Q-1 Which of the following is true about Jacob's Model Portfolio for investors in distribution phase? (a) Investment in diversified equity should be around 15% -30% (b) Investment in income and gilt funds should be around 15% -30% (c) Investment in liquid funds should be around 15% -30 % (d) None of the above. (2 marks) Q-2 Which of the following is not a relevant criterion to select a debt fund (a) Expense Ratio (b) Total return (c) Credit quality (d) Beta. (2 marks) Q-3 As per Bogle, asset allocation for older investors in distribution phase should be (a) 20% equity; 80% debt (b) 40% equity; 60% debt (c) 50% equity; 50% debt (d) 0% equity; 100% debt (2 marks) Q-4 Which of the following is not a case of sudden wealth surge stage (a) Your client wins Rs. 1 Cr in lottery (b) Your client receives property and other assets worth 5 Cr as inheritance from his uncle (c) Your client gets a yearly bonus of Rs. 5 lakh (d) All of the above. (2 marks) Q-5 Which of the following is not a step to develop a model portfolio for an investor? (a) Develop goals (b) Discuss with clients relatives (c) Determine asset allocation (d) Determine sector distribution. (1 marks) Q-6 A steady holding of investments in an equity fund's portfolio indicates 1. Long-term orientation 2. Lower transaction costs 3. Both the above 4. None of the above (1 marks) Q-7 An ideal money market mutual fund must have (a) Lower returns (b) Lower expense ratio (c) Low quality of investments (d) All the above. (1 marks) Q-8 An investor asks you in what order he should list the following schemes, going from the scheme with the least risk to the one with the highest risk - 1 Balanced Fund, 2 A Stock Index Fund, 3 A Liquid Fund, 4 An IT Sector Fund. (a) 1,2,3,4 (b) 1,3,4,2 (c) 3,1,2,4
2,3,1,4. (2 marks)
Q-9 Which is a better investment option while selecting an equity fund? (a) Ex Marks -75%, Beta - 0.9, Gross Dividend Yield 8% (b) Ex Marks - 80%, Beta- 0.9, Gross Dividend Yield - 8% (c) Ex Marks - 90%, Beta- 0.8, Gross Dividend Yield - 9% (d) All of the above. (2 marks) Q-10 Sharpe and Treynor Ratios are measures of (a) Average return (b) Risk (c) Risk adjusted return (d) Beta of the portfolio. (1 marks) Q-11 Short Term bond funds are (a) Low risk funds (b) Moderate risk funds (c) High risk (d) None of the above (1 marks) Q-12 Investor of bank deposit is called (a) Creditor (b) Unit holder (c) Shareholder (d) Lender (1 marks) Q-13 The power of compounding is best realized by investing in (a) Income funds with dividend option (b) Equity funds with growth/reinvestment option (c) Balanced funds with dividend option (d) None of the above. (1 marks) Q-14 Which of the following factors play vital role for asset allocation of any investor? (a) Stage of his life (b) Risk appetite (c) The purpose of making investment (d) All of these. (1 marks) Q-15 Tracking error is a measure of performance in case of (a) Debt Funds (b) Liquid Funds (c) Balance Funds (d) Index Funds. (1 marks) Q-16 How many scripts does Nifty constitute of (a) 40 (b) 30 (c) 100
None of the above.
(1 marks) Q-17 The choice of an appropriate benchmark for evaluating a fund's performance depends on (a) The fund manager (b) The investment objective of the fund (c) SEBI (d) AMFI. (1 marks) Q-18 Analyst of Finance and operations are called (a) Chart analyst (b) Technical analyst (c) Fundamental Analyst (d) Quantitative Analyst. (1 marks) Q-19 In mutual fund investors' subscriptions are accounted for as (a) Liabilities (b) Deposits (c) Unit Capital (d) None of the above. (1 marks) Q-20 YTM can also be defined as bonds (a) IRR (b) Coupon rate (c) Current yield (d) Duration. (1 marks) Q-21 In UK the mutual funds are structured as (a) (b) (c) (d) Trust Corporate Both (a) and (b) above None of the above. (1 marks) Q-22 Which of the following are the constituents of the mutual fund in USA? (a) Management company (b) Underwriter (c) Custodian (d) All of the above. (1 marks) Q-23 The minimum contribution of the sponsor to the net worth of the AMC is (a) 25% (b) 30% (c) 40% (d) 50%. (1 marks) Q-24 The trustee is the___________ of the unit holder's funds and assets. (a) Owner
(b) (c) (d)
Primary guardian Profit sharer Primary account. (1 marks)
Q-25 The agreement the trustees are required to make with the AMC is known as (a) Borrower and lender (b) Lender and borrower (c) Employer and employee (d) Investment management (1 marks) Q-26 Which of the following is true with respect to the net worth requirement of the AMC? (a) The minimum net worth requirement is Rs.10 crore but the weekly average should be at least Rs.20 crore (b) The minimum net worth requirement is Rs.10 crore but the monthly average should be at least Rs.20 crore (c) The minimum net worth requirement is Rs.10 crore but the yearly average should be at least Rs.20 crore (d) The minimum net worth requirement is Rs.10 crore at all the times. (2 marks) Q-27 As per the SEBI mandate minimum how many directors of the board of directors of the AMC are required to be independent? (a) One fourth (b) One half (c) Two third (d) One fourth. (2 marks) Q-28 Which of the following entities is responsible for issuing and redeeming units? (a) Custodian (b) Bankers (c) Registrar (d) Distributors. (1 marks) Q-29 The acquisition of Zurich mutual fund by HDFC is the example of (a) Scheme takeover (b) AMC takeover by a new sponsor (c) Merger of two AMCs (d) None of the above. (2 marks) Q-30 Which of the following is true with respect to the merger of two AMCs? (a) The Companies Act apply to the mergers of the two AMCs (b) For such mergers the approval of respective High Court is also needed (c) Merger of HB and Taurus is the example of the merger of two AMCs (d) All of the above. (2 marks) Q-31 The each day's NAV of the scheme should be updated on the website of (a) AMFI (b) SEBI (c) EDIFAR (d) None of the above.
(1 marks) Q-32 The money market mutual funds are regulated by (a) SEBI (b) RBI (c) AMFI (d) Bank itself. (1 marks) Q-33 AMCs are registered under (a) The SEBI Act (b) The Company's Act (c) The Trust Act (d) The Asset Management Act. (1 marks) Q-34 The unit holders are entitled to receive dividend warrants within (a) 10 days of the date of dividend declaration (b) 15 days of the date of dividend declaration (c) 20 days of the date of dividend declaration (d) 30 days of the date of dividend declaration. (2 marks) Q-35 Which of the following is an SRO? (a) SBI (b) AMFI (c) Insurance Companies (d) NSE. (1 marks) Q-36 The status of old UTI assured return schemes is (a) They are now converted to closed-end schemes (b) They are open-ended but they are not issuing new units (c) Their assurance of returns has been removed and they are now simple open-end schemes (d) They have been wound up. (2 marks) Q-37 Which of the following schemes do not exist in India? (a) Open-end fund (b) Close-end fund (c) Index fund (d) Assured return fund. (1 marks) Q-38 Which of the following is/are true with respect to the offer document? (a) (b) (c) (d) It is a primary vehicle for investment decision It is a legal document It is a reference document All of the above. (1 marks) Q-39 An investor can get an updated offer document from (a) AMC (b) Fund Office
Distributor All of the above. (1 marks)
Q-40 Which of the following is not the standard risk factor pertaining to a scheme? (a) NAV can move up or down on the basis of capital market movements (b) Name of the scheme does not indicate the performance (c) Past performance is not indicative of the future performance (d) Less diversification is risk (2 marks) Q-41 The disclosures are to be made in offer document if the scheme has invested more than _______ % of its net assets in associate group companies. (a) 10 (b) 15 (c) 20 (d) 25. (2 marks) Q-42 Which of the following information is not published on the cover page of the offer document? (a) Name of the mutual fund (b) Type of the scheme (c) Price of units (d) Risk factors. (1 marks) Q-43 All distributors selling the mutual funds are required to take (a) Distributor number (b) ARN number (c) AMC broker number (d) Retail channel number. (1 marks) Q-44 As on March 31 2005 how many candidates passed the AMFI certification test? (a) 49,837 (b) 24,850 (c) 3,232 (d) 1,946. (2 marks) Q-45 The fund can charge the initial issue expenses including the brokerage to the maximum of (a) 5% of the average net assets (b) 6% of the amount mobilized (c) 6% of the total weekly average net assets (d) 8% which includes 6% of the amount mobilized and 2% for the brokerage. (2 marks) Q-46 The compounded annualized yields can be advertised if the scheme has been in existence for (a) More than 1 year (b) More than 2 years (c) More than 3 years (d) More than 5 years. (1 marks) Q-47 The distributor will execute every transaction on behalf of the customer, in case of any error (a) Client can ask for the distributor to make well the losses
(b) (c) (d)
Client can sue the distributor for the incorrect advise Client has no recourse to the distributor All of the above. (1 marks)
Q-48 For whom of the following AMFI certification is mandatory (a) Newly recruited individual distributors (b) Employees of mutual fund involved in sales (c) Employees of mutual who interact with investors (d) All of the above. (1 marks) Q-49 The closed-end schemes, which are not mandatorily listed on the stock exchange, should publish their NAV at (a) Daily interval (b) Weekly interval (c) Monthly interval (d) Semi-annual interval. (1 marks) Q-50 For all the schemes except the liquid schemes the cut-off time is (a) 8.00 a.m. (b) 12.30 p.m. (c) 2.00 p.m. (d) 3.00 p.m. (2 marks) Q-51 NAV of the scheme is Rs.20 applicable entry load is 2.5%, the minimum repurchase price should be Rs. (a) 19.065 (b) 20.500 (c) 20.000 (d) 18.755. (2 marks) Q-52 The fund with the weekly average net assets of Rs.500 crore can charge investment management and advisory fees of Rs. (a) 4.00 crore (b) 4.25 crore (c) 5.00 crore (d) 5.25 crore. (2 marks) Q-53 Which of the following expense is not charged to the scheme? (a) Brokerage and transaction cost (b) Custodian fees (c) Cost of statutory advertisement (d) Depreciation of fixed assets. (1 marks) Q-54 The average net assets of a fund of fund is Rs.1000 crore, the maximum total expenses charged by it is (a) 7.5 crore (b) 12.5 crore (c) 15.0 crore (d) 25.0 crore.
(2 marks) Q-55 Within 6 months of the closure of the accounting year the fund shall (a) Display the scheme wise annual report on its website (b) Mail the annual report to all unit holders (c) Forward to SEBI a copy of the annual report (d) All of the above. (1 marks) Q-56 An asset shall be classified as non-performing if the interest and/or principal amount have not been received for (a) 1 month (b) 3 months (c) 6 months (d) 1 year. (2 marks) Q-57 When a security is not traded on any stock exchange for 30 days prior to the valuation date, is becomes (a) Traded security (b) Thinly traded security (c) Non-traded security (d) None of the above. (1 marks) Q-58 If a debt security is not traded on valuation day, the earliest previous day on which it was traded is considered but this date should not be more than (a) 15 days prior to the valuation date (b) 30 days prior to the valuation date (c) 45 days prior to the valuation date (d) 60 days prior to the valuation date. (2 marks) Q-59 A debt scheme can invest in the rated debt instrument of a single issuer up the maximum of (a) 10% of NAV (b) 15% of NAV (c) 20% of NAV (d) 25% of NAV. (1 marks) Q-60 If an investor has purchased 100 units of mutual fund at Rs.12, he receives the dividend of Rs.2 and reinvests the same at pre-dividend NAV of Rs.16 at the end he sells Rs16, the return earned by him is (a) 6% (b) 25% (c) 52.39% (d) 66.67%. (2 marks) Q-61 At what interest rate Rs.100 will become Rs.150 after 2 years? (a) 10.56 (b) 20.41 (c) 22.47 (d) 25.48. (2 marks) Q-62
To track the performance of long-term securities, the index that can be used is (a) Li-bex (b) Mi-bex (c) Si-bex (d) Composite index. (2 marks)
Q-63 How many debt indices does CRISIL have? (a) 2 (b) 4 (c) 6 (d) 8. (1 marks) Q-64 If an investor purchases the units at Rs.15 paying 2.25% as entry load and he takes the exit at a price of Rs.20 paying exit load of 0.5%, the return to the investor is (a) 6% (b) 29.75% (c) 52.39% (d) 66.67%. (2 marks) Q-65 For which of the following fund choice of benchmark is easier? (a) Equity growth fund (b) Mid cap and small cap fund (c) Balanced fund (d) Sectoral fund. (2 marks) Q-66 In India, besides NSE, who else has also developed the T-bill index? (a) J.P. Morgan (b) DSP Merrill Lynch (c) ABN Amro (d) Canara Robeco. (2 marks) Q-67 Which of the following is correct for the financial planning exercise? (a) He should understand that financial planning is setting measurable goals (b) He should understand that financial planning is nothing but investing (c) He should understand that financial planning is tax planning (d) He should understand that financial planning is retirement planning. (2 marks) Q-68 A salaried executive in late fifties who is planning to retire at 60 years of age, his wealth cycle stage is (a) Accumulation (b) Transition (c) Reaping (d) Transfer. (1 marks) Q-69 The Treynor’s ratio divides risk premium by (a) Alpha (b) Beta
R squared Standard deviation. (2 marks)
Q-70 A portfolio turnover of 200 percent implies that (a) On an average a security stays in the portfolio for 6 months (b) On an average a security stays in the portfolio for 12 months (c) On an average a security stays in the portfolio for 36 months (d) On an average a security stays in the portfolio for 48 months. (2 marks)
ANSWERS : A-1 A A-2 D A-3 C A-4 C A-5 B A-6 A A-7 B A-8 C A-9 C A-10 C A-11 A A-12 D A-13 B A-14 D A-15 D A-16 D A-17 B A-18 C A-19 C A-20 A A-21 C A-22 D A-23 C A-24 B A-25 D A-26 D A-27 B A-28 C A-29 A A-30 D A-31 A A-32 A A-33 B A-34 D A-35 D
A-36 A-37 A-38 A-39 A-40 A-41 A-42 A-43 A-44 A-45 A-46 A-47 A-48 A-49 A-50 A-51 A-52 A-53 A-54 A-55 A-56 A-57 A-58 A-59 A-60 A-61 A-62 A-63 A-64 A-65 A-66 A-67 A-68 A-69 A-70
D D D D D D D B A B A C D C D A D D A D B C A B C C A D C D A A B B A