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Mutual Fund ased Questions

1. Explain the structure of a mutual fund?

2. Concept of Entry load and Exit Load?3. How is entry load and exit load calculated?4. Various kind of funds?

a. Index Fundsb. MIPsc. Liquid Fundsd. FMPse. ETFsf. Equity Fundsg. Balanced Fundsh. Floating Rate Mutual Fundsi. Tax Saving Mutual Funds

These are the Debt mutual funds which invests about 75% to 100% insecurities which pay a floating rate interest (bank loans, bonds and other debtsecurities) while the rest is in fixed income securities.

Coupon rate : The stated interest rate on a bond or other debt security whenits issued.

Benchmark rate : A rate used as a yardstick for measuring or setting otherinterest rates.

Expense ratio : A measure of what it costs an investment company to operatea mutual fund.

There are two kinds of floating rate funds long term and short term.o The portfolio of the short-term fund plan is normally skewed towards

short-term maturities with higher liquidity and the portfolio of thelong-term plan is skewed towards longer-term maturities. However,even the longer-term funds are positioned more on the lines of short-term funds and are not very aggressive in nature.

o The MIBOR rate is the weighted average of call money businesstransactions done by 29 institutions, including banks, primary dealersand financial institutions.

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5. What is Systematic Withdrawal plan?6. What is a growth plan?7. What is a dividend plan?8. What is a SIP and how does it work?9. What is Systematic transfer plan?

a. Debt to Equity

b.

Equity to Debt10. What are some of the transparent processes adopted by the mutual funds toprove that the investors money has been mobilized?

11. Do investors know that distributors are paid?12. What is the advantage of FMP?13. Index Funds are passive investments, Why?14. What kind of risks are mutual funds exposed to?

a. Equity Risks : Volatilityb. Debt Fund : Credit Risk and Interest Rate Risk

15. Check List for a mutual fund ?a. Investment objective,b. Asset allocation,c. Investment pattern,d. Features of the scheme,e. Risk factors associated with the scheme,f. Initial issue expenses and recurring expenses to be charged to the

scheme,g. Entry or exit loads,h. Sponsors track record,i. Educational qualification and work experience of key personnel including

fund managers, j. Performance of other schemes launched by the mutual fund house in the

past.16. Regulatory bodies of mutual funds in India?

a. SEBI

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17. Role of AMFIa. Committee on Valuationb. Committee on best practicec. Committee on Operations and Complianced. Committee on Registration of AMFI Certified Distributorse. Committee on Investment Awareness Programf. Committee of Customer Engagement