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Test 1


1 NAV of a fund has gone from Rs.24 to 26 in 16months. What is the annualized return
  8.35% 6.25% 10% Insufficient information to calculate the returns
2. An investment has doubled in 6 years. The annualized compounded returns is:
  16,67% 12.25% 100% Insufficient information to calculate the returns
3. A moderate risk investor who has been advised 35% equity allocation, would be best advised to invest in
  Value fund Diversified equity fund Sector fund Aggressive growth fund
4. An MBA, 25 years has joined Hindustan Lever as a management trainee. What allocation would be your recommend to him?
  50% in equities and balance in debt/money market
80% in debt and 20% in money market
90% in money market and 10% in equit
100% in equities
5. A person has invested as follows:
Rs.50,000 in a SEBI approved equity scheme
Rs.50,000 in a Infrastructure Bond
Rs.20,000 in ELSS
How much exemption under sec 80C will he get?
  Rs.20000 Rs.70000 Rs.50000 Rs.100000
6. A stock with a high PE is likely to be a part of?
  Growth stocks portfolio Value portfolio
Sectoral fund portfolio Small cap portfolio
7. Which of these cannot be prevented by unit holders even if 75% of unit holders are behind it:
  Change the AMC
Prevent the takeover of the fund’s AMC by another sponsor
Prevent the merger of two schemes
Slling off a scheme of one fund to another fund
8. Which of the following is correct about disclosure of illiquid securities?
  If the fund propose to invest more than 25% of net assets in associate companies, it should disclose in offer document
If the fun propose to invest more than 10% of net assets in illiquid securities, it should disclose the possible impact on redemption/liquidity in offer document
If the fund proposes to invest in illiquid securities it should disclose in the offer document.
If the fund propose to invest more than 20% of net assets in illiquid securities, it should disclose the possible impact on NAV in offer document
9. An equity fund has an average weekly net assets of Rs.250 crores throughout the year. The maximum investment management and advisory fee it can charge is:
  Rs.2.50 crores Rs.5 crores Rs.2.75 crores Rs. 6.25 crores
10. The duration of a bond is 4. If the annual yield changes from .4% to .8% without any change in the benchmark yield, the impact on bond will be
  -1.6% 1.6% No impact
11. Which of the following are important in fund comparison
  Investment objective of the schemes Size of the scheme
Both of the above None of the above
12. The brokerage paid to investors is
  Regulated by SEBI . Decided by AMFI Decided by individual AMC’s
13. Which of the following is correct about appointing agents
  They have to graduates They have to be cleared by SEBI
They have to be AMFI certified
(caution: both c and d could be correct)
Their appointment is in line with individual AMC’s policies
14. A stock exchange is involved in the supervision of
  All mutual fund schemes Only open end schemes
Only closed end schemes
Only the closed end schemes which are listed in the particular stock exchange
15. Investors can demand a minimum assured returns
  If other schemes of the same fund are doing very well
If other schemes of other funds are doing very well
If there was an assurance on the returns in the offer document
If the scheme has delivered very high returns in the past
16 Which of the following is not true about trustees?
  They can ask for investment portfolio at any time
They have to approve the appointment of brokers/distributors
They have to exercise due diligence in ensuring that the AMC has the proper system in place
17 Which of the following is true as per SEBI rules?
  One fund manager can manage only one fund
One fund manager cannot run both equity and debt fund
The name of the fund manager of each scheme has to be given in offer document of the scheme
Each fund has to be by a team of und managers
18. A person who is 55 years and about to retire in 3 years, is in
  Growth phase Income phase Accumulation phase Distribution phase
19. An investment analyst looks at the operations and financial of the company. Such an analysis is called
  Technical analysis Fundamental analysis Chartist approach
20. Which is the best MMMF in the following
  Returns 10% Rating BB Load .05%
Returns 9% Rating A Load .04%
Returns 8% Rating AA Load .04%
Returns 10% Rating AAA Load .05%
21. Which of the following does not form part of a direct strategy?
  Seminars Newspaper advertisements
Distribution of pamphlets Using distribution company of sponsors
22. Application printing charges for existing open end schemes
  Can be amortised over 5 years Can be amortised over 260weeks
Can be amortised over 10 years Cannot be amortised
23. In the event that an assured return fund does not meet its obligion, a unit holder can use
  The AMC The sponsor
The person named as guarantor in the offer document The trustees
24 . Which of the following is not the object of AMFI?
  To promote interest of mutual funds
To create ethical practices amongst mutual funds
Accept the application form and the cheque
Check the offer document to see whether charitable trusts are allowed to apply for units
25. A charitable trust wishes to invest in units of super equity fund 2001 and approaches you as distributor. What do you do?
  Accept the application form without the cheque and sent it to the AMC for approval
Refuse to accept the application
Accept the form and the cheque
Chech the offer document to see whether charitable trusts are allowed to apply for units
26 . Which of the following is not a criteria for a sponsor:
  Net worth to be more than capital invested
Sponsor should contribute 40% of net worth
Sponsor should ensure that 20% of fund’s assets to be invested in sponsor’s company
27. In case of corporate deposits the most important thing an investor must look for is:
Rate of return
Credit rating of the company and depost
Profitability of the company
28. Which of the following can an exsting MF investor sue?
  The AMC Directors of the AMC The mutual Fund/Trust The trustees
29. In a comparison of direct equity and mutual fund investment, which of the following is true?
  A large capital is required while investing in MF’s as compared to direct investing
Diversification is possible in direct equity as compared to MF’s
Transaction costs with a fund wipe out the profits as compared to direct equity
The investment objective is more likely to be achieved through MF investing as against direct equity investment
30. The health of a fund can be known from
  Offer document Annual/half-yearly report NAV Newspapers
31. Which of the following in not a Specialty fund?
  Small Cap fund Balanced fund Pharma fund
32. In India , a Mutual fund is constituted as
  Trst Investment Com0pany Company None of the above
33. An investment shall be regarded as non-performing, if it has provided no returns through dividend/interest for more than
  3 months 6 months 12 months 36 months
34. If a security is thinly traded it implies that the security has not traded on any stock exchange for the last_________ days
  40 15 30 60
35. Diversified Debt funds are most affected by
  Reinvestment Risk Liquidity Risk Interest Rate risk Default risk
36. For a merger of two AMCs to go through, which of the following is not correct?
  Approval by SEBI Approval by Trustee Approval by company law board
37. Which of the following is not a characteristic of LIC?
  Its objective is to provide life insurance with return comparable to Govt debt instruments
It assures a fixed amount in the event of death of the policy holder.
Premium paid towards policies provide tax exemption under 88 and proceeds at the time of death or maturity are exempt from tax
A’with profits’ policy not only pays the sum assured in the event od death during the policy term, but also pays a bonus as declared by LIC from year to year
38. The mutual fund may be managed by
  Board of Trustees Trust company Either of the above None of the above
39. The maximum load that can be charged by the AMC for paying intial issue expenses
  7% 6% 5% 8%
40. Safekeeping of physical securities is the role of
  The custodian The transfer Agent Trustee Sponsor
41. Which of the following is untrue of the automatic reinvestment plan?
  The plan allows for automatic reinvestments of all income and capital gains
Automatic reinvestment allows for the accumulation of additional units of the fund
The benefit of automatic reinvestment is often lost, if reinvestment is subject to heavy load
The major benefit of automatic reinvestment is the compounding of returns
42. SEBI regulations for mutual funds came into force in
  1993 1987 1996 1998
43. Which class of investors is not allowed to invest in Indian Mutual Fund?
  Foreign National FII NRI Indian Resident
44. Values stocks refers to
  Shares of companies whose earnings are correlated with the state of the economy
Shares of companies whose earnings are expected to increase at normal levels
Shares of companies trading in precious commodities
Shares of companies in nature industries expected to yield low growth earnings
45 Investors can address their compliant except to
  Consumer court SEBI AMFI Sponsor
46. Commissions payable by a fund to its agents
  Dpend upon the fund’s discretion to decide Regulated by SEI
Regulated by AMFI Regulated by AMC
47. The dividend yield of a company growing faster than the market usually will be:
  Higher than the market average Lower than the market average
Same as the market average
48. Which of the following statement is false :
  Gift funds have the least credit risk among various types of debt funds
Gilt funds NAV will not fluctuate irrespective of interest rate movements
Gilt funds would not face the risk of default unless the government defaults on its payments
Gilt funds are ideal for investors who look for safety of principal amount
49. Valu investment means
  Investing based on attractiveness of sector
Investing based on p/e of company as compared to an industry
Investing with the intention of unlocking an intrinsic value.
Investing in companies that have good dividend yield
50. An investor purchased an open-end fund when its NAV was Rs.20. 16 months later, its NAV stood at Rs.22. The percentage NAV change(annualized)in the fund was:
  8% 7% 7.5% 8.5%


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