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

b. His income
c. The stock market movements
d. His job security

16.A sector fund is a
a. Low risk fund
b. Moderate risk fund
c. High risk fund
d. Low-to-moderate risk fund

17.International funds invest in different countries and so are low risk funds.
a. True
b. False

18.Investment in gold is a hedge against inflation but investment in a precious metal fund falls in the high-risk category
a. True
b. False

19.By their very nature, growth funds are considered as high risk funds
a. True
b. False

20.Short term bond funds are
a. Low risk funds
b. Moderate risk funds
c. High risk
d. Of the above depending on the market

21.The risk level of commodity fund is
a. High risk category
b. Determined by the commodity price movements
c. Cannot be specified
d. Low risk category

22.As compared to a fund with fluctuating total returns, a fund with stable positive earnings
a. Gives higher returns
b. Is less risky
c. Gives lower returns
d. Is more risky

23."risk" is equated with
a. Volatility of earnings
b. Level of earnings
c. The number of investors in a fund
d. The number of schemes of a fund family

24.Volatility of an equity fund portfolio is independent of the
a. Kind of stocks in the portfolio
b. Degree of diversification of the portfolio
c. Fund manager's success at market timing
d. Number of investors in the scheme

25.Equity price risks are
a. Company specific
b. Market level
c. Sector specific
d. All of the above

26.Diversification decreases
a. Company specific risk
b. Market level risk
c. Both of the above
d. None of the above

27.Which of the subsequent is most risky
a. Investing in a money market mutual fund
b. Investing in an index fund
c. Short term investment in an equity fund
d. Long term investment in an equity fund

28.A fund with a high beta coefficient provide greater returns in a rising market, and is more risky in a falling market
a. True
b. False

29.Which of the subsequent is a disadvantage of standard deviation as a measure of risk
a. Standard deviation measures total risk, not just market risk
b. It is based on past returns, which does not necessarily indicate further performance
c. It is an independent number
d. All kinds of fund can be measured with standard deviation

30.The role of an agent is to
a. Point out the features and benefits of different investment choices
b. Help the investor develop the right approach to investing

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