Exam NISM - 90 marks

The risk mitigation strategies adopted by the fund management to control and manage the risks associated with investing in specific types of securities are described in the __________.

• Scheme Information Document (SID)

• Statement of Additional Information (SAI)

• Fund Factsheet

• KYC form

Share certificate is a physical asset

• True

• False

An investor already has a folio in a mutual fund scheme where he is a joint holder. Now he wants to do additional investments in the same scheme as a sole holder. How can he make the change ?

• He can do the investments by mentioning the mode of holding in the application as single to apply only for the fresh investments being made

• He will have to do the investments under a new folio and select the mode of holding as single

• He can do the investment by changing the mode of holding for the additional units after the investment has been made

Identify the TRUE statements -

A) The diversified stock index has a Beta of 1

B) An investment with a beta of 0.7 will move 7 percent when markets move by 10 percent

• Only A is True

• Only B is True

• A and B are True

Long term debt funds would be sensible in declining interest rate scenarios - True or False ?

• True

• False

Identify the TRUE statement(s) with respect to risk levels in mutual funds ?

A) Corporate bond funds are relatively more riskier than Credit risk fund

B) The NAV of Gilt funds generally fluctuate more than NAV of Liquid funds due to changes in yield

• Only A is True

• A and B are False

• A and B are True

• Only B is True

Dividend Distribution Tax (DDT) on Equity oriented mutual fund schemes for Corporate Investors is ____.

• 0.1

• 0.25

• 0.3

• NIL TAX

While doing an asset allocation for an investor, which amongst the following factors will have the least importance ?

• RBI's announcement that there could be huge recession

• RBI's announcements of changes in interest rates

• Bonus issued by one of the MF schemes

• Changes in prices of equity shares

What is Indexation ?

• Benchmarking the index fund against a suitable index like Sensex / Nifty

• Adjusting the cost of acquisition downward to reflect the impact of inflation

• Adjusting the cost of acquisition upwards to reflect the impact of inflation

• Reduction of short and long term capital gains tax by using an index based calculation

Identify the TRUE statement.

A) While calculating scheme returns for an investor, if there is an entry load, then the initial value of the Net Asset Value (NAV) is taken as NAV plus Entry Load

B) While calculating scheme returns for an investor, if there is an exit load, then the later value of the Net Asset Value (NAV) is taken as NAV plus Exit Load

• Only B

• Both A and B

• Only A