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Test 5


201 The rate of wealth tax on mutualfund units is
  10% 20% 30% MF units are exempt from wealth tax
2. A bond with a coupon rate of 9% when interest rates for similar maturities are 11% will sell
  Above par
  At par
  Below par
  T a price which is not related to interest rates for similar maturities
3. A 'certificate of Deposit' is issued by
  Government Corporates Banks Trust
4. Commercial paper isissued by
  Mutual funds
5. Debentures differ from fixed deposits in respect of
  Interest rates Security Liquidity End use of unds
6. A longer maturity has the fllowing impact on its price risk case of interest rate fluctuation
  Risk increases with longer maturity
Prce risl depends solely on credit rating of issuer
RIsk decreases with longer maturity
None of the above
7. Treasury bills are issued by
  A company's treasury department
RBI on behalf of the government
Nationalised banks
8. The following investments are affected by price risk in case of interest rate movement
  Company's debentures
Institutional bonds
Mutual funds
Floating rate bonds
9. Can one scheme of a mutual fund invest in another scheme of the same AMC

Yes upto 10% of the net assets of the fund
With prior permissions of SEBI k
Yes. upto 5% without charging any fee

10. Can a mutual fund transfer investments from one scheme to another
  Yes. Only with prior approval of SEBI
Yes. Only upto 10% od total investmentss
Yes.provided transfer is at current market rate
11. Which of the following is not a type of load?
  A charge at the time of investors into fund, by debuting a specific amount from his intial contributions
A charge at the time of investor exit from the scheme by debuting a specified amount from redemption proceeds
A charge of fixed amount if the investor exists before completing a predetermined period of holding his investment
12. Gilt funds would not invest in
  Treasury blls
  Govt securities
  Convertible debentures
  Call money

A sponsr of a mutual fund may be compared to-

  A director in a company
A chief executive of a company
A promoter of a company
An equity shareholder in a company
14. The board of trustees is expected to protect the interest of
  The sponsor's
The Asset management company
The Unit holders
15. In case of an assures return who is responsible for meeting the shortfall in case the assured return is not achieved
  The AMC
The fund manager
The trustees
The person named in the OD
16 In index funds the expenses are low because
  The fund manager does not want a large tracking erro
The equity research expenses are not incurred
SEBI regulations stipulate lower expenses for index funds
To compare against the activitely managed funds
17 The areas monitored by SEBI in the activities of Mututal Funds include:
  Fund structure and governance
Exercisng of voting rights by funds
Fund Operations
All the above
18. Ethical norms require that the Trustees exercise their voting rights at the share holders meetings of companies
  In the interesst of the promoters
In the interest of the companies employees
In the interest of the Unit holders in the fund
In the interest of the fund manager
19. Front running is a practice which means
  A bull/run in the market
The fund manager buys and sells securities ahead of dong the same transactions for the fund
Both the above
None of the above
20. Insider Trading by a fund manager means
  Colluding with other insiders to gain access to private information
Using that information to trade on their personal account.
Both the above
None of the above
21. Responsible investing in the US include the following tools:
  Screening of investment
Share holders activism
Community investing
All the above
22. SEBI Regulations require the Directors of a Trustee company to file the details of transaction in securites with the Mutual Fund, where they exceed the value of
  Rs.1 Lac
Rs.2 Lac
Rs.5 Lac
Rs.10 Lac
23. Conflict of interest in a mutual fund business means

No identify of interest between the sponsor and the Trustee
The interest of the Trustees and AMC are in conflict
The interest of the investor runs counter to the interest of the intermediary
Both a & b above

24 AGNI refers to
  Code of conduct laid down by SEBI for Mutual Funds
Code of Conduct laid down by AMFI per distributiiors
Actionfor good governance in nationalized institutions
25. Objectives of Business Ethics are :
  Simply being honest, open and transparent with ptential clients
To protect the consumers of goods and services for being cheated or exploited
Bothe the above
None f the above
26 What are the advantages of investing in MF's over direct investing
  Benefits of diversification
Benefits of professional management
Both of the above
None of the above
27. If inflation rises which of the following funds will be most affected
  Sector fund
Bond fund
Mid cap fund
Equity fund
28. Which of the following is an advantage of investing through Mutual Funds
  No control over cost
Liquidity & Convenience
No tailor made portfolio
Managing a portfolio of funds
29. Which of the following is an SRO
None of these
30. Bank sponsored MF:S are regulated by
31. What percentage of unit holders present at a meeting can terminate the appointment of AMC
None of the above
32. Which officials name is mandatory to be mentioned in the offer document
  Investor relations officer
Fund manager
Managing Director
33. The first time investor should be advised to read the
  Detailed offer document
The key information memorandum
SEBI regulation
34. Commissions payable to a funds advisor is one of the following
  Discretion of the fund
SEBI Regulation
AMFI Mandate
None of these
35. Which of the following an FII is not allowed
  Investing directly in a Mutual Fund
Opening a NR account
Opening a NR(rupee) account
Investing through a broker
36. The following is not deisrable activity of an advisor selling Mutual funds
  He should keep himself updated on the important characteristics of schemes he sells
He should asses the clients needs and help him in choosing the right investment
He should pass on the highestm possible incentive to the clent
He must encourage regular investment and give personalized after sales service
37. Intial issue expenses for a close ended fund can be amortised over
  10 years
5 years
term of the fund
6 years
38. Among the following debt schemes having the same portfolio which will you recommend to your client
  Upfront load of 0.4% recuring expense of 0.7% p.a
Upfront load of 0.3% recuring expenses of 0.8% p.a
Upfront load of 0.6% recuring expense of 0.4% p.a
Upfront load of 0.0% recuring expense of 1% p.a
39. Which of the following untrue of systematic investment plan
  It allows investor to invest a fixed amount on a monthly basis.
It allows investor to invest to change the amount.
It inclucates regular investment discipline in the investor
It facilitates Rupee cost averaging
40. Which of the following is true about switching from MMMF to Equity fund
  It is not allowed
It takes too long to execute
Such switching should not be done
It is a means of dealing with market volatility
41. Voluntary Accumulation Plan is the modfied version of
  Automatic reinvestment plan
Automatic investment plan
Systematic withdrawal plan
Systematic transfer plan
42. Which of the following statements is true.
  SWP is different from Monthly Income Plans
SWP allows withdrawal of principal in installments
Monthly income Plans the Income amounts periodically
All of the above
43. Mutual funds cannot provide Cheque writing facility without
  The RBI approval
The SEBI approval
The AMFI approval
Both (a) & (b
44. Which of the statements is correct
  The fund must have the approval of RBI to offer Cheque writing facility
RBI permits the investors to issue Cheques against the FUnd balance subject to maintaining a minimum balance
RBI rules do not permit investors to issue cheques to third party
All of the above
45 What is the time frame for sending the Annual finanacial statement to the unit holders
  Within 6 months from the close of the accounting year
Within 3 months from the close of the accounting year
Within2 months from the close of the accounting year
Within 1months from the close of the accounting year
46. In automatic reinvestment plans the reinvestment takes place at the Ex- divdend NAV
47. Which authority approves Mutual Fund t give Loans against Units
SEBI prohibits such loans
RBI prohibits such loans
48. Which of the following statement is correct
  MF's are allowed to borrow as per SEBI guidelines
MF's are allowed to borrow to meet temporary liquidity requirements
MF's are allowed to borrow for a period more than six months
MF's are allowed to borrow not more than 20% of the Net asset value
All of the above
Only a, b&d are correct
49. In index funds the expenses are low because
  The fund manager does not want a large tracking error
The equity research expenses are not incurred
SEBI regulations stipulate lower expenses for index funds
To complete against actively managed funds
50. FInanacial Planning is?
  Investing funds to receive higher rate of return
Resorting to tax planning to keep taxes low
Planning for retirement with maxmum income possible
Process of solving financial problems and reaching financial goals


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