Final Practice Exam 1

Which of the following is NOT included under commodities as an asset class?

Value of an existing bond fund is likely to go down when interest rates______.

Which of the following is a key element of setting financial goals?

A trader is convinced that he can consistently outperform the market. This is an example of _____ bias.

In a Contra Fund, what is the minimum investment requirement in equity and equity-related instruments as a percentage of total assets?

In a closed-end fund, which of these remains fixed?

What is the minimum investment required in top-rated bonds for a Corporate Bond Fund?

What is the required investment range for a mutual fund house to allocate to debt instruments in a Balanced Hybrid Fund?

Who submits the application to SEBI for registering a mutual fund?

One of the primary goals of ________ is to undertake nationwide investor awareness programme specifically related to mutual fund investments.

What minimum percentage of unit holders must agree to terminate a mutual fund scheme or remove the Asset Management Company (AMC)?

The AMFI Code of Ethics (ACE) outlines________.

What is the minimum number of investors required by SEBI for a mutual fund scheme?

If a fund manager is overseeing more than six funds, then __________ must be disclosed in all performance-related advertisements.

Can you identify the correct statement:

Mutual funds are required to make public their unaudited accounts twice in a year on which platform?

How often is the Statement of Additional Information (SAI) updated?

Under what circumstances an Asset Management Company can terminate the empanelment of a mutual fund distributor?

AMCs need to establish a due diligence process to oversee distributors who:

If the total value of buy and sell transactions for a quarter was Rs. 2,500 crore, and the average size of net assets during that period was Rs. 1,000 crore, on average, for how long were investments held in the portfolio?

Which statement is accurate regarding the number of units an investor can hold in a mutual fund scheme?

If there is any discrepancy between Principles of fair valuation and AMC’s Valuation Guidelines, which one will prevail?

Equity Linked Savings Schemes (ELSS) qualify for tax deductions under Section 80C of the Income Tax Act. What is the duration of lock-in period applicable to ELSS investments?

Short-Term Capital Loss can be set off against short-term capital gain or long-term capital gain.

How do you define indexation?

One can invest in __________ to enjoy a high level of liquidity in their investments.

Which of the following is classified as an Institutional Investor?

Which statement is correct?

(A) Asset Management Companies (AMCs) are not liable to reimburse foreign investors for any losses suffered as a result of unfavorable currency fluctuations

(B) AMCs are obligated to reimburse foreign investors for any losses incurred as a result of unfavorable currency fluctuations.

A mutual fund manager is looking to invest in Indian chemical companies currently increasing their production capacity. This can serve as an example for which type of investment strategy?

Which of the following statements is/are true regarding benchmarks for mutual fund schemes?

(A) – An international equity fund should benchmark against the BSE 500 since it is a broad-based index

(B) – Gold prices serve as the ideal benchmark for Gold ETFs

While selling units (redemption) from a mutual fund scheme, a financial advisor should consider the impact of which factors on the investor’s portfolio?

Index Funds carry the highest level of risk?

Transactions in an open-ended fund are based on what pricing mechanism?

How would you define Asset Allocation?

Identify the passive fund:

Investors in closed-end funds encounter a greater degree of ______ than those in open-ended funds.

Expenses incurred to manage the fund can be charged by the AMC to a mutual fund scheme.

An investor selects a mutual fund scheme by ensuring their _________ aligns with the fund’s goals.

Which of the following is NOT a risk associated with real estate investments?

Which factor contributes the MOST to credit risk in an investment?

How does market risk differ from price risk?

What is a primary benefit of rebalancing a portfolio?

Which of the following is a potential drawback of managing investments oneself?

Which of the following is NOT considered a sub-category of Equity Schemes?

What is the investment focus of a Gilt Fund?

How are units in a Close-ended Fund typically traded after the New Fund Offer (NFO)?

Which type of fund is a Smart Beta Fund an extension of?

What is the significance of SEBI’s 2017 circular on the Categorization and Rationalization of Mutual Fund Schemes?

The process of appointing a custodian requires the approval of which entity?

Which team in the AMC handles investor queries and service issues?

True or False: A person found guilty of any economic offence can be appointed as a trustee.

Which entity provides fair valuation for non-traded debt securities?

Who performs the role of calculating the NAV for a mutual fund?

Which of the following is true about SEBI’s requirements for mutual fund governance?

True or False: SEBI regulations allow mutual funds to invest more than 10% of their corpus in a single company’s shares.

Which of the following limits the investment by a mutual fund scheme in unlisted non-convertible debentures?

True or False: AMFI’s Code of Ethics is optional for AMCs.

What is the primary goal of SEBI’s regulations for mutual funds?

How frequently is the NAV of an open-ended mutual fund scheme disclosed?

True or False: The Statement of Additional Information must be updated within three months of every financial year.

Which document should investors refer to for understanding the fundamental attributes of a scheme?

Where can investors find the applicable load structure and impact on redemption price in the Scheme Information Document?

Which of the following does the Scheme Information Document NOT contain?

Which of the following is NOT a mode of mutual fund distribution?

True or False: The Goods and Services Tax (GST) is applicable on the commission earned by mutual fund distributors.

Which of the following is true regarding the nomination facility for mutual fund distributors?

What happens to the commission of a mutual fund distributor if the investor changes the distributor?

Mutual fund distributors are allowed to rebate commissions back to investors.

Which type of security is considered ‘non-traded’ for valuation if it has not been traded on any stock exchange for 30 days prior to the valuation date?

If a mutual fund invests more than 10% of its assets in Additional Tier 1 (AT1) bonds of a single issuer, it would be:

The NAV of mutual funds must be calculated up to how many decimal places for liquid funds?

Valuation gains in a mutual fund portfolio are always considered part of the distributable reserves.

Which type of scheme’s TER is capped at 2.25% of daily net assets?

True or False: Capital gains from non-equity mutual funds are taxed differently based on whether indexation is applied.

How is the cost of acquisition adjusted for indexation in non-equity-oriented funds?

True or False: Securities Transaction Tax (STT) is applicable on the purchase of equity mutual fund units.

What is the grandfathering date for capital gains in equity-oriented mutual funds to avoid retrospective taxation?

True or False: Under the new tax regime, Section 80C benefits can still be availed.

True or False: Units in a bonus issue are offered for free to existing investors.

How many nominees can an investor have for a mutual fund folio?

What is the primary document needed to open a mutual fund folio?

True or False: Mutual fund investments by NRIs can be made through NRO or NRE accounts.

What is the NAV used for a repurchase request received before the cut-off time?

Which of the following is a measure of the risk-adjusted performance of a mutual fund?

What type of risk is specific to securitized assets?

Which is the correct order of risks from highest to lowest for debt securities?

True or False: Inflation risk affects both equity and debt investments.

Which measure compares a fund’s return relative to the risk-free rate, adjusted for volatility?

What does Alpha measure in mutual fund performance?

Which of the following is a blended benchmark used for conservative hybrid funds?

True or False: AMFI’s website provides performance data for all mutual fund schemes.

For which type of scheme would gold prices serve as the benchmark?

What is Beta used to measure in relation to a mutual fund?

What is the recommended fund for investors looking for low volatility and short-term liquidity?

Which type of investor is most likely to prefer a dynamic asset allocation fund?

What is a key characteristic of a value fund?

Sector funds carry higher risk due to their concentrated investment in a single industry.

What is the main advantage of choosing the growth option in a mutual fund?

Zero-coupon securities do not pay regular interest but accumulate interest and pay it out with the principal amount at maturity.

Which of the following cannot be the originator of a transaction involving a Special Purpose Vehicle (SPV) for a securitized asset?