Association of Mutual Funds in India (AMFI) 2007 AMFI Mutual Fund Basic Module Test - Question Paper
Saturday, 02 February 2013 08:55Web
Page 4 of 4
38. A high portfolio turnover in an equity fund means
a. The fund is very active in market
b. Transaction costs are high
c. The fund may be quite risky
d. All of the above
39. An actively managed equity fund expects to
a. Be able to beat the benchmarks
b. Earn the identical returns as the benchmark
c. Have no benchmarks
d. Under-perform when compared with the benchmark
40. An Investor buys 1 unit of a fund at an NAV of Rs. 20. He receives a dividend of Rs. three when the NAV is Rs. 21. The unit is redeemed at an NAV of Rs. 22. Total Return is
a. 25.71%
b. Rs. 27.51%
c. 21.27%
d. Rs. 21.75%
41. For evaluating sectoral funds, the preferred benchmark would be the
a. BSE Sensex
b. S&P CNX Nifty
c. BSE 200
d. S&P CNX Sectoral Indices
42. The improper benchmark for evaluating a fund’s performance depends on
a. The fund manager
b. The investment objective of the fund
c. SEBI
d. AMFI
43. The Expense Ratio as a measure of a fund’s performance is described as
a. Total expenses and avg. net assets
b. Total expenses and total asset
c. Average expenses and avg. net assets
d. None of the above
44. The most suitable measure of fund performance for all fund kinds is
a. NAV change
b. Total Return
c. Total Return with reinvestment
d. None of the above
45. Financial planners and their clients should focus on
a. Allocating funds to asset classes (e.g. debt, equity etc.)
b. Allocating funds to individuals securities
c. Tracking stocks which they feel have potential
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 recommendation
d. All of the above
47. Which of the subsequent is the 1st step in financial planning
a. Asset Allocation
b. Selection of fund
c. Studying the features of a scheme
d. None of the above
48. Within an asset class, which individual security to invest in should be decided by
a. The financial planner
b. The investor himself
c. A professional fund manager
d. An objective advisor
49. The biggest disadvantage of investment in real estate is
a. Less potential for capital appreciation
b. High purchase price
c. Depreciation in value as time passes
d. Value gets eroded due to inflation
50. The current yield on Indira Vikas Patra works out to
a. 10.5%
b. 11%
c. 10%
d. 9%
51. The maturity period of RBI Relief Bonds is
a. 5 years
b. 6 years
c. 7 years
d. 8 years
52. The most important factor look for when investing in a corporate fixed deposit is the
a. Yield
b. Rate of interest
c. Credit rating of the deposit
d. None of the above
53. The most important cause for an investor to prefer a bank deposit to a mutual fund is
a. The creditworthiness of the bank
b. Because the bank does not invest in securities
c. That the bank offers a guarantee
d. All of the above
54. Annual contribution to Public Provident Fund should be
a. Rs. 10000
b. Between 100 and Rs. 60000
c. Between Rs. 600 and Rs. 1000
d. None of the above
55. Compounding of interest is best discussed by a
a. Balanced fund
b. Growth fund
c. Value fund
d. Income fund
56. Listing of shares at a stock exchange ensures
a. Guaranteed returns
b. Long term capital appreciation
c. Low risk
d. High liquidity
57. The annual yield on RBI Relief Bond is
a. 9.5%
b. 9.5% before tax
c. 8.5% before tax
d. 8.5% after tax
58. Flexible asset allocation means
a. Continuously changing the ratio of different assets in the portfolio
b. Not doing any re-balancing and letting the profits run
c. Active switching
d. None of the above
59. A very high proportion of investment in all kinds of equity funds is advisable for investors
a. In distribution phase
b. In accumulation phase
c. In transition phase
d. Who are wealth preserving affluent individuals
60. For older investors who want to transfer their wealth
a. Financial planning is needed
b. The right investment strategy depends upon who the beneficiaries are
c. The right investment strategy depends upon the state of the stock market
d. All the funds can be invested in aggressive equity funds
61. Of the following, which would be suitable for a retiree with a modest risk appetite
a. Value Fund
b. Diversified Equity Fund
c. Growth Fund
d. Balanced Fund
62. The strategy advisable for an investor to maximize investment return in the long run is
a. Buy and hold on to investments for a long time
b. Liquidate poorly performing investments from time to time
c. Liquidate good performing investments fro time to time
d. Switch from poor performers to good performers
63. The transition phase of an investor’s wealth cycle is when the
a. Financial goals have been already met
b. The investor has retired
c. Financial goals are approaching
d. Investor suddenly gets a windfall
64. Which of the subsequent lets an investor book profits in a rising market and increase holdings in a falling market
a. Fixed Rates of Asset Allocation
b. Flexible Ratio of Asset Allocation
c. Investment without any asset allocation plan
d. Buy and Hold Strategy
65. 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.
66. A wealth preserving affluent investor is likely to invest pre-dominantly in
a. Equity securities
b. Debt funds and fixed income securities
c. Money market
d. Real estate
67. A fund with stable positive earnings
a. Gives higher returns
b. Is less risky
c. Gives lower returns
d. Is more risky
68. Investors should be advised to avoid investing in a debt fund with a
a. Lower rated portfolio and higher expense ratio
b. Higher rated portfolio and lower expense ratio
c. Lower rated portfolio and lower expense ratio
d. None of the above
69. Which of the subsequent funds should a risk-averse investor choose?
a. Gross dividend yield 15% Beta 1.5, Ex-Marks 90
b. Gross dividend yield 10% Beta 1, Ex-Marks 70
c. Gross dividend yield 11% Beta 0.9, Ex-Marks 80
d. Gross dividend yield 12% Beta 1.2, Ex-Marks 80
Earning: Approval pending. |