NISM Mutual Fund Exam Paper 1

1. Question

1 points

In the context of NPS portfolio allocation based on Investors age is known as

Life Cycle Fund
Wealth Cycle Fund
Pension Fund
Retirement Fund

2. Question

1 points

The minimum holding period for capital gains to qualify as long term in the case of ETF-Gold scheme is

1 year
2 years
3 years
24 months and 1 day

3. Question

1 points

Which of the following is incorrect?

An equity fund would invest in Equity Shares of a company
A bond fund would invest in Bond and Debentures
A sector fund invests in the shares of companies in a particular industry
An index fund is indexed to inflation index

4. Question

1 points

An investor gives a cheque of Rs 2 lacs for investing in a ELSS scheme at 2.30 pm at a Mutual Fund office. The NAV of which day will be applicable to him ?

NAV of the same day
NAV of the next business day
NAV of the day on which funds will be available

5. Question

1 points

Mutual funds investing in money market instruments need to comply with

SEBI requirements
RBI requirements
Both (a) and (b)
Neither (a) nor (b)

6. Question

1 points

Who is responsible for overall investments of the Fund

Chief Investment Officer
Fund Manager
Securities Dealer
Market Analyst

7. Question

1 points

Risk appetite of investors is assessed through

Risk Appetizers
Asset Allocators
Risk Profilers
Financial Plan

8. Question

1 points

Which website provides dedicated information regarding mutual funds?

SEBI
IRDA
AMFI
NISM

9. Question

1 points

Which of the following is true?

All mutual fund units need to be in physical form
All mutual fund units need to be in demat form
Investor has the option of choosing between physical and demat form
Transaction in stock exchange only happens in physical units

10. Question

1 points

In the mutual funds space, Tracking Error is a metric most often used in the context of ____________.

International funds
Index funds
Fund-Of-funds
Feeder funds

11. Question

1 points

What does KRA stand for?

Key Responsibility Area
Knowledge Resource Advisor
KYC Registration Agency
Know your Registered Advisor

12. Question

1 points

Average Return of an investors portfolio is 55%. The risk free return for the market is 8%. The Beta of the investors portfolio is 1.2. Calculate the Treynor Ratio.

41
39
43
45

13. Question

1 points

Year-wise cash flows going several years into future is a feature of comprehensive financial plan

TRUE
FALSE

14. Question

1 points

A Growth mutual fund would be expected to invest in

High quality corporate bonds
Equities
commercial paper
Real estate

15. Question

1 points

NFOs other than ELSS can be open for a maximum of

7 days
10 days
15 days
30 days

16. Question

1 points

Distribution phase of Wealth Cycle is a parallel of Retirement phase of Life Cycle

TRUE
FALSE

17. Question

1 points

The Association of Mutual Funds has introduced KYD which is Known as ________

Know Your Dividend
Know Your Down Payment
Know Your Distributor
Know Your Dividend Payout

18. Question

1 points

An investor looking for Capital Appreciation having a high risk tolerance and longterm horizon must invest in

Bank FD
Equity
Bonds
Debt Mutual Fund Schemes

19. Question

1 points

The comparable for a liquid scheme is

Equity scheme
Balanced Scheme
Gilt Fund
Savings Bank account

20. Question

1 points

Which of the following scheme need not be held for a minimum of 36 months in order to be treated as a Long Term Capital Asset?

Floating Rate Funds
Fixed Maturity Plans
Income Funds
Arbitrage Funds

21. Question

1 points

The comparable for a liquid scheme is

Equity scheme
Balanced Scheme
Gilt Fund
Savings Bank account

22. Question

1 points

Securities Transaction Tax is applicable to Debt Schemes

TRUE
FALSE

23. Question

1 points

The Appropriate Benchmark for a Banking Fund

BSE Tech
BSE Small Cap
BSE Bankex
BSE 500

24. Question

1 points

RGESS offers a rebate to first time retail investors in equity or mutual funds with annual income upto __________

Rs 10 Lakhs
Rs 15 Lakhs
Rs 12 Lakhs
Rs 8 Lakhs

25. Question

1 points

The most appropriate measure of returns for a scheme in existence for several years is ______.

Holding Period Return
Absolute
Annualised Return
CAGR

26. Question

1 points

Physical Health Influences Ideal Asset Allocation of an Investor?

TRUE
FALSE

27. Question

1 points

The MF Regulations prescribe

The Minimum Commission to the distributor
The Maximum Commission to the distributor
Both of the above
Neither of the Above

28. Question

1 points

A man nearing his retirement will be in

Peak of his income
Need to plan for his retirement
Need not worry about retirement
Plan for his vacation

29. Question

1 points

An investor in a debt-oriented mutual fund scheme

Would not bear any STT
Would not bear a tax on short term capital gains as per the tax slab
Would not bear a tax on long term capital gains
All of the above

30. Question

1 points

What does EUIN stand for?

Employee Union Identification Number
Employee Unique Identification Number
Employer Unique Identification Number
Employer Unique Ideal Number

31. Question

1 points

Purchase transaction in Equity Scheme for Rs 1 crore at 11 AM

Same Day NAV
Next Business Day NAV
NAV of Fund Realization day
Investor cannot invest Rs 1 Crore in a single day

32. Question

1 points

Which one of the following is True with respect to Custodian

Safe Keeping of a schemes assets
Accepting and Delivering Securities for Trades done by Fund Manager
Tracking Corporate benefits
Custodian is different from Sponsor
All of the above

33. Question

1 points

A due diligence certificate does not certify that

the draft offer document forwarded to SEBI is in accordance with SEBI regulations
all legal requirements connected with launching of the scheme have been complied with
disclosures made in the offer document are true, fair and adequate
the AMC guarantees a good performance

34. Question

1 points

TIER 1 account of New Pension Scheme is known as Pension Account

TRUE
FALSE

35. Question

1 points

What is the contribution of sponsor to net worth of Asset Management Company?

Maximum 40%
Minimum 40%
Maximum 75%
Minimum 25%

36. Question

1 points

An example of closed end fund

Fixed Maturity Plan
Monthly Income Plan
Gilt Funds
ELSS

37. Question

1 points

Investors have bought 20 crore units of a mutual fund scheme at Rs 10 each.
An amount of Rs 140 crore, invested in equities, has appreciated by 10%.
The balance amount of Rs 60 crore, mobilized from investors, was placed in bank deposits.
Interest and dividend received by the scheme is Rs 8 crore,
Scheme expenses paid is Rs 4 crore, while a further expense of Rs 1 crore is payable.
Calculate NAV of the scheme?

Rs 10.585
Rs 10.85
Rs 10.985
Rs 11.85

38. Question

1 points

An example of a derivative security is ______.

Ordinary equity share of a company
Gold Futures contract
Both 2 and 3 above

39. Question

1 points

An investor who decides to go overweight on equities is taking a

tactical asset allocation call
Strategic asset allocation
Fixed asset allocation

40. Question

1 points

Risk free return of the scheme is 5%, and standard deviation is 0.5. Return earned by the scheme is 7%. Sharpe Ratio is

40
4
2.5
35

41. Question

1 points

A person who is better informed about markets is in a better position to take market risks, than someone who is ignorant about them.

True
FALSE

42. Question

1 points

An investor asks you in what order he should list the following schemes, going from the scheme with the least risk to the one with the highest risk. 1)Balanced Fund 2)Index Fund 3)Liquid Fund 4)Pharma Fund

1,2,3,4
3,1,2,4
2,3,1,4

43. Question

1 points

A Mutual fund can benefit from economics of scale because of

Portfolio diversification
Risk Reduction
Large volume of trades

44. Question

1 points

A systematic withdrawal plan is ideal for

Investors with growth as the main investment objective
Investors who wish to benefit from market fluctuations
Investors who prefer a regular income stream

45. Question

1 points

A technical analyst studies ___________.

Share price trends
Share trading volumes
Both the above

46. Question

1 points

Financial Planner is likely to offer advice on all except

Loans
Insurance
Inheritance
Choice of Best Car

47. Question

1 points

Which of the below is a short-term capital asset?

Units of Equity Mutual Fund held for a period exceeding one year
Units of Mutual Fund held for a period less than or equal to one year
units of Debt mutual fund held for a period exceeding three years

48. Question

1 points

SEBI has mandated AMCs to put in place a due diligence process to regulate distributors if they have

Presence in More than 20 locations
AUM raised over Rs. 100 crore across industry in the non-institutional category but including high networth individuals (HNIs)
Received Commission of over Rs. 1 Crore p.a. across industry
All of the above

49. Question

1 points

The assets of the mutual fund are held by

AMC
Trustees
Custodian
Registrar

50. Question

1 points

Pictorial representation of risk in schemes offered by a Mutual Fund is known as______

Fundometer
Style Box
Colour Code
Riskometer

51. Question

1 points

Trail commissions are linked to valuation of portfolio in the market

TRUE
FALSE

52. Question

1 points

Generally, a portfolio that has 70% of its assets invested in stocks would be best suited for:

An 18-year-old using the assets to pay for college expenses over the next 4 years.
A 35-year-old investing for retirement.
A 75-year-old investing for income and capital preservation.
None of the above.

53. Question

1 points

An index fund manager tries

To beat the market by superior stock selection
To beat the market by using Technical Analysis
To beat the market by using asset allocation strategies
None of these

54. Question

1 points

Fundamental analysis is an evaluation of the strength of the company’s price-volume charts.

TRUE
FALSE

55. Question

1 points

Consolidated Account Statement is a single account statement that consolidates financial transactions in all portfolios across Mutual Funds based on _________

Folio Number
Bank Account Number
PAN
KYC

56. Question

1 points

NAV in a re-investment option comes down after payment of dividend

TRUE
FALSE

57. Question

1 points

STP is a combination of SIP and SWP

TRUE
FALSE

58. Question

1 points

Today’s costs can be translated into future requirement of funds using

A = P X (1 + i)n
A = P / (1 + i)n
P = A n X (1 + i)
P = A n X (1 + i)

59. Question

1 points

On which website can you find the draft Scheme Information Document (SID) of mutual fund scheme(s) that will be launched in the future if approved?

SEBI
AMFI
RBI
Ministry of Finance

60. Question

1 points

When expecting a fall in market price, fund managers can reduce the loss in portfolio value by?

Speculating
Not buying and selling shares at all for some days
Using equity derivatives
Borrowing from banks

61. Question

1 points

A mutual fund which deploys its funds in short-term instruments such as Treasury bills, commercial paper, and Certificate of Deposits.

REIT
Equity mutual fund
Money market mutual fund
Gold ETF

62. Question

1 points

An Investor redeemed units of Gold ETF 20 months after Investment.What is the tax treatment for the capital gains he got?

Long Term Capital Gains taxed at 10% without Indexation or 20% with Indexation
Short Term Capital Gains taxed at 15%
Short term capital gains which will be added to the income of the investor and taxed as per investors tax slab
Long term capital gains and is completely tax free.

63. Question

1 points

Certificates of Deposits (CDs) are issued by

Regional Rural Banks
Corporate India
Schedules commercial banks
None of the above

64. Question

1 points

If 75% of unit holders jointly decide; the services of the AMC can be terminated.

TRUE
FALSE

65. Question

1 points

Higher the capital base, better the ability to financially take the downsides that come with risk

TRUE
FALSE

66. Question

1 points

In case of a minor ,KYC is compulsory for Guardian.

TRUE
Option

67. Question

1 points

Most investor service centre are offices of

Trustees
Registrar
Fund Accountant
Custodian

68. Question

1 points

Who is the authority to issue ARN number ?

AMFI
SEBI
AMC
Trustee

69. Question

1 points

NAV of a scheme is Rs 10 on Jan 1, 2006 and was Rs 11 after 10 months. What is the annualized return ?

0.11
12%
0.01

70. Question

1 points

Equity Linked Savings Schemes and Rajiv Gandhi Equity Savings Schemes offer tax benefits to investors.

True
FALSE

71. Question

1 points

Which of the following is NOT a characteristic of a balance fund?

It is less risky than growth funds
It is more risky than Bond funds
It must invest in both equity and bonds in equal amount
It provides both growth and income objectives

72. Question

1 points

Dividend distribution tax is applicable at ___% on investors other than individuals and HUFs

0.125
0.25
30%
0.2

73. Question

1 points

Commodities, as an asset class, include

pepper
copper
gold and silver
All of the above

74. Question

1 points

AMFI Code of Ethics is meant for

AMCs
Distributors
Investors in mutual funds
All the above

75. Question

1 points

Dividend distribution tax is applicable at ___% on investors other than individuals and HUFs in case of Debt and Liquid Schemes

0.125
0.25
30%
0.2

76. Question

1 points

Who cannot invest in Mutual Fund in India?

Army/Navy/Air Force
Scientific and Industrial Research Organizations
Universities and Educational Institutions
None of the above

77. Question

1 points

Statement of Account is to be sent to investors within ___ days of NFO closure

3
5
7
15

78. Question

1 points

Constant amount offered for re-purchase at regular intervals is the concept of

SIP
Value investment
SWP
STP

79. Question

1 points

Board of Trustees appoint Custodians for

Making payment to bankers on behalf of the fund
Selling units of a mutual fund
Safekeeping of physical securities of the mutual fund or participating in any clearing system.

80. Question

1 points

A hybrid fund is one that

invests in both bonds and stocks
has different loads for different classes of investors in the fund
invests in derivative securities, as well as stocks.
Invests in Gold

81. Question

1 points

A company buying plant and machinery is buying

Financial Assets
Intangible assets
Physical Assets
All of the above

82. Question

1 points

As per SEBI mandate the Minimum networth requirement for AMCs who wish to start operations has been increased to _______ since May 2014.

10 Cores
15 Crores
50 Crores

83. Question

1 points

Strategic Asset Allocation is Based on Risk Profiling

TRUE
FALSE
35 Crores

84. Question

1 points

The format of the KIM is decided by each fund

TRUE
FALSE

85. Question

1 points

Investors in the _____________ should allot a higher proportion to Income Funds.

Accumulation Phase
Distribution Phase
Inter generational transfer phase
Sudden Wealth category

86. Question

1 points

Appeal against SEBI ruling can be filed with

Ministry of Finance
SAT(Securities Appellate Tribunal)
RBI
SEBI ruling is the final.

87. Question

1 points

At least TWO THIRD of trustees has to be independent.

TRUE
FALSE

88. Question

1 points

Cash is accepted as a mode of payment for Mutual Fund Investments to the extent of _______

Rs 10,000 per transaction
Rs 50,000 Per Fund House Per Financial Year
Rs 20,000 Per Fund House Per Financial Year

89. Question

1 points

PAN Card is compulsory for all MF investments above Rs 50,000 including SIPs

TRUE
FALSE

90. Question

1 points

Which of the following withrespect to STT is TRUE?

STT is payable when investors purchase units of Equity Mutual Fund Units
STT is payable when investors repurchase units of Equity Mutual Fund Units
STT is payable when investors purchase units of Debt Mutual Fund Units
STT is payable when investors repurchase units of Debt Mutual Fund Units

91. Question

1 points

Which of the following schemes are exempt from paying DDT?

Liquid Fund
Gold ETF
GILT Fund
Equity Fund

92. Question

1 points

Cut-off timing guidelines are not applicable for _____.

NFOs
International Funds
Equity Mutual Funds
Only A and B

93. Question

1 points

Capital Protection Schemes aim to provide capital protection based on

Bank Guarantee
AMC Guarantee
Investment in Securities with No Credit Risk
Structure of the portfolio

94. Question

1 points

Distributors can time stamp the applications at their office.

TRUE
FALSE

95. Question

1 points

Which of the following does a fundamental analyst study?

Company’s financials
Company’s management
Competitive position in industry
All the above

96. Question

1 points

An investor has sold his investments in a Debt Mutual Fund Scheme two years after buying the units. The profits he earns are classified as _________________.

as short term capital gains
as dividends
Taxed at a rate of 10%
as long term capital gains

97. Question

1 points

PAN Card is not required for mutual fund investments below Rs 50,000 per mutual fund per financial year, where payment is in cash.

TRUE
FALSE

98. Question

1 points

Sector funds are highly diversified funds

TRUE

Average score
Your score

NISM Mutual Fund Exam Paper 1

NISM Mutual Fund - 1

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