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

1. Insider trading means:
a. Personal trading transactions done by anyone associated with a Mutual Fund
b. Personal transaction done by anyone with knowledge of the fund decision in the security
c. Personal trading transaction without prior approval of the AMC
d. Personal trading transaction done by an insider of an AMC/Fund

2. Fund merger involving two or more schemes of various AMCs requires consent of unit holders with X% voting rights. X is:
a. 50
b. 100
c. 51
d. 75

3. What makes mutual fund the single most important financial instrument as a financial planner?
a. Mutual Funds help in portfolio diversification and risk reduction
b. Mutual Funds help in doubling investment
c. Both the above
d. None of the above

4. Select which of the subsequent is an example of unethical behaviour?
a. Fund distributor buying shares that he knows are part of the fund portfolio recommended to investors
b. Fund employee buying shares that he knows the fund has decided to buy
c. Fund trustee owning a share portfolio of his own
d. Fund manager buying shares in his own name

5. A mutual fund launches a new scheme. 10 crore units are issued. An entry load of 2.25% of the face value during the New Fund Offer period is mentioned in the Offer Document. problem expenses are eight cr. How much of this would be borne by the scheme?
a. 6 cr
b. 3.75 cr
c. 2.25 cr
d. 8 cr

6. Which of the subsequent is true?
a. KIM is abridged offer document
b. OD is abridged shareholder agreement
c. KIM is abridged Investment Management Agreement
d. OD is abridged KIM

7. A young couple has two incomes and two children. Jacob’s recommendation to them would be:
a. 100% equity funds
b. 10% money market, 50-60% aggressive equity and 30-40% conservative bond funds
c. 25% debt 75% equity growth funds
d. 80% debt and 20% equity funds






8. Role of the custodian is:
a. Managing the fund’s distribution channel
b. Making investments on behalf of the Fund Managers
c. Handling payment of investments with bankers
d. Safe keeping of securities or participating in the clearing system on behalf of the mutual fund

9. A person enters a fund at NAV of 22. 18 months later the NAV is 24. The annualized percent change in NAV is:
a. 9%
b. 5.56%
c. 9.09%
d. 6.06%

10. During the reaping phase the investor looks to:
a. Building wealth
b. Cashing out
c. Transferring wealth
d. All of the above

11. In the offer document “unit & offer” defines the nature and significant attributes of the units under offer. Which of the subsequent is not covered under this:
a. Minimum amount to be raised
b. Period under which refund should be carried out
c. Circumstances under which refund may take place
d. Maximum target amount to be raised

12. A mutual fund is:
a. A partnership

Earning:   Approval pending.