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

1) A mutual fund is not
a) A company that manages an investment portfolio.
b) A portfolio of stocks, bonds and other securities.
c) A pool of funds used to purchase securities on behalf of investors
d) A collective investment vehicle.

2) Which of the subsequent is true? a few close end funds sell at a discount to their NAV, because
a) Of high expense ratios
b) Investors expect that current NAV cannot be sustained by future potential
c) The repurchase price fixed by the fund is lower than the NAV
d) Of the inherent risk of closed end funds.

3) If the entry load is 2% and the NAV is Rs. 10, then the investor will have to pay for 1000 units
a) Rs. 15000
b) Rs. 8000
c) Rs. 12000
d) Rs. 10200

4) Which of the subsequent Mutual Funds was not set up within the Phase 2:1987-1993?
a) Canbank Mutual Fund
b) Kothari Pioneer Mutual Fund
c) SBI Mutual Fund
d) LIC Mutual Fund

5) Which of the subsequent is not a benefit from a Mutual Fund?
a) Investor has custody of securities where fund invests.
b) Investor is able to diversify risk
c) Investor can save costs
d) Investor can get professional management to manage his money.

6) Which of the subsequent has the least risk?
a) Liquid Fund (MMMF)
b) Gilt Fund
c) Diversified debt fund
d) Diversified equity fund

7) The current Mutual Fund Regulations from SEBI was introduced in
a) 1992
b) 1994
c) 1996
d) 1998

8) The sponsor of a mutual fund may be compared to:
a) A director in a company
b) The chief executive of a company
c) The promoter of a company
d) An equity shareholder of a company

9) Issuing additional fresh units and redeeming the existing units of a mutual fund scheme is the role of:
a) The custodian
b) The transfer agent
c) The trustees
d) The bankers

10) The appointment of AMC for the Mutual Fund can be terminated by
a) Majority of Directors of the Trustee
b) 50% of the Unitholders
c) 45% of the Unitholders
d) 60% of the Unitholders

11) The Asset Management Company shall make investment decisions solely in the interest of
a) The sponsor
b) The Trustee
c) The Unit Holders
d) Its Employees

12) Mutual funds in India are set up as a
a) Company
b) Trust
c) Partnership
d) Association of Person

13) Minimum number of independent directors on the board of asset management company is
a) 50%
b) 25%
c) 75%
d) Two-thirds

14) Under the Indian Trusts Act, the interests of the unit-holders is safeguarded by
a) A board of trustees
b) A trustee company
c) Either
d) Neither

15) The asset management company is appointed by
a) SEBI
b) Unit holders
c) Sponsors
d) Trustee

16) Who needs to sign the trust deed with the trustee?
a) Asset Management Company
b) Sponsor
c) Custodian
d) All of the above

17) Which of the subsequent qualifies as a self-regulatory organization?

Earning:   Approval pending.