NISM Series V A Mutual Fund Distributors Exam Series - 1

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Q 1. Apart from capital appreciation, what other sources of income can real estate generate?

a) Dividends

b) Interest

c) Rental income 

d) Royalties

e) Capital gains

Q 2. What is the purpose of assessing an investor's risk profile?

a) To maximize returns

b) To minimize investment costs

c) To align investments with the investor's financial goals and risk tolerance

d) To eliminate all investment risks

e) To time the market effectively

Q 3. How do investors purchase units of a close-ended mutual fund scheme?

a) Through direct purchase from the mutual fund at any time

b) Only during the New Fund Offer (NFO) period

c) After the NFO period from the stock exchange

d) Through systematic transactions at regular intervals

e) None of the above

Q 4. What is the characteristic maturity range of securities in a Medium Duration Fund?

a) 1 year to 3 years

b) 3 months to 6 months

c) 6 months to 12 months

d) 1 year to 4 years

e) None of the above

Q 5. What authority does AMFI have regarding the conduct of distributors in the mutual fund industry?

a) Auditing distributors' transactions

b) Providing investment advice to distributors

c) Regulating the conduct of distributors, including disciplinary actions

d) Calculating the Net Asset Value (NAV) of distributors' portfolios

e) Licensing distributors

Q 6. Who appoints collection bankers in the context of mutual fund transactions?

a) Trustees

b) SEBI

c) Custodians

d) Investors

e) AMCs

Q 7. What is the role of the Insurance Regulatory and Development Authority of India (IRDAI)?

a) Regulating the banking system

b) Regulating the securities markets

c) Regulating the insurance market

d) Regulating the pension market

e) Representing the interests of consumers

Q 8. What information is included in the risk-to-meter of a mutual fund scheme?

a) Exit load and lock-in period

b) Month-end AUM and TER

c) Portfolio disclosure and yield of instruments

d) Scheme classification and category

e) Risk level of the scheme relative to its benchmark

Q 9. How does a mutual fund distributor contribute to the investment process?

a) By managing mutual fund schemes

b) By providing company-specific analysis

c) By constructing a portfolio of securities

d) By identifying appropriate mutual fund schemes for investors

e) By analyzing market factors

Q 10. What is the primary reason behind SEBI's directive regarding the full trial model of commission?

a) To increase distributor revenue

b) To align distributor incentives with investor interests

c) To reduce AMC's profitability

d) To encourage upfront commission payments

e) None of the above

Q 11. How should equity instruments be generally valued for non-traded securities?

a) Based on the highest quoted price on the stock exchange

b) Solely based on earnings capitalization

c) Solely based on net asset value

d) Based on the lowest quoted price on the stock exchange

e) Using a fixed valuation method determined by SEBI

Q 12. In the old regime, how was dividend distribution tax treated in the hands of the investor?

a) It was considered a deductible expense

b) It was available as a setoff against other tax liabilities

c) It is not considered a tax liability for the investor

d) It was exempted for certain categories of investors

e) It was directly deducted from the investor's income

Q 13. Can a nominee be specified for mutual fund units held in dematerialized mode?

a) Yes, governed by the AMC

b) No, only physical units can have nominees

c) Yes, governed by the depository

d) Yes, but only if the nominee is an individual

e) No, only corporations can be nominated

Q 14. How many nominees can be specified for a mutual fund investment?

a) One

b) Two

c) Three

d) Four

e) Unlimited

Q 15. What happens to an investor's unit-holding upon dematerialization?

a) The investor receives cash equivalent to the units.

b) The units are held in physical form with the depository.

c) They are held electronically in a demat account.

d) The units are transferred to another investor automatically.

e) The units are cancelled and the investor must repurchase them electronically.

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