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

Q.29 RBI relief bonds are an attractive investment choice for:

1.High net worth individual investors
2.Small investors
3.Governments
4.Mutual funds


Q.30 The biggest disadvantage of investment in real estate is

1.Less potential for capital appreciation
2.High purchase price
3.Depreciation in value as time passes
4.Value gets eroded due to inflation


Q.31 A small investor can build a diversified portfolio by

1.Buying 1 share every of all listed companies
2.Investing in a mutual fund
3.Borrowing enough money to buy shares of well-managed companies
4.None of the above

Q.32 Most individuals invest in life insurance policies for

1.Risk protection
2.Tax benefits
3.Easy liquidity
4.High returns

Q.33 The difference ranging from debenture and bond is:

1.Bonds are issued by corporations and debentures are issued by PSUs
2.Bonds are unsecured and debentures are secured.
3.Bonds are backed by loans and debentures are backed by assets
4.None of the above.

Q.34 An income fund scheme invests in debenture of a companyWhat is the relationship of MF investor with that company.

1.Debenture holder
2.Shareholder
3.Creditor
4.No relationship

Q.35 Investor of bank deposit is called

1.Creditor
2.Unit holder
3.Shareholder
4.Lender


Q.36 If beta is higher than 1, the fund is:

1.Less volatile than market
2.More volatile than market
3.Equally volatile than market
4.No relation


Q.37 Volatility in a mutual fund portfolio is caused by ………

1.Investment in blue chip stocks
2.Idle cash lying with the fund
3.Investment in high rated bonds
4.None of these


Q.38 Sharpe and Treynor Ratios are measures of :

1.Average return
2.Risk
3.Risk adjusted return
4.Beta of the portfolio


Q.39 Which is a better investment choice while selecting an equity fund?

1.Ex Marks -75%, Beta – 0.9, Gross Dividend Yield 8%
2.Either one or 3
3.Ex Marks – 80%, Beta- 0.9, Gross Dividend Yield – 8%
4.Ex Marks – 90%, Beta- 0.8, Gross Dividend Yield – 9%


Q.40 Ex Marks or ( a R Squared Factor) of a fund measures

1.How much of a fund’s NAV movement is due to the market index movement
2.How a fund’s NAV movement relates to the market index movement
3.How much of a fluctuation has occurred in a fund’s NAV over a historical period.
4.How many marks a Credit rating Agency accords to a fund.

Q.41 An investor asks you in what order he should list the subsequent schemes, going from the scheme with the lowest risk to the 1 with the highest risk – 1Balanced Fund, 2A Stock Index Fund, 3A Liquid Fund, 4A IT Sector Fund.

1.1,2,3,4
2.1,3,4,2
3.3,1,2,4
4.2,3,1,4


Q.42 As per Jacob’s recommendation low risk fund portfolio is likely to have.

1.50% invested in Government Securities Funds and 50% invested in Money Market funds
2.An equal split ranging from Government Securities Funds, Growth Funds and Index Funds
3.Equal investments in Aggressive Growth Funds, Value Funds, Sector Funds and Debt Fund
4.A mix of Balanced and Growth

Q.43 For which of the subsequent would you consider “ avg. maturity” as an important factor in selecting the right 1 for the investor ?

1.A debt fund
2.A balanced fund
3.A money market or liquid fund
4.Both a and b above


Q.44 A very high proportion of investment in all kinds of equity funds is advisable for investors

1.In distribution phase
2.In accumulation phase
3.In transition phase
4.Who are wealth preserving affluent individuals

Q.45 For older investors who want to transfer their wealth

1.No financial planning is needed
2.The right investment strategy depends upon who the beneficiaries are
3.The right investment strategy depends upon the state of the stock market
4.All the funds can be invested in aggressive equity funds

Q.46 Which of the subsequent is recommended by Jacob for a Low Risk portfolio ?

1.50 % Growth and Income fund + 50% Money Market fund
2.50% Growth funds + 50% index fund
3.50% Government Securities fund + 50% Money Market fund
4.50% Sector Funds + 50 % Money Market fund


Q.47 Code of ethics should be followed by distributors as:

1.It is needed by AMFI
2.It is needed by AMC
3.Business increases
4.All of the above


Q.48 What is insider trading?

1.Buying and selling securities ahead of doing the identical transaction for the fund.
2.Buying and selling securities on the basis of privileged info available to the fund by persons who are insiders to the company.
3.Both of the above
4.None of the above


Q.49 Mutual funds in India are needed by SEBI to :

1.prohibits their employees from personal trading in secondary markets.
2.allows all employees to trade freely in secondary markets without restrictions.
3.to establish a code of conduct and allow employees to do personal trading that conforms to SEBI guidelines.
4.allows employees to carry on personal trading as long as they abide by SEBI regulations.


Q.50 The detailed version of SEBI circular regarding code of conduct for distributors provided by AMFI is known as:

1.Ethics code
2.AGNI
3.Front running
4.None of the Above


Q.51 The regulation of Personal trading is applicable to :

1. Key Personnel of the AMC
2. The directors of the trustee company
3. Sponsor of the fund
4. Only a and b

Earning:   Approval pending.