NISM VA MCQs from Book’s Exercise 0% NISM Series V-A Mutual Fund Distributors Questions from Book 1 / 50 1. Unsystematic risk can be reduced through diversification. State whether True or False True False 2 / 50 2. What is the real rate of return? Return that the investor gets after payment of all expenses Return that the investor gets after taxes Return that the investor gets after adjusting the risks Return that the investor gets after adjusting inflation 3 / 50 3. In the non-equity-oriented funds, the rate of long-term capital gains tax is . 10 percent with indexation 10 percent without indexation 20 percent with indexation 20 percent without indexation 4 / 50 4. At what price are the bonus units issued to the unitholder? The price is decided by the AMC in consultation with the trustees The bonus units are allotted free of cost At the prevailing NAV At the prevailing NAV divided by the bonus ratio 5 / 50 5. ___________ takes into account all dividends generated from the basket of constituents that make up the index in addition to the capital gains. Total return index Price return index Dividend return index 6 / 50 6. Registrar and Transfer Agency function must be independent of the Asset Management Company, and it cannot be retained in-house. State whether this statement is True or False. True False 7 / 50 7. Which amongst the following asset categories can also be purchased for consumption purposes apart from an investment? Real Estate Stocks Bonds Debentures 8 / 50 8. Whose KYC needs to be completed in case of an application by a minor? The minor The guardian Any family member of the minor 9 / 50 9. The purchasing power of currency changes on account of which of the following? Asset allocation Compound interest Inflation Diversification 10 / 50 10. How often should the Key Information Memorandum (KIM) be updated? At least once a month At least once every six months At least once a year It need not be updated after it is issued once 11 / 50 11. Which of the following is an advantage of mutual funds? Customised portfolio Convenience to buy stocks and bonds directly from the mutual fund Economies of scale 12 / 50 12. The transparency levels in mutual funds are very low. State whether True or False. True False 13 / 50 13. As per the SEBI guidelines, how often should the mutual fund scheme’s portfolio be published? Monthly Half-yearly Annually Never 14 / 50 14. Whose job is it to track the various corporate actions like a bonus, dividend, or rights issues in companies where the mutual fund scheme has invested? Registrar and Transfer Agency Custodian Auditors of the Asset Management Company Unitholders 15 / 50 15. When the interest rate in the economy increases, the price of existing bonds. Increases Fluctuate Decreases 16 / 50 16. Mutual funds are constituted as ‘Trusts’ in India. Who are the beneficiaries of the trust? The employees of the Asset Management Company The mutual fund distributors Unitholders Trustees of the mutual fund 17 / 50 17. Which amongst the following categories of mutual funds have a fixed maturity date? Open-ended funds Exchange Traded Funds Close-ended funds Interval funds 18 / 50 18. For an investor to get a quick sense of the level of risk involved in a mutual fund scheme, SEBI suggested a simplified framework known as . Risk-o-meter Risk factors Fact sheet Investor’s risk profile 19 / 50 19. Only individuals are allowed to distribute mutual funds in India. State whether True or False. True False 20 / 50 20. Which among the following investment avenues does not offer income on a regular basis? Real estate Debentures Stocks Physical Gold 21 / 50 21. What term is used to describe the Net Asset Value (NAV) of the scheme after the dividend is paid out (Remember the NAV would have dropped to the extent of the dividend paid)? Ex-Dividend NAV Cum-Dividend NAV Lower NAV Dividend NAV 22 / 50 22. Mutual Fund Distributors Certification Examination offered by is required for becoming a mutual fund distributor. Securities and Exchange Board of India National Institute of Securities Markets Association of Mutual Funds in India National Skills Development Corporation 23 / 50 23. Which amongst the following is a measure of risk-adjusted returns of mutual fund scheme? Standard deviation Beta Variance Sharpe ratio 24 / 50 24. Which of the following type of analysis tracks the price and volume data related to trading in the security? Quantitative analysis Fundamental analysis Technical analysis Situation analysis 25 / 50 25. Mutual funds are allowed to charge differential exit loads based on the amount of investment. True False 26 / 50 26. Mutual fund distributors can only earn upfront commission from the mutual funds. State whether True or False. True False 27 / 50 27. In case of mutual fund schemes, dividends can be paid only out of. Premium reserve account Unit capital Distributable surplus generated by the scheme Mark-to-market profits 28 / 50 28. Each mutual fund scheme must have a stated investment objective. State whether True or False. True False 29 / 50 29. With which agency are the mutual fund distributors registered? Securities and Exchange Board of India Fund Accounting Team Depositories Association of Mutual Funds in India 30 / 50 30. Mutual fund distributors earn no commission when the investor chooses to invest in “direct” plans. State whether True or False. True False 31 / 50 31. In what form do mutual fund distributors earn revenue? Commission from mutual funds for the distribution of the schemes Fees collected from the investors Commission received from Association of Mutual Funds in India Investment advisory fee from mutual funds 32 / 50 32. What minimum percentage of the mutual fund scheme corpus must be invested in equity and related instruments in the case of Equity Linked Savings Schemes (ELSS)? 65 percent 70 percent 80 percent 100 percent 33 / 50 33. What is the maximum Total Expense Ratio chargeable in case of index funds? 1 percent of the daily net assets 1.5 percent of the daily net assets It depends as the TER changes in line with the size of the scheme Any amount that the AMC may deem appropriate 34 / 50 34. Mutual funds can buy and sell securities only on delivery basis. State whether this statement is True or False. True False 35 / 50 35. The Income Tax Act allows setting-off of the short-term capital loss against long term capital gains. State whether True or False. True False 36 / 50 36. As per the fair valuation principles laid out by SEBI, it is mandatory to disclose the valuation policy in. Statement of Additional Information Statement of Accounts sent to investors periodically Fund fact sheet The fair valuation principles are not to be put in public 37 / 50 37. Please read the scheme related documents carefully” – which documents does this line refer to? Scheme Information Document and audited balance sheet of the Asset Management Company Trust deed and Key Information Memorandum Statement of Additional Information and fund fact sheet Scheme Information Document and Statement of Additional Information 38 / 50 38. Which of the following is a measure of fluctuation in periodic returns in an equity mutual fund scheme? Variance Sharpe ratio Modified duration Jensen’s Alpha 39 / 50 39. Which of the following regulates mutual funds in India? Securities and Exchange Board of India Association of Mutual Funds in India Asset Management Companies Board of Trustees of mutual funds 40 / 50 40. Which among the following is not a statutory document? Fund factsheet Statement of Additional Information Scheme Information Document Key Information Memorandum 41 / 50 41. Mutual funds are constituted as ‘Trusts’ in India. Who are the beneficiaries of the trust? The employees of the Asset Management Company The mutual fund distributors Unitholders Trustees of the mutual fund 42 / 50 42. Which amongst the following categories of mutual funds have a fixed maturity date? Open-ended funds Exchange Traded Funds Close-ended funds Interval funds 43 / 50 43. Redemption from which of the following mutual fund schemes would attract Securities Transaction Tax (STT) for an investor? Multi-cap mutual fund Government Securities Fund Liquid Fund Overnight Fund 44 / 50 44. Investors have the right to specify up to nominees for their mutual fund investment folios. Zero One Two Three 45 / 50 45. In case of capital gains from mutual fund investments, Tax Deduction at Source (TDS) is applicable for: Minor through guardian Non-Resident Indians (NRIs) All investors, who have invested more than Rs. 5 lacs TDS is not applicable in case of mutual funds 46 / 50 46. How many (maximum) bank accounts can a resident individual investor register with a mutual fund folio? 1 2 3 5 47 / 50 47. Who handles the day-to-day management of the mutual fund? Asset Management Company Registrar and Transfer Agency Mutual Fund Trustees Unitholders 48 / 50 48. Which of the following statements is True? Hindu Undivided Families (HUFs) are not allowed to invest in mutual fund schemes Minors cannot invest in mutual fund schemes Foreign investors can invest in Indian mutual fund schemes, provided they have completed the Know-Your-Client (KYC) formalities 49 / 50 49. _________ indicates how much money can be generated per unit of mutual fund in case the scheme is liquidated. Asset Under Management Net Asset Value Market price Exit load 50 / 50 50. Government securities can be considered to be completely risk-free. State whether True or False. True False Your score is The average score is 70% 0% Restart quiz