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Practice Test (Finance)

Description: AMFI MOCK TEST PAPER PREPARATION AND PRACTICE STUDY 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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Running a money market mutual fund requires more of

  1. credit analysis skills

  2. equity analysis skills

  3. patience

  4. trading skills

Show answer
Correct Option: D

Investors should be advised to avoid investing in a debt fund with a

  1. lower rated portfolio and higher expense ratio

  2. higher rated portfolio and lower expense ratio

  3. lower rated portfolio and lower expense ratio

  4. higher rated portfolio and higher expense ratio

Show answer
Correct Option: A

Circumstances that might cause an investor to change the composition of his portfolio are

  1. cyclical changes in economy

  2. unforeseen economic change affecting the portfolio's preferred sectors

  3. both the above

  4. None of the above

Show answer
Correct Option: C

An application form for investment in a mutual fund is available along with

  1. the offer document

  2. the abridged annual report

  3. the key information memorandum

  4. a bank challan

Show answer
Correct Option: C

If a charitable trust approaches a distributor for investment in a mutual fund, the distributor should

  1. accept the application without wasting time

  2. reject the application outright

  3. refer to the offer document

  4. accept the application as a direct application

Show answer
Correct Option: C

An Ex-Mark of 100% is possible for

  1. a growth fund

  2. an aggressive growth fund

  3. an index fund

  4. a balanced fund

Show answer
Correct Option: C

Of the following, which type of fund would have a higher PIE multiple in comparison to the average market multiple?

  1. A Value Fund

  2. A Growth Fund

  3. An Index Fund

  4. Could be any of the above three, one cannot generalize

Show answer
Correct Option: B

Which of the following is not true as per SEBI Regulations?

  1. Investment in rated debt securities of a single issuer should not exceed 15% of net assets

  2. Total investment in unrated debt securities of a single issuer should not exceed 25% of net assets

  3. Total investment in unrated debt securities below investment grade should not exceed 25% of NAV

  4. Total investment in rated debt securities below investment grade should not exceed 25% of net assets

Show answer
Correct Option: B

A Money Market Mutual Fund is most likely to invest in

  1. corporate Bonds

  2. equity Shares

  3. Government securities with maturity less than 1 year

  4. All of the above

Show answer
Correct Option: C

An ideal money market mutual fund must have

  1. lower returns

  2. lower expense ratio

  3. low quality of investments

  4. All the above

Show answer
Correct Option: B

Which of the following is true for Equity Linked Savings Scheme (ELSS)?

  1. A tax rebate is available to investors in these schemes

  2. The investment has to be locked in for 3 years

  3. The minimum amount for availing tax rebate is fixed

  4. All of the above

Show answer
Correct Option: A

As per Boggle, asset allocation for younger investors in accumulation phase should be

  1. 20% equity; 80% debt

  2. 70% equity; 30% debt

  3. 50% equity; 50% debt

  4. 80% equity; 20% debt

Show answer
Correct Option: D

Of the following, which would be more suitable for a retiree with a modest risk appetite?

  1. Value Fund

  2. Diversified Equity Fund

  3. Growth Fund

  4. Balanced Fund

Show answer
Correct Option: D

The most important factor look for when investing in a corporate fixed deposit is the

  1. yield

  2. rate of interest

  3. credit rating of the deposit

  4. None of the above

Show answer
Correct Option: C

Which of the following is the first step in financial planning?

  1. Asset Allocation

  2. Selection of fund

  3. Studying the features of a scheme

  4. Setting up financial objectives

Show answer
Correct Option: D

When selling a mutual fund, a good agent would never

  1. describe the past performance of the scheme

  2. compare the fund with other mutual funds

  3. assure a rate of return

  4. compare the fund with other financial products

Show answer
Correct Option: C

Investors who follow the fixed Asset Allocation approach

  1. maintain balance in their portfolio by liquidating some investments from the asset class which has given higher return and reinvesting in the other asset class which has lower return

  2. are not disciplined

  3. increase their equity position when equity prices tend to climb

  4. None of the above

Show answer
Correct Option: A

Why should one buy an insurance policy?

  1. It gives high current returns

  2. It gives good capital appreciation over its term

  3. It should be bought due to the need for insurance and not as an investment

  4. All of the above

Show answer
Correct Option: C

An investor should not invest in a mutual fund if

  1. he expects a customized portfolio

  2. he is able to carry out detailed investment research and monitor the stock market

  3. both the above

  4. None of the above

Show answer
Correct Option: C

From whom can a unit-holder seek redressal, if his complaint is not entertained by the mutual fund?

  1. AMC

  2. Board of Trustees

  3. SEBI

  4. RBI

Show answer
Correct Option: C

As per Boggle, asset allocation for older investors in accumulation phase should be

  1. 30% equity; 70% debt

  2. 40% equity; 60% debt

  3. 50% equity; 50% debt

  4. 70% equity; 30% debt

Show answer
Correct Option: D

Which of the following characterize the fund that a risk adverse investor should choose?

  1. Gross dividend yield 15% Beta 1.5,Ex-Marks 90

  2. Gross dividend yield 10%, Beta 1, Ex-Marks 70

  3. Gross dividend yield 11%, Beta 0.9,Ex-Marks 80

  4. Gross dividend yield 12%, Beta '''1Ex-Marks 80

Show answer
Correct Option: C

A mainstream diversified debt fund is most affected by

  1. re-investment risk

  2. liquidity risk

  3. interest rate risk

  4. default risk

Show answer
Correct Option: C

An investor wishes to switch between a money market mutual fund and an equity fund. What would you advise him?

  1. It would be better to stick to one type of fund, the one that meets his investment objective.

  2. He should keep switching parts of his investment from the equity fund to the money market fund as the market rises and switch back to the equity fund when the market falls

  3. He should switch from the money market fund to the equity fund in a rising market and switch back to money market fund when the Market falls

  4. None of the above

Show answer
Correct Option: C

The most important reason for an investor to prefer a bank deposit to a mutual fund is

  1. the creditworthiness of the bank

  2. because the bank does not invest in securities

  3. that the bank offers a guarantee

  4. All of the above

Show answer
Correct Option: A
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