Feel Real Exam 6- NISM-Series-V-A: Mutual Fund Distributors Certification

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NISM-Series-V-A: Mutual Fund Distributors Certification

Feel Real Exam 6- NISM-Series-V-A: Mutual Fund Distributors Certification

The number of attempts remaining is 10

1 / 100

1. _______ is not a fair selling practice by a mutual fund distributor.

2 / 100

2. Ultra-short-term debt scheme invests in debt and money market instruments with Macaulay duration between

3 / 100

3. In case of capital gains from mutual fund investments, Tax Deduction at Source (TDS) is applicable for:

4 / 100

4. ‘Once it is finalized, a mutual fund scheme’s benchmark cannot be changed at a later date.’ State whether the statement is True or False.

5 / 100

5. Which of the following statements is ‘TRUE’ with respect to the Scheme Information Document (SID) and Statement of Additional Information (SAI)?

6 / 100

6. When an investment is done by a minor, what is rule regarding Know Your Customer (KYC) requirement?

7 / 100

7. Passive funds are safe, as the NAV of such funds do not go down even when the respective markets fall. State whether this is True or False.

8 / 100

8. In case of mutual fund schemes, dividends can be paid only out of

9 / 100

9. Mutual funds are allowed to charge differential exit loads based on the amount of investment.

10 / 100

10. Which strategy can be used to ensure that a mutual fund scheme is suitable to the investor’s need and situation?

11 / 100

11. Which of the following regulates mutual funds in India?

12 / 100

12. Which among the following schemes would have a lower risk of concentration?

13 / 100

13. What is the investment of a constant amount at regular intervals in a mutual fund scheme called?

14 / 100

14. What is the maximum Total Expense Ratio chargeable in case of index funds?

15 / 100

15. Once a New Fund Offer closes, an open-ended mutual fund is open for purchases ________.

16 / 100

16. Calculate the Treynor Ratio from the following data: Return from a mutual fund scheme is 7.5%. The beta is 0.62. The risk-free rate of return is 6%.

17 / 100

17. Which of the following types of analysis tracks the price and volume data related to trading in the security?

18 / 100

18. Which of these is a physical asset?

19 / 100

19. Which of these funds has the highest risk?

20 / 100

20. The average net assets of a fund were Rs 800 crore and the investment transactions of the fund were Rs 1600 crore. Calculate the Portfolio Turnover Ratio.

21 / 100

21. Which among the following schemes would have a lower risk of concentration?

22 / 100

22. Identify the TRUE statement.

A) While calculating scheme returns for an investor, if there is an entry load, then the initial value of the Net Asset Value (NAV) is taken as NAV plus Entry Load B) While calculating scheme returns for an investor, if there is an exit load, then the later value of the Net Asset Value (NAV) is taken as NAV plus Exit Load

23 / 100

23. Each mutual fund scheme must have a stated investment objective. State whether True or False.

24 / 100

24. What is the purpose of ‘credit enhancement’ in case of securitized transactions?

25 / 100

25. Which of the following scheme categories would be considered the least risky in terms of credit risk?

26 / 100

26. Long Duration debt scheme invests in debt instruments with Macaulay duration _____ .

27 / 100

27. are close-ended debt funds.

28 / 100

28. Which of the following is an advantage of mutual funds?

29 / 100

29. What is the tax applicable on the income earned by the mutual fund schemes?

30 / 100

30. Passive funds are safe, as the NAV of such funds do not go down even when the respective markets fall. State whether this is True or False.

31 / 100

31. Which of the following statements is True?

32 / 100

32. Whom should the investor approach if his complaint is not resolved by the Asset Management Company (AMC)?

33 / 100

33. A mutual fund scheme’s NAV is said to be cum-dividend from the

34 / 100

34. When the asset allocation is maintained as a constant ratio by regular rebalancing of the portfolio, it is known as ________ .

35 / 100

35. Mutual funds can buy and sell securities only on a delivery basis. State whether this statement is True or False.

36 / 100

36. For KYC verification, ________ is not accepted as a photo identity documentation for Micro SIP’s.

37 / 100

37. Redemption from which of the following mutual fund schemes would attract Securities Transaction Tax (STT) for an investor?

38 / 100

38. 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.

39 / 100

39. Which is the most appropriate measure of evaluating how closely an index fund is tracking its benchmark?

40 / 100

40. In what form do mutual fund distributors earn revenue?

41 / 100

41. ______ are close-ended debt funds.

42 / 100

42. Which of these statement(s) is/are FALSE?

43 / 100

43. Segregated portfolio means _________ .

44 / 100

44. 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

45 / 100

45. indicates how much money can be generated per unit of mutual fund in case the scheme is liquidated.

46 / 100

46. Which amongst the following categories of mutual funds have a fixed maturity date?

47 / 100

47. Mutual fund distributors earn no commission when the investor chooses to invest in “direct” plans. State whether True or False.

48 / 100

48. Mutual Fund Distributors Certification Examination offered by is required for becoming a mutual fund distributor.

49 / 100

49. The purchasing power of currency changes on account of which of the following?

50 / 100

50. In the non-equity-oriented funds, the rate of long-term capital gains tax is

51 / 100

51. Mutual fund distributors can only earn upfront commission from the mutual funds. State whether True or False.

52 / 100

52. At what price are the bonus units issued to the unitholder?

53 / 100

53. Banks and NBFCs can lend money against ________ of mutual fund units.

54 / 100

54. In whose beneficial interest is a mutual fund managed?

55 / 100

55. For which of these documents is Time Stamping mandatory?

56 / 100

56. In an Arbitrage fund, the minimum investment in equity and equity related instruments shall be ______ of total assets.

57 / 100

57. Inflation Risk is also referred as

58 / 100

58. “Please read the scheme related documents carefully” – which documents does this line refer to?

59 / 100

59. As per the SEBI guidelines, how often should the mutual fund scheme’s portfolio be published?

60 / 100

60. What is asset allocation?

61 / 100

61. Securities and Exchange Board of India (SEBI) functions does not include which of the following?

62 / 100

62. Which of the following cannot be considered for the purpose of selecting a scheme’s benchmark?

63 / 100

63. What is negative Alpha?

64 / 100

64. The opening of time stamping machine needs to be documented and reported to _______.

65 / 100

65. What is the portfolio of a ‘Fund of Funds’ made up of?

66 / 100

66. What is the real rate of return?

67 / 100

67. 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)?

68 / 100

68. Stamp duty is required to be paid for which of these mutual fund transactions? A) New purchases B) Systematic Investment Plan (SIP) C) Dividend reinvestment D) Systematic Transfer Plan (STP)

69 / 100

69. Which among the following is not a statutory document?

70 / 100

70. The transparency levels in mutual funds are very low. State whether True or False.

71 / 100

71. How many (maximum) bank accounts can a resident individual investor register with a mutual fund folio?

72 / 100

72. Government securities can be considered to be completely risk-free. State whether True or False.

73 / 100

73. Investors have the right to specify up to ________ nominees for their mutual fund investment folios.

74 / 100

74. As per the fair valuation principles laid out by SEBI, it is mandatory to disclose the valuation policy in

75 / 100

75. The loss booked from a debt investment of 15 months can be set off against

76 / 100

76. With which agency are the mutual fund distributors registered?

77 / 100

77. The expenses which can be charged by an Asset Management Company to a Mutual Fund scheme are limited by

78 / 100

78. Whose KYC needs to be completed in case of an application by a minor?

79 / 100

79. Which of these statement(s) is/are FALSE with respect to Benchmarks?

A) Portfolio concentration is an important factor while selecting a benchmark for an equity mutual fund B) Choice of investment universe is not an important factor while selecting an appropriate benchmark for debt mutual funds

80 / 100

80. A mutual fund has the policy of imposing an exit load of 2% for redemption up to one year and 1% for redemptions beyond one year. If an investor redeems 2000 units at an NAV of Rs 40 at the end of six months from the date of investment, what will be the redemption amount receivable by the investor?

81 / 100

81. Which amongst the following is a measure of risk-adjusted returns of a mutual fund scheme?

82 / 100

82. Mutual funds are constituted as ‘Trusts’ in India. Who are the beneficiaries of the trust?

83 / 100

83. When the interest rate in the economy increases, the price of existing bonds

84 / 100

84. 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)?

85 / 100

85. The Income Tax Act allows setting-off of the short-term capital loss against long term capital gains. State whether True or False.

86 / 100

86. takes into account all dividends generated from the basket of constituents that make up the index in addition to the capital gains.

87 / 100

87. Which of the following statements is ‘True’ with respect to celebrity endorsement for mutual funds?

88 / 100

88. Who handles the day-to-day management of the mutual fund?

89 / 100

89. How often should the Key Information Memorandum (KIM) be updated?

90 / 100

90. An investor invested in scheme A when the scheme’s NAV was Rs. 120 per unit. The investor redeemed the investments at the NAV of Rs. 135. Calculate the simple return.

91 / 100

91. By mistake the ARN number is wrongly mentioned in the application form. How will such an application be processed?

92 / 100

92. 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

93 / 100

93. Which of the following is a measure of fluctuation in periodic returns in an equity mutual fund scheme?

94 / 100

94. Only individuals are allowed to distribute mutual funds in India. State whether True or False.

95 / 100

95. ________ is a proper benchmark for a balanced hybrid scheme.

96 / 100

96. Which of these statements are false?A) While evaluating schemes, the Expense Ratio will matter much more in Debt Funds than Equity mutual funds. B) A mutual fund with a long track record is always better for investments as it would give higher returns in the future C) Ultra short-term debt funds always invest in high credit quality debt securities

97 / 100

97. 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?

98 / 100

98. Investors have bought 20 crore units of a mutual fund scheme at Rs. 10 each. The scheme has thus mobilized 20 crore units X Rs. 10 per unit i.e., Rs 200 crore. An amount of Rs. 140 crore is invested in equities. The balance amount of Rs 60 crore, mobilized from investors, was placed in bank deposits. Interest and dividend receivable (accrued but yet not received) by the scheme is Rs 8 crore, scheme expenses payable (accrued but not paid yet) is Rs 4 crore. Calculate the scheme’s NAV per unit.

99 / 100

99. Which of the following scheme categories would be considered the least risky in terms of credit risk?

100 / 100

100. Unsystematic risk can be reduced through diversification. State whether True or False.

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Feel Real Exam 5- NISM-Series-V-A: Mutual Fund Distributors Certification

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NISM-Series-V-A: Mutual Fund Distributors Certification

Feel Real Exam 5- NISM-Series-V-A: Mutual Fund Distributors Certification

The number of attempts remaining is 10

1 / 100

1. Different investors of the similar age group should always have the same asset allocation in their investment portfolios – State whether True or False?

2 / 100

2. The form for registering a change in the default bank account has to be signed _____ .

3 / 100

3. Where is the performance data for all schemes across the mutual fund industry available?

4 / 100

4. Identify the TRUE statement. A) While calculating scheme returns for an investor, if there is an entry load, then the initial value of the Net Asset Value (NAV) is taken as NAV minus Entry Load B) While calculatingscheme returns for an investor, if there is an exit load, then the later value of the Net Asset Value (NAV) is taken as NAV minus Exit Load

5 / 100

5. In which of the following case can a mutual fund charge the additional expense of 0.30 % of daily net assets of the scheme?

6 / 100

6. The additional Total Expense Ratio (TER) charged has to be credited back to the Mutual Fund in which of these situations?

7 / 100

7. Who is NOT authorized to attest the documents submitted for Know Your Customer compliance, in case originals are not produced at the time of KYC?

8 / 100

8. Opening of a time-stamping machine needs to be documented and reported to the Asset Management Company (AMC) – State whether True or False?

9 / 100

9. A top-performing scheme within a category ________.

10 / 100

10. Identify the FALSE statement/s with respect to benchmarks for mutual fund schemes.

A) A Multi-Cap fund can have Nifty 500 index as its benchmark
B) A Multi-Cap fund can have BSE Sensex as its benchmark

11 / 100

11. Usually, most investors might have invested across various asset categories. However, the problem with such asset allocation is that _______ .

12 / 100

12. These debt mutual funds have been arranged from lowest risk to highest risk. Identify the risk which we are discussing : 1. Liquid Funds 2. Money market funds 3. Medium term bond funds

13 / 100

13. Ms Shweta purchases through a distributor 5000 units of a mutual fund scheme at a NAV of Rs 30. The current NAV of the scheme is Rs 28. What will be the trail commission for today if the trail commission rate is 1% per annum?

14 / 100

14. On what basis will the payment be made to an investor who claims his erstwhile unclaimed redemption amount within three years?

15 / 100

15. How can the empanelment of a mutual fund distributor be terminated?

16 / 100

16. An Addendum has to be issued for changes in ________.

17 / 100

17. Which of these statements are TRUE with respect to time stamping on mutual fund documents? A) Time stamping is relevant for non-financial mutual fund transactions B) The daily time stamping of application does not start with serial 1 C) Breakdown of time stamping process or breaking of seal is mandated to be duly recorded and reported to the Trustees

18 / 100

18. Investors who have not transacted during the previous ______ are known as dormant investors.

19 / 100

19. A mutual fund scheme’s performance must always be measured relative to the _____ .

20 / 100

20. Identify the true statement with respect to investments in mutual funds through Stock Exchanges?

21 / 100

21. The minimum number of investors that a mutual fund scheme should have:

22 / 100

22. Identify the true statement(s) – A) An Addendum must accompany the KIM B) Addendum is considered to be a part of the Scheme Related Documents

23 / 100

23. Which of these entities can invest in Indian mutual funds? A) Foreign portfolio investor B) Insurance company C) Salaried individual

24 / 100

24. Indicate which of these funds have the lowest to highest risk sequence? A) Liquid Fund B) Credit Risk Fund C) Corporate Bond Fund

25 / 100

25. The expenses of _______ cannot be charged to a mutual fund scheme.

26 / 100

26. _______ is not included in the fundamental attributes of a mutual fund scheme.

27 / 100

27. Which is the Source Scheme in a Systematic Transfer Plan?

28 / 100

28. In case one of the joint holders dies, the units will ________ .

29 / 100

29. The trustees of a mutual fund are appointed by the ______ .

30 / 100

30. Which of these pieces of information is not contained in the Scheme Information Document (SID)?

31 / 100

31. In a Contra Fund, the minimum investment in equity & equity-related instruments shall be ________ of total assets.

32 / 100

32. In which document is a commentary on the current state of the economy and markets is also generally provided?

33 / 100

33. An investor purchases through a distributor 5000 units of a mutual fund scheme at an NAV of Rs 25. The current NAV of the scheme is Rs 43. What will be the trail commission for today if the trail commission rate is 1% per annum.

34 / 100

34. Identify which of these is a function of Association of Mutual Funds in India’s (AMFI).

35 / 100

35. Some of the costs incurred by the Asset Management Companies to manage the mutual fund schemes can be charged to _________ in proportion to their holding of units in the scheme.

36 / 100

36. When does the market price of close-end mutual fund scheme converge with the NAV price?

37 / 100

37. SEBI has regulations pertaining to restrictions on the investment policies of mutual fund schemes for ensuring that _____ .

38 / 100

38. Which of these statement(s) is/are TRUE? A) If the mutual fund units are held in demat form, they cannot be converted into physical form B) When a mutual fund is redeemed or when there is a dividend pay-out, the amount will be credited to the bank account linked to the demat account for those mutual fund investors who opt for demat units

39 / 100

39. Identify the information which is NOT included in the Statement of Additional Information (SAI).

40 / 100

40. Ms. Apeksha invests Rs 2 crore in a Gilt scheme at 2 pm with a local cheque. What would be the applicable NAV for the allotment of units?

41 / 100

41. The return from a fund is 9%, Standard Deviation is 0.75, and the Beta is 1.4. The risk-free rate of return is 7%. What is the DENOMINATOR in the calculation of the Sharpe Ratio?

42 / 100

42. _________ would not be an originator to a special purpose vehicle, in case of securitized asset.

43 / 100

43. Identify the TRUE statement with respect to ‘Jensen’s Alpha’ of a mutual fund scheme?

44 / 100

44. Long-term capital loss from an investment can be set off against _____ .

45 / 100

45. Identify the FALSE statement(s) – A) For Index funds, the NAV is calculated up to 4 decimal points B) The AMC and a mutual fund scheme of the AMC can have the same auditor

46 / 100

46. On whom is the compliance requirement under Foreign Account Tax Compliance Act (FATCA) applicable?

47 / 100

47. Identify the TRUE statement(s) – A) A systematic transaction cannot be canceled B) Assuming a mutual fund scheme is profitable, then the investors can keep encashing some profits through a Systematic Withdrawal Plan

48 / 100

48. ________ is not a mutual fund distribution channel.

49 / 100

49. When a mutual fund distributor empanels with an AMC, he/she has to sign a declaration for ______ .

50 / 100

50. The return from a mutual fund scheme is 8.3% and the Standard Deviation is 0.6. The risk-free rate of return is 5%. Calculate the Sharpe ratio.

51 / 100

51. If an investor has to change his default account, he/she has to do it with ____ .

52 / 100

52. Identify the true statement(s) with respect to the benchmark for Sector Funds. A) It’s ideal to benchmark a sector fund against an index representing the respective sector B) It’s advisable to benchmark a sector fund against a diversified fund to get the correct picture

53 / 100

53. Redemption proceeds have to be paid to the mutual fund unit holders within the time specified by _____ from time to time.

54 / 100

54. Identify the False statement/s. A. Investments in mutual funds can be made on a repatriable basis by NRIs B. The mutual fund will automatically pay in Dollars when the NRI redeems his investments which were made on a repatriable basis

55 / 100

55. Identify the factor that must be considered to determine the asset allocation for an investor.

56 / 100

56. Identify the False statement/s. A) Valuation gains are ignored, but valuation losses need to be adjusted against the profits while calculating distributable surplus B) TheMark-to-market gains form a part of the distributable reserves in case of a mutual fund Income Distribution Cum Capital Withdrawal plan

57 / 100

57. Calculate the Average holding period if the portfolio turnover ratio is 25 percent.

58 / 100

58. Identify the TRUE statement/s with respect to the risks associated with short selling and stock lending.

1. There is counterparty risk and liquidity risk in short selling
2. There is no risk associated with stock lending as the transaction is done through an approved intermediary

59 / 100

59. ________ ensures that the information contained in the scheme-related documents (SID and SAI) is fully complied with.

60 / 100

60. What is required for the termination of the services of an Asset Management Company (AMC)?

61 / 100

61. An investor is interested in buying some units of a Close-ended fund after the NFO is over. How can he buy the same?

62 / 100

62. Smita is a young investor, and her parents advise her to invest in fixed deposits of banks so that these funds can be used for her retirement. If Smita follows her parents’ advice, what risk does she face?

63 / 100

63. Once the mutual fund units are pledged, the unit holder/s _______ .

64 / 100

64. Identify the FALSE statement(s) – A – Authorized signatories have to sign the request for transactions of institutional investors in mutual funds B – Even if the Memorandum of Association and Articles of Association does not permit investment in mutual funds, the company can invest in mutual funds based on a Board Resolution

65 / 100

65. When can mutual funds charge an additional expense of 0.30% of daily net assets of the scheme?

66 / 100

66. The ARN is allotted to the mutual fund distributors by ______ .

67 / 100

67. Identify the TRUE statement/s. 1. The market liquidity can get impacted due to market-related events and company factors 2. There cannot be a price impact on mutual fund units due to liquidity demands due to redemption or portfolio rebalancing

68 / 100

68. The portfolio of a fund of funds consists of ______ .

69 / 100

69. Identify the false statement(s). A) When an investor wants to redeem from a scheme, the distributor must suggest redemption from the scheme with the maximum exit load B) The mutual fund distributors can ignore the impact of exit load at the time of repurchase

70 / 100

70. Which of these funds will generally have a higher fund management cost?

71 / 100

71. What is the disadvantage of company fixed deposits when compared to bank fixed deposits?

72 / 100

72. Rising Sun Mutual Fund holds shares of AAA Ltd. in its portfolio. When the NAV of the scheme is calculated on 10th April, then each share of AAA Ltd. will be valued at ______ .

73 / 100

73. Which of the following functions can an Asset Management Company (AMC) do in-house?

74 / 100

74. Mrs. Neeta needs Rs. 5,00,000 in 3 years from now. The interest rate is 6%. By which formula can we calculate the amount that is required to be invested today to achieve the goal?

75 / 100

75. If a mutual fund enters into a transaction for the purchase or sale of securities with any of its associates, then the members of the Asset Management Company of the mutual fund have to ________ .

76 / 100

76. An Asset Management Company (AMC) can recover investment management and advisory fees on the management of unclaimed amounts, ________.

77 / 100

77. Which of these investors CANNOT do CASH investments in mutual funds up to a limit of Rs. 50,000?

78 / 100

78. Amongst the distribution channels mentioned below, which one is likely to sell funds of only a single mutual fund house?

79 / 100

79. Mr. Mohit has filled up an application form for subscribing to a mutual fund scheme. However, the address mentioned in the application form is different from the address provided at the time of KYC compliance. Which address will be included in the mutual fund records once the KYC compliance is validated?

80 / 100

80. The NAV of an equity fund is Rs. 76.45, and the face value is Rs. 10. An investor invests Rs 30,000. How many units will be allotted to him? (There is no entry load)

81 / 100

81. In which of the following cases can Goods and Service Tax (GST) be charged to the mutual fund scheme over and above the Total Expense Ratio of the scheme?

82 / 100

82. Which of these statements is true with respect to Key Information Memorandum (KIM)?

83 / 100

83. Not more than 25% of the Net Assets will be invested in the Derivatives Market’ – This statement best describes the ________ of the mutual fund scheme.

84 / 100

84. Identify the FALSE statement. 1. Arbitrage funds can invest in both Futures/Options (F&O) and cash markets 2. The only objective of an Arbitrage fund is to provide capital appreciation 3. Arbitrage funds have lower risk compared to Equity Funds

85 / 100

85. Investments have to be made only through authorized signatories for investments by _______.

86 / 100

86. Identify the TRUE statements with respect to Transmission of mutual fund units – A) Before the transfer is effected, the mutual fund will insist on an indemnity against future problems for the mutual fund arising out of the transfer B) Before the transfer is effected, the mutual fund will not insist on the death certificate of the deceased unit-holder C) Before the transfer is effected, the mutual fund will insist on the KYC documentation from the nominee

87 / 100

87. What is the maximum percentage of holding a single investor can have in a mutual fund scheme?

88 / 100

88. For a Sector Fund, the minimum investment in equity and equity-related instruments of a particular sector/theme shall be 90 percent of total assets. State whether True or False?

89 / 100

89. How can the fundamental attributes of a mutual fund scheme be changed?

90 / 100

90. ______ is the most relevant factor for comparing the performance of liquid funds of similar category offered by various mutual fund houses.

91 / 100

91. Which of the following is INCORRECT with respect to advertisements of Mutual Funds by AMCs?

92 / 100

92. In the case of ________, the Net Asset Value has to be declared for up to 4 decimal points.

93 / 100

93. The compliance requirements under the Foreign Account Tax Compliance Act (FATCA) apply only to mutual funds and not to other financial institutions – State whether True or False?

94 / 100

94. From the below-mentioned entities associated with a mutual fund, who has to mandatorily contribute to the corpus of the mutual fund?

95 / 100

95. In the case of a Sectoral Fund, the minimum investment in equity and equity-related instruments of a particular sector of total assets should be _____.

96 / 100

96. AMFI Code of Ethics states that _______ cannot become a distributor of mutual funds.

97 / 100

97. If an investor claims his unclaimed redemption amount after 3 years, the payment will be based on the ________.

98 / 100

98. Which document is used by fund rating agencies and also by investors to check the performance of various schemes of a mutual fund?