1.

The most important attribute of a money market mutual fund is Quick capital appreciation High regular income Safety of principal No loads

(1-Mark)

2.

Which of the following is not true for Index Funds These funds invests in the shares that constitute a specific index The investment in shares is in the same proportion as in the index These funds aim to minimise the tracking error These funds are not diversified

(1-Mark)

3.

A mutual fund can benefit from economies of scale because of Indirect Investment Large volumes of trade Portfolio diversification Fund manager

(1-Mark)

4.

An open-end mutual fund is one that has An option to invest in any kind of security Units available for sale and repurchase at all times An upper limit on its NAV A fixed fund size

(1-Mark)

5.

Assured return or guaranteed monthly income plans are essentially Hybrid funds Growth Funds Debt funds Sector funds

(1-Mark)

6.

CDSC is a kind of Entry load Entry load, which varies with holding period of an investor Exit load, which varies with the holding period of an investor None of the above

(2-Mark)

7.

The networth of an asset management company Should be greater than Rs.100 Crores Can be decided by the Sponsor Should be Rs. 10 Crores at all times Should be atleast Rs. 10 Crores at all times

(1-Mark)

8.

The Board of Trustees of a mutual fund Act as a protector of investors' interests Directly manage the portfolio of securities

(2-Mark)

Do not have the right to dismiss the AMC Cannot supervise and direct the working of the AMC 9. The entity that SEBI does not regulate is Share registrars Mutual funds Stock exchanges Non-banking finance companies 10. Investors have the right to receive interest from the AMC if redemption (1-Mark) proceeds are not dispatched within a period of A month 14 days 14 working days 10 working days 11. After closure of the initial offer an open ended scheme, on going sales (1-Mark) and repurchases must start within One week 30 days 45 days 180 days 12. Which of the following is an SRO (Self Regulatory Organisation) NSE SEBI AMFI RBI 13. The functions and duties of the sponsor, AMC, trustees and custodian (1-Mark) of the mutual fund are listed in Offer document only Key information memorandum only Both offer document and key information memorandum None of the above 14. The names and background of key personnel of the AMC Need not be disclosed to investors Are of no relevance as they may change Are disclosed in the offer document Are declared in newspaper advertisements 15. Which the following is not false The offer document need not be studied by an investor before investing in a scheme The offer document is not a legal document (2-Mark) (1-Mark) (1-Mark) (1-Mark)

A change in key personnel of the AMC does not necessitate a revision of the offer document If fresh litigation cases or adjudication proceedings are referred by SEBI against the fund sponsors or a company associated with the sponsors, then the offer document needs to be revised 16. The offer document of an open ended fund has to be fully revised and updated Every six months Once in two years Every quarter Every month 17. The investment policies listed out in the offer document of a fund do not include The type of securities in which the scheme will invest principally Asset allocation pattern Policy of diversification The specific securities in which the fund will invest 18. Standard risk factors are the one Which are uniformly applicable for any mutual fund scheme Different for different schemes Which are made by a "standards" committee None of the above 19. Valuation norms for non-traded securities should be disclosed At the end of every financial year Every quarter In the offer document at the time of launch of the scheme Should not be disclosed, being confidential information 20. The code of ethics for mutual funds published by AMFI Is mandatory Is in the form of recommended practices Is unfavourable to investors Does not cover distribution and selling practices 21. The following are not termed as "sales practices" Agents commission Before-and after-sales service to investors Advertising of schemes Stockbroking 22. The terms of appointment of a broker by a fund are Laid down by SEBI Laid down by AMFI (1-Mark) (1-Mark) (1-Mark) (2-Mark) (2-Mark) (2-Mark) (2-Mark)

Not uniform to all funds None of the above 23. Which of the following is not true Companies can invest in mutual fund schemes Registered societies can invest in mutual fund schemes NRI cannot invest in mutual fund HUF can invest in mutual fund 24. In a mutual fund investors' subscriptions are accounted for as Liabilities Deposits Unit capital None of the above 25. Scheme-wise annual report of a mutual fund need not be Sent to all unit-holders Forwarded to SEBI Published as an advertisement Stock exchanges 26. The NAV of Scheme is 50.What can be the maximum entry load charged (2-Mark) to the investor Rs.2.25 Rs. 3.30 Rs. 3.50 Rs.7.00 27. For an open ended scheme, initial issue expenses Can be amortised over a period of 10 years Can be amortised over a period not exceeding 5 years Can not be recovered from investors Can be amortised over the life of the scheme 28. For a no-load fund , the AMC can change an investment management fee not exceeding 3.50% 4.00% 2.25% 0.50% 29. In case of joint holding, on redemption, the proceeds are paid to the Nominee Last holder First holder (1-Mark) (2-Mark) (2-Mark) (1-Mark) (1-Mark) (2-Mark)

As per the request of all the holders 30. The maximum number of joint holders can be 2 3 4 Unlimited 31. In a mutual fund, the overall decisions on allocating money to particular industries/sectors are taken by Equity analysts Fund managers Security dealers Trustees 32. Certificates of Deposits (CDs) are issued by Regional Rural Banks Corporates Scheduled commercial banks None of the above 33. A high credit rating does not mean High yield spread High perceived safety Low yield spread Low risk premium 34. If a bond cannot be sold at a price near its value, it means that investment in this bond has High liquidity risk High default risk Low liquidity risk Inflation risk 35. Technical analysis guides the decision on Whether to buy or sell The right time to buy or sell Whether company's technical personnel are adequately qualified None of the above 36. The largest proportion of trades done in the wholesale debt market is accounted by Mutual funds Foreign banks Indian banks Financial institutions (1-Mark) (1-Mark) (1-Mark) (1-Mark) (1-Mark) (1-Mark) (2-Mark)

37. As per SEBI norms, a fund's investments, in the equity shares of any one company are restricted to 25% of Net Assets 10% of Net Assets 50% of Net Assets 100% of Net Assets 38. When interest rates rise, prices of existing bonds Also rise Fall Are not affected Fluctuate either up or down 39. Which of the following is generally true for a growth stock Steady capital appreciation and steady dividends yields High capital appreciation and high dividend yields High capital appreciation and low dividend yields Steady capital appreciation and high dividend yields

(2-Mark)

(2-Mark)

(2-Mark)

40. It may not be possible to reinvest interest received at the same rate as (2-Mark) principal. This is known as Reinvestment risk Inflation risk Interest-rate risk Call risk 41. The most suitable measure of fund performance for all fund types is NAV Change Total Return Total Return with dividend reinvestment method None of the above 42. Change in NAV as a measure of fund performance is more suitable for (1-Mark) Growth funds Income funds Funds with withdrawal plans None of the above 43. Turnover rates would be most relevant to analyse the performance of Equity funds Index funds Debt funds Value funds 44. Standard devaition is a measure of (2-Mark) (1-Mark) (1-Mark)

Market risk Total risk Credit risk Re-investment risk 45. While computing the Expense Ratio for a fund, the transaction cost for (2-Mark) buying and selling securities are not included in the fund expenses because These are not borne by investors As per accounting policies, these are capitalised and are not shown as expenses at all AMC wants to show lower expense ratios The statement is not correct 46. The Expense Ratio as a measure of a fund's performance is defined by (2-Mark) a fund's Total expenses and average net assets Total expenses and total assets Average expenses and average net assets None of the above 47. Which of the following is true about returns Relative returns are important than absolute returns for mutual funds Historical average is a good proxy for expected returns Risk arises when actual returns are different from expected returns All of the above 48. Deciding on strategies such as cost averaging, value averaging, active (1-Mark) switching, all depend on the Stock market situation on date Amount of money to be invested Investor's risk tolerance Phase through which the economy is passing 49. Annual contribution to Public Provident Fund should be Rs.10000 Between 100 and Rs.6000 Between Rs.600 and Rs.1000 None of the above 50. Of the following, which would be more suitable for a retiree with a modest risk appetite Value Fund Diversified Equity Fund Growth Fund Balanced Fund (1-Mark) (1-Mark) (2-Mark)

51. A sectoral fund is a Low risk fund Moderate risk fund High risk fund Low-to-moderate risk fund 52. The maturity period of RBI Relief Bonds is 5 years 6 years 7 years 8 years

(1-Mark)

(1-Mark)

53. The most important reason for an investor to prefer a bank deposit to a (1-Mark) mutual fund is The creditworthiness of the bank Because the bank does not invest in securities That the bank offers a guarantee All of the above 54. Retired investors should Not draw down on their capital Not invest in securities which bear risk of capital erosion Continue holding some portion of their holding in equity growth funds Never invest in equity 55. From whom can a unit-holder seek redressal if his compalint is not entertained by the mutual fund AMC Board of Trustees SEBI RBI 56. Which of the following investment products do not give guarantee for return or capital Bank deposits Pubic provident fund (PPF) National Savings Certificates (NSC) Units of a mutual fund 57. Within an asset class, which individual security to invest in should be decided by The financial planner The investor himself A professional fund manager An objective advisor 58. The differentiating factor among debt funds of comparable maturity and (1-Mark) (1-Mark) (1-Mark) (1-Mark) (1-Mark)

quality is Gross yields Costs Fund age Tenure of the fund manager 59. Which of the following is true about an equity fund selection Fund with higher percentage in cash should be selected Funds with low market capitalization have more liquidity Track record of fund managers is not important Funds with higher x-marks are more diversified and have lower risk 60. A Money Market Mutual Fund is most likely to invest in Corporate Bonds Equity Shares Government Securities with maturity less than 1 year All of the above 61. Ex-Marks of an equity fund measures its Performance Risk Both the above None of the above 62. A small investor can build a diversified portfolio by Buying one share each of all listed companies Investing in a mutual fund Borrowing enough money to buy shares of well-managed companies None of the above 63. Which of the following is true about Jacob's Model Portfolio for investors in accumulation phase Investment in diversified equity should be around15% - 30% Investment in income and gilt funds should be around 65% - 80% Investment in liquid funds should be around 5% None of the above 64. Which of the following is not true about the buy and hold strategy It is preferred by a many investors It does not involve rebalancing It is very beneficial as investors may exit from poor performers and invest in better ones All of the above 65. Financial planning helps a person To become a billionaire (2-Mark) (2-Mark) (2-Mark) (2-Mark) (2-Mark) (2-Mark) (2-Mark)

To achieve financial goals through proper management of finances To invest in foreign countries None of the above 66. Which of the following is not a relevant criteria to select an equity fund (2-Mark) Percentage of cash in portfolio Concentration of portfolio Market capitalization of the fund The interest rate environment 67. A very high proportion of investment in all types of equity funds is advisable for investors In distribution phase In accumulation phase In transition phase Who are wealth preserving affluent individuals 68. Which of the following will result in higher percentage of equity than in (2-Mark) debt during bullish phase of the equity markets Fixed Asset Allocation Flexible Asset Allocation both a and b neither a nor b 69. Which of the following is true about Jacob's Model Portfolio for investors in distribution phase Investment in diversified equity should be around 15% - 30% Investment in income and gilt funds should be around 15% - 30% Investment in liquid funds should be around 15% - 30 % None of the above (2-Mark) (2-Mark)