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

d. Never invest in equity

43.For older investors who want to transfer their wealth
a. No financial planning is needed
b. The right investment strategy depends upon who the beneficiaries are
c. The right investment strategy depends upon the state of the stock market
d. All the funds can be invested in aggressive equity funds

44.Investors who acquire sudden wealth
a. Can speculate with all the acquired money in the stock markets
b. Should not use any of the new wealth to invest in equity
c. Should take the effect of taxes into account
d. Need not pay any taxes on the newly acquired wealth as it is not a part of their regular income

45.If a specialty offshore fund has consistently provided very good performance, it can be considered for investment by a retiree
a. True
b. False

46.Past performance should not be solely relied on for selecting a fund
a. True
b. False

47.Between the past performance of the fund and its suitability for an investor, past performance is more important
a. True
b. False

48.Structural characterizations of an equity fund include
a. Costs of investing
b. The specific securities in which the fund has invested
c. The number of employees of the AMC
d. All of the above

49.An equity fund's age and size are irrelevant when selecting a fund for investment
a. True
b. False

50.The charge to an investor at the time of he redeems his units from the fund is known as
a. Recovery charge
b. Repurchase load
c. Redemption weight
d. Exit load

51.The load amount charged to a scheme over a period of time is called
a. Entry load
b. Exit load
c. Deferred load
d. No-load

52.Contingent deferred sales charge (CDSC)
a. Is higher for investors who stay invested in the scheme longer
b. Is lower for investors who stay invested in the scheme longer
c. Is the identical for all investors irrespective of how long they stay invested
d. Is not allowed to be charged to mutual fund investors in India

53.A fund's declared NAV does not include loads
a. True
b. False

54.Which of the subsequent fund kinds are comparable
a. An aggressive equity fund and a money market mutual fund
b. A value fund and government securities fund
c. A bond fund and a debt fund
d. A diversified equity fund and a debt fund

55.Who is the primary guardian of unit holders' funds/assets
a. The AMC
b. The trustees
c. The registrars
d. The custodians

56.In case of a fund merger or take-over
a. High court approval may not be necessary
b. SEBI approval is a must
c. All unit holders must be informed
d. All of the above

57.Units of a money market mutual fund can be issued to
a. Individuals
b. Banks
c. Trusts
d. All of the above

58.Though Indian mutual funds have restrictions on borrowings (only 20% of net assets and for 6 months only) which are to meet cash needs for redemption only, UTI is allowed to borrow within more relaxed norms
a. True
b. False

59.An equity fund can be stated to be concentrated when
a. When it invests in 2 or 3 stocks
b. When it invests in many companies of the identical sector
c. When top ten holdings account for more than 50% of net assets invested
d. When top ten holdings account for more that 25% net assets invested

60.The size of the market capitalisation of a fund's equity holdings is inversely proportional to the returns that
a. Can be expected from the fund
b. Level of risk presumed by the fund
c. State of the stock market
d. All of the above

61.A steady holding of investments in an equity fund's portfolio shows
a. Long-term orientation
b. Lower transaction costs
c. Both the above
d. None of the above

62.Ex-mark of an equity fund measures its
a. Performance
b. Risk
c. Both the above
d. None of the above

63.Beta of an equity fund measures its
a. Performance
b. Risk
c. Both the above
d. None of the above

64.The best equity fund, relative to others, would have
a. Higher ex marks, lower beta and higher gross dividend yield
b. Higher ex marks, higher beta and higher gross dividend yield
c. Lower ex marks, lower beta and lower gross dividend yield
d. Lower ex marks, higher beta and higher gross dividend yield

65.When selecting equity funds for investing, those at the top of the performance ranking need not be automatically opted
a. True
b. False

66.A debt fund's age and size are not important when selecting a fund for investment
a. True
b. False

67.Debt schemes are popular because
a. The Indian stock market is always going down
b. The returns are more predictable
c. Most investors are always in debt
d. All of the above

68.Yield-to-maturity of a debt fund's portfolio is more important when the investment objective is
a. Current income
b. Total return
c. Liquidity
d. All of the above

69.Compared to equity funds, income margins for debt funds are
a. Narrow
b. Higher
c. The identical
d. Almost nil

Earning:   Approval pending.