Mutual Fund Quiz

Which of the following statements about Expense Ratio is TRUE?

• Higher AUM automatically leads to higher expense ratio

• Expense ratio is inversely related to fund size

• Expense ratio includes exit load charges

• SEBI does not regulate expense ratio in India

For an open-ended mutual fund, if the NAV increases from ₹20 to ₹22 in one year and the fund distributed a dividend of ₹1 per unit, what is the annual return?

• 10%

• 15%

• 20%

• 5%

Which type of mutual fund is MOST exposed to interest rate risk?

• Gilt Fund

• Equity Fund

• Liquid Fund

• Balanced Fund

Which mutual fund has the lowest risk?

• Equity Fund

• Liquid Fund

• Sector Fund

• Mid-cap Equity Fund

What is the main objective of an index fund?

• To outperform the market index

• To replicate and track a market index

• To invest only in government securities

• To offer guaranteed returns

What is an Expense Ratio in mutual funds?

• Commission charged by agents

• Total fund expenses expressed as a percentage of total assets

• Tax on mutual fund investments

• Penalty for early withdrawal

Which of the following is true about Close-ended mutual funds?

• They can be bought or sold anytime

• They are traded only during a specified period after launch

• They always guarantee returns

• They are only debt-oriented

What is the lock-in period for Equity Linked Savings Scheme (ELSS) in India?

• 1 year

• 3 years

• 5 years

• 7 years

Which factor does NOT directly affect NAV of a mutual fund?

• Market value of portfolio securities

• Fund expenses

• Dividend payouts

• Investor's income tax bracket

Which risk is highest in sectoral funds?

• Market risk

• Interest rate risk

• Credit risk

• Inflation risk