Nism 5 A - Mutual Fund Exam - Practice Test 6 - Copy - PDF (Secured) - Adobe Reader
Nism 5 A - Mutual Fund Exam - Practice Test 6 - Copy - PDF (Secured) - Adobe Reader
Nism 5 A - Mutual Fund Exam - Practice Test 6 - Copy - PDF (Secured) - Adobe Reader
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TEST DETAILS – The NISM MUTUAL FUND DISTRIBUTORS CERTIFICATION EXAM is a 100 mark exam with 50% as
passing marks. In all 100 questions will be asked with NO negative marking. The time duration is 2 hours.
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NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
PRACTICE TEST 6
Question 3 A Mutual Fund has several schemes running. To avoid more backoffice
work etc. it can put funds of all the schemes in a single bank account -
True or False ?
(a) TRUE
(b) FALSE
Question 4 The benchmark for a Gilt fund investing in Government Securities with
maturities ranging from 1 to 3 years is ___________.
(a) Si-Bex
(b) Mi-Bex
(c) Li-Bex
(d) None of the above
Answer The funds of each scheme has to be maintained in a different Bank Account.
Explanation
Answer ICICI Securities and Finance Company Limited (Isec) has been maintaining
Explanation ICICI Securities Sovereign Bond Index (i-BEX) since 1994 representing gilts
market.
In order to meet specific needs of market participants, it has also been
maintaining short-maturity index (Si-BEX) comprising securities maturing in
one to three years, medium maturity index (Mi-BEX) comprising
securities maturing in three to seven years, and long-maturity index (Li-
BEX) comprising securities maturing later than seven years since March
1996.
These three new indices alongwith a composite index, which is an average of
Si-BEX, Mi-BEX and Li-BEX were chosen by AMFI as benchmark gilt
indices for mutual fund schemes.
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 5 Floating rate debt market securities generally hold their value despite
changes in the yields in the debt market - True or False ?
(a) TRUE
(b) FALSE
Correct Answer 6 30
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 7 The Market Value of a scheme is Rs 240 crores. Dividend accrued but
not received is Rs 30 crore. The Expenses payable are Rs 10 crore. The
total number of outstanding units is 120 lakhs. What is the NAV of the
scheme ?
(a) 175.8
(b) 216.66
(c) 224.7
(d) 311.74
Correct Answer 8 Custody of his share of the portfolio in his demat account
Answer Mutual Fund investors do not get shares in their demat account.
Explanation
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 10 Mr. Mohit invested Rs 5000 in a Mutual Fund on 1 Jan 2011 and when
he redeemed on 31 Dec 2012 he got Rs 12000. Calculate the CAGR.
(a) 54.90%
(b) 69.75%
(c) 70.80%
(d) 125%
Answer Mutual Funds in India have not constituted any SRO for themselves.
Explanation Therefore, they are directly regulated by SEBI.
AMCs in India are members of AMFI, an industry body that has been created
to promote the interests of the mutual funds industry. AMFI is not an SRO.
Question 13 Investors of debt oriented mutual funds do not have to pay STT - True
or False ?
(a) TRUE
(b) FALSE
Question 14 ' Not more than 25% of the Net Assets will be invested in the Derivatives
Market' - This statement best describes ___________.
(a) Investment Interest
(b) Investment Objective
(c) Investment Policy
(d) Investment Strategy
Question 15 A Mutual Fund scheme has equity shares of ICICI Bank in its portfolio.
For calculation of NAV, which of the following prices will be considered
?
(a) The closing price of ICICI Bank on Regional Stock Exchanges on the day of
calculation of NAV
(b) The closing price of ICICI Bank on BSE / NSE on the day of calculation of
NAV
(c) The Average trading price on Regional Stock Exchanges on the day of
calculation of NAV
(d) The Average trading price on BSE/NSE on the day of calculation of NAV
Correct Answer 15 The closing price of ICICI Bank on BSE / NSE on the day of calculation of
NAV
Question 17 The unit capital in an open ended fund keeps changing on a regular
basis - True or False ?
(a) TRUE
(b) FALSE
Question 18 People who are better able to take the downside that comes with risk are
those who have a ____________.
(a) Daring and adventurous psyche
(b) Multi-skilled and qualified professionals
(c) Regular source of income
(d) All of the above
Question 19 The unit holder who has given his money to the Mutual Fund can decide
what securities or investments the scheme would buy - True or False ?
(a) TRUE
(b) FALSE
Answer The unit holder can never decide which investments the fund should buy.
Explanation The Fund Manager / Concerned Authority decided on the investments.
Question 21 What is the sale price of the additional units bought by an investor of an
open ended scheme?
(a) More than NAV
(b) Less than NAV
(c) Equal to NAV
(d) 2.5 % more than NAV
Question 22 Arbitrage funds are meant to give better equity risk exposure - True or
False ?
(a) TRUE
(b) FALSE
Answer Arbitrage Funds are not meant for equity risk exposure, but to lock into a
Explanation better risk-return relationship than liquid funds – and take the tax benefits
that equity schemes offer.
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 24 The NSEs platform for Mutual Fund trading is called NEAT MFSS -
True or False ?
(a) TRUE
(b) FALSE
Answer Longer the maturity of a debt security, higher would be its interest rate
Explanation sensitivity.
Therefore, weighted average maturity of debt securities in a scheme’s
portfolio is indicative of the interest rate sensitivity of a scheme.
(Also in the above question all the other three options are related to Equity
Fund)
Question 26 The Mutual Fund distributor can charge a fee from the investor - True
or False ?
(a) TRUE
(b) FALSE
Answer As per new rules : Upfront commission to distributors will be paid by the
Explanation investor directly to the distributor, based on his assessment of various factors
including the service rendered by the distributor.
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Answer STT ie. Securities Transaction Tax on purchase or sale of equity shares in
Explanation stock exchange is 0.1%
STT on sale of futures & options in stock exchange is 0.01%
Question 29 Fundamental analysis can be effectively used for Intra Day Trading -
True or False ?
(a) TRUE
(b) FALSE
Answer It is generally agreed that longer term investment decisions are best taken
Explanation through a fundamental analysis approach.
Technical analysis is generally used for shorter term speculative decisions,
including intra-day trading.
Answer It is generally agreed that longer term investment decisions are best taken
Explanation through a fundamental analysis approach.
Technical analysis is generally used for shorter term speculative decisions,
including intra-day trading.
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 34 Offer documents of mutual fund schemes are approved by SEBI - True
or False ?
(a) TRUE
(b) FALSE
Answer Offer Documents in the market are “vetted” by SEBI, though SEBI does not
Explanation formally “approve” them.
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 35 _____________ assumes that all dividend payouts are re-invested in the
scheme at the ex-dividend NAV.
(a) Compounded Returns
(b) Compounded Annual Growth Rate
(c) Annualised Returns
(d) Simple Returns
Question 36 Nomination and Pledge options are not available for mutual fund
investors - True or False ?
(a) TRUE
(b) FALSE
Answer Nomination and Pledge options are available for mutual fund investors.
Explanation
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Correct Answer 38 10
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
Question 39 ELSS schemes should contain the least amount of Ill Liquid Investments
- True or False ?
(a) TRUE
(b) FALSE
Question 40 Anyone who is aggrieved by a ruling of SEBI, can file an appeal with the
Ministry of Finance - True or False ?
(a) TRUE
(b) FALSE
Answer Open-ended scheme, which have a greater need for liquidity because
Explanation investors can offer their units for re-purchase at any time - should have the
least amount of ill liquid investments in their portfolio.
ELSS Schemes have a lockin period of three years - so the fund manager can
buy more illiquid investments if he feels there is great potential in them in the
long run.
Answer Anyone who is aggrieved by a ruling of SEBI, can file an appeal with the
Explanation Securities Appellate Tribunal (SAT).
NISM SERIES V A – MUTUAL FUND DISTRIBUTORS
CERTIFICATION EXAM – PRACTICE TEST 6
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