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Test 4


1 The NAV of a scheme is Rs.11. What is the maximum sale price that the MF can announce?
  Rs.11 Rs.11.55 Rs.11.77 None of the above
2. Which of the following is true?
  A load fund is better than a no load fund
  With load funds, the NAV increases faster than no load funds
  No load funds gurantee higher returns than load funds
  None of the above
3. Non traded securities are to be excluded while calculating the NAV. True or False?
  True False
4. While comparing Mutual funds with other options, which of the following should not be taken into considerations?
  Transaction costs
Cumulative aggregate returns
Compounded anual return
5. Contingent deffered sales charge is:
  A variable charge to cover the marketing and sales charges
A variable charge to make up for the loss of unit value
A fixed amount charged every time an investor exists
A fixed or variable load depending upon how many years the investor has stayed with the fund
6. Which of the following factors would prompt an investor to prefer a bank deposit over a debt mutual fund scheme?
  Bank deposits always offer higher yields
They are guranteed by bankers for capital protection
Credit rating is higher
They are more liquid than mutual funds
7. As per SEBI guidelines, which of the following activities is an AMC allowed to undertake?
  To be a trustee of some other mutual fund
TO provide advisory functions to pension and provident funds
To look after the schemes of other mutual funds
8. Which of the following is untrue of systematic investment plan?
  It allows investor to invest a fixed amount on a monthly basis
It allows investor to change the amount
It inclucates a discipline of regular investment in the investor
It faciliates rupee cost averaging
9. Offer document as per trust deed is issued by :

AMC Sponsors AMC in the name of the trustees k Trustees

10. In case of assured schemes, which information is not required to be given in offer document
  Means of meeting the gurantee
All past assured return schemes with details of the shortfalls
Comparison with other funds/MF
Disclosure about the investment objective
11. Which of the following funds would not be very volatile?
  A fund with investments across only two sectors
A fund with investments in high quality assets
A fund with investments in a handful of stocks
A small cap fund
12. Bank sponsored MF are regulated by

Which of the following was true about US 64?

  Sales and repurchase done at NAV based prices
It's a closed end scheme-hence no redemption offered by UTI
Units under US 64 are not tradable
Sales and repurchase are done at rates decided by UTI from timr to time
14. Which of the following is true about switching from a MMMF to an equity fund?
  It is not allowed
It takes too long to execute
One should remain invested in one fund always
It is a means to deal with the stock market swings
15. A debenture with a face value of Rs.1000 and a 2 year term to maturity has yields to maturity(YTM) of 10%. The coupon rate is 12% per annum, payable half-annualy. What is its price?
16 The maximum limit of inter-scheme investments by a fund is
  5% of the NAV of the NAV of the transferring scheme
15% of the NAV of the receiving scheme
5%of the NAV of all schemes of the fund
15% of the NAV of all schemes of the fund
17 Which of the following is true about investments made under section 54 ea of the income tax act:
  The investment cannot be withdrawn for 5 years
The investment cannot be withdrawn for 4 years
The investment cannot be pledged
The investment can be transferred
18. Which of the following is an FII not all0owed?
  Investing directly in a mutual fund
Opening a non-resident(external)account
Open a non-resident(rupee)account
Can invest through a broker
19. The performance of which of the follwoing is not comparable?
  Two debt funds
Two diversified equity funds
A liquid fund and a MMMF
An IT fund and a diversified equity fund
20. A scheme has realised gains of Rs.5 crore, unrealised losses of RS.1 crore, unrealised gains of Rs.2 crore and excess of income over experience of Rs.3crore. Whatwould be the distributable surplus?
  Rs 5crore
Rs 7crore
Rs 9crore
Rs 10crore
21. A bridged offer document distributed with application is called
Key information memorandum
Statement in lieu of prospectus
Scheme features document
22. The difference between repurchase and sale price of the unit should not exceed
23. Intial issue expenses in respect of any scheme shall not exceed


24 For valuing equity holdings in a scheme, quotes from the following exchange should be taken:
Regional stock exchange
Principal Stock Exchange
25. What is the rate of tax on large term capital gains in case of MF units?
  20% after indexation
10% without indexation
Either a or b
Higher of a or b
26 In the offer document of a scheme the name of which official in the AMC is mandatory required to be given
  Investor relations officer
Operations head
Name of the dealer
Fund manager
27. The following characteristics is not present in an open end fund
  Facility to buy or sell back units to the fund
A fixed unit corpus for the life of the scheme
Regular declarations of NAV
Regular disclosure of portfolio
28. The following is not a characteristics of a closed end fund
  It has fixed corpus
It has a fixed duration
It declares NAV & Portfolio regularly
It units can be purchased or resold on any working day
29. A fund charges 2 %entry load. An investor holds 1000 units. The investor wants to redeem today and the NAV is RS.20. What amount will he/she get?
30. A fund charges 1.5% exit load. An investor holds 1000 units. The investor wants to redeem today and the NAV is RS.20
31. Money market funds would not invest in
  Treasury bills
Cert. of deposit
Commercial papers
Long term corporate debt
32. Which of the following statement is false
  Gilt funds have the least credit risk among various types of funds
Gilt funds NAv will not fluctuate irrespective of interest rate movements
Gilt funds would not face the rsk of default unless the government defaults on its payments
Gilt funds are ideal for investors who look for highest safety of principal amount
33. Arrange the fund types starting from lowest risk to highest risk: Sector funds, Balanced funds, Diversity equity funds, Money market funds
34. Index funds aim to
  Beat all market indices
Track specified index subject to a small tracking error
Beat a specific market index
Invest in researched stock to beat popular indices
35. The following is not of the board of trustees of a mutual fund
  Ensure that investors interests are safeguarded
The management of the fund is in accordance with SEBI regulations
Ensure the AMC has proper systems, procedures and key personnel in place Raise the maximum possible amount of assets in each scheme floated by the fund
36. The following is not a duty of the board of trustees of a mutualfund
  Enter into IMA with AMC in accordance with SEBI regulations
Guarantee returns on the investors money
Furnish a report to SEBI on the funds activities on half yearly basis Ensure due diligence on part of the AMC for empanelment f brkers
37. What percentage of unit holders f the scheme present at a meeting called for the purpose can terminate the appoinment of an AMC
None of the above
38. Which organisation should an investor approach in case of grievance against a mutual fund
  Consumer protection court Company law board AMFI SEBI
39. The first time investor would be advised to refer to
  Detailed offer do-cument The key information memorandum SEBI regulations
None of these
40. Which of the following is not true of the offer document

Investor does not get information for evaluating the proposed schemes performances
Investor gets useful information for evaluating the performance of the AMC's past schemes
Investor does not get any information on service he can except from the fund
Investor will be able to assess the risks of the scheme based on the offer dcument

41. Which of the folowing statement is not true
  As per SEBI regulations, all intial issue expense incl.Brokerage are limited to 6% of resources raised
Open-end funds are authorised to charge the investors entry & exit loads to cover fund distribution expenses
There is a cap on the total expenses chargable to a scheme each year Excess expenses over prescribed cap and can be carried forward and charged next year
42. The following is not desirable from an agent selling mutual funds
  He should be fully aware of the important characterstics of the scheme he sells
He should know the clients need and hep choose the right investment
He should pass the highest possible incentive to the client
He must encourage regular investment & gve personalised after sales service
43. An open-end fund with 10,000 units outstanding has the following items on its balance sheet. Investments at market value Rs. 100,000, other assets Rs. 20,000, current liabilites Rs.25,000. Calculate the funds NAV per unit
  Rs. 9.5
44. The expenses charged to a fund on recuring basis are calculated on
  Ave. Weeklly net assets
Ave. Quarterly net assets
Ave. Monthly net assets
Year end net assets
45 Dividend received by the fund on a share is to be recognised on
  Dividend declaration date
Dividend receipt rate
Last date of the quarter end after dividend declaration
Date on which the share is quoted ex-dividend
46. A fund acquires 100 shares in a company for Rs.5000, it buys another 150 shares in the same company for Rs.7000. Later it sells 50 shares for Rs.3500. What is the gain/loss on the sale?
47. An investment shall be regarded as non-performing, if it has provided no returns through dividend/interest for more than
  6 months
12 months
24 months
3 months
48. At what rate does a mutual fund have to pay tax
22%on Debt funds, nil on Equity Funds
A mutual fund does not have to pay tax
49. The following funds are exempt from dividend distribution tax
  All-open end funds
Open-end debt schemes
All open and close-ended equity schemes
Open-end funds with over 51% investment in equities*now 65%
50. Mutual fund units become long term capital assets it held for
  12 months
over 12 months
36 months
over 36 months


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