FinanceInsights has created mock tests for individuals who want to learn about mutual fund investing. These are multiple choice questions that will test your knowledge on mutual funds. If you need any clarifications/explanations on mutual fund investing, please feel free to send your query on sharmila@financeinsights.com
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2.
Legal charges related to recovery of investments in a scheme's segregated portfolio in excess of the TER limits, if any, shall be borne by the AMC.
3.
Profits and losses of the scheme —
4.
No mutual fund under all its schemes shall own more than __ percent of units issued by a single issuer of REIT and InvIT.
5.
AMCs shall send details of the scheme portfolio while communicating the fortnightly, monthly and half yearly statement of the portfolio via email to unitholders whose email address is registered with the fund, within __ days from the end of each half year.
6.
SID and SAI are prepared in the format prescribed by —
7.
As per the fair valuation principles laid out by SEBI, it is mandatory to disclose the valuation policy in __________. (from NISM)
8.
Time stamping machines are available at —
9.
In case of open-ended funds, investors can purchase and sell units after the NFO —
10.
Mutual Fund Distributors Certification Examination offered by is required for becoming a mutual fund distributor. (from NISM)
11.
Which amongst the following is a measure of risk-adjusted returns of mutual fund scheme? (from NISM)
12.
Passive funds track —
13.
In case of an index fund scheme or exchange traded fund, the total expense ratio of the scheme including the investment and advisory fees shall not exceed ____ per cent of the daily net assets.
14.
GST on all fees, brokerage and transaction costs, should be within the limit of TER.
15.
Mutual funds offer options that can help investors defer their tax liability.
16.
SEBI does not handle complaints issued against insurance companies.
17.
In case of interval funds, during the transaction period —
18.
Only one sector fund is permitted by SEBI.
19.
A single SAI is relevant for all the schemes offered by a mutual fund.
20.
In case of joint holding, the income, be it capital gains or dividend, would be considered to have been earned by the ____.
21.
Certificates of Deposits issued by Banks are for ______.
22.
A debt fund had investments in debentures of ABC Ltd to the extent of 5% of scheme's NAV. The debentures defaulted and the scheme had a 50% withdrawal from its investors. Since there are no buyers for the debentures, the remaining scheme holders now have 10% of the scheme portfolio in these debentures. Hence they are at a disadvantage. What is the solution for this?
23.
In case of medium duration funds, portfolio macaulay duration under anticipated adverse situation is —
24.
Investors can buy units of a close-ended scheme from the fund —
25.
The valuation policies and procedures of securities held by schemes shall be reviewed at least once in a ________ by an independent auditor to seek to ensure their continued appropriateness.
26.
The AMC and schemes can have the same auditor.
27.
As per SEBI regulations, money market funds can invest in money market instruments having maturity up to —
28.
A first time investor invests Rs 25,000. The scheme's NAV at the time of investment is Rs 43.21. After applying transaction charges, how many units will the investor get?
29.
Schemes in the process of winding up are required to be listed on the stock exchange.
30.
As per SEBI regulations, mid cap companies are defined as —
31.
Online mutual fund platforms don't permit SIP, STP and SWP transactions.
32.
There are four broad asset classes —
33.
Calculate the CAGR: Investment amount: Rs 10,000 @NAV of Rs 10; Investment date: 30 Jun 2019; First Dividend paid: Re 1 per unit; First Dividend date: 1 January 2020; Ex-dividend NAV: Rs 12.50; Second Dividend paid: Re 1 per unit; Second Dividend date: 1 January 2021; Ex-dividend NAV: Rs 15.
34.
In case of valuation of convertible debentures and bonds, the non-convertible and convertible components shall be valued together.
35.
Registrar and Transfer Agency function must be independent of the Asset Management Company, and it cannot be retained in-house. State whether this statement is True or False. (from NISM)
36.
Registrar and Transfer agents don't need to register with SEBI.
37.
In case of partial redemption, units will be assumed to be redeemed on ______ basis.
38.
Which of the following scheme categories would be considered the least risky in terms of credit risk? (from NISM)
39.
Debt securities that are to mature within a year are called ________.
40.
ETFs can be purchased —
41.
You invest in two funds. Fund A returned 5%; Fund B returned 3%. You have held Fund A for 6 months and Fund B for 4 months. What is the annualized return for Fund A and Fund B?
42.
At least ______of the trustees need to be independent trustees.
43.
Treynor Ratio comparisons should ideally be restricted to _____ schemes.
44.
The total expense ratio of close-ended equity-oriented scheme(s) shall not exceed ____ per cent of the daily net assets of the scheme.
45.
In case of change in fundamental attributes of a scheme, the AMC should give existing investors at least __ days to exit the scheme.
46.
When a scheme charges exit load, the repurchase price is ______ than the NAV.
47.
In case of fund of funds scheme, investing in other than a minimum of sixty-five per cent of assets under management in equity-oriented schemes and liquid schemes, index fund scheme and exchange traded funds, the total expense ratio of the scheme including weighted average of the total expense ratio levied by the underlying scheme(s) shall not exceed ____ per cent of the daily net assets of the scheme.
48.
The 'satellite' portfolio of an investor will be invested to take advantage of expected _____ market movements.
49.
In case of SIP investments, transaction charges are levied only if the total investment commitment amounts to —
50.
An SIP cannot be initiated during a New Fund Offer (NFO).
51.
Rajesh filed a complaint with a mutual fund in which he stated that the scheme's objective did not match with his requirements. Is his complaint valid?
52.
When the interest rates in the economy increase, the prices of existing bonds decrease; why?
53.
The risk-o-meter has to be evaluated on a ______ basis.
54.
At least ___ percent of the directors of the AMC should be independent directors.
55.
What is SEBI's web-based centralized grievance redress system called?
56.
For mutual fund applicants, including guardians, whose country of birth/citizenship/nationality/tax residency is other than India, the application requires additional information under ______________.
57.
High standard deviation indicates ______ risks and volatility in returns.
58.
In case of STP, transfer of funds from the source scheme is equivalent to redemption. Exit loads and taxes will apply like any other redemption transactions.
59.
For a sector fund or a mid-cap fund with limited investment options, a large fund size may be _________.
60.
Which among the following schemes would have lower risk of concentration? (from NISM)
61.
Mutual fund investments would be subject to levy of stamp duty @ _____ of the amount invested.
62.
A first time investor invests Rs 25,000. What is the transaction charge?
63.
The nominee holds the units in trust for the legal heirs of the investor.
64.
Higher the modified duration, _____ is the interest sensitive risk in a debt portfolio.
65.
ELSS funds need to be listed on the stock exchange.
66.
Schemes that seek liquidity invest in–
67.
As per SEBI regulations, large cap companies are defined as —
68.
Short term capital loss is to be set off against ____________.
69.
Units of seggregated portfolios are required to be listed on the stock exchange.
70.
If the trustee is a company, it must have at least —
71.
As per SEBI regulations, medium to long duration funds can invest in debt and money market securities with Macaulay duration of —
72.
While transacting through MF utilities, the investor —
73.
Investors exempt from providing PAN, have to quote the ________ issued by the KRA and submit a copy of the letter with the application form.
74.
Lower the safety of the bond or debenture, the investor expects–
75.
The transparency levels in mutual funds are very low. State whether True or False. (from NISM)
76.
A _________ account may be opened by a returning Indian to transfer balances from NRE /FCNR (B) accounts.
77.
In case of close-ended funds, investors can purchase and sell units after the NFO —
78.
A minor’s account is frozen for operation by the guardian on the day the minor attains the age of majority and no further customer-initiated transactions shall be permitted till the status is changed from minor to major.
79.
The factors affecting the performance of a scheme are — a. the movement of the specific market in which the money is invested, b. the performance of individual securities held, c. the skills of the investment management team. Which are these factors are in control of the fund manager?
80.
The purpose of tactical asset allocation is to–
81.
Mutual funds are constituted as ‘Trusts’ in India. Who are the beneficiaries of the trust? (from NISM)
82.
For an investor to get a quick sense of the level of risk involved in a mutual fund scheme, SEBI suggested a simplified framework known as ______. (from NISM)
83.
Certificates of Deposit issued by financial institutions are for __________.
84.
___________ indicates how much money can be generated per unit of mutual fund in case the scheme is liquidated. (from NISM)
85.
When a scheme advertises pay out of dividends, all advertisements shall disclose —
86.
What does Mark-to-Market mean?
87.
FMPs are the only schemes that offer guaranteed returns.
88.
As per SEBI regulations, minimum investment in equity & equity related instruments of large cap, midcap and small cap companies shall be —
89.
Large-cap stocks have been defined as ____ company in terms of full market capitalization.
90.
Each mutual fund scheme must have a stated investment objective. State whether True or False. (from NISM)
91.
The day-to-day management of a scheme is handled by —
92.
What is the maximum number of nominees an investor can have per scheme?
93.
Value investing implies picking stocks that are priced ______ than their intrinsic value based on fundamental analysis.
94.
You invested in a fund at NAV of Rs 12. NAV rose to Rs 15. What is your return on investment (simple return)?
95.
Investors require KYC to be complaint with which Act?
96.
Unclaimed dividends and redemption amounts should be —
97.
AUM is calculated by —
99.
While planning for an NFO, the Scheme Information Document needs to be approved by ___________.
100.
Lock-in period in case of ELSS funds is —
