WorksheetsMOCK - 2
Total questions: 100
Worksheet time: 50mins
Name
Class
Date
1.
Financial Planning involves
a)
Studying financial management
b)
Financing the client's investments
c)
Managing the risks of default
d)
None of the above
2.
Greater returns come only from assuring higher risks, and a higher risk portfolio guarantees higher returns
a)
True
b)
False
3.
The risk tolerance of an investors is independent of
a)
His age
b)
The stock market movements
c)
His income
d)
His job security
4.
A sector fund is a
a)
Low risk fund
b)
High risk fund
c)
Regulatory limits on borrowing
d)
Low-to-moderate risk fund
5.
Investment in gold is a hedge against inflation but investment in a precious metal fund falls in the high-risk category
a)
True
b)
False
6.
By their very nature, growth funds are considered as high-risk funds
a)
True
b)
False
7.
Short Term bond funds are comparatively
a)
Low risk funds
b)
High risk funds
c)
Moderate risk funds
d)
All of the above depending on the market
8.
The risk level of commodity funds is
a)
High risk category
b)
Cannot be specified
c)
Determined by the commodity price movements
d)
Low risk category
9.
As compared to a fund with fluctuating total returns, a fund with stable positive earings
a)
Gives higher returns
b)
Gives lower returns
c)
Is less risky
d)
Is more risky
10.
"Risk" is equated with
a)
Volatility of earnings
b)
The number of investors in a fund
c)
Level of earnings
d)
The number of schemes of a fund family
11.
Volatility of an equity fund portfolio is independent of the
a)
Kind of stocks in the portfolio
b)
Fund manaqer's success at market timinq
c)
Degree of diversification of the portfolio
d)
Number of investors in the scheme
12.
Equity price risks are
a)
Company specific
b)
Sector specific
c)
Market level
d)
All of the above
13.
Diversification reduces
a)
Company specific risk
b)
Market level risk
c)
Both of the above
d)
None of the above
14.
Which of the following is most risky?
a)
Investing in a money market muhual fund
b)
Short term investment in an equity fund
c)
Investing in an index fund
d)
Long term investment in an equity fund
15.
A fund with a high beta coefficient gives greater returns in a rising market, and is more risky in a market
a)
True
b)
False
16.
Which of the following is a disadvantage of Standard Deviation as a measure of risk
a)
Standard Deviation measures total risk, not just market risk
b)
It is an independent number
c)
It is based on past returns, which does not necessarily indicate further performance
d)
All types of funds can be measured with standard deviation
17.
The role of an agent is to
a)
Sell products based on the features and benefits of various investments options
b)
Recommend some investment option available
c)
Help the investor develop the right approach to investing
d)
Offer ad hoc advise whenever the investor has surplus money available
18.
One of the most effective ways to invest through mutual funds is to
a)
Develop a model portfolio
b)
Invest all the money in one fund scheme
c)
Buy a few units of every mutual fund scheme
d)
Invest all the money in different scheme of the same fund family
19.
Mutual fund should be advised to expect
a)
Low post tax returns
b)
Better returns than every other available option
c)
Dramatic results
d)
Only realistic wealth accumulation goals
20.
Asset Allocation is
a)
Keeping certificates of the physical securities in proper places
b)
Allocating the right proportion of funds to equity, debt and money market securities
c)
Allocation the available money to all the securities available
d)
None of the above
21.
Once a financial advisor works out ideal Asset Allocation, it can be used for all investors whom he/she advises
a)
True
b)
False
22.
Asset distribution among equity, debt and money market securities should correspond to the investors' need for capital growth, income and liquidity
a)
True
b)
False
23.
The liquidity needs of an investor are met through
a)
Equity Funds
b)
Money Market Funds
c)
Index Funds
d)
Sector Funds
24.
A retired person generally needs a greater proportion of
a)
Debt funds
b)
Money Market funds
c)
Equity funds
d)
All of the above
25.
To satisfy a young investor's need for growth, a greater proportion of investment should be advised in
a)
Gilt funds
b)
Equity Growth funds
c)
Income Funds
d)
Liquid funds
26.
A very high proportion of investment in all types of equity funds is advisable for investors
a)
In distribution phase
b)
In transition phase
c)
In accumulation phase
d)
Who are wealth preserving affluent individuals
27.
The transition phase of an investor's wealth cycle is when
a)
The financial goals have been already met
b)
Financial goals are approaching
c)
The investor has retired
d)
Investor suddenly gets a windfall
28.
A high proportion of investment in income funds is required by
a)
Accumulating investors
b)
Investors in the inter-generational transfer phase
c)
Affluent investors
d)
Investors in the distribution phase
29.
Retired investors should
a)
Not draw down on their capital
b)
Continue holding atleast a small portion of their holding in equity growth funds
c)
Not invest in securities which bear risk of capital erosion
d)
Never invest in equity
30.
For older investors who want to transfer their wealth
a)
No financial planning is required
b)
The right investment strategy depends upon the state of the stock market
c)
The right investment strategy depends upon who the beneficiaries are
d)
All the funds can be invested in aggressive equity funds
31.
Investors who acquire sudden wealth
a)
Can speculate with all the acquired money in the stock markets
b)
Should take the effect of taxes into account
c)
Should not use any of the new wealth to invest in equity
d)
Need not pay any taxes on the newly acquired wealth as it is not a part of their regular income
32.
Only if a specialty offshore fund has consistently given very good performance, it can be considered for investment by a
a)
True
b)
False
33.
Past performance should not be solely relied on for selecting a fund
a)
True
b)
False
34.
Between the past performance of a fund and its suitability for an investor, past performance is more important
a)
True
b)
False
35.
A mutual fund distributor is paid commission for
a)
First 5 years of Investment done by investor
b)
First 10 years of investment done by investor
c)
First 3 years of Investment done by investor
d)
As long as investor held the investment
36.
The guideline issued by AMFI for intermediaries are known as
a)
AGNI
b)
AMFI
c)
ACE
d)
None of above
37.
The investment in MF portfolio are valued at
a)
Face value of portfolio
b)
Market value of portfolio
c)
Cost of investment
d)
Book value of portfolio
38.
Exit loads are generally lower for large investors.
a)
True
b)
False
39.
Time stamping arrangement is must at
a)
Offices of distributors
b)
Bank distributor's branch
c)
AMC offices
d)
Offices declared as point of acceptance
40.
SEBI has put a stop on charging _______ to the scheme.
a)
Exit load
b)
Recurring Expenses
c)
Entry Load
d)
CDSC
41.
Unaudited accounts of the scheme must be published
a)
Through monthly fact sheet national & Regional news paper
b)
Once every six month
c)
Only at AMFI website
d)
Only on AMCs website
42.
An investor invested Rs. 100000/- in a 370 day FMP and got Rs. 107750/-, what is capital gain in this case?
a)
7750
b)
Insufficient details
c)
750
d)
10% Plus surcharge or 20% after index bebefit
43.
Which of the following is true
a)
STT is payable when investor purchase equity MF
b)
STT is payable when investor purchase debt MF
c)
STT is payable when investor does redemption from equity MF
d)
STT is payable when investor sale debt MF
44.
Liquid funds can not charge management fees of funds parked in a short term bank deposits.
a)
True
b)
False
45.
STT is charged on
a)
Equity share trading
b)
Equity MF
c)
Derivatives trading
d)
All of the above
46.
Which of the following is not required for KYC norms.
a)
Proof of investment
b)
Proof of address
c)
Proof of Identity
d)
All of the above
47.
The information on minimum investment amount, investor's service centers, and how to make purchase is provided in.
a)
Application form
b)
KIM
c)
Nomination Form
d)
None of the above
48.
Which of the following document is not require to be submitted by charitable trust to invest in MF?
a)
Trust deed
b)
Board resolution and Memorandum and article of association
c)
List of authorized signatories
d)
Certificate of registration
49.
SIP is a good investment strategy because
a)
Investor gets units at a discount to NAV
b)
It helps regular income for investor
c)
It offers benefits of rupee cost averaging
d)
All of the above
50.
An investor plans to invest Rs. 12000 in a scheme whose NAV is 12 and FV is 10, how many units is he likely to be obtained.
a)
< 1000
b)
1200
c)
1000
d)
Can't say
51.
An investor is doing a liquid investment, fund is available and time is 12.30 pm. NAV would be applicable for the
a)
Next working day
b)
Closing NAV of Day immediately preceding the date of application
c)
Same day
d)
Closing NAV of Day immediately preceding next business day
52.
Investor invest 50 lakh in GILT at 3.30 pm with a local cheque. He gets NAV of
a)
Closing NAV of day fund are available
b)
Next business day
c)
Same day
d)
Next preceding day
53.
Time stamping needs to start with serial no 1 on every business day.
a)
True
b)
False
54.
Funds pay dividend in
a)
Dividend Option
b)
Dividend Re-lnvestment option
c)
Both of the above
d)
Growth option
55.
Offering for repurchase, constant amounts worth of units at regular interval basis is called
a)
SIP
b)
SWP
c)
STP
d)
Value investment
56.
A company's PE ratio may be low because it is unlikely to replicate it's past performance
a)
True
b)
False
57.
Fundamental analysts are called "Chartists"
a)
True
b)
False
58.
In case of liquid fund, investment less than 3 months old. which return would be calculated?
a)
Total return
b)
Absolute return
c)
CAGR
d)
Simple annualized
59.
In case of equity fund, if fund has higher allocation to cash in bullish market the performance is likely to
a)
Be comparable to that of benchmark index
b)
Better than benchmark return
c)
Be worse than benchmark return
d)
can't say
60.
CRISIL's indicator for highest safety in a debenture is
a)
AAA
b)
Good
c)
High
d)
P1+
61.
During the period of turmoil, gold prices
a)
Go down
b)
Remain steady
c)
Go up
d)
Mirror equities
62.
While evaluating return for an index fund across a peer group, which of the following is more important?
a)
BETA Coefficient
b)
Tracking error
c)
Past performance
d)
R-squared
63.
Balance funds are for
a)
Aggressive investors
b)
Moderately agressive investor
c)
Highly aggressive investor
d)
Highly conservative
64.
The lower risk among equity fund is
a)
Index Fund
b)
Dividend yield fund
c)
Value Fund
d)
Growth fund
65.
Returns in international fund is dependent on
a)
Exchange rates
b)
Asset class performance
c)
Both of the above
d)
None of the above
66.
Mutual funds in India are not permitted to invest in
a)
Gold
b)
Art
c)
Real estate
d)
Secularized debt
67.
A value fund is expected to have _________ exposure to front line stocks
a)
Entire
b)
Half of it's
c)
High
d)
Low
68.
Index funds are safer because their NAV does not go down
a)
True
b)
False
69.
Which of the followings are least comparable
a)
Liquid and Savings account
b)
ETF and Index fund
c)
Liquid and Current account
d)
Gilt and sector fund
70.
An investor seeking capital appreciation, having high risk tolerance and long term horizon must invest in
a)
Bonds
b)
Real-Estate
c)
Bank FD
d)
PPF
71.
Credit rating enables an investors to judge the
a)
Duration of loan
b)
Risk of default by borrower
c)
Extent of securities against the borrowing
d)
Interest rate risk
72.
Which of the following is not government saving scheme?
a)
Infrastructure Bonds
b)
Post Office Savings Schemes
c)
RBI Bonds
d)
KVP
73.
An investor looking for capital appreciation, having a high risk tolerance and long tem horizon must invest in
a)
Bank FD
b)
Bonds
c)
Equity
d)
Gold
74.
Which of the followings is physical asset?
a)
Securised debt
b)
Real estate fund
c)
Real estate
d)
Gold future
75.
Financial Planning Involves
a)
Helping client to select the out performing stock
b)
Advising client to invest only in secured investments
c)
Assessing the clients financial information
d)
None of the above
76.
Value stocks
a)
Have high current dividend
b)
Are currently under valued
c)
Yield high growth in earning
d)
None of the above
77.
A better performance than the return on index is given by
a)
Passive fund manager
b)
All fund managers
c)
An active fund manager
d)
Non fund manager
78.
Emerging or new channel for distributors/marketing of mutual funds in India is
a)
Internet
b)
Stock Exchange
c)
All of the above
d)
None of the above
79.
Trail commission means paying
a)
No upfront commission at all
b)
Part of commission upfront and balance in phases
c)
The entire commission upfront
d)
The entire commission after Five years
80.
Agents are compensated by mutual funds
a)
Through salaries
b)
Through an annual fees
c)
Through commission
d)
Not in cash but in kind
81.
The fund sponsors should have a sound financial track record of
a)
7 years
b)
12 months
c)
5 years
d)
3 years
82.
Which of the following are self regulatory organization(SRO)
a)
BSE
b)
AMFI
c)
SEBI
d)
RBI
83.
Bank owned mutual fund are supervised by
a)
SEBI
b)
RBI
c)
Jointly by SEBI & RBI
d)
AMFI
84.
A passive un manager
a)
Researches stocks extensively
b)
Does not have to go through the process of stock selection
c)
Does not buy and sell stocks often
d)
Does not have to track stocks
85.
A trail commission is justified when
a)
An investor cancels his investment
b)
An agent invests his own money, not that of client
c)
The investor redeems his investment a very short time
d)
An Agent retain the Investment
86.
Risk adjusted return is measured by
a)
Sharpe ratio
b)
Treynor ratio
c)
Standard deviation
d)
A & B
87.
Intra day trading can be done on the basis of-
a)
Fundamental analysis
b)
Economic analysis
c)
Technical analysis
d)
Political analysis
88.
Mid cap stocks are risky in the time of
a)
Boom
b)
Political instability
c)
Recession/Economic turmoil
d)
All of the above
89.
Who Appoints the AMC
a)
Custodian
b)
Trustee
c)
R&T
d)
Distributors
90.
Which of the following has lowest risk
a)
Liquid fund (mmmf)
b)
Diversified debt fund
c)
Gilt funds
d)
Diversified equity fund
91.
Long term capital gains in a debt fund without indexation for an investor is
a)
10%
b)
15%
c)
20%
d)
No tax
92.
What of the following is not a reason for investor to prefer mutual fund over Bank FD
a)
Tax benefits
b)
Deposit insurance
c)
Possibility of capital gain
d)
Investment convenience
93.
Need of Life insurance in life is
a)
Must
b)
Can be done without
c)
Not required
d)
None of above
94.
All investor have similar requirements at similar stage in the life/wealth cycle
a)
True
b)
False
95.
Name of asset allocation strategy if it is fixed @ 50 %
a)
Tactical allocation
b)
Strategic allocation
c)
A & B
d)
None of above
96.
Model portfolio should be determined based on commission income possibility for distributor
a)
True
b)
False
97.
Which of the following is true for model portfolio
a)
Stipulated by SEBI
b)
Decided by financial planner
c)
Guaranteed by AMC
d)
Common across industry
98.
As the number of earning member in a family increases risk appetite
a)
Increases
b)
Stays constant
c)
Decreases
d)
None of above
99.
Equity investment through sip can be suggested for investor looking for
a)
Long term growth
b)
Portfolio churning
c)
Short term target
d)
Tax benefit
100.
What type of bond fund carries least interest rate risk
a)
Short term bonds
b)
Mid term Bonds
c)
Long term Bonds
d)
All of above
100 %
