NISM V A Sample 500 Questions - PDF - Bonds (Finance) - Mutual Funds

7/10/23, 1:24 PM NISM V A Sample 500 Questions | PDF | Bonds (Finance) | Mutual Funds
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Practice Questions for AMFI Test
1. A close-ended mutual fund has a fixed : c. on a stock exchange where the fund is
a. NAV listed
b. fund size d. to the agent through which he/she
c. rate of return subscribed to the units of the fund
d. number of distributors
9. The "load" charged to an investor in a mutual f
2. The maximum load that a fund can charge is is
determined by the : a. entry fee
a. AMC b. cost of the paper on which the unit
b. SEBI certificates are printed
c. AMFI c. the fee the agent charges to the investor
d. distribution agents based on demand for the d. the expenses incurred by fund manage
fund for marketing a mutual fund scheme
3. The amount required to buy 100 units of a scheme 10. A mutual fund is owned by
having an entry load of 1.5% and NAV of Rs.20 is : a. the Govt. of India
a. Rs.2000 b. SEBI
b. Rs.2015 c. all its investors
c. Rs.1985 d. AMFI
d. Rs.2030
11. Units from an open-ended mutual fund are bo
4. A gilt fund is a special type of fund that invests : a. on a stock exchange
a. in very high quality equity only b. from the fund itself
b. in instruments issued by companies with a c. from AMFI
sound track record d. from a stock broker
c. in short-term securities
d. in government securities only 12. A mutual fund is not
a. owned jointly by all investors
5. Of the following fund types, the highest risk is b. a company that manages investment
associated with portfolios of high networth individual
a. Balanced Funds c. a pool of funds used to purchase securiti
b. Gilt Funds on behalf of investors
c. Equity Growth Funds d. a collective investment vehicle
d. Debt Funds
13. "Load" cannot be recovered
6. The NAV of a mutual fund: a. at the time of the investor's entry into the
a. is always constant fund
b. keeps going up at a steady rate b. as a fixed amount each year
c. fluctuates with market price movements c. at the time the investor exits the fund
d. cannot go down at all d. from the fund's distribution agent
7. An open-ended mutual fund is one that has: 14. The most important advantage of a money ma
a. an option to invest in any kind of security mutual fund is
b. units available for sale and repurchase at a. quick capital appreciation
all times b. high regular income
c. an upper limit on its NAV c. safety of principal
d. a fixed fund size d. no loads
8. An investor in a close-ended mutual fund can get 15. Some close-ended funds are quoted at a disco
his/her money back by selling his/her units: to their NAV because
a. back to the fund a. of high expense ratios
b. to a special trust at NAV b. investors do not expect the current NA
to be sustained in future
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c. the repurchase price fixed by the fund in b. gilt funds
lower than the NAV c. growth funds
d. of the inherent risk involved in investing in d. balanced funds
such type of funds
24. A Systematic Withdrawal Plan, allows investo
16. The NAV of each scheme should be updated on to get back the principal amounts invested in addi
AMFI's website to the income on investment
a. every quarter a. True
b. every month b. False
c. every hour
d. every day 25. Which of the following is untrue of an automa
reinvestment plan?
17. Debt funds target a. The plan allows for automatic reinvestm
a. low risk and stable income of all income and capital gains
b. protection of principal b. Automatic reinvestment allows for
c. high growth with risk accumulation of additional units of the fu
d. long term capital appreciation c. The major benefit of automatic reinvestm
is compounding
18. In which of the following do debt funds not invest d. The benefit of automatic reinvestment
a. government debt instruments often lost on account of the heavy load
b. corporate paper charge on the reinvestment
c. financial institutions' bonds
d. equity of private companies 26. Constraints imposed by most funds on check
writing are:
19. Which of the following risks do not affect a debt a. Account balance should not fall below th
fund minimum capital required
a. default by issuer on payment of interest or b. Checks issued must be for at least the
principal minimum amount specified.
b. price fluctuations of the debt securities c. Number of checks per month must not
c. share price movements exceed a specified number
d. interest volatility d. Both a & b above
20. Assured return or guaranteed monthly income 27. The performance of a fund is largely measure
plans are essentially the success of
a. Hybrid funds a. the marketing function
b. Growth Funds b. the operations function
c. Debt/Income funds c. the portfolio market function
d. Sector funds d. none of the above
21. A Fixed Term Plan Series is 28. Generally invest in

a. an open-ended fund a. unlisted
b. a close-ended fund b. market-traded
c. a fixed term bank deposit c. thinly traded
d. a fixed term corporate bond d. privately placed
22. NAVs of equity funds are not affected by 29. Which of the following is not an equity
a. Stock market movements instrument
b. Events affecting the industry/sector in which a. preference shares
the fund has invested b. equity warrants
c. Happenings in the companies in which the c. ordinary debentures
fund has invested d. convertible debentures
d. real estate prices
30. The drawback of an ordinary share is
23. The greatest potential for growth in capital is A. possibility of capital appreciation
offered by B. ownership privilege of the company
a. debt funds C. guaranteed dividend income
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D. no guaranteed income or security
38. Dividend yield for a stock is
31. An owner of preference shares is given which of a. dividend per share
the following rights b. dividend per face value
a. voting rights c. dividend per share to current market
b. fixed dividend income from post-tax price
profits d. none of the above
c. voting rights and unlimited dividend income
d. no guaranteed rights 39. Value stocks
a. have high current dividend yield
32. Market capitalisation of a company is calculated b. yield high growth in earnings
by multiplying the number of outstanding shares by c. are currently under valued
a. R.10 d. none of the above
b. Face value of each share
c. Current market value of each share 40. A better performance than the return on index
d. dividend yield given by
a. passive fund manager
33. The Price/Earnings (P/E) Ratio is an important b. an active fund manager
measure of a company's anticipated performance. It is c. all fund managers
calculated using: d. non fund manager
a. Market price and dividend
b. Market price and earning per share 41. A change in key personnel especially the fund
c. Market capitalisation and dividend manager of an AMC does not necessitate a revisio
d. Market price and face value of the offer document
a. True
34. A company whose earnings are strongly related to b. False
the state of economy is known as
a. Economy stocks 42. If fresh litigation cases or adjudication
b. Cyclical Stocks proceedings are referred by SEBI against the fund
c. Value Stocks sponsors or a company associated with the sponso
d. Growth stocks then the offer document needs to be revised
a. True
35. A Growth stock refers to shares of a company b. False
whose earnings are projected to grow at the normal
market rates 43. The offer document need not be revised if the
a. True management or the controlling interest in the AM
b. False change
a. True
36. Which of the following is generally true for a b. False
growth stock?
a. steady capita appreciation and steady 44. An AMC cannot explain adverse variations
dividends yields between expense estimates for the scheme on off
b. high capital appreciation and high dividend and actual expenses for past schemes in
yields a. financial newspapers
c. high capital appreciation but low b. business channels on TV
dividend yields c. the offer document
d. steady capital appreciation but high dividend d. AMFI newsletter
yields
45. Information on estimated expenses to be incur
37. Shares of companies with large capital market by a scheme is not found in the offer document, b
capitalisation in brochures of the fund
a. have greater growth potential a. True
b. are more liquid b. False
c. are not available
d. none of the above 46. When comparing a fund's performance with th
of its peer group, the following cannot be compar
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a. Two debt funds with 5 year maturities h. change with change in the AMC's key
b. A broad-based equity fund with an IT personnel
Sector Fund
c. A bond fund with a bond 54. The investment policies listed out in the offer
d. A government securities fund with a document of a fund do not include
government security e. the type of securities in which the schem
will invest principally
47. An AMC must explain adverse variation between f. asset allocation pattern
expense estimates for the scheme on offer and actual g. policy of diversification
a. expenses for past schemes in h. the specific securities in which the fun
b. financial newspapers will invest
c. business channels on TV
d. offer document 55. If a scheme's name implies that it will invest
e. AMFI Newsletter primarily in a particular type of security or in cert
48. Information on estimated expenses to be incurred industry/sector, then it should invest at least the
by a scheme is not found in the offer document, but following percentage of its total assets in the
in brochures of the fund indicated type of security/industry/sector
a. True e. 100%
b. False f. 80%
49. The offer document and key information g. 65%
memorandum contain financial information for h. 40%
a. all schemes of all mutual funds in the capital
market 56. For assured return schemes, information abou
b. all schemes launched by the particular guarantor's net worth which justifies the guaranto
fund during the last 3 fiscal years ability to meet any shortfalls in the returns assure
c. none of the schemes under the scheme can be found in
d. companies in which investment is proposed e. the offer document
50. The functions and responsibilities of the sponsor, f. the key information memorandum
AMC, trustees and custodian of the mutual fund are g. both (a) and (b)
listed in h. none of the above
a. offer document only
b. key information memorandum 57. The names and background of key personnel
c. both offer document and key information the AMC
memorandum e. need not be disclosed to investors
d. none of the above f. are of no relevance as they may change
51. Information about trusteeship fees is included in g. are disclosed in the offer document
the offer document but not in the key information h. are declared in newspaper advertisement
memorandum
e. True 58. The minimum amount to be raised, and the
f. False maximum target amount
e. are not known before the offer is conclu
52. The following information about the constitution f. can be decided based on investor respon
of the mutual fund is found in both the offer the offer
document and key information memorandum g. are defined as per SEBI Regulations
e. activities of the sponsor before the offer is made
f. summary of trust deed provisions h. need not be disclosed in the offer docum
g. name and addresses of the board of trustees
h. all of the above 59. The circumstances for refund of investment in
initial offer and period within which refund must
53. The investment objectives of the fund an investor carried out are not specified in the offer documen
selects for investment but only on the application
e. are of no relevance e. True
f. should be the same as his own investment f. False
objectives
g. change with market movements 60. Offer related information required to be listed
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the offer document and key information g. 25%
memorandum includes h. 10%
e. dates of opening, closing, earliest closing,
allotment and despatch of certificates 67. Mutual funds are allowed to borrow
f. procedure for transfer and transmission of e. freely to meet their requirements
units f. for investment purposes
g. both the above g. only to meet redemption demands
h. neither of the above h. not allowed at all
61. In the offer document, funds are required to make 68. As a part of borrowing policy, the following n
disclosures summarizing associate transactions and not be disclosed in an offer document
their impact on the performance of the scheme for the e. purpose and circumstances of borrowing
last f. regulatory limits on borrowing
e. one fiscal year g. potential risk to AMC and unit-holders
f. 2 fiscal years h. names of lenders
g. 3 fiscal years
h. 5 fiscal years 69. Valuation norms for non-traded securities sho
be disclosed
62. The circumstances under which a scheme shall be e. at the end of every financial year
wound up are to be described in the offer document f. every quarter
at the time of the initial launch of the scheme itself g. in the offer document at the time of
e. True launch of the scheme
f. False h. should not be disclosed, being confident
information
63. The following do not form a part of the
investment procedure described in an offer document 70. Procedure for redemption or repurchase need
e. various plans under the scheme (e.g. e. be described in the offer document
dividend reinvestment plant) f. include how redemption or repurchase p
f. minimum initial (and subsequent) of units would be determined
investment g. include names of centres where redempt
g. details of who can invest can be effected
h. details of other competing mutual funds h. indicate the redemption or repurchase
price as at the end of the current fisca
64. A scheme's policy on dividends and distribution year
e. is decided by the fund manager as per is
market outlook 71. The fund need not describe its accounting pol
f. can be changed to suit the requirements of in the offer document as these are of no use to an
the AMC investor
g. need not be consistent e. True
h. should be disclosed at the time of initial f. False
launch
72. The accounting policies of a fund should be in
65. SEBI restricts mutual fund investments in accordance with
companies forming part of the same group as the e. GAAP
AMC. This is: f. SEBI regulations
e. not true g. ICAI Guidelines
f. in the interest of investor protection h. American GAAP
g. applied only to some mutual funds, not all
h. not favourable to investors at all 73. Tax treatment of investments does not
e. form a section in the offer document
66. A disclosure should be made in the offer f. describe the tax elements applicable to
document if an AMC has invested more than the investors who invest in the fund
following percentage of its net assets in group g. form a section in the key information
companies memorandum
e. 50% h. offer tax advice to investors
f. 40%
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g. if Ministry of Finance approves
74. Documents available to investors for inspection h. if AMFI approves
do not include
c. Memorandum and Articles of Association of 83. Who among the following are not Institutiona
AMC Investors
d. consent of auditors and legal advisors e. Banks
e. investment management reports f. Resident Individuals
f. reports based on which actual g. Provident Funds
investments are made h. Non Banking Finance Companies
75. Investors' rights under a scheme are 84. It is compulsory to use fund agents/intermedi
e. uniform for all schemes of all funds for investing MFs
f. not defined e. True
g. listed in the offer document f. False
h. available with stock exchanges
85. Generally, which category of investors need
76. The offer document for a scheme should describe advice for Investing in Mutual Funds
how the NAV of the scheme is to be computed c. Non Banking Finance Companies
e. True d. Insurance Companies
f. False e. Foreign Institutional Investors
f. Individuals
77. An offer document contains an AMC's investor
grievance's history for the past 86. Most eligible investors of Mutual Funds can
e. one fiscal year broadly be grouped into either individual or
f. 2 fiscal years institutional investors
g. 3 fiscal years e. True
h. six months f. False
78. Any pending cases or penalties levied on the 87. Commission rates or loads applicable to big
sponsors or AMC should be disclosed in the offer investors and small investors are
document e. same
e. True f. different
f. False g. not charges to either
h. none of the above
79. Who among the following are not eligible to
invest in MF 88. What document Mutual Fund distributors nee
e. Indian Companies refer for finding out eligible category of investors
f. Banks particular Mutual Fund Scheme
g. Non Banking Finance Companies e. SEBI Regulations Manual
h. Foreign Citizens f. AMFI booklet
g. Offer document
80. NRIs are eligible to invest in Mutual Funds h. RBI Guidelines
a. True
b. False 89. As per AMFI figures, how many agents
approximately, are there in India selling Mutual
81. The most important link between Mutual Fund Funds
and Investors is e. 50000
e. Government f. 100000
f. SEBI g. 75000
g. Fund distributors h. 150000
h. AMFI
90. Which Mutual Fund has majority of the agent
82. Are Overseas Corporate Bodies allowed to invest selling its Mutual Fund units in India
in Mutual Funds e. LIC Mutual Fund
e. No f. UTI Mutual Fund
f. Yes g. SBI Mutual Fund
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h. None of the above
99. The front page of an offer document need not
91. Mutual Fund agents/distributors are not allowed cover
to sell Financial Products other than Mutual Funds e. opening, closing and earliest closing dat
c. True the offer
d. False f. disclaimer clause
g. legal and regulator compliance
92. Are Mutual Fund agents/distributors in India h. price of units
required to pass any examination to qualify to sell
Mutual Fund Units 100. A "glossary" of Defined Terms must be inclu
c. Yes, a test conducted by AMFI in the offer document
d. Yes, a test conducted by SEBI e. True
e. No f. False
f. a Post Graduate university course
93. How many major distributor Companies are there 101. Standard risk factors are not
in India selling Mutual Fund units g. market driven
c. approximately 9 h. common to all schemes
d. approximately 11 i. of relevance to novice investors
e. approximately 10 j. new to a regular investor
f. approximately 25
102. The risk of a scheme's NAV moving up or d
94. The offer document is not a legal document on the basis of capital market movements is a
e. True standard risk factor
f. False i. True
j. False
95. A copy of all changes in the offer document has
to be filed with SEBI 103. Past performance of a sponsor/AMC mutual
c. True fund is not indicative of the future performance o
d. False scheme. This is
i. not true
96. The legal responsibility for the accuracy of the j. a standard risk factor for all schemes
statements made in the offer document lies with k. a scheme-specific risk factor
e. SEBI l. applicable only to gilt funds
f. the AMC
g. AMFI 104. Risk arising from a scheme's investment
h. the Company Law Board objective/strategy and proposed asset allocation is
i. not present
97. Though the offer document of a scheme is j. common to all schemes
prepared as per SEBI Regulations and is filed with k. specific to that scheme
SEBI, SEBI does not certify the accuracy or l. not applicable to debt funds
adequacy of the document
f. True 105. In an assured returns scheme, if assurance is
g. False only for a limited period, it must be stated in the o
document that there is no guarantee for sustaining
98. The following need not be covered in a Key assured return for the remaining duration of the
Information Memorandum scheme
c. Risk Factors i. True
d. Opening, Closing and earliest Closing Date j. False
of the offer
e. Disclaimer Clause 106. If the AMC is managing a fund for the first t
f. Functions and responsibilities of the this information can be found in
sponsor, trustees, AMC and Custodian i. newspapers
responsibilities j. SEBI
k. AMFI Newsletter
l. Offer document
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7/10/23, 1:24 PM NISM V A Sample 500 Questions | PDF | Bonds (Finance) | Mutual Funds

21. A Fixed Term Plan Series is 28. Generally invest in

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