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

b) Over a period of time, avg. per share price will be more than guessing the 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
60) If you maintain a flexible ratio of asset allocation, would you
a) Rebalance the Debt/Equity allocation periodically?
b) Rebalance the Debt/Equity allocation very frequently?
c) Generally avoid portfolio rebalancing?
d) Keep fixed percentages of equity and debt investments at all times?
61) SIP is best example of
a) Rupee Cost Averaging
b) Value Averaging
c) Buy & Hold
d) None of the above
62) Direct investment in stock markets can be better choice over investing through mutual funds if:
a) The investor wants better returns than those offered by mutual funds
b) The investor has large capital, knowledge and resources for research
c) The investor has identified a bullish phase in the stock market
d) The investor wants to invest for the long run
63) An investor in need of regular income should not select:
a) A bank deposit
b) A debt fund
c) An equity growth fund
d) PPF
64) Which of the subsequent has the highest level of liquidity?
a) Equity
b) PPF
c) Company fixed deposits
d) Mutual Funds
65) Which of the subsequent should not be viewed primarily as an investment option?
a) Mutual Funds
b) Equity shares
c) Life Insurance
d) None of the above
66) An investor asks you in what order he should list the subsequent schemes, going from the scheme with the lowest risk to the 1 with the 1 with the highest risk — 1. A Balanced Fund, 2. A Stock Index Fund, 3. A Liquid (Money Market) Fund and 4. A Pharmaceuticals Sector Fund.
a) 1, 2, 3, 4
b) 1, 3, 4, 2
c) 3, 1, 2, 4
d) 2, 3, 1, four
67) Ex-Marks (or R-Squared factors) of a fund measures
a) How much of a fund’s NAV movement is due to the market index movement
b) How a fund’s NAV movement relates to the market index movement
c) How much of a fluctuation has occurred in a fund’s NAV over a historical period
d) How many marks a Credit rating Agency accords to a fund
68) Which is better investment choice whilst selecting an equity fund?
a) Ex Marks – 75%, Beta – 0.9, Gross Dividend Yield – 8%
b) Either a or c
c) Ex Marks – 80%, Beta – 0.9, Gross Dividend Yield – 8%
d) Ex Marks – 90%, Beta – 0.8, Gross Dividend Yield – 9%
69) What kind of portfolio asset mix would recommend to your 55 year old client who plans to retire at age 58? select a portfolio that is the nearest match to the investor’s needs.
a) 40% in Equity Schemes and 60% in Balanced Funds.
b) 40% in Equity Schemes and 60% in Debt Funds
c) 20% in Equity Schemes, 20% in Liquid Funds and 60% in Debt Funds
d) 100% in Monthly Income Statements
70) For which of the subsequent funds would you consider “average maturity” as an important factor in selecting the right 1 for the investor?
a) A Debt Fund
b) A Balanced Fund
c) A Money Market or Liquid Fund
d) Both ‘a’ and ‘b’ above
71) Which of the subsequent Portfolios would you recommend to a recently retired Couple?
a) 35% in Conservative Equity Funds, 25% in moderately aggressive equity, 40% in money market funds.
b) 30% in short term municipal funds, 35% long term municipal funds, 25% moderately aggressive equity, 10% in emerging growth equity
c) 50% in aggressive equity fund, 25% in high Yield bond funds and growth and income funds, 25% in conservative money market funds
d) Either two or 3
72) AMFI Code of Conduct for Intermediaries
a) prohibits mutual fund distributors from accepting commissions from an investor who renew his investment in a scheme
b) Prohibits them from rebating the commission back to such investors
c) Encourages them to refrain from rebating the commissions to such investors, but does not prohibit
d) Prohibits them from rebating the commissions back to all investors
73) Mutual funds in India are needed by SEBI to
a) Prohibit their employees from personal trading in secondary markets
b) Allow all employees to trade freely in secondary markets without restrictions
c) To establish a code of conduct and allow employees to do personal trading that conforms to SEBI guidelines
d) Allow employees to carry on personal trading as long as they abide by SEBI guidelines

74) A Charitable Trust wanted to invest in Mutual Funds. What would you do?
a) Accept the application form with cheque
b) Refuse to accept the application
c) Refer to the offer document of the scheme to confirm that a charitable trust is allowed to invest
d) Accept the application form, without the cheque, and forward it for financial acceptance by the fund/ AMC

75) Contingent Deferred Sales Charge (CDSC)
a) Is higher for investors who stay invested in the schemes longer
b) Is lower for investors who stay invested in the scheme longer
c) Is the identical for all investors irrespective of how long they stay invested
d) Is not allowed to be charged to mutual fund investors in India

Earning:   Approval pending.