ISFM Mutual Fund Mock Test

International School of Financial Markets
Mutual Fund questions Bank
Reg. office: Plot no. 152 - P (LGF), Sec – 38, Medicity Road, Near Medanta Hospital
Contact No. - 0124-2200689, +919540008689, +918368025252, +919953147497
Web: www.isfm.co.in
ISFM Mutual Fund Question Bank
1. A close-ended mutual fund has a fixed : c. on a stock exchange where the fund is
a. NAV listed
b. fund size d. to the agent through which he/she
c. rate of return subscribed to the units of the fund
d. number of distributors
9. The "load" charged to an investor in a mutual fund
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2. The maximum load that a fund can charge is is
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determined by the : a. entry fee
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a. AMC b. cost of the paper on which the unit
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b. SEBI certificates are printed
c
c. AMFI c. the fee the agent charges to the investor
d. distribution agents based on demand for the
fund
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d. the expenses incurred by fund managers
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for marketing a mutual fund scheme
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3. The amount required to buy 100 units of a scheme
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10. A mutual fund is owned by
68
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having an entry load of 1.5% and NAV of Rs.20 is : a. the Govt. of India
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a. Rs.2000 b. SEBI
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b. Rs.2015 c. all its investors
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c. Rs.1985 d. AMFI
d. Rs.2030
c k
4. A gilt fund is a special type of fund that invests :
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11. Units from an open-ended mutual fund are bought
a. on a stock exchange
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a. in very high quality equity only b. from the fund itself
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b. in instruments issued by companies with a c. from AMFI
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sound track record d. from a stock broker
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c. in short-term securities
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d. in government securities only 12. A mutual fund is not
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a. owned jointly by all investors
B
associated with
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5. Of the following fund types, the highest risk is b. a company that manages investment
portfolios of high networth individuals
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a. Balanced Funds
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c. a pool of funds used to purchase securities
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b. Gilt Funds on behalf of investors
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c. Equity Growth Funds d. a collective investment vehicle
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d. Debt Funds
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6. The NAV of a mutual fund:
.
a. at the time of the investor's entry into the
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a. is always constant fund
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b. keeps going up at a steady rate b. as a fixed amount each year
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c. fluctuates with market price movements c. at the time the investor exits the fund
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d. cannot go down at all d. from the fund's distribution agent
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7. An open-ended mutual fund is one that has: 14. The most important advantage of a money market
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a. an option to invest in any kind of security mutual fund is
b. units available for sale and repurchase at a. quick capital appreciation
all times b. high regular income
c. an upper limit on its NAV c. safety of principal
d. a fixed fund size d. no loads
8. An investor in a close-ended mutual fund can get 15. Some close-ended funds are quoted at a discount
his/her money back by selling his/her units: to their NAV because
a. back to the fund a. of high expense ratios
b. to a special trust at NAV b. investors do not expect the current NAV
to be sustained in future
Reg. office: Plot no. 152 - P (LGF), Sec – 38, Medicity Road, Near Medanta Hospital Contact No. - 0124-2200689, +919540008689, +918368025252, +919953147497
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c. the repurchase price fixed by the fund in b. gilt funds
lower than the NAV c. growth funds
d. of the inherent risk involved in investing in d. balanced funds
such type of funds
24. A Systematic Withdrawal Plan, allows investors
16. The NAV of each scheme should be updated on to get back the principal amounts invested in addition
AMFI's website to the income on investment
a. every quarter a. True
b. every month b. False
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c. every hour
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d. every day 25. Which of the following is untrue of an automatic
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reinvestment plan?
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17. Debt funds target a. The plan allows for automatic reinvestment
c
a. low risk and stable income of all income and capital gains
b. protection of principal
c. high growth with risk
b. Automatic reinvestment allows for
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accumulation of additional units of the fund
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d. long term capital appreciation c. The major benefit of automatic reinvestment
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is compounding
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18. In which of the following do debt funds not invest d. The benefit of automatic reinvestment is
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a. government debt instruments often lost on account of the heavy load
,
b. corporate paper charge on the reinvestment
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c. financial institutions' bonds
d. equity of private companies 26. Constraints imposed by most funds on check
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19. Which of the following risks do not affect a debt
writing are:
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a. Account balance should not fall below the
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fund minimum capital required
a. default by issuer on payment of interest or b. Checks issued must be for at least the
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principal minimum amount specified.
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b. price fluctuations of the debt securities c. Number of checks per month must not
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c. share price movements exceed a specified number
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d. interest volatility d. Both a & b above
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20. Assured return or guaranteed monthly income 27. The performance of a fund is largely measured by
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plans are essentially
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the success of
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a. Hybrid funds a. the marketing function
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b. Growth Funds b. the operations function
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c. Debt/Income funds
d. Sector funds
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c. the portfolio market function
d. none of the above
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21. A Fixed Term Plan Series is 28. Generally invest in
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a. an open-ended fund a. unlisted
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b. a close-ended fund b. market-traded
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c. a fixed term bank deposit c. thinly traded
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d. a fixed term corporate bond d. privately placed
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a. Stock market movements
b. Events affecting the industry/sector in which
29. Which of the following is not an equity
instrument
a. preference shares
the fund has invested b. equity warrants
c. Happenings in the companies in which the c. ordinary debentures
fund has invested d. convertible debentures
d. real estate prices
30. The drawback of an ordinary share is
23. The greatest potential for growth in capital is A. possibility of capital appreciation
offered by B. ownership privilege of the company
a. debt funds C. guaranteed dividend income
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D. no guaranteed income or security
38. Dividend yield for a stock is
31. An owner of preference shares is given which of a. dividend per share
the following rights b. dividend per face value
a. voting rights c. dividend per share to current market
b. fixed dividend income from post-tax price
profits d. none of the above
c. voting rights and unlimited dividend income
d. no guaranteed rights 39. Value stocks
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a. have high current dividend yield
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32. Market capitalisation of a company is calculated b. yield high growth in earnings
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by multiplying the number of outstanding shares by c. are currently under valued
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a. R.10 d. none of the above
c
b. Face value of each share
c. Current market value of each share
d. dividend yield
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given by
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40. A better performance than the return on index is
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a. passive fund manager
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33. The Price/Earnings (P/E) Ratio is an important b. an active fund manager
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measure of a company's anticipated performance. It is c. all fund managers
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calculated using: d. non fund manager
,
a. Market price and dividend
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b. Market price and earning per share 41. A change in key personnel especially the fund
c. Market capitalisation and dividend manager of an AMC does not necessitate a revision
d. Market price and face value
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of the offer document
6a. True
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34. A company whose earnings are strongly related to b. False
the state of economy is known as
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a. Economy stocks 42. If fresh litigation cases or adjudication
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b. Cyclical Stocks proceedings are referred by SEBI against the fund
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c. Value Stocks sponsors or a company associated with the sponsors,
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d. Growth stocks then the offer document needs to be revised
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35. A Growth stock refers to shares of a company
a. True
b. False
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whose earnings are projected to grow at the normal
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market rates 43. The offer document need not be revised if the
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a. True management or the controlling interest in the AMC
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b. False
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change
a. True
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36. Which of the following is generally true for a
.
b. False
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growth stock?
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a. steady capita appreciation and steady 44. An AMC cannot explain adverse variations
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dividends yields between expense estimates for the scheme on offer
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b. high capital appreciation and high dividend and actual expenses for past schemes in
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yields a. financial newspapers
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c. high capital appreciation but low b. business channels on TV
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dividend yields c. the offer document
d. steady capital appreciation but high dividend d. AMFI newsletter
yields
45. Information on estimated expenses to be incurred
37. Shares of companies with large capital market by a scheme is not found in the offer document, but
capitalisation in brochures of the fund
a. have greater growth potential a. True
b. are more liquid b. False
c. are not available
d. none of the above 46. When comparing a fund's performance with that
of its peer group, the following cannot be compared
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a. Two debt funds with 5 year maturities h. change with change in the AMC's key
b. A broad-based equity fund with an IT personnel
Sector Fund
c. A bond fund with a bond 54. The investment policies listed out in the offer
d. A government securities fund with a document of a fund do not include
government security e. the type of securities in which the scheme
will invest principally
47. An AMC must explain adverse variation between f. asset allocation pattern
expense estimates for the scheme on offer and actual g. policy of diversification
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a. expenses for past schemes in h. the specific securities in which the fund
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b. financial newspapers will invest
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c. business channels on TV
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d. offer document 55. If a scheme's name implies that it will invest
c
e. AMFI Newsletter primarily in a particular type of security or in certain
48. Information on estimated expenses to be incurred
by a scheme is not found in the offer document, but
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industry/sector, then it should invest at least the
following percentage of its total assets in the
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in brochures of the fund indicated type of security/industry/sector
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a. True e. 100%
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b. False f. 80%
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49. The offer document and key information g. 65%
,
memorandum contain financial information for h. 40%
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a. all schemes of all mutual funds in the capital
market 56. For assured return schemes, information about the
c k
b. all schemes launched by the particular
fund during the last 3 fiscal years
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guarantor's net worth which justifies the guarantor's
ability to meet any shortfalls in the returns assured
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c. none of the schemes under the scheme can be found in
d. companies in which investment is proposed e. the offer document
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50. The functions and responsibilities of the sponsor, f. the key information memorandum
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AMC, trustees and custodian of the mutual fund are g. both (a) and (b)
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listed in h. none of the above
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a. offer document only
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b. key information memorandum
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c. both offer document and key information
57. The names and background of key personnel of
the AMC
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memorandum
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e. need not be disclosed to investors
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d. none of the above f. are of no relevance as they may change
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51. Information about trusteeship fees is included in g. are disclosed in the offer document
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the offer document but not in the key information
memorandum
h. are declared in newspaper advertisements
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e. True
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f. False maximum target amount
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e. are not known before the offer is concluded
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52. The following information about the constitution f. can be decided based on investor response to
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of the mutual fund is found in both the offer the offer
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document and key information memorandum g. are defined as per SEBI Regulations
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e. activities of the sponsor before the offer is made
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f. summary of trust deed provisions h. need not be disclosed in the offer document
g. name and addresses of the board of trustees
h. all of the above 59. The circumstances for refund of investment in the
initial offer and period within which refund must be
53. The investment objectives of the fund an investor carried out are not specified in the offer document,
selects for investment but only on the application
e. are of no relevance e. True
f. should be the same as his own investment f. False
objectives
g. change with market movements 60. Offer related information required to be listed in
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the offer document and key information g. 25%
memorandum includes h. 10%
e. dates of opening, closing, earliest closing,
allotment and despatch of certificates 67. Mutual funds are allowed to borrow
f. procedure for transfer and transmission of e. freely to meet their requirements
units f. for investment purposes
g. both the above g. only to meet redemption demands
h. neither of the above h. not allowed at all
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61. In the offer document, funds are required to make 68. As a part of borrowing policy, the following need
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disclosures summarizing associate transactions and not be disclosed in an offer document
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their impact on the performance of the scheme for the e. purpose and circumstances of borrowing
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last f. regulatory limits on borrowing
c
e. one fiscal year g. potential risk to AMC and unit-holders
f. 2 fiscal years
g. 3 fiscal years
h. names of lenders
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h. 5 fiscal years 69. Valuation norms for non-traded securities should
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be disclosed
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62. The circumstances under which a scheme shall be e. at the end of every financial year
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wound up are to be described in the offer document at f. every quarter
,
the time of the initial launch of the scheme itself g. in the offer document at the time of
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e. True launch of the scheme
f. False h. should not be disclosed, being confidential
c k
63. The following do not form a part of the
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information
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investment procedure described in an offer document 70. Procedure for redemption or repurchase need not
e. various plans under the scheme (e.g. e. be described in the offer document
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dividend reinvestment plant) f. include how redemption or repurchase price
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f. minimum initial (and subsequent) of units would be determined
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investment g. include names of centres where redemption
e
g. details of who can invest can be effected
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h. details of other competing mutual funds h. indicate the redemption or repurchase
price as at the end of the current fiscal
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64. A scheme's policy on dividends and distribution
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year
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e. is decided by the fund manager as per is
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market outlook 71. The fund need not describe its accounting policies
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the AMC
f m
f. can be changed to suit the requirements of in the offer document as these are of no use to an
investor
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g. need not be consistent
.
e. True
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h. should be disclosed at the time of initial f. False
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launch
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72. The accounting policies of a fund should be in
4
65. SEBI restricts mutual fund investments in accordance with
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companies forming part of the same group as the e. GAAP
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AMC. This is: f. SEBI regulations
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e. not true g. ICAI Guidelines
f. in the interest of investor protection h. American GAAP
g. applied only to some mutual funds, not all
h. not favourable to investors at all 73. Tax treatment of investments does not
e. form a section in the offer document
66. A disclosure should be made in the offer f. describe the tax elements applicable to
document if an AMC has invested more than the investors who invest in the fund
following percentage of its net assets in group g. form a section in the key information
companies memorandum
e. 50% h. offer tax advice to investors
f. 40%
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g. if Ministry of Finance approves
74. Documents available to investors for inspection h. if AMFI approves
do not include
c. Memorandum and Articles of Association of 83. Who among the following are not Institutional
AMC Investors
d. consent of auditors and legal advisors e. Banks
e. investment management reports f. Resident Individuals
f. reports based on which actual g. Provident Funds
investments are made h. Non Banking Finance Companies
75. Investors' rights under a scheme are
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84. It is compulsory to use fund agents/intermediaries
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e. uniform for all schemes of all funds for investing MFs
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f. not defined e. True
c
g. listed in the offer document f. False
h. available with stock exchanges
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85. Generally, which category of investors need
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76. The offer document for a scheme should describe advice for Investing in Mutual Funds
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how the NAV of the scheme is to be computed c. Non Banking Finance Companies
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e. True d. Insurance Companies
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f. False e. Foreign Institutional Investors
,
f. Individuals
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77. An offer document contains an AMC's investor
grievance's history for the past 86. Most eligible investors of Mutual Funds can
e. one fiscal year
f. 2 fiscal years
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broadly be grouped into either individual or
institutional investors
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g. 3 fiscal years e. True
h. six months f. False
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78. Any pending cases or penalties levied on the
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sponsors or AMC should be disclosed in the offer investors and small investors are
e
document e. same
e. True
f. False
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g. not charges to either
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h. none of the above
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79. Who among the following are not eligible to
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invest in MF 88. What document Mutual Fund distributors need to
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e. Indian Companies
f. Banks
f m
refer for finding out eligible category of investors in a
particular Mutual Fund Scheme
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g. Non Banking Finance Companies
.
e. SEBI Regulations Manual
2
h. Foreign Citizens f. AMFI booklet
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g. Offer document
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80. NRIs are eligible to invest in Mutual Funds h. RBI Guidelines
4
a. True
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b. False 89. As per AMFI figures, how many agents
1
approximately, are there in India selling Mutual
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81. The most important link between Mutual Fund Funds
and Investors is e. 50000
e. Government f. 100000
f. SEBI g. 75000
g. Fund distributors h. 150000
h. AMFI
90. Which Mutual Fund has majority of the agents
82. Are Overseas Corporate Bodies allowed to invest selling its Mutual Fund units in India
in Mutual Funds e. LIC Mutual Fund
e. No f. UTI Mutual Fund
f. Yes g. SBI Mutual Fund
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h. None of the above
99. The front page of an offer document need not
91. Mutual Fund agents/distributors are not allowed cover
to sell Financial Products other than Mutual Funds e. opening, closing and earliest closing date of
c. True the offer
d. False f. disclaimer clause
g. legal and regulator compliance
92. Are Mutual Fund agents/distributors in India h. price of units
required to pass any examination to qualify to sell
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Mutual Fund Units 100. A "glossary" of Defined Terms must be included
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c. Yes, a test conducted by AMFI in the offer document
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d. Yes, a test conducted by SEBI e. True
5
e. No f. False
c
f. a Post Graduate university course
93. How many major distributor Companies are there

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101. Standard risk factors are not
2
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in India selling Mutual Fund units g. market driven
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c. approximately 9 h. common to all schemes
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d. approximately 11 i. of relevance to novice investors
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e. approximately 10 j. new to a regular investor
,
f. approximately 25
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102. The risk of a scheme's NAV moving up or down
94. The offer document is not a legal document on the basis of capital market movements is a
e. True
f. False
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standard risk factor
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j. False
95. A copy of all changes in the offer document has to
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be filed with SEBI 103. Past performance of a sponsor/AMC mutual
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c. True fund is not indicative of the future performance of the
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d. False scheme. This is
e
i. not true
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96. The legal responsibility for the accuracy of the
statements made in the offer document lies with
j. a standard risk factor for all schemes
k. a scheme-specific risk factor
,
e. SEBI
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l. applicable only to gilt funds
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f. the AMC
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g. AMFI 104. Risk arising from a scheme's investment
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h. the Company Law Board objective/strategy and proposed asset allocation is
i. not present
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97. Though the offer document of a scheme is
.
j. common to all schemes
2
prepared as per SEBI Regulations and is filed with k. specific to that scheme
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SEBI, SEBI does not certify the accuracy or l. not applicable to debt funds
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adequacy of the document
4
f. True 105. In an assured returns scheme, if assurance is
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g. False only for a limited period, it must be stated in the offer
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document that there is no guarantee for sustaining the
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98. The following need not be covered in a Key assured return for the remaining duration of the
Information Memorandum scheme
c. Risk Factors i. True
d. Opening, Closing and earliest Closing Date j. False
of the offer
e. Disclaimer Clause 106. If the AMC is managing a fund for the first time,
f. Functions and responsibilities of the this information can be found in
sponsor, trustees, AMC and Custodian i. newspapers
responsibilities j. SEBI
k. AMFI Newsletter
l. Offer document
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i. desirable marketing practices
107. A compliance officer j. agents' responsibilities to the investor
i. stands guarantee to the information k. ethical code of conduct
contained in the offer document l. all of the above
j. belongs to SEBI
k. cannot certify that the AMC's legal and 115. The following are not termed as "sales practices"
procedural obligations are fulfilled i. agents commission
l. cannot be appointed by the AMC j. before-and after-sales service to investors
k. advertising of schemes
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108. The due diligence certificate that must be l. stock broking
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submitted to SEBI along with the draft offer
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document cannot be signed by 116. Sales practices are never mandated by
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i. the managing director of the AMC regulators, but arise from convention only
c
j. an executive director of the AMC i. True
k. the compliance officer
l. Investor relations officer
j. False
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117. Agents are compensated by mutual funds
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109. A due diligence certificate does not certify that i. through salaries
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g. the draft offer document forwarded to SEBI j. through commissions
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is in accordance with SEBI regulations k. through an annual fee
,
h. all legal requirements connected with l. not in cash but in kind
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launching of the scheme have been complied
with 118. In India the minimum or maximum commissions
true, fair and adequate
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i. disclosures made in the offer document are
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payable to distributors are not prescribed by law, but
are decided using the fund's own discretion
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j. the AMC guarantees a good performance i. True
j. False
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110. In developed countries, an important Mutual
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Fund marketing channel is through 119. Lowest commissions are paid on
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i. Insurance Companies i. Equity funds
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j. Banks j. tax benefit schemes of mutual funds
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k. Non-Banking Finance Companies
l. Retail Distributors
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l. long-term investments in mutual funds
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111. Emerging or new channel for 120. Excess distribution expenses are to be borne by
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distributors/marketing of Mutual Fund in India is the
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j. Banks
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i. Insurance Companies i. AMC
j. unit holders
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k. Qualified Mutual Fund agents
.
k. SEBI
2
l. Direct Sales agents of respective mutual l. AMFI
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funds
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121. To cover fund distribution expenses, open ended
4
112. Mutual Funds often use their own employees to funds
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mobilise funds from g. charge a fee from agents
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g. retail investors h. charge entry and exit loads from investors
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h. High Networth individuals/institutional i. create a reserve
investors j. sell investments
i. all investors
j. foreign investors 122. Trail commission means paying
i. no commission at all
113. Retail distribution channels are a critical element j. the entire commission up-front
in the distribution of mutual funds in India k. part of the commission up-front and the
i. True balance in phases
j. False l. the entire commission after five years
114. "Sales Practices" cover the following areas 123. Sub-brokers serve as agents of the principal
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broker and a mutual fund is not answerable for their j. a price determined by competition among
activities agents
i. True k. a price based on demand for that fund's units
j. False l. the public offering price currently in
effect
124. In India, Mutual fund agents' rate and services
are at present defined by 132. All buy orders through an agent do not become
g. SEBI rules valid till the fund accepts and confirms the orders
h. stock exchange bye-laws i. True
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i. AMFI rules j. False
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j. convention
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133. When an agent purchases, offers or sells units,
5
125. Along with the application, it is mandatory to ensuring compliance with applicable regulations is
c
distribute the responsibility of
i. investment rebate
j. offer document
i. the fund
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j. the agent
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k. key information memorandum k. AMFI
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l. none of the above l. SEBI
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126. To sell funds effectively, an agent need not 134. The terms of appointment of a broker by a fund
,
g. be fully aware of the important are
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characteristics of the scheme g. laid down by SEBI
h. know his/her client's risk profile h. laid down by AMFI
i. give after sales service
c
j. offer large investment rebates
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i. not uniform to all funds
j. none of the above
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127. For investors to correctly compare performance 135. The code of ethics for mutual funds published
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of different funds SEBI's advertising codes include by AMFI
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i. uniform computation of yields g. is mandatory
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j. uniform presentations of dividends h. is in the form of recommended practices
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k. identical time periods i. is unfavourable to investors
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l. all of the above
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practices
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128. SEBI's advertising code mandate that all
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performance calculations in a fund's advertisement 136. The AMFI code of ethics does not cover the
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should be based following prescriptions
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g. NAV
f
h. the NSE Fifty Index
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g. Adequate disclosures should be made to the
investors
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i. the BSE Sensex
. s h. Funds should be managed in accordance
2
j. none of the above with stated investment objectives
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i. conflict of interest should be avoided in
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129. An agent's appointment by a fund dealings with directors or employees
4
i. requires SEBI's approval j. each investment decision should be
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j. is a lengthy and cumbersome process approved by investors
1
k. is mandatorily preceded by an AMFI test
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l. does not require any approval 137. Distribution and sales practices are only partly
regulated by SEBI at present
130. An investor does not have recourse to his agent i. True
in case of errors, problems or the quality of the j. False
investment
c. True 138. Which of the following distribution channels is
d. False preferred by private mutual funds
i. Individual Agents
131. An agent can offer and sell a funds's units at j. Small Distribution companies
i. any price he chooses k. established distribution companies
l. the Internet
WWW.ISFM.CO.IN
139. Which of the following sales practices is 147. If a fund calculates NAV daily, it will include all
prescribed by regulation the transaction concluded up to
i. AMFI Code of Ethics h. last week
j. SEBI Advertising i. last two days
k. AMFI's Code for Agents j. previous day
l. None of the above k. today
140. In a mutual fund investors' subscriptions are 148. For a open-ended fund,the repurchase price
l 2
accounted for as should not be lower than
o 5
i. liabilities g. NAV
ho 2
j. deposits h. 95% of NAV
5
k. unit capital i. 93% of NAV
c
l. none of the above j. 97% of NAV
141. Investments made by a mutual fund on behalf of

S 0 2
149. For a close-ended fund, the repurchase price
t 8
investors are accounted as should not be lower than
e 6
e. assets i. NAV
k 3
f. liabilities j. 95% of NAV
ar 8
g. capital k. 93% of NAV
,
h. none of the above l. 97% of NAV
M
142. Liabilities in the balance sheet of a mutual fund
9
150. For a scheme that has a load, the AMC can
8
k
are change an investment management fee not exceeding
c
g. in the form of long-term loans
6
g. 1.50%
to 08
h. strictly short term in nature h. 2.00%
i. combination of long term and short term i. 1.25%
S 0
j. not allowed as per regulations j. 0.50%
t 0
151. Initial expenses of launching schemes should
s 54
143. Net Asset Value (NAV) of a mutual fund scheme not exceed
e
is defined as the schemes k. 15% of amount received
B 9
g. assets minus liabilities
h. assets per unit
. i n l. 10% of amount raised
m. 6% of amount raised
, , o
i. assets minus liabilities per unit
9 c
n. 5% of the amount raised
M .
j. none of the above
8
152. Which of the following expenses cannot be
SF 0 6
is known as
f m
144. The day on which NAV is calculated by a fund charged to the scheme
k. Audit fees
I 0 i s
g. computation date
.
l. costs related to investor communication
2
h. valuation date m. winding costs for terminating the scheme
2 w
i. record date n. penalties and fines for infraction of laws
- w
j. book closure date
4
153. Which of the following are not true for Equity
2 w
145. A funds NAV is affected by Linked Savings Schemes?
1
e. Purchase and sale of investment securities m. Investors can claim an income tax rebate
0
f. valuation of all investment securities held n. There is a lock-in period before investment
g. units sold or redeemed can be withdrawn
h. all of the above o. There are not specific restrictions on
investment objectives for the fund managers
146. When computing NAV of fund SEBI requires p. These funds cannot invest in equity
accrual of major expenses to be accounted
i. quarterly 154. Which of the following is not true for Index
j. annually Funds
k. on a day to day basis m. These funds invests in the shares that
l. when actually paid constitute a specific index
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n. The investment in shares is in the same n. cannot appoint sub-agents or sub-brokers
proportion as in the index o. should be only individuals not companies or
o. These funds take only the overall market banks
risk p. should not be an employee or associate of
p. These funds are not diversified the AMC
155. The structure which is required to be followed 162. A transfer in the management of a close-ended
by mutual funds in India is laid down by scheme does not require the consent of
k. Financial Ministry k. unit holders with 75% voting rights
l 2
l. Securities & Exchange Board of India l. SEBI
o 5
(SEBI) m. Trustees
ho 2
m. Fund Sponsor n. AMC
5
n. Association of Mutual Funds of India
c
(AMFI) 163. The fund sponsor has to contribute
156. The Board of Trustees of a mutual fund:

k. nothing to the AMC
S 0
l. the total networth of the AMC
2
t 8
m. act as a protector of investors' interests m. atleast 40% of the AMC's networth
e 6
n. directly manage the portfolio of securities n. exactly 50%
k 3
o. do not have the right to dismiss the AMC
ar 8
p. cannot supervise and direct the working of 164. The sponsor of a mutual fund may be compared
,
the AMC to
M 9
m. a director in a Company
157. The AMC of a mutual fund cannot n. the Chief Executive of a Company
consulting
c k
m. undertake advisory services or financial
6 8
o. Promoter of a Company
p. an equity shareholder in a Company
to 08
n. cannot invest the funds in government paper
o. act as a trustee of more than one mutual 165. Issuing and redeeming units of a mutual fund is
S 0
fund the role
t 0
p. cannot invest the funds in securities m. the custodian
s 54
n. the transfer agent
e
158. The trust that manages a mutual fund is o. the trustees
appointed by
B 9
m. The Finance Ministry
. i n p. the bankers
,
n. R.B.I
9, c o
166. The fund sponsors should have a sound financial
M .
o. SEBI track record of
8
p. The sponsor of that mutual fund k. 7 years
SF 0 6 f m
159. The custodian of a mutual fund:
l. 12 months
m. 5 years
I 0 i s
k. is appointed for safekeeping of securities
.
n. 3 years
2
l. need not be an entity independent of the
2 w
sponsors 167. The networth of an asset management company
- w
m. not required to be registered with SEBI should be greater than
4
n. does not give or receive deliveries of m. Rs.100 Crores
2 w
physical securities n. can be decided by the Sponsor
1
o. should be atleast Rs. 10 Crores at all
0
160. Transfer Agents of a mutual fund are not times
responsible for p. should be greater than Rs.10 Crores
m. issuing and redeeming units of the mutual
fund 168. The AMC and directors are answerable to
n. updating investor records k. Stock Exchanges
o. preparing transfer documents l. The Board of Trustees
p. investing the funds in securities markets m. Agents and distributors
n. Stock Brokers
161. Distributors or agents
m. can distribute several mutual funds 169. The role of an AMC is to act as
simultaneously 1. promoters
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2. investment managers o. guidelines issued by the Ministry of
3. distribution agents Commerce
4. regulators p. Companies Act provisions relating to
transactions in securities
170. A change in the following key people does not
materially impact the performance of the fund 178. The entry of mutual funds in India was initiated
m. Fund sponsors by mutual funds set up by
n. Trustees of the fund k. Public Sector Banks
o. Fund Manager l. Private Sector mutual funds
l 2
p. Members of the AMFI Committee m. Unit Trust of India
o 5
n. mutual funds set up by insurance companies
ho 2
171. To transfer the management of a scheme from
5
one AMC to another, the consent of the following is 179. For a close-ended scheme to change its
c
required fundamental attributes, it must obtain the consent of
k. SEBI
l. Unit holders
m. 50% of unit holders
S
n. 50% of trustees
0 2
t 8
m. both SEBI and unit holders o. 75% of unit holders
e 6
n. none of the above p. none of the above
k 3
ar 8
172. As per SEBI's principles, the AMC and the 180. The largest corpus of investable funds in India is
,
Board of Trustees of a fund should belong to the with
M 9
same sponsors e. Bank-owned mutual funds
m. True f. Private Sector mutual funds
n. False
c k 6
g. UTI
8
h. Insurance Companies
to 08
173. After UTI, the first mutual funds were started by
k. private sector banks 181. The Board of Trustees of the UTI does not have
S 0
l. public sector banks nominees from
t 0
m. financial institutions m. RBI
s 54
n. non-banking finance companies n. LIC
e
o. IDBI
k. SEBI
B 9 . i n
174. The highest authority among the following is the p. The Bombay Stock Exchange (BSE)
, ,
l. Company Law Board
9 c o
182. UTI Cannot provide
M .
m. RBI k. corporate finance
8
n. Ministry of Finance l. engage in real estate and property
SF 0 6 f m
175. The entity that SEBI does not regulate is
development business
m. provide merchant banking services
I 0 i s
m. share registrars
.
n. invest in securities
2
n. mutual funds
2 w
o. stock exchanges 183. The "Capital" of a scheme does not include
- w
p. non-banking finance companies m. unit capital
4
n. reserves
2 w
176. The accounts and all other records of an AMC o. borrowing
1
are filed with p. networth of the AMC
0
k. AMFI
l. Registrar of Companies 184. Which of the following are Self Regulatory
m. Agents' Association Organisations
n. UTI k. Bombay Stock Exchange
l. SEBI
177. A close-ended scheme of a mutual fund is not m. AMFI
governed by n. RBI
m. Exchange Rules of the stock exchange
where it is listed 185. A Self Regulatory Organisation can regulate
n. Listing Agreement between the fund and the k. all entities in the market
stock exchange l. only its own members in a limited way
WWW.ISFM.CO.IN
m. its own members with total jurisdiction l. only if the offer document specifically
n. no entity at all provided such a guarantee by a named
sponsor
186. The amount of authority enjoyed by a m. the Government of India
1. self-regulatory organisation is defined by n. AMFI
2. the apex regulatory authority
3. company law board 193. Unit-holders aggrieved by a Fund or AMC can
4. its own members get redressed from
5. RBI k. Consumer Courts
l 2
l. SEBI
o 5
187. The role of AMFI in the mutual funds industry is m. AMFI
ho 2
not to n. RBI
5
k. promote the interests of the unit holders
c
l. set a Code of Ethics 194. If the Directors of an AMC commit fraud, Unit-
m. regulate mutual funds in
n. crease public awareness of mutual funds in
S 0
Department of Company Affairs and the Company
2
holders investments' cannot be protected by the
t 8
the country Law Board
e 6
k. True
k 3
188. The rights of investors in a mutual fund scheme l. False
ar 8
are laid down in
,
m. the Offer Document of that scheme 195. The responsibilities of a unit-holder do not
M 9
n. Quarterly Reports include:
o. Annual Reports i. Monitor his investments carefully
p. marketing brochures
c k 6 8
j. being aware of information that affects his
investment in a major way
to 08
189. Unit holders of a mutual fund scheme do not k. carefully studying the offer document
have a right to l. taking decisions about where the fund
S 0
m. proportionate ownership of the scheme's managers should invest
t 0
assets
s 54
n. dividend declared for that scheme 196. UTIs scheme US-64 falls under the purview of
e
o. dividend declared for other schemes of the SEBI
B 9
mutual funds
. i n
p. income declared under that scheme
m. True
n. False
, 9, c o
M .
190. After dividend declaration, unit-holders are 197. UTI was set up by
8
entitled to receive dividend within l. SEBI
SF 0 6
m. one week
n. one month
f m
m. AMFI
n. A special act
I 0
o. 42 days
. i s o. RBI
2
p. six weeks
2 w
198. Bank owned Mutual Funds are supervised by
- w
191. Unit holders' right to information does not k. SEBI
4
include l. RBI
2 w
i. obtaining from the trustees any information m. jointly by SEBI & RBI
1
having an adverse effect on their n. AMFI
0
investments
j. inspecting major documents of a fund 199. Investor does not have the right to receive any
k. receiving of a copy of the annual financial interest from an AMC if his redemption proceeds are
statements of that fund not despatched within 10 working days
l. approving investment decisions of the m. True
fund n. False
192. Shortfalls in the case of assured returns schemes 200. If an investor failed to claim his redemption
are met proceeds within 3 years, he can claim the proceeds at
k. by sponsors of such schemes k. Par
l. Prevailing NAV
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m. the on the date he has applied for
redemption 208. SEBI does not require the following to be
n. 15% below the prevailing NAV included in the offer document issued by a mutual
201. After closure of the initial offer an open ended fund
scheme, on going sales and repurchases must start q. details of the Sponsor and the AMC
within r. Description of the Scheme & investment
o. One week objective/strategy
p. 30 days s. Investors' Rights and Services
q. 45 days t. Performance of other mutual funds
l 2
r. 180 days
o 5
209. 'Key Information Memorandum' is
ho 2
202. For scheme to be able to change its fundamental o. an abridged version of the offer document
5
attributes, it must obtain the consent of p. the Memorandum & Articles of Association
c
o. 50% of the unit holders of the AMC
p. 50% of the trustees
q. 75% of the unit holders
S
fund schemes
0 2
q. a sheet containing historical NAVs of other
t 8
r. none of the above r. Annual Report of the AMC
203. The prospectus or Offer Document containing
k e 36
210. The offer document for a scheme remains valid
ar 8
the details of new scheme is first registered with the even if
,
q. AMFI q. the AMC is reconstituted
M 9
r. SEBI r. entry or exit load are changed
s. Bombay Stock Exchange s. the scheme's NAV changes
t. Ministry of Finance
c k 8
t. new plans are added to existing schemes
6
to 08
204. The offer document issued by mutual funds does 211. The offer document has to be fully revised and
not serve the purpose of updated
S 0
q. announcing the scheme q. every six months
t 0
r. giving detailed information about the r. once in two years
s 54
scheme s. every quarter
e
s. inviting the the investors t. every month
B 9 . i
outlook for the next quarter
n
t. giving the fund manager's investment
212. An addendum giving details of material change
, 9, c o
in the offer document should be circulated
M .
205. The prospectus of a close-ended fund is issued o. distributors/brokers
8
o. every year p. unit holders
SF 0 6
q. every quarter
f m
p. only once at the time of issue q. SEBI
r. all of the above
I 0 i s
r. every six months
.
2
213. Which of the following is not true for offer
2 w
206. Fundamental attributes of scheme documents of open-ended schemes
- w
q. do not include the objective of the scheme o. it is first issued at the time the scheme is
4
r. can be changed without the investor's launched
2 w
approval or knowledge p. it is registered with SEBI
1
s. include the terms of the scheme q. it has to be revised periodically
0
t. are not necessary for deciding whether to r. it need not be revised at all
invest in the scheme or not
214. All important disclosures that the mutual fund is
207. The offer document required to make, by regulation, are contained in the
q. contains the terms of issue offer document
r. gives no information relevant for making an q. True
investment decision r. False
s. is not the operating document describing the
scheme 215. The offer document issued when an open-ended
t. cannot be called a reference document scheme is launched is valid for all times, until
amended
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q. True
r. False 225 A passive fund manager
q. researches stocks extensively
216 The most important source of information for a r. does not buy and sell stocks often
prospective investor is s. does not have to go through the process of
o. offer document stock selection
p. Annual Report of the AMC t. does not have to track stocks
q. Economic Times
r. AMFI Newsletter 226 A fund manager managing an index fund
l 2
o. has to keep fund expenses low
o 5
217 The offer document need not be studied by an p. does not have to research stocks
ho 2
investor before investing in a scheme q. does not have to balance his portfolio
5
q. True r. none of the above
c
r. False
218 The offer document is not a legal document

227 A growth manager looks for
S
q. high current income
0 2
t 8
o. True r. undervalued stocks
e 6
p. False s. above average earnings growth
k 3
t. none of the above
ar 8
219 Initial issue expenses are charged to a scheme in
,
the first year itself 228 A value manager does not look for
M 9
m. True o. stocks that are currently undervalued in the
n. False market
c k
220 Scheme-wise annual report of a mutual fund
6 8
p. stocks whose worth will be recognised by
the market in the long term
to 08
need not be q. high current yield
q. sent to all unit-holders r. long term capital appreciation
S 0
r. forwarded to SEBI
t 0
s. published as an advertisement 229 From an investor's viewpoint, the most important
s 54
t. stock exchanges is
e
q. a fund's investment style
B 9
o. at purchase price
. i n
221 Mutual funds value their investments r. performance of the fund
s. the fund manager's judgement
, ,
p. on a mark-to-market basis
9 c o
t. none of the above
M .
q. at par
8
r. at book value 230 Fundamental analysis involves
SF 0 6 f m
222 Investors are totally exempt from paying any tax
i. checking the foundations of the company's
factory building
I 0 i s
on the dividend income they receive from mutual
.
j. research into the operations and finances
2
funds of the company
2 w
o. True k. studying the company's share prices
- w
p. False l. none of the above
2 4 w
223 Income distributed to unit-holders by a debt fund 231. Which of the following is not considered for
1
is liable to dividend distribution tax technical analysis
0
o. True q. historical data on the company's share price
p. False r. the company shares' trading volume
s. current market sentiment
224 A close-ended has average weekly net assets of t. the company's regulatory environment
Rs 200 crore.As per SEBI regulations, the AMC can
charge the fund with investment and advisory fees 232. Quantitative analysis is more likely to be done
upto: to evaluate a particular sector or industry rather than
o. Rs 2.25 crore any specific stock
p. Rs 2.00 crore o. True
q. Rs 2.50 crore p. False
r. Rs 3.00 crore
WWW.ISFM.CO.IN
m. continuous tracking systems
233. Fundamental analysis forms the basis to decide n. equity analysts
q. when to buy a given share o. trustees
r. whether to buy a given share or not p. security dealers
s. whether to use technical analysis or
quantitative analysis 242. Security dealers of a mutual fund
t. whether the company's factory can o. guard the cabin of the fund manager
withstand earthquakes p. execute buy and sell orders for the fund
q. decide which shares to buy or sell
l 2
234. Technical analysis guides the decision on r. none of the above
o 5
o. whether to buy or sell
ho 2
p. the right time to buy or sell 243. As per SEBI's requirements each scheme of a
5
q. whether company's technical personnel are mutual fund should have a different fund manager
c
adequately qualified o. True
r. none of the above p. False
S 0 2
t 8
235. Which of the following is not an investment 244. Debt securities bought at a discount to their face
e 6
philosophy value are generally
k 3
o. capitalising on economic cycles m. interest bearing
ar 8
p. focusing on growth sectors n. zero coupon bonds
,
q. capitalisation o. paying interest at a floating rate
M 9
r. finding value stocks p. none of the above
c k
236. When expecting a fall in market price, fund
managers can reduce the loss in portfolio value by
6
interest on 8
245. In India, a large part of debt securities pay
to 08
k. speculating m. a floating rate basis
l. not buying and selling shares at all for some n. a fixed rate plus a variable portion
S 0
days o. a fixed rate
t 0
m. using equity derivatives p. zero coupon basis
s 54
n. giving TV interviews to improve sentiment
e
246. The Indian debt market is largely wholesale in
B
o. shares
9 . i
237. Equity derivative instruments are
n nature
o. True
,
p. bonds
9, c o
p. False
M .
q. contracts
8
r. notes 247. In the wholesale debt market, the largest
SF 0 6 f m
238. A futures contract allows one to buy or sell the
proportion of trading is seen in
1. Government Securities
I 0 i s
underlying shares, but need not result in delivery
.
2. Corporate Bonds
2
q. True 3. T-Bills
2 w
r. False 4. PSU Bonds
4 - w
239. Derivatives cannot be based on market indices 248. The largest proportion of trades done in the
2 w
q. True wholesale debt market is accounted by
1
r. False o. mutual funds
0
p. foreign banks
240. In a mutual fund, the overall decisions on q. Indian banks
allocating money to particular industries/sectors are r. financial institutions
taken by
q. equity analysts 249. Certificates of Deposits (CDs) are issued by
r. fund managers o. Regional Rural Banks
s. security dealers p. Corporates
t. trustees q. Scheduled commercial banks
r. none of the above
241. Continuous tracking of the companies in which
a mutual fund has invested is done by 250. Commercial Paper is issued by Corporate bodies
WWW.ISFM.CO.IN
o. to meet short-term working capital u. call out the names of the investors
requirements v. redeem the debt on maturity
p. to finance the acquisition of long term w. extend the tenure of the debt
capital assets x. redeem the debt before maturity
q. to retire long term debt
r. to pay dividend 259. A put provision in a debt issue allows
251. Government securities are issued through the 1. investor to put away the certificates in safe
RBI deposit vaults
s. True 2. investors to redeem debt prior to
l 2
t. False maturity
o 5
3. issuers to redeem debt prior to maturity
ho 2
252. The yield on Treasury Bill (T-Bill) us 4. investors to extend the tenure of debt
5
determined by
c
s. the Government of India 260. Current yield relates interest on a security to
t. auction
u. the State Governments
u. its current market price
S
v. its face value
0 2
t 8
v. floating rate method w. its fair value
e 6
x. the current price of T-Bills
k 3
253. Which of the following are not normally found
ar 8
in the portfolio of a debt fund 261. To compare bonds with different coupon rates,
,
u. long-dated Government Securities maturities and prices, investors would use:
M 9
v. Corporate debentures u. current yield
w. bonds issued by financial institutions v. technical analysis
c k
x. certificates of deposit issued by banks
8
w. yield to maturity
6
x. fundamental analysis
to 08
254. Which of the following do not represent the
amount an investor of a debt security will be paid 262. When interest rates rise, bond prices
S 0
upon maturity 1. also rise
t 0
u. par value 2. fall
s 54
v. face value 3. are not affected
e
w. fair value 4. fluctuate either up or down
9
x. redemption value
B . i n 263. Yield curve is also known as
, , o
255. Coupon of a debt security refers to
9 c
s. Curve of Interest
M .
s. a piece of paper attached to the certificate t. Term Structure of Interest Rates
8
t. the return on investor would earn u. Curve that yields
SF 0 6 f
value of the bond
m
u. the amount rate of interest paid on par v. none of the above
I 0 i s
v. none of the above
.
264. An important indicator of expected trends in
2
interest rates is
2 w
256. Which of the following do not apply to the term s. The Economic Times
- w
'maturity' of a debt security? t. the Sensex
4
u. the date on which the certificates becomes u. the Yield Curve
2 w
old v. the Chief Minister's Speech
1
v. the term of the bond
0
w. the date of redemption 265. It may not be possible to reinvest interest
x. the date on which the issuer has to repay the received at the same rate as principal. This is known
amount as
s. reinvestment risk
257. Call or put provisions are used to modify the t. inflation risk
fixed maturity of debt securities u. interest-rate risk
u. True v. call risk
v. False
266. A bond's rating indicates its
258. A call provision in a debt issue allows the issuer s. reinvestment risk
to t. default risk
WWW.ISFM.CO.IN
u. inflation risk
v. interest-rate risk 275. Investment policies of a mutual fund are
determined by
267. If a bond cannot be sold at a price near its value, u. the fund manager
it means that investment in this bond has v. the AMC management
s. high liquidity risk w. the marketing department based on what
t. high default risk distributors want
u. low liquidity risk x. the investors
v. inflation risk
l 2
276. Which of the following measures are not taken
o 5
268. The additional yield required to account for the by SEBI for protecting investors of mutual funds
ho 2
risk of default by the borrower is known as s. mandating minimum levels of
5
q. yield plus diversification for mutual funds
c
r. yield spread t. ensuring that the funds are not used to
s. yield extra
t. yield premium
S
favour a few companies
0 2
u. tracking the securities that each fund has
t 8
invested in
e 6
269. A high credit rating does not mean v. ensuring that the funds are invested in
k 3
o. high yield spread approved securities only
ar 8
p. high perceived safety
,
q. low yield spread 277. As per SEBI norms, a fund's investments, in the
M 9
r. low risk premium equity shares of any one company are restricted to
u. 25% of NAV
c k
270. If 10-year government securities Neil 10% and a
10-Year fixed deposit in a company yields 12%, the
6 8
v. 10% of NAV
w. 50% of NAV
to 08
yield spread is x. 100% of NAV
u. 12%
S 0
v. 22% 278. A mutual fund manager is not allowed to sell
t 0
w. 10% short when he expects a crash in the market
s 54
x. 2% s. True
e
t. False
B 9
s. longer than its maturity
. i n
271. The "duration" of an interest-bearing bond is
279. In a mutual fund, having many schemes, al
, ,
t. less than its maturity
9 c o
securities bought can be held in a general account and
M .
u. equal to its maturity transferred later to various schemes to attain certain
8
v. the quality of paper used for the certificate profit or loss objectives
SF 0 6 f m
272. A bond with a coupon of 9% when interest rates
u. True
v. False
I 0 i s
for similar maturities are 11% will sell
.
2
q. above par 280. A mutual fund may invest in short-term deposits
2 w
r. below par of scheduled commercial banks
- w
s. at par m. True
4
t. at a price unrelated to the prevailing interest n. False
2 w
rate
1
281. Mutual funds are allowed to lend
0
273. Changes in foreign exchange rates have no u. loans
bearing on interest rates v. securities
q. True w. physical assets
r. False x. none of the above
274. Inflation and interest rates are inversely 282. In case of listed securities of group companies
proportional of the sponsor, mutual fund is not allowed to invest
s. True q. 25% of its net assets
t. False r. 10% of its net assets
s. at all
t. >5% of net assets
WWW.ISFM.CO.IN
283. A mutual fund may transfer investments from 291. The difference between NAV change and total
one scheme to another return as measures of fund performance is
u. not at all q. none
v. at current market rates r. total return takes dividend into account
w. at cost price while NAV change does not
x. at a fixed premium over market rate s. total return does not take NAVs into account
t. total return does not take the time period
284. Interest Rate Risk for an Indian debt fund can be into account
l 2
reduced by using
o 5
s. Futures 292. The most suitable measure of fund performance
ho 2
t. Options for all fund types is
5
u. Interest Rate Swaps s. NAV Change
c
v. none of the above t. Total Return
285. The Interest Rate Forecasting Unit of a debt

u. Total Return with reinvestment
S
0 2
t 8
fund is generally manned by
e 6
s. technicians 293. The expense ratio used for measuring fund
k 3
t. statisticians performance is an indicator of
ar 8
u. economists & econometricians q. product market condition
,
v. accountants r. growth in the economy
M 9
s. prevalent market practices
286. AMCs need not maintain records in support of t. the fund's efficiency
each investment decision
o. True
c k 6 8
294. The Expense Ratio as a measure of a fund's
to 08
p. False performance is defined by a fund's
q. total expenses and average net assets
S 0
287. When interest rates for similar maturities' bonds r. total expenses and total assets
t 0
are 11%, bond with a 9% coupon rate will sell s. average expenses and average net assets
s 54
s. above par t. none of the above
e
t. below par
u. at par
B 9 . i n
v. at a price unrelated to the interest rates for
295. While computing the Expense Ratio for a fund,
brokerage commissions on the fund's transactions are
, ,
similar securities
9 c o
not included in the fund expenses
M .
q. True
8
288. The most suitable measure for a fund's r. False
SF 0 6
s. type of fund
f m
performance does not depend on the
296. The Expense Ratio is not of utmost importance
I 0 i s
t. investment objective of the fund
.
in case of
2
u. financial market conditions q. Debt fund
2 w
v. amount invested by investor r. Index fund
- w
s. Equity fund
4
289. If the NAV of an open-ended fund was Rs.16 at t. Bond fund
2 w
the beginning of the year and Rs.22 after 13 months,
1
the annualised change in NAV is 297. The Expense Ratio is not affected by
0
s. 6.0% p. fund size
t. 34.6% q. average account size
u. 40.6% r. portfolio composition
v. 37.5% s. stock market conditions
290. Change in NAV as a measure of fund 298. The Income Ratio as a measure of a fund's
performance is more suitable for performance is defined by the fund's
u. growth funds s. total income and total assets
v. income funds t. net investment income and net assets
w. funds with withdrawal plans u. total income and net assets
x. none of the above v. none of the above
WWW.ISFM.CO.IN
x. 50% of net assets
299. The Income Ratio is more suitable for y. 25% of net assets
evaluating the performance of z. 20% of net assets
s. Equity Funds
t. Growth Funds 308. Which of the following is of no relevance in
u. Regular Income Funds evaluating a fund's performance
v. Index Funds y. The performance of the stock market as a
whole
300. Portfolio turnover rate of a fund measure the z. The performance of other mutual funds
l 2
s. size of the fund's portfolio aa. The returns given by other comparable
o 5
t. amount of buying and selling done by the financial products
ho 2
fund bb. The change in wholesale price index
5
u. the average number of units sold by the fund
c
in one day 309. The choice of an appropriate benchmark for
301. A high turnover rate for a fund indicates
evaluating a fund's performance depends on
S
s. the fund manager
0 2
t 8
u. high transaction costs t. the investment objective of the fund
e 6
v. greater efficiency u. SEBI
k 3
w. high returns to the investor v. AMFI
ar 8
x. a rising market
,
310. An actively managed equity fund expects to
M 9
302. Turnover rates would be most relevant to y. be able to beat the benchmarks
analyse the performance of z. earn the same returns as the benchmark
w. equity funds
x. growth funds
c k 6 8
aa. have no benchmarks
bb. underperform when compared with the
to 08
y. debt funds benchmark
z. value funds
S 0
311. For evaluating funds, the preferred benchmark
t 0
303. Transaction costs include would be the
s 54
y. all expenses related to trading y. BSE Sensex
e
z. all expenes charged to the fund z. S&P CNX Nifty
B 9
aa. distribution expenses
bb. none of the above
. i n aa. BSE 200
bb. S&P CNX Sectoral Indices
, 9, c o
M .
304. Which of the following are not included in 312. To evaluate a close-ended debt-fund, a suitable
8
Transaction costs? benchmark would be
SF 0 6 f m
y. brokerage commissions
z. stamp duty on transfers
s. BSE Sensex
t. I-Sec's I-BEX
I 0 i s
aa. custodians fees
.
u. interest on bank fixed deposits of similar
2
bb. agent commissions maturity
2 w
v. S&P CNX Defty
- w
305. Which of the following transaction costs are not
4
quantified in the offer document 313. When comparing performance of two funds, the
2 w
w. brokerage commissions following need not be similar
1
x. dealer spreads w. Risk profiles
0
y. custodian's fees x. Investment objectives
z. registrar's fees y. Fund size
z. Fund managers
306. The size of a fund has no bearing on its
performance 314. Which of the following is false?
y. True w. ROI is a measure similar to Total Return
z. False with Reinvestment of distribution
x. Total Return with Reinvestment of
307. As per SEBI, mutual funds can borrow for short distributions assumes reinvestment at NAV
term to the extent of on the distribution date
w. total net assets
WWW.ISFM.CO.IN
y. As a measure of performance, Total Return z. none of the above
with Reinvestment of distribution seeks to
overcome the shortcomings of simple Total 322. Within an asset class, which individual security
Return to invest in should be decided by
z. Because of its simplicity, simple Total u. the financial planner
Return is preferred in practice to Total v. the investor himself
Return with Reinvestment of distribution w. a professional fund manager
x. an objective advisor
315. The basis of genuine investment advice should
l 2
be 323. Financial Planning comprises
o 5
1. the current market situation s. defining a client's profile and goals
ho 2
2. the agent commissions paid by different t. recommending appropriate asset allocation
5
funds u. monitoring financial planning
c
3. financial planning to suit the investor's recommendations
situation
4. planning to complete the agent's annual
v. all of the above
S 0 2
t 8
targets 324. Financial planning is relevant only for high
e 6
networth individuals
k 3
316. Financial goals do not include u. True
ar 8
w. buying a home v. False
,
x. winning a sports gold medal
M 9
y. planning for retirement 325. Financial planning does work for older clients
z. saving for child's education y. True
c k
317. Financial planning allows a person
z. False
6 8
to 08
w. to become a billionaire 326 Financial planning is primarily tax planning
x. to achieve financial goals through proper w. True
S 0
management of finances x. False
t 0
y. to invest in foreign countries
s 54
z. none of the above 327 In financial planning, all responsibility ends with
e
the financial planner and the client has no
B 9 . i n
318. Financial plans do not alter in any way the
amount of tax an investor pays as the tax is on his
responsibilities
y. True
,
income
9, c o
z. False
M .
u. True
8
v. False 328 The constraint on financial planning due to
SF 0 6 f m
319. Which of the following works with an investor
insufficient investable resources can be remedied to
some extent by
I 0 i s
on his overall financial situation
.
u. decreasing the standard of living
2
s. Tax Advisor v. disciplining children
2 w
t. Financial Planner w. disciplined monthly budgeting
- w
u. Insurance Agent x. none of the above
4
v. Financial Advisor
2 w
329 In the growth option offered by mutual funds, the
1
320. A financial planner takes responsibility for the number of units held by an investor increases because
0
financial well-being of his/her clients of
y. True w. growth in net asset value i.e. capital
z. False appreciation
x. reinvestment of dividend which is like
321. Financial planners and their clients should focus compounding
on y. interest received on the fund's assets
w. allocating funds to asset classes (e.g. debt, z. none of the above
equity etc.)
x. allocating funds to individual securities 330 To maximise returns on investment, once an
y. tracking stocks which they feel have investor buys into a fund, he/she should hold on to it
potential no matter what happens
WWW.ISFM.CO.IN
o. True
p. False 337. Which of the following entities can given loans
against securities
331 If an investor keeps investing a fixed amount at w. UTI
regular intervals, the average cost of his purchases x. Banks
will always be less than if he makes investment at y. Mutual funds
irregular periods z. none of the above
y. True
z. False 338. Which of the following investment products do
l 2
not give guarantee for return or capital
o 5
332. Which of the following lets an investor book w. Bank deposits
ho 2
profits in a rising market and increase holdings in a x. Pubic provident fund (PPF)
5
falling market y. National Savings Certificates (NSC)
c
u. Fixed Rates of Asset Allocation z. Units of a mutual fund
v. Flexible Ratio of Asset Allocation
w. Investment without any asset allocation plan
S 0 2
339. The biggest advantage of investment in gold is
t 8
x. Buy and Hold Strategy w. High returns
e 6
x. High appreciation in value
k 3
333. A Flexible Ratio of Asset Allocation means y. Low Purchase price
ar 8
y. continuously changing the ratio of various z. Hedge against inflation
,
assets in the portfolio
M 9
z. not doing any re-balancing and letting the 340. The biggest disadvantage of investment in real
profits run estate is
aa. active switching
bb. none of the above
c k 6 8
y. Less potential for capital appreciation
z. High purchase price
to 08
aa. Depreciation in value as time passes
334. The strategy advisable for an investor to bb. Value gets eroded due to inflation
S 0
maximise investment return in the long run is
t 0
w. buy and hold on to investments for a long 341. Which of the following is not an advantage of
s 54
time bank deposits?
e
x. liquidate poorly performing investments u. Liquidity
B 9
from time to time
. i n
y. liquidate good performing investments fro
v. High perceived safety
w. Low entry price
, ,
time to time
9 c o
x. High yield after tax
M .
z. switch from poor performers to good
8
performers 342. Listing of shares at a stock exchange ensures
SF 0 6 f m
335. A criticism of rupee-cost averaging is
w. guaranteed returns
x. long term capital appreciation
I 0 i s
w. Investment is for the same amount at regular
.
y. low risk
2
intervals z. high liquidity
2 w
x. Over a period of time, the average purchase
- w
price will work out higher than if one tries to 343. The rate of interest paid by a company on
4
guess the market highs and lows debentures issued by it depends on
2 w
y. It does not tell you when to buy, sell or u. the stock market situation
1
switch from one scheme to another v. SEBI guidelines
0
z. Rupee cost averaging has no serious w. the company's credit rating
shortcomings x. the amount of money being raised
336. In India, individual investors do not have direct 344. Which of the following is not a characteristic of
access to company fixed deposits
q. capital market instruments u. A higher rate of interest
r. real estate v. higher risk
s. bullion w. unfavourable effect of tax
t. money market instruments x. very high liquidity
WWW.ISFM.CO.IN
dd. 9.5% before tax
345. Which of the following is untrue for Public ee. 8.5% before tax
Provident Fund Schemes ff. 8.5% after tax
s. The interest is tax-free
t. Post-tax returns are attractive 354. Individual investors do not normally invest
u. Liquidity is rather low in Government Securities because
v. none of the above cc. individual investors re not allowed to
invest in Government Securities
346. Indira Vikas Patra is an investment product dd. the amount required for investment is
l 2
popular with very large
o 5
u. rural investors ee. safety of principal is not guaranteed
ho 2
v. investors in high tax bracket ff. none of the above
5
w. urban investors
355. The amount an insurance company would
c
x. risk taking investors
347. Finance Acts of 2000 and 2001 have reduced

pay to the nominee if a policyholder died is
S
known as the
0 2
t 8
tax-free interest on Public Provident Fund to aa. premium
e 6
t. 12% bb. sum assured
k 3
u. 10.5% cc. face value
ar 8
v. 9% dd. real value
,
w. 11%
356. Dividends distributed by mutual funds are
M
348 Most individuals invest in life insurance policies
9
aa. taxed at source
8
k
for bb. taxed in the hands of the investors
c 6
w. risk protection cc. are subject to capital gains tax
to 08
x. tax benefits dd. are tax-free in the hands of the investor
y. easy liquidity
S 0
z. high returns 357. Investing through mutual fund is a better
t 0
option than investing directly in the stock market
s 54
349. Annual contribution to Public Provident Fund because
e
should be identifying stocks is a difficult process
i n
agents get commissions on mutual fund investment
9
w. Rs.10000
B .
x. between 100 and Rs.6000 returned are guaranteed by mutual funds
, , o
y. between Rs.600 and Rs.1000 all of the above
M 9
z. none of the above
8 . c 358. A small investor can build a diversified
F 6 m
350. The current yield on Indira Vikas Patra works portfolio by
I S
out to
0 i s f aa. buying one share each of all listed
0
w. 10.5% companies
2
x. 11%
w. bb. investing in a mutual fund

cc. borrowing enough money to buy shares
2
y. 10%
-
of well-managed companies
w
z. 9%
4
351. The tenure of an Indira Vikas Patra is dd. none of the above
2 w
y. 7 years
359. Which of the following is not an advantage
1
z. 6 years
of mutual fund investment over direct investment
0
aa. 5 years
bb. 3 years cc. Higher liquidity
dd. Lower transaction costs
352. The maturity period of RBI Relief Bonds is ee. Greater convenience
aa. 5 years ff. guaranteed returns
bb. 6 years
cc. 7 years 360. There is no contractual guarantee for
dd. 8 years repayment of principal or interest to an investor
in
353. The annual yield on RBI Relief Bonds is w. bank deposit
cc. 9.5% x. debt fund
WWW.ISFM.CO.IN
y. secured debentures aa. low risk fund
z. all of the above bb. moderate risk fund
cc. high risk fund
361. Which of the following debt investments is dd. low-to-moderate risk fund
not rated
cc. Corporate Bonds 369. International funds invest in various and so
dd. Commercial Paper are low risk funds
ee. Company Deposit w. True
ff. Debt Fund x. False
362. Gold and real estate are attractive
ol
370. Investment in gold is a hedge against
5 2
ho 2
investment options only in high inflation inflation but investment in a precious metal fund
economies falls in the high risk category
cc. True
dd. False
w. True
c
x. False
2 5
363. Direct investment in stock market can be a
t S 80
371. By their very nature, growth funds are
e 6
better option than investing through mutual considered as high risk funds
k 3
funds if the investor aa. True
ar 8
w. wants better returns than those offered bb. False
,
by mutual funds
x. has large capital, knowledge and 372. Short Term bond funds are
resources for research
M 9
aa. low risk funds
8
k
y. has identified a bullish phase in the bb. moderate risk funds
c 6
stock market cc. high risk
to 08
z. wants to invest for the long term dd. of the above depending on the market
S 0
364. Deciding on strategies such as long-term 373. The risk level of commodity funds is
t 0
compounding, cost averaging, value averaging, y. high risk category
s 54
active switching, all depend on the z. determined by the commodity price
e
aa. stock market situation on date movements
i n
bb. amount of money to be invested aa. cannot be specified
, B, 9
cc. investor's risk tolerance
o .
dd. phase through which the economy is
bb. low risk category
9 . c
passing 374. As compared to a fund with fluctuating total
F M 68 m
365. Financial Planning involves
returns, a fund with stable positive earnings
w. gives higher returns
I S 0 i s f
aa. studying financial management x. is less risky
0
bb. managing the risks of investing y. gives lower returns
2 w.
cc. financing the client's investments
dd. none of the above
z. is more risky
- 2 w
375. "Risk" is equated with
4
366. Greater returns come only from assuring w. volatility of earnings
2 w
higher risks, and a higher risk portfolio x. level of earnings
guarantees higher returns y. the number of investors in a fund
0 1 w. True
x. False
z. the number of schemes of a fund family
376. Volatility of an equity fund portfolio is

367. The risk tolerance of an investors is independent of the
independent of aa. kind of stocks in the portfolio
aa. his age bb. degree of diversification of the portfolio
bb. his income cc. fund manager's success at market
cc. the stock market movements timing
dd. his job security dd. number of investors in the scheme
368. A sector fund is a 377. Equity price risks are
WWW.ISFM.CO.IN
y. company specific dd. dramatic results
z. market level ee. better returns than every other available
aa. sector specific option
bb. all of the above ff. only realistic wealth accumulation goals
378. Diversification reduces 385. Asset Allocation is

aa. company specific risk aa. keeping certificates of the physical
bb. market level risk securities in proper places
cc. both of the above bb. allocation the available money to all the
l 2
dd. none of the above securities available
o 5
cc. allocating the right proportion of funds to
ho 2
379. Which of the following is most risky? equity, debt and money market
y. Investing in a money market mutual securities
fund
z. Investing in an index fund
c 2 5
S 0
aa. Short term investment in an equity fund 386. Once a financial advisor works out ideal
t 8
bb. Long term investment in an equity fund Asset Allocation, it can be used for all investors
e 6
whom he/she advises
k 3
380. A fund with a high beta coefficient gives aa. True
ar 8
greater returns in a rising market, and is more bb. False
,
risky in a falling market
aa. True 387. Asset distribution among equity, debt and
bb. False
M 9
money market securities should correspond to
8
k
the investors' need for capital growth, income
c 6
381. Which of the following is a disadvantage of and liquidity
to 08
Standard Deviation as a measure of risk u. True
q. Standard Deviation measures total risk, v. False
S 0
not just market risk
t 0
r. It is based on past returns, which does 388. The liquidity needs of an investor are met
s 54
not necessarily indicate further through
e
performance aa. Equity Funds
i n
s. It is an independent number bb. Index Funds
, B, 9
standard deviation
o .
t. All types of funds can be measured with cc. Money Market Funds
dd. Sector Funds
M 8 9 . c
382. The role of an agent is to 389. A retired person generally needs a greater
F 6 m
aa. point out the features and benefits of proportion of
I S 0 i s f
various investments options aa. Debt funds
0
bb. help the investor develop the right bb. Equity funds
2 w.
approach to investing
cc. recommend some investment option
cc. Money Market funds
dd. All of the above
- 2 available
w
4
dd. offer ad hoc advise whenever the 390. To satisfy a young investor's need for
2 w
investor has surplus money available growth, a greater proportion of investment
should be advised in
0 1 383. One of the most effective ways to invest

through mutual funds is to
y. develop a model portfolio
aa. Gilt funds
bb. Income Funds
cc. Equity Growth funds
z. buy a few units of every mutual fund dd. Liquid funds
scheme available
aa. invest all the money in one fund scheme 391. A very high proportion of investment in all
bb. invest all the money in different types of equity funds is advisable for investors
schemes of the same fund family cc. in distribution phase
dd. in accumulation phase
384. Mutual fund should be advised to expect ee. in transition phase
cc. low post tax returns
WWW.ISFM.CO.IN
ff. who are wealth preserving affluent x. True
individuals y. False
392. The transition phase of an investor's wealth 399. Between the past performance of a fund
cycle is when and its suitability for an investor, past
y. the financial goals have been already performance is more important
met aa. True
z. the investor has retired bb. False
aa. financial goals are approaching
l 2
bb. investor suddenly gets a windfall 400. Structural characterisations of an equity
o 5
fund include
ho 2
393. A high proportion of investment in income aa. costs of investing
funds is required by bb. the specific securities in which the fund
aa. accumulating investors
bb. affluent investors
c
has invested
cc. the number of employees of the AMC
2 5
S 0
cc. investors in the inter-generational dd. all of the above
t 8
transfer phase 401. An equity fund's age and size are irrelevant
e 6
dd. investors in the distribution phase when selecting a fund for investment
k 3
cc. True
ar 8
394. Retired investors should dd. False
,
y. not draw down on their capital
z. not invest in securities which bear risk of
9
402. The charge to an investor at the time of he
capital erosion
M redeems his units from the fund is known as
8
k
aa. continue holding a major portion of their ee. recovery charge
c 6
holding in equity growth funds ff. repurchase load
to 08
bb. never invest in equity gg. redemption weight
hh. exit load
S 0
395. For older investors who want to transfer
t 0
their wealth 403. The load amount charged to a scheme over a
s 54
y. no financial planning is required period of time is called
e
z. the right investment strategy depends gg. entry load
i n
upon who the beneficiaries are hh. exit load
, B, 9 o .
aa. the right investment strategy depends
upon the state of the stock market
ii. deferred load
jj. no-load
9 . c
bb. all the funds can be invested in
F M 68
aggressive equity funds
m
404. Contingent Deferred Sales Charge (CDSC)
gg. is higher for investors who stay invested in
I S 0 i s f
396. Investors who acquire sudden wealth the scheme longer
0
w. can speculate with all the acquired hh. is lower for investors who stay invested in
2 w.
money in the stock markets
x. should not use any of the new wealth to
the scheme longer
2
ii. is the same for all investors irrespective of
-
invest in equity
w
how long they stay invested
4
y. should take the effect of taxes into jj. is not allowed to be charged to mutual fund
2 w
account investors in India
z. need not pay any taxes on the newly
0 1 acquired wealth as it is not a part of their

regular income
405 A fund's declared NAV does not include loads
ee. True
ff. False
397. Only if a specialty offshore fund has
consistently given very good performance, it can 406. Which of the following fund types are
be considered for investment by a retiree comparable
y. True ee. An aggressive equity fund and a money
z. False market mutual fund
ff. A value fund and a government securities
398. Past performance should not be solely fund
relied on for selecting a fund gg. A bond fund and a debt fund
WWW.ISFM.CO.IN
hh. A diversified equity fund and a debt fund ee. performance
ff. risk
407. Who is the primary guardian of unitholders' gg. both the above
funds/assets hh. none of the above
ee. The AMC
ff. The Trustees 415. Beta of an equity fund measures its
gg. The Registrars y. performance
hh. The custodians z. risk
aa. both the above
l 2
408. In case of a fund merger or Take-over bb. none of the above
o 5
gg. High Court approval may not be necessary
ho 2
hh. SEBI approval is a must 416. The best equity fund, relative to others, would
5
ii. all unitholders must be informed have
c
jj. all of the above ee. higher Ex Marks, lower Beta and higher
409. Units of a money market mutual fund can be

S
Gross Dividend Yield
0 2
ff. higher Ex Marks, higher Beta and higher
t 8
issued to Gross Dividend Yield
e 6
aa. individuals gg. lower Ex Marks, lower Beta and lower
k 3
bb. banks Gross Dividend Yield
ar 8
cc. trusts hh. lower Ex Marks, higher Beta and higher
,
dd. all of the above Gross Dividend Yield
M
410. Though Indian mutual funds have restrictions on
9
417. When selecting equity funds for investing, those
8
k
borrowings (only20% of net assets and for six at the top of the performance rankings should be
c
months only) which are to meet cash needs for
6
avoided
to 08
redemption only, UTI is allowed to borrow within ee. True
more relaxed norms ff. False
S 0
gg. True
t 0
hh. False 418. A debt fund's age and size are not important
s 54
when selecting a fund for investment
e
411. An equity fund can be said to be concentrated y. True
when
B 9 . i n
ee. when it invests in only in two or three stocks
z. False
, , o
ff. when it invests in may companies of the
9 c
419. Debt schemes are popular because
M .
same sector y. the Indian Stock Market is always going
8
gg. when top ten holdings account for more than down
SF 0 6 f m
50% of net assets invested
hh. when top ten holdings account for more than
z. the returns are more predictable
aa. most investors are always in debt
I 0 i s
25% of net assets invested
.
bb. all of the above
2 2 w
412. The size of the market capitalisation of a fund's 420. Yield-to-maturity of a debt fund's portfolio is
- w
equity holdings is inversely proportional to the more important when the investment objective is
4
returns that cc. current income
2 w
aa. can be expected from the fund dd. total return
1
bb. level of risk assumed by the fund ee. liquidity
0
cc. state of the stock market ff. all of the above
dd. all of the above
421. Compared to equity funds, income margins for
413. A steady holding of investments in an equity debt funds are
fund's portfolio indicates ee. narrow
ee. long-term orientation ff. higher
ff. lower transaction costs gg. the same
gg. both the above hh. almost nil
hh. none of the above
422. Debt funds with long-term investments carry
414. Ex-Mark of an equity fund measures its higher risk of capital loss
WWW.ISFM.CO.IN
cc. True v. unforeseen economic changes affecting the
dd. False portfolio's preferred sectors
w. both the above
423. The differerentiating factor among debt funds of x. none of the above
comparable maturity and quality is
aa. gross yields 431. If a charitable trust approaches a distributor with
bb. costs an application for investment in a mutual fund, the
cc. fund age distributor should
dd. tenure of the fund manager ee. accept the application without wasting time
l 2
ff. reject the application outright
o 5
424. Dstribution tax should be taken into into account gg. refer to the offer document
ho 2
when computing net returns from hh. accept the application as a direct application
5
aa. equity funds
c
bb. debt funds 432. An application form for investment in a mutual
cc. both the above
fund is available with
S
cc. the offer document
0 2
t 8
dd. the abridged annual report
e 6
425. All debt fund investors are exposed to risk of ee. the key information memorandum
k 3
principal loss ff. a bank challan
ar 8
ee. True
,
ff. False 433. An aggrieved unit-holder of a mutual fund can
M 9
sue
426. Running a money market mutual fund requires gg. the AMC
more of
cc. credit analysis skills
c k 6 8
hh. the trustees
ii. the sponsor if returns have been guaranteed
to 08
dd. equity analysis skills by them
ee. patience jj. none of the above
S 0
ff. trading skills
t 0
434. As per SEBI regulations for valuation of
s 54
427. Which is the most important in selecting debt investments held by mutual funds, a security is
e
fund for better return considered "non-traded" when it
B 9
ee. past performance
ff. level of interest rates
. i n ee. has not been traded for 60 days prior to
valuation
, ,
gg. fund expertise
9 c o
ff. has not been traded for 30 days prior to
M .
hh. the securities in which it has invested valuation
8
gg. is not listed on any stock exchange
SF 0 6
a debt fund with a
f m
428. Investors should be advised to avoid investing in hh. is held by the mutual fund without buying or
selling
I 0 i s
cc. lower rated portfolio and higher expense
.
2
ratio 435. An Ex-Mark of 100% is possible for
2 w
dd. higher rated portfolio and lower expense cc. a growth fund
- w
ratio dd. an aggressive growth fund
4
ee. lower rated portfolio and lower expense ee. an index fund
2 w
ratio ff. a balanced fund
1
ff. lower rated portfolio and higher expense
0
ratio 436. A trail commission is justified when
w. an investor cancels his investment
429. An ideal money market mutual fund must have x. the investor redeems his investment in a
cc. lower returns very short time
dd. lower expense ratio y. an agent invests his own money, not that of a
ee. low quality of investments client
ff. all the above z. an agent sells many mutual funds
430. Circumstances that might cause an investor to 437. Of the following, which type of fund would
change the composition of his portfolio have a higher P/E multiple in comparison to the
u. cyclical changes in economy average market multiple
WWW.ISFM.CO.IN
ee. A Value Fund
ff. A Growth Fund 444. A fund that charges a load is better than a no-
gg. An Index Fund load fund
hh. Could be any of the above three, one cannot cc. True
generalise dd. False
438. Which of the following is not true as per SEBI 445. An AMC can approach investors either directly
Regulations for Debt Funds? or with the help of
ee. Investment in rated debt securities of a aa. individual agents
l 2
single issuer should not exceed 15% of NAV bb. banks and non-banking finance companies
o 5
ff. Total investment in unrated debt securities cc. distribution companies
ho 2
of a single issuer should not exceed 25% of dd. all of the above
5
NAV
c
gg. Total investment in unrated debt securities 446. Which of the following is true for Equity Linked
below investment grade should not exceed
25% of NAV
Savings Scheme (ELSS)
S 0 2
aa. A tax rebate is available to investors in these
t 8
hh. Total investment in rated debt securities schemes
e 6
below investment grade should not exceed bb. The investment has to be locked in for 3
k 3
25% of NAV years
ar 8
cc. The minimum amount for investment is
,
439. A Money Market Mutual Fund is most likely to fixed
M 9
invest in dd. All of the above
ee. Corporate Bonds
ff. Equity Shares
c k
gg. Government Securities with maturity less
6 8
447. A prospective investor
z. has the same status as a unit-holder of a fund
to 08
than 1 year aa. can sue the AMC/trustee
hh. All of the above bb. has no legal recourse
S 0
cc. all of the above
t 0
440. Of the following, which would be suitable for a
s 54
retiree with a modest risk appetite 448. An investor can assess the performance of his
e
gg. Value Fund mutual fund by comparing it with the performance of
B 9
hh. Diversified Equity Fund
ii. Growth Fund
. i n cc. other mutual fund of the same type
dd. the stock market
, ,
jj. Balanced Fund
9 c o
ee. other financial products
M .
ff. all of the above
8
441. A high portfolio turnover for a fund indicates
SF 0 6 f m
cc. that the fund is active
dd. higher transaction costs
449. Unrated securities in the portfolio of a mutual
fund are not to be valued
I 0 i
ee. both the above
. s ee. True
2
ff. none of the above ff. False
- 2 w w
442. Unit Trust of India's US-64 Scheme 450. An exit load guarantees a higher return
4
ee. is listed on stock exchanges aa. True
2 w
ff. has a fixed price for sale and repurchase bb. False
1
gg. has its sale and repurchase price declared 451 Bonds held in the portfolio of a mutual fund are
0
periodicaly by UTI valued at yield to maturity
hh. has its price determined by market forces ee. True
ff. False
443. The Indian debt market
cc. is Wholesale in nature 452 The Valuation of non-traded equity shares is
dd. comprises large players like financial done at the trading price 30 days prior to valuation
institutions and banks date
ee. witnesses large scale trading in government ii. True
securities jj. False
ff. all of the above
WWW.ISFM.CO.IN
kk. Rs.1000
453 If a unit-holder does not agree to the merger of ll. none of the above
his fund with another, he has not exit option
kk. True 461. When a scheme with assured returns is being
ll. False launched, which of the following need not be
published in the offer document?
454. The most important factor look for when ii. Means of fulfilling the guarantee
investing in a corporate fixed deposit is the jj. Information for all schemes launched by the
kk. yield fund in the past
l 2
ll. rate of interest kk. comparison with other mutual funds
o 5
mm. credit rating of the deposit ll. Investment objective
ho 2
nn. none of the above
5
462. Mutual fund units can be distributed by
c
455. The most important reason for an investor to ee. trustees of the fund
prefer a bank deposit to a mutual fund is
gg. the credit worthiness of the bank
ff. the AMC
S 0
gg. Non-banking finance companies
2
t 8
hh. because the bank does not invest in hh. banks
e 6
securities
k 3
ii. that the bank offers a guarantee 463. A debt fund distributes 10% dividend. How
ar 8
jj. all of the above much tax does the investor have to pay on this
,
dividend?
M 9
456. A deep discount bond ii. 10%
ii. is always sold at a discount to its issue price jj. 12%
jj. bears interest annually
c k
kk. is redeemed at a price much higher than
kk. 20%
6
ll. None 8
to 08
issue price
ll. bears interest at varying interests 464. A debt fund distributes a 10% dividend. How
S 0
much tax does the fund have to pay?
t 0
457. A mutual fund in India is a ii. 10%
s 54
ii. body corporate jj. 12%
e
jj. company kk. 10.2%
kk. trust
B 9 .
ll. an asset management company
i n ll. None
, 9, c o
465. How many scrips is the NIFTY constitutes of
M .
458. When selling a mutual fund, a good agent would cc. 40
8
never dd. 100
SF 0 6 f m
kk. describe the past performance of the scheme
ll. compare the fund with other mutual funds
ee. 30
ff. none of the above
I 0
mm.
i s
assure a rate of return
.
2
nn. compare the fund with other financial 466. Which of the following is the first step in
2 w
products financial planning
- w
ii. Asset Allocation
4
459. An investor buys one unit of a fund at an NAV jj. Selection of fund
2 w
of Rs.20. He receives a dividend of Rs.3 when the kk. Studying the features of a scheme
1
NAV is Rs.21. The unit is redeemed at an NAV of ll. None of the above
0
Rs.22. Total Return is
ee. 25.71% 467. Why should one buy an insurance policy?
ff. Rs.27.51 gg. It gives high current returns
gg. 21.27% hh. It gives good capital appreciation over its
hh. Rs.21.75 term
ii. It should be bought due to the need for
460. A fund sells 100 units of face value Rs.10/- at an insurance and not as an investment
NAV of Rs.12.25. How much would be credited to jj. All of the above
unit capital?
ii. Rs.1225 468. SEBI Regulations for Mutual Funds were
jj. Rs.225 formulated in
WWW.ISFM.CO.IN
aa. 1992
bb. 1993 476. A disadvantage suffered by mutual fund investor
cc. 1995 is that he has no control over the costs of investing
dd. 1996 gg. True
hh. False
469. Expenses incurred by a fund for printing of Key
Information Memorandum can be amortised over 477. Which of the following statements about UTI is
cc. 10 Yrs untrue
dd. 5 Yrs ii. It was set up in 1963
l 2
ee. 15 Yrs jj. It was formed by RBI
o 5
ff. Cannot be amortised kk. It was established by an act of Parliament
ho 2
ll. It was not given a monopoly status
5
470. A mutual funds' investments are guided by the
c
gg. AMC 478. Which scheme has the largest investor base?
hh. Board of Trustees
ii. Investment Objectives
gg. ULIP
S
hh. UTI Mastershare
0 2
t 8
jj. Unit holders ii. US-64
e 6
jj. SBI Magnum
k 3
471. UTI was the only mutual fund for the period
ar 8
ii. 1984 to 1988 479. Which was the first diversified equity
,
jj. 1963 to 1988 investment scheme in India
M 9
kk. 1964 to 1992 gg. SBI Magnum
ll. none of the above hh. UTI Mastershare
c k
472. Investors who follow the fixed Asset Allocation
ii. MEP-91
6 8
jj. Mastergain-92
to 08
approach
ee. maintain balance in their portfolio by 480. The private sector was granted permission to
S 0
liquidating a part of the position in the asset enter the mutual fund industry in
t 0
class which has given higher return and y. 1992
s 54
reinvesting in the other asset class which has z. 1993
e
lower return aa. 1998
B 9
ff. are not disciplined
. i n
gg. increase their equity position when equity
bb. 1995
, ,
prices tend to climb
9 c o
481. The first non-UTI mutual fund was
M .
hh. none of the above ii. SBI MF
8
jj. LIC MF
SF 0 6 f m
473. An investor should not invest in a mutual fund if
ee. his capital base is large
kk. Canbank MF
ll. Indian Bank MF
I 0 i s
ff. he is able to carry out detailed investment
.
2
research and monitor the stock market 482. The organisation responsible for a
2 w
gg. both the above comprehensive set of regulations for all mutual funds
- w
hh. none of the above in India is
4
gg. RBI
2 w
474. Mutual fund can benefit from economies of hh. SEBI
1
scale because of ii. AMFI
0
ee. portfolio diversification jj. SHCIL
ff. risk reduction
gg. large volume of trades 483. The 1999 Union Government Budget helped the
hh. none of the above Mutual Fund industry by
kk. regulating the industry practices
475. Which of the following is a disadvantage ll. exempting all mutual fund dividends in the
suffered by a mutual fund investor? hands of investors from income tax
gg. High liquidity mm. approving the code of ethics
hh. diversification formulated by AMFI
ii. no tailor made portfolio nn. doing away with all regulations for mutual
jj. low investment funds
WWW.ISFM.CO.IN
mm. asset classification, sector
484. During the period 1992-99, the mobilisation of selection, selection of fund managers and
funds by the mutual fund industry was about schemes
ii. 5% - 6% of gross domestic savings nn. selection of fund managers and schemes,
jj. 2% - 4% of gross domestic savings sector selection, asset classification
kk. 7% - 10% of gross domestic savings
ll. 25% - 40% of gross domestic savings 491. Compounding of interest is best explained by a
gg. balanced fund
485. Which of the following about Public Providend hh. growth fund
l 2
Fund (PPF) are untrue ii. value fund
o 5
gg. 50% of the balance of the 4th year can be jj. income fund
ho 2
withdrawn in the 7th year
5
hh. The interest is tax free 492. From whom can a unit-holder seek redressal if
c
ii. The rate of interest is 12% p.a. his complaint is not entertained by the mutual fund
jj. contributions upto Rs.60000 are eligible for
tax rebate
ii. AMC
S
jj. Board of Trustees
0 2
t 8
kk. SEBI
e 6
486. A close-ended scheme is quoted on the stock ll. RBI
k 3
exchange at a discount to its NAV when
ar 8
aa. the markets are bearish 493. An investor wishes to switch between a money
,
bb. investors perceive that the fund will be market mutual fund and an equity fund. What would
M 9
unable to maintain the NAV you advise him?
cc. the assets of the fund are undervalued gg. It would be better to stick to one type of
c k 6 8
fund, the one that meets his investment
objective.
to 08
487. Which of the following is a fundamental hh. He should keep switching parts of his
attribute of a mutual fund scheme investment from the equity fund to the
S 0
ii. The names and addresses of the registrars money market fund as the market rises and
t 0
and custodians switch back to the equity fund when the
s 54
jj. The nature of the scheme being income market falls
e
bearing ii. He should switch from the money market
B 9
portfolio
. i n
kk. The specified stocks in the scheme's fund to the equity fund in a rising market
and switch back to money market fund when
, , o
ll. The name and address of the compliance
9 c
the market falls
M .
officer jj. none of the above
F 68 m
488. Offer Document of a mutual fund is 494. For choosing an appropriate benchmark to
I S 0 i s f
ii. required by investors measure a scheme's performance, all of the following
0
jj. required by the AMC for its own reference are required except
2 .
kk. required as per SEBI regulations
w
ee. the composition and size of the portfolio
2
ll. not mandatory as per SEBI ff. the investment objective
- w
gg. historical data of fund performance
4
489. The units of a scheme being sold and hh. the nature of investments
2 w
repurchases as per the procedure laid down is one of
1
the fundamental attributes of a scheme 495. Which of the following characterise the fund
0
ii. True that a risk averse investor should choose
jj. False ee. Gross dividend yield 15% Beta 1.5, Ex-
Marks 90
490. The steps involved in the selection of an equity ff. Gross dividend Neil 10%, Beta 1, Ex-Marks
fund for investment are 70
kk. sector selection, asset classification, gg. Gross dividend yield 11%, Beta 0.9, Ex-
selection of fund managers and schemes Marks 80
ll. sector selection, selection of fund managers hh. Gross dividend yield 12%, Beta 1.2, Ex-
and schemes, asset classification Marks 80
WWW.ISFM.CO.IN
hh. 50% in equity funds and 50% in income
496. A mainstream diversified debt fund is most funds
affected by ii. 90% in equity funds having a higher P/E
ee. reinvestment risk Ratio than the market
ff. liquidity risk jj. all the money in a balanced fund
gg. interest rate risk
hh. default risk 499. An investor buys units in a fund that has given
excellent returns in the past, but his expectations are
497. If yields fall, a debt fund manager will do all of not met as the fund does not perform well this year.
l 2
the following except The investor can
o 5
dd. sell short maturity securities and buy long gg. sue the AMC
ho 2
maturity securities hh. sue the Trustees
5
ee. see that the fund's average duration becomes ii. sue the agent
c
longer than the market's average duration jj. none of the above
ff. sell long duration securities and buy short
duration securities
S 0 2
500. A fund's investments at market value total
t 8
gg. sell high coupon securities and buy low Rs.700 crores, Total liabilities stand at Rs.50 lacs and
e 6
coupon securities the number of units outstanding is Rs.28 Crores.
k 3
What is the NAV
ar 8
498. In which type of schemes should an unmarried cc. Rs.30.19
,
professional working HLL invest dd. Rs.24.98
M 9
gg. Scheme investing 80% in debt securities ee. Rs.32.15
ff. Rs.40.49
c k 6 8
S to 0 08
st 0
B e9 . i n 54
, 9, c o
F M 8 .
S 0 6 f m
I 0 . i s
2 2 w
4 - w
1 2 w
0
WWW.ISFM.CO.IN
ol 5 2
c ho 2 5 2
t S 80
k e 36
ar , 8
M 8 9
c k 6
S to 0 08
st 0
B e
Answers to Practice Question
9 . i n 54
, , o
Q. Ans Q. No Ans Q. No Ans Q. No Ans Q. No Ans
9 c
No
F M 1
8
b
. 51 a 101 d 151 c 201 b
6 m
2 b 52 d 102 a 152 d 202 d
S 0 f
3 d 53 b 103 b 153 d 203 b
I 4
0
d
. i s 54 d 104 c 154 d 204 d
2
5 c 55 c 105 a 155 b 205 b
2 w
6 c 56 c 106 d 156 a 206 c
- w
7 b 57 c 107 a 157 c 207 a
4
8 c 58 c 108 d 158 d 208 d
1 2
9
10
d
c
w 59
60
b
d
109
110
d
b
159
160
a
d
209
210
a
c
0
11 b 61 c 111 b 161 a 211 b
12 b 62 a 112 c 162 d 212 d
13 d 63 d 113 a 163 c 213 d
14 c 64 d 114 d 164 c 214 a
15 b 65 b 115 d 165 b 215 a
16 d 66 c 116 b 166 d 216 a
17 b 67 c 117 b 167 c 217 b
18 d 68 d 118 a 168 b 218 b
19 c 69 c 119 c 169 b 219 b
WWW.ISFM.CO.IN
20 c 70 d 120 a 170 d 220 d
21 b 71 b 121 b 171 c 221 b
22 d 72 b 122 c 172 b 222 a
23 c 73 d 123 a 173 b 223 b
24 a 74 d 124 d 174 d 224 a
25 d 75 c 125 c 175 d 225 c
26 d 76 a 126 d 176 b 226 a
27 c 77 c 127 d 177 c 227 c
28 b 78 a 128 a 178 c 228 c
29 c 79 d 129 d 179 c 229 b
30 d 80 a 130 a 180 c 230 b
31
32
b
c
81
82
c
b
131
132
d
a
181
o
182l d
b
231
232
5 2
d
a
ho 2
33 b 83 b 133 b 183 d 233 b
34
35
b
b
84
85
b
d
134
135
c
b
c
184
185
c
b
234
2
235
5 b
c
S 0
36 c 86 a 136 d 186 a 236 c
t 8
37 b 87 b 137 a 187 c 237 c
e 6
38 c 88 c 138 c 188 a 238 a
k 3
39 a 89 b 139 b 189 d 239 b
ar 8
40 b 90 b 140 c 190 b 240 b
,
41 b 91 b 141 a 191 d 241 b
M 9
42 a 92 c 142 b 192 b 242 b
8
43 b 93 c 143 c 193 b 243 a
44 c 94
c k b 144
6
b 194 a 244 b
08
45 b 95 a 145 d 195 d 245 c
to
46 b 96 b 146 c 196 b 246 a
S 0
47 c 97 a 147 d 197 c 247 a
t 0
48 b 98 d 148 c 198 c 248 c
s 54
49 B 99 c 149 b 199 b 249 c
e
50 A 100 a 150 c 200 a 250 a
B 9 i n
Answers to Practice Question for AMFI Test
.
, 9, A
c o A A A A
M 8 .
Q. No n Q. No n Q. No n Q. No n Q. No n
F 6
s s s s s
S 0
251
f m
a 301 a 351 b 401 b 451 a
I s
252 b 302 a 352 a 402 c 452 b
20
253
254
. i d
c
303
304
a
d
353
354
d
b
403
404
c
b
453
454
b
c
- 2
255
w
256w c
a
305
306
b
b
355
356
b
d
405
406
a
c
455
456
a
c
4 w
257 a 307 d 357 a 407 c 457 c
2
258 d 308 d 358 b 408 d 458 c
1
259 b 309 b 359 d 409 d 459 a
0
260 a 310 a 360 b 410 a 460 c
261 c 311 d 361 d 411 c 461 c
262 b 312 c 362 a 412 b 462 d
263 b 313 d 363 b 413 c 463 d
264 c 314 d 364 c 414 a 464 c
265 a 315 c 365 b 415 b 465 d
266 b 316 b 366 b 416 a 466 a
267 a 317 b 367 c 417 a 467 c
268 b 318 b 368 c 418 a 468 d
269 a 319 b 369 b 419 b 469 b
WWW.ISFM.CO.IN
270 d 320 a 370 a 420 b 470 c
271 b 321 a 371 b 421 a 471 b
272 b 322 c 372 b 422 a 472 a
273 b 323 d 373 a 423 a 473 c
274 b 324 b 374 b 424 b 474 c
275 b 325 a 375 a 425 a 475 c
276 c 326 b 376 d 426 d 476 a
277 b 327 b 377 d 427 c 477 d
278 a 328 c 378 a 428 a 478 c
279 b 329 b 379 c 429 b 479 b
280 a 330 b 380 a 430 c 480 b
281 b 331 a 381 b 431 c 481 a
282
283
a
b
332
333
a
b
382
383
b
a
432
433
ol c
c
482
483
b
b
5 2
ho 2
284 c 334 d 384 d 434 b 484 a
5
285 c 335 c 385 c 435 c 485 c
c 2
286 b 336 d 386 b 436 b 486 b
S 0
287 b 337 b 387 a 437 b 487 b
t 8
288 d 338 d 388 c 438 b 488 c
e 6
289 c 339 d 389 a 439 c 489 a
k
290 a 340 b 390 c 440 d 490 c
3
ar
291 b 341 s 391 b 441 c 491 b
292
293
c
d
342
343
d
c
392
393
c
d
442
443
,
c
d
8 492
493
c
b
M 9
294 a 344 d 394 b 444 b 494 c
8
295 a 345 d 395 b 445 d 495 c
296 c 346
c k c 396 c
6
446 d 496 c
08
297 d 347 b 397 b 447 a 497 c
to
298 b 348 b 398 a 448 d 498 c
0
299 c 349 b 399 b 449 b 499 d
300
t S b 350 a 400
0
b 450 b 500 b
es n 54
B, 9 . i
, 9 c o
F M 8 .
S 0 6 f m
I 0 . i s
2 2 w
4 - w
1 2 w
0
WWW.ISFM.CO.IN

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International School of Financial Markets

Mutual Fund questions Bank

f m 13. "Load" cannot be recovered

0 1 22. NAVs of equity funds are not affected by

. i s 58. The minimum amount to be raised, and the

75. Investors' rights under a scheme are

0 0 87. Commission rates or loads applicable to big

93. How many major distributor Companies are there

true, fair and adequate

. i n j. does not cover distribution and selling

. s h. Funds should be managed in accordance

141. Investments made by a mutual fund on behalf of

156. The Board of Trustees of a mutual fund:

203. The prospectus or Offer Document containing

218 The offer document is not a legal document

B . i n 263. Yield curve is also known as

285. The Interest Rate Forecasting Unit of a debt

347. Finance Acts of 2000 and 2001 have reduced

8 . c 358. A small investor can build a diversified

0 i s f aa. buying one share each of all listed

w. bb. investing in a mutual fund

362. Gold and real estate are attractive

376. Volatility of an equity fund portfolio is

368. A sector fund is a 377. Equity price risks are

378. Diversification reduces 385. Asset Allocation is

0 1 383. One of the most effective ways to invest

0 1 acquired wealth as it is not a part of their

409. Units of a money market mutual fund can be

. i s 54 d 104 c 154 d 204 d

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