The NAV of a fund has increased from Rs.24 to 26 in 16 months.

What is the annualized return Wrong Answer : 10% Correct Answer : 6.25% 2 An investment has doubled in 6 years The annualized compounded return is Wrong Answer : Insufficient information Correct Answer : 12.25% 3 A moderate risk investor who has been advised 35% equity allocation would be best advised to invest in Wrong Answer : Aggressive growth fund Correct Answer : Diversified equity fund 4 Rajesh is a 25 yr old person who is unmarried and working in a Software firm and wants to invest. What allocation would you recommend to him Wrong Answer : 90% in money market and 10% in equity Correct Answer : 100% in equities 5 Which of these cannot be prevented by unitholders even if 75% of unitholders are behind it Wrong Answer : Selling off a scheme of one fund to another fund Correct Answer : Prevent the takeover of the funds AMC by another sponsor 6 Which of the following are important in fund comparison Wrong Answer : None of the above Correct Answer : Both of the above 7 A stock exchange is involved in the supervision of Wrong Answer : Only open end schemes Correct Answer : Only the closed end scheme which are listed in the particular stock exchange 8 Which of the following is true as per SEBI rules? Wrong Answer : Each fund has to be run by a team of fund managers Correct Answer : The name of the fund manager of each scheme has to be given in the offer document of the scheme 9 An analysis of operations and financials of the company is called Wrong Answer : Chartist approach Correct Answer : Fundamental analysis

10 In the event that an assured return fund does not meet its obligation a unitholder can sue Wrong Answer : The trustees Correct Answer : The person named as guarantor in the offer document 11 Which of the following is not the object of AMFI? Wrong Answer : To increase awareness of mutual fund Correct Answer : To regulate norms governing mutual funds 12 In case of corporate deposits the most important thing an investor must look for is : Wrong Answer : Profitability of the company Correct Answer : Credit rating of the company and deposit 13 Which of the following is not a specialty fund? Wrong Answer : Test fund Correct Answer : Balanced fund 14 An investment shall be regarded as non-performing if it has provided no returns through dividend/interest for more than Wrong Answer : 36 months Correct Answer : 3 months 15 If a security is thinly traded it implies that the security has not traded on any stock exchange for the last __ days Wrong Answer : 60 Correct Answer : 30 16 Diversified debt funds are most affected by Wrong Answer : Default risk Correct Answer : Interest rate risk 17 For a merger of two AMCs to go through which of the following is not required? Wrong Answer : Approval by trustees Correct Answer : Approval by company law board 18 Safekeeping of physical securities is the role of Wrong Answer : Sponsor Correct Answer : The custodian 19 SEBI regulations for mutual funds came into force in

Wrong Answer : 1987 Correct Answer : 1996 20 Which class of investors is not allowed to invest in Indian mutual funds? Wrong Answer : Indian resident Correct Answer : Foreign national 21 Value of stocks refers to Wrong Answer : Shares of companies whose earnings are expected to increase at normal levels Correct Answer : Shares of companies in nature industries expected to yield low growth earnings 22 Which of the following statements is false: Wrong Answer : Gilt funds would not face the risk of default unless the government defaults on its payments Correct Answer : Gilt funds NAV will not fluctuate irrespective of interest rate movements 23 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 percentage NAV change: [{{absolute change in NAV/NAV at the beginning}/months covered}*12}]*100 Wrong Answer : 8% Correct Answer : 7.50% 24 A unit of an open-end fund was purchased when its NAV was Rs.25. At year-end its NAV was Rs.27. In the interim period the fund made a distribution of Rs.5 per unit when its NAV was 26. What was the simple total return of the fund? Wrong Answer : 27.50% Correct Answer : 28% 25 Mutual fund can borrow Wrong Answer : In order to meet redemption units/dividends or interest payouts Correct Answer : All of the above 26 A security is considered to be untraded if Wrong Answer : It is not traded for 180 days Correct Answer : It is not traded for 30 days 27 An investment of Rs.100 000 on January 1 2006 is redeemed to August 1 or any other tax benefit? Wrong Answer : 15000 Correct Answer : 0

28 Which of these would you recommend to a low risk investor? Wrong Answer : Small cap fund Correct Answer : Bond fund 29 SIP is not Wrong Answer : Rupee cost averaging Correct Answer : Transfer of units 30 A mutual fund is not Wrong Answer : A company that manages an investment portfolio Correct Answer : A portfolio of stocks- bonds- and securities 31 Which is not true about an SRO Wrong Answer : Passes its own laws Correct Answer : Reports to an apex regulatory body 32 An investor invests Rs 300 today. After 7 yrs the value becomes Rs. 600. What is his annualized compounded rate of return Wrong Answer : 9 Correct Answer : 10.41 33 A NRI holds units in mutual fund. What should he do with his holding if he takes up foreign citizenship Wrong Answer : He continues Correct Answer : He redeems 34 The strategy advisable for an investor to maximize investment return in the long run Wrong Answer : Liquidate good performing investments Correct Answer : Switch from poor performers to good performers 35 Which of the following portfolio would you recommend to a young couple with dual income & 2 children Wrong Answer : Either 1 or 2 Correct Answer : 10% in money market fund-30% in aggressive equity fund-25% in high yield bond fund and long term growth fund and 35% in municipal bond funds 36 Indira Vikas Patra caught the attention of the masses because of Wrong Answer : popularity in rural areas Correct Answer : easy transferability and identity of owner is hidden

37 While comparing mutual funds with other options which of the following should not be taken into consideration? Wrong Answer : Compounded annual return Correct Answer : Transaction costs 38 Which of the following funds would not be very volatile? Wrong Answer : A fund with investments in a handful of stocks Correct Answer : A fund with investments in high quality assets 39 Which of the following is true about switching from a MMMF to an equity fund? Wrong Answer : It is not allowed Correct Answer : It is a means to deal with the stock market swings 40 The maximum limit of inter-scheme investments by a fund is: Wrong Answer : 5% of the NAV of the transferring scheme Correct Answer : 5% of the NAV of all schemes of the fund 41 The performance of which of the following is not comparable? Wrong Answer : Two diversified equity funds Correct Answer : An it fund and a diversified equity fund 42 Abridged offer document distributed with application is called Wrong Answer : prospectus Correct Answer : key information memorandum 43 The difference between repurchase and sale price of the unit should not exceed Wrong Answer : 5% Correct Answer : 7% 44 What is the rate of tax on long term capital gains in case of mf units? Wrong Answer : 20% after indexation Correct Answer : either of a or b 45 The following is not a characteristic of a closed end fund. Wrong Answer : it has fixed corpus Correct Answer : its units can be purchased or resold on any working day 46 A fund charges 2% entry load its NAV is Rs.15. An investor invests Rs.15 Wrong Answer : "1 Correct Answer : 980.39

47 Money market funds would not invest in Wrong Answer : Treasury bills Correct Answer : Long term corporate debt 48 Which of the following statements is false Wrong Answer : gilt funds would not face the risk of default unless the government defaults on its payments Correct Answer : gilt funds NAV will not fluctuate irrespective of interest rate movements 49 Arrange the fund types starting from lowest risk to highest risk sector funds balanced fund diversified equity fund Wrong Answer : D B S M Correct Answer : M B D S 50 Index Funds aim to Wrong Answer : invest in well researched stock to beat popular indices Correct Answer : track a specified index subject to a small tracking error 51 The following is not a duty of the board of trustees of a mutual fund Wrong Answer : enter into IMA with AMC in accordance with SEBI regulations. Correct Answer : guarantee returns on the investors money 52 Which organisation should an investor approach in case of grievance against a mutual fund Wrong Answer : AMFI Correct Answer : SEBI 53 The first time investor would be advised to refer to Wrong Answer : none of these Correct Answer : detailed offer document 54 Gilt funds would not invest in Wrong Answer : call money Correct Answer : convertible debentures 55 The board of trustees is expected to protect the interest of Wrong Answer : SEBI Correct Answer : the unit holders