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Practice Test (Mutual Fund)

Description: AMFI MOCK TEST PAPER TEST PREPARATION AND PRACTICE MATERIAL
Number of Questions: 25
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Tags: AMFI MOCK TEST PAPER Test AMFI MOCK TEST PAPER AMFI MOCK TEST AMFI MOCK PAPER MOCK TEST AMFI EXAM AMFI TEST Mutual Funds
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A no-load fund is one in which

  1. the entry load is not charged

  2. the exit load is not charged

  3. the entry load as well as exit load is not charged

  4. the initial issue expenses are not charged to the investor


Correct Option: D

CDSC stands for

  1. Contingent Deferred Sales Charge

  2. Commission and Discounts Structure Committee

  3. Commonly Disclosed Commission

  4. Compounded and Discounted Sales Commitment Sales


Correct Option: A

CDSC is a kind of

  1. entry load

  2. entry load, which varies with holding period of an investor

  3. exit load, which varies with the holding period of an investor

  4. none of the above


Correct Option: C

Which of the following is not an advantage of a mutual fund?

  1. Professional management at lower costs

  2. Diversification of portfolio

  3. Liquidity

  4. None of the above


Correct Option: D

Which of the following is not false about a mutual fund?

  1. Open ended funds can be sold in secondary market

  2. Closed ended fund does not have a fixed tenure

  3. Open ended funds do not calculate their NAV on every business day

  4. The NAV of a closed ended fund has to be calculated at least once a week


Correct Option: D

Who is the primary guardian of unit holder's funds?

  1. The AMC

  2. The Sponsor

  3. The Trustees

  4. The Custodians


Correct Option: D

A mutual fund can benefit from economies of scale because of

  1. indirect Investment

  2. large volumes of trade

  3. portfolio diversification

  4. fund manager


Correct Option: B
Explanation:

 A mutual fund can benefit from economies of scale because of large volumes of trade

The Board of Trustees of a mutual fund

  1. acts as a protector of investor's interests

  2. directly manages the portfolio of securities

  3. does not have the right to dismiss the AMC

  4. cannot supervise and direct the working of the AMC


Correct Option: A

The custodian of a mutual fund

  1. is appointed for safekeeping of securities

  2. need not be an entity independent of the sponsors

  3. is not required to be registered with SEBI

  4. does not give or receive deliveries of physical securities


Correct Option: A

Which of the following is not applicable if the schemes of one mutual fund are taken over by another mutual fund?

  1. The schemes' offer documents have to be changed and updated

  2. There is a change in the AMC of the schemes that are taken over

  3. There is a change in the sponsor of the schemes that are taken over

  4. The schemes have to be wound up compulsorily


Correct Option: D

Which of the following investment options does not give the benefit of compounding?

  1. Growth option

  2. Dividend payout option

  3. Dividend Reinvestment option

  4. None of the above


Correct Option: B

Transfer agents of a mutual fund are not responsible for

  1. issuing and redeeming units of the mutual fund

  2. updating investor records

  3. preparing transfer documents

  4. investing the funds in securities markets


Correct Option: D

The AMC of a mutual fund cannot

  1. undertake advisory services or financial consulting

  2. invest the funds in government paper

  3. indulge in an activity not related to financial services

  4. invest the funds in listed securities


Correct Option: C

In India, mutual funds are formed as

  1. a public limited company

  2. a trust

  3. a private limited company

  4. a society


Correct Option: B

The board of trustees which manages a mutual fund is appointed by

  1. The Finance Ministry

  2. The RBI

  3. SEBI

  4. The sponsor of that mutual fund


Correct Option: D

The fund sponsor has to contribute

  1. nothing to the AMC

  2. the total net worth of the AMC

  3. at least 40% of the AMC's net worth

  4. exactly 50%


Correct Option: C

The structure which is required to be followed by mutual funds in India is laid down by the

  1. Finance Ministry

  2. Securities & Exchange Board of India (SEBI)

  3. Fund Sponsor

  4. Association of Mutual Funds in India (AMFI)


Correct Option: B

Issuing and redeeming units of a mutual fund is the role

  1. the custodian

  2. the registrar and transfer agent

  3. the trustees

  4. the bankers


Correct Option: B

The net worth of an asset management company

  1. should be greater than Rs. 100 crores

  2. can be decided by the sponsor

  3. should be Rs. 10 crores at all times

  4. should be at least Rs. 10 crores at all times


Correct Option: D

The fund sponsors should hold financial track record of

  1. 7 years

  2. 12 months

  3. 5 years

  4. 3 years


Correct Option: C

The agreement between the trustees and the AMC is known as

  1. Trust deed

  2. Investment management agreement

  3. Agreement to manage portfolio

  4. AMC appointment letter


Correct Option: D

Regulations which govern the working of mutual funds in India are

  1. SEBI Act, 1992

  2. The Companies Act, 1956

  3. Income Tax Act, 1961

  4. SEBI (Mutual Funds) Regulations, 1996


Correct Option: D

The highest authority among the following is the

  1. SEBI

  2. Company Law Board

  3. RBI

  4. Ministry of Finance


Correct Option: D

Which of the following is not true for Index Funds?

  1. These funds invest in the shares that constitute a specific index

  2. The investment in shares is in the same proportion as in the index

  3. These funds aim to minimize the tracking error

  4. These funds are not diversified


Correct Option: D

Which of the following is not true about a mutual fund?

  1. The mutual fund is owned by all the investors

  2. Mutual fund gives a diversified portfolio to investors

  3. The objectives of investors of a mutual fund are diverse

  4. The mutual funds do not invest in real estate


Correct Option: C
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