Association of Mutual Funds in India (AMFI) 2008 AMFI Mutual Fund Basic Module Model Mock Test O - Question Paper

1.The annual yield on RBI Relief Bonds (2000-01) is
a. 9.5%
b. 9.5% before tax
c. 8.5% before tax
d. 8.5% after tax

2.Individual investors do not normally invest in Government Securities because
a. Individual investors are not allowed to invest in Government Securities
b. The amount needed for investment is very large
c. Safety of principal is not guaranteed
d. None of the above

3.The amount an insurance company would pay to the nominee if a policyholder died is known as the
a. Premium
b. Sum assured
c. Face value
d. Real value

4.Dividends distributed by mutual funds are
a. Taxed at source
b. Taxed in the hands on the investors
c. Are subject to capital gains tax
d. Are tax-free in the hands of the investor

5.Investing through mutual fund is a better choice than investing directly in the stock market because
a. Identifying stocks is a difficult process
b. Agents get commissions on mutual fund investment
c. Returned are guaranteed by mutual funds
d. All of the above

6.A small investor can build a diversified portfolio by
a. Buying 1 share every of all listed companies
b. Investing in a mutual fund
c. Borrowing enough money to buy shares of well-managed companies
d. None of the above

7.Which of the subsequent is not an advantage of mutual fund investment over direct investment
a. Higher liquidity
b. Lower transaction costs
c. Greater convenience
d. Guaranteed returns

8.There is no contractual guarantee for repayment of principal or interest to an investor in
a. Bank deposit
b. Debt fund
c. Secured debentures
d. All of the above

9.Which of the subsequent debt investments is not rated
a. Corporate bonds
b. Commercial paper
c. Company deposit
d. Debt fund

10.Gold and real estate are attractive investment choices only in high inflation economies
a. True
b. False

11.Direct investment in stock market can be a better choice than investing through mutual funds if the investor
a. Wants better returns than those offered by mutual fund
b. Have large capital, knowledge and resources for research
c. Has identified a bullish phase in the stock market
d. Wants to invest for the long term

12.Deciding on strategies such as long-term compounding, cost averaging, value averaging, active switching, all depend on the
a. Stock market situation on date
b. Amount of money to be invested
c. Investor's risk tolerance
d. Phase through which the economy is passing

13.Financial planning involves
a. Studying financial management
b. Managing the risk of investment
c. Financing the client's investments
d. None of the above.

14.Greater returns come only from assuming higher risks, and a higher risk portfolio guarantees higher returns
a. True
b. False


15.The risk tolerance of an investor is independent of
a. His age

Earning:   Approval pending.