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PRACTICE KIT PAPER 7

No.

QUESTION

OPTION A

OPTION B

OPTION C

OPTION D

We have to do the registration of the mutual fund with the SEBI.

Who gets registration done

Trust

R&T

Sponsor

AMC

AMFI do the following activity

Publish NAV, AUM of the fund

house and maintain and publish
industry data

Compute NAV

Manages money under

None of the above

In a liquid fund a application for repurchase comes at 3.30. Whats

is the NAV which would be available to it

Closing NAV of the date of

application

Closing NAV of the next business

day

Closing NAV of the day

preceeding the next business
day

Closing NAV of the day

preceesing the date of
application

In creating of model portfolio which is the first step

Deciding the Asset Allocation

Identify financial Goal

Selection of Sector

Selection of the scheme

Once the asset allocation is decided, sharpe ratio can help us to

select the good debt and equity Schemes

TRUE

FALSE

Once the asset allocation is decide, treynor ratio can help us to

select the good debt and equity schemes

TRUE

FALSE

With the increase in the regular income from the job risk taking
ability of the investor _________

Remains the same

Decreases

Increases

Insufficient data

A repurchase comes in a GILT fund at 2.30 pm. Whats would be

the NAV available to the redemption

Closing NAV of Next Business

Day

Closing NAV of the Application

Day

Closing NAV of the day

preceeding the next business
day

Closing NAV of the day

preceeding the Application date

75% investment in debt is suggested to

Aged couple with no immediate

family support

40 year old man with a family with

grown up children

Young call centre executive

Yound couple with 2 school

going kinds

10

An investor with interest to earn high return and willing to take high
risk are refferred to as

Cautious Investor

Conservative Investor

Adventurous Investor

Aggressive Investor

11

A person requires 1,00,000 rs for the specific goal after 3 years. If

we want to known what amount he needs to invest no to get the said
amount at rate of 5%. which of the following formula needs to be
used

100000*(1+0.05)^3

100000*(1+0.05)*3

100000/(1+0.05)^3

100000/(1+0.05)*3

12

For an Micro SIP which one of the following is not a valid photo ID
proof

PAN proof

Debit card with photo ID

Credit card with Photo ID

Voter ID proof

13

The responsiblity to manage funds in the new pension scheme is

with

PFRDA

Insurance Companies

AMCs

PFMs

14

Where you get the information in regards to the key personals

involved in an AMC

They are not published as it is not

very important for the investor

They are published on the website

of the mutual Fund

Available in SAI ( Statement of

Additonal Information )

15

Which of the following is not available in SID

Type of Fund

Risk Factor

Due Diligence certificate

None of the above

16

Legally SAI is the part of SID

TRUE

FALSE

17

The date of the applicablity of the NAV is not dependent on

Time at which the application is

submiited

b) Scheme in which the money is

invested

The day on which the

application is submiited

The amount which is getting

invested

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Answer

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18

The AMFI allots unique the ARN no which is valid for the period of
three years

TRUE

FALSE

19

The following would not affect the trail commission to the advisor in
mutual Fund

Portfolio value going up with the

increase in the market

Investor making fresh purchase

during the period

Change in the unit capital of the

the scheme

Investor redeeming the money

during the period

20

The STT paid on the equity mutual fund sold on the stock exchange
is

0.00125

Nil

0.0025

0.00017

21

The STT paid on th equity mutual fund purchased on the stock

exchange is

0.00125

Nil

0.0025

0.00017

22

STT paid on the re purchase of units by the AMC

0.00125

Nil

0.0025

0.00017

23

Which of the following when transacted on the stock exchange STT

is not applicable

ELSS

GOLD ETF

Index ETF

Diversified Equity Fund

24

Its is advisable for an average investor to do Tactical Asset

allocation for planning his retirement

TRUE

FALSE

25

In case of sudden wealth which among the following is least

advisable

Park the money in the liquid fund

for a short time

Invest all money into equity at one

go

Start STP from liquid fund into

Equity Funds

Review the financial plan

26

Tactical asset allocation is suitable for seasoned investor with large

investible surpluses

TRUE

FALSE

27

An application for re purchase in equity comes at 3.30. What would

be the applicable NAV

Closing NAV of Next Business

Day

Closing NAV of the Application

Day

Closing NAV of the day

preceeding the next business
day

Closing NAV of the day

preceeding the Application date

28

In case there is a redemption from a NRI who have invested the

money on a non repatriable basis. The mutual would pay in dollors
as redemption

TRUE

FALSE

29

The investment grow faster in dividend re investment options as

compared to the growth option because more units are added on
dividend reinvest

TRUE

FALSE

30

Maximum expense that can we charged in a debt fund is

0.0175

b) 0.75%

0.025

0.0225

31

In case of the growth option which of the following is not true

The NAV capture the full value of

the porfolio gain

There is no dividend declared

The number of units increases

over period

There is a Tax Deffereal

32

We require the board resolution from companies to invest is mutual

fund as it may not be specified in the Memorundum and Articale of
Assoiation to invest in such schemes

TRUE

FALSE

33

If the company have 10 cores if Issued shares. The profit it makes

is 105 coree. IT pays 5 crore as tax. Also pays 20 crore as dividend
what is the EPS

10

Not sufficient Data

34

An investor in the debt scheme who completely want to eliminate

investment in equity should invest in MIP

TRUE

FALSE

0.36

3.6

0.25

TRUE

FALSE

35

36

The fund have an average asset of 300 crore. The portfolio turnover
is Rs 1000 crore. For how many months the investment are held for
The floating rate fund hold on to there value even if the interest rate
are fluctuating

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37

Performance of the fund is most sensitive to the expense ratio in

which of the following Fund

Liquid Fund

Diversified Equity Fund

ETF

Sector Fund

38

Who among the following are not distributor for Mutual Funds

National Distributors

Branches of public Sector Bank

Branches of reserve bank of

India

Branches of Forein Banks

39

Importance of credit rating agency is most important in

Equity Funds

Secutised Debt

ETF

40

Full form of AGNI

AMFI gudieline and Norms for

Intermidiary

AMFI guideline and norms for

Investment

AMFI guideline for Asset

Management Company

AMFI Guideline for Non Indians

41

Which of the following scheme is exempted from the divident

distribution Tax

Debt Oriented Funds

Balance Funds

Liquid Funds

Equity Funds

42

Sector selection is the key decision in the Bottom Up Apprach

TRUE

FALSE

43

Illiquid Shares would be valued at

Value Decided by the broker

Fair market value as the the

guidelines of SEBI

Price decided by the offmarket

Trade

None of the above

44

Tax consultant should not advice financial planning to his client

TRUE

FALSE

45

Mother want to set apart Rs 25 lakhs in 3 years time

Financial Goal

Asset Allocation

Financial Planning

Financial Desire

46

Followinf is the Asset Allocation

Dividend payout and Growth

Option

Art and Gold Fund

Growth and Value Fund

Active fund and Passive Fund

47

Limit of the commission to be paid to distributor is decided by SEBI

TRUE

FALSE

48

Whats is an NFO Investments?

Investment done by any investor in

the new Scheme

Additonal Purchase by the existing

investor

First time investment in any of

the mutual Fund Scheme

Additional Purhase by the

existing investot in another
scheme

49

Whats is true about the FMP

NAV dose fluctuate

No defaul Involve

Returns can be reasonably

predicted before the maturity

All of the above

50

SAI needs to be updated every

Yearly

Monthly

Quarterly

Half Yearly

51

Who is responsible for the information available in OD

Trustee

AMC

Sponsor

Custodian

52

Which of the following government secuity have leasr maturity

period

CD

CP

T Bills

Gilt Scheme

53

Which of the following credit rating is not required

Shor term debt Fund

Liquid Schemes

GILT Schemes

FMPs

54

Insurance is more important in case of Physical Asset Vis a Vis

financial Asset

TRUE

FALSE

55

Which of the asset have the higest risk to be stolen

Real Estate

GOLD

Mutual Fund

Bank Balance

56

Most best way to decide the risk appetite of the person is to ask
client that how mush risk you are ready to take in the market

TRUE

FALSE

57

Share price of the Gold Mining Company is dependent on

Gold Reserve

Quality of the operation of the

company

Gold Price

All of the above

58

Expense ration is more important in case of

Offshore Fund

Equity Fund

Debt Fund

Sector Fund

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59

While construction of the portfolio the relative performance is done

with

Peer Group

Asset Alllocaton

60

The balance funds based on flexible Asset Allication is lower riskier

than high yield debt fund

FALSE

TRUE

61

Between whom the Trustdeed is executed between

Trustee and Sponsor

62

Repurchasing the predecided no unit at the regular interval is called

63

Model Portfolio

Tracking error

Sponsor and Custodian

Trustee and AMC

AMC and Sponsor

STP

SWP

SIP

All of the above

Unclaimed investment amount and dividend can be demand by the

investor

TRUE

FALSE

64

Applicable NAV for the different scheme is as per the following time

Office time of AMC

Office time of R&T

As per the time of stock market

Cut-Off time decided by SEBI

for various MF scheme

65

While empannel with the AMC, every distributor have to provide the
following

Correct and complete information

Commitment to abide by
instruction given as also statutory
codes and guideline

Provide all information and

document that the AMC may
ask for from time to time

All of the above

66

Transaction done of MF on the NSE NEAT and BSE Start the

exchange gurantee the settlement of Funds

TRUE

FALSE

67

Low P/E ratio indicate that it is unlikely to replicate its past

performance

TRUE

FALSE

68

Churning of the portfolio by the Fund Manager is called

Portfolio Turnover Ratio

Liquidity Ratio

Annual Turnover Ration

All of the above

69

Invesment in a Real Estate Mutual Fund is

Beyond the means of the retail

investor

Extremally Liquid and cost

effedctive

Highly illiquid

Offer the benefit of both real

estate and Mutual Fund

70

Advantage of investing in PPF is

Loan is available any time

Premature withdrwal is allowable

after one year

Any amount of investment in

the scheme

Tax free return every year

71

Self Regulatory Organisation controls

All his member to the limited

extent

All his member completely

All mutual fund company

All share brokers

72

In case of Joint holder the pan card requriment for

1st and 2nd Holder

All joint holders

Only 1st Holder

Any One

73

Maximum number of nominee which can be added

74

In case New Pension scheme how many PFM( Pesion Fund

Managers) are managing the money

75

Which is the right Sequence

Liquid Fund, MIP,Gilt Fund

Gilt Fund.Liquid Fund,MIP

Diversify Debt,Gilt Fund, Liquid

Fund.

MIP ,Liquid Fund, Diversify

Debt.

76

In Lower Interest Rate Senario Debt Product of MF will Generate

higher return compared to Fixed Deposit.

TRUE

FALSE

77

An employee of the mutual Fund can be an Agent

TRUE

FALSE

78

Commission on Investment done by Sponsor in a Fund is

Not Payable

Payable to Sponsor

Payable to Distributor whose

ARN is mentioned in the
Application Form

None of the above

79

Book Value of a Share is dependent on Accounting Policies of the

company

TRUE

FALSE

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80

Code of Conduct for AMC Personnel & Trustees are mentioned in

Chapter II

Chapter IV

Schedule II

Schedule V ( 5th Schedule)

81

If complaint of an investor is not solved by AMC, investor has to

complain to

SEBI

Trustees

Sponsor

R&T

82

Feeder Fund can invest in International Market as

Anywhere as per Investment

Objective of the Fund

Only International Equity

Only International Debt

All of the above

83

Tax Deferral is available in

Growth

Dividend

Dividend Reinvest

84

Benchmark of Sectoral Fund investing in Banking Sector would be

BSE Bankex

Nifty Junior

S&P Nifty

S&P 500

85

Before going to SEBI for approval of a Fund Launch AMC needs to

Take approval from Trustees

Print the application Form

Finalise the Launch Date

All of the above

86

Which of the Following Fund is most Sensitive to Expense Ratio

Liquid Fund

Index Fund

Equity Fund

Off shore Fund

87

ASBA is an Excellent Facility for Additional Purchase in a Fund

TRUE

FALSE

88

Converting Units of a Mutual Fund from Demat Form to Physical &

Vice Versa is Possible

TRUE

FALSE

89

Indexation means

Finalising the benchmark for the

fund

Adjusting the Purchase Price of

the Fund considering the Inflation

Considering the growth of

partcular asset class

All of the above

90

Investor in Reaping Phase would primarily invest in

Equity

Securities yielding Regular Return

Both

None of the above

91

Most of the AMC publish Portfolio of their scheme on their Website

Daily

Monthly

Six Monthly

Yearly

92

Difference between Unit Certificate & Account Statement

Unit certificate shows only the

closing balance while account
statement shows opening balance,
transactions and closing balance

There is no difference

Unit certificate is issued at the

time of NFO and account
statement are send
consecutively

Account statement shows

closing balance and unit
certificate shows opening
balance, transactions and
closing balance

93

Which of the following is not the scheme specific risk factor?

Risk arising from the schemes

objective

Risk arising from the nondiversification

No previous experience in
managing a fund

Movement in NAV because of

the market movements.

94

Expense Ratio of an Index Fund is

0.01

0.0125

0.025

0.015

95

A Financial Planner can use any of the Model Portfolio available on

the Web

TRUE

FALSE

96

In NPS Tier I account is compulsory for opening Tier II account

TRUE

FALSE

97

A Retired couple with Zero income should invest all the money in
Liquid Fund

TRUE

FALSE

98

SIP can be done by

Standing Instruction

ECS

PDCs

All of the above

99

Concentration risk is highest in

Equity Share

Bank deposit

Real Estate

Commodity

100

A high amount of equity investment is suggested to the investor if

he is in which stage ?

Accumulation phase

Transition phase

Distribution phase

No such relation with any phase

of life.

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