companies in which a mutual fund has r. financial institutions
invested is done by
m. continuous tracking systems 249. Certificates of Deposits (CDs) are
n. equity analysts issued by
o. trustees o. Regional Rural Banks
p. security dealers p. Corporates
q. Scheduled commercial banks
242. Security dealers of a mutual fund r. none of the above
o. guard the cabin of the fund
manager 250. Commercial Paper is issued by
p. execute buy and sell orders for Corporate bodies
the fund o. to meet short-term working
q. decide which shares to buy or capital requirements
sell p. to finance the acquisition of
r. none of the above long term capital assets
q. to retire long term debt
243. As per SEBI's requirements each r. to pay dividend
scheme of a mutual fund should have a 251. Government securities are issued
different fund manager through the RBI
o. True s. True
p. False t. False

244. Debt securities bought at a discount 252. The yield on Treasury Bill (T-Bill)
to their face value are generally us determined by
m. interest bearing s. the Government of India
n. zero coupon bonds t. auction
o. paying interest at a floating rate u. the State Governments
p. none of the above v. floating rate method
Rishu Modi 19
 1. investor to put away the
253. Which of the following are not certificates in safe deposit
normally found in the portfolio of a debt vaults
fund 2. investors to redeem debt prior
u. long-dated Government to maturity
Securities 3. issuers to redeem debt prior to
v. Corporate debentures maturity
w. bonds issued by financial 4. investors to extend the tenure of
institutions debt
x. certificates of deposit issued by
banks 260. Current yield relates interest on a
security to
254. Which of the following do not u. its current market price
represent the amount an investor of a v. its face value
debt security will be paid upon maturity w. its fair value
u. par value x. the current price of T-Bills
v. face value
w. fair value 261. To compare bonds with different
x. redemption value coupon rates, maturities and prices,
investors would use:
255. Coupon of a debt security refers to u. current yield
s. a piece of paper attached to the v. technical analysis
certificate w. yield to maturity
t. the return on investor would x. fundamental analysis
earn
u. the amount rate of interest paid 262. When interest rates rise, bond
on par value of the bond prices
v. none of the above 1. also rise
2. fall
256. Which of the following do not 3. are not affected
apply to the term 'maturity' of a debt 4. fluctuate either up or down
security?
u. the date on which the 263. Yield curve is also known as
certificates becomes old s. Curve of Interest
v. the term of the bond t. Term Structure of Interest Rates
w. the date of redemption u. Curve that yields
x. the date on which the issuer has v. none of the above
to repay the amount
264. An important indicator of expected
257. Call or put provisions are used to trends in interest rates is
modify the fixed maturity of debt s. The Economic Times
securities t. the Sensex
u. True u. the Yield Curve
v. False v. the Chief Minister's Speech

258. A call provision in a debt issue 265. It may not be possible to reinvest
allows the issuer to interest received at the same rate as
u. call out the names of the principal. This is known as
investors s. reinvestment risk
v. redeem the debt on maturity t. inflation risk
w. extend the tenure of the debt u. interest-rate risk
x. redeem the debt before maturity v. call risk

259. A put provision in a debt issue 266. A bond's rating indicates its
allows s. reinvestment risk
Rishu Modi 20
 t. default risk r. False
u. inflation risk
v. interest-rate risk 274. Inflation and interest rates are
inversely proportional
267. If a bond cannot be sold at a price s. True
near its value, it means that investment t. False
in this bond has
s. high liquidity risk 275. Investment policies of a mutual
t. high default risk fund are determined by
u. low liquidity risk u. the fund manager
v. inflation risk v. the AMC management
w. the marketing department based
268. The additional yield required to on what distributors want
account for the risk of default by the x. the investors
borrower is known as
q. yield plus 276. Which of the following measures
r. yield spread are not taken by SEBI for protecting
s. yield extra investors of mutual funds
t. yield premium s. mandating minimum levels of
diversification for mutual funds
269. A high credit rating does not mean t. ensuring that the funds are not
o. high yield spread used to favour a few companies
p. high perceived safety u. tracking the securities that each
q. low yield spread fund has invested in
r. low risk premium v. ensuring that the funds are
invested in approved securities
270. If 10-year government securities only
Neil 10% and a 10-Year fixed deposit in
a company yields 12%, the yield spread 277. As per SEBI norms, a fund's
is investments, in the equity shares of any
u. 12% one company are restricted to
v. 22% u. 25% of NAV
w. 10% v. 10% of NAV
x. 2% w. 50% of NAV
x. 100% of NAV
271. The "duration" of an interest-
bearing bond is 278. A mutual fund manager is not
s. longer than its maturity allowed to sell short when he expects a
t. less than its maturity crash in the market
u. equal to its maturity s. True
v. the quality of paper used for the t. False
certificate
279. In a mutual fund, having many
272. A bond with a coupon of 9% when schemes, al securities bought can be held
interest rates for similar maturities are in a general account and transferred later
11% will sell to various schemes to attain certain
p. above par profit or loss objectives
q. below par u. True
r. at par v. False
s. at a price unrelated to the
prevailing interest rate 280. A mutual fund may invest in short-
term deposits of scheduled commercial
273. Changes in foreign exchange rates banks
have no bearing on interest rates m. True
q. True n. False
Rishu Modi 21
 s. type of fund
281. Mutual funds are allowed to lend t. investment objective of the
u. loans fund
v. securities u. financial market conditions
w. physical assets v. amount invested by investor
x. none of the above
289. If the NAV of an open-ended fund
282. In case of listed securities of group was Rs.16 at the beginning of the year
companies of the sponsor, mutual fund is and Rs.22 after 13 months, the
not allowed to invest annualised change in NAV is
q. 25% of its net assets s. 6.0%
r. 10% of its net assets t. 34.6%
s. at all u. 40.6%
t. >5% of net assets v. 37.5%

283. A mutual fund may transfer 290. Change in NAV as a measure of

investments from one scheme to another fund performance is more suitable for
u. not at all u. growth funds
v. at current market rates v. income funds
w. at cost price w. funds with withdrawal plans
x. at a fixed premium over market x. none of the above
rate
291. The difference between NAV
284. Interest Rate Risk for an Indian change and total return as measures of
debt fund can be reduced by using fund performance is
s. Futures q. none
t. Options r. total return takes dividend into
u. Interest Rate Swaps account while NAV change
v. none of the above does not
s. total return does not take NAVs
285. The Interest Rate Forecasting Unit into account
of a debt fund is generally manned by t. total return does not take the
s. technicians time period into account
t. statisticians
u. economists & econometricians 292. The most suitable measure of fund
v. accountants performance for all fund types is
s. NAV Change
286. AMCs need not maintain records in t. Total Return
support of each investment decision u. Total Return with reinvestment
o. True v. none of the above
p. False
293. The expense ratio used for
287. When interest rates for similar measuring fund performance is an
maturities' bonds are 11%, bond with a indicator of
9% coupon rate will sell q. product market condition
s. above par r. growth in the economy
t. below par s. prevalent market practices
u. at par t. the fund's efficiency
v. at a price unrelated to the
interest rates for similar 294. The Expense Ratio as a measure of
securities a fund's performance is defined by a
fund's
288. The most suitable measure for a q. total expenses and average net
fund's performance does not depend on assets
the r. total expenses and total assets
Rishu Modi 22
 s. average expenses and average
net assets 302. Turnover rates would be most
t. none of the above relevant to analyse the performance of
w. equity funds
295. While computing the Expense Ratio x. growth funds
for a fund, brokerage commissions on y. debt funds
the fund's transactions are not included z. value funds
in the fund expenses
q. True 303. Transaction costs include
r. False y. all expenses related to trading
z. all expenes charged to the fund
296. The Expense Ratio is not of utmost aa. distribution expenses
importance in case of bb. none of the above
q. Debt fund
r. Index fund 304. Which of the following are not
s. Equity fund included in Transaction costs?
t. Bond fund y. brokerage commissions
z. stamp duty on transfers
297. The Expense Ratio is not affected aa. custodians fees
by bb. agent commissions
p. fund size
q. average account size 305. Which of the following transaction
r. portfolio composition costs are not quantified in the offer
s. stock market conditions document
w. brokerage commissions
298. The Income Ratio as a measure of a x. dealer spreads
fund's performance is defined by the y. custodian's fees
fund's z. registrar's fees
s. total income and total assets
t. net investment income and net 306. The size of a fund has no bearing
assets on its performance
u. total income and net assets y. True
v. none of the above z. False

299. The Income Ratio is more suitable 307. As per SEBI, mutual funds can
for evaluating the performance of borrow for short term to the extent of
s. Equity Funds w. total net assets
t. Growth Funds x. 50% of net assets
u. Regular Income Funds y. 25% of net assets
v. Index Funds z. 20% of net assets

300. Portfolio turnover rate of a fund 308. Which of the following is of no

measure the relevance in evaluating a fund's
s. size of the fund's portfolio performance
t. amount of buying and selling y. The performance of the stock
done by the fund market as a whole
u. the average number of units z. The performance of other
sold by the fund in one day mutual funds
v. none of the above aa. The returns given by other
301. A high turnover rate for a fund comparable financial products
indicates bb. The change in wholesale price
u. high transaction costs index
v. greater efficiency
w. high returns to the investor 309. The choice of an appropriate
x. a rising market
Rishu Modi 23
benchmark for evaluating a fund's in practice to Total Return with
performance depends on Reinvestment of distribution
s. the fund manager
t. the investment objective of the 315. The basis of genuine investment
fund advice should be
u. SEBI 1. the current market situation
v. AMFI 2. the agent commissions paid by
different funds
310. An actively managed equity fund 3. financial planning to suit the
expects to investor's situation
y. be able to beat the benchmarks 4. planning to complete the agent's
z. earn the same returns as the annual targets
benchmark
aa. have no benchmarks 316. Financial goals do not include
bb. underperform when compared w. buying a home
with the benchmark x. winning a sports gold medal
y. planning for retirement
311. For evaluating funds, the preferred z. saving for child's education
benchmark would be the
y. BSE Sensex 317. Financial planning allows a person
z. S&P CNX Nifty w. to become a billionaire
aa. BSE 200 x. to achieve financial goals
bb. S&P CNX Sectoral Indices through proper management of
finances
312. To evaluate a close-ended debt- y. to invest in foreign countries
fund, a suitable benchmark would be z. none of the above
s. BSE Sensex
t. I-Sec's I-BEX 318. Financial plans do not alter in any
u. interest on bank fixed deposits way the amount of tax an investor pays
of similar maturity as the tax is on his income
v. S&P CNX Defty u. True
v. False
313. When comparing performance of
two funds, the following need not be 319. Which of the following works with
similar an investor on his overall financial
w. Risk profiles situation
x. Investment objectives s. Tax Advisor
y. Fund size t. Financial Planner
z. Fund managers u. Insurance Agent
v. Financial Advisor
314. Which of the following is false?
w. ROI is a measure similar to 320. A financial planner takes
Total Return with Reinvestment responsibility for the financial well-
of distribution being of his/her clients
x. Total Return with Reinvestment y. True
of distributions assumes z. False
reinvestment at NAV on the
distribution date 321. Financial planners and their clients
y. As a measure of performance, should focus on
Total Return with Reinvestment w. allocating funds to asset classes
of distribution seeks to (e.g. debt, equity etc.)
overcome the shortcomings of x. allocating funds to individual
simple Total Return securities
z. Because of its simplicity, y. tracking stocks which they feel
simple Total Return is preferred have potential
Rishu Modi 24
 z. none of the above x. reinvestment of dividend which
is like compounding
322. Within an asset class, which y. interest received on the fund's
individual security to invest in should be assets
decided by z. none of the above
t. the financial planner
u. the investor himself 330 To maximise returns on investment,
v. a professional fund manager once an investor buys into a fund, he/she
w. an objective advisor should hold on to it no matter what
happens
323. Financial Planning comprises o. True
s. defining a client's profile and p. False
goals
t. recommending appropriate 331 If an investor keeps investing a
asset allocation fixed amount at regular intervals, the
u. monitoring financial planning average cost of his purchases will always
recommendations be less than if he makes investment at
v. all of the above irregular periods
y. True
324. Financial planning is relevant only z. False
for high networth individuals
u. True 332. Which of the following lets an
v. False investor book profits in a rising market
and increase holdings in a falling market
325. Financial planning does work for u. Fixed Rates of Asset Allocation
older clients v. Flexible Ratio of Asset
y. True Allocation
z. False w. Investment without any asset
allocation plan
326 Financial planning is primarily tax x. Buy and Hold Strategy
planning
w. True 333. A Flexible Ratio of Asset
x. False Allocation means
y. continuously changing the ratio
327 In financial planning, all of various assets in the portfolio
responsibility ends with the financial z. not doing any re-balancing and
planner and the client has no letting the profits run
responsibilities aa. active switching
y. True bb. none of the above
z. False
334. The strategy advisable for an
328 The constraint on financial planning investor to maximise investment return
due to insufficient investable resources in the long run is
can be remedied to some extent by w. buy and hold on to investments
u. decreasing the standard of for a long time
living x. liquidate poorly performing
v. disciplining children investments from time to time
w. disciplined monthly budgeting y. liquidate good performing
x. none of the above investments fro time to time
z. switch from poor performers to
329 In the growth option offered by good performers
mutual funds, the number of units held
by an investor increases because of 335. A criticism of rupee-cost averaging
w. growth in net asset value i.e. is
capital appreciation
Rishu Modi 25
 w. Investment is for the same u. Liquidity
amount at regular intervals v. High perceived safety
x. Over a period of time, the w. Low entry price
average purchase price will x. High yield after tax
work out higher than if one tries
to guess the market highs and 342. Listing of shares at a stock
lows exchange ensures
y. It does not tell you when to w. guaranteed returns
buy, sell or switch from one x. long term capital appreciation
scheme to another y. low risk
z. Rupee cost averaging has no z. high liquidity
serious shortcomings
343. The rate of interest paid by a
336. In India, individual investors do not company on debentures issued by it
have direct access to depends on
q. capital market instruments u. the stock market situation
r. real estate v. SEBI guidelines
s. bullion w. the company's credit rating
t. money market instruments x. the amount of money being
raised
337. Which of the following entities can
given loans against securities 344. Which of the following is not a
w. UTI characteristic of company fixed deposits
x. Banks u. A higher rate of interest
y. Mutual funds v. higher risk
z. none of the above w. unfavourable effect of tax
x. very high liquidity
338. Which of the following investment
products do not give guarantee for return 345. Which of the following is untrue for
or capital Public Provident Fund Schemes
w. Bank deposits s. The interest is tax-free
x. Pubic provident fund (PPF) t. Post-tax returns are attractive
y. National Savings Certificates u. Liquidity is rather low
(NSC) v. none of the above
z. Units of a mutual fund
346. Indira Vikas Patra is an investment
339. The biggest advantage of product popular with
investment in gold is u. rural investors
w. High returns v. investors in high tax bracket
x. High appreciation in value w. urban investors
y. Low Purchase price x. risk taking investors
z. Hedge against inflation
347. Finance Acts of 2000 and 2001
340. The biggest disadvantage of have reduced tax-free interest on Public
investment in real estate is Provident Fund to
y. Less potential for capital t. 12%
appreciation u. 10.5%
z. High purchase price v. 9%
aa. Depreciation in value as time w. 11%
passes
bb. Value gets eroded due to 348 Most individuals invest in life
inflation insurance policies for
w. risk protection
341. Which of the following is not an x. tax benefits
advantage of bank deposits? y. easy liquidity
Rishu Modi 26
 z. high returns
356. Dividends distributed by mutual
349. Annual contribution to Public funds are
Provident Fund should be aa. taxed at source
w. Rs.10000 bb. taxed in the hands of the
x. between 100 and Rs.6000 investors
y. between Rs.600 and Rs.1000 cc. are subject to capital gains
z. none of the above tax
dd. are tax-free in the hands of
350. The current yield on Indira Vikas the investor
Patra works out to
w. 10.5% 357. Investing through mutual fund is
x. 11% a better option than investing directly
y. 10% in the stock market because
z. 9% identifying stocks is a difficult process
351. The tenure of an Indira Vikas agents get commissions on mutual fund investment
Patra is returned are guaranteed by mutual funds
y. 7 years all of the above
z. 6 years
aa. 5 years 358. A small investor can build a
bb. 3 years diversified portfolio by
aa. buying one share each of all
352. The maturity period of RBI listed companies
Relief Bonds is bb. investing in a mutual fund
aa. 5 years cc. borrowing enough money to
bb. 6 years buy shares of well-managed
cc. 7 years companies
dd. 8 years dd. none of the above

353. The annual yield on RBI Relief 359. Which of the following is not an
Bonds is advantage of mutual fund investment
cc. 9.5% over direct investment
dd. 9.5% before tax cc. Higher liquidity
ee. 8.5% before tax dd. Lower transaction costs
ff. 8.5% after tax ee. Greater convenience
ff. guaranteed returns
354. Individual investors do not
normally invest in Government 360. There is no contractual
Securities because guarantee for repayment of principal
cc. individual investors re not or interest to an investor in
allowed to invest in w. bank deposit
Government Securities x. debt fund
dd. the amount required for y. secured debentures
investment is very large z. all of the above
ee. safety of principal is not
guaranteed 361. Which of the following debt
ff. none of the above investments is not rated
cc. Corporate Bonds
355. The amount an insurance dd. Commercial Paper
company would pay to the nominee ee. Company Deposit
if a policyholder died is known as the ff. Debt Fund
aa. premium
bb. sum assured 362. Gold and real estate are
cc. face value attractive investment options only in
dd. real value high inflation economies
Rishu Modi 27
 cc. True cc. high risk fund
dd. False dd. low-to-moderate risk fund

363. Direct investment in stock 369. International funds invest in

market can be a better option than various and so are low risk funds
investing through mutual funds if the w. True
investor x. False
w. wants better returns than
those offered by mutual 370. Investment in gold is a hedge
funds against inflation but investment in a
x. has large capital, knowledge precious metal fund falls in the high
and resources for research risk category
y. has identified a bullish phase w. True
in the stock market x. False
z. wants to invest for the long
term 371. By their very nature, growth
funds are considered as high risk
364. Deciding on strategies such as funds
long-term compounding, cost aa. True
averaging, value averaging, active bb. False
switching, all depend on the
aa. stock market situation on 372. Short Term bond funds are
date aa. low risk funds
bb. amount of money to be bb. moderate risk funds
invested cc. high risk
cc. investor's risk tolerance dd. of the above depending on
dd. phase through which the the market
economy is passing
373. The risk level of commodity
365. Financial Planning involves funds is
aa. studying financial x. high risk category
management y. determined by the
bb. managing the risks of commodity price movements
investing z. cannot be specified
cc. financing the client's aa. low risk category
investments
dd. none of the above 374. As compared to a fund with
fluctuating total returns, a fund with
366. Greater returns come only from stable positive earnings
assuring higher risks, and a higher w. gives higher returns
risk portfolio guarantees higher x. is less risky
returns y. gives lower returns
w. True z. is more risky
x. False
375. "Risk" is equated with
367. The risk tolerance of an w. volatility of earnings
investors is independent of x. level of earnings
aa. his age y. the number of investors in a
bb. his income fund
cc. the stock market movements z. the number of schemes of a
dd. his job security fund family

368. A sector fund is a 376. Volatility of an equity fund

aa. low risk fund portfolio is independent of the
bb. moderate risk fund aa. kind of stocks in the portfolio
Rishu Modi 28
 bb. degree of diversification of bb. help the investor develop the
the portfolio right approach to investing
cc. fund manager's success at cc. recommend some
market timing investment option available
dd. number of investors in the dd. offer ad hoc advise
scheme whenever the investor has
surplus money available
377. Equity price risks are
y. company specific 383. One of the most effective ways
z. market level to invest through mutual funds is to
aa. sector specific y. develop a model portfolio
bb. all of the above z. buy a few units of every
mutual fund scheme
378. Diversification reduces available
aa. company specific risk aa. invest all the money in one
bb. market level risk fund scheme
cc. both of the above bb. invest all the money in
dd. none of the above different schemes of the
same fund family
379. Which of the following is most
risky? 384. Mutual fund should be advised
y. Investing in a money market to expect
mutual fund cc. low post tax returns
z. Investing in an index fund dd. dramatic results
aa. Short term investment in an ee. better returns than every
equity fund other available option
bb. Long term investment in an ff. only realistic wealth
equity fund accumulation goals

380. A fund with a high beta 385. Asset Allocation is

coefficient gives greater returns in a aa. keeping certificates of the
rising market, and is more risky in a physical securities in proper
falling market places
aa. True bb. allocation the available
bb. False money to all the securities
available
381. Which of the following is a cc. allocating the right proportion
disadvantage of Standard Deviation of funds to equity, debt and
as a measure of risk money market securities
q. Standard Deviation dd. none of the above
measures total risk, not just
market risk 386. Once a financial advisor works
r. It is based on past returns, out ideal Asset Allocation, it can be
which does not necessarily used for all investors whom he/she
indicate further performance advises
s. It is an independent number aa. True
t. All types of funds can be bb. False
measured with standard
deviation 387. Asset distribution among equity,
debt and money market securities
382. The role of an agent is to should correspond to the investors'
aa. point out the features and need for capital growth, income and
benefits of various liquidity
investments options u. True
v. False
Rishu Modi 29
 z. not invest in securities which
388. The liquidity needs of an bear risk of capital erosion
investor are met through aa. continue holding a major
aa. Equity Funds portion of their holding in
bb. Index Funds equity growth funds
cc. Money Market Funds bb. never invest in equity
dd. Sector Funds
395. For older investors who want to
389. A retired person generally transfer their wealth
needs a greater proportion of y. no financial planning is
aa. Debt funds required
bb. Equity funds z. the right investment strategy
cc. Money Market funds depends upon who the
dd. All of the above beneficiaries are
aa. the right investment strategy
390. To satisfy a young investor's depends upon the state of
need for growth, a greater proportion the stock market
of investment should be advised in bb. all the funds can be invested
aa. Gilt funds in aggressive equity funds
bb. Income Funds
cc. Equity Growth funds 396. Investors who acquire sudden
dd. Liquid funds wealth
w. can speculate with all the
391. A very high proportion of acquired money in the stock
investment in all types of equity markets
funds is advisable for investors x. should not use any of the
cc. in distribution phase new wealth to invest in
dd. in accumulation phase equity
ee. in transition phase y. should take the effect of
ff. who are wealth preserving taxes into account
affluent individuals z. need not pay any taxes on
the newly acquired wealth as
392. The transition phase of an it is not a part of their regular
investor's wealth cycle is when income
y. the financial goals have
been already met 397. Only if a specialty offshore fund
z. the investor has retired has consistently given very good
aa. financial goals are performance, it can be considered
approaching for investment by a retiree
bb. investor suddenly gets a y. True
windfall z. False

393. A high proportion of investment 398. Past performance should not be

in income funds is required by solely relied on for selecting a fund
aa. accumulating investors x. True
bb. affluent investors y. False
cc. investors in the inter-
generational transfer phase 399. Between the past performance
dd. investors in the distribution of a fund and its suitability for an
phase investor, past performance is more
important
394. Retired investors should aa. True
y. not draw down on their bb. False
capital

Rishu Modi 30
 hh. A diversified equity fund and a
400. Structural characterisations of debt fund
an equity fund include
aa. costs of investing 407. Who is the primary guardian of
bb. the specific securities in unitholders' funds/assets
which the fund has invested ee. The AMC
cc. the number of employees of ff. The Trustees
the AMC gg. The Registrars
dd. all of the above hh. The custodians
401. An equity fund's age and size are
irrelevant when selecting a fund for 408. In case of a fund merger or Take-
investment over
cc. True gg. High Court approval may not
dd. False be necessary
hh. SEBI approval is a must
402. The charge to an investor at the ii. all unitholders must be
time of he redeems his units from the informed
fund is known as jj. all of the above
ee. recovery charge
ff. repurchase load 409. Units of a money market mutual
gg. redemption weight fund can be issued to
hh. exit load aa. individuals
bb. banks
403. The load amount charged to a cc. trusts
scheme over a period of time is called dd. all of the above
gg. entry load
hh. exit load 410. Though Indian mutual funds have
ii. deferred load restrictions on borrowings (only20% of
jj. no-load net assets and for six months only)
which are to meet cash needs for
404. Contingent Deferred Sales Charge redemption only, UTI is allowed to
(CDSC) borrow within more relaxed norms
gg. is higher for investors who stay gg. True
invested in the scheme longer hh. False
hh. is lower for investors who stay
invested in the scheme longer 411. An equity fund can be said to be
ii. is the same for all investors concentrated when
irrespective of how long they ee. when it invests in only in two
stay invested or three stocks
jj. is not allowed to be charged to ff. when it invests in may
mutual fund investors in India companies of the same sector
gg. when top ten holdings account
405 A fund's declared NAV does not for more than 50% of net assets
include loads invested
ee. True hh. when top ten holdings account
ff. False for more than 25% of net assets
invested
406. Which of the following fund types
are comparable 412. The size of the market
ee. An aggressive equity fund and capitalisation of a fund's equity holdings
a money market mutual fund is inversely proportional to the returns
ff. A value fund and a government that
securities fund aa. can be expected from the fund
gg. A bond fund and a debt fund bb. level of risk assumed by the
fund
Rishu Modi 31
 cc. state of the stock market aa. most investors are always in
dd. all of the above debt
bb. all of the above
413. A steady holding of investments in
an equity fund's portfolio indicates 420. Yield-to-maturity of a debt fund's
ee. long-term orientation portfolio is more important when the
ff. lower transaction costs investment objective is
gg. both the above cc. current income
hh. none of the above dd. total return
ee. liquidity
414. Ex-Mark of an equity fund ff. all of the above
measures its
ee. performance 421. Compared to equity funds, income
ff. risk margins for debt funds are
gg. both the above ee. narrow
hh. none of the above ff. higher
gg. the same
415. Beta of an equity fund measures its hh. almost nil
y. performance
z. risk 422. Debt funds with long-term
aa. both the above investments carry higher risk of capital
bb. none of the above loss
bb. True
416. The best equity fund, relative to cc. False
others, would have
ee. higher Ex Marks, lower Beta 423. The differerentiating factor among
and higher Gross Dividend debt funds of comparable maturity and
Yield quality is
ff. higher Ex Marks, higher Beta aa. gross yields
and higher Gross Dividend bb. costs
Yield cc. fund age
gg. lower Ex Marks, lower Beta dd. tenure of the fund manager
and lower Gross Dividend
Yield 424. Dstribution tax should be taken into
hh. lower Ex Marks, higher Beta into account when computing net returns
and higher Gross Dividend from
Yield aa. equity funds
bb. debt funds
417. When selecting equity funds for cc. both the above
investing, those at the top of the dd. none of the above
performance rankings should be avoided
ee. True 425. All debt fund investors are exposed
ff. False to risk of principal loss
ee. True
418. A debt fund's age and size are not ff. False
important when selecting a fund for
investment 426. Running a money market mutual
y. True fund requires more of
z. False cc. credit analysis skills
dd. equity analysis skills
419. Debt schemes are popular because ee. patience
y. the Indian Stock Market is ff. trading skills
always going down
z. the returns are more predictable 427. Which is the most important in
selecting debt fund for better return
Rishu Modi 32
 ee. past performance gg. the AMC
ff. level of interest rates hh. the trustees
gg. fund expertise ii. the sponsor if returns have been
hh. the securities in which it has guaranteed by them
invested jj. none of the above

428. Investors should be advised to 434. As per SEBI regulations for

avoid investing in a debt fund with a valuation of investments held by mutual
cc. lower rated portfolio and higher funds, a security is considered "non-
expense ratio traded" when it
dd. higher rated portfolio and lower ee. has not been traded for 60 days
expense ratio prior to valuation
ee. lower rated portfolio and lower ff. has not been traded for 30 days
expense ratio prior to valuation
ff. lower rated portfolio and higher gg. is not listed on any stock
expense ratio exchange
hh. is held by the mutual fund
429. An ideal money market mutual without buying or selling
fund must have
cc. lower returns 435. An Ex-Mark of 100% is possible
dd. lower expense ratio for
ee. low quality of investments cc. a growth fund
ff. all the above dd. an aggressive growth fund
ee. an index fund
430. Circumstances that might cause an ff. a balanced fund
investor to change the composition of his
portfolio 436. A trail commission is justified
u. cyclical changes in economy when
v. unforeseen economic changes w. an investor cancels his
affecting the portfolio's investment
preferred sectors x. the investor redeems his
w. both the above investment in a very short time
x. none of the above y. an agent invests his own
money, not that of a client
431. If a charitable trust approaches a z. an agent sells many mutual
distributor with an application for funds
investment in a mutual fund, the
distributor should 437. Of the following, which type of
ee. accept the application without fund would have a higher P/E multiple
wasting time in comparison to the average market
ff. reject the application outright multiple
gg. refer to the offer document ee. A Value Fund
hh. accept the application as a ff. A Growth Fund
direct application gg. An Index Fund
hh. Could be any of the above
432. An application form for investment three, one cannot generalise
in a mutual fund is available with
cc. the offer document 438. Which of the following is not true
dd. the abridged annual report as per SEBI Regulations for Debt
ee. the key information Funds?
memorandum ee. Investment in rated debt
ff. a bank challan securities of a single issuer
should not exceed 15% of NAV
433. An aggrieved unit-holder of a
mutual fund can sue
Rishu Modi 33
 ff. Total investment in unrated dd. False
debt securities of a single issuer
should not exceed 25% of NAV 445. An AMC can approach investors
gg. Total investment in unrated either directly or with the help of
debt securities below aa. individual agents
investment grade should not bb. banks and non-banking finance
exceed 25% of NAV companies
hh. Total investment in rated debt cc. distribution companies
securities below investment dd. all of the above
grade should not exceed 25% of
NAV 446. Which of the following is true for
Equity Linked Savings Scheme (ELSS)
439. A Money Market Mutual Fund is aa. A tax rebate is available to
most likely to invest in investors in these schemes
ee. Corporate Bonds bb. The investment has to be
ff. Equity Shares locked in for 3 years
gg. Government Securities with cc. The minimum amount for
maturity less than 1 year investment is fixed
hh. All of the above dd. All of the above

440. Of the following, which would be 447. A prospective investor

suitable for a retiree with a modest risk z. has the same status as a unit-
appetite holder of a fund
gg. Value Fund aa. can sue the AMC/trustee
hh. Diversified Equity Fund bb. has no legal recourse
ii. Growth Fund cc. all of the above
jj. Balanced Fund
448. An investor can assess the
441. A high portfolio turnover for a fund performance of his mutual fund by
indicates comparing it with the performance of
cc. that the fund is active cc. other mutual fund of the same
dd. higher transaction costs type
ee. both the above dd. the stock market
ff. none of the above ee. other financial products
ff. all of the above
442. Unit Trust of India's US-64 Scheme
ee. is listed on stock exchanges 449. Unrated securities in the portfolio
ff. has a fixed price for sale and of a mutual fund are not to be valued
repurchase ee. True
gg. has its sale and repurchase price ff. False
declared periodicaly by UTI
hh. has its price determined by 450. An exit load guarantees a higher
market forces return
aa. True
443. The Indian debt market bb. False
cc. is Wholesale in nature 451 Bonds held in the portfolio of a
dd. comprises large players like mutual fund are valued at yield to
financial institutions and banks maturity
ee. witnesses large scale trading in ee. True
government securities ff. False
ff. all of the above
452 The Valuation of non-traded equity
444. A fund that charges a load is better shares is done at the trading price 30
than a no-load fund days prior to valuation date
cc. True ii. True
Rishu Modi 34
 jj. False Rs.21. The unit is redeemed at an NAV
of Rs.22. Total Return is
453 If a unit-holder does not agree to the ee. 25.71%
merger of his fund with another, he has ff. Rs.27.51
not exit option gg. 21.27%
kk. True hh. Rs.21.75
ll. False
460. A fund sells 100 units of face value
454. The most important factor look for Rs.10/- at an NAV of Rs.12.25. How
when investing in a corporate fixed much would be credited to unit capital?
deposit is the ii. Rs.1225
kk. yield jj. Rs.225
ll. rate of interest kk. Rs.1000
mm. credit rating of the ll. none of the above
deposit
nn. none of the above 461. When a scheme with assured
returns is being launched, which of the
455. The most important reason for an following need not be published in the
investor to prefer a bank deposit to a offer document?
mutual fund is ii. Means of fulfilling the
gg. the credit worthiness of the guarantee
bank jj. Information for all schemes
hh. because the bank does not launched by the fund in the past
invest in securities kk. comparison with other mutual
ii. that the bank offers a guarantee funds
jj. all of the above ll. Investment objective

456. A deep discount bond 462. Mutual fund units can be

ii. is always sold at a discount to distributed by
its issue price ee. trustees of the fund
jj. bears interest annually ff. the AMC
kk. is redeemed at a price much gg. Non-banking finance
higher than issue price companies
ll. bears interest at varying hh. banks
interests
463. A debt fund distributes 10%
457. A mutual fund in India is a dividend. How much tax does the
ii. body corporate investor have to pay on this dividend?
jj. company ii. 10%
kk. trust jj. 12%
ll. an asset management company kk. 20%
ll. None
458. When selling a mutual fund, a good
agent would never 464. A debt fund distributes a 10%
kk. describe the past performance dividend. How much tax does the fund
of the scheme have to pay?
ll. compare the fund with other ii. 10%
mutual funds jj. 12%
mm. assure a rate of return kk. 10.2%
nn. compare the fund with other ll. None
financial products
465. How many scrips is the NIFTY
459. An investor buys one unit of a fund constitutes of
at an NAV of Rs.20. He receives a cc. 40
dividend of Rs.3 when the NAV is dd. 100
Rishu Modi 35
 ee. 30 which has given higher return
ff. none of the above and reinvesting in the other
asset class which has lower
466. Which of the following is the first return
step in financial planning ee. are not disciplined
ii. Asset Allocation ff. increase their equity position
jj. Selection of fund when equity prices tend to
kk. Studying the features of a climb
scheme gg. none of the above
ll. None of the above
473. An investor should not invest in a
467. Why should one buy an insurance mutual fund if
policy? ee. his capital base is large
gg. It gives high current returns ff. he is able to carry out detailed
hh. It gives good capital investment research and
appreciation over its term monitor the stock market
ii. It should be bought due to the gg. both the above
need for insurance and not as an hh. none of the above
investment
jj. All of the above 474. Mutual fund can benefit from
economies of scale because of
468. SEBI Regulations for Mutual Funds ee. portfolio diversification
were formulated in ff. risk reduction
aa. 1992 gg. large volume of trades
bb. 1993 hh. none of the above
cc. 1995
dd. 1996 475. Which of the following is a
disadvantage suffered by a mutual fund
469. Expenses incurred by a fund for investor?
printing of Key Information gg. High liquidity
Memorandum can be amortised over hh. diversification
cc. 10 Yrs ii. no tailor made portfolio
dd. 5 Yrs jj. low investment
ee. 15 Yrs
ff. Cannot be amortised 476. A disadvantage suffered by mutual
fund investor is that he has no control
470. A mutual funds' investments are over the costs of investing
guided by the gg. True
gg. AMC hh. False
hh. Board of Trustees
ii. Investment Objectives 477. Which of the following statements
jj. Unit holders about UTI is untrue
ii. It was set up in 1963
471. UTI was the only mutual fund for jj. It was formed by RBI
the period kk. It was established by an act of
ii. 1984 to 1988 Parliament
jj. 1963 to 1988 ll. It was not given a monopoly
kk. 1964 to 1992 status
ll. none of the above
478. Which scheme has the largest
472. Investors who follow the fixed investor base?
Asset Allocation approach gg. ULIP
dd. maintain balance in their hh. UTI Mastershare
portfolio by liquidating a part ii. US-64
of the position in the asset class jj. SBI Magnum
Rishu Modi 36
479. Which was the first diversified 485. Which of the following about
equity investment scheme in India Public Providend Fund (PPF) are untrue
gg. SBI Magnum gg. 50% of the balance of the 4th
hh. UTI Mastershare year can be withdrawn in the
ii. MEP-91 7th year
jj. Mastergain-92 hh. The interest is tax free
ii. The rate of interest is 12% p.a.
480. The private sector was granted jj. contributions upto Rs.60000 are
permission to enter the mutual fund eligible for tax rebate
industry in
y. 1992 486. A close-ended scheme is quoted on
z. 1993 the stock exchange at a discount to its
aa. 1998 NAV when
bb. 1995 aa. the markets are bearish
bb. investors perceive that the fund
481. The first non-UTI mutual fund was will be unable to maintain the
ii. SBI MF NAV
jj. LIC MF cc. the assets of the fund are
kk. Canbank MF undervalued
ll. Indian Bank MF dd. none of the above

482. The organisation responsible for a 487. Which of the following is a

comprehensive set of regulations for all fundamental attribute of a mutual fund
mutual funds in India is scheme
gg. RBI ii. The names and addresses of the
hh. SEBI registrars and custodians
ii. AMFI jj. The nature of the scheme being
jj. SHCIL income bearing
kk. The specified stocks in the
483. The 1999 Union Government scheme's portfolio
Budget helped the Mutual Fund industry ll. The name and address of the
by compliance officer
kk. regulating the industry practices
ll. exempting all mutual fund 488. Offer Document of a mutual fund is
dividends in the hands of ii. required by investors
investors from income tax jj. required by the AMC for its
mm. approving the code of own reference
ethics formulated by AMFI kk. required as per SEBI
nn. doing away with all regulations regulations
for mutual funds ll. not mandatory as per SEBI

484. During the period 1992-99, the 489. The units of a scheme being sold
mobilisation of funds by the mutual fund and repurchases as per the procedure laid
industry was about down is one of the fundamental
ii. 5% - 6% of gross domestic attributes of a scheme
savings ii. True
jj. 2% - 4% of gross domestic jj. False
savings
kk. 7% - 10% of gross domestic 490. The steps involved in the selection
savings of an equity fund for investment are
ll. 25% - 40% of gross domestic kk. sector selection, asset
savings classification, selection of fund
managers and schemes

Rishu Modi 37
 ll. sector selection, selection of hh. the nature of investments
fund managers and schemes,
asset classification 495. Which of the following characterise
mm. asset classification, the fund that a risk averse investor
sector selection, selection of should choose
fund managers and schemes ee. Gross dividend yield 15% Beta
nn. selection of fund managers and 1.5, Ex-Marks 90
schemes, sector selection, asset ff. Gross dividend Neil 10%, Beta
classification 1, Ex-Marks 70
gg. Gross dividend yield 11%, Beta
491. Compounding of interest is best 0.9, Ex-Marks 80
explained by a hh. Gross dividend yield 12%, Beta
gg. balanced fund 1.2, Ex-Marks 80
hh. growth fund
ii. value fund 496. A mainstream diversified debt fund
jj. income fund is most affected by
ee. reinvestment risk
492. From whom can a unit-holder seek ff. liquidity risk
redressal if his complaint is not gg. interest rate risk
entertained by the mutual fund hh. default risk
ii. AMC
jj. Board of Trustees 497. If yields fall, a debt fund manager
kk. SEBI will do all of the following except
ll. RBI dd. sell short maturity securities
and buy long maturity securities
493. An investor wishes to switch ee. see that the fund's average
between a money market mutual fund duration becomes longer than
and an equity fund. What would you the market's average duration
advise him? ff. sell long duration securities and
gg. It would be better to stick to buy short duration securities
one type of fund, the one that gg. sell high coupon securities and
meets his investment objective. buy low coupon securities
hh. He should keep switching parts
of his investment from the 498. In which type of schemes should an
equity fund to the money unmarried professional working HLL
market fund as the market rises invest
and switch back to the equity gg. Scheme investing 80% in debt
fund when the market falls securities
ii. He should switch from the hh. 50% in equity funds and 50% in
money market fund to the income funds
equity fund in a rising market ii. 90% in equity funds having a
and switch back to money higher P/E Ratio than the
market fund when the market market
falls jj. all the money in a balanced
jj. none of the above fund

494. For choosing an appropriate 499. An investor buys units in a fund

benchmark to measure a scheme's that has given excellent returns in the
performance, all of the following are past, but his expectations are not met as
required except the fund does not perform well this year.
ee. the composition and size of the The investor can
portfolio gg. sue the AMC
ff. the investment objective hh. sue the Trustees
gg. historical data of fund ii. sue the agent
performance jj. none of the above
Rishu Modi 38
 cc. Rs.30.19
500. A fund's investments at market dd. Rs.24.98
value total Rs.700 crores, Total ee. Rs.32.15
liabilities stand at Rs.50 lacs and the ff. Rs.40.49
number of units outstanding is Rs.28
Crores. What is the NAV

Answers to Practice Question

Q. Ans Q. No Ans Q. No Ans Q. No Ans Q. No Ans
No
1 b 51 a 101 d 151 c 201 b
2 b 52 d 102 a 152 d 202 d
3 d 53 b 103 b 153 d 203 b
4 d 54 d 104 c 154 d 204 d
5 c 55 c 105 a 155 b 205 b
6 c 56 c 106 d 156 a 206 c
7 b 57 c 107 a 157 c 207 a
8 c 58 c 108 d 158 d 208 d
9 d 59 b 109 d 159 a 209 a

Rishu Modi 39
10 c 60 d 110 b 160 d 210 c
11 b 61 c 111 b 161 a 211 b
12 b 62 a 112 c 162 d 212 d
13 d 63 d 113 a 163 c 213 d
14 c 64 d 114 d 164 c 214 a
15 b 65 b 115 d 165 b 215 a
16 d 66 c 116 b 166 d 216 a
17 b 67 c 117 b 167 c 217 b
18 d 68 d 118 a 168 b 218 b
19 c 69 c 119 c 169 b 219 b
20 c 70 d 120 a 170 d 220 d
21 b 71 b 121 b 171 c 221 b
22 d 72 b 122 c 172 b 222 a
23 c 73 d 123 a 173 b 223 b
24 a 74 d 124 d 174 d 224 a
25 d 75 c 125 c 175 d 225 c
26 d 76 a 126 d 176 b 226 a
27 c 77 c 127 d 177 c 227 c
28 b 78 a 128 a 178 c 228 c
29 c 79 d 129 d 179 c 229 b
30 d 80 a 130 a 180 c 230 b
31 b 81 c 131 d 181 d 231 d
32 c 82 b 132 a 182 b 232 a
33 b 83 b 133 b 183 d 233 b
34 b 84 b 134 c 184 c 234 b
35 b 85 d 135 b 185 b 235 c
36 c 86 a 136 d 186 a 236 c
37 b 87 b 137 a 187 c 237 c
38 c 88 c 138 c 188 a 238 a
39 a 89 b 139 b 189 d 239 b
40 b 90 b 140 c 190 b 240 b
41 b 91 b 141 a 191 d 241 b
42 a 92 c 142 b 192 b 242 b
43 b 93 c 143 c 193 b 243 a
44 c 94 b 144 b 194 a 244 b
45 b 95 a 145 d 195 d 245 c
46 b 96 b 146 c 196 b 246 a
47 c 97 a 147 d 197 c 247 a
48 b 98 d 148 c 198 c 248 c
49 B 99 c 149 b 199 b 249 c
50 A 100 a 150 c 200 a 250 a
Answers to Practice Question for
AMFI Test
A A A A A
Q. No n Q. No n Q. No n Q. No n Q. No n
s s s s s
251 a 301 a 351 b 401 b 451 a
252 b 302 a 352 a 402 c 452 b
253 d 303 a 353 d 403 c 453 b
254 c 304 d 354 b 404 b 454 c
Rishu Modi 40
255 c 305 b 355 b 405 a 455 a
256 a 306 b 356 d 406 c 456 c
257 a 307 d 357 a 407 c 457 c
258 d 308 d 358 b 408 d 458 c
259 b 309 b 359 d 409 d 459 a
260 a 310 a 360 b 410 a 460 c
261 c 311 d 361 d 411 c 461 c
262 b 312 c 362 a 412 b 462 d
263 b 313 d 363 b 413 c 463 d
264 c 314 d 364 c 414 a 464 c
265 a 315 c 365 b 415 b 465 d
266 b 316 b 366 b 416 a 466 a
267 a 317 b 367 c 417 a 467 c
268 b 318 b 368 c 418 a 468 d
269 a 319 b 369 b 419 b 469 b
270 d 320 a 370 a 420 b 470 c
271 b 321 a 371 b 421 a 471 b
272 b 322 c 372 b 422 a 472 a
273 b 323 d 373 a 423 a 473 c
274 b 324 b 374 b 424 b 474 c
275 b 325 a 375 a 425 a 475 c
276 c 326 b 376 d 426 d 476 a
277 b 327 b 377 d 427 c 477 d
278 a 328 c 378 a 428 a 478 c
279 b 329 b 379 c 429 b 479 b
280 a 330 b 380 a 430 c 480 b
281 b 331 a 381 b 431 c 481 a
282 a 332 a 382 b 432 c 482 b
283 b 333 b 383 a 433 c 483 b
284 c 334 d 384 d 434 b 484 a
285 c 335 c 385 c 435 c 485 c
286 b 336 d 386 b 436 b 486 b
287 b 337 b 387 a 437 b 487 b
288 d 338 d 388 c 438 b 488 c
289 c 339 d 389 a 439 c 489 a
290 a 340 b 390 c 440 d 490 c
291 b 341 s 391 b 441 c 491 b
292 c 342 d 392 c 442 c 492 c
293 d 343 c 393 d 443 d 493 b
294 a 344 d 394 b 444 b 494 c
295 a 345 d 395 b 445 d 495 c
296 c 346 c 396 c 446 d 496 c
297 d 347 b 397 b 447 a 497 c
298 b 348 b 398 a 448 d 498 c
299 c 349 b 399 b 449 b 499 d
300 b 350 a 400 b 450 b 500 b

Rishu Modi 41