AMFI-questionairre

7/31/2019 AMFI-questionairre

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AMFI TRAINING QUESTIONS

1. A mutual fund is owned by a) The Govt. of India b) SEBI c) AMFI d) All its investors

2." As per RBI guidelines, MMMF can invest in"a) Corporate bondsb) Equity shares

c) G-sec of maturity less than 1 yeard) None of the above

3. Minimum risk is associated witha) Govt securities of 6 months b) Equities c) Bonds d)MMMF

4. A 55-year-old retiree is in stagea) Accumulation Stage b) Growth Stage c) Income Stage d)Distribution Stage

5. In accordance with -------------- of SEBI (Mutual Funds) Regulations, 1996 all mutual funds arerequired to publish their unaudited half-yearly.

a) Regulations 59 b) Regulations 45 c) Regulations 65 d) None of the above

6. Each Director of the AMC shall file the details of his transaction of dealing in securitieswith the trustees on a --------- basis.

a) Quarterly b) monthly c) daily d) yearly

7. Mutual funds invest in ------------ listed / unlisted securities / units of venture capital fundsa) 10 % of NAV in equity sharesb) 5% of NAV in unlisted equity shares in case of open-ended schemesc) 10% of NAV in case of close- ended Schemesd) All of the above

8. Appointment of the AMC can be terminated by majority of the trustees or by -----------of the uholders of the scheme

a) 70% b) 75% c) 100% d) 25%

9. --------Days before the launch of the scheme all information in the offer document are to beupdated.

a) 30 b) 60 c) 15 d) None of the above

10. As per Regulation 52(6), Debt Schemes expenses shall be lesser by -----a) 1% b) 2% c) 0.25% d) 0.50%

11. Trading in securities based on information that is price sensitive isa) Self dealing b) Front running c) Short sale d)None of the above

12. Valuation of non-traded equity shares is based on a) Capitalisation of earnings

b) Book value of sharesc) Both the aboved) None of the above


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13. Which among the following is not allowed to invest in Indian Mutual Fund?a) NRI b) FII c) Indian National d) Foreign National

14. ------------ regulates Commission payable to Distributorsa) AMC b) Trustees c) AMFI d) SEBI e) Sponsor

15. The publication of the unaudited half-yearly results is to be printed in at least point fonta) 10 b) 5 c) 7 d) No such restriction e) None of the above

16. Dividend warrants are to be dispatched to the unit holders within ------ of dividend declarationa) 42 days b) 30 days c) 60 days d) 90 days

17. An asset is classified as non-performing if the interest /principal amount has not been receivorremained outstanding for ------ quarter from the day such income /installment has fallen due.

a) One b) Two c) Three d) Four

18. Which among these are assigned zero value to all illiquid securities?a) 20% of total assets (from September 30,2001)b) 15% of total assets (from September 30,2002)c)Both are correct

d) Only A is correcte) Only B is correct

19. ---------- is a self-regulatory organisation?a) NSE b) SEBI c) RBI d) AMFI

20. Main role of any AMC is toa)Manage investments on behalf of the fundb) Keep a track of unit holders in the fundc) Keep physical securitiesd) All the above

21. Minimum stake a sponsor needs to hold in the Asset Management Company isa) 20% b) No stake is needed c) 1% d) 25%

22. Minimum net worth that an AMC needs to have is a) Rs: 10 Crore b) Rs: 50 Crore c) Rs: 100 Crore d) Rs: 5 Crore

23. Which of the following is applicable to the debt market in India?a) The debt market is a wholesale marketb) Government securities are traded on a large scalec) There are large players like banks, financial institutions, and mutual funds.d) None of above

e) All of above

24. What is the measure of market risk?a) Mean b) Standard Deviation c) Beta d) None of above

25. Re-Purchase price specified by SEBI is a) Minimum 93% of NAV for open-end schemesb) Minimum 95% of NAV for closed-end schemesc) Both the above


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36. The sponsor of a mutual fund may be compared toa) Director in a company b) The CEO c) The promoter d) An equity holder

37. Which of the following along with Central Government holds substantial control over thefunctioning of theUTI?

a) IDBI b) RBI c) SEBI d) AMFI

38. AMFI was incorporated in ------with the objective of representing mutual fund industry

a) 1996 b) 1992 c) 1995 d) 1993 e) None of above

39. Which of the following qualifies as a self-regulatory organization?a) SEBI b) AMFI c) SBI d)None of above

40. Majority of --------------of unit holders of the scheme can terminate AMCa) Trustees or 75%b) SEBI or 75%c) Trustees or 70%d) AMFI or 70%e) SEBI or 70%

41. What happens to bond prices when interest rates go up?a) Bond prices riseb) Bond prices fallc) Bond prices neither rise nor falld) None of above

42. Treasury Bonds (T-Bonds) pay a higher interest rate than Treasury Bills (T-bills).a) True b) False c) Never

(T-Bonds have 30 day maturity period where as T-bills have maturity period of less than a year)

43. What is a P/E ratio?a) The ratio of the price of a stock divided by the stocks earnings per shareb) The ratio of the price of a bond divided by the coupon of the bondc) The ratio of the price of a stock divided by the stocks yield

44. What is a dividend?a) A bonus to employeesb) A division of an international corporationc) A payment of cash to stockholdersd) A cash payment distributed among creditors

45. Which among the following is considered the highest- risk category of funds?a) Aggressive Growth Funds:b) Growth Funds:c) Growth and Income Funds:d) Global Funds:e) International Fundsf) All of above


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46. What is default?a) Failure to pay principal on a financial obligationb) Failure to pay interest on a financial obligationc) Failure to pay principal or interest on a financial obligationd) None of above

47. What is a junk bond?a) A strong bond that has a low default risk

b b)A weak bond that has a high default risk

c) None of aboved) Both A & B

48. Can a Passive fund be rebalanced?a) Yes b) No c) Irrelevant Question

49. The complete Offer Document contains the address of the followinga) The Trustees of the Mutual fundb) The Directors of the AMCc) The Registrars and Transfer Agentsd) The Unit holders of the Mutual fund

e) Both a, b, c50. Section ---- of the Indian Contract Act, 1872 defines a fraud.

a) 17 b) 18 c) 19 d) 20

51. Scheme means a scheme of a mutual fund launched under Chapter ---a) IV b) V c) VII d) VIII e) VI

52. Which among the following means any person who acting alone or in combination with anothebody corporate establishes a mutual fund?

a) Unit holder b) Trustee c) Sponsor d) Relative e) None of above

53. The Sponsor should contribute at least ------to the net worth of the AMC.a) 45 b) 50 c) 40 d) 35

54. Mutual fund shall pay before the ----- April each year a service fee as specified in the-------Schedule for every financial year from the year following the year of registration.

a) 30th & 1st b) 15th & 3rd c) 30th & 2nd d) 15th & 1st e) 15th & 2nd

55. Can AMC or any of its officers or employees act as a trustee of any mutual fund?a) Yes b)No c) Sometimes

56. The Trustees shall abide by the Code of Conduct as specified in the ------ Schedule

a) 1st b) 2nd c) 3rd d) 4th e) 5th

57. The Chairman of the AMC is not a trustee of any mutual funda) True b) False

58. Every AMC should maintain and preserve for a period of ----- its books of accounts, records, adocuments.

a) 5 years b) 10 years c) 12 years d ) 8 years e) No such restriction


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59. An Auditor is appointed by the ------a) Unit holders b) AMC Director c) Trustees d) All of above e) None of above

60. Statement of Accounts are prepared with accounting policies and standards in accordance with

the ------Schedulea) 10th b) 8th c)7th d)5th e)9th

61. Certificate of registration is conferred as per Section -------of the SEBI Act, 1992.a) 20 b) 21 c) 25 d) 30 e)None of above

62. As per Trust Deed minimum number of trustees shall be ------a) 5 b) 4 c) 2 d) 3 e) 1

63. Which among the following cannot advertise a Mutual Fund?a) Celebrity b) Unit holder c) Trustee d) AMC Sponsor

64. Advertisements for NAVs must indicate the --------------NAV of a schemea) Past b) Latest c)Past & latest d) None of above

65. A mutual fund scheme shall not invest more than -- of its NAV in unrated debt instruments

issued by a single issuer and the total investments in such investments shall not exceed --% of theNAV of the scheme

a) 5% & 20% b) 5% & 25% c) 10% & 25% d) 10% & 20%

66. The initial expenses in respect of any scheme may not exceed --- of the funds raised under thatscheme.

a)10% b) 5% c) 6% d) 2%

67. No mutual fund scheme shall invest more than ---of its NAV in the equity shares or equityrelated instruments of any company

a) 5% b) 10% c) 25% d) 15% e) None of above

68. A Mutual fund scheme shall not invest more than -- of its NAV in the unlisted equity shares orequity related instruments in case of open-ended scheme and -- of its NAV in case of close endedscheme.

a)5% & 10% b) 10% & 10% c) 5% & 15% d) 10% & 15% e) None of above

69. The securities shall be valued at the last quoted ----price on the stock exchangea) Opening b) Closing

70. When a security is not traded on any stock exchange for a period of ---- prior to the valuationdate, the scrip is treated as non-traded scrip

a)120 days b) 90 days c) 60 days d) 30 days

71. R-Squared factor of a fund measuresa)How much of a funds NAV movement is due to the market index movementb)How a funds NAV movement relates to the market index movementc)How much of fluctuating has occurred in a fund s NAV over a historical periodd)How many marks a Credit rating Agency accords to a fund

72. Longer the maturity of a portfolio the greater the risk it has from interest rate fluctuationsa)True b) False


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73. An investor in need of a regular income should not selecta) A debt fund b) A bank deposit c) PPF d) An equity growth fund

74. Under Section--------of the Act the mutual fund is required to deduct TDS at the rate of ----- onany long-term capital gains if the payee Unit holder is a non-resident

a) 190 & 20% b) 195& 15% c) 195 & 10% d) 190 & 10% e) 195 & 20%

75. Under Wealth Tax Act, Ownership of units is not considered as ---------

a)Income b) Expense c) Wealth d) All of above

76. ---------------------is preferred by private mutual funds?a)W.W.Wb)Individual agentsc)Small distribution companiesd) Established distribution companies

77. Which among these give basic information about a fund that is already launched and whosedocument is available?

a) Product Launch Advertisement

b) Tombstone Advertisementc) Performance Advertisementd) None of above

78. Income funds with --- or more of investments in debt instruments should always be comparedwith a suitableindex.

a) 40% b) 45% c) 60% d) 75%

79. --------------------- provide general information about AMC / Mutual Funds to the public.a) Ranking Entity b) Time Periods c) Brochures d) None of above

80. All advertisement and sales literature containing an AMC / Mutual Funds ranking, must be

disclosed with respect toa) The name of the categoryb) The number of AMC/ Mutual funds in the categoryc) The name of the Ranking Entityd) The publisher of the Ranking datae) All of the above

81. Advertisements and sales literature must not use any rankings other than rankings based on

yield for a period of -------------------a) Less than one yearb) More than one year

c) Less than two yeard) More than two year

82. ------------- advertisement uses performance figures in its advertisements or sales literature.a) Tombstone b)Performance c) Product Launch d) All of above

83. The Liabilities of the Balance Sheet should be divided into the following groupsa) Loans, Reserves & Surplus, Unit Capital, Investmentsb) Reserves & Surplus, Fixed Assets, Current Liabilities and Provisions, Investments


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c) Investments, Deposits, Other Current Assets, Fixed Assets, Deferred Revenue Expenditured) Unit Capital, Loans, Reserves & Surplus, Current Liabilities and Provisions

84. Which among the following should sign the Balance Sheets and the Revenue Account?a) Board Of Trusteesb) Scheme wise fund managersc) Neither of aboved) Both a & b

85. The financial statements of the scheme should be approved at a meeting of --------------------a) Board of Directors of AMCb) Trusteesc) Board of Directors of Trustee Company (in case of trustee company)d) Both a & be) Both a, b, c

86. Mutual fund can invest in the units of UTI or in the units of any other Mutual Fund Manager.a) Yes b) No

87. The Board of Trustees of the Mutual Fund must meet at least ------- in the month to review the

operations of the Mutual Funds.a) Once b) Twice c) Thrice d) Daily

88. Mutual Funds should submit-------------- reports to SEBI in the enclosed formats giving details

theirmoney market operationsa) Periodic b) Monthly c) Quarterly d) Fortnightly e) Yearly

89. Which among the following regulates the entry into call /notice money market, bill discountingmarket and term money market etc

a) SEBI b) AMFI c) AMC d ) RBI e) FII

90. Offer documentcontains information relating to types of investments to be made during pre-

allotment stage and the accounting procedures to be adopted.a) False b) True c) Sometimes

91. As per 2nd Schedule Service Fee is paid by Mutual Fund before the ----- each yeara) 30th April b) 15th April c) 31st December d) None of above

92. Providing for Childs Marriage or Education Expenses is an example of -----------------needa) Investment b) Protection c) Both

93. Which are the benefits of a Mutual fund distributor who becomes a well-trained financial

planner?

a) Ability to establish long- term relationshipsb) Ability to build a profitable businessc) Both of aboved) Neither a nor b

94. The Financial Planning Process was first formalized by ------------------------a) SEBI b) AMFI c) AMC


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d) Certified Financial PlannerBoard of Standards (USA)

95. The basic principle of investing in Financial Planning is -------------------------a) Lesser the risk, the Greater the rewardb) Lesser the risk, the Lesser the rewardc) Greater the risk, the Lesser the rewardd) Greater the risk, the Greater the reward

96. Generally, income earned by any Mutual Fund registered with -------- is exempt from tax

a) AMC b) RBI c)SEBI d) FII

97. Income distributed to unit-holders by a close-ended or debt fund is liable to the followinga) Dividend Distribution Tax of 10%b) Surcharge of 2%c) Dividend Distribution Tax of 10% plus a surcharge of 2%d) Tax of 12%

98. According toSection 88 of the Income Tax Act, investment upto to Rs -------- is eligible for taxrebate of 20 % for Infrastructure mutual funds units.

a) 60000 b) 98000 c) 65000 d) 80000

99. Which of the following statement is correct for Tax law definition of Capital Gains ?a) Sale Consideration (Cost of Improvements + Cost of transfer- Cost of Acquisition)b) Sale Consideration (Cost of Acquisition + Cost of Improvements + Cost of transfer)c) Sale Consideration + (Cost of Acquisition + Cost of Improvements + Cost of transfer)d) None of above

100. Which among the following is the Cashing out Stage?a) Transition Stageb) Sudden Wealth Stagec) Reaping Staged) Accumulation Stage

101. Affluent investors can be classified intoa) Wealth-Creatingb) Wealth Perseveringc) Both a & bd) None of above

102. Which among the following can be associated with Indira Vikas Patra?a) Good returnsb) Tax Free Benefitsc) No record of identity of investors

d) Easily available

103. Which among the following can be termed as a limitation of Rupee Cost Averaging Methoda) No information regarding when to buy or sell a fundb) Switch from losing to winning fundsc) Only ad) Both a & b


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104. As per John .C. Bogle, which among the following combinations is a Complex ManagedPortfolio?

a) 20% in diversified Equity Fund, 20 % in aggressive Growth fund, 10% in specialty funds,30% in long-term bond funds, 20 % in short term bond fund

b) Single Index Fund with 60/40 equity/ bond holdingsc) 85% in a Balanced 60/40 Fund, 15% in medium term Bond Fundd) 50% in Total Stock Market/Index Fund, 50 % in Total Bond Market Portfolio

105. What would you do to Maximise Investment Return in the long run?

a) Buy and Hold investmentsb) Liquidate poorly performing investmentsc) Liquidate good performing investmentsd) Switch from poor to good performance

106. Which of the following can be perceived as a hedge against inflation or as a means of securitybad times?

a) Shares b) Bonds c) Financial Assets d) Gold

107. Which among the following governing body supervises SEBI?a) RBI b) AMC c)MOF d) ROC e) CLB

108. From the following, identify the Rights and Obligations of the Investors?a) Beneficial Ownershipb) Right to Timely Service & Informationc) Right to Right to wind up a schemed) Right to Terminate the AMCe) All of above

109. Characteristic(s) ofRBI Relief Bonds?a) Tax free interestb) Maturity period of 5-yearsc) Free from Defaultd) All of above

110. Instruments carrying longer than one-year maturities are generally called ---------a) Money Market Securitiesb) Government Securitiesc) FI Bondsd) Debt Securities

111. Which of the following is the best measure of Risk?a) R-Squared b) Beta Coefficient c)Standard Deviation d) None of above

112. In what order you would list the following schemes. i.e: Least Risk to Highest Risk(1) Balanced fund (2) Money Market Fund (3) Sector Fund (4) Index fund

a) 1234 b) 2134 c) 4321 d) 2143

113. Suggest a model portfolio for Young, Unmarried Professional?a) 50% in Aggressive Equity Funds, 25% in High Yield Bond funds 25% in Conservative Mo

Marketb) 25% in Aggressive Equity Funds, 25% in High Yield Bond funds 50% in Conservative Money

Market


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c) 30 % in short-term Municipal Funds, 35% in long- term Municipal Funds, 25% in ModeratelyAggressive Equity for modest capital growth, 10% in Emerging Growth Equity

d) 50% in Aggressive Equity Funds, 50% in High Yield Bond funds

114. Application forms are available witha) Newspaperb) Memorandum containing key informationc) Newsletterd) Offer Document

115. ----------------measures the amount of buying and selling of securities done by a fund.a) Income Ratio b) Expense Ratio c) Turnover Rate d) None of above

116. Which among the following acts as the distributor of mutual funds shares to brokers / deale

and the public?a) Trustee b) Underwriter c) None of the above

117. Cost of Investments acquired or purchased should include--------------a) Brokerageb) Stamp Charges

c) Any other charge included in brokers bought noted) All of above

118. Asset Management Companies may launch schemes either on aa) Load Basis b) No-Load Basis c) Mixed Basis d)All of Above

119. In close-endedscheme floated on a load basis the initial expenses shall be amortized on------basis over the period of the scheme

a) Daily b) Weekly c) Five Years d) Fortnightly

120. In open-endedschemes floated on a load basis the initial expenses may be amortized overperiod not exceeding -------

a) Weekly b) Five Years c) Ten Years d) Daily

121. In the case of open-endedscheme when units are sold, the difference between the Sale Priceand the Face Value of the unit, if positive should be -------- to reserves and if negative is --------- toreserve

a) Credited, Debitedb) Debited, Creditedc) Credited, Creditedd) Debited, Debited

122. In the case of an open-endedscheme, when units are sold an appropriate part of the sale

proceeds shouldbe credited to ----------------a) Capital A/c b)Equalization A/c c) Reserve A/c d) Revenue A/c

123. Underwriting Commission should be -----------------when there is no development on the schema) Reduced from of Investmentb) Both a & cc) Recognized as Revenue

124. Identify the Characteristics of Income Funds


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a) Higher Return than a Bank Depositb) More Safe than a Bank Depositc) Invest money as Fixed Deposit or Recurring Deposit or Saving Depositd) Both a & c

125. If EPSis negative for Non-Traded / Thinly Traded Equity Securities, then value for that yea

shall be taken as ----- for arriving at capitalized earninga) One b) Two c)Zero d) Three

126. The Offer Document & theMemorandum shallbe fully revised and updated at least once in---a) Six Months b) One Year c) Five Years d) Two Years

127. A debt security (other than Government Securities) that has a trading volume of less than 15crores for a period of thirty days prior to the valuation date shall be considered as a ------------------

a) Equity Related Securityb) Thinly Traded Debt Securityc) Government Securityd) None of above

128. Which among the following is US-64 of UTI?

a) Sale / Repurchase price declared by UTI for a specific periodb) Fixed price of sale / repurchasec) Price is determined by market forcesd) Quoted in stock market

129. As per the guidelines laid down by RBI Money Market Mutual Fundscan invest ina) Corporate Bondsb) Equity Sharesc) Government Securities of less than one year maturityd) All of above

130. As per SEBI guidelines, a Security is to be treated as untraded when

a) Security is not traded for 30 daysb) Security is not traded for 60 daysc) Security is never traded on stock exchanged) Security is traded for 30 days

131. Value StyleInvestors buy stocks that havea) High Growth Rateb) Low Interest Ratec) High Interest Rated) Low Growth Ratee) High Prices to Earnings

f) Low Prices to Earnings

132. ---- of the trustees shall be independent persons and shall not be associated with the sponsors be associated with them in any other manner.

a) 2/4th b) 1/3rd c) d) 2/3rd

133. In case of Corporate Fixed Deposit, the most important thing an investor must look for is-----a) Credit Rating of Deposit b) Yield c) Rate Of Interest d) All of above


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134. AMC can directly approach theInvestorwith the help of--------------a) Individual agents b) Banks c) Distribution Companies d)All of above

135. In India, a Mutual Fund is constituted as--------------a) Investment companyb) Trust c) AMC d) Companye) All of the above

136. ---------------is a Fund that stands ready to Buy and Sellunits at any timea) Open stock Fundb) Open end Fundc) Closed end Fundd) None of above

137. ----------------submit the portfolio of the scheme to SEBI.a) Trustee b) Sponsor c) Depository d) Custodian e)AMC f) All of above

138. What is the Risk Profile of a fund having 20% exposure to Growth Fund?

a) Very Aggressive b)Moderate c) Low d) High

139. What is the Risk Profile of a fund having 10% exposure to Gold Funds?a) Low b) Moderate c) High d) Very Aggressive

140. An open-end fund was purchased when its NAV was Rs 40, 18 months later, its NAV stood at45. Thepercentage NAV change in the fund was:

a) 7.5% b) 8.33% c) 7% d) 8%

141. Which among the following are Fund Tracking Agenciesin India?a) Credence b) Value Research c)Both a & b d) None of above

142. UTIs Fund is based on ---------- Indexa) S & P CNX Nifty b)BSE SENSEX c) Both a & b d) None of above

143. Yield and Price of a bond movea) In similar directionsb) Unrelated Fashionc) In line with the inflation indexd) None of above

144. The Current Market Price of an 11%-coupon bond, when other bonds of similar maturities p

9% will be

a) Above Par b)Below Par c) At Par

145. Bank Certificate of Deposits has a maturity period of ------days to one yeara) 90 b) 30 c) 61 d) 91

146. -------------------------is incorporated for the purpose of managing a mutual funda) Trustee b) Trustee Company c)AMC d) All of above

147. How important is for Mutual Funds to disclosure Half-Yearly Resultson their websites


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a) Not needed b) Optional c)Very Much Needed d) Can be ignored

148. As per Schedule 12 of SEBI, borrowings if any, above ------ of net assets of any scheme of amutual fund should be disclosed.

a) 5% b) 7% c) 15% d) 10% e) None of above

149. Which among the following an investor should refer to if he/she is a first time investora) Key information Memorandumb) Offer Document

c) Both a & bd) None of above

150. Corporate Debentures are ------ in Liquiditya) High b) Moderate c) Very High d)Low e) Very Low

151. Which among the following are low in Liquidity?a) Life Insurance b) PPF c) Bank Deposit d) Equity e) All of above

152. Inspite of charging high management fees Mutual funds are able to keep the transactions cosdown becauseof ------

a) High Dividends b)Economies of Scale c) Maturity Period d) Flexibility

153. Direct investment in stock markets can be a better option over investing through mutual fundIf

a) The investor wants to invest for long termb) There exits a bullish phase in stock marketc) The investor has large capital, knowledge and resources for researchd) The investor wants better returns than those offered by mutual funds

154. Volatility of an Equity Fund Portfolio comes froma) The nature and kind of stocks in the portfoliob) The number of stocks in or degree of diversification of the portfolioc) Fund Mangers success at market timingd) All of above

155. What happens when there is more number of sectors in a portfolio?a) Less is the Portfolios Sector Riskb) More is the Portfolios Sector Riskc) Sector Risk remain the samed) All of the above

156. Which among the following can be considered as simple way of checking funds risk level?a) Stock Turnover Ratio

b) Debt Turnover Ratioc) Price Earning Multipled) None of above

157. Which among the following a retired person would prefera) Greater Proportion of Equity Assetsb) Greater Proportion of Income Producing Assetsc) Lesser Proportion of Income Producing Assetsd) Lesser Proportion of Equity Assets


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158. Liquidity needs are generally satisfied witha) Money Market Mutual Fundsb) Equity Income Fundsc) Municipal Bond Fundsd) None of above

159. MR. Rakesh is a Salaried Executive who is planing to retire at 60 yrs of age; he should therefograduallytransform from --------------------- generating investments

a) Income To Growthb) Growth To Incomec) Equity Investments To Income and Cash Funds

160.A person whos Grandchildren are young, investing in Growth Fundsare considered best duto

a) They have capacity to provide current incomeb) Higher Risk bearing capacityc) Lot of time available for the investment to grow in value

d) Tax Benefits are available

161. Debt Funds are required to provide a --------------------a) Distribution taxb) Dividend Distribution Taxc) Yield Sacrificed) Expense Performance

162. Type of Fund(s) where in average maturityis an important factor for an investora) Debt Fund b) Balanced Fund c) Liquid Fund d)Both a & b

163. As per Second Schedule of SEBI (Mutual Fund Regulations, 1996) Filing Fees for OfferDocumentis

a) Rs: 10,000 b) Rs: 15,000 c)Rs: 25,000 d) Rs: 50,000

164. As per Second Schedule of SEBI (Mutual Fund Regulations, 1996) Service Fees Payable by

Mutual Fundsisa) Rs: 2,00,000 b) Rs: 2,50,000 c) Rs: 1,50,000 d) Rs: 4,00,000

165. Custodian when appointed should carry out the custodial services within-----after his

appointmenta) 30 days b) 7 days c) 15 days d) 30 days

166. NAV of the scheme(s) can go ------ depending upon the factor and forces affecting the securiti

market

a) Up b) Down c) Up or Down d) Neither of any

167. Non-traded investments shall be valued in good faith in accordance with the norms specified --------Schedule

a) Fifth b) Sixth c) Ninth d)Seventh

168. An investment shall be regarded as non-performing if it has provided no returns in the form

dividend orinterest for more than ---- as at the end of the accounting year of the mutual fund.a) One year b) Two Years c) Three Years d) Four Years


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169. The investment and advisory fees for a fund with Rs.200 Crores as avg net asset isa) 2.25 Crores b) 2 Crores c) 3 Crores d) 2.5 Crores

170. Private sector funds were granted permission to enter the Mutual Fund industry in:a) 1993 b) 1994 c) 1995 d) 1996 e) 199

171. SEBI guidelines for agents includesa) Agents can sell products of a single mutual fund

b) Agents can sell products of mutual funds with whom he has entered into an agreementc) Assets are undervaluedd) None of the above

172. Can an AMC contribute to Initial Capital?a) No b) Yes c) Sometimes

173. Which among the following was the first diversified equity investment scheme in India?a) SBI Magnum b)Master Share c) Mastergain92 d) None of above

174.Identify the features ofCompounding mean

a) Longer the period, more is the power of compoundingb) More frequent the compounding, greater the growth of capital."c) Both a & bd) Longer the period, less is the power of compounding

175.In USA, Mutual Fund is represented as-------------------a) Trust b) Investment Companyc) Public Limited Companyd) Private Limited Company

176. Which is possible in case of Systematic Investment plan?a) Allows investor to invest a fixed amount on a monthly basisb) It inculcates a discipline of regular investment in the investorc) Investor can change the amountd) Both a & b

177. An elevated P/E in consideration to average market multiple could be ofa) Income Fundsb) Gilt Fundsc) Value Fundd) Growth Funde) Balanced Fund

f) All of above

178. Market Risk is not diversifiable and Sector specific risk is not diversifiable.a)Market Risk is diversifiable and Company specific Risk is not diversifiable.b) Market Risk is not diversifiable and Sector specific risk is not diversifiable.c)Market Risk is not diversifiable and Company specific Risk is diversifiable.d) Company specific Risk is not diversifiable and Sector specific risk is not diversifiable.

179. For which of the following instruments, credit rating is desirable."


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a) Treasury bills issued by the Government of Indiab)Debentures issued by the private corporate sectorc) Insurance policies issued by the LICd) Medium term dated securities issued by the Government of India

180 How many scripts does NIFTY havea) 40 b) 100 c) 500 d)None of the above e) 30

181. Bond Fund distributes 20 Crores as dividend. What is the Taxable note on Mutual Fund

a) 10% + 10% b) 20% + 20% c) 20% + 10% d)Income is not taxable

182. Investor can sue if it isa) Any specific person who guarantees itb)Mentioned in the offer documentc) Both a & bd) Cannot Sue

183. In case of assured schemes which information is not required to be given along with the offerdocument

a) Means of meeting the guarantee

b) All past schemes with their returnsc) Comparison to other funds/MFd) Disclosure about the investment objective

184. A Mutual Fund can borrowa) 20% of NAV b) For Six Months c) To meet temporary liquidity d)All above

185. Which of the following is not related with Infrastructure funda) Tax Benefit b) Fixed Rate of Return c) Capital Appreciation d) Traded in Stock Market

186. How is Unit Trust of India different from other Mutual Funds?a) They can borrow internally and abroadb) They can hire leasec) Underwritingd)All of the above

187. What is the current yield of a bond, whose coupon rate is 8% and market price, is Rs 122?a) 6.57% b) 5% c) 6.59% d) 5.67%

188. A fund invested 20 million. Total market value is 55 million, unit holder is 1 million. NAV isa) Rs. 20 b)Rs.55 c) Rs.50 d) None

189. In case of corporate 'Fixed Deposit', the most important thing an investor must look for is

a) Yield b) Rate of Interest c) Credit rating of deposit d) None

190. Due diligence certificate isa) Signed by CEO / MD / Corporateb) Attached to Annual Reportc) Part of Offer Documentd) All of abovee) Incorrect Question


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191. What all can be associated with an Equity linked saving schemea) Tax rebate b) 3 yrs Lock in period c) Minimum investment in equity is fixed d)All of abov

192. The 1999 Union Government Budget helped the Mutual Fund industry bya) Regulating the practices in Mutual Fund Industryb) Exempting all mutual funds dividends from income tax in the hands of the investorsc) Approving the code of ethics suggested by AMFId) All of above

193. Trail commission is justified in case ofa) Deferring the commissionb) When an investor cancels his application for investmentc) Agent can voluntarily return the commission for the cancelled applicationd) None of the above

194. Ex-mark of 100% could be for a Funda) Growth Fund b) Aggressive growth fund c)Index Fund d) Sector Fund e) Balanced Fu

195. Which among the following can be termed as a value fund?a) Monthly Income Fund

b) Equity Income Fundc) Templeton Fundd) None of above

196. Which of the following is a criteria for sponsora) Net worth to be more than unit capitalb) 40% net worth should be of sponsorc) Sponsor should invest 30% of assetsd) None of the above.

197. The Debt Fund in India isa) On wholesale basisb) Large players like FII and Banksc) G-Sec are traded in large scaled) All of the above

198. Which among the following statement(s) are truea) Load Fund is better than No Load Fundb) Load increases NAVc) Load guarantees higher returnd) None of the above

199. AMC can directly approach the investor as well as with the help of

a) Individual agentsb) Banks and NBFCc) Distribution Companiesd) All of the abovee) The question is incorrect

200. As per SEBI regulations derivatives trading will be done for ------------a) Hedgingb) Portfolio Balancing


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c) Both a & b

201. Characteristics of SWP area) A prospective investor can seek recourse tob) Sue the investment of the earlier fundc) Sue the AMC/Trusteed) Cannot seek recoursee) Incorrect Question

202. Health of a Fund is known froma) Offer documentb) Annual / Half-yearly reportc) End of the Termd) Can be ascertained from NAV

203. If a unit holder does not agree to mergera) He is allowed to exit only in CESb) He is allowed to exit only in OESc) He is allowed to exit in OES and CESd) He is allowed to exit only by SEBI

e) None of the above

204. Which is not true about KIMa) KIM is a concise format offer documentb) KIM is not given by AMCc) KIM shows the health of fund

d) None of the above

205. An investor can assess his funds performance bya) Performance of another MFb) Performance of Stock Marketc) Performance of other financial productd) All of the above

206. What will be the current market price of a 10% coupon bond when other bonds of similarmaturities pay 13%

a) Above parb) Below parc) At Par

207. Bank sponsored MF are controlled bya) RBI b) SEBI c) RBI & SEBI d) None

208. A Mutual Funds can borrowa) 20% of NAV b) For 6 months c) To meet temporary liquidity d) All above

209. In case of assured schemes which information is not required to be given in offer documenta) Means of meeting the guaranteeb) All past schemes with their returnsc) Comparison to other funds / MFd) Disclosure about the investment objective


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210. KIM is available ata) AMC office b) Authorised banks c)Both a & b d) None

211.All Mutual Fund AMC and Corporate Trustees are companies registered under the ----------a) Department of Company Affairsb) Company Law Boardc) Companies Act, 1956d) All of above

212. What is the correct order of decision1. Asset Allocation 2. Selection of Fund 3. Features of schemea) 1,2, 3 b) 1,3,2 c) 2,3,1 d) Any other

213. Rs.300 becomes Rs.600 in 8 years. Rate of return isa) 10% b) 12.5% c) Data insufficient d) None of the above

214. As per the SEBI regulations, a mutual fund shareholder can change his/her AMC.a) Yes b) No c) Never

215. If its liquidity that a mutual fund share holder looking for, then which among these he/she

should not be looking for?a) Open-end Scheme b) Close-end Scheme

216. As per the regulations of SEBI, mutual funds should provide investor with at least ------exit

route at any given point in time.a) Two b) None c) Three d) One

217. ---------------are open for sale or redemption during pre-determined intervals at NAV-relatedprices.a) Income Fund b) Interval funds c) Growth Funds d) Index Funds e) None of above

218. ------------------funds are what corporate and individual investors need to park their surplus

funds for short periods.a) Money Market Funds b) Income Funds c) Interval Funds d) Growth funds e) Sector Funds

219. Which among the following replicate the returns of the specific index?a) Income Funds b) Sector Funds c) Index Funds d) Balanced Funds e) All of above

220. When a Shareholder sells shares of a fund, he will realize either a taxable-------a) Gain b) Loss c) Both a & b d) None of above

221. Mutual Fund is not a trust that pools the savings of investors who share a common financial

goal.

a) True b) False c) Sometimes

222. Which among the following describes broadly the working of a mutual fund?a) Securities, Returns, Fund Manager Investorsb) Securities, Fund Manager, Investors, Returnsc) Investors, Returns, Securities, Fund Managerd) Investors, Fund Manager, Securities, Returns


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223. Because the fund stands ready to redeem units at any time, units in an open-end funds arealways worth therea) Net Asset Value b) Asset Revenue c) Par value d) Sellingprice

224. Best way to determine if the client is in wealth creating or wealth preserving mode is bya) Asking series of questionsb) Make trade offs between higher returns with possibility of lossc) More nominal returns but with a lower probability of lossd) By analyzing responses

e) All of abovef) Both a & b

225. Benefits of Financial Planning area) Help in form of financial plannerb) Peace of mind and happiness to investorsc) Provide advise on achieving financial needsd) All of abovee) Only a & c

226. ----------------------is an useful approach to Financial Planning

a) Life Cycle Guide b) Wealth Cycle c) Income Cycle d) Only a & b

227. ------------------groups all investors irrespective of their financial conditiona) Wealth Cycle Approachb) Life Cycle Approachc) Income Cycle Approachd) None of above

228. Which among the following is/are comprehensive & relevant approach to Financial Planninga) Income Cycle b) Wealth Cycle c) Life Cycle

229. ------------------------ is a specific & separate asset investment strategy evolved to meet each

individual goala) Sudden Wealth Stageb) Goal Oriented Investingc) Reaping Staged) Transition Stagee) Investment Strategy

230. Foremost constraints of Financial Planning area) Problems in Financial Planning productsb) Timec) Risk

d) Insufficient investible resourcese) All of above

231. Which of the following can upset Financial Planning?a) Forced early retirement from jobb) Early deathc) Divorced) Marital Break-upe) Both a & b


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f) All of above

232. ----------------------is not useful to understand benefits of Financial Planninga) Life Cycle Model b) Wealth Cycle Guide c) Both a & b d) None of above

233. Which among the following stages are considered to be dependenta) Childhood Stage b) Pre-retirement Stage c) Young Married Stage d) All of above

234. Which stage changes the financial situation of any young couple?

a) Childhood Stageb) Young Married Stagec) Young Unmarried Staged) Young Married with Children Stagee) Both d & af) None of above

235. In which stage parents Financial Planning would be changing from Protection needtoInvestment need.

a) Childhood Stageb) Post Family Stage

c) Young Married Staged) Retirement Stagee) Married with older Children Stage

236. Why does investing consideration have paramount value to people who are married and arehaving old children?

a) Couple may be raising loansb) Couple may have raised loansc) Plans have to be made to service loans & replay capitald) Pension provision to provide an income at later stagee) All of abovef) Only b & c

237. Need for Financial Planning take place rarely in an individuals lifea) False b) True

238. Retirement Stage precedes Post-Family Stage.a) True b) False

239. Which among the following is associated with an individual at all stage?a) Expense b)Expense & Income c) Income d) None of above

240. In financial planning, priority and ability change with each stage of the life cycle.

a) False b) True

241. Financial Planning is nota) Investing funds to receive highest rate of returnb) Planning for retirement with maximum income payablec) Tax Planning to keep taxes as low as possibled) All of above


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242. -----------------is first step in Financial Planning process and a basic tool for translation offinancial plan into action

a) Asset Allocation Stageb) Selecting the right investment products for investorsc) Comparison of investments productsd) Helping investors understand risks in fund investing

243. Trustees shall----------review all transactions carried out between Mutual Funds, AMC and itsAssociates

a) Daily b) Quarterly c) Monthly d) Yearly

244. Under Sec.88 of Income tax, how much exemption:SEBI approved Mutual Fund: 60,000/-Infrastructure: 10,000/-

Equity linked savings: 20,000/-a) 16,000/- b) 4,000/- c) 14,000/- d) 6,000/-

245. Cost of investing is most important in a:a) Balanced Fund b)Bond Fund c) Growth Fund d) Equity Fund

246. A scheme transfers the securities to another scheme under same AMC. Which is incorrect?a) The AMC holds 4% in the total inter-scheme transfers.b) The securities are sold at market value + 10% add. Chargesc) Both a & b

247. When is the value of stock not unlocked?a) When PSU is privatisedb) When corporate restructuring of companyc) When there is a bull run in the market.d) When buy-back of shares takes place

248. For choosing an appropriate benchmark the following are required, excepta) The portfolio composition and size.b) Historical data of Fund performancec) Investment objectived) Nature of investmentse) None of above

249. Comparison of Direct Equity and Mutual Fund Investment, which is true.a) A large capital required in MF as compared to direct investing.b) Diversification is possible in Direct Equity as compared to MF.c) Transaction costs with fund wipe out the profits as compared to equity.d) The investment objective is possible through MF investing as against Direct Equity

investment.

250. What do u mean by the term Loada) Charge to scheme / fundb) Charge paid to investorc) Charge paid by AMC to SEBId) Recovery amount from investor

251. Loads can be primarily classified into ---------a) Front-end/resale load b) Back-end/repurchase load c) Both a & b d) Only a


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252. When does a Fund recover load expenses?a) When Investor buys Scheme b) During Re-purchase c) Either a or b d) Neither a nor b253. ----------------- is a measure of scattering of the values about the average (mean) value.a) Standard Deviation b) Beta c) Ex-marks d) Beta Coefficient

254. There is no minimum initial investment while investing in a mutual fund?a) No b) Yes

255. Which fund would a person wanting low risk (risk averse) and high yields choose?a) Div.yield 15%, Beta - 1.5, ex-marks-90b) Div.yield 10%, Beta -1, ex-marks-70c)Div.yield 11%, Beta -0.9, ex-marks-80d) Div.yield 12%, Beta -1.2, ex-marks-80

256. Mainstream diversified debt funds are most affected by:a) Reinvestment risk b) Liquidity risk c)Interest rate risk d) Default risk

257. If yield falls, the Fund Manager will do all except;

a) Sells short maturity stocks and buy long maturity stocks.b) See that the funds average duration become longer than the market average duration.c) Sell long duration stocks and buy short duration stocks.d) Sells low coupon stocks and buy high coupon stocks.

258. The Fixed Asset Allocation is all of these except:a) Liquidation of a part of the higher asset class & reinvesting in the asset class with lower

return.b) A conservative approach to portfolio managementc) A disciplined approach lets him book profits in rising markets and increase holdings in falling

markets.d) Taking advantage of market fluctuations.

259. Which among the following was responsible for the poor resource mobilisation by mutual funin 1998/99.

a) MOF b) SEBI c) UTI d) None of above

260. During 1999-2000, resource mobilisation by Indian corporate through Euro issues by way of

------- registered a significant increasea) FCCB b) GDR c) ADR d)All of above

261. Buy-back of shares allows the GOI to --------- the targeted amounta)Raise b) Reduce c) Both a & b d) Any of above

262. Offer for Buy back of shares is given to -------shareholdersa) Few b) None c) Selected d)All

263. Buy back of shares is possible only to ----------PSUsa) Cash - starved b) Cash rich c) All of above


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264. Fund Management is a ---------- process in which agency problems could surface at many levea) Simple b) Complex c) Any one of above d) None of above

265. ---------- funds invest in equities in one or more foreign countriesa) Offshore Funds b) Equity Funds c) Sector Funds d) Specialty Funds

266. There is a -------- relationship between risk & rewarda)Direct b) Inverse c) Both d) Any one

267. Allocation of investments depends on ----------------& ----------------a) Income & expense

251 b) Age & income252 c) Tolerance for risk & expected time frame253 d) Tolerance for risk & income

268. Evaluating------------- needs is part of personal financial planning a) Insurance b) Finance c) Stock d) Only a & b

269. A comprehensive financial plan must

a) review your net worth ,goals ,objectives, investments etcb) address your entire financial picturec) plan for implementing goalsd) All of above

270. The following are included in the financial planning process:a) Cash flow & Tax managementb) Estate Planning & managementc) Risk planning & managementd) Investment & retirement planninge) All of above

271. The reason people fail to plan isa) they are too youngb) they are too oldc) they dont have the expertise to plan welld) they procrastinate

272. All of the following investments are examples of "debt" investments EXCEPT:a) Corporate Bonds b) Gold c) Certificate of Deposit d) Fixed annuity

273. If Bond A had a lower rating than Bond B, the yield on Bond A would bea)Higher b) Lower c) The same

274. Ability to convert an investment into cash without losing any of the principal is:a) Equity b) Liquidity c) Marketability d) Current Yield

275. If Mr. Ambani, who is in the 28% tax bracket, invested in a Certificate of Deposit which, we

paying 6% interest, his after-tax Yield would be?

a) 4.32% b) 4.23% c) 26.32% d) None of the above

{After-tax Yield = Current Yield (1 Tax Rate)}


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276. Generally ------------the rating ------- the yield on the bond

a) Higher, Lower b) Lower, Lower c) Higher, Higher d)Lower, Higher

277. Generally -----------the term of the bond higher is the yield.

a)Longer b) Shorter c) None of the above d) Insufficient data

278. Which among the following are fixed -income investments

a) Commercial Paper b) Certificate of Deposit c) Savings A/c d) All of the above

279. Stocks of high quality with long stable record of earnings and dividends are called as

a) Growth Stocks b) Income Stocks c)Blue Chip Stocks d) Speculative Stocks

280. Can stocks be categorised by market capitalisation or size?

a) Yes b) No c) At times

281. Which of the following types of accounts are available from financial institutions?

a) Demand Deposits b) Time Deposits c) Money Market Accounts d)All of above

282. Which of the following do not determine how much you earn on your investment funds?

a) The amount of tie the money is left on depositb) The rate of interest being paidc) The method of interest calculationd) Whether the banking institution is a federal or a state-charted banke) The initial investment and any subsequent deposits

283. The amount to which today's investment will grow over a given period of time at a specific ra

of interest is known as:

a) Current Value b) Future Value c) Compound Value d) Simple Value

284. The first step in budgeting is to:

a) Target any areas in your spending which needs to be changed.

b)Record historical information concerning your income and expenses.c) Project your income and expenses for the next year.d) Decide how much each month you can devote to savings.

285. --------------Statement shows your financial condition as of a certain date.

a) Cash Flow b) Budget c) Credit application d) Financial e) Liquidity

286. All of the following are true statements concerning an auto lease EXCEPT:

a)A lease never requires a down payment.b) Mileage during the lease is limited to a specific amount.c) Additional fees may apply if you terminate the lease early

d) The leasing company retains ownership of the vehicle287. The type of mortgage in which interest rate changes during the life of the loan is called a:

a) Fixed Rate Loanb) Balloon Mortgage Growingc) Equity Mortgaged) Adjustable Rate Mortgagee) Reverse Mortgage

288. All of the following investments are examples of "Debt" investments EXCEPT:


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a) Corporate Bonds b) Gold c) Certificates of deposit d) Fixed annuity

289. The investment risk that deals with the upward or downward movement of the value of theinvestment, based on the changes in the financial market is known as

a) Risk of principal b)Market Risk c) Purchase Power Risk d) Interest Rate Risk

290. ---------refers to the ability to convert an investment into cash without losing any of the princip

a) Marketability b) Equity c)Liquidity d) Current Yield

291. Generally, if Bond A had a lower rating than Bond B, the yield on Bond A would be:a)Higher b) Lower c) The Same

292. All of the following are advantages to the purchase of common stock EXCEPT:

a) It can provide an income stream.b) There is good marketability.c) There can be tax advantages for long-term purchases.d) The issuing company guarantees the return.

293. One of the disadvantages associated with the purchase of real estate as an investment is:

a) Financial leverage may be used.b) Certain tax deductions may be available.c) It can create a hedge against inflationd) There is a lack of liquidity

294. The return on a mutual fund comes from:

a) Dividend incomeb) Capital gains distributionsc) Increase in share value above purchase price

d) All of the above

*295. The commission structure in a mutual fund that features a Deferred Sales Charge isa)"A" shares b)"B" shares c)"C" shares d)All of the above

296. Stocks whose movement tends to follow the business cycle of the economy as a whole are calle

a) Large Cap stocks b) Cyclical stocks c) Growth stocks d) Speculative stocks e)Blue Chip stocks

297. Which of the following is NOT a disadvantage of investing via common stock?

a) There is no guarantee of return, either through dividends or capital gain.b) The timing of purchases and sales will significantly effect investment return.c) The entire investment is subject to risk on principal.d) Common stocks can generally be purchased with a small initial investment.

298. Which of the following statements concerning people in retirement years is (are) correct?(1) A large percent of monthly income is spent on living expenses.(2) As inflation rises, purchasing power increases.

a) Only 1 b) Only 2 c) Both (1) and (2) d) Neither (1) nor (2)

299. Which of the following statements concerning inflation is (are) correct?(1) Inflation affects the rupee amount of a person's assets available at retirement.(2) Some retirement plans adjust benefits to take inflation into consideration.


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a) Only 1 b) Only 2 c) Both 1 & 2 d) Neither 1 nor 2

300. You should base your retirement income objectives in terms of---------------------

a) After-taxes, adjusted for assumed inflationb) Before-taxes, adjusted for assumed inflationc) Before-taxes, in current rupeesd) After-taxes, in current rupeese) After-taxes, in current rupees, discounted for future expected inflation

301. To calculate the amount to be saved annually to meet retirement objectives, all the followingassumptions must be made EXCEPT:

a) Annual before-tax returns on investmentsb) Annual after-tax returns on investmentsc) Annual inflation rated) Difference in ages between spousese) Desired number of years to enjoy one's retirement, or one's life expectancy following retirement

302. To determine one's assets available at retirement, all the following are included, EXCEPT:a) Cash on hand and cash in a checking accountb) IRA accountsc) Vested retirement plan benefits from a pension pland) Money market and other mutual funds

e) Stocks and bonds

303. To calculate the future value of income-producing investments in the retirement planning

calculations, the most correct interest factor to use is the:a) Before-tax percentage return.b) After-tax return.c) Expected rate of inflation.d) Modified interest rate.

304. Which of the following personal objectives is Least important in the retirement planningprocess?

a) Maximizing personal tax benefitsb) Maximizing personal retirement benefitsc) Providing estate liquidityd) Achieving a stated personal retirement income objective

305. Following statements concerning retirement planning objectives are correct EXCEPT:a) You may have conflicting objectives.b) You may have altruistic objectives.c) Your objectives should be ranked in order of priority.d) Your personal objectives should not affect the type of plan selected.e) Some objectives can be achieved only at the expense of other objectives.

306. Why is liquidity an important consideration while selecting a pension plan investment?

a)It provides a source of funds to pay plan expenses and benefits.b) Liquid investments provide a high rate of return.c) Liquid investments are growth-oriented, which is desirable in pension plans.d) The liquidity of investments keeps plan expenses at a minimum.

307. An Investment manager must consider which of the following types of investment risks?a) Market risk b)Safety of principal c) Specific risk d) None of the above

308. The duration of a bond is a function of its


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a) Current price b) Time to maturity c) Yield to maturity d) Coupon rate e)All of above

309. Which among the following best describes the investment characteristics of a high quality long-termmunicipal fund?

a)High inflation risk, Low default riskb) Low inflation risk, High market riskc) Low inflation risk, Low default riskd) High inflation risk, high market risk

310. A client provides a current personal balance sheet to the financial planner during the initialdata gathering phase of the financial planning process. This financial statement will enable the

financial planner to gain an understanding of all of the following except thea) Diversification of the client's assets.b)Size of the client's net cash flow.c) Clients liquidity position.d) Clients use of debt.

311. Which one of the following products is designed to provide both growth and income?a) Fixed premium annuityb) Non-participating mortgage real estate investment trustsc) Aggressive growth mutual fund

d) Convertible bond

312. Company ABC is currently trading at Rs: 35 and pays a dividend of Rs: 2.30. Analysts projecdividend growth rate of 4%. Your client Ravi requires a rate of 9% to meet his stated goal. Raviwants to know if he should purchase stock in Company ABC.

a) Yes, the stock is undervalued.b) No, the stock is overvalued.c) No, the required rate is higher than the projected growth rate.d) Yes, the required rate is higher than the expected rate.e) No, the required rate is lower than the expected rate.f) Both a, c, d

313. Which of the following would result in the largest increase in the price of a diversified commostock mutual fund?

a) Unexpected inflationb) Expected dividend increasesc) Unexpected corporate earnings growthd) Expected increase in the prime interest rate

314. While analyzing the position of a portfolio in terms of risk/return on the Capital market line

superior performance exists, if the fund's position is ----------the Capital market line, inferiorperformance exists if the fund's position is -----------the CML, and equilibrium position exists if it

is--------- the Capital market line.

a) Above; on; belowb) Above; below; on

c) Below; on; aboved) Below; above; one) On, above; below

315. Which one of the following best describes a debenture?a) A long-term corporate promissory note

b) An investment in the debt of another corporate partyc) A long-term corporate debt obligation with a claim against securities rather than against physical assets


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d) A corporate debt obligation that allows the holder to repurchase the security at specified dates before maturite) Unsecured corporate debt

316. Which combination of the following statements about investment risk is correct?1) Beta is a measure of systematic, non-diversifiable risk.2) Rational investors will form portfolios and eliminate systematic risk.

3)Rational investors will form portfolios and eliminate unsystematic risk.4) Systematic risk is the relevant risk for a well-diversified portfolio.5) Beta captures all the risk inherent in an individual security.

a) Only 1 b) Only 2 c) Both a & c d) Both a , c , d e) None of above

317. Arrange the following financial planning functions into the logical order in which a professionfinancial planner performs these functions.

(1) Interview clients and identify preliminary goals(2) Monitor financial plans(3) Prepare financial plan(4) Implement financial strategies, plans, and products(5) Collect, analyze and evaluate client dataa) 1,3,5,4,2 b) 5,1,3,2,4 c)1,5,4,3,2 d)1,5,3,4,2 e)1,4,5 3, 2

318. The Standard Deviation of the returns of a portfolio of securities will be ____________ the weighted

average of the Standard Deviation of returns of the individual component securities.a) Equal to b) Greater than c) Less than d) Less than or equal to e) Less than, equal to, or greater th

319. According to fundamental analysis, which phrase best defines the intrinsic value of a share of commonstock?

a) The par value of the common stockb) The book value of the common stockc) The liquidating value of the firm on a per share basisd) The stock's current price in an inefficient markete) The discounted value of all future dividends

320. The party to a trust who creates the trust is called the-----a) Grantor b) Executor c)Trustee d)Beneficiary

321. Historically investors have used -------as benchmarks to judge the performance of debt funds.a) Interest Rates b) Bank Deposits c) Bank Deposit Interest Rates

322. Benchmark for -----------is clear & pre-specified by the fund manager in advancea) Debt Funds b) Index Funds c) Balanced Funds d) Income Funds

323. Unit Trust of Indias Index fund is based on ------------- indexa) S&P PCNX Nifty b)BSE Sensex c) None of above

324. --------measures the percentage change in a Bonds price with a Change in yielda) Duration b) Term to maturity c)Both of above

325. Future contracts are contracts fora) Delivery b) Performance c) Differentiation d)Difference e) None of these

326. Forwards contracts are contacts fora)Delivery b) Difference c) Performance d) Differentiation e)None of these


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327. Gilt futures is an example ofa) Blue chip equity futuresb) Gold futuresc) Sovereign Debt futuresd) Corporate bond futurese) None of the above

328. Usually one would sell Bond Futures if one expectsa) Yields to fall b) Prices to rise c) Yields to rise d) Equity prices to fall e) None of the above

329. In Futures terminology, fair value refers toa) The intrinsic value of the futureb) The spot price plus the cost of carryc) The market value of the futured) The convergence of the spot price and the futures pricee) None of the above

330. In Futures terminology, Premium refers toa) The cost of the futureb) The futures price above spot price

c) The futures price above fair valued) The futures price above exercise valuee) None of the above

331. Equity Index futures are used fora) Speculationb) Asset Allocationc) Anticipate Cash Flowsd) Hedginge) All of the above

332. In Options terminology Premium refers toa) The cost of the optionb) The cost of the option over its intrinsic valuec) The cost of the option of in the-money-callsd) None of the abovee) All of the above

333. The buyer of a call option is usually someone who expectsa) The price of the underlying asset to increase from spotb) The price of the underlying asset to decrease from spotc) The price of the underlying asset to fluctuate only a little from spotd) The price of the underlying to fluctuate substantially from spot

e) None of the above

334. Investors in-------------stage prefer long term risky investments (Accumulation)

335.Investors who value safety the most choose ------------- over mutual funds(Bank deposits )

336. PPF account is to be held for a minimum of -------years(15)


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337.Expense ratio is very important for -----------(Interest)

338.Rupee cost averaging means investing ----------amount periodically(fixed)

339.A better performing equity fund will have -------ex marks, --------beta and ---gross dividend yie

(Higher, Lower, Higher)

340. Higher expense ratios lead to ------(Yield Sacrifice )

341.Portfolio turnover is ----- for liquid funds(high)

342.Sharpe-ratio measures return per unit of --- defined by --------( Risk, Standard Deviation)

343.The benchmark for a balanced fund is -------and ------combined in the same proportion as ----

of the fund.( Equity index, Debt index, Asset Allocation)

344.If a fund is assuming higher risk than the market index, its beta will be--------( Higher)

345. Mutual funds should disclose their returns for ---, ---and ---years(1,3 and 5)

346. Illiquid securities should not exceed -----% of the net assets.(15)

347. Valuation of debt instruments with less than 182 days to maturity is done on-------basis(Accru

348.An equity share is considered illiquid if it is not traded for over ------days(30)

349.An asset is non-performing if interest and /or principal is due for over-----months(3)

350. If a single unit holder holds more than -----% of net assets, the numbers of such unit holdersand their percentage holding in the net asserts, have to be disclosed.(25%)

351.Portfolio has to be disclosed to investor once in -----months(Six)

352.Annual report has to be disclosed to investor once in ---- months(Six)

353.Mutual funds cannot pay dividend out of --------. Such amounts are accounted for in the-------account.(Unrealised profit, income equalization)

354. A fund whose initial issue expense is borne by the AMC is called------fund and the AMCreceives -----fee on such funds.(No Load Fund,1%)

355. Dividend has to be accounted for on---------date(Ex-dividend)

356. Investments are accounted for on --------date(Trade)

357. Investments are to be valued at -------cost for determining profit or loss on sale of securities.(Average)358. Net asset computation cannot be impacted by errors in computation arising due to accounting

for accrued income, by more than ----(1%)

359.Investments in sponsor companies cannot exceed ------% of net assets.(25%)


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360. Inter-scheme transfers have to be made at -----price(Market)

361. Mutual funds cannot borrow up to ----% of net assets for a period not exceeding-------(20%,Simonth)

362. Limit on a fund investing in another fund is -----(5%)

363.If-yield curve is sloping up, long term rates are --------than short-term rates.(higher)

364. If credit rating of a bond moves from AAA to AA, its yield will ------and price will-----( Increasfall)

365. If interest rates have gone down current yield will be ---------than coupon rate, (lower)

366. If equity markets move down, dividend yield will move -----(Up)

367. The offer document for an open ended fund is valid for ---------years(Two)

368. The sponsors financial history for ---------years is to be provided in the offer document.(3 yrs)

369. If a scheme invests in unlisted shares, it has to state this as a ----------risk factor.( SchemeSpecific)

370.If units are held by three investors jointly, redemption proceeds are payable to ----(First Hold

371. Long term capital gains without indexation are taxable at --------------------(10% + surcharge)

372. Listed mutual funds have to abide the ----------------of the stock exchanges(Listing Regulations)

373. The AMC and the trustees enter into an -----------agreement( Investment Management)

374. The unit holders are ---------owners and the Trust is the -----------owner of the mutual funds

assets.(Beneficial, Registered)

375. ------------------is appointed before all other constituents(Custodian)

376. If two ------merge, the ----------- stake is altered.( AMCs, Sponsors)

377.The schemes are formulated by------- and approved by ----------(AMC, Trustees)

378. Private sector mutual funds were permitted in the year(1993)

379.Mutual funds can invest only in --------securities.(Marketable)

380.Closed end funds were usually trading at -------to NAV(Discounted)

381. What is the price of a bond, whose face value is Rs. 100, coupon 10%, maturity in 3 years, if tYTM is 14%?

382. The NAV of a fund on June 30th, 2001 was Rs 16.45. Six months later, the NAV had grown to

Rs. 17.985. Using the percentage change in NAV method, calculate the annualised return.


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383. A mutual fund incurs Rs. 9 Crore as initial issue expense for mobilising Rs. 60 Crore. How wthis expense be treated in the books of the fund?

384. The weekly average net assets of a no-load fund are Rs. 650 Crores. As per SEBI regulations,

what is the maximum amount that can be charged towards investment management fees to thefund?

AMFI-questionairre

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