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

a. Agents commission
b. Before-and after-sales service to investors
c. Advertising of schemes
d. Stock broking

16.Sales practices are never mandated by regulators, but arise from convention only
a. True
b. False

17.Agents are compensated by mutual funds
a. Through salaries
b. Through commissions
c. Through an annual fee
d. Not in cash but in type

18.In India the minimum or maximum commissions payable to distributors are not prescribed by law, but are decided using the fund's own discretion
a. True
b. False

19.Lowest commissions are paid on
a. Equity funds
b. Tax benefit schemes of mutual funds
c. Debt funds
d. Long-term investments in mutual funds

20.Excess distribution expenses are to be borne by the
a. AMC
b. Unit holders
c. SEBI
d. AMFI

21.To cover fund distribution expenses, open ended funds
a. Charge a fee from agents
b. Charge entry and exit loads from investors
c. Create a reserve
d. Sell investments

22.Trail commission means paying
a. No commission at all
b. The entire commission up-front
c. Part of the commission up-front and the balance in phases
d. The entire commission after 5 years

23.Sub-brokers serve as agents of the principal broker and a mutual fund is not answerable for their activities
a. True
b. False

24.In India, Mutual fund agent's rate and services are at current described by
a. SEBI rules
b. Stock exchange bye-laws
c. AMFI rules
d. Convention

25.Along with the application, it is mandatory to distribute
a. Investment rebate
b. Offer document
c. Key info memorandum
d. None of the above

26.To sell funds effectively, an agent need not
a. Be fully aware of the important characteristics of the scheme
b. Know his/her client's risk profile
c. Give after sales service
d. Offer large investment rebates

27.For investors to correctly compare performance of various funds SEBI's advertising codes include
a. Uniform calculation of yields
b. Uniform presentations of dividends
c. Identical time periods
d. All of the above

28.SEBI's advertising code mandate that all performance computations in a fund's advertisement should be based
a. NAV
b. The NSE Fifty Index
c. The BSE Sensex
d. None of the above

29.An agent's appointment by a fund
a. Requires SEBI's approval
b. Is a lengthy and cumbersome process
c. Is mandatory preceded by an AMFI test
d. Does not require any approval

30.An investor does not have recourse to his agent in case of errors, issues or the quality of the investment

Earning:   Approval pending.