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

4.Sector distribution, selection of fund managers, asset allocation and schemes

Q.10 One of the subsequent should not be recommended by a financial planner as a sound investment objective?

1.Saving for the client’s children’s education
2.Doubling the investment in three years
3.Purchase of a new car
4.Purchase of a new home

Q.11 Financial planning for an investor should be re-evaluated when.........

1.Your client has just retired
2.Your client has just been divorced from his spouse at age 40
3.Your client’s mutual funds portfolio indicates substantial appreciation
4.Your client feels he has attained his financial goals

Q.12 Which of the subsequent statements is actual

1.Risk profile of a client remains constant through the life cycle
2.Two investors with the identical risk profile would always have identical portfolios
3.All wealthy investors have exactly the identical risk profile
4.The level of risk tolerance for most of the clients is fixed
5.None of the above statements is actual


Q.13 The power of compounding is best realized by investing in:

1.Income funds with dividend choice
2.Equity funds with growth/reinvestment choice
3.Balanced funds with dividend choice
4.None of the above


Q.14 Value averaging means

1.Keeping the target value of investment constant by investing the amount by which the investment value has gone down.
2.Investing the identical amount of funds regularly
3.Investing in 1 lump sum amount
4.None of these

Q.15 Compounding of interest is best discussed by a

1.Balanced fund
2.Growth fund
3.Value fund
4.Income fund


Q.16 A criticism of rupee-cost averaging is

1.Investment is for the identical amount at regular intervals
2.Over a period of time, the avg. purchase price will work out lower than if 1 tries to guess the market highs and lows
3.It does not tell you when to buy, sell or switch from 1 scheme to a different
4.Rupee cost averaging has no serious shortcomings

Q.17 Which of the subsequent strategies is an example of the combined approach of Rupee Cost and Value Averaging?

1.When the investor sets a target value for his investments in an Equity fund
2.When the investor invests a fixed sum every month in a Liquid Fund
3.When the investor invests regularly in a Liquid Fund
4.When the investor invests regularly in a Liquid Fund , sets a target for an Equity Fund, then invests more in Equity Fund if its value declines and books profits when its value exceeds the target value

Earning:   Approval pending.