3.

____________ is an example of Passive investment product.(1 Point)

Mutual funds

Hedge funds

Exchange Traded funds (ETFs)

Private Equity funds

4.
Which of the below mentioned statements is not true in context of wealth
management?(1 Point)

It is a service for affluent clients

It is a fee-based service provided to clients

Retirement planning is not part of wealth management service

It is framework to deliver a customized, high-value experience, bringing all aspects of

financial life together to create, build and protect wealth
5.
To minimize the impact of currency price fluctuation, a company enters into
currency futures contract. The company is going to receive $2 million and is
worried about Rupee appreciating against the $. Which of the following best
describes action of the company?(1 Point)

Hedging

Speculation

Arbitrage
 Bull spread
6.
Which of the below mentioned statements is true about bond price and yield?(1
Point)

As yield rises, price of a bond falls and reinvestment income also falls

As yield rises, price of a bond prices and reinvestment income also goes up

As yield rises, price of a bond falls and reinvestment income goes up (yield rises so yield on
reinvestment increases as well)

As yield rises, price of bond falls but there is no change in the reinvestment income
7.
Risk free rate of return is the return of an investment with ______________(1
Point)`

zero interest rate risk

zero credit risk

zero reinvestment risk

zero call risk

8.
__________is a term used in investing to describe an investment strategy's
ability to beat the market.(1 Point)

Alpha

Beta

Outperformance
 Gamma
9.
Which of the following entity is responsible for keeping cash, stock of
investments of a mutual fund and handling post trading activities of mutual
fund?(1 Point)

Custodian

Depository Participant

Registrar and Transfer Agent

Fund Manager
10.
Which of the following risk adjusted return calculation takes into consideration the
fund's alpha to the portfolio's unsystematic risk or residual standard deviation?(1
Point)

oSharpe Rati

Sortino Ratio

Jensen’s Alpha

Appraisal Ratio
11.
Which of the below mentioned combination of standards should be part of a
benchmark?(1 Point)

Unambiguous, transparent, investable

Unambiguous, investable, maximum 50 stocks

Unambiguous, transparent, equal weighted, priced weekly

 Unambiguous, transparent, illiquid
12.
___________ is often used to compare the returns of investment managers
because it eliminates the distorting effects on growth rates created by inflows and
outflows of money.(1 Point)

Time Weighted Rate of Return

Money Weighted Rate of Return

Arithmetic Mean

Standard Deviation
13.
Which of the following investment product has zero investment risk?(1 Point)

Treasury Bill

Zero coupon bond

Government Bonds

Both a and b
14.
BlackRock hedge fund is expecting markets to go down and based on this view
they can adopt the following strategy -(1 Point)

Buy and Hold Strategy

Short selling

Long term holding of shares

 Bullet strategy
15.
Mr. X is an aggressive and high-risk taking investor. He is looking for wealth
management services and was approached by a bank. The Client Ob-boarding
team is in the process of finalizing risk appetite of Mr. X. Which document will
help them?(1 Point)

Client Application Form

Client Questionnaire

KYC Documents

Client Service Agreement

16.
Which of the following bonds will change most in price for a given change in
interest rates?(1 Point)

Bond A : Coupon : 5.75%, Maturity 6 years, Trading at discount

Bond B : Coupon : 0%, Maturity 8 years, Trading at discount

Bond C : Coupon 5.15%, Maturity 6 years, Trading at premium

Bond D : Coupon : 0%, Maturity 3 years, Trading at discount

17.
Identify from the following that can be considered as a financial goal for
managing personal finance.(1 Point)

Anil needs Rs. 25 lakhs for his son’s higher education abroad.

Sandeep is planning to replace his car with a new high-end luxury car in few years from
now.
 Neha is planning to buy a residential flat in 2 years at Rs. 85 lakhs.

All of the above

18.
Strategic asset allocation is ________ whereas tactical allocation is
___________(1 Point)

need based; view based

view based; need based

Any of the above

None of the above

19.
For the short-term deployment of the fund, investors rely on which of the
following instrument?(1 Point)

Liquid Funds

Equity Mutual funds

Real estate

Government bonds
20.
Asset Allocation decision is not based on which of the following?(1 Point)

Investment objectives

Portfolio turnover

Risk Appetite of the investor

 View on each asset class
21.
In order to settle on compound growth rate of an investment over period, an
investor determines the ___________(1 Point)

geometric mean

calculus mean

arithmetic mean

arithmetic median
22.
What should be the next step after, “Evaluate Current Financial Assets” in the
process of wealth management?(1 Point)

Process and analyze information

Provide options and recommendations

Implement a wealth management plan

Continuously review plan

23.
Which of the following has the highest expense ratio?(1 Point)

Money Market Mutual Fund

Bond Fund

Hybrid Fund

Equity Fund
 24.
What is the current tax treatment on dividend income for investors under Income
Tax Act?(1 Point)

Dividend is taxable in the hands of investor

Dividend is exempt from tax

Dividend Distribution Tax is payable by issuer

Corporate Dividend Tax is payable

25.
Which of the following is not an alternative investment product?(1 Point)

Collectibles

Structured products

Private debt

Exchange Traded Funds

26.
___________ wealth management is a form of wealth management in which buy
and sell decisions are made by a wealth manager or investment counselor for the
client's account.(1 Point)

Discretionary

Non-Discretionary

Trade-Only

Trusted advisor
 27.
Private Equity Funds are structured as ________________(1 Point)

Private Limited Company

Joint Venture

Trust

Limited liability partnerships

28.
Mr. X has opened a private company and kept staff to manage his personal
investments, trusts, taxes and other legal affairs. This will be classified as
_____________(1 Point)

Private Banking

Private Client Group

Family Office

Portfolio Management Services

29.
In which of the following scenarios fractional entitlement of shares will get
created, assuming that Mr. X holds 300 shares and the company announces
bonus in the below mentioned ratios?(1 Point)

2:3

5:7

1:1
 3:5
30.
Which of the following risks will be faced by a risk-free investment (Treasury Bill),
if it is sold before maturity?(1 Point)

Credit Risk

Reinvestment Risk

Interest rate risk

Call Risk
31.
Which of the following is not true about an investment policy statement?(1 Point)

An investment policy statement (IPS) is a formal document drafted between a portfolio

manager or financial advisor and a client that outlines general rules for the manager.

This statement provides the general investment goals and objectives of a client and
describes the strategies that the manager should employ to meet these objectives.

Specific information on matters such as asset allocation, risk tolerance, and liquidity
requirements are not covered in an investment policy statement.

A well-conceived IPS enables both the manager and the investor to stay focused on the
long-term objectives.
32.
Which of the below mentioned statements is incorrect?(1 Point)

Wealth management is a consultative process.

Wealth management is a subset of investment advisory

Wealth management plans are tailored to client specific needs

Wealth management services are usually appropriate for wealthy individuals who have a
broad array of diverse needs