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Posted Date: 21 Dec 2008 Posted By: Nilesh Panchal Member Level: Platinum
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2008 Association of Mutual Funds in India (AMFI) AMFI Advisor Module AMFI AMFI Model Mock Sample Test M University Question paper
1.The offer document has to be fully revised and updated
a. Every six months
b. Once in two years
c. Every quarter
d. Every month
2.An addendum giving details of material change in the offer documents should be circulated
a. Distributors/brokers
b. Unit holders
c. SEBI
d. All of the above
3.Which of the following is not true for offer documents of open-ended schemes
a. It is first issued at the time the scheme is launched
b. It is registered with SEBI
c. It has to be revised periodically
d. It need not be revised at all
4.All important disclosures that the mutual fund is required to make, by regulation are contained in the offer document
a. True
b. False
5.The offer document issued when an open-ended scheme is launched is valid for all times, until amended
a. True
b. False
6.The most important source of information for a prospective investor is
a. Offer document
b. Annual Report of the AMC
c. Economic Times
d. AMFI Newsletter
7.An investor need not study the offer document before investing in a scheme
a. True
b. False
8.The offer document is not a legal document
a. True
b. False
9.Initial issue expenses are charged to a scheme in the first year itself
a. True
b. False
10.Scheme-wise annual report of a mutual fund need not be
a. Sent to all unit-holders
b. Forwarded to SEBI
c. Published as an advertisement
d. Stock exchanges
11.Mutual funds value their investments
a. At purchase price
b. On a mark-to-market basis
c. At par
d. At book value
12.Investors are totally exempt from paying any tax on the dividend income they receive from mutual funds
a. True
b. False
13.Income distributed to unit-holders by a debt fund is liable to dividend distribution tax
a. True
b. False
14.A close-ended has average weekly net assets of Rs.200 crore. As per SEBI regulations, the AMC can charge the fund with investment and advisory fee upto:
a. Rs.2.25 Crores
b. Rs.2.00 Crores
c. Rs.2.50 Crores
d. Rs.3.00 Crores
15.A passive fund manager
a. Researches stocks extensively
b. Does not buy and sell stocks often
c. Does not have to go through the process of stock selection
d. Does not have to track stocks
16.A fund manager managing an index fund
a. Has to keep fund expenses low
b. Does not have to research stocks
c. Does not have to balance his portfolio
d. None of the above
17.A growth manager looks for
a. High current income
b. Undervalued stocks
c. Above average earnings growth
d. None of the above
18.A value manager does not look for
a. Stocks that are currently undervalued in the market
b. Stocks whose worth will be recognised by the market in the long term
c. High current yield
d. Long term capital appreciation
19.From an investor's viewpoint, the most important is
a. A fund's investment style
b. Performance of the fund
c. The fund manager's judgement
d. None of the above
20.Fundamental analysis involves
a. Checking the foundations of the company's factory building
b. Research into the operations and finances of the company
c. Studying the company's share prices
d. None of the above
21.Which of the following is not considered for technical analysis
a. Historical data on the company's share price
b. The company share's trading volume
c. Current market sentiment
d. The company's regulatory environment
22.Quantitative analysis is more likely to be done to evaluate a particular sector or industry rather than any specific stock
a. True
b. False
23.Fundamental analysis form the basis to decide
a. When to buy a given share
b. Whether to buy a given share or not
c. Whether to use technical analysis or quantitative analysis
d. Whether the company's factory can withstand earthquakes
24.Technical analysis guides the decision on
a. Whether to buy or sell
b. The right time to buy or sell
c. Whether company's technical personnel are adequately qualified
d. None of the above
25.Which of the following is not an investment philosophy
a. Capitalising on economic cycles
b. Focusing on growth sectors
c. Capitalisation
d. Finding value stocks
26.When expecting a fall in market price, fund managers can reduce the loss in portfolio value by
a. Speculating
b. Not buying and selling shares at all for some days
c. Using equity derivatives
d. Giving TV Interviews to improve sentiment
27.Equity derivative instruments are
a. Shares
b. Bonds
c. Contracts
d. Notes
28.A futures contract allows one to buy or sell the underlying shares, but need not result in delivery
a. True
b. False
29.Derivatives cannot be based on market indices
a. True
b. False
30.In a mutual fund, the overall decisions on allocating money to particular industries/sector are taken by
a. Equity analysts
b. Fund managers
c. Security dealers
d. Trustees
31.Continuous tracking of the companies in which a mutual fund has invested is done by
a. Continuous tracking systems
b. Equity analysts
c. Trustees
d. Security dealers
32.Security dealers of a mutual fund
a. Guard the cabin of the fund manager
b. Execute buy and sell orders for the fund
c. Decide which shares to buy or sell
d. None of the above
33.As per SEBI's requirements each scheme of a mutual fund should have a dedicated fund manager
a. True
b. False
34.Debt securities bought at a discount to their face value are generally
a. Interest bearing
b. Zero coupon bonds
c. Paying interest at a floating rate
d. None of the above
35.In India, a large part of debt securities pay interest on
a. A floating rate basis
b. A fixed rate plus a variable portion
c. A fixed rate
d. Zero coupon basis
36.The Indian debt market is largely wholesale in nature
a. True
b. False
37.In the wholesale debt market, the largest proportion of trading is seen in
a. Government Securities
b. Corporate Bonds
c. T -Bills
d. PSU Bonds
38.The largest proportion of trades done in the wholesale debt market is accounted by
a. Mutual funds
b. Foreign banks
c. Indian banks
d. Financial institutions
39.Certificates of Deposits (CD’s) are issued by
a. Regional Rural Banks
b. Corporates
c. Scheduled commercial banks
d. None of the above
40.Commercial Paper is issued by corporate bodies
a. To meet short-term working capital requirements
b. To finance the acquisition of long term capital assets
c. To retire long term debt
d. To pay dividend
41.Government securities are issued through the RBI
a. True
b. False
42.The yield on Treasury Bill (T-Bill) is determined by
a. The Government of India
b. Auction
c. The State Governments
d. Floating rate method
43.Which of the following are not normally found in the portfolio of a debt fund
a. Long-dated Government Securities
b. Corporate debentures
c. Bonds issued by financial institutions
d. Certificates of deposit issued by banks
44.Which of the following do not represent the amount an investor of a debt security will be paid upon maturity
a. Par value
b. Face value
c. Fair value
d. Redemption value
45.Coupon of a debt security refers to
a. A piece of paper attached to the certificate
b. The return on investor would earn
c. The amount rate of interest paid on par value of the bond
d. None of the above
46.Which of the following do not apply to the term 'maturity' of a debt security ?
a. The date on which the certificates becomes old
b. The term of the bond
c. The date of redemption
d. The date on which the issuer has to repay the amount
47.Call or put provisions are used to modify the fixed maturity of debt securities
a. True
b. False
48.A call provision in debt issue allows the issuer to
a. Call out the names of the investors
b. Redeem the debt on maturity
c. Extend the tenure of the debt
d. Redeem the debt before maturity
49.A put provision in a debt issue allows
a. Investor to put away the certificates in safe deposit vaults
b. Investors to redeem debt prior to maturity
c. Issuers to redeem debt prior to maturity
d. Investors to extend the tenure of debt
50.Current yield relates interest on a security to
a. It’s current market price
b. Its face value
c. It’s fair value
d. The current price of T-Bills
51.To compare bonds with different coupon rates, maturities and prices, investors would use:
a. Current yield
b. Technical analysis
c. Yield to maturity
d. Fundamental analysis
52.When interest rates rise, bond prices
a. Also rise
b. Fall
c. Are not affected
d. Fluctuate either up or down
53.Yield curve is also known as
a. Curve of Interest
b. Term Structure of Interest Rates
c. Curve that yields
d. None of the above
54.An important indicator of expected trends in interest rates is
a. The Economic Times
b. The Sensex
c. The Yield Curve
d. The Chief Minister's Speech
55.It may not be possible to reinvest interest received at the same rate as principal. This is known as
a. Reinvestment risk
b. Inflation risk
c. Interest-rate risk
d. Call risk
56.A bond's rating indicates its
a. Reinvestment risk
b. Default risk
c. Inflation risk
d. Interest-rate risk
57.If a bond cannot be sold at a price near its value, it means that investment in this bond has
a. High liquidity risk
b. High default risk
c. Low liquidity risk
d. Inflation risk
58.The additional yield required to account for the risk of default by the borrower is known as
a. Yield plus
b. Yield spread
c. Yield extra
d. Yield premium
59.A high credit rating does not mean
a. High yield spread
b. High perceived safety
c. Low yield spread
d. Low risk premium
60.If 10-year government securities yields 10% and a 10 -Year fixed de posit in a company yields 12%,the yield spread is
a. 12%
b. 22%
c. 10%
d. 2%
61.The "duration" of an interest - bearing bond is
a. Longer than its maturity
b. Less than its maturity
c. Equal to its maturity
d. The quality of paper used for the certificate
62.A bond with a coupon of 9% when interest rates for similar maturities are 11% will sell
a. Above par
b. Below par
c. At par
d. At a price unrelated to the prevailing interest rate
63.Changes in foreign exchange rates have no bearing on interest rates
a. True
b. False
64.Inflation and interest rates are inversely proportional
a. True
b. False
65.Investment policies of a mutual fund are determined by
a. The fund manager
b. The AMC management
c. The marketing department based on what distributors want
d. The investors
66.Which of the following measures are not taken by SEBI for protecting investors of mutual funds
a. Mandating minimum levels of diversification for mutual funds
b. Ensuring that the funds are not used to favour a few companies
c. Tracking the securities that each fund has invested in
d. Ensuring that the funds are invested in approved securities only
67.As per SEBI norms, a fund's investments, in the equity shares of any one company are restricted to
a. 25% of NAV
b. 10% of NAV
c. 50% of NAV
d. 100% of NAV
68.A mutual fund manager is not allowed to sell short when he expects a crash in the market
a. True
b. False
69.In a mutual fund, having many schemes, all securities bought can be held in a general account and transferred later to various schemes to attain certain profit or loss objectives
a. True
b. False
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