MFM Practice MCQ Questions

Multiple Choice Questions 3 Pages

APJ Abdul Kalam Technological University

Bachelor of Finance Management

Contributed by

Gulab Sawhney

Sr No.
Question A B C D
1 NFO is the ______ time subscription offer for a new scheme launched by AMC. Second Third First Forth
2 Open ended funds have ______ liquidity. Low High Medium None of the above
3 Transaction cost and research cost are more in ______ managed funds. Actively Passively Both A and B None of the above
4 SWP means ______. Systematic Withdrawal Plan Systematic Transfer Plan Systematic Deposit Plan None of the above
5 STP means ______. Systematic Withdrawal Plan Systematic Deposit Plan Systematic Transfer Plan None of the above
6 Mutual fund is established by AMC Sponsor Custodian All of the above
7 The trustee of the mutual fund appoints the Sponsor Banker AMC None of the above
8 AMC is required to be approved by RBI SEBI IRDA None of the above
9 Which funds have maturity date? Open ended Both A& C Close ended None of the above
10 Close ended funds are Less liquid Highly liquid Not liquid All of the above
11 Which Funds normally mimic an Index? Actively Managed Passively Managed Both A&B None of the above
12 AMFI means
Association of Mutual Funds
in India
Securities and Exchange
Board of India
State Bank of India None of the above
13 SEBI means
Association of Mutual Funds
in India
Securities and Exchange
Board of India
State Bank of India All of the above
14 Who is regulator of Mutual funds in India? AMFI AMC SEBI None of the above
15 The main objective of Equity fund is ______ term capital appreciation. Long short Medium None of the above
16 Risk of failure is greater with ______ Fund Large Cap Mid Cap Small Cap None of the above
17 Risk is less in ______. Index Fund Debt Fund Growth Fund None of the above
18 _____ funds are less risky. Sectoral Money Market Hybrid All of the above
19 ___ funds are based on algorithms, computer software. Growth Quant Hybrid Money market
20 _____ funds invest exclusively in Central and State Government securities. Debt Gold Sectoral Gilt
21 Under Direct plan investors have to invest _____. through broker through AMC through Distributor None of the above
22 ______ means yearly returns. HPR AR Average Return None of the above
23 Market Risk is measured by Beta Standard Deviation Alpha Both B&C
24 Treynor ratio uses ____ risk in its calculations. Non market Market Unsystematic Total
25 ____ ratio uses total risk in its calculations. Treynor Jensen Sharpe None of the above
26 ______ of a mutual fund is the price at which units are bought or sold by investor. NAV NPV Dividend Received None of the above
27 ______ Load is charged when investors sell a mutual fund scheme. Entry Transaction Exit None of the above
28 The accounting year for mutual fund ends on ______ of each year. 31st December 31st March 30st April None of the above
29 ______ securities are valued based on Mark to Market concept. Traded Non Traded Illiquid None of the above
30 For Mutual Funds, Transaction cost is High
Low Medium Not Applicable
31
NFO means New Fund Offer New First Offer New Fund Opening Not Offered Fund
32
_____helps in financial transactions of a mutual fund.
Custodian RTA Banker Sponsor
33
Actively managed Mutual funds alter the fund’s portfolio
Never Less Frequently Rarely Continuously
34
First Phase of Mutual funds in India from
1961- 1987 1964- 1987 1961- 1978 1964- 1982
35
The one who safeguards the assets of mutual fund is
Sponsor Distributor RTA Custodian
36
The First player of the Mutual fund industry was______________.
ICICI MF Axis MF UTI MF SBI MF
37 Processing of application forms and updating investor records is done by Registrar and Transfer Agent Sponsor Trustees Banker
38 In India, AMC must be registered with____________. Company’s Act, 2013
Securities Exchange
Board of India
Reserve Bank of India No registration required.
39 Diversification of portfolio helps to
increase risk minimise risk
reduce returns
avoid risk
40
Second Phase of Mutual funds in India from
1987-1994 1987-1993 1989-1991 1988-1995
41 Role of Mutual Fund Trustee is distribute Units buy & sell securities
safeguard interest of unit
holders
update investor records
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42
_____ is a type of investment vehicle consisting of a portfolio of stocks, bonds, or
other securities.
Mutual Funds Government Securities Shares Derivatives
43
Index funds incur _______ expenses
higher lesser no None of the above
44
_____schemes not exposed to sudden and large movements of funds.
Open-Ended Funds Close-Ended Funds Fixed maturity plan None of the above
45
Third Phase of Mutual funds in India from
1993-2003 1996-2003 1999-2004 None of the above
46
Mutual Funds are
professionally managed regulated Both A&B not risky
47 AMC is
Alternate Managing
Committee
Asset Management
Company
Additional Maintenance
Committee
Asset Making Committee
48 Dividend income received from equity mutual fund, in the hands of unit holders is Partly Exempt Fully Taxable Fully Exempt Partly Taxable
49
Gold ETFs are traded in Physical form Jewellary form Electronic form No specific form
50
The funds in which units can be purchased only during the initial offer period are
called
Interval Funds Open-Ended Funds Fixed maturity plan Close-Ended Funds
51 FMP schemes do not invest in Debt Securities
Money

market

instruments
Equities Fixed Income securities
52
AMC can be terminated, if ____ % of Unit holders agree.
50 40 75 25
53 ______are considered high-risk funds but also tend to provide high returns. Sectoral Fund
Balanced or Hybrid
Funds
Equity Funds Money Market Funds
54
Money market mutual fund schemes are for Long term Short term Medium term Perpetual term
55
____________ are funds that invest in company debentures, government bonds
and other fixed-income assets.
Thematic Fund Money Market Funds Debt Funds Gold Fund
56 ETF means Efficient Trade Fund Exchange Traded Fund Emerging Trade Fund Easy Trade Fund
57
ELSS Schemes are called
Fund of Fund Tax Saving schemes Debt Schemes Non of the above
58
Tax Saving Mutual Funds are offering tax benefits under which section of Income
Tax Act?
80 D 80 E 80 C 80 G
59
If fund is assuming higher risk than the market index, its beta will be ________.
Equal to 0 Equal to 1 Less than 1 Greater than 1
60
AMFI was incorporated in
1948 1995 1992 1935
61
Which fund invest in other fund schemes? Fund of Fund Equity Fund Index Fund Multi Cap Fund
62 A benchmark once chosen cannot be altered without _________ approval. RTA Custodian Banker Trustees
63
Countrywise asset allocation is done in International Fund Domestic Fund National Fund Tax Saving Fund
64
Which type of fund is more volatile?
Hybrid Funds Mid-cap funds Large-cap funds Index Fund
65
_____is the Sharpe ratio, better is fund
Lower Higher Both A & B None of the above
66 Higher expenses ratio lead to _______. Less return More return No impact on return None of the above
67 Full form of KIM is
Knowledge Information
Manager
Key Information
Memorandum
Key Inputs Management Key Internal Manager
68 Investors can enter and exit under _______ at any time Open-Ended Funds Both A & C Close-Ended Funds None of the above
69 CAGR means
Compounded Annual
Growth Rate
Common Average
Growth Rate
Composite Average
Growth Rate
Composite Aggregate Growth
Rate
70
Mutual Fund schemes are first offered to investors through
AMFI Initial Public Offer New Fund Offer Stock exchange
71
Returns are not measured with HPR Beta AR CAGR
72
_____is the Treynor ratio, better is fund
Lower Higher Both A & B None of the above
73
Day to day operations of a mutual fund is handled by
Sponsor Shareholders Unit holders Asset Management Company
74
Beta of Market or Benchmark is always considered as One more than one Zero Less than one
75
Correlation between Beta and Benchmark index is measured by
HPR Standard Deviation AR R-Squared
76 Expense ratio for a fund should be as ______ as possible High Average Low None of the above
77
Information ratio is advanced version of Sortino Ratio Treynor Ratio Sharpe Ratio Fama Measure
78
Lower value of Standard deviation means No Volatility High Volatility Moderate Volatility Low Volatility
79 Mutual funds are constituted in India as Limited liability partnership Trusts Non-Profit organisations Companies
80
In ________________a large portion of investment is done in companies with
Large market capitalization.
Mid-cap funds Small-cap funds Multi cap funds Large-cap funds
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81
High Beta schemes are avoided by Conservative investors Speculative investors Aggressive investors Risk taking investors
82
The _________ is the market value of the securities that mutual funds have
purchased minus any liabilities per unit.
Gross asset value Net asset value Book value None of the above
83
Which value of R-Squared represents no correlation less than one One Zero more than zero
84
_____ funds invest in stocks of companies that operate in a particular industry
Mid-cap companies Sector Funds Small-cap companies None of the above
85 Which payment mode is not applicable while purchasing mutual fund scheme? Cash Cheque Electronic Fund Transfer Demand Draft
86 NAV =
Current Assets – Current
Liabilities
Total Liabilities – Total
Assets
Current Liabilities –
Current Assets
Total Assets – Total
Liabilities
87
______ fund buys and sells the stock simultaneously in two different markets.
Arbitrage funds Index Funds Debt Fund None of the above
88
Open ended funds can be purchased and sold
Starting of the day Anytime during the day End of the day None of the Above
89
____is a facility provided by banks to investors in new fund offers (NFOs) of
mutual funds.
ABSA AABS ASBA None of the Above
90
Annual Fee charged to unit holders is called Entry Load Exit Load Initial issue Expense Expense Ratio
91
Private Sector mutual funds were permitted in the year
1990 1985 1993 1987
92 Following is not the one time charge by mutual fund to unit holders Recurring Expense Initial issue Expense Entry Load Exit Load
93
Gold ETFs are popular because of
Non Liquidity Real Time Price Unlisted All of the above
94
Dividend stripping strategy is used to reduce tax
increase tax pay tax calculate tax
95 Debt funds focus on High growth with risk
Long term capital
appreciation
Low risk and stable
income
Non of the above
96
Lock in period for tax saving ELSS scheme is normally 1 year 2 years 3 years 4 years
97
______ funds, where asset management company invest the money into both debt
and equity.
Debt Funds Money Market Funds Balanced Funds Gold Funds
98
Opening Units + Subscribed Units - Redeemed Units= Purchase Units Closing Units Sell Units Opening Units
99
________ is the benefit of investing in growth funds
Less returns
P
ossibility of high returns High risk None of the Above
100
Which load is abolished completely? Entry Exit Both A&B
None of the Above
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