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Question 1 Minors are not legally eligible to contract, so for investing in Mutual
Funds they _________.
(a) have to become 18 years before investing
(b) can invest thro' their guardians
(c) can invest only in long term capital gain funds
(d) can invest in specific 'Minors Only' Mutual Funds
Answer Minors i.e. persons below the age of 18 are not legally eligible to contract,
Explanation they need to invest through their Parents/Lawful guardians.
Question 3 Who receives and delivers securities on behalf of the Mutual Fund ?
(a) Authorised Stock Brokers
(b) The AMC to which the fund belongs
(c) Custodian
(d) Merchant Bankers
Answer The custodian has custody of the assets of the fund. The custodian accepts
Explanation and gives delivery of securities for the purchase and sale transactions of the
various schemes of the fund.
Thus, the custodian settles all the transactions on behalf of the mutual fund
schemes.
Answer For all Equity and Debt funds (except Liquid funds) - For investment of
Explanation below Rs 2 lacs - NAV of the same day if received before 3 pm ( cut-off
time)
For investments of amount of Rs 2 lacs and above, irrespective of the time of
receipt of application, NAV of the business day on which the funds are
available for utilisation before the cut-off time of that day is applicable.
NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST
Question 6 Long term debt funds would be sensible in declining interest rate
scenarios - True or False ?
(a) TRUE
(b) FALSE
Answer Reaping / Distribution the stage when the investor needs regular money.
Explanation Hence, investors in this stage need to have higher allocation to income
generating assets.
It is the parallel of retirement phase in the Life Cycle.
Answer As yields in the market goes down, debt securities gain in value.
Explanation Therefore, long term debt funds would be sensible in declining interest rate
scenarios.
NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST
Question 7 In case a Mutual Fund scheme is winded up and some of the illiquid
securities are sold after a period of two years, the funds so received are to
be _________.
(a) kept by the Mutual Fund under the head 'Other Profits'
(b) transferred to the Investor Education Fund
(c) paid to the old investors
(d) transferred to AMFI and to be used for Mutual Fund promotional activities
Question 8 An investor holds 5000 units of a scheme and this scheme announces a 1 :
5 bonus. How many more units will be allotted to the investor ?
(a) 25000
(b) 10000
(c) 5000
(d) 1000
Answer If the amounts received on sale of illiquid securities are substantial, and
Explanation recovered within 2 years, then the amount is to be paid to the old investors
In other cases, the amount is to be transferred to the Investor Education Fund
maintained by each mutual fund.
Question 9 An investor who has a long term view and is looking for capital
appreciation and also has high risk tolerance should opt for investments
in ___________.
(a) Gold
(b) Equities
(c) Fixed Deposits
(d) High interest bearing junk bonds