Exercise - 1

1.

A Debt Fund that invests in all available types of debt securities issued by entities across all industries & sectors is a: a) b) c) d)

2.

11.

a) Marketing

various schemes through agent’s network. b) Handling securities in terms of physical delivery & eventual safekeeping. c) Issuing & redeeming units of the fund. d) Receiving the proceeds on sale of investments & discharging its obligations towards operating expenses.

Focused debt fund Diversified debt fund Assured return fund High yield debt fund Some close - end funds sell at a discount to their NAV because

a) The repurchase price fixed by the fund is lower than its NAV b) Of the inherent risk prevalent in close end funds c) Investors expect their future potential to be unable to sustain their current NAV d) Of high expense ratio. 3.

What is the duty of the custodian?

12.

Which one of the following is not a specialty fund? a) Growth Fund b) Small- Cap Equity Fund c) Offshore Fund d) Sectoral Fund

13.

Direct investments in stock markets can be better option over investing through mutual funds if:

The AMC is required to be approved & registered with SEBI with a net worth of: a) Rs. 20 Crores c) Rs. 50 Crores

4.

b) d)

a) The investor wants better returns than those offered by mutual funds. b) The investor has identified bullish phase in the stock market. c) The investor wants to invest for the long run. d) The investor has large capital, knowledge & resources for research.

Rs. 100 Crores Rs. 10 Crores

The sponsor of a mutual fund may be compared to: a) b) c) d)

5.

An equity shareholder in a company The Chief Executive of a company The promoter of a company A director in a company

14. a) b) c) d)

Money Market Funds are regulated by: a) b) c) d)

6.

Trustee AMC SEBI RBI

15.

An investor in need of regular income should invest: a) b) c) d)

7.

A Debt (Income) fund PPF Bank Fixed Deposit Equity growth fund

16.

8.

Index Fund Short-term Bond Fund Intermediate Bond Fund International Fund

17.

a) c)

SEBI AMFI

a) c)

Which is the self-regulatory authority from the following? AMFI b) RBI SEBI d) Bombay Stock Exchange

10.

b) d)

Sponsor AMC Unit-Holders Board of Trustee What is the criticism of the Rupee Average costing?

a) It has no shortcomings b) Investment is for the same amount every month c) It does not guide you when to buy, sell or switch from one scheme to another d) In the long run, the average per share price will be more than guessing the highs & lows

a) 3 Months b) 6 Months c) 12 Months d) None of the above The trustees appoint AMC with the prior approval of:

As a AMC requirement As a SEBI requirement As an investor requirement All of the above The ownership of Mutual Fund belongs to:

a) b) c) d)

The scheme wise Annual Report of a Mutual Fund shall be published or mailed to unit holders not later then:

9.

Money Market Fund Sector Fund Index Fund Balanced Fund Offer Document is required by Mutual Fund:

a) b) c) d)

Which is the High Risk Fund from the following? a) b) c) d)

Which is the High-Risk fund?

18.

On which of the following incomes investor can't claim rebate U/s 88? a) b) c) d)

Stock Exchange None of the above

19.

Winning from state lotteries Long-term capital gains Speculation business Income from house property What is the feature of the Passive Fund?

a) A passive fund matches the performance of the index b) A passive fund tracks the index c) A passive fund selects the stocks that are present in the index d) All of the above 20.

21.

22.

30.

23.

a) SEBI c) Govt. of India 24.

b) d)

25.

32.

a) Weekly c) Half yearly 34.

A good agent consideration of a) b) c) d)

will

never

b) d)

Quarterly Yearly

Which of the following is not a balanced fund? a) b) c) d)

Diversified risk Professional management Small amount of investment All of the above

the

In case of the closes end scheme what is the periodicity of amortization of Issue expenses.

Investors AMFI

35.

50% equity 50% debt 65% equity 35% debt 35% equity 65% debt 90% equity 10% debt AMFI code of ethics broadly covers the following areas.

a) Management of the fund ought to be in the interest of the unit-holders.

The mutual fund industry began in a) 1969 b) 1963 c) 1972 d) 1973

27.

Commission are not paid to distributors for

33.

can hire, lease underwriting can borrow internally & abroad all of the above

Detailed offer document Key information memorandum Either of the above None of the above

a) Any out of pocket expenses incurred which attracting investors b) For bringing in investors to the fund c) To provide extra returns to investors d) all of the above

The advantage of mutual fund is a) b) c) d)

The first time investor would be well advised to refer to: a) b) c) d)

How UTI different from other mutual funds? a) b) c) d)

What portfolio mixed would you recommend to the 56 years old client?

31.

Investment Company Trust Company None of the above A mutual fund is owned by

AMFI code of Ethics SEBI Advertising code AMFI's code of Agents None of the above

a) 40% in Equity & 60 % in Debt funds b) 20% Equity, 20% in Liquid & 60% in Debt funds c) 40% in Equity & 60% in Balanced funds d) 100% in Monthly Income schemes

The Mutual Fund in India is constituted as: a) b) c) d)

Which of the following sales practices is prescribed by regulation? a) b) c) d)

NAV is a) Asset value divided by all shares sold since the fund was initiated b) Total number of shares divided by asset value c) Total value of assets held by the fund divided by the number of outstanding units d) Total value of assets held by the annual revenue

28.

29.

The AMFI objectives does not include the following: a) To emphasize on ethical & moral trade practices b) To create awareness about mutual funds c) To regulate the stock markets along with SEBI in tandem d) To improve the standards of mutual fund industry

26.

c) Take decision of keeping. Liquidating or acquiring mutual fund d) None of the above

sale

b) High standards of service are expected c) d)

on

Comparative features of other funds Can assure rate of dividend Past record of the scheme None of the above

36.

a) He comes to know the performance of the fund b) The annual reports inform him about the NAV of the fund

Which of the following are important criteria for comparison of fund performance? a) b) c) d)

Investor should track mutual funds in which he has invested because 37.

from funds. Both a and b. Neither a nor b.

Portfolio composition Maturity profile Fund size None of the above. Jacob's 4 step program includes

a) work with investors to develop long term goals

b) determine asset allocation of investment portfolio c) neither of the above d) both a and b 38.

Maximum permissible investment by a mutual fund in money market securities during the first 6 months from allotment of units in an IPO is a) 100 % b) 60 % c) 50 % d) Depends on whether it is an equity scheme or a debt scheme

39.

a) b) c) d) e)

40.

Which of the following statements is true? Open-end schemes have variable unit capital. Open end schemes can be listed in the stock market. Closed-end schemes can offer re-purchase facility. All the above. Only (a) and (c)

47. a) c)

41.

Rs. 1000.00 Rs. 990.10

b) d)

Rs. 995.35 Rs. 1052.80

NAV of a scheme has gone up from Rs.10 to Rs.11.50 in 15 months. The CAGR is 12 per cent a) b) c) d)

50.

44.

45.

The position on tax benefit under section 88 for investment in units of pension scheme floated by a mutual fund is -

51.

Mutual funds in India can invest in a) Transferable securities in the capital and money markets b) Gold c) Real-estate d) Only (a) and (c) e) (a), (b) and (c)

52.

The unit capital of a mutual fund scheme is Rs.20 million. The market value of investments is Rs.55 million. If the number of units outstanding is 1 million, what is the NAV per unit? a) Rs. 20 c) Rs. 55

Open End – Close End Investment Pattern Sponsor & Trustees Address Registrars Address none of the above

53.

"Load" is

54.

a) Charge borne by Fund b) Charge borne by AMC c) Charge borne by investor d) Charged borne by Trustees

What is the risk profile of a fund having 35% exposure to equities? a) c)

Low Aggressive

b) d)

Moderate Very Aggressive

Rs. 75 cannot be determined

a) The trustees b) The sponsor c) The AMC d) AMC on behalf of the trustees The most significant risk in a welldiversified debt scheme is a) Re-investment risk c) Interest rate risk 55.

b) d)

Credit risk Liquidity risk

A Systematic Investment Plan is the best example of a) b) c) d)

a) Penalties and fines

46.

b) d)

A scheme can be launched by

Recurring Expenses include b) Interest on delayed payment to unit holders c) Depreciation on fixed assets d) Marketing and selling expenses of a scheme

(11.5 / 10)^(12/15) -1 (11.5 / 10)^(15/12) -1 (10 / 11.5)^(15/12) -1 (10 / 11.5)^(12/15) -1

a) benefit not available b) available upto a cap of Rs.10,000, but within overall limit of Rs.60,000 for all section 88 investments c) available without cap, but within overall limit of Rs.60,000 for all section 88 investments d) available upto Rs.80,000

43. Offer document may not contain following a) b) c) d) e)

Trustee Custodian

49.

What is the best combination for a high yield - low risk investment?

The following are the characteristics of bonds except a) Par value b) Coupon c) Maturity d) Technical analysis

b) d)

Of the following types of equity funds, the highest potential risk is with a) diversified funds b) sector funds c) growth funds d) index funds

a) Ex-Marks: 70% Beta:0.9 Dividend Yield:10% b) Ex-Marks: 70% Beta:0.8 Dividend Yield:11% c) Ex-Marks: 80% Beta:0.9 Dividend Yield:12% d) Ex-Marks:90% Beta:0.8 Dividend Yield:13% 42.

AMC Sponsor

48.

A debenture with a face value of Rs. 1000 and a 2 year term to maturity has yield to maturity (YTM) of 9 per cent. The coupon rate is 12 per cent per annum, payable half-annually. What is its price? a) c)

Distributors can be appointed by

56.

Rupee Cost Averaging Value averaging Buy & Hold none of the above Indira Vikas Patra is liked because of -

a) b) c) d)

Good returns Tax-free returns No record of identity of investors All of the above

57.

The Statutory auditor of the mutual fund should not be associated with the auditor of a) b) c) d)

The trustee Company The Asset management Company The Sponsor All of the Above What does AMFI stands for?

a) b) c) d)

Association of Mutual Funds in India Association of Market Federation of India Association of Money Funds in India Association of Money Federation of India

58.

59.

The concept of Distribution companies has been accepted internationally to (a) avoid administrative costs (b) to get more sophisticated distributors (c) to get institutional money (d) to get niche marketing a) b) c) d)

e) f) 60.

A only b only c only d only All of the above None of the above The appointment of AMC of the Mutual Fund can be terminated by

a) b) c) d) e) f) 61.

Managing Director Chairman 60% of the Unitholders 45% of the Unitholders 75% of the Unitholders 50% of the Unitholders Investor's rights are available in which of the following documents:

a) b) c) d) e) 62.

Application form Offer Document AMFI directory SEBI UTI What is Mark to Market?

a) Valuing investments at cost price b) Valuing investments at market price c) Valuing investments at cost or market price whichever is lower d) Valuing investments at cost or market price whichever is higher 63.

Information about a scheme can be found out from a) b) c) d)

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