NISM Series V A Mutual Fund Distributors Exam Series - 14

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Q 1. What benchmark is suitable for a corporate bond fund focusing on short-term bonds?

a) CRISIL Medium to Long Term Debt Index

b) CRISIL Credit Risk Index

c) CRISILAA Short-Term Bond Fund Index

d) CRISIL Liquid Fund Index

e) S&P BSE India Sovereign Bond Index

Q 2. How often is the Risk-o-meter evaluated?

a) Quarterly

b) Annually

c) Monthly

d) Biannually

e) Daily

Q 3. What type of fund strategy seeks to identify stocks available at a price considered cheap relative to their potential future value?

a) Growth funds

b) Value funds

c) Large-cap funds

d) Mid-cap funds

e) Small-cap funds

Q 4. What are some of the hidden costs associated with managing investments independently?

a) Financial constraints

b) Emotional attachment to finances

c) Time spent on research and administration

d) Investment returns

e) None of the above

Q 5. Why is real estate considered popular among all asset classes?

a) It offers high liquidity

b) It has low transaction costs

c) It is often used for self-occupation

d) There are minimal maintenance costs

e) It offers quick capital appreciation

Q 6. What happens to the unit balance of an open-ended mutual fund scheme when investors exit?

a) It remains unchanged

b) It increases

c) It decreases

d) It doubles

e) None of the above

Q 7. How is a change in the control of the AMC communicated to unitholders?

a) Through a phone call

b) Through a letter

c) Through email

d) Through advertisements in newspapers

e) Through a press release

Q 8. What role does the sponsor play in the mutual fund operation?

a) Day-to-day management of schemes

b) Maintaining custody of assets

c) Registration of trustees

d) Investing in the capital of the AMC

e) Appointment of custodians

Q 9. What is the primary function of the Securities and Exchange Board of India (SEBI) according to its preamble?

a) Maximizing profits for investors

b) Promoting speculative trading

c) Protecting the interests of investors in securities

d) Regulating the banking system

e) Encouraging excessive risks in the securities market

Q 10. Question: Who painted the famous artwork "Mona Lisa"?

a) Leonardo da Vinci

b) Vincent van Gogh

c) Pablo Picasso

d) Michelangelo

e) Claude Monet

Q 11. Where can candidates find detailed procedures for effecting changes in distributor codes?

a) SEBI guidelines

b) AMFI Circular dated July 16, 2020

c) Distributor association websites

d) Mutual fund company websites

e) None of the above

Q 12. What is one of the purposes of the trial commission paid to distributors in the mutual fund industry?

a) To compensate the distributor for the initial investment made by the investor

b) To ensure the investor continues to receive regular updates and services from the distributor

c) To cover the administrative costs incurred by the mutual fund company

d) To provide additional incentives for distributors to bring in new investors

e) None of the above

Q 13. How are traded securities, other than money market and debt securities, valued according to SEBI and AMFI guidelines?

a) Based on the highest quoted price of the day

b) At the average price of the day's trading

c) At the last quoted closing price on the stock exchange

d) At the opening price on the valuation day

e) Based on the lowest quoted price of the day

Q 14. How does taxation differ for short-term capital gains before and after the Finance Act of 2023 for certain debt funds?

a) Taxation remains the same

b) Taxation changes from long-term capital gains to short-term capital gains

c) Taxation changes from short-term capital gains to long-term capital gains

d) Taxation changes to exempt from capital gains tax

e) None of the above

Q 15. Which section of the Income Tax Act exempts all income earned by mutual funds from tax?

a) Section 10(23) (D)

b) Section 80C

c) Section 44AD

d) Section 115BB

e) Section 10(38)

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