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

d. S & P CNX Nifty

50. Financial planning involves the achievement of subsequent objectives:
a. Buying a home
b. Purchase of a new car
c. Planning for retirement
d. All of the above

51. What is Bogle’s suggestion regarding the ‘rule of thumb’ for asset allocation?
a. 50% equity and 50% debt
b. 60% equity and 40% debt
c. An investor’s allocation to debt should be equal to his age.
d. Investor should not do any re-balancing of his/her portfolio.

52. What should be the recommended portfolio for an investor who is risk averse in his transition phase?
a. Higher allocation to equity funds
b. Higher allocation to debt instruments
c. Investments only in equity
d. He should not invest anywhere

53. Which of the subsequent is true?
a. SEBI does not allow the investor to pledge his mutual fund units in favor of a financial institution
b. An investor cannot redeem his mutual fund holding in part.
c. The frequency of investment offered for SIP varies from 1 fund to a different.
d. All of the above

54. What is the proof that the investor has invested in mutual fund units?
a. The investors receive units commensurate with the investment made.
b. Investors get an account statement, showing their holdings and their price.
c. The receipt of money acts as the proof
d. None of the above

55. What is the maximum time provided to the Asset management company to provide their reply after the observations made by SEBI to a new fund scheme filed with it?
a. 2 months
b. 3 months
c. 4 months
d. 6 months

56. How would you convince a first-time investor who is risk-averse to invest in mutual funds in comparison to a bank deposit?
a. Mutual funds is the right option to grow your wealth at a fast pace
b. Mutual fund has the likelihood of giving more growth than the bank deposit as the investment is in a diversified portfolio of securities.
c. Investment in Mutual fund doubles your money in three years.
d. All of the above



57. Bogle’s suggestion for debt is based on:
a. Age
b. Wealth
c. Family size
d. None

58. Govt. securities are valued for computing NAV by:
a. AMFI
b. RBI
c. SEBI
d. MOF

59. Who cannot distribute mutual funds in India?
a. Regional office
b. SEBI
c. Post Office
d. Foreign Bank
e. PSU Bank

60. Who cannot distribute mutual funds in India?
a. Directors of AMC
b. Trustee
c. Employee of AMC
d. Sponsor

61. Who cannot distribute mutual funds in India?
a. RBI
b. PSU Bank
c. Foreign Bank
d. All of the above

62. An important part of transaction cost is:
a. Stamp duty
b. Custodian fee
c. Registrar fee
d. Commission

63. Best choice for power of compounding is:
a. 12% yearly
b. 6% half-yearly
c. 3% quarterly
d. 1% monthly

64. For tax implication computation, a client should
a. Read the OD
b. Consult tax consultant
c. AMC will take care
d. Clarify with IT Dept

65. Who registers the mutual fund with the SEBI?
a. AMC
b. Trustee
c. Sponsor
d. Investment manager



66. A client’s financial plan should not be reviewed when
a. The client has just retired
b. The client has just been divorced at age 40
c. The client feels he has attained his financial goals
d. The client’s mutual fund portfolio indicates appreciation

67. NAV means:
a. (Market Value of Assets – Liabilities) / number of units outstanding
b. (Book Value of Assets – Liabilities) / number of units outstanding
c. Unit capital / number of units outstanding
d. Net assets / initial number of units

68. If an investor needs income, he should choose funds with:
a. Low expense ratio
b. High expense ratio
c. Low current yield
d. High current yield

69. When interest rate rises, bond price
a. Is not affected
b. Fluctuates up or down
c. Also rises
d. Falls

70. The AMFI is governed by:
a. RBI
b. Ministry of Finance
c. A board of directors elected from among members of AMFI
d. SEBI

71. A fund that charges a load is better than a no-load fund
a. True
b. False

72. Documents available to investors for inspection do not include
a. Memorandum and Articles of Association of AMC
b. Consent of auditors and legal advisors
c. Investment management reports
d. Reports based on which true investments are made

73. A passive fund has the subsequent feature
a. A passive fund tracks the index
b. A passive fund matches the performance if the index
c. A passive fund chooses the stocks that are current in the index
d. All of the above

74. Where do Gilt Funds Invest?
a. Shares
b. Debentures
c. Dated Securities
d. None of the above

75. Which of the subsequent Mutual Fund was setup after 1963 but before 1987?
a. SBI Mutual Fund
b. Can Bank Mutual Fund
c. LIC Mutual Fund
d. None of the above

Earning:   Approval pending.