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Amfi 500 Questions

Amfi 500 Questions

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Published by: shantaram666 on Feb 24, 2009
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11/30/2010

 
Practice Questions for AMFI Test1. A close-ended mutual fund has a fixed :a.NAV b.fund sizec.rate of returnd.number of distributors2. The maximum load that a fund can charge isdetermined by the :a.AMC b.SEBIc.AMFId.distribution agents based on demand for thefund3. The amount required to buy 100 units of a schemehaving an entry load of 1.5% and NAV of Rs.20 is :a.Rs.2000 b.Rs.2015c.Rs.1985d.Rs.20304. A gilt fund is a special type of fund that invests :a.in very high quality equity only b.in instruments issued by companies with asound track recordc.in short-term securitiesd.in government securities only5. Of the following fund types, the highest risk isassociated witha.Balanced Funds b.Gilt Fundsc.Equity Growth Fundsd.Debt Funds6. The NAV of a mutual fund :a.is always constant b.keeps going up at a steady ratec.fluctuates with market price movementsd.cannot go down at all7. An open-ended mutual fund is one that has :a.an option to invest in any kind of security b.units available for sale and repurchase at alltimesc.an upper limit on its NAVd.a fixed fund size8. An investor in a close-ended mutual fund can gethis/her money back by selling his/her units:a.back to the fund b.to a special trust at NAVc.on a stock exchange where the fund is listedd.to the agent through which he/she subscribedto the units of the fund9. The "load" charged to an investor in a mutual fundisa.entry fee b.cost of the paper on which the unit certificatesare printedc.the fee the agent charges to the investor d.the expenses incurred by fund managers for marketing a mutual fund scheme10. A mutual fund is owned bya.the Govt. of India b.SEBIc.all its investorsd.AMFI11. Units from an open-ended mutual fund are boughta.on a stock exchange b.from the fund itself c.from AMFId.from a stock broker 12. A mutual fund is nota.owned jointly by all investors b.a company that manages investment portfoliosof high networth individualsc.a pool of funds used to purchase securities on behalf of investorsd.a collective investment vehicle13. "Load" cannot be recovereda.at the time of the investor's entry into the fund b.as a fixed amount each year c.at the time the investor exits the fundd.from the fund's distribution agent14. The most important advantage of a money marketmutual fund isa.quick capital appreciation b.high regular incomec.safety of principald.no loads15. Some close-ended funds are quoted at a discountto their NAV becausea.of high expense ratios b.investors do not expect the current NAV to besustained in futurec.the repurchase price fixed by the fund in lower than the NAV
 
d.of the inherent risk involved in investing insuch type of funds16. The NAV of each scheme should be updated onAMFI's websitea.every quarter  b.every monthc.every hour d.every day17. Debt funds targeta.low risk and stable income b.protection of principalc.high growth with risk d.long term capital appreciation18. In which of the following do debt funds not investa.Government debt instruments b.Corporate paper c.Financial institutions' bondsd.Equity of private companies19. Which of the following risks do not affect a debtfunda.Default by issuer on payment of interest or  principal b.Price fluctuations of the debt securitiesc.Share price movementsd.Interest volatility20. Assured return or guaranteed monthly income plans are essentiallya.Hybrid funds b.Growth Fundsc.Debt/Income fundsd.Sector funds21. A Fixed Term Plan Series isa.an open-ended fund b.a close-ended fundc.a fixed term bank depositd.a fixed term corporate bond22. NAVs of equity funds are not affected bya.Stock market movements b.Events affecting the industry/sector in whichthe fund has invested Happenings in thecompanies in which the fund has investedc.real estate prices23. The greatest potential for growth in capital isoffered bya.debt funds b.gilt fundsc.growth fundsd.balanced funds24. A Systematic Withdrawal Plan, allows investorsto get back the principal amounts invested in additionto the income on investmenta.True b.False25. Which of the following is untrue of an automaticreinvestment plan?a.The plan allows for automatic reinvestment of all income and capital gains b.Automatic reinvestment allows for accumulation of additional units of the fundc.The major benefit of automatic reinvestment iscompoundingd.The benefit of automatic reinvestment is oftenlost on account of the heavy load charge on thereinvestment26. Constraints imposed by most funds on check writing are:a.Account balance should not fall below theminimum capital required b.Checks issued must be for at least theminimum amount specifiedc.Number of checks per month must not exceeda specified number d.Both a & b above27. The performance of a fund is largely measured bythe success of a.the marketing function b.the operations functionc.the portfolio market functiond.none of the above28. Generally invest ina.unlisted b.market-tradedc.thinly tradedd.privately placed29. Which of the following is not an equityinstrumenta.preference shares b.equity warrantsc.ordinary debenturesd.convertible debentures30. The drawback of an ordinary share isA.possibility of capital appreciationB.ownership privilege of the companyC.guaranteed dividend incomeD.no guaranteed income or security
 
31. An owner of preference shares is given which of the following rightsa.voting rights b.fixed dividend income from post-tax profitsc.voting rights and unlimited dividend incomed.no guaranteed rights32. Market capitalisation of a company is calculated by multiplying the number of outstanding shares bya.R.10 b.Face value of each sharec.Current market value of each shared.dividend yield33. The Price/Earnings (P/E) Ratio is an importantmeasure of a company's anticipated performance. It iscalculated using:a.Market price and dividend b.Market price and earning per sharec.Market capitalisation and dividendd.Market price and face value34. A company whose earnings are strongly related tothe state of economy is known asa.Economy stocks b.Cyclical Stocksc.Value Stocksd.Growth stocks35. A Growth stock refers to shares of a companywhose earnings are projected to grow at the normalmarket ratesa.True b.False36. Which of the following is generally true for agrowth stock a.steady capita appreciation and steady dividendsyields b.high capital appreciation and high dividendyieldsc.high capital appreciation but low dividendyieldsd.steady capital appreciation but high dividendyields37. Shares of companies with large capital marketcapitalisationa.have greater growth potential b.are more liquidc.are not availabled.none of the above38. Dividend yield for a stock isa.dividend per share b.dividend per face valuec.dividend per share to current market priced.none of the above39. Value stocksa.have high current dividend yield b.yield high growth in earningsc.are currently under valuedd.none of the above40. A better performance than the return on index isgiven bya.passive fund manager  b.an active fund manager c.all fund managersd.non fund manager 41. A change in key personnel especially the fundmanager of an AMC does not necessitate a revisionof the offer documenta.True b.False42. If fresh litigation cases or adjudication proceedings are referred by SEBI against the fundsponsors or a company associated with the sponsors,then the offer document needs to be reviseda.True b.False43. The offer document need not be revised if themanagement or the controlling interest in the AMCchangea.True b.False44. An AMC cannot explain adverse variations between expense estimates for the scheme on offer and actual expenses for past schemes ina.financial newspapers b.business channels on TVc.the offer documentd.AMFI newsletter 45. Information on estimated expenses to be incurred by a scheme is not found in the offer document, butin brochures of the funda.True b.False46. When comparing a fund's performance with thatof its peer group, the following cannot be compareda.Two debt funds with 5 year maturities b.A broad-based equity fund with an IT Sector Fundc.A bond fund with a bond

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