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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 Financial Markets
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Which of the following works with an investor on his overall financial situation?

  1. Tax Advisor

  2. Financial Planner

  3. Insurance Agent

  4. Financial Advisor


Correct Option: B

The constraint on financial planning due to insufficient resources can be remedied to some extent by

  1. decreasing the standard of living

  2. disciplining children

  3. disciplined monthly budgeting

  4. None of the above


Correct Option: C

Financial Planning comprises

  1. defining a client's profile and goals

  2. recommending appropriate asset allocation

  3. monitoring financial recommendations

  4. All of the above


Correct Option: D

A criticism of rupee-cost averaging is

  1. investment is for the same amount at regular intervals

  2. over a period of time, the average purchase price will work out higher than if one tries to guess the market highs and lows

  3. it does not inform an investor when to buy, sell or switch from one scheme to another

  4. Rupee cost averaging has no serious shortcomings


Correct Option: C

Which of the following lets an investor book profits in a rising market and increase holdings in a falling market?

  1. Fixed ratio of asset allocation

  2. Flexible ratio of asset allocation

  3. Investment without any asset allocation plan

  4. Buy and hold strategy


Correct Option: A

Which of the following investment products do not give guarantee for return or capital?

  1. Bank deposits

  2. Pubic provident fund (PPF)

  3. National Savings Certificates (NSC)

  4. Units of a mutual fund


Correct Option: D

In the dividend reinvestment option the number of units held by an investor increases because of

  1. growth in net asset value i.e. capital appreciation

  2. reinvestment of dividend, which is like compounding

  3. interest received on the fund's assets

  4. None of the above


Correct Option: B

The strategy advisable for an investor to maximize investment return in the long run is

  1. buy and hold on to investments for a long time

  2. liquidate poorly performing investments from time to time

  3. liquidate good performing investments from time to time

  4. switch from poor performers to good performers


Correct Option: D

The rate of interest paid by a company on debentures issued by it depends on

  1. the stock market situation

  2. SEBI guidelines

  3. the company's credit rating

  4. the amount of money being raised


Correct Option: C

Which of the following is not an advantage of bank deposits?

  1. Liquidity

  2. High perceived safety

  3. Low entry price

  4. High yield after tax


Correct Option: D

Within an asset class, which individual security to invest in should be decided by?

  1. The financial planner

  2. The investor himself

  3. A professional fund manager

  4. An objective advisor


Correct Option: C

Which of the following represent indirect investments?

  1. Investment in a mutual fund

  2. Investment in shares

  3. Investment in bank deposit

  4. Investment in post office schemes


Correct Option: A

Which of the following is not a characteristic of company fixed deposits?

  1. A higher rate of interest

  2. Higher risk

  3. Unfavourable effect of tax

  4. Very high liquidity


Correct Option: D

In India, individual investors do not have direct access to

  1. capital market instruments

  2. real estate

  3. bullion

  4. money market instruments


Correct Option: D

Which of the following is untrue for Public Provident Fund Schemes?

  1. The interest is tax-free

  2. Post-tax returns are attractive

  3. Liquidity is rather low

  4. None of the above


Correct Option: D

The biggest advantage of investment in gold is

  1. high returns

  2. high appreciation in value

  3. low purchase price

  4. hedge against inflation


Correct Option: D

A flexible ratio of asset allocation means

  1. continuously changing the ratio of various assets in the portfolio

  2. not doing any re-balancing and letting the profits run

  3. active switching

  4. None of the above


Correct Option: B

The biggest disadvantage of investment in real estate is

  1. less potential appreciation

  2. high purchase price

  3. depreciation in value as time passes

  4. value gets eroded due to inflation for capital


Correct Option: B

Financial planners and their clients should focus on

  1. allocating funds to asset classes Based on objectives (e.g. debt, equity Etc.)

  2. allocating funds to individual Securities

  3. tracking stocks, which they feel, have Potential

  4. None of the above


Correct Option: A

Listing of shares at a stock exchange ensures

  1. guaranteed returns

  2. long term capital appreciation

  3. low risk

  4. high liquidity


Correct Option: D

Financial planning is relevant for

  1. high net worth individuals

  2. older clients

  3. tax and estate planning

  4. All of the above


Correct Option: D

Indira Vikas Patra is an investment product popular with

  1. rural investors

  2. investors in high tax bracket

  3. urban investors

  4. risk taking investors


Correct Option: C

Annual contribution to Public Provident Fund should be

  1. Rs.10000

  2. between 100 and Rs.60000

  3. between Rs.600 and Rs.1000

  4. None of the above


Correct Option: B

The maturity period of RBI Relief Bonds is

  1. 5 years

  2. 6 years

  3. 7 years

  4. 8 years


Correct Option: A

Financial planning helps a person

  1. to become a billionaire

  2. to achieve financial goals through proper management of finances

  3. to invest in foreign countries

  4. None of the above


Correct Option: B
Explanation:

 Financial planning helps a person to achieve financial goals through proper management of finances

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