Set 1

1) Which type of fund’s investment objective could be – ‘To achieve growth by investing in equity and
equity related investments, balanced with income generation by investing in debt and money market
instruments’?

a. Arbitrage Fund
b. Money Market fund
c. Equity Fund
d. Balanced Fund

2) ___________________gives the investor exposure to international assets.

a. Index funds
b. ELSS Fund
c. International Funds
d. Arbitrage Funds

3) When a Mutual fund scheme makes profits or losses, who do these profits and losses belong to?

a. The AMC
b. The Trustees
c. The Fund Manager
d. The Investor

4) ______________ is/are included in the Key Information Memorandum (KIM).

a. Name of the fund manager, trustees etc.

b. Performance of schemes
c. Asset allocation plan
d. All of the above

5) Who appoints the trustees of a Mutual Fund?

a. RBI
b. SEBI
c. Sponsor
d. AMC
6) In the 'Married with Young Children' life cycle stage, what will be the impact of additional children on
the insurance requirement of an individual?

a. Insurance requirement will increase

b. Insurance requirement will decrease
c. Insurance requirement will increase for the first two children and then remain same
d. Insurance requirement will remain constant

7) Gold futures contract _____________

a. are traded in commodity exchanges

b. are not standardized contracts
c. are available through mutual funds
d. None of the above

8) From the listed below, _______________ has the highest credit risk

a. High yield funds

b. ELSS Funds
c. Gilt funds
d. Index funds

9) Which of the following is an important aspect of an OFFER DOCUMENT?

a. To inform the investors about the AMC's views on Stock Markets

b. To inform the investors on the performance of the scheme
c. To provide a comparison of the schemes
d. To inform the investors on the detailed information about the scheme

10) __________________ Is Not A Fair Selling Practice By A Mutual Fund Distributor

a. Informing the investor of the various investment options

b. Carefully understanding the clients financial needs
c. Encouraging the churning of investments
d. Giving personalised after sales service

11) 'Stock Picking' Approach Is Similar To_________?

a. Blended style of investment

b. Growth style of investment
c. Top down approach of investment
d. Bottom up approach of investment
12) With Respect To Kim - Key Information Memorandum, Which Of The Following Statement Is Not True?

a. KIM is basically an abridged version of the offer document

b. KIM basically contains only the names of Sponsor, Trust and AMC and not their functions
c. The KIM is attached to each and every mutual fund application form
d. KIM has to be provided only if the investors ask for it

13) In which type of fund is the risk of an investor not selecting the correct sector maximum?
a. Thematic Funds
b. Sector Funds
c. Arbitrage Funds
d. Index Funds

14. A person who wants to have a risk cover for a long term horizon should opt for _______________

a. investment in Gold
b. Life insurance
c. Equity Mutual Funds
d. Bank Fixed Deposits

15. The NAV which is applicable for processing a mutual fund transaction depends on _______________

a. The type of scheme

b. The day of transaction
c. The time of transaction
d. All of the above

16. What does a portfolio which has beta less than 1 mean?

a. Highly risky as compared to market

b. More risky than market
c. Less risky than market
d. Same risk as that of market
 17.________ investment style involves buying stocks which are valued lower as per fundamental
analysis.
a. Tactical
b. Growth
c. Cyclical
d. Value

18. The dividend declared on units under lien is paid to ______________

a. always to the lien holder

b. always to the unit holder
c. the lien holder or the unit holder as per the agreement
d. Units under lien do not receive any dividends

19. One of the below options is a function of AMFI - which one ?

a. To manage the investor protection fund

b. To compute the NAV
cTo make available the data on AUM, NAV and other data of the mutual fund industry.
d.To regulate insider trading

20. A person wishes to avail of a loan. For which of the below options he cannot get a loan ?
a. To start a Pharma factory
b. To buy a car of value above Rs 20 lacs
c. To buy a high priced lottery ticket
d. To buy a house in a Union Territory

21. What is the role of the custodian ?

a. To issue account statements to the MF unit holders
b. To keep the safe custody of the securities of the mutual fund scheme
c. To issue statement of funds holding to the investors
d. To execute the buy and sell orders in the stock market

22. An investor who has a long term view and is looking for capital appreciation and also has high risk
tolerance should opt for investments in _______________
a. Gold
b. Equities
c. Fixed Deposits
d. High interest bearing junk bonds
 23. By investing in mutual funds an investor uses the services of _______________
a. a professional actuary
b. a professional insurance agent
c. a professional investment manager
d. a professional tax planner

24. The Offer Document will NOT give any information on ____________
a. The risk factors of the scheme
b. The name of stocks in which the scheme is likely to invest
c. Investment objectives of the scheme
d. The features of the portfolio of the scheme

25. The NAV of a mutual fund unit changes every day due to changes in _____________
a. number of investors in the mutual fund
b. market value of the mutual fund portfolio
c. the size of the portfolio
d. the units remaining in the portfolio

25. The difference between the yield on Gilt and the yield on a non-Government Debt security is called
its __________________
a. YTM
b. Credit Spread
c. Yield to Call
d. Risk Spread

26. Who cannot invest in Mutual Funds in India ?

a. Minors
b. HUFs
c. NRIs
d. All of the above

27. The lock in for Equity Linked Savings Scheme (ELSS Funds) is ______________
a. 1 year
b. 2 years
c. 3 years
d. 5 years
 28. When should an investor adopt a strategy of limiting equity exposure to index funds ?
a. In the Accumulation phase
b. In the Retirement phase
c. In the Sudden wealth phase
d. None of the above

29. An ongoing bond fund will lose value when the interest rates in the market ____________
a. Rise
b. Fall
c. remains same
d. will be equal to yields

30. Inflation Risk is also referred as __________________

a. Credit Risk
b. Liquidity Risk
c. Purchasing Power Risk

31. Which of these investors is/are exempted from proving PAN details for investments in Mutual
Funds?
a. Systematic investment plans, where annual investment does not exceed Rs 50000
b. Investors residing in the state of Sikkim
c. Transactions undertaken on behalf of Central/State government
d. All of the above

32. A mutual fund has the policy of imposing an exit load of 2% for redemption upto one year and 1% for
redemptions beyond one year. If an investor redeems 2000 units at an NAV of Rs 40 at the end of six
months from the date of investment, what will be redemption amount receivable by the investor?
a. Rs. 76500
b. Rs. 79200
c. Rs. 80000
d. Rs. 78400

33. Commodity as an Asset Class does not include ___________________

a) Fibre b) Spices c) Energy d) Art

34. 5 Star Fund indicates ____________________

a) Lowest Expenses Ratio b) Lowest Load c) Highest performance

d) Best portfolio
35. NAV changes with ______________________

a) Number of investors b) Number of investors remaining invested size of portfolio

c) of portfolio d) Market value of portfolio

36. Investor selects an MF based on matching __________________

a) investment philosophy b) investment policy

c) Investment objective d) Investment Strategy

37. Indian investors in a US $ based fund will benefit when $ becomes __________________

a) Weak b) Strong c) Euro becomes weak d) Steady

38. Securities of a fund are held by ________________

a) Custodian b) AMC c) R&T d) Broker

39. Risk may be defined as ________________

a) Asset Allocation b) High Transaction cost c) Portfolio Balancing

d) Probable financial loss

40. Financial Planner finds that client does not have resources to meet his goals. He should _______

a) Inform the client b) Avoid telling as client will be disheartened

c) Avoid telling as he may lose client

d) Increase risk to generate higher returns to meet goals

41. Which of the following is withdrawable in NPS?

a) TIER I b) TIER II c) TIER III d) Tier IV

42. KYC is required for investment more than _______________

a) 50000 b) 5000 c) 100000 d) Any Amount

43. Which of these distribution channel does not have wide branch network?

a) Bank b) Distribution Houses c) Broking Company

 d) IFA

44. Which of the following is not a function of R&T?

a) Process Dividend and Redemption b) Maintain the records

c) Setting investor transaction fund d) calculation of NAV

45. AM Fl interacts with ______________ on all issues related to MF industry.

a) RBI b) SEBI c) Government d) Ministry of Finance

46. CVL system generates acknowledgement along with __________________

a) PAN b) MIN c) KYC d) Folio

47. High portfolio turnover ratio implies ___________________

a) High Cost b) Low Expenses c) High Returns

d) Non Performance

48. Benefit of Demat account is ____________________

a) Direct credit of bonus units b) Single point of contact for change of address

c) Single point for portfolio valuation d) All of the above

49. What determines the interest rate sensitivity?

a) Credibility b) Quantity c) YTM d) Avg Maturity

50. Investing in Gold ETF helps _________________

a) Generate high returns b) Not permitted in India

c) Provide Risk Cover d) Reduce Storage cost and risks

51. Which of these activities are carried out before getting SEBI approval?

a) Updating SID with NFO dates

b) Approval of the features by trustee and AMC board

c) Dispatch product literature d) Printing KIM and application form

52. Which of the following funds has the highest risk?

a) Equity Fund b) St Debt fund c) Income Fund d) Liquid fund

53. What is the drawback of PPF?

a) One withdrawal at the end of 7 th year b) Interest and withdrawal are not taxable

c) Half yearly compounding interest d) Not guaranteed by government

54. Commission paid at the time of investments are called as _______________

a) Upfront Commission b) Rebate c) Trail d) AUM Return Fee

55. Settlement responsibility in BSE/NSE platforms are with ________________

a) AMC b) Clearing House c) Stock Exchange d) Member

56. Which of the following information does the time stamp include?

a) Machine Identifier b) Location Code c) Serial No

d) All of the above

57. Closed ended funds has _______________

a) Fixed AUM b) Fixed Unit Capital c) Fixed NAV

d) Assured Dividends

58. To which of the following PAN does not apply?

a) PIO b) NRI c) Minor & Senior Citizen d) None of the above

59. Father wants to start his own business, This is _________________

a) Asset Allocation b) Financial Goal c) Appreciation

d) Financial Planning

60. Liquidity Risk arises in _______________________

a) Closed ended funds has b) Open ended funds c) Gold

d) Debt
61. A mutual fund is ________________________

a) a pool of trust money b) A pool of investment institutions

c) A pool of investment managers d) A pool of investment funds

62. Names and background of key personnel in AMC are ______________

a) not included in SID b) Declared on website c) Are included in SAI

d) Are not so relevant to disclose

63. STCG in gold is applicable if the holding period is less than _____________________

a) 12 months b) 36 months c) 6 months d) 9 months

64. ___________ allots ARN Number

a) AMC b) AMFI c) SEBI d) NISM

65. Application for MF would be rejected if paid in ___________________

a) Cheque b) DD c) Cash d) Online payment

66. Role of credit rating agencies is highest in _________________

a) Debt fund b) Gold Fund c) Real estate fund d) Equity Fund

67. In which of the following transactions a 'Transaction charge’ can be deducted?

O Online purchases

O Systematic transfer plan (STP) transaction

O Purchases of Rs 10000 or more

O Purchase made on stock exchanges

68. The unaudited accounts of the Mutual Fund schemes must be published once in every six months
___________

O on the AMC website

Oon the AMFI website

O in a minimum of 2 newspapers

OAII of the above

69. Amit does not have a PAN Card. He wishes to invest Rs 1 lakh in a mutual fund scheme. He does not
fall into any exempt investor category. In which way can he invest?

O He cannot invest as PAN Card is mandatory

O He can sign up for a SIP and get an exemption from the requirements of a PAN card

O He can provide additional prescribed photo proofs like the Aadhaar, Voter Id etc.

70. Which document is NOT required for the KYC process by a mutual fund investor?

O Proof of Income

OProof of Address

O Proof of Identity

O PAN Card

71. One of the disclosure which an AMC has to make is _________________

Othe commission paid to the distributors in the financial year on the website of AMC

Othe distributor wise amount mobilized in the financial year on the website of AMC

Othe annual report (scheme wise) and the abridged summary on the website of AMC

OAII of the above

72. What exception is made for investments by Systematic Invest Plans, if the annual investment is
below Rs 50000?

O KYC is not required to be done

O Photo identity is not required

O PAN Card is not required

O None of the above

73. Which is the most appropriate measure of evaluating how closely an index fund is tracking its
benchmark?

OTotal Expense Ratio (TER)

OAssets Under Management (AUM)

OTracking error

O Treynor ratio

74. Who issues the ’Certificate of Deposit'?

O Reserve Bank of India

O Asset Management Company

O SEBI

O Commercial Banks

75. Which of the below is /are not the FUNDAMENTAL ATTRIBUTES of a scheme?

OThe type of scheme

O Investment objective(s) of the scheme

O Terms of the issue

O treated as incomplete application and will be returned to the investor for completion

76. The first step in developing a model portfolio is __________________

O Deciding the size of portfolio

O Selection of the Mutual Fund schemes

O Setting of goals

O None of the above

77. If the ARN code is not mentioned and choice of plan is not indicated in the application form, then the
allocation will be __________________

O processed as a Direct Plan application

O rejected
O processed as a Regular Plan application

O treated as incomplete application and will be returned to the investor for completion

78. Which of these assets has the highest risk of loss through theft?

O Real Estate

O Commercial papers

O Shares and Debentures

O Gold

79. Which of the below is used to measure risk-adjusted performance?

O Sharpe Ratio

O Standard Deviation

O R-squared

OBeta Coefficient

80. What is the Total Expense Ratio for an Index fund or an ETF?

O Total Expense Ratio shall not exceed 1.00 per cent of the daily net assets.

O Total Expense Ratio shall not exceed 2.00 per cent of the daily net assets.

O Total Expense Ratio shall not exceed 1.5 per cent of the daily net assets.

O Total Expense Ratio shall not exceed 0.50 per cent of the daily net assets.

81. If an investor in a Multicar Fund wants to know the industry wise allocation of the funds then which
document should he refer to?

O Fund Factsheet

O SID and SAI

O Investment management agreement

O Annual accounts of the AMC

82. Commodities as an asset class does not include _____________

OFood Crops

O Industrial Metals

OGold

O Real Estate

83. Identify which of these statements is / are FALSE ?

A) Banks and mutual funds both offer the Gold Deposit Scheme

B) Gold ETFs are closed ended funds

O Only A is false

OOnly B is false

O Both A and B are false

84. An investor in debt oriented mutual fund receives the benefit of ______________

A) Indexation

B) Tax exemption

O Only A

O Only B

O Both A and B

85. The valuation of Illiquid securities held by a Mutual Fund is done as per ________________

O the last traded price of that security on BSE or NSE

O the norms prescribed by SEBI to arrive at a fair valuation

O the average price of bid and ask quotation

O the lowest price calculated as per the above three methodsQ

86. If a charitable trust wishes to invest in a Mutual Fund, which amongst the following documents is not
required to be submitted ?

O Memorandum and Articles of Association

O Trust Deed

O Board Resolution authorising the investments

O List of authorised signatories

87. Risk appetite increases as the number of earning members _________________

O decreases

O increases

O becomes zero

O None of the above

88. Mr. Gupta invests Rs 1 crore in a Gilt Mutual Fund scheme and gives a local cheque at 1 pm. Which
will be the applicable NAV for allotment of units to Mr. Gupta ?

O Closing NAV of the day on which the application was made

O NAV of the business day on which the funds are available for utilisation before the cut-off time of
that day is applicable.

O Next business day NAV

O Closing NAV of the day immediately preceding the application day.

89. Which is the ideal investment class for an investor who wishes to have an edge against inflation and
has a long term perspective ?

O Bluechip Equity Shares

OGold

O Real Estate

O Government Bonds

90. As per SEBI rules, the NAV has to be published_________, in at least _____________ circulation all
over India.

Odaily , 4

O weekly , 2

Odaily , 2

O weekly , 4

91. While making a Comprehensive Financial Plan, ________________

O High time commitment is required from the investor / client

O High time commitment is required from the planner

O High time commitment is required both from the client and planner
O Not much time commitment as all the planning is done in the computer

92. Investors in Mutual Fund are not responsible for __________________

O monitoring their investments regularly

O checking the risk factors before investing

O reading the offer documents carefully

O Taking investment decisions of behalf of the fund manager

93. While doing an asset allocation for an investor, which amongst the following factors will have the
least importance?

O RBI's announcement that there could be huge recession

O RBI's announcements of changes in interest rates

O Bonus issued by one of the MF schemes

O Changes in prices of equity shares

94. Risk Appetite is influenced by which financial factor(s) ?

O Capital Base

O Regularity of Income

OBoth 1 and 2

O None of the above

95. Amongst the below given options, which one is NOT an example of Transition Phase?

O house to be purchased

O trying to get a better job

O children’s higher education

O marriage approaching

96. The Scheme Information Document (SID) prepared by the AMC is approved by ______________

OSEBI

O Board of Trustees

O Sponsors

O Stock Exchanges

97. Due to the Index scheme’s performance could be higher or lower than that of the benchmark.
O Market Volatility

OBull Run

OTracking Error

O Systematic Risks

98. The trustees in an AMC cannot make any change in the fundamental attributes of a scheme, unless
approval is received from ________________

O Unitholders

OSEBI

OSponsor

O Fund Manager of that scheme

99. The current market value of the stocks of a Mutual Fund scheme portfolio is Rs 12 cr and the current
liabilities are 7 cr. The unit capital is Rs 10 cr and the face value per unit is Rs 10. What is the current
NAV of this scheme?

ORs 10

ORs 12

ORs 19

ORs 5

100. While deciding on investments for his clients, what should be the right sequence?

O Selection of Scheme - Risk Profiling - Making a Model Portfolio

ORisk Profiling - Making a Model Portfolio - Selection of Scheme

O Making a Model Portfolio - Risk Profiling - Selection of Scheme

O Selection of Scheme - Making a Model Portfolio - Risk Profiling