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

Q.1 The objective of the financial planning is to ensure that ………

1.Right amount of money is available in the right hands at the right point in future to achieve an individual’s financial goals
2.That tax payable is as low as possible
3.One understands that technicalities of the financial market
4.One does not require the expertise of the financial advisers

Q.2 Direct investment in stock markets can be a bettter choice over investing through mutual funds if:

1.The investor wants better returns than those offered by mututal funds
2.The investor has large capital, knowledge and resources for research
3.The investor has identified a bullish phase in the stock market
4.The investor wants to invest for the long term

Q.3 What is incorrect of the following?

1.Value funds invest in overpriced stocks
2.Value funds invest in under priced stocks
3.Growth funds invest in overpriced stocks
4.None of the above.

Q.4 Mutual funds should be recommended as.

1.Investments to achieve long term goals
2.A rich quick investment choice
3.Investments to take advantage from stock market swings
4.All of these.

Q.5 As a financial planner, which of your subsequent clients would you strongly advise to begin investing for retirement?

1.26 year old unmarried executive with two yrs experience in a job
2.30 year old executive supporting a family of wife, child and mother
3.30 year old executive with his spouse working as well
4.31-year-old unmarried son of a wealthy businessman.

Q.6 How does a financial planner help his client?

1.By picking up cheques and application forms from the client
2.By identifying client needs, recommending the accurate asset allocation and providing him service, that would help investors in making investments
3.By researching and identifying individual stocks or bonds for the client’s portfolio
4.By tracking the economy and government policies.

Q.7 After developing a financial plan for a client, financial planners should:

1.Leave it as it is, as a lot of time has been spent for developing it and executing it
2.Review it periodically – at regular intervals and / or when there is a substantial change in market conditions
3.Review it once in 5 years – there is no point in reviewing it more often since the client should take a long term view
4.None of the above

Q.8 Financial planner’s income should be generally linked to:

1.Performance of the scheme he sells
2.Man-hours spent with the client
3.A fixed annual fee
4.None of the above

Q.9 In developing a fund portfolio for any investor, the subsequent steps are involved The order in which these steps are to be followed is

1.Asset allocation, sector distribution, selection of fund managers and scheme
2.Sector distribution, asset allocation, selection of fund managers and scheme
3.Selection of fund managers/scheme, sector distribution and asset allocation

Earning:   Approval pending.