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Worksheets100 MCQ Mutual Fund
Total questions: 100
Worksheet time: 8hrs 20mins
Name
Class
Date
1.
______ are suitable for investors with a long term investment horizon and looking for growth.
a)
Equity funds
b)
Income funds
c)
Liquid funds
d)
Long duration funds
2.
A custodian of a mutual fund scheme performs which of the following functions?
a)
Keep safe custody of the securities held by the mutual fund scheme
b)
Issue account statements to the unit holders
c)
Issue fund portfolio statement to the scheme investors
d)
Execute the buy and sell orders in the securities market on behalf of the mutual fund
3.
A mutual fund can have a common _____ for all its schemes.
a)
Scheme Information Document (SID)
b)
Key Information Memorandum (KIM)
c)
Statement of Additional Information (SAI)
d)
Offer Document
4.
A portfolio with a beta less than 1 is ________.
a)
Equally risky than market
b)
More risky than market
c)
Less risky than market
d)
Highly risky compared to market
5.
All the transactions in securities by key personnel (who are directly involved in investment operations) of mutual fund schemes should be disclosed by the Asset Management Company (AMC) to its compliance officer at least on __________ basis.
a)
Monthly
b)
Half yearly
c)
Yearly
d)
Quarterly
6.
An investor wants to invest Rs. One lakh in a mutual fund scheme but does not have a PAN card. If the investor does not fall in any of the exempt investor categories, what is the option available to the investor?
a)
A PAN card is mandatory and the investor cannot invest without one.
b)
The investor may invest by signing up for an SIP and get exempt from the requirement for PAN card
c)
The investor can provide other prescribed proofs of identity such as Voter's Id, Aadhaar card and Passport.
7.
As per the SEBI Advertising Code for mutual funds, NO celebrities should endorse any schemes of a particular mutual fund. State whether True or False.
a)
true
b)
false
8.
Asset Management Companies (AMC) in India are members of Association of Mutual Funds in India (AMFI). State whether True or False.
a)
true
b)
false
9.
Code of conduct for Asset Management Companies (AMCs) and Trustees is specified under Schedule V of the SEBI (Mutual Funds) Regulation, 1996. State whether True or False.
a)
true
b)
false
10.
Financial goal setting involves _____________.
a)
Presenting financial planning recommendations
b)
Determining risk profile
c)
Ascertaining asset allocation
d)
Setting monetary goals and needs of a client
11.
Financial planning involves which of the following aspects to meet the various financial goals of the investor? I. Tax Planning II. Insurance Planning III. Retirement Planning
a)
II only
b)
I and III
c)
I, II and III
d)
20363
12.
Fundamental Analysis of a company entails review of which of the following parameters?
a)
Financial statements of the company
b)
Quality of Management of the company
c)
Competitive position of the company in the market
d)
All of the above
13.
In the _____ phase of 'Wealth Cycle', investors tend to increase the proportion of liquid assets in their portfolio to meet the financial goals that are nearing horizon.
a)
Accumulation
b)
Transition
c)
Reaping
14.
Investment advice to an investor depends on which of the following factors? I. Risk appetite of investor II. Risk level of investment options
a)
Either I or II
b)
Neither I nor II
c)
Both I and II
15.
Long term capital loss from an investment ___________.
a)
Can be set off against long term and short term capital gains~
b)
Can be set off only against long term capital gains
c)
Can be set off only against short term capital gains
d)
None of the above
16.
Mutual funds can charge higher expense ratio if there is a specific percentage of new inflows/ assets under management from other than __________, as per the geographical data consolidated by the Association of Mutual Funds in India (AMFI)
a)
Top 10 cities
b)
Top 30 cities
c)
Top 20 cities
d)
Top 25 cities
17.
No pre-requisites are mandated by SEBI for becoming a mutual fund distributor. State whether True or False.
a)
true
b)
false
18.
Redemption transactions of mutual fund units are priced at ________.
a)
NAV plus exit load
b)
NAV minus exit load
c)
NAV minus entry load
d)
NAV plus entry load
19.
Risk Profile of an investor is influenced by which of the following factors? I. Life expectancy of the investor II. Employability of the investor III. Age of the investor
a)
I and III
b)
II only
c)
II and III
d)
I, II and III
20.
Securities and Exchange Board of India (SEBI) is the only regulatory authority for mutual funds in India. State whether True or False.
a)
true
b)
false
21.
SThe highest risk of loss through theft is in ________.
a)
Shares
b)
Commercial Papers
c)
Gold
d)
Real Estate
22.
Which amongst the following expenses cannot be charged to the mutual fund scheme?
a)
Software Development Expenses
b)
Registrar & Transfer Agent Fees
c)
Custodian Expenses
d)
Goods and Services Tax
23.
Which of the following mutual fund schemes are NOT eligible to be distributed by the new cadre of distributors comprising postal agents, retired government officials, bank employees, teachers and other such specified categories?
a)
Diversified Large-Cap equity scheme
b)
Retirement Benefit Schemes with tax benefits
c)
Fixed maturity plans
d)
Index schemes that have under-performed their benchmark in the last three years
24.
.Investors need financial planners due to which of the following reasons ? I. Lack of requisite investment knowledge by investors. II. Lack of required time by investors. III. Lack of required money to invest by investors.
a)
I only
b)
I and II
c)
II and III
d)
I, II and III
25.
________ funds take positions that are contrary to the market.
a)
Dividend Yield
b)
Contra
c)
Index
d)
Thematic
26.
A conservative investor will not invest in _______.
a)
Junk Bonds
b)
G-Sec Funds
c)
Corporate Bond Funds
d)
Liquid Funds
27.
A mutual fund scheme is made up of ________.
a)
A pool of sponsor funds
b)
A pool of investor funds
c)
A pool of trustee money
28.
AMC directors are appointed with the permission of Trustees
a)
True
b)
False
29.
An investment application form for mutual fund units with multiple holders should be signed by ______.
a)
All the holders
b)
First holder
c)
Any of the holders
30.
An investor, with high risk tolerance, looking for capital appreciation for long term horizon must invest in which of the following?
a)
Long term Government securities
b)
Equity
c)
Bonds/Debentures
d)
Gold
31.
Application form is attached to ______.
a)
SID
b)
SAI
c)
KIM
32.
Asset allocation of a portfolio can vary due to which of the following factors? I. Changes in interest rates II. Changes in market value of the assets
a)
I only
b)
II only
c)
I and II
33.
Cut-off timing guidelines are not applicable for ________.
a)
NFOs
b)
International Funds
c)
Both of the above
34.
Dematerialization is a process by which _________________.
a)
An investor's holding of investments in physical form is converted into electronic form
b)
An investor's holding of investments in electronic form is converted into physical form
c)
Mutual fund units are held through a power of attorney
d)
Mutual fund units are offered as security for loan
35.
Diversified equity funds are safer to invest in, than sectoral funds. State whether True or False.
a)
true
b)
false
36.
During empanelment with the Asset Management Company, the mutual fund distributor has to sign a declaration. Indicate which of the aspects are covered in the declaration? (a) Commitment to abide by statutory codes, guidelines and circulars (b) Undertake not to rebate commission back to investors, or attract investors through temptation of rebate / gifts, pass back of commission etc. (c) Ensure that atleast 1 out of all employees who are engaged in selling or marketing of mutual funds have an ARN.
a)
a, b, c
b)
a,b
c)
b,c
d)
a,c
37.
Fund accounting activity of a scheme is to be compulsorily outsourced.
a)
True
b)
False
38.
Fundamental analysis is evaluation of the strength of the company’s price-volume charts.
a)
True
b)
False
39.
Gilt schemes have higher risk than liquid schemes because their Net Asset Value (NAV) can fluctuate a lot more, due to changes in yield in the market. State whether True or False.
a)
true
b)
false
40.
High yield bond schemes invest in junk bonds.
a)
True
b)
False
41.
If an AMFI Registration Number (ARN) and choice of plan are not mentioned in the application form for subscription of units to a mutual fund scheme then the application will be treated as ________________.
a)
An incomplete application and will be returned for completion
b)
A regular plan application
c)
A direct plan application
d)
An incomplete application and will be rejected
42.
In a top-down approach, sector allocation precedes stock selection.
a)
False
b)
True
43.
In the pre-retirement stage, investors reach the peak of their earning capacity. State whether True or False.
a)
true
b)
false
44.
Institutional distributors build reach through ______.
a)
Employees
b)
Agents
c)
Sub-brokers
d)
Any of the above
45.
Investment objective defines the broad investment charter.
a)
True
b)
False
46.
Investment objective is closely linked to
a)
Scheme
b)
Option
c)
Plan
d)
SIP
47.
Investments in mutual fund can be made using _______.
a)
Cheque / DD
b)
Remittance
c)
ASBA
d)
Any of the above
48.
Investors’ KYC details are stored in the server of _______.
a)
AMC
b)
AMFI
c)
SEBI
d)
KRA
49.
It would cost Rs 25 lakh today, to start a business. You expect your son to start the same business 5 years down the line, during which period, inflation would be 8% p.a.. The requirement of funds 5 years down the line can be calculated by using which amongst the following formula?
a)
Rs 25,00,000/(1+0.08)^5}
b)
Rs 25,00,000*(1+0.08)*5
c)
Rs 25,00,000*(1+0.08)^5
d)
Rs 25,00,000*[{(1+0.08)*5} + 1]
50.
KIM has to be updated every 6 months.
a)
True
b)
False
51.
Legally, SAI is part of the SID.
a)
True
b)
False
52.
Loads and taxes may account for the difference between scheme returns and investor returns.
a)
True
b)
False
53.
Minimum networth requirement for a new AMC is
a)
Rs. 10 crore
b)
Rs. 50 crore
c)
Rs. 100 crore
d)
Rs. 1000 crore
54.
Most investor service centres are offices of
a)
Trustees
b)
Registrar
c)
Custodian
d)
Fund Accountant
55.
Mr. A, 30 year old unmarried professional from a well to do family has a secured job. He can invest a larger part of his portfolio in equity compared to debt. State whether True or False.
a)
True, as he does not have much liability and can take a risk
b)
False, as he needs to provide for a comfortable livelihood
c)
True, since he is from a well to do family
56.
Mutual funds are constituted in India as ____________.
a)
Companies
b)
Limited Partnership Firms
c)
Trusts
d)
Non-Government Organisations
57.
NAV of income funds is to be calculated upto _____ decimals.
a)
1
b)
2
c)
3
d)
4
58.
Net Asset Value (NAV) is the basis for pricing of which transactions of an open-ended fund?
a)
Purchase of units
b)
Redemption of units
c)
Both purchase and redemption of units
59.
Net Asset Value (NAV) of mutual fund scheme is calculated on ______ basis and published on websites of ________.
a)
Daily; SEBI and mutual fund
b)
Daily; AMFI and mutual fund
c)
Daily; SEBI and AMFI
60.
Net assets of a scheme are nothing but its investment portfolio.
a)
True
b)
False
61.
NFOs other than ELSS can be open for a maximum of ________
a)
10 days
b)
15 days
c)
20 days
d)
30 days
62.
Offer documents of mutual fund schemes are approved by SEBI.
a)
True
b)
False
63.
Open-ended schemes generally offer exit option to investors through a stock exchange.
a)
True
b)
False
64.
Risk can be measured by ______.
a)
Variance
b)
Standard Deviation
c)
Beta
d)
Any of the above
65.
Scheme-wise Annual Report has to be sent through email to all the unitholders of mutual fund schemes within 4 months of the close of financial year. State whether True or False.
a)
true
b)
false
66.
SEBI regulates
a)
Mutual Funds
b)
Depositories
c)
Registrar & Transfer Agents
d)
All of the above
67.
Sector funds invest in a diverse range of sectors.
a)
true
b)
False
68.
Securities Transaction Tax is applicable to Equity Schemes.
a)
True
b)
False
69.
Statement of Account is to be sent to investors within ________ days of NFO closure.
a)
3 days
b)
5 days
c)
7 days
70.
Stock exchange brokers are permitted to distribute mutual funds without the requirement of passing the certifying test.
a)
True
b)
False
71.
STP is a combination of SIP and SWP.
a)
True
b)
False
72.
Tactical asset allocation should ideally be done by seasoned investors with large investible corpuses. State whether True or False.
a)
true
b)
false
73.
The assets of the mutual fund are held by
a)
✘ AMC
b)
✘ Trustees
c)
✔ Custodian
d)
✘ Registrar
74.
The cut off time for determining applicable Net Asset Value (NAV) for liquid fund sale is ________.
a)
12.00 pm
b)
10.00 am
c)
3.00 pm
d)
1.00 pm
75.
The difference between NAV and re-purchase price is _______.
a)
Entry Load
b)
Exit Load
76.
The distributor can charge a fee from the investor.
a)
True
b)
False
77.
The market price of which of the following financial instruments fluctuates the maximum?
a)
Long term debt securities
b)
Certificates of Deposit
c)
Commercial Papers
d)
Debentures
78.
The maximum initial commission that a scheme can pay to distributors is ____.
a)
Nil
b)
1%
c)
2%
79.
The most appropriate measure of returns for a scheme in existence for several years is ________.
a)
Simple Return
b)
Dividend Return
c)
Annualised Return
d)
CAGR
80.
The process of offering a mutual fund scheme to the public for the first time for subscription is known as __________.
a)
Initial Public Offer (IPO)
b)
New Fund Offer (NFO)
c)
New Public Offer (NPO)
81.
The returns generated by junk bond schemes are typically _____ the returns generated by Gilt funds.
a)
Higher than
b)
Lower than
c)
Equal to
82.
Ticket Size' is a reference to _________.
a)
Capitalization of companies where a fund invests
b)
Compensation for fund manager
c)
Fund management fees in a mutual fund scheme
d)
Minimum investment amount in real estate
83.
Time stamping in context of mutual funds is mandatory for _______.
a)
The application form only
b)
The payment instrument only
c)
Both application form or transaction slip and payment instrument
d)
The transaction slip for purchasing additional scrips
84.
Trail commissions are linked to valuation of portfolio in the market.
a)
True
b)
False
85.
Transfer of investments from one scheme to another is allowed in case of mutual funds. State whether True or False.
a)
true
b)
true
86.
Unit holders can hold their units in demat form.
a)
True
b)
False
87.
Units of ________ must be listed on the stock exchange.
a)
Sector funds
b)
Arbitrage funds
c)
Close ended funds
d)
Liquid funds
88.
Units of Close ended funds must be listed on the stock exchange.
a)
True
b)
False
89.
Which amongst the following information is available in the mutual fund offer document? I. Investment objective and strategy of the scheme II. Fees and expenses charged to the scheme III. Statutory information about the Asset Management Company (AMC) offering the scheme
a)
I and II
b)
I and III
c)
I, II and III
d)
I only
90.
Which amongst the following is an example of a physical asset?
a)
Bank Deposit
b)
Units by Real Estate Investment Trusts
c)
Shares held in physical form
d)
Real Estate
91.
Which amongst the following metrics are used to depict returns from an investment of less than 1 year?
a)
Compounded Annual Growth Rate
b)
Annualised Return
c)
Simple Return
d)
Total Return
92.
Which amongst the following mutual fund schemes will generate higher returns?
a)
Mutual fund schemes investing in bonds of companies having poor credit rating
b)
Mutual fund schemes investing in risk free government securities
c)
Mutual funds schemes investing in bonds of companies having highest credit rating
93.
Which of the following is a truly international asset class?
a)
Debt
b)
Equity
c)
Real Estate
d)
Gold
94.
Which of the following statement is FALSE regarding the nomination in a mutual fund scheme?
a)
Only individual investors can make a nomination.
b)
Investments by minors cannot have a nomination.
c)
A Power of Attorney holder cannot make a nomination.
d)
A nomination can be made in favour of the Karta of HUF
95.
Within ___ days of dividend declaration, warrants will have to be sent to investors.
a)
10 days
b)
20 days
c)
30 days
96.
Risk appetitte as no of dependant menber increases
a)
Decreases
b)
Increases
c)
No change
d)
Any of the above
97.
Many have made available the risk profiling tool on their web sites
a)
AMCs
b)
Research Houses
c)
Both
d)
None of this
98.
------is the decision outcome based on the market behaviour
a)
Tactical Asset Allocation
b)
Strategic Asset Allocation
c)
Flexible Asset Allocation
d)
Fixed Asset Allocation
99.
Many Financial advisor work on the Model Portfolio
a)
TRUE
b)
FALSE
100.
Which are the aspects that affect the Risk profiling of the investors?
a)
Family Information
b)
Financial Information
c)
Personal Information
d)
All of the above
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