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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 P University Question paper
1.Distribution tax should be taken into account when computing net returns from
a. Equity fund
b. Debt funds
c. Both the above
d. None of the above
2.All debt fund investors are exposed to risk of principal loss
a. True
b. False
3.Running a money market mutual fund requires more of
a. Credit analysis skills
b. Equity analysis skills
c. Patience
d. Trading skills
4.Which is the most important in selecting debt fund for better return
a. Past performance
b. Level of interest rates
c. Fund expertise
d. The securities in which it has invested
5.Investors should be advised to avoid investing in a debt fund with a
a. Lower rated portfolio and higher expense ratio
b. Higher rated portfolio and lower expense ratio
c. Lower rated portfolio and lower expense ratio
d. Higher rated portfolio and higher expense ratio
6.An ideal money market mutual fund must have
a. Lower returns
b. Lower expense ratio
c. Low quality of investment
d. All the above
7.Circumstances that might cause an investor to change the composition of his portfolio
a. Cyclical changes in economy
b. Unforeseen economic changes affecting the portfolio's preferred sectors
c. Both the above
d. None of the above
8.If a charitable trust approaches a distributor with an application for investment in a mutual fund the distributor should
a. Accept the application without wasting time
b. Reject the application outright
c. Refer to the offer document
d. Accept the application as a direct application
9.An application form for investment in mutual fund is available with
a. The offer document
b. The abridged annual report
c. The key information memorandum
d. A bank challan
10.An aggrieved unit-holder of a mutual fund can sue
a. The AMC
b. The trustees
c. The sponsor if returns have been guaranteed by them
d. None of the above
11.As per SEBI regulations for valuation of investments held by mutual funds, a security is considered "non-traded" when it
a. Has not been traded for 60 days prior to valuation
b. Has not been traded for 30 days prior to valuation
c. Is not listed on any stock exchange
d. Is held by the mutual fund without buying or selling
12.An ex-mark of 100% is possible for
a. A growth fund
b. An aggressive growth fund
c. An index fund
d. A balanced fund
13.A trail commission is justified when
a. An investor cancels his investment
b. The investor redeems his investment in a very short time
c. An agent invests his own money, not that of a client
d. And agent sells many mutual funds
14.Of the following, which type of the fund would have a higher p/e multiple in comparison to average market multiple
a. A value fund
b. A growth fund
c. An index fund
d. Could be any of the above three, one cannot generalise
15.Which of the following is not true as per SEBI regulations for debt funds?
a. Investment in rated debt securities of a single issuer should not exceed 15% of NAV
b. Total investment in unrated debt securities of a single issuer should not exceed 25% of NAV
c. Total investment in unrated debt securities below investment grade should not exceed 25% of NAV
d. Total investment in rated debt securities below investment grade should not exceed 25% of NAV
16.A money market mutual fund is most likely to invest in
a. Corporate bonds
b. Equity shares
c. Government securities with maturity less than 1 year
d. All of the above
17.Of the following, which would be suitable for a retiree with a modest risk appetite
a. Value fund
b. Diversified equity fund
c. Growth fund
d. Balanced fund
18.A high portfolio turnover for a fund indicates
a. That the fund is active
b. Higher transaction cost
c. Both of the above
d. None of the above
19.Unit Trust of India's US-64 scheme
a. Is listed on stock exchanges
b. Has a fixed price for sale and repurchase
c. Has its sale and repurchase price declared periodically by UTI
d. Has its price determined by market forces
20.The Indian debt market
a. Is wholesale in nature
b. Comprise large players like financial institutions and banks
c. Witnesses large scale trading in government securities
d. All of the above
21.A fund that charges a load is better than a no-load fund
a. True
b. False
22.An AMC can approach investors either directly or with the help of
a. Individual agents
b. Banks and non-banking finance companies
c. Distribution companies
d. All of the above
23.Which of the following is true for equity linked savings scheme (ELSS)
a. A tax rebate is available to investors in these schemes
b. The investment has to be locked in for 3 years
c. The minimum amount for investment is fixed
d. All of the above
24.A prospective investor
a. Has the same status as a unit-holder of a fund
b. Can sue the AMC / trustee
c. Has no legal recourse
d. All of the above
25.An investor can assess the performance of his mutual fund by comparing it with the performance of
a. Other mutual fund of the same type
b. The stock market
c. Other financial products
d. All of the above
26.Unrated securities in the portfolio of a mutual fund are not to be valued
a. True
b. False
27.An exit load guarantees a higher return
a. True
b. False
28.Bonds held in the portfolio of a mutual fund are valued at yield to maturity
a. True
b. False
29.The valuation of non-traded equity shares is done at the trading price 30 days prior to valuation date
a. True
b. False
30.If a unit-holder does not agree to the merger of his fund with another, he has no exit option
a. True
b. False
31.The most important factor to look for when investing in a corporate fixed deposit is the
a. Yield
b. Rate of interest
c. Credit rating of the deposit
d. None of the above
32.The most important reason for an investor to prefer a bank deposit to a Mutual fund is
a. The credit worthiness of the bank
b. Because the bank does not invest in securities
c. That the bank offers a guarantee
d. All of the above
33.A deep discount bond
a. Is always sold at a discount to its issue price
b. Bears interest annually
c. Is redeemed at a price much higher than issue price
d. Bears interest at varying interests
34.A mutual fund in india is a
a. Body corporate
b. Company
c. Trust
d. An asset management company
35.When selling a mutual fund, a good agent would never
a. Describe the past performance of the scheme
b. Compare the fund with other mutual funds
c. Assure a rate of return
d. Compare the fund with other financial products
36.An investor buys one unit of a fund at a NAV of Rs.20.00 He receives a Dividend of Rs.3.00 when the NAV is Rs.21.00 The unit is redeemed at an NAV of Rs.22.00 Total return is
a. 25.71%
b. Rs.27.51
c. 21.27%
d. Rs.21.75
37.A fund sells 100 units of face value Rs.10/- at an NAV of Rs.12.25. How much would be credited to unit capital?
a. Rs.1225
b. Rs.225
c. Rs.1000
d. None of the above
38.When a scheme with assured returns is being launched, which of the following need not be published in the offer document?
a. Means of fulfilling the guarantee
b. Information for all schemes launched by the fund in the past
c. Comparison with other mutual funds
d. Investment objective
39.Mutual fund units cannot be distributed by
a. Trustees of the fund
b. The AMC
c. Non-banking finance companies
d. Banks
40. A debt fund distributes 10% dividend. How much tax does the investor have to pay on this dividend?
a. 10%
b. 12%
c. 20%
d. None
41.A debt fund distributes a 10% dividend, how much tax does the fund have to pay?
a. 10%
b. 12%
c. 13.07%
d. None
42.How many scripts does NIFTY constitute
a. 40
b. 100
c. 30
d. None of the above
43.Which of the following is the first step in financial planning
a. Asset allocation
b. Selection of fund
c. Studying the features of a scheme
d. None of the above
44.Why should one buy an insurance policy
a. It gives high current returns
b. It gives capital appreciation over its term
c. It should be bought due to the need for insurance and not as an investment
d. All of the above
45.SEBI regulations for mutual funds were formulated in
a. 1992
b. 1993
c. 1995
d. 1996
46.Expenses incurred by a fund for printing of key information memorandum can be amortized over
a. 10 yrs
b. 5 yrs
c. 15 yrs
d. Cannot be amortized
47.A mutual fund's investments are guided by the
a. AMC
b. Board of trustees
c. Investment objectives
d. Unit holders
48.UTI was the only mutual fund for the period
a. 1984 to 1988
b. 1963 to 1988
c. 1964 to 1992
d. None of the above
49.Investors who follow the fixed allocation approach
a. Maintain balance in their portfolio by liquidating a part of the position in the class, which has given higher return, and reinvesting in the other asset class, which has lower return
b. Are not disciplined
c. Increase their equity position when equity prices tend to climb
d. None of the above
50.An investor should not invest in a mutual fund if
a. His capital base is large
b. He is able to carry out detailed investment research and monitor the stock market
c. Both the above
d. None of the above
51.Mutual fund can benefit from economies of scale because of
a. Portfolio diversification
b. Risk reduction
c. Large volume of trades
d. None of the above
52.Which of the following is a disadvantage suffered by a mutual fund investor?
a. High liquidity
b. Diversification
c. No tailor made portfolio
d. Low investment
53.A disadvantage suffered by mutual fund investor is that he has no control over the costs of investing
a. True
b. False
54.Which of the following statements about UTI in untrue
a. It was set up in 1963
b. It was formed by RBI
c. It was established by an act of parliament
d. It was not given a monopoly status
55.Which scheme has the largest investor base?
a. ULIP
b. UTI Master Share
c. US-64
d. SBI Magnum
56.Which was the first diversified equity investment scheme in India
a. SBI magnum
b. UTI Master Share
c. Mep-91
d. Mastergain-92
57.The private sector was granted permission to enter the mutual fund industry in
a. 1992
b. 1993
c. 1998
d. 1995
58.The first Non-UTI mutual fund was
a. SBI MF
b. LIC MF
c. Canbank MF
d. Indian Bank MF
59.The organisation responsible for a comprehensive set of regulations for all mutual funds in India is
a. RBI
b. SEBI
c. AMFI
d. SHCIL
60.The 1999 union government budget helped the mutual fund industry by
a. Regulating the industry practices
b. Exempting all mutual fund dividends in the hands of investors from income tax
c. Approving the code of ethics formulated by AMFI
d. Doing away with all regulations for mutual funds
61.During the period 1992-99,the mobilisation of funds by the mutual fund industry
was about
a. 5%-6% of gross domestic savings
b. 2%-4% of gross domestic savings
c. 7%-10% of gross domestic savings
d. 25%-40% of gross domestic savings
62.Which of the following about public provident fund (PPF) are untrue
a. 50% of the balance of the 4th year can be withdrawn in the 7th year
b. The interest is tax free
c. The rate of interest is 12% p.a.
d. Contribution upto Rs.60000.00 are eligible for tax rebate
63.A close-ended scheme is quoted on the stock exchange at a discount to its NAV when
a. The markets are bearish
b. Investors perceive that the fund will be unable to maintain the NAV
c. The assets of the fund are undervalued
d. None of the above
64.Which of the following is a fundamental attribute of a mutual fund scheme
a. The names and addresses of the registrars and custodians
b. The nature of the scheme being income bearing
c. The specified stocks in the scheme's portfolio
d. The name and address of the compliance officer
65.Offer document of a mutual fund is
a. Required by investors
b. Required by the AMC for its own reference
c. Required as per SEBI regulations
d. Not mandatory as per SEBI
66.The unites of a scheme being sold and repurchased as per the procedure laid down is one of the fundamental attributes of a scheme
a. True
b. False
67.The steps involved in the selection of an equity fund for investment are
a. Sector selection, asset classification, and selection of fund managers and schemes
b. Sector selection, selection of fund managers and schemes, asset classification
c. Asset classification, sector selection, selection of fund managers and schemes
d. Selection of fund managers and schemes, sector selection, asset classification
68.Compounding of interest is best explained by a
a. Balanced fund
b. Growth fund
c. Value fund
d. Income fund
69.From whom can a unit-holder seek redressal if his complaint is not entertained by the mutual fund
a. AMC
b. Board of trustees
c. SEBI
d. RBI
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