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The Mutual Fund Market of India

Description: This quiz aims to assess your knowledge about the Mutual Fund Market in India. It covers various aspects such as the history, structure, regulations, types of mutual funds, and their performance.
Number of Questions: 15
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Tags: mutual funds indian economy financial markets
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In which year was the Unit Trust of India (UTI) established?

  1. 1963

  2. 1974

  3. 1984

  4. 1994

Show answer
Correct Option: A
Explanation:

UTI was established in 1963 under the Unit Trust of India Act, 1963.

What is the regulatory body for mutual funds in India?

  1. Reserve Bank of India (RBI)

  2. Securities and Exchange Board of India (SEBI)

  3. Insurance Regulatory and Development Authority of India (IRDAI)

  4. Pension Fund Regulatory and Development Authority (PFRDA)

Show answer
Correct Option: B
Explanation:

SEBI is the regulatory body for mutual funds in India.

What is the primary objective of a mutual fund?

  1. To provide capital appreciation

  2. To provide regular income

  3. To provide both capital appreciation and regular income

  4. To provide tax benefits

Show answer
Correct Option: C
Explanation:

The primary objective of a mutual fund is to provide both capital appreciation and regular income to its investors.

Which type of mutual fund invests primarily in equity shares?

  1. Equity Fund

  2. Debt Fund

  3. Hybrid Fund

  4. Money Market Fund

Show answer
Correct Option: A
Explanation:

Equity funds invest primarily in equity shares of companies.

Which type of mutual fund invests primarily in debt instruments?

  1. Equity Fund

  2. Debt Fund

  3. Hybrid Fund

  4. Money Market Fund

Show answer
Correct Option: B
Explanation:

Debt funds invest primarily in debt instruments such as bonds and debentures.

Which type of mutual fund invests in a combination of equity and debt instruments?

  1. Equity Fund

  2. Debt Fund

  3. Hybrid Fund

  4. Money Market Fund

Show answer
Correct Option: C
Explanation:

Hybrid funds invest in a combination of equity and debt instruments.

Which type of mutual fund invests primarily in short-term money market instruments?

  1. Equity Fund

  2. Debt Fund

  3. Hybrid Fund

  4. Money Market Fund

Show answer
Correct Option: D
Explanation:

Money market funds invest primarily in short-term money market instruments such as treasury bills and commercial papers.

What is the minimum investment required to start a SIP (Systematic Investment Plan) in a mutual fund?

  1. Rs. 100

  2. Rs. 500

  3. Rs. 1,000

  4. Rs. 5,000

Show answer
Correct Option: B
Explanation:

The minimum investment required to start a SIP in a mutual fund is Rs. 500.

What is the lock-in period for ELSS (Equity Linked Savings Scheme) mutual funds?

  1. 1 year

  2. 2 years

  3. 3 years

  4. 5 years

Show answer
Correct Option: C
Explanation:

The lock-in period for ELSS mutual funds is 3 years.

What is the expense ratio of a mutual fund?

  1. The annual fee charged by the fund manager

  2. The annual fee charged by the distributor

  3. The annual fee charged by the custodian

  4. All of the above

Show answer
Correct Option: D
Explanation:

The expense ratio of a mutual fund includes the annual fee charged by the fund manager, the annual fee charged by the distributor, and the annual fee charged by the custodian.

What is the NAV (Net Asset Value) of a mutual fund?

  1. The market value of the fund's assets minus its liabilities

  2. The total value of the fund's assets

  3. The total value of the fund's liabilities

  4. The difference between the fund's assets and its liabilities

Show answer
Correct Option: A
Explanation:

The NAV of a mutual fund is the market value of the fund's assets minus its liabilities.

What is the purpose of a dividend reinvestment plan (DRIP) in a mutual fund?

  1. To automatically reinvest dividends in additional shares of the fund

  2. To automatically withdraw dividends from the fund

  3. To automatically transfer dividends to a savings account

  4. To automatically invest dividends in another mutual fund

Show answer
Correct Option: A
Explanation:

The purpose of a DRIP in a mutual fund is to automatically reinvest dividends in additional shares of the fund.

What is the difference between an open-ended mutual fund and a closed-ended mutual fund?

  1. Open-ended funds can be bought and sold on any business day, while closed-ended funds can only be bought and sold during their initial offering period.

  2. Open-ended funds have a fixed number of shares, while closed-ended funds have a variable number of shares.

  3. Open-ended funds are more liquid than closed-ended funds.

  4. All of the above

Show answer
Correct Option: D
Explanation:

Open-ended funds can be bought and sold on any business day, while closed-ended funds can only be bought and sold during their initial offering period. Open-ended funds have a fixed number of shares, while closed-ended funds have a variable number of shares. Open-ended funds are more liquid than closed-ended funds.

What is the role of a fund manager in a mutual fund?

  1. To make investment decisions for the fund

  2. To manage the fund's assets

  3. To provide customer service to investors

  4. All of the above

Show answer
Correct Option: D
Explanation:

The role of a fund manager in a mutual fund is to make investment decisions for the fund, manage the fund's assets, and provide customer service to investors.

What is the difference between a mutual fund and a unit trust?

  1. Mutual funds are regulated by SEBI, while unit trusts are regulated by RBI.

  2. Mutual funds are open-ended, while unit trusts are closed-ended.

  3. Mutual funds can be bought and sold on any business day, while unit trusts can only be bought and sold during their initial offering period.

  4. All of the above

Show answer
Correct Option: D
Explanation:

Mutual funds are regulated by SEBI, while unit trusts are regulated by RBI. Mutual funds are open-ended, while unit trusts are closed-ended. Mutual funds can be bought and sold on any business day, while unit trusts can only be bought and sold during their initial offering period.

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