AMFI Test Kotak

8/7/2019 AMFI Test Kotak

http://slidepdf.com/reader/full/amfi-test-kotak 1/39

1.The NAV of a fund has increased from Rs.24 to 26 in 16 months. What is theannualized return

Marks : 1

10%

Insufficient information

8.33%

6.25%

2.

An investment has doubled in 6 years The annualized compounded return is Marks : 1

16.67%

12.25%

100%


3.A moderate risk investor who has been advised 35% equity allocation would be bestadvised to invest in Marks : 1

Value fund

Diversified equity fund

Sector fund

Aggressive growth fund

4.

Rajesh is a 25 yr old person who is unmarried and working in a Software firm andwants to invest. What allocation would you recommend to him

Marks : 1

50% in equities and balance in debt/money market

80% in debt and 20% in money market

90% in money market and 10% in equity



100% in equities

5.A stock with a high PE is likely to be a part of Marks : 1

Growth stocks portfolio

Value portfolio

Sectoral fund portfolio

Small cap portfolio

6.

Which of these cannot be prevented by unitholders even if 75% of unitholders arebehind it

Marks : 1

Change the AMC

Prevent the takeover of the funds AMC by another sponsor

Prevent the merger of two schemes

Selling off a scheme of one fund to another fund

7.

Which of the following is correct about disclosure of illiquid securities Marks : 1

If the fund proposes to invest more than 25% of net assets in associate companies- itshould disclose in offer document

If the fund proposes to invest more than 10% of net assets in illiquid securities- itshould disclose the impact on redemption / liquidity in offer document

If the fund proposes to invest in illiquid securities it should disclose in the offer document

If the fund proposes to invest more than 20% of net assets in illiquid securities- itshould disclose the possible impact on NAV in offer document

8.

The duration of a bond is 4 years. If the annual yield changes from .4% to .8% withoutany change in the benchmark yield the impact on bond will be Marks : 1



-1.60%

1.60%

No impact

9.

The brokerage paid to investors is Marks : 1

Regulated by SEBI

Decided by AMFI

Decided by individual AMCs

10.

Which of the following is correct about appointing agents Marks : 1

They have to be graduates

They have to cleared by SEBI

They have to be AMFI certified

Their appointment is in line with individual AMCs policies [Caution: both c and d couldbe correct]

11.

A stock exchange is involved in the supervision of Marks : 1

All mutual fund schemes

Only open end schemes

Only closed end schemes

Only the closed end scheme which are listed in the particular stock exchange

12.Investors can demand a minimum assured returns Marks : 1



If other schemes of the same fund are doing very well

If other schemes of other funds are doing very well

If there was an assurance on the returns in the offer document

If the scheme has delivered very high returns in the past

13.

Which of the following is true as per SEBI rules? Marks : 1

One fund manager can manage only one fund

One fund manager cannot run both equity and debt fund

The name of the fund manager of each scheme has to be given in the offer documentof the scheme

Each fund has to be run by a team of fund managers

14.

An analysis of operations and financials of the company is called Marks : 1

Technical analysis

Fundamental analysis

Chartist approach

15. Which is the best among the following Marks : 1

Returns 10% Rating BB Load ..05%

Returns 9% Rating A Load .04%

Returns 8% Rating AA Load ..04%

Returns 10% Rating AAA Load ..05%



16.

Which of the following does not form part of a direct marketing strategy? Marks : 1

Newspaper advertisements

Distribution of pamphlets

Using distribution company of sponsors

17.

In the event that an assured return fund does not meet its obligation a unitholder cansue

Marks : 1

The AMC

The sponsors

The person named as guarantor in the offer document

The trustees

18.

Which of the following is not the object of AMFI? Marks : 1

To promote interest of mutual funds

To create ethical practices amongst mutual funds

To regulate norms governing mutual funds

To increase awareness of mutual fund

19.

Which of the following is not a criteria for a sponsor : Marks : 1

Networth to be more than capital investment

Sponsor should contribute 40% of net assets

Sponsor should ensure that 20% of funds assets to be invested in sponsors company



20.

In case of corporate deposits the most important thing an investor must look for is : Marks : 1

Yield

Rate of return

Credit rating of the company and deposit

Profitability of the company

21. Which of the following can an existing mf investor sue? Marks : 1

The AMC

Directors of the AMC

The mutual fund/ trust

The trustees

22.

Which of the following is not a specialty fund? Marks : 1

Test fund

Balanced fund

Pharma fund

23.

In India a mutual fund is constituted as Marks : 1

Trust

Investment company

Company

None of the above

24.

An investment shall be regarded as non-performing if it has provided no returnsthrough dividend/interest for more than

Marks : 1



3 months

6 months

12 months

36 months

25.

If a security is thinly traded it implies that the security has not traded on any stockexchange for the last __ days

Marks : 1

40

15

30

60

26.

Diversified debt funds are most affected by Marks : 1

Reinvestment risk

Liquidity risk

Interest rate risk

Default risk

27.

For a merger of two AMCs to go through which of the following is not required? Marks : 1

Approval by SEBI

Approval by trustees

Approval by company law board



28.

What is the maximum initial issue expenses that can be charged by the AMC? Marks : 1

7%

6%

5%

8%

29.

Safekeeping of physical securities is the role of Marks : 1

The custodian

The transfer agent

Trustee

Sponsor

30.

Which of the following is untrue of the automatic reinvestment plan? Marks : 1

The plan allows for automatic reinvestment of all income and capital gains

Automatic reinvestment allows for the accumulation of additional units of the fund

The benefit of automatic reinvestment is often lost- if reinvestment is subject to heavyload

The major benefit of automatic reinvestment is the compounding of returns

31.

SEBI regulations for mutual funds came into force in Marks : 1

1993

1987

1996



1998

32.Which class of investors is not allowed to invest in Indian mutual funds? Marks : 1

FII

NRI

Indian resident

Foreign national

33.

Value of stocks refers to Marks : 1

Shares of companies whose earnings are correlated with the state of the economy

Shares of companies whose earnings are expected to increase at normal levels

Shares of companies trading in precious commodities

Shares of companies in nature industries expected to yield low growth earnings

34.

Investors can address their complaint to the following except to Marks : 1

Consumer court

SEBI

AMFI

Sponsor

35.

Commissions payable by a fund to its agents depends Marks : 1

Regulated by SEBI



Regulated by AMFI

Regulated by AMC

upon the funds discretion

36.

Which of the following statements is false: Marks : 1

Gilt funds have the least credit risk among various types of funds

Gilt funds NAV will not fluctuate irrespective of interest rate movements

Gilt funds would not face the risk of default unless the government defaults on itspayments

Gilt funds are ideal for investors who look for highest safety of principal amount

37.

Value investment means Marks : 1

Investing based on attractiveness of sector

Investing based on p/e of company as compared to an industry

Investing with the intention of unlocking an intrinsic value

Investing in companies that have good dividend yield

38.

An investor purchased an open-end fund when its NAV was Rs.20. 16 months later

its NAV stood at Rs.22. What was the annualized returns?{Formula for percentageNAV change: [{{absolute change in NAV/NAV at the beginning}/monthscovered}*12}]*100

Marks : 1

8%

7%

7.50%

8.50%



39.

A unit of an open-end fund was purchased when its NAV was Rs.25. At year-end itsNAV was Rs.27. In the interim period the fund made a distribution of Rs.5 per unitwhen its NAV was 26. What was the simple total return of the fund?

Marks : 1

27%

28%

27.50%

28.50%

40.

Mutual fund can borrow Marks : 1

In order to meet redemption units/dividends or interest payouts

For a maximum duration of 6 months

Upto a maximum of 20% of the net assets

All of the above

41. A security is considered to be untraded if Marks : 1

It is not traded for 30 days




42.A prospective investor to seek legal recourse can sue Marks : 1

AMC

Sponsors

Trustees

None of the above



43.

An investment of Rs.100 000 on January 1 2006 is redeemed to August 1 or any other tax benefit?

Marks : 1

10000

0

Marginal rate

15000

44.

Which of these securities will you not find in a Liquid Fund Marks : 2

Call money

Certificated of deposits

3 year government securities

Commercial paper

45.

Mutual funds in India started with the launch of schemes by Marks : 3

SBI

UTI

RBI

Canbank

46.

Closed end funds sell at discount to their NAV because Marks : 3

Repurchase price fixed by the fund is lower than the NAV

Investors expect that current NAV cannot be sustained by future potential

Closed end funds have a higher expense ratio



Interest risks of closed end funds

47.Which of the following services is not permitted by mutual funds Marks : 3

Cheque writing

Nomination

Loan against units

Transfer of units

48.

Which of the following is not false of a fund sponsor Marks : 3

He cannot invest in the scheme

He can invest in the scheme

The scheme should invest in the sponsors companies

Custodial and registrar agreement

49.

Which of the following cannot market mutual fund schemes Marks : 2

NBFC

Banks

Distribution companies

Agents

None of the above

50.

Which is not true about an SRO Marks : 1



Works as a decentralizing organization

Reports to an apex regulatory body

Passes its own laws

51.

An investor invests Rs 300 today. After 7 yrs the value becomes Rs. 600. What is hisannualized compounded rate of return

Marks : 1

9

11

10.41

52.

A mutual fund has an NAV of Rs. 12. What is the maximum price of repurchase. Marks : 1

12

11.5

12.84

53.

AMC should have a net worth of not less than Marks : 2

10 crores

10 crores at all times

5 crores at all times

54.

Sale and repurchase of units is the job of the Marks : 2

custodian

registrar and transfer agents



agents

brokers

55.

Which of the following would be termed as direct marketing measures? Marks : 2

selling units through well established distribution channels

selling through agents

sending staff to corporate houses for marketing

none of the above

56.

If an NRI investor wanted the facility of investment with repatriation benefits whatkind of an account would you advise him to open:

Marks : 2

NRO

NRNR

NRE

None of the above

57.

An investor approaches you to build his portfolio. What is the sequence of the stepsthat you'll take?

Marks : 2

selection of sector- selection of fund manager and schemes- classification of assets

selection of fund manager and schemes- selection of sector- classification of assets

classification of assets- selection of sector- selection of fund manager and schemes

selection of sector- classification of assets- selection of fund manager and schemes

58.

Non traded securities are to be excluded while calculating the NAV. True or false? Marks : 3



True

False

59.

Which of the following is untrue of systematic investment plan? Marks : 2

It allows investor to invest a fixed amount on a monthly basis

It allows investor to change the amount

It inculcates a discipline of regular investment in the investor

It facilitates rupee cost averaging

60.

Offer document as per trust deed is issued by: Marks : 2

AMC

Sponsors

AMC in the name of the trustees

Trustees

61. Which of the following funds would not be very volatile? Marks : 1

A fund with investments across only two sectors

A fund with investments in high quality assets

A fund with investments in a handful of stocks

A small cap fund

62.

The maximum limit of inter-scheme investments by a fund is: Marks : 1

5% of the NAV of the transferring scheme

15% of the NAV of the receiving scheme



5% of the NAV of all schemes of the fund


63.

The performance of which of the following is not comparable? Marks : 1

Two debt funds

Two diversified equity funds

A liquid fund and a MMMF

An it fund and a diversified equity fund

64.

A scheme has realised gains of Rs 5 crore unrealised losses of Rs 1 crore unrealisedgains of Rs 2 crore and excess of income over expenses of Rs 3 crore. What wouldbe the distributable surplus?

Marks : 1

Rs 5 crore

Rs 7 crore

Rs 9 crore

Rs 10 crore

65.

Abridged offer document distributed with application is called Marks : 1

prospectus

statement in lieu of prospectus

key information memorandum

scheme features document

66.

The difference between repurchase and sale price of the unit should not exceed Marks : 1



7%

5%

6%

2%

67.

What is the rate of tax on long term capital gains in case of mf units? Marks : 1

20% after indexation

10% without indexation

either of a or b

higher of a or b

68.

The following characteristic is not present in an open end fund Marks : 1

facility to buy or sell back units to the fund

a fixed unit corpus for the life of the scheme

regular declaration of NAV

regular disclosure of portfolio

69.

The following is not a characteristic of a closed end fund. Marks : 1

it has fixed corpus

it has a fixed duration

it declares NAV and portfolio regularly

its units can be purchased or resold on any working day





payments

gilt funds are ideal for investors who look for highest safety of principal amount

74.

Index Funds aim to Marks : 1

beat all market indices

beat a specific market index

track a specified index subject to a small tracking error

invest in well researched stock to beat popular indices

75.

The following is not a duty of the board of trustees of a mutual fund Marks : 1

raise the maximum possible amount of assets in each scheme floated by the fund

ensure that investors interests are safeguarded

the management of the fund is in accordance with SEBI regulations

ensure the AMC has proper systems- procedures and key personnel in place

76.


enter into IMA with AMC in accordance with SEBI regulations.

guarantee returns on the investors money

furnish a report to SEBI on the funds activities on half yearly basis

ensure due diligence on part of the AMC for empanelment of brokers

77.

What percentage of unit-holders of the scheme present at a meeting called for thepurpose can terminate the appointment of an AMC

Marks : 1

51%



100%

75%

none of the above

78.

Which organisation should an investor approach in case of grievance against amutual fund

Marks : 1

consumer protection court

company law board

AMFI

SEBI

79.

The first time investor would be advised to refer to Marks : 1

detailed offer document

the key information memorandum

SEBI regulations

none of these

80.

An open-end fund with 10000 units outstanding had the following items on itsbalance sheet investments at market value Rs 10000 current liabilities Rs.25000.

Calculate the funds NAV per unit

Marks : 2

Rs. 9.5

Rs. 12

Rs 10

Rs 14.5

1. The following investments are not adversely affected by rising interest rates. Marks : 3



company debentures

institutional bonds

mutual funds

floating rate bonds

2.

Which of the following is not a type of load? Marks : 3

a charge at the time of investors entry into the fund- by deducting a specific amount

from his initial contributions

a charge at the time of investor exit from the scheme by deducting a specified amountfrom redemption proceeds

a charge of investment management fees to the fund every year

a charge of fixed amount if the investor exits before completing a predetermined periodof holding his investment

3.

The board of trustees is expected to protect the interest of Marks : 3

the sponsors

the asset management company

SEBI

the unit holders

4.

In index funds the expenses are low because Marks : 3

the fund manager does not want a large tracking error

the equity research expenses are not incurred

SEBI regulations stipulate lower expenses for index funds



to compete against the actively managed fund

5.An investment has doubled in 6 years The annualized compounded return is Marks : 1

16.67%

12.25%

100%


6.

A moderate risk investor who has been advised 35% equity allocation would be bestadvised to invest in

Marks : 1

Value fund

Diversified equity fund

Sector fund

Aggressive growth fund

7.

Rajesh is a 25 yr old person who is unmarried and working in a Software firm andwants to invest. What allocation would you recommend to him

Marks : 1

50% in equities and balance in debt/money market

80% in debt and 20% in money market

90% in money market and 10% in equity

100% in equities

8.

Which of these cannot be prevented by unitholders even if 75% of unitholders arebehind it

Marks : 1

Change the AMC



Prevent the takeover of the funds AMC by another sponsor

Prevent the merger of two schemes

Selling off a scheme of one fund to another fund

9.

Which of the following is correct about disclosure of illiquid securities Marks : 1

If the fund proposes to invest more than 25% of net assets in associate companies- itshould disclose in offer document

If the fund proposes to invest more than 10% of net assets in illiquid securities- itshould disclose the impact on redemption / liquidity in offer document

If the fund proposes to invest in illiquid securities it should disclose in the offer document

If the fund proposes to invest more than 20% of net assets in illiquid securities- itshould disclose the possible impact on NAV in offer document

10.

An equity fund has an average weekly net assets of Rs.250 crores throughout theyear; The maximum investment management and advisory fee it can charge is

Marks : 1

Rs.2.50 crores

Rs.5 crores

Rs.2.75 crores

Rs.6.25 crores

11.

The duration of a bond is 4 years. If the annual yield changes from .4% to .8% withoutany change in the benchmark yield the impact on bond will be

Marks : 1

-1.60%

1.60%

No impact



12.

Which of the following are important in fund comparison Marks : 1

Investment objective of the schemes

Size of the scheme

Both of the above

None of the above

13.

Which of the following is correct about appointing agents Marks : 1

They have to be graduates

They have to cleared by SEBI

They have to be AMFI certified

Their appointment is in line with individual AMCs policies [Caution: both c and d couldbe correct]

14.

A stock exchange is involved in the supervision of Marks : 1

All mutual fund schemes

Only open end schemes

Only closed end schemes

Only the closed end scheme which are listed in the particular stock exchange

15.

Investors can demand a minimum assured returns Marks : 1

If other schemes of the same fund are doing very well

If other schemes of other funds are doing very well

If there was an assurance on the returns in the offer document



If the scheme has delivered very high returns in the past

16.Which of the following is not true about trustees? Marks : 1

They can ask for investment portfolio at any time

They have to approve the appointment of brokers/distributors

They have to exercise due diligence in ensuring that the AMC has the proper systemsin place

17.

A person who is 55 years and about to retire in 3 years is in Marks : 1

Growth phase

Income phase

Accumulation phase

Distribution phase

18.

Which is the best among the following Marks : 1

Returns 10% Rating BB Load ..05%

Returns 9% Rating A Load .04%

Returns 8% Rating AA Load ..04%

Returns 10% Rating AAA Load ..05%

19.

Which of the following does not form part of a direct marketing strategy? Marks : 1

Newspaper advertisements

Distribution of pamphlets





Sponsor should ensure that 20% of funds assets to be invested in sponsors company

24.In case of corporate deposits the most important thing an investor must look for is : Marks : 1

Yield

Rate of return

Credit rating of the company and deposit

Profitability of the company

25.

Which of the following can an existing mf investor sue? Marks : 1

The AMC

Directors of the AMC

The mutual fund/ trust

The trustees

26.

The health of a fund can be known from Marks : 1

Offer document

Annual / half-yearly report

NAV

Newspapers

27.

Which of the following is not a specialty fund? Marks : 1

Test fund





Reinvestment risk

Liquidity risk

Interest rate risk

Default risk

32.

What is the maximum initial issue expenses that can be charged by the AMC? Marks : 1

7%

6%

5%

8%

33.

Safekeeping of physical securities is the role of Marks : 1

The custodian

The transfer agent

Trustee

Sponsor

34.

SEBI regulations for mutual funds came into force in Marks : 1

1993

1987

1996

1998



35.

Which class of investors is not allowed to invest in Indian mutual funds? Marks : 1

FII

NRI

Indian resident

Foreign national

36.

Value of stocks refers to Marks : 1

Shares of companies whose earnings are correlated with the state of the economy

Shares of companies whose earnings are expected to increase at normal levels

Shares of companies trading in precious commodities

Shares of companies in nature industries expected to yield low growth earnings

37.

Investors can address their complaint to the following except to Marks : 1

Consumer court

SEBI

AMFI

Sponsor

38.

Commissions payable by a fund to its agents depends Marks : 1

Regulated by SEBI

Regulated by AMFI

Regulated by AMC



upon the funds discretion

39.The dividend yield of a company growing faster than the market usually will be: Marks : 1

Higher than the market average

Lower than the market average

Same as the market average

40.

Value investment means Marks : 1

Investing based on attractiveness of sector

Investing based on p/e of company as compared to an industry

Investing with the intention of unlocking an intrinsic value

Investing in companies that have good dividend yield

41.

An investor purchased an open-end fund when its NAV was Rs.20. 16 months later its NAV stood at Rs.22. What was the annualized returns?{Formula for percentageNAV change: [{{absolute change in NAV/NAV at the beginning}/monthscovered}*12}]*100

Marks : 1

8%

7%

7.50%

8.50%

42.

A unit of an open-end fund was purchased when its NAV was Rs.25. At year-end itsNAV was Rs.27. In the interim period the fund made a distribution of Rs.5 per unitwhen its NAV was 26. What was the simple total return of the fund?

Marks : 1

27%

28%

27.50%





Balanced fund

Sector fund

Small cap fund

47.

When is the offer document of an open-end scheme updated Marks : 3

Once a year

Once in 6 months

Once every 3 months

When a material change occurs

48.

Which of the following statements are correct: Marks : 1

MFs are allowed to borrow as per SEBI regulations

MFs are allowed to borrow to meet temporary liquidity requirements

In case of borrowing by mf- the duration should be more than six months

In case of borrowing by mf- the mf shall not borrow more than 20% of the net assetvalue of the scheme

All of the above

Only 1-2 and 4 are correct

49.

A mutual fund is not Marks : 1

A portfolio of stocks- bonds- and securities

A pool of funds used to purchase securities on behalf of investors

A collective investment vehicle



A company that manages an investment portfolio

50.

An investor invests Rs 300 today. After 7 yrs the value becomes Rs. 600. What is hisannualized compounded rate of return Marks : 1

9

11

10.41

51.

Money market funds invest in Marks : 1

Company fixed deposits

Government securities with less than 1 yr maturity

52.

A NRI holds units in mutual fund. What should he do with his holding if he takes upforeign citizenship

Marks : 1

He redeems

He continues

He transfers the units to his mother- who resides in India

None of the above

53.

The strategy advisable for an investor to maximize investment return in the long run Marks : 2

Buy and hold on to investment for a long time

Liquidate poorly performing investment from time to time

Liquidate good performing investments

Switch from poor performers to good performers



54.

Sale and repurchase of units is the job of the Marks : 2

custodian

registrar and transfer agents

agents

brokers

55.

What is the maximum limit for investing in unlisted securities for an open endscheme (as % of net assets)

Marks : 2

10%

5%

15%

none of the above

56.

The 1999 union budget helped the mutual fund industry by Marks : 2

57.

A load means Marks : 2

58. Which was the first diversified equity fund in India? Marks : 2

59.

The first non-UTI mutual fund was Marks : 2

60.

In case of assured schemes which information is not required to be given in offer document

Marks : 2

61. Which of the following funds would not be very volatile? Marks : 1



A fund with investments across only two sectors

A fund with investments in high quality assets

A fund with investments in a handful of stocks

A small cap fund

62.

Which of the following is true about switching from a MMMF to an equity fund? Marks : 1

It is not allowed

It takes too long to execute

One should remain invested in one fund always

It is a means to deal with the stock market swings

63.

The maximum limit of inter-scheme investments by a fund is: Marks : 1

5% of the NAV of the transferring scheme

15% of the NAV of the receiving scheme



64.

The performance of which of the following is not comparable? Marks : 1

Two debt funds

Two diversified equity funds

A liquid fund and a MMMF

An it fund and a diversified equity fund



65.

Abridged offer document distributed with application is called Marks : 1

66.

Initial issue expenses in respect of any scheme shall not exceed Marks : 1

67.

What is the rate of tax on long term capital gains in case of mf units? Marks : 1

68.

The following is not a characteristic of a closed end fund. Marks : 1

69.

A fund charges 2% entry load its NAV is Rs.15. An investor invests Rs.15 Marks : 1

70.

A fund charges 1.5% exit load. An investor holds 1000 units. The investor wants toredeem today and the NAV is Rs.20. What amount will he/she get ?. How many unitswill he/she get ?

Marks : 1

71.

Money market funds would not invest in Marks : 1

72.

Which of the following statements is false Marks : 1

73.

Arrange the fund types starting from lowest risk to highest risk sector fundsbalanced fund diversified equity fund

Marks : 1

74.

Index Funds aim to Marks : 1

75.


76.




77.

What percentage of unit-holders of the scheme present at a meeting called for thepurpose can terminate the appointment of an AMC

Marks : 1

78.

Which organisation should an investor approach in case of grievance against amutual fund

Marks : 1

79.

The first time investor would be advised to refer to Marks : 1

80. The expenses charged to a fund are calculated on Marks : 2

AMFI Test Kotak

Documents