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

45. Financial planning allows a person
a. To become a billionaire
b. To achieve financial goals through proper management of finances
c. To invest in foreign countries
d. None of the above

46. Financial Planning comprises
a. Defining a client’s profile and goals
b. Recommending improper asset allocation
c. Monitoring financial planning recommendations
d. All of the above

47. Financial planning does not include
a. Enabling investors to describe financial goals
b. Assessing the investors risk and return requirements
c. Recommending an improper asset allocation
d. Selecting securities that will be included in the investor’s portfolio

48. A small investor can build a diversified portfolio by
a. Buying 1 share every of the listed companies
b. Investing in a mutual fund
c. Borrowing enough money to buy shares of well-managed companies
d. None of the above

49. Direct investment in stock market can be a better choice than investing through mutual funds if the investor
a. Wants better returns than those offered by mutual funds
b. Has large capital, knowledge and resource for research
c. Has identified a bullish phase in the stock market
d. Wants to invest for the long term

50. The cause for popularity of Indira Vikas Patra was
a. Rural investors
b. Investors in high tax bracket
c. Urban investors
d. Investors who want to protect their identity

51. Most individuals invest in life Insurance policies for
a. Risk protection
b. Tax benefits
c. Easy liquidity
d. High returns

52. Which of the subsequent about PPF is false?
a. Investments have to be made from taxable income of the relevant year.
b. Investments once made cannot be withdrawn until maturity.
c. Both interest and principal are tax free in the year of withdrawal
d. Investments enjoy tax benefits under part 80c of the IT Act.

53. The difference ranging from debenture and bond is:
a. Bonds are issued by corporations and debentures are issued by PSUs.
b. Bonds are unsecured and debentures are secured.
c. Bonds are backed by loans and debentures are backed by assets
d. None of the above

54. 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 ties 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

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