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Test 2

1	A unit of an open-end fund was puechased when its NAV was Rs.27.In the interim period, the fund made a distribution of Rs.5 per unit when its NAV was Rs.26. What was the simple total return of the fund?
	27% 28% 27.5% 28.5%
2.	Mutual fund can borrow
	In order to meet redemption units/dividends or interest payouts
	For a maximum duration of 6 months
	Upto a maximum of 20% of the net assets
	All of the above
3.	A security is considered to be untrade if
	It is not traded for 30 days It is not traded for 60 days
	Upto a maximum of 20% of the net assets All of the above.
4.	Which of the following is true for valuation of traded instruments
	Capitalization of earnings Mark to market Last quoted closing price on the stock exchange when it is principally traded
5.	Which of the following is true for valuation of traded instruments
	10 years based WNA 5 years cannot be done 6years
6.	A prospective investor to seek legal resources can use
	AMC Sponsors Trustees None of the above
7.	An investment of Rs.100,000 January 1,1998 is redeemed to December 1,1999 for a sum of Rs.200000. what will the capital gains tax be without considering indexation, or any other tax benefit?
	10,000 0 Margin rate 15,000 (hint: the flat tax rate of 10% came into force after the March 2000 budget)
8.	Which of these would you recommended to alow risk investor?
	Bond fund Balanced fund Sector fund Small cap fund
9.	Which of the following is not an advantage of investing in mutual funds vis-à-vis directly investing in stocks
	Portfolio diversification Professional management Risk management k Reduction in transaction cost Liquidity None of the above
10.	Which of these securities will you not find in a MMMF
	Call money Certificate of deposits 3year government securities Commercial paper
11.	Mutual funds in India started with the launch of schemes by.
	SBI UTI RBI Canbank
12.	Closed end funs sell at discount to their NAV because
	Repurchase price fixed by the fund is lower than the NAV
	Investors expect that current NAV cannot be sustained by future potential
	Closed end funds have a higher expense ratio
	Interest risks of closed end funds
13.	Which of the following services is not permitted by mutual funds
	Cheque writing Nomination Loan against units Transfer of units
14.	Which of the following is not an ethical practice by an agent
	Assuring or raising investor expectation on the return that the investment would generate Explaining the risk/return profile of a scheme
15.	Commissions are paid to agents for the following expect
	Enhance the returns of the investor Pre and post sale service To meet their selling expense For introducing the investor to the fund
16	If your brother who is in the US and now a citizen wants to invest in US 64. What will you do?
	Send him the form of US 64 to invest Recommend another scheme to him Ask him to send you the money immediately Read the offer document of the scheme to ascertain to ascertain whether he can invest, and then send him the forms
17	Which of the following can be used to measure the performance of a scheme relative to its benchmark
	Beta Ex-marks(r-squard) Alpha All of the above
18.	When is the offer document of an open end scheme updated
	Once a year Once in 6 months Once every 3 months Once in every 2 years
19.	Between the following four debt schemes, which one would you recommended to your clients
	Upfront load 0.4%; recurring expense of 0.7% p.a Upfront load 0.3%; recurring expense of 0.8% p.a Upfront load 0.6%; recurring expense of 0.4% p.a Upfront load nil; recurring expense of 1% p.a
20.	What will you not find on the cover of the offer document
	Starting, closing and earliest closing date Type of scheme Investment policy of the scheme SEBI disclaimer
21.	Which of these are advantages of investing in Mutual funds over direct investing
	Portfolio diversification Professional management Liquidity Lower transaction cost Reduction in risk Convenience & flexibility All of the above
22.	For an assured return scheme, which of the following are not required disclosures in the offer document
	Basic detail of guarantee Name of the gurantor Justification of net worth of gurantor with respect to meeting short falls Explanation of how the guaranteed return will be achieved
23.	Which of the following is not false of a fund sponsor
	He cannot invest in the scheme He can invest in the scheme The scheme should invest in the sponsor’s companies
24	Which of the following documents can an investor inspect
	Custodial and register agreement Trust deed Investment management agreement All of the above
25.	An application can be found along with
	Newspaper advertisement Offer document Key information memorandum Brochure
26	Which of the following is not true of the offer document?
	Investor gets useful information to evaluate the performance of AMC’s past schemes Investor gets information on services he can expect from the fund Investor can assess the risk of the proposal scheme Investor can evaluate the performance of competitive schemes
27.	SWP can be useful to an investor looking for
	Rupee coast averaging Power of compounding Regular income
28.	Which of the folllwoing is untrue of automatic reinvestment plan/growth plan
	The plan allows for automatic reinvestment of all income and capital gains Automatic reinvestment allows for the accumulation of additional units of the fund The major benefit is the compounding of returns The benefit of automatic reinvestment is often lost, if reinvestment is subject to a heavy load
29.	Systematic transfer plan is
	Exchange of units from one scheme to another at regular intervals Regular withdrawal of units Automatic reinvestment
30.	SIP is not
	Rupee cost averaging Systematic investment at regular intervals Transfer of units
31.	Untraded instruments are to be valued at
	Capitalization of earnings While using capitalization of earnings discount has to applied for credit worthiness of the compony. Both of the above None of the above
32.	A unit holder
	Assigns the management of funds to the fund manager Manages the fund by himself Can insist for a tailor made portfolio
33.	Report on portfolio of investments is submitted to SEBI by
	AMC directors Sponsors Trustees Fund manager
34.	In respect of the diligence certificate, which of the following is not true?
	It is signed by the compliance officer It is issued at the time of launching a scheme It is filed along with the annual report
35.	Which of the following is true under the AMFI code of ethics
	Protecting the interests of investors Protecting the interest of trustees Protecting the sponsor None of the above.
36.	Which of the following is true?
	AMFI certified distributors can sell any mutual fund schemes An agent can sell any other mutual scheme An AMC allows their agents to sell their own funds
37.	Which of the following cannot market mutual fund schemes.
	NBFC Banks Distribution companies Agents None of the above
38.	Mutual fund is not a
	Trust Investment company
39.	Commissions are to agents for not
	Bringing investors to fund For assuring the investor returns
40.	which of the following statements are correct
	MFs are allowed to borrows as per SEBI requlations MFs are allowed to borrow to meet temporary liquidity requirements In case of borrowing by mf, the duration should be more than 6 months In case of borrowing by mf, the mf shall not borrow more than 20% of the net asset value of the scheme All of the above Only a, b & d are correct
41.	A young couple with dual income is looking for a asset allocation pan, What would you suggest
	10% in equities 90% in debt and money market instruments 25% in debt 25% in balanced 50% in equities 30% in debt 70% in equities and balanced funds
42.	A mutual fund is not
	A portfolio of stocks, bonds and securities A pool of funds used to purchase securities on behalf of investors A collective investment vehicle A company that manages an investment portfolio
43.	Which is not true about an SRO
	Work as decentralizing organization Reports to an apex regulatory body Passes its own laws
44.	An investor who has invested Rs.300 after 7 yrs tge value Rs.600. what is his annualized compounded of return.
	9 11 10.41
45	Money market funds invest in
	Company fixed deposit Government securities with less than 1 yr maturity
46.	An investor had a property of Rs. 1,25,000in 1995 and sold it in Rs.1,87,000 in 1998. The inflation rates where 281 & 361 in 1995 & 1998. What is the amount on which he will be taxed
	6250 90000 26412
47.	A mutual fund has an NAV of Rs.12. What is the maximum sale price? a. b. c.
	12 11.50 12.84
48.	A NRI holds units in Mutual Fund. What should he do with his holding if he takes up foreign citizenship
	Hereems He continues He transfer the units to his mother, who resides in India None of the above.
49.	The strategy advisable for an investor to maximize investment return in the long run
	Bur & hold on it to investment for a long time Liquidate poorly performing investment from time to time Liquidate good performing investments Switch from poor performers to good performers
50.	Which of the following portfolio would you recommended to a young couple with 2 income & 2 children
	50% in aggressive equity fund, 25% in high yield bond and growth & income funds, 25% in conservative money market fund 50% moderately aggressive equity fund, 20% aggressive equity , 15% municipal bond fund Either a or b None of the above

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