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

c. The investor has identified a bullish phase in the stock market
d. The investor wants to invest for the long term

30. As a financial planner, which of your subsequent clients would you strongly advise to begin investing for retirement?
a. 26 year old unmarried executive with two yrs experience in a job
b. 30 year old executive supporting a family of wife, child and mother
c. 30 year old executive with his spouse working as well
d. 31-year-old unmarried son of a wealthy businessman.

31. How does a financial planner help his client?
a. By picking up cheque and application forms from the client
b. By identifying client needs, recommending the accurate asset allocation and providing him service, that would help investors in making investments
c. By researching and identifying individual stocks or bonds for the client’s portfolio
d. By tracking the economy and government policies.

32. Financial planner’s income should be generally linked to:
a. Performance of the scheme he sells
b. Man-hours spent with the client
c. A fixed annual fee
d. None of the above

33. 1 of the subsequent should not be recommended by a financial planner as a sound investment objective?
a. Saving for the client’s children’s education
b. Doubling the investment in three years
c. Purchase of a new car
d. Purchase of a new home

34. The power of compounding is best realized by investing in:
a. Income funds with dividend choice
b. Equity funds with growth/reinvestment choice
c. Balanced funds with dividend choice
d. None of the above

35. Value averaging means
a. Keeping the target value of investment constant by investing the amount by which the investment value has gone down.
b. Investing the identical amount of funds regularly
c. Investing in 1 lump sum amount
d. None of these

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

37. Which of the subsequent strategies is an example of the combined approach of Rupee Cost and Value Averaging?
a. When the investor sets a target value for his investments in an Equity fund
b. When the investor invests a fixed sum every month in a Liquid Fund

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