NISM Series 5-A Mutual Fund Distributors Mock Test – Quiz 7

An investor purchases through a distributor 5000 units of a mutual fund scheme at a NAV of Rs 25. The current NAV of the scheme is Rs 43. What will be the trail commission for today if the trail commission rate is 1% per annum.

According to guidelines given by SEBI, every mutual fund scheme should have a minimum of ___ investors.

Smita is a young investor and her parentsadvice her to invest in fixed deposits of banks so that these funds can be used for her retirement. If Smita follows her parents advice, what risk does she face?

Investors who have not transacted during the previous ______ are known as dormant investors.

Mr. Mohit has filled up a application form for subscribing to a mutual fund scheme. However the address mentioned in the application form is different from the address provided at the time of KYC compliance. Which address will be included in the mutual funds records once the KYC compliance is validated?

Who uses the information collected under the Foreign Account Tax Compliance Act (FATCA)?

Which of these entities can invest in Indian mutual funds?
(A) Foreign Portfolio Investor
(B) Insurance company
(C) Salaried individual

Identify the TRUE statements with respect to Transmission of mutual fund units.
(A) Before the transfer is effected, the mutual fund will insist for an indemnity against future problems for the mutual fund arising out of the transfer
(B) Before the transfer is effected, the mutual fund will not insist on the death certificate of the deceased unit – holder
(C) Before the transfer is effected, the mutual fund will insist on the KYC documentation from the nominee

Which of these is NOT a function of Registrars and Transfer Agents?

The NAV of an equity fund is Rs. 76.45 and the face value is Rs. 10. An investor invests Rs. 30,000. How many units will be allotted to him? (There is no entry load)

AMFI Code of Ethics states that ______ cannot become a distributor of mutual fund.

Identify the TRUE statement –

Identify the true statement(s)-
(A) A systematic transaction cannot be cancelled
(B). Assuming a mutual fund scheme is profitable then the investors can keep enchasing some profits through a Systematic Withdrawal Plan

The expenses of ________ cannot be charged to a mutual fund scheme.

Identify the false statement(s).
(A) When an investor wants to redeem from a scheme, the distributor must suggest redemption from the scheme with the maximum exit load
(B) The mutual fund distributors can ignore the impact of exit load at the time of repurchase

Indicate which of these funds have the lowest to highest risk sequence?
A) Liquid Fund B) Credit Risk Fund C) Corporate Bond Fund.

Identify the FALSE statements(s) –
(A) For Index funds, the NAV is calculated upto 4 decimal points
(B). The AMC and a mutual fund scheme of the AMC can have the same auditor

Long term capital loss from an investment can be set off against_______.

Which of these statements are TRUE with respect to time stamping on mutual fund documents?
(A) Time stamping is relevant for non-financial mutual fund transactions
(B) The daily time stamping of application does not start with serial 1
(C) breakdown of time stamping process of breaking of seal is mandated to be duly recorded and reported to the Trustees

__________ ensures that the information contained in the scheme related documents (SID and SAI) are fully complied with.

Cut-off timing guidelines are not applicable for _______.

Registrar and Transfer Agency function must be independent of the Asset Management Company, and it cannot be retained in- house. State whether this statement is True or False.

Today’s costs can be translated into future requirement of funds using the formula:

Investments in mutual fund are allowed using________.

The Income Tax Act allows setting-off of the short term capital loss against long term capital gains. State whether True or False.

The purchasing power of currency changes on account of which of the following?

_______________ is a basis to select the better scheme in Index Funds.

Investors’ KYC details are stored in the server of ________,

Tactical Asset Allocation is the decision that comes out of calls on the likely behavior of the market – True or False?

Investors have the right to specify upto_____ nominees for their mutual fund

Lower the expenses of a Mutual Fund, lower would be the NAV – True or False?

__________ Have to make additional disclosures related to credit evaluation policy, sectors and types of investments in the offer document.

PAN No. and KYC documentation is compulsory for mutual fund investments with the only exception of ___________.

How many (maximum) bank accounts can a resident individual investor register with a mutual fund folio?

NAV of Equity funds is to be calculated upto ______ decimals.

Beta as a risk measure is relevant for _______.

Which of the following is a truly international asset class?

Liquid schemes are a variant of debt schemes that invest only in debt securities of upto 60-days maturity – True or False?

STP is a combination of SIP and SWP – True or False?

Which among the following investment avenues does not offer income on a regular basis?

What minimum percentage of the mutual fund scheme corpus must be invested in equity and related instruments in case of Equity Linked Savings Scheme (ELSS)?

The difference between NAV and re-purchase price is _________.

The asset allocation that is worked out for an investor based on risk profiling is called_____.

For calculating Capital Gains, investment in mutual funds for less then 1 year is considered as _______

Interval funds combine features of both-ended and close-ended schemes – True or False?

A Mutual Fund wants to launch a new scheme with a Face Value of Rs. 50. Will it get the required permissions?

The ARN number is assigned by_________.

Arbitrage Funds have BASIS risks – True or False?

Recurring expenses cannot be charged to a Mutual Fund scheme as it drags down the NAV – True or False?

Which amongst the following asset categories can also be purchased for consumption purposes apart from investment?

Mutual Funds cannot accept cash from investors for investing in their schemes – True or False?

All the records of the investors of a Mutual Fund are maintained by the Fund Manager – True or False?

An important objective of SEBI is to represent to the Government, Reserve Bank of India and other bodies on all matters relating to the Mutual Fund Industry – True or False?

SEBI approval is required for an AMC to appoint a distributor – True or False?

The Price Earning (PE) Ratio of a company is 7 and its Earning Per Share is Rs 10. What is the Market Price of this company?

A Mutual Fund scheme has a portfolio of shares whose beta is less than 1. This indicates that the scheme is _____________.

For an investor to get a quick sense of the level of risk involved in a mutual fund scheme, SEBI suggested a simplified framework known as _________.

An investor gives a cheque of Rs 1 lacs for investing in a Debt scheme at 3.30 pm at Mutual Fund office. The NAV of which day will be applicable to him?

As per the Income Tax Act – which of the below option is True?

Of the following documents, which is required to be appended to the application form of a MF scheme?

Pension Funds Regulatory and Development Authority (PFRDA) is the regulator for the National Savings System.

Every trust has beneficiaries and the beneficiaries, in the case of a mutual fund trust, are ____________.

All advertisements and Sales Literature containing an AMC(s)/ Mutual Fund ranking must prominently disclose___________.

The Entry/ Exit Loads and Taxes do not have an impact on the returns to the investors – True or False?

Relaxation in documentation requirements for micro-SIPs is not available for ______.

Expenses incurred to launch a new fund can be charged to the fund – True or False?

Usually Diversified Equity Funds are safer than Diversified Debt funds – True or False?

An investor purchases through a distributor 20000 units of a mutual fund scheme at a NAV of Rs 65. The current NAV of the scheme is Rs 62. What will be the trail commission for today if the trail commission rate is 1% per annum.

In case a fund manager is managing more than six funds, then performance data top____ and bottom_____ schemes has to be disclosed in all performance related advertisements.

Gold Future Contracts _________.

Identify the TRUE statement (s) with respect to risk levels in mutual funds?
(A). Corporate bond funds are relatively more riskier than Credit risk fund
(B). The NAV of Gilt funds generally fluctuate more than NAV of Liquid funds due to changes in yield

A Mutual Fund scheme is known to distribute dividends from time to time. Such MF can be used as a source of ___________.

‘Once it is finalized, a mutual fund scheme’s benchmark cannot be changed at a later date. ‘State whether the statement is True or False.

As per the provisions of the Income Tax Act – Short-term capital loss is to be set off against short-term capital gain or long term capital gain –?

Which of the following is a measure of fluctuation in periodic returns in an equity mutual fund scheme?

A Mutual Fund investor can file a case against the _______ for breach of trust.

Prediction of equity markets in the short run is easier than in the long run -?

Which of the following regulates mutual funds in India?

The investment objective of a _________ might read as follows: ‘To generate capital appreciation form a portfolio of predominantly

Of the below options, what is false with respect to Arbitrage Funds?

The amount which is paid to the distributor at the time the money is invested in a scheme is called_____________.

The cost of fund management are the highest in _________.

Many AMCs, distribution houses and mutual fund research houses offer free tools in their website, which can be used for evaluating a fund’s performance – True or False?

Which of the following options form the basis of appointment of a Mutual Fund distributor?

The Stock Exchanges which provide facilities for Mutual Fund trading also do the functions of Mutual Fund RTAs. – True or False?

Open-ended schemes, except ELSS, have to re-open for ongoing sale / re-purchase within _______ business days of allotment.

The trail commission paid by Mutual Funds to a distributor_______________.

Mutual funds can accept cash to the tune of Rs __________ from small investors who do not have a PAN.

Asset allocation means_____________.

Which of the given statements below aptly fit the description of actively managed funds?

Identify the difference between Sharpe Ratio and Treynor Ratio uses Beta

Gold ETF’s are meant only for FI’s and FII’s –?

As per SEBI regulations, every application form is to be accompanied by__________.

What are the benefits of Dematerialization?
(A) No inconvenience of safekeeping paper certificates
(B) Reduction in paper work
(C) Auto credit of bonus units etc.

Dividend Distribution Tax (DDT) on Equity oriented mutual fund schemes for Corporate Investors is ________.

The Market Value of a scheme is Rs 579 crores. Dividend accrued but not received is Rs 18 crore. The Expenses payable are Rs. 3 crore. The total number of outstanding units is 300 lakhs. What is the NAV of the scheme?

Minors are not legally eligible to contract, so for investing in Mutual Funds they________.

A person wishes to avail of a loan. For which of the below options he cannot get a loan?

The _______ is the phase when the earning years usually starts.

“To generate income by investing predominantly in a wide range of debt and money market securities” – this could be the investment objective of a _________