NISM Model Test Paper

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

Maximum Marks: 50 Test Duration: 60 minutes Pass Marks: 25 NISM is mandated to implement certification examinations for professionals employed in various segments of. [ 1 Marks ] (a) Mutual Fund Market

Q1

(b) The Indian securities markets. (c) Financial Markets (d) Association of Mutual Funds in India (AMFI) (e) I am not attempting the question The examination seeks to create a common minimum knowledge benchmark for all persons involved in selling and distributing mutual funds including: A) Individual Mutual Fund Distributors B) Employees of organizations engaged in sales and distribution of Mutual Funds C) Employees of Asset Management Companies specially persons engaged in sales and distribution of Mutual Funds [ 1 Marks ]

Q2

Only A Only B Only C All of the above (e) I am not attempting the question SEBI (Mutual Fund) Regulations, 1996 as amended till date define mutual fund as [ 1 Marks ]

(a) a trust established in the form of a fund to raise moneys through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets. (b) a fund established in the form of a trust to collect moneys through the purchase of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets. (c) a fund established in the form of a trust to raise moneys through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets. (d) a trust established in the form of a fund to raise moneys through the purchase of units to the public undertakings or a section of the public undertakings under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets. (e) I am not attempting the question Q4 Although the AMC manages the schemes, custody of the assets of the scheme (securities, gold, gold-related instruments & real estate assets) is with a Custodian, who is appointed by the Trustees. [ 1 Marks ]

Q3

(a) TRUE (b) FALSE (c) I am not attempting the question Interval funds combine features of both open-ended and close ended schemes. [ 1 Marks ] (a) TRUE Q5 (b) FALSE (c) I am not attempting the question The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 is [ 1 Marks ] (a) Rs.2000 (b) Rs.2015 Q6 (c) Rs.1975 (d) Rs.2030 (e) I am not attempting the question Mr.SRK wants to invest in only treasury bills and government securities. He will invest in: [ 1 Marks ] (a) Actively Managed Funds (b) Diversified Funds Q7 (c) Sector Funds (d) Gilt Funds (e) I am not attempting the question _____________ linked to a host fund [ 1 Marks ] (a)Foreign Investment Fund (b) International funds Q8 (c)Feeder Funds (d) Normal Funds (e) I am not attempting the question ___________ are the main people behind the mutual fund operation [ 1 Marks ] (a) RTA (b) AUM Q9 (c) Custodian (d) Sponsors (e) I am not attempting the question In order to perform the trusteeship role, either individuals may be appointed as trustees or a Trustee company may be Q10 appointed. When individuals are appointed trustees, they are jointly referred to as Board of Trustees. A trustee company functions through its COO [ 1 Marks ]

(a) TRUE (b) FALSE (c) I am not attempting the question _________have a key role in selling suitable types of units to their clients i.e. the investors in the schemes [ 1 Marks ] (a) Sponsors (b) RTA Q11 (c) Distributors (d) Collecting Bankers (e) I am not attempting the question All RTAs need to register with ____ [ 1 Marks ] (a) NISM (b) NSE Q12 (c) AMFI (d) SEBI (e) I am not attempting the question Mr. Yogesh expected to retain the Units for at least 3 years. He is a investor in : [ 1 Marks ] (a) DYS (b) ELSS Q13 (c) GF (d) EI (e) I am not attempting the question A "glossary" of Defined Terms must be included in the offer document [ 1 Marks ] (a) TRUE (b) FALSE Q14 (c) I am not attempting the question

Rama invested in debt securities where his interest rate depends on market line and Shayma invested in a variant of debt schemes. In which type of Debt Fund they both actually invested: [ 1 Marks ] (a) Rama in Gilt Funds & Shyama in Diversified Debt funds Q15 (b) Both have invested in Diversified Debt Fund (c) Rama in Floating Rate Funds & Shyama in Diversified Debt Funds (d) Rama in Floating Rate Funds & Shyama in Money Market Schemes

(e) I am not attempting the question BSE Sensex would buy only the shares that are part of the composition of the __________ [ 1 Marks ] (a) Listed Securities (b) SEBI Listed Securities Q16 (c) NIFTY (d) BSE (e) I am not attempting the question Sensex stands for [ 1 Marks ] (a) Securities Index (b) Sensitive Index Q17 (c) SEBI Securities (d) Sector Index (e) I am not attempting the question In India, mutual fund AUM is ____ of bank deposits. [ 1 Marks ] (a) 51.2% (b) 10% Q18 (c) 15% (d) 42% (e) I am not attempting the question ETFs are [ 1 Marks ] (a) Exchange Tradable Funds (b) Exchange & Traded Funds Q19 (c) Exchange Traded Funds (d) Exchange Trading Funds (e) I am not attempting the question At least ____ of the trustees / directors on the Board of the trustee company, would need to be independent trustees [ 1 Marks ] (a) 1/3 Q20 (b) 2/3 (c) 4 (d) 1 (e) I am not attempting the question

The appointment of an AMC can be terminated by a _______ of the trustees, or by ____ of the Unit-holders. [ 1 Marks ] (a) 75%,Majority Q21 (b) Majority, Majority (c) 75%,75% (d) Majority,75% (e) I am not attempting the question Payment instruments against applications handed over to branches of the AMC or the RTA need to be banked with the collecting bankers, so that the moneys are available for investment by the scheme. [ 1 Marks ] Q22 (a) TRUE (b) FALSE (c) I am not attempting the question Investors in a mutual fund scheme can recover the value of the moneys invested, from the mutual fund itself [ 1 Marks ] Q23 (a) TRUE (b) FALSE (c) I am not attempting the question Assets under management (AUM) is looked at as a measure of success against the competition and consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow.[ 1 Marks ] Q24 (a) TRUE (b) FALSE (c) I am not attempting the question Worlds Largest AUM is [ 1 Marks ] (a) SBI Capitals (b)Black Rock Q25 (c) Allianz (d) State Street Global (e) I am not attempting the question The options offered under a scheme allow investors to structure their investments in line with their liquidity preference and tax position. [ 1 Marks ] Q26 (a) TRUE (b) FALSE (c) I am not attempting the question UTI was set up by the _____________ [ 1 Marks ] Q27 (a) SEBI

(b) Mutual Fund Association (c) RBI (d) Parliament (e) I am not attempting the question In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an Act of Parliament. The primary objective behind this was to: [ 1 Marks ] (a) Re-Organise UTI Q28 (b) Bring all mutal fund players on the same level (c) To specify undertakings (d) None of the above (e) I am not attempting the question The Alliance of PNB is with [ 1 Marks ] (a) Sun F&C Mutual Fund (b) Birla Sun Life Q29 (c) Fidelity (d) Principal Mutual Fund (e) I am not attempting the question Which is an Institutional Sponsor [ 1 Marks ] (a) PNB MF (b) SBI MF Q30 (c) LIC MF (d) HSBC MF (e) I am not attempting the question _______ arranges for the requisite offices and infrastructure, engages employees, provides for the requisite software, handles advertising and sales promotion, and interacts with regulators and various service providers. [ 1 Marks ] (a) RTAs Q31 (b) Sponsors (c) Custodian (d) AMC (e) I am not attempting the question The SEBI regulations provide that if the sponsor or its associates control 51% or more of the shares of a custodian, or if 50% or more of the directors of a custodian represent the interest of the sponsor or its associates, then that custodian cannot appointed for the mutual fund operation of the sponsor or its associate or subsidiary company. [ 1 Marks ] (a) TRUE

Q32

(b) FALSE (c) I am not attempting the question Managers of balanced funds can, however, shift this ratio one way or the other to take advantage of high interest rates or stock market growth. [ 1 Marks ] Q33 (a) TRUE (b) FALSE (c) I am not attempting the question Income Securities focus on paying dividends as their top priority while de-emphasizing the growth in value of their portfolios. [ 1 Marks ] Q34 (a) TRUE (b) FALSE (c) I am not attempting the question Mutual Fund industry is part of a well-regulated investment environment where the interests of the investors are protected by the regulator. All funds are registered with AMFI and complete transparency is forced. [ 1 Marks ] Q35 (a) TRUE (b) FALSE (c) I am not attempting the question Closed-end Funds may also offer "buy-back of units" to the unit holders. In this case, the corpus of the Fund and its outstanding units do get changed. [ 1 Marks ] Q36 (a) TRUE (b) FALSE (c) I am not attempting the question Deferred load is charged to the scheme over a period of time. [ 1 Marks ] (a) TRUE Q37 (b) FALSE (c) I am not attempting the question Profits arising out of sale of units by an investor within 12 months of purchase are categorized as short-term capital gains, which are taxable. [ 1 Marks ] Q38 (a) TRUE (b) FALSE (c) I am not attempting the question Market capitalization of Mid-Cap companies is less than that of big, blue chip companies (less than Rs. 2500 crores but more than Rs. 500 crores) and Small-Cap companies have market capitalization of less than Rs. 500 crores. [ 1 Marks ] Q39 (a) TRUE (b) FALSE (c) I am not attempting the question

MAGNUM BALANCED FUND is SBIs Hybrid Fund Scheme [ 1 Marks ] (a) TRUE Q40 (b) FALSE (c) I am not attempting the question Balanced funds generally have low volatility and are popular with investors seeking current income with growth potential [ 1 Marks ] Q41 (a) TRUE (b) FALSE (c) I am not attempting the question Franklin India Prima Fund is a closed-ended Equity Fund [ 1 Marks ] (a) TRUE Q42 (b) FALSE (c) I am not attempting the question Asset Allocation Funds depends upon the skill of a fund manager in anticipating market trends. [ 1 Marks ] (a) TRUE Q43 (b) FALSE (c) I am not attempting the question Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the total number of its outstanding shares in the market. [ 1 Marks ] Q44 (a) TRUE (b) FALSE (c) I am not attempting the question Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his investments (as long as he holds the units), irrespective of the performance of the fund. [ 1 Marks ] Q45 (a) TRUE (b) FALSE (c) I am not attempting the question As per the mandate, a minimum of 90% of investments by ELSS should be in equities at all times. [ 1 Marks ] (a) TRUE Q46 (b) FALSE (c) I am not attempting the question SBI TAX ADVANTAGE FUND - SERIES I ,is an ELSS Scheme [ 1 Marks ] (a) TRUE Q47 (b) FALSE (c) I am not attempting the question

The biggest advantage offered by ETF is that they offer diversification, flexibility of holding a single share (tradable at index linked prices) at the same time. [ 1 Marks ] Q48 (a) TRUE (b) FALSE (c) I am not attempting the question IPOs are related with Open ended Schemes [ 1 Marks ] (a) TRUE Q49 (b) FALSE (c) I am not attempting the question The NAV of an open-end fund is calculated every day [ 1 Marks ] (a) TRUE Q50 (b) FALSE (c) I am not attempting the question

QUESTIONS THESE QUESTIONS COMPRISE OF 1st & 2nd CHAPTERS OF NISM-Series-V- A: Mutual Fund Distributors Certification Examination ISM-SeriesTHANKS & REGARDS Lokakriti.financials@gmail.com