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

a.The financial workings of a company
b.The stock price movements of a company
c.Both of the above
d.None of the above

39 . Financial planning is
a.Investing funds to receive the highest rate of return possible.
b. Resorting to tax planning to keep taxes as low as possible.
c.Planning for retirement with the maximum income possible.
d.Process of solving the financial issues and reaching financial goals.*

40 . An investor in need of the regular income should not choose
a.A bank deposit
b. A debt fund
c.An equity growth fund*
d.PPF

41 . What kind of the portfolio asset mix would you recommend to your 55 year old client who plans to retire at the age of 58? select a portfolio that is the nearest match to the investor’s needs
a.40% in the equity scheme 60% in balanced fund
b. 40% Equity – 60% Debt
c.20% Equity – 20% liquid –60% debt.*
d.100% Monthly income schemes.

42 . Illiquid securities in a portfolio
a.Cannot be transferred across schemes
b. Cannot be more than 15% of net assets
c.Cannot be more than 20% of net assets
d.A and B are true*

43 . A fund manager who believes in the growth philosophy looks for companies with
a.Above avg. earnings growth
b.Large equity base
c.Likely to go for public problem
d.All of the above

44 . India’s Central Bank is called
a.Central Bank of India
b. Bank of India
c.Indian Bank
d.Reserve Bank of India*

45 . A mutual fund cannot invest more than ____ % of its net assets in un-rated debt of 1 issuer. Total investments in un-rated debt cannot exceed _____ % of net assets
a.10; 20
b. 15; 25
c.10; 25*
d.15; 20

46 . Financial planning is
a.Investing funds to achieve a highest possible rate of return
b. Resorting to tax planning to keep taxes as low as possible
c.Planning for retirement with maximum income possible
d.Process of solving financial issues and reaching financial goals*

47 . Mutual funds can lend funds in the form of
a.Loans
b.Promissory notes
c.Securities
d.None of the above

48 . Which of the subsequent has the least risk?
a.Liquid Fund (MMMF)*
b. Gilt funds
c.Diversified Debt fund.
d.Diversified Equity fund

49 . Mutual funds in India are set up as a
a.Company
b. Trust*
c.Partnership
d.Association of persons

50 . Whose consent is needed to approve a change in the fundamental attributes of a close end scheme?
a.50% of the unitholders
b. 50% of the trustees
c.75% of the unit holders*
d.None of the above

51 . The abridged offer document contains the address of the subsequent
a.The trustees of the mutual fund
b.The directors of the AMC
c.The Registrars and Transfer agents.
d.A & B

52 . Which of the subsequent sales practices is prescribed by regulation?
a.AMFI code of ethics
b.SEBI advertising code
c.AMFI’s code for agents
d.None of the above

53 . A closed-end equity fund has avg. weekly net assets of Rs. 200 crores. As per SEBI’s regulations, the AMC can charge the fund with investment and advisory fees upto.
a.Rs.2.25 crores*
b. Rs.2 crores
c.Rs.2.5 crores
d.Rs. three crores

54 . The strategy advisable for an investor to maximize investment return in the long run is
a.Buy and hold on to investments for a long time
b. Liquidate poorly performing investments from time to time
c.Liquidate good performing investments from time to time.
d.Switch from poor performers to good performers.*

55 . Unit holders’ right to info does not include
a.Obtaining from the trustees any info having an adverse effect on their investments.
b.Inspecting major documents of a fund.
c.Receiving of a copy of the annual financial documents of that fund
d.Approving the investment decision of the fund.

56 . A value manager does not look for
a.Stocks that are currently undervalued in the market
b.Stocks whose worth will be recognized by the market in the long term
c.High current yield
d.Long term capital appreciation

57 . For evaluation of the traded securities, which of the subsequent is not true?
a.The security is valued at the last quoted price
b.The security is valued on the basis of the earnings capitalization
c.Marking to market is applied
d.If the security has not been traded on the evaluation date, the trading price on any previous date may be used, given that date is not more than 30 days prior to the valuation d

58 . The most suitable measure of a fund’s performance for all fund kinds is
a.NAV change
b. Total returns
c.Total return with reinvestment*
d.NONE

Earning:   Approval pending.