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					Q-1 Unit capital is found in the (a) Liability side of scheme's balance sheet (b) Asset side of the balance sheet (c) Revenue account (d) Equalization account. (1 mark) Q-2 An open-ended fund (a) Opens after 30 days of the NFO for further sale and repurchase (b) Is obliged to repurchase the units issued all the times (c) Is not obliged to issue now units all the times (d) Both (a) and (b) (e) All of the above. (1 mark) Q-3 In India, the public sector mutual funds came (a) Before private sector funds & UTI (b) After UTI but before SEBI regulation 1996 (c) After SEBI Regulation 1996 (d) After SEBI Regulation 1996 but before private sector funds. (2 mark) Q-4 During which of the following period Children’s Gift Growth Fund was lunched? (a) 1964-1967 (b) 1971-1974 (c) 1984-1987 (d) 1992-1997. (1 mark) Q-5 During which of the following phase did Fidelity enter India? (a) Growth of Unit Trust of India (b) Entry of Public Sector Funds (c) Emergence of Private Funds (d) Consolidation and Growth. (2 mark) Q-6 Investors’ awareness program to educate the investors was launched by (a) AMFI (b) SEBI (c) Both SEBI and AMFI (d) Both SEBI and SEC. (1 mark) Q-7 As at the end of March 2006 there were (a) 26 funds

(b) (c) (d)

29 funds 32 funds 39 funds.

(1 mark) Q-8 Some funds charge only an entry load and some only exits load. Such funds may be termed as (a) Partial load funds (b) No load funds (c) Both of the above (d) None of the above (1 mark) Q-9 Which of the following is not true for Government Securities? (a) Government Securities are issued for medium to long-term period (b) Since GOI is issuing these securities it has little risk of default (c) These securities does not face interest rate risk (d) These securities are also known as dated securities. (2 mark) Q-10 Which of the following is an example of Narrow-focus fund? (a) Offshore debt funds (b) Corporate debentures fund (c) Tax-free infrastructure bond fund (d) All of the above. (2 mark) Q-11 The most popular assured return scheme of UTI was (a) Mastershare (b) ULIP (c) MIP (d) None of the above. (1 mark) Q-12 Which of the following is not true for equity index funds? (a) Index funds tracks the performance of the specific stock market Index (b) The fund invests in shares of the that constitute the index and in the same proportion as the index (c) This fund does not bare any market risk (d) Index fund can be made for the narrow sartorial index. (2 mark) Q-13 Which of the following is not true for Exchange Traded Funds(ETF)? (a) ETF combines the best features of open end and closed end. (b) Its pricing is linked to the index

(c) (d)

It offers the investors the benefit of flexibility of holding a single share as well as the diversification and cost efficiency of index ETFs recover heavy load from the investors. (2 mark)

Q-14 Which of the following does not pay any commission to the intermediaries? (a) Exchange traded funds (b) Balanced funds (c) Commodity funds (d) Fund of funds. (2 mark) Q-15 Total number of units issued by a fund is 1,000. If an investor buys 150 units, his ownership of the fund would be (a) 1.5% (b) 15% (c) 150% (d) Can not be decided. (1 mark) Q-16 Which of the following helps the investor to diversify his risk not only in the terms of the types of the securities but also in terms of the schemes of different fund managers and investment styles? (a) Exchange traded funds (b) Balance funds (c) Commodity funds (d) Fund of funds. (2 mark) Q-17 Which of the following is the most risky fund? (a) Index funds (b) Bank Fund (c) Mid cap fund (d) Both (b) and (c) above. (1 mark) Q-18 The minimum contribution of the sponsor to the net worth of the AMC is (a) 25% (b) 30% (c) 40% (d) 50%. (1 mark) Q-19 The trust is created through a document called (a) Offer document (b) Draft offer document

(c) (d)

Shelf Prospectus Trust deed. (1 mark)

Q-20 Which of the following is not true? (a) The trustees appoint the AMC with the prior approval of the sponsor only (b) The trustees also approve each of the schemes floated by the AMC (c) The trustees may take remedial action if they believe that conduct of the business is not in accordance with SEBI regulations (d) The trustees are required to ensure that the AMC is in the compliance with the Trust Deed. (2 mark) Q-21 What is the role of AMC for the trust? (a) Investment manager (b) Employee (c) Lender (d) Borrower. (1 mark) Q-22 Which of the following entities is responsible for issuing and redeeming units? (a) Custodian (b) Bankers (c) Registrar (d) Distributors. (1 mark) Q-23 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 mark) Q-24 After the acquisition of the AMC which of the following documents are required to be revised? (a) Trust deed (b) Offer document (c) AMC agreement (d) Memorandum (e) Articles of association (f) All of the above. (2 mark) Q-25 The money market mutual funds are regulated by (a) SEBI

(b) (c) (d)

RBI AMFI Both SEBI and RBI jointly. (1 mark)

Q-26 The liquid funds can no longer invest in (a) Commercial Paper (b) Certificate of Deposits (c) Treasury bills (d) Call money. (1 mark) Q-27 The ministry of finance regulates (a) SEBI (b) RBI (c) Both (a) and (b) (d) None of the above. (1 mark) Q-28 An investor can claim the interest if he does not receive the redemption proceeds within (a) 10 working days (b) 15 working days (c) 20 working days (d) 30 working days. (1 mark) Q-29 AMFI was incorporated in the year (a) 1992 (b) 1993 (c) 1995 (d) 1996. (1 mark) Q-30 Which of the following is/are the limitations to the rights of the investors? (a) Unit holders cannot sue the trust (b) Prospective investor does not enjoy any right of the fund (c) Investors can not force the AMC to assure a specific level of returns (d) All of the above. (2 mark) Q-31 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. (1 mark)

Q-32 For the liquid schemes the cut-off time for applying the scheme is (a) 8.00 a.m. (b) 1.00 p.m. (c) 2.00 p.m. (d) 3.00 p.m. (2 mark) Q-33 If the total trading value of a security is less than Rs.5 lakh and total volume is less than 50,000 shares, such security is called (a) Traded security (b) Thinly traded security (c) Non-traded security (d) None of the above. (1 mark) Q-34 The value of illiquid securities held in excess of the prescribed limits is considered at (a) Last traded price (b) Discounted at 10% (c) Discounted at 75% (d) Considered zero. (1 mark) Q-35 Investment is gold is considered as short term asset, if it is held for less than (a) 12 months (b) 24 months (c) 36 months (d) None of the above. (1 mark) Q-36 The applicable tax rate on long-term capital gain with indexation is (a) 10% (b) 15% (c) 20% (d) 30%. (1 mark) Q-37 To avail the benefit of section 54 EC the gains should be transferred to specified bonds within (a) 3 months of the accrual of the gain (b) 6 months of the accrual of the gain (c) 9 months of the accrual of the gain (d) 12 months of the accrual of the gain. (2 mark) Q-38 Under section 80C an HUF is entitled to the deduction up to

(a) (b) (c) (d)

Rs.1 lakh Rs.2 lakh Rs.5 lakh Rs.10 lakh.

(1 mark) Q-39 If the unit holder is foreign company, the tax deducted at source for short-term capital gain is (a) 10% (b) 15% (c) 20% (d) 48%. (1 mark) Q-40 In which year the steps to curb dividend stripping were taken? (a) 1993 (b) 1999 (c) 2000 (d) 2001. (1 mark) Q-41 FIIs can make payments directly by remitting from abroad or from their (a) FCNR account (b) Non-Resident Rupee account (c) NRE account (d) Both (a) and (c). (2 mark) Q-42 Which of the following is not true with respect to the voluntary accumulation plan? (a) It gives the flexibility to the investor regarding the amount to be invested (b) It gives the flexibility to the investor regarding the frequency of investment (c) VAP follower is obliged to keep investing (d) None of the above. (2 mark) Q-43 For providing the cheque writing facility the fund should have the approval of (a) RBI (b) SEBI (c) AMFI (d) All of the above. (1 mark) Q-44 Which of the following can be called as option on stock? (a) Equity shares (b) Preference shares (c) Warrants

(d)

None of the above. (1 mark)

Q-45 Which of the following are the most liquid shares? (a) Large cap shares (b) Mid cap shares (c) Small cap shares (d) All of the above. (1 mark) Q-46 Which of the following is/are true with respect to the P/E ratio? (a) It is calculated by dividing price by earning per share (b) It indicates what the investors are willing to pay for the company's earning potential (c) Faster growing companies usually have higher P/E ratio (d) All of the above. (2 mark) Q-47 Which of the following stock is expected to give higher returns than the market returns? (a) Cyclical stock (b) Growth stock (c) Value stock (d) Power stock. (1 mark) Q-48 A management of index fund can be called (a) Active fund management (b) Passive fund management (c) Semi-active fund management (d) Poor fund management. (1 mark) Q-49 Which of the following steps are to be created to manage a robust equity portfolio? (a) Set realistic goals (b) Decide on an appropriate investment philosophy (c) Develop flexible approach to investing (d) All of the above. (1 mark) Q-50 Which of the following contract allows one to buy or sale the underlying assets at a specific future date? (a) Futures (b) Options (c) Swaps (d) None of the above. (2 mark)

Q-51 Mutual funds in India before 2005 were using futures and options contract for (a) Risk management (b) Portfolio balancing (c) Taking an opportunity to earn from derivative markets (d) Both (a) and (b) above (2 mark) Q-52 Which of the following is not true for commercial paper? (a) It is a short-term unsecured instrument (b) This instrument is issued to meet short-term working capital requirement (c) CP can be issue to NRIs (d) None of the above. (2 mark) Q-53 Treasury bills are available in the maturity of (a) 91 days (b) 180 days (c) 364 days (d) Both (a) and (c) above. (2 mark) Q-54 If the current yield of a bond is 10% and the coupon rate of the bond is 8%, price of the bond should be Rs. (a) 120 (b) 100 (c) 90 (d) 80. (2 mark) Q-55 The yield curve is usually (a) Upward slopping (b) Downward slopping (c) Generally flat (d) None of the above. (1 mark) Q-56 If the YTM of the bond is equal to the coupon rate, (a) Bond will be traded at par (b) Bond will be traded at discount (c) Bond will be traded at premium (d) Reinvestment risk is very high in such case. (2 mark) Q-57 Under which of the following cases the reinvestment risk will be high? (a) Interest rate is less than the coupon

(b) (c) (d)

Interest rate is equal to the coupon Interest rate is higher than the coupon None of the above. (2 mark)

Q-58 Yield spread of the high rated bond will be (a) High (b) Zero (c) Low (d) Negative. (2 mark) Q-59 Which of the following is not true with respect to the duration? (a) The duration of the coupon bearing bond will be less than the maturity (b) The duration of the zero coupon bonds will be equal to the maturity (c) The bonds, which pay higher interest, will have shorter duration (d) During the economy slump the duration of the zero coupon bonds exceed the maturity. (2 mark) Q-60 As per SEBI regulations the minimum number of investors required in a scheme is (a) 10 (b) 20 (c) 50 (d) 75. (1 mark) Q-61 Which of the following is/are the credit rating agencies of India? (a) CARE (b) CRISIL (c) ICRA (d) All of the above. (1 mark) Q-62 Which of the following instruments can be issued for a period of 91 days? (a) Treasury bills (b) Commercial paper (c) Certificate of deposit (d) All of the above. (1 mark) Q-63 When a coupon rate on the freshly issued bonds rise to 10%, an existing bond with a coupon of 8% will face (a) Increase in price (b) Decrease in price (c) Volatility in price

(d)

Nothing. (2 mark)

Q-64 The inter-scheme transfers can be done by the mutual fund if, (a) If the schemes belong to same AMC (b) No fees is charged for such transfer (c) It does not exceed 5% of the net assets (d) All of the above. (1 mark) Q-65 Which of the following is true with respect to the fund of funds? The inter-scheme transfers can be done by the mutual fund if, (a) FoF scheme cannot invest in another FoF scheme (b) FoF cannot invest in the direct equities (c) A mutual fund scheme cannot invest in FoF (d) All of the above. (2 mark) Q-66 Which of the following is a more accurate measure of sensitivity of a bond to change in interest rate? (a) YTM (b) IRR (c) Time value of money (d) Duration. (1 mark) Q-67 Total investment in debt instruments of all the issuers in a scheme are not permitted to exceed (a) 10% of NAV (b) 15% of NAV (c) 20% of NAV (d) 25% of NAV. (2 mark) Q-68 Mutual funds can deposit or hold cash for short-term with (a) Commercial banks (b) Co-operative banks (c) Development banks (d) Scheduled banks. (2 mark) Q-69 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 Rs.14 at the end he sells at Rs16, the return earned by him is (a) 6% (b) 25%

(c) (d)

52.39% 66.67%. (2 mark)

ANSWERS:
A-1 A-2 A-3 A-4 A-5 A-6 A-7 A-8 A-9 A-10 A-11 A-12 A-13 A-14 A-15 A-16 A-17 A-18 A-19 A-20 A-21 A-22 A-23 A-24 A-25 A-26 A-27 A-28 A-29 A-30 A-31 A-32 A-33 A-34 A-35 A E B C C C B A C D C C D A B D B C D A A C A F A D C A C D A B B D C 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 C B A D D B C A A A D B B D A D D D D A A A C D B D D B D D D D D C


				
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