1 The NAV of a fund has increased from Rs.24 to 26 in 16 months.

What is the annualized return Wrong Answer : Insufficient information Correct Answer : 6.25% 2 An investment has doubled in 6 years The annualized compounded return is Wrong Answer : 100% Correct Answer : 12.25% 3 Rajesh is a 25 yr old person who is unmarried and working in a Software firm and wants to invest. What allocation would you recommend to him Wrong Answer : 50% in equities and balance in debt/money market Correct Answer : 100% in equities 4 Which of these cannot be prevented by unitholders even if 75% of unitholders are behind it Wrong Answer : Prevent the merger of two schemes Correct Answer : Prevent the takeover of the funds AMC by another sponsor 5 Which of the following is correct about disclosure of illiquid securities Wrong Answer : If the fund proposes to invest more than 20% of net assets in illiquid securities- it should disclose the possible impact on NAV in offer document Correct Answer : If the fund proposes to invest in illiquid securities it should disclose in the offer document 6 An equity fund has an average weekly net assets of Rs.250 crores throughout the year; The maximum investment management and advisory fee it can charge is Wrong Answer : Rs.2.50 crores Correct Answer : Rs.2.75 crores 7 A stock exchange is involved in the supervision of Wrong Answer : All mutual fund schemes Correct Answer : Only the closed end scheme which are listed in the particular stock exchange 8 Which of the following is true as per SEBI rules? Wrong Answer : Each fund has to be run by a team of fund managers Correct Answer : The name of the fund manager of each scheme has to be given in the offer document of the scheme 9 A person who is 55 years and about to retire in 3 years is in Wrong Answer : Accumulation phase Correct Answer : Distribution phase 10 Which is the best among the following Wrong Answer : Returns 10% Rating BB Load ..05% Correct Answer : Returns 10% Rating AAA Load ..05% 11 A charitable trust wishes to invest in units of super equity fund 2001 and approaches you as distributor. What do you do? Wrong Answer : Accept the application form and the cheque Correct Answer : Check the offer document to see whether charitable trusts are allowed to apply for units 12 Which of the following can an existing mf investor sue? Wrong Answer : Directors of the AMC Correct Answer : The trustees 13 If a security is thinly traded it implies that the security has not traded on any stock exchange for the last __ days Wrong Answer : 15 Correct Answer : 30 14 What is the maximum initial issue expenses that can be charged by the AMC? Wrong Answer : 7% Correct Answer : 6% 15 Which of the following is untrue of the automatic reinvestment plan? Wrong Answer : The major benefit of automatic reinvestment is the compounding of returns Correct Answer : The benefit of automatic reinvestment is often lost- if reinvestment is subject to heavy load 16 SEBI regulations for mutual funds came into force in Wrong Answer : 1987 Correct Answer : 1996 17 Which class of investors is not allowed to invest in Indian mutual funds? Wrong Answer : FII Correct Answer : Foreign national 18 Value of stocks refers to Wrong Answer : Shares of companies whose earnings are expected to increase at normal levels Correct Answer : Shares of companies in nature industries expected to yield low growth earnings 19 Investors can address their complaint to the following except to Wrong Answer : Sponsor Correct Answer : Consumer court 20 Commissions payable by a fund to its agents depends Wrong Answer : Regulated by AMC Correct Answer : upon the funds discretion 21 The dividend yield of a company growing faster than the market usually will be: Wrong Answer : Higher than the market average Correct Answer : Lower than the market average 22 Value investment means Wrong Answer : Investing based on p/e of company as compared to an industry Correct Answer : Investing with the intention of unlocking an intrinsic value 23 Report on portfolio of investments is submitted to SEBI by Wrong Answer : AMC directors Correct Answer : Trustees 24 A mutual fund is not Wrong

Answer : A collective investment vehicle Correct Answer : A portfolio of stocks- bonds- and securities 25 Which is not true about an SRO Wrong Answer : Works as a decentralizing organization Correct Answer : Reports to an apex regulatory body 26 An investor invests Rs 300 today. After 7 yrs the value becomes Rs. 600. What is his annualized compounded rate of return Wrong Answer : 11 Correct Answer : 10.41 27 Money market funds invest in Wrong Answer : Company fixed deposits Correct Answer : Government securities with less than 1 yr maturity 28 A mutual fund has an NAV of Rs. 12. What is the maximum price of repurchase. Wrong Answer : 12 Correct Answer : 12.84 29 Which of the following is a self regulatory body? Wrong Answer : SEBI Correct Answer : BSE 30 The 1999 union budget helped the mutual fund industry by Wrong Answer : none of the above Correct Answer : exempting mf dividends from income tax in the hands of investors 31 A load means Wrong Answer : an expense charged to the scheme/ fund Correct Answer : a sales charge 32 An investor may not invest in a mutual fund if Wrong Answer : his capital base is large and is able to monitor the stock market Correct Answer : both of the above 33 The mutual fund industry in India began in Wrong Answer : none of the above Correct Answer : 1963 34 Contingent deferred sales charge is: Wrong Answer : A fixed amount charged every time an investor exits Correct Answer : A fixed or variable load depending upon how many years the investor has stayed with the fund 35 Which of the following is true about switching from a MMMF to an equity fund? Wrong Answer : It is not allowed Correct Answer : It is a means to deal with the stock market swings 36 The maximum limit of inter-scheme investments by a fund is: Wrong Answer : 5% of the NAV of the transferring scheme Correct Answer : 5% of the NAV of all schemes of the fund 37 The performance of which of the following is not comparable? Wrong Answer : Two debt funds Correct Answer : An it fund and a diversified equity fund 38 A scheme has realised gains of Rs 5 crore unrealised losses of Rs 1 crore unrealised gains of Rs 2 crore and excess of income over expenses of Rs 3 crore. What would be the distributable surplus? Wrong Answer : Rs 5 crore Correct Answer : Rs 9 crore 39 Abridged offer document distributed with application is called Wrong Answer : prospectus Correct Answer : key information memorandum 40 Initial issue expenses in respect of any scheme shall not exceed Wrong Answer : 5% Correct Answer : 6% 41 The following is not a characteristic of a closed end fund. Wrong Answer : it has fixed corpus Correct Answer : its units can be purchased or resold on any working day 42 Arrange the fund types starting from lowest risk to highest risk sector funds balanced fund diversified equity fund Wrong Answer : M D B S Correct Answer : M B D S 43 A fund acquires 100 shares in company a for Rs 5000 it buys another 150 shares in the same company for Rs 7000. Later it sells 50 shares for Rs 3500. What is the gain/loss on the sale? Wrong Answer : Rs. 1167 Correct Answer : Rs. 1100 44 A longer maturity has the following impact on its price risk in case of interest rate fluctuation Wrong Answer : none of the above Correct Answer : risk increases with longer maturity 45 The following investments are not adversely affected by rising interest rates. Wrong Answer : company debentures Correct Answer : floating rate bonds
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