Practice Test

Q1) Open-ended schemes generally offer exit option to investors through stock exchange. Show Answer

Q2) Sector funds invest in a diverse range of sectors. Show Answer

Q3) High yield bond schemes invest in a junk bonds. Show Answer

Q4) AMC directors are appointed with the permission of trustees. Show Answer

Q5) Fund accounting activity of a scheme is to be compulsorily outsourced. Show Answer

Q6) As per SEBI’s principles, the AMC and the Board of Trustees of a fund should belong to the same sponsors. Show Answer

Q7) Investors are totally exempt from paying any tax on the dividend income they received from Mutual Funds. Show Answer

Q8) Income distributed to unit-holders by a debt fund is liable to dividend distribution tax. Show Answer

Q9) International funds invest in various and so are low risk funds. Show Answer

Q10) Investment in gold is a hedge against inflation but investment in a gold fund is risky. Show Answer

Q11) By their vary nature, growth funds are considered as high risk frauds. Show Answer

Q12) A fund’s declared NAV does not include loads. Show Answer

Q13) A fund that charges a load is better than a no-load fund. Show Answer

Q14) Unrated securities in the portfolio of a mutual fund are not to be valued. Show Answer

Q15) An exit load guarantees a higher return. Show Answer

Q16) Bonds held in the portfolio of a mutual fund are valued at yield to maturity. Show Answer

Q17) The valuation of non-traded equity shares is done at the trading price 30 days prior to the valuation date. Show Answer

Q18) A disadvantage suffered by mutual fund investor is that he has no control over costs of investing. Show Answer

Q19) A person can earn 12 percent by investing in equity shares on his own. Now he is considering a recently announced equity based mutual fund scheme in which initial expenses 5 percent and annual recurring expenses are 1.5 percent. How much should the mutual fund earn to provide him a return of 10 percent ? Show Answer

Q20) XYZ mutual fund had a net asset value of Rs.10 at the beginning of a month, made income and capital gain distribution of Rs.0.05 and Rs.0.02 respectively per unit during the month. The fund ended the month with a net asset value of Rs.10.08. The monthly rate of return of XYZ mutual fund is Show Answer

Q21) The following information is extracted from ABC Mutual Fund Scheme : Asset value at the beginning of the month Rs.60
Annualised return 12%
Distributions made in the nature of income Rs.0.40 and 0.30 and Capital gain (per unit respectively).
The month end net asset value of the mutual fund scheme is (limit your answers to two decimals) Show Answer

Q22) The following information is available to a mutual fund scheme :
Size of the scheme Rs.150 lakhs
Face value of the shares Rs.100
Number of the outstanding shares Rs.1.5 lakhs
Market value of the fund's investments Rs.220 lakhs
Receivables Rs.1 lakhs
Liabilities Rs.50,000
NAV of the scheme is
Show Answer

Q23) SEBI regulates Show Answer

Q24) A close-ended mutual fund has a fixed Show Answer

Q25) The maximum load that a fund can charge is determined by the Show Answer

Q26) A gilt fund is a special type of fund that invests Show Answer

Q27) Of the following fund types, the highest risk is associated with Show Answer

Q28) The NAV of a mutual fund Show Answer

Q29) An open-ended mutual fund is one that has Show Answer

Q30) An investor in a close-ended mutual fund can get his/her money back by selling the units Show Answer

Q31) The "load" charged to an investor in a mutual fund is Show Answer

Q32) A mutual fund is owned by Show Answer

Q33) Units from an open-ended mutual fund are bought Show Answer

Q34) A mutual fund is not Show Answer

Q35) "Load" cannot be recovered Show Answer

Q36) The most important advantage of a money market mutual fund is Show Answer

Q37) Some close-ended funds are quoted at a discount to their NAV because of high expenses ratios Show Answer

Q38) The NAV of each scheme should be updated on AMFI's website Show Answer

Q39) Debt funds target Show Answer

Q40) In which of the following do debt funds not invest ? Show Answer

Q41) Which of the following risks do not affect a debt fund ? Show Answer

Q42) NAVs of equity funds are not affected by Show Answer

Q43) The greatest potential for growth in capital is offered by Show Answer

Q44) In a mutual fund investors' subscriptions are accounted for as Show Answer

Q45) Investments made by a mutual fund on behalf of investors are accounted as Show Answer

Q46) Liabilities in the balance sheet of a mutual fund are Show Answer

Q47) Net Asset Value (NAV) of a mutual fund scheme is defined as the schemes Show Answer

Q48) The day on which NAV is calculated by a fund is known as Show Answer

Q49) A funds NAV is affected by Show Answer

Q50) When computing NAV of fund SEBI requires accrual of major expenses to be a Show Answer

Q51) If a fund calculates NAV daily, it will include all the transaction concluded upto Show Answer

Q52) For a open-ended fund, the repurchase price should not be lower than NAV Show Answer

Q53) For a close-ended fund, the repurchase price should not be lower than NAV Show Answer

Q54) Which of the following are not true for Equity Linked Savings Scheme ? Show Answer

Q55) Which of the following is not true for Index Funds ? Show Answer

Q56) The structure which is required to be followed by mutual funds in India is laid down by Show Answer

Q57) The Board of Trustees of a mutual fund Show Answer

Q58) The AMC of a mutual fund cannot Show Answer

Q59) The trust that manages a mutual fund is appointed by Show Answer

Q60) The custodian of a mutual fund Show Answer

Q61) Transfer agents of a mutual fund are not responsible for Show Answer

Q62) Distributors or agents Show Answer

Q63) The fund sponsor has to contribute Show Answer

Q64) The sponsor of a mutual fund may be compared to Show Answer

Q65) Issuing and redeeming units of a mutual fund is the role Show Answer

Q66) The fund sponsors should have a sound financial track record of Show Answer

Q67) The net worth of an asset management company should be greater than Show Answer

Q68) The AMC and directors are answerable to Show Answer

Q69) After UTI, the first mutual funds were started by Show Answer

Q70) The highest authority among the following is the Show Answer

Q71) The entity that SEBI does not regulate is Show Answer

Q72) A close-ended scheme of a mutual fund is not governed by Show Answer

Q73) The entry of mutual funds in India was initiated by mutual funds set up by Show Answer

Q74) The "capital" of a scheme does not include Show Answer

Q75) Unit holders of a mutual fund scheme do not have a right to Show Answer

Q76) Mutual funds value their investments Show Answer

Q77) Investment policies of a mutual fund are determined by Show Answer

Q78) Which of the following measures are not taken by SEBI for protecting investors ? Show Answer

Q79) Dividends distributed by mutual funds are Show Answer

Q80) Investing through mutual fund is a better option that investing directly in the stock market because Show Answer

Q81) A small investor can build a diversified portfolio by Show Answer

Q82) Which of the following is not an advantage of mutual fund investment over direct investment ? Show Answer

Q83) A sector fund is a Show Answer

Q84) Short term bond funds are Show Answer

Q85) The load amount charged to a scheme over a period of time is called Show Answer

Q86) Which of the following fund types are comparable ? Show Answer

Q87) Who is the primary guardian of unit holders' funds/assets ? Show Answer

Q88) Which of the following is true for Equity Linked Savings Scheme (ELSS) ? Show Answer

Q89) A mutual fund in India is a Show Answer

Q90) A fund sells 100 units of face value Rs.10 at an NAV of Rs.12.25. How much would be credited to unit capital ? Show Answer

Q91) SEBI Regulations for Mutual Funds were formulated in Show Answer

Q92) A mutual funds' investments are guided by the Show Answer

Q93) UTI was the only mutual fund for the period Show Answer

Q94) Mutual fund can benefit from economies of scale because of Show Answer

Q95) Which of the following is a disadvantage suffered by a mutual fund investor ? Show Answer

Q96) Which of the following statements about UTI is untrue ? Show Answer

Q97) The organisation responsible for a comprehensive set of regulations for all mutual funds in India is

Show Answer

Q98) A fund's investments at market value total Rs.700 crores, total liabilities stand at Rs.50 lakhs and the number of units outstanding is 28 crore. What is the NAV ? Show Answer

Q99) The role of an AMC is to act as Show Answer