Banking Awareness Quiz: Mutual Funds

1. The term Mutual Fund refers to

(a) the business of acquisition, holding, management, trading or disposal of securities, participation
certificated or any other instruments, income or growth participation business and unit trust scheme.
(b) fund created by commercial banks for trading in shares
(c) fund created by an enterprise to meet out super animation liability of the enterprise
(d) none
(e) all
2. Which of the following is the first commercial bank who had launch a mutual fund?
(a) State bank of India
(b) Canara bank
(c) Indian bank
(d) Bank of India
(e) Indian overseas bank
3. Which of the following statement about Mutual funds are correct?
(a) Distribution of any income in advance on a monthly basis or otherwise is not permitted
(b) Mutual funds are listed in stock exchanges
(c) Lock in period for repurchase of units should not be more than 36 years
(d) all
(e) none
4. The main function of Mutual funds are
(a) collection of funds from a large number of investors
(b) Investment of funds so collected in capital markets
(c) Holding investment in trust, and to diversify the risk in the investment, proper management of
portfolio with an object to optimize the returns
(d) all
(e) none
5. An open ended fund means
(a) The fund exists for perpetuity. There is no ceiling on the amount to be collected or raised
(b) Investors are assured of dividends, capital appreciation and safety of their investment
(c) A repurchase facility close to net asset value (NAV)
(d) All
(e) None
6.A close-ended fund means
(a) The corpus is of fixed size with a definite redemption period
(b) Listing on stock exchanges provides easy liquidity
(c) The market price is always below the net asset value
(d) All
(e) None
7.An offshare fund is
(a) a fund established outside the country
(b) a mutual fund which is stipulated at sea shore
(c) a fund meant for development of oceans and sea shores
(d) none
(e) all of these
8.Mutual funds are vehicles for collective investment that pool the savings of many investors
for
(a) Investment in securities, according to stated objective and the profits are shared equally among its
participants in proportion to their holdings
(b) It brings together the investors who have surplus money to invest corporate entities who need the
money to their projects

(c) the fund collects money from the members and invests them in diversified portfolio of financial
assets
(d) All
(e) None
9. Which of the following organizations is the Mutual Fund Market regulator?
(a) AMFI
(b) SEBI
(c) CIBIL
(d) CRISIL
(e) RBI
10. In the term called as AMFI, what do you mean by M?
(a) Mutual
(b) money
(c) Managing
(d) Miscellaneous
(e) none of the above
Answers:
1. (a)
2. (a)
3. (d)
4. (d)
5. (d)
6. (d)
7. (a)
8. (d)
9. (b)
10. (a)

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RBI Grade B: Banking Awareness

1. ______ is a type of preference share where the dividend payable on the same accumulates, if not paid and after a specified date, these shares
will be converted into equity capital of the company.
a) Preference shares
b) cumulative preference shares
c) cumulative convertible preference shares

d) participating preference shares

e) none of the above

2. A bond giving the investor the option to convert the bond into equity at a fixed conversion price is referred to as _____ bond.
a) Coupon bond
b) zero coupon bond
c) convertible bond
d) conversion bond
e) none of the above

3. The issue of new securities to existing shareholders at ratio to those already held is known as
a) Preference shares
b) rights shares(Issue)
c) bonus shares
d) cumulative preference shares
e) none of the above

4. When it comes to the following term namely- IPO, what do you mean by P?
a) Provisions
b) Public
c) Private
d) Prudent
e) Pension

5. _____ refers to the right of certain preference shareholders to participate in profits, after a specified fixed dividend contracted for, is paid.
a) Preference shares
b) cumulative preference shares
c) participating preference shares
d) preference shares
e) none of the above

6. ______ refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock
exchange.
a) Security market
b) Secondary market
c) Stock market
d) Bond market
e) debenture market

7. The short term bearer (up to 364 days) bearer discount security, issued by the government (through the Reserve Bank of India) as a means of
meeting its cash requirements is called as
a) Treasury bills
b) commercial paper
c) coupon bonds
d) zero coupon bonds
e) convertible bonds

8. When it comes to the following term FPO, what do you mean by F?

a) Further
b) Facility
c) Favour
d) Future
e) None of the above

9. In the ______________, the securities like shares and debentures are offered to the public subscription for the purpose of raising capital or
fund:
a) Secondary market
b) Primary market
c) share market
d) debenture market
e) none of the above

10. The specified interest rate on a fixed maturity security fixed at the time of issue is called as:
a) Market rate of interest
b) call rate
c) repo rate
d) coupon rate
e) discount rate

Answers:
1. c
2. c
3. b
4. b
5. c
6. b
7. a
8. e
9. b
10. d

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