NISM Series V A Mutual Fund Distributors Exam Series - 16

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Q 1. When is evaluating Alpha most relevant?

a) For all types of investment schemes

b) Only for non-index schemes

c) Only for diversified equity schemes

d) Only for index funds

e) For fixed-income schemes

Q 2. What is the primary focus of certain debt funds aiming for steady returns?

a) Capital appreciation

b) High-risk investments

c) Interest income

d) Derivative trading

e) Equity investments

Q 3. What action should an investor take if one asset class in their portfolio has significantly outperformed another?

a) Increase investment in the outperforming asset class

b) Reduce investment in the outperforming asset class

c) Do nothing as the outperformance may continue

d) Sell all assets and reinvest in a different asset class

e) Seek advice from a financial advisor before taking any action

Q 4. What types of companies generally pose a lower credit risk?

a) Small-sized companies

b) New companies

c) Stable companies with market leadership

d) Companies in declining industries

e) Companies with high debt-to-equity ratios

Q 5. How does the growth of the Indian mutual fund industry compare to the world?

a) The Indian mutual fund industry's share has decreased over the years.

b) The Indian mutual fund industry's share has remained constant.

c) The Indian mutual fund industry's share has grown significantly.

d) The Indian mutual fund industry's share has decreased compared to the world.

e) The Indian mutual fund industry's share is negligible compared to the world.

Q 6. What is the primary purpose of a mutual fund?

a) To compete with traditional investment instruments

b) To offer professional fund management services

c) To provide access to unique investment products

d) To generate higher returns than individual stock investments

e) None of the above

Q 7. What is the primary function of a depository in the context of securities?

a) Auditing securities transactions

b) Holding securities in dematerialized or electronic form on behalf of investors

c) Managing branding and advertising for securities

d) Calculating the Net Asset Value (NAV) of securities

e) Selling securities to investors

Q 8. How are investors informed about changes in the fundamental attributes of a mutual fund scheme?

A) Through social media updates

B) Through email communication

C) Through written communication sent by the Trustees/AMC

D) Through press releases only

E) None of the above

Q 9. Which of the following regulators sets guidelines for mutual funds regarding investment in the money market and foreign exchange market?

a) RBI

b) SEBI

c) IRDAI

d) PFRDA

e) AMFI

Q 10. When are the unaudited financial results of a mutual fund typically displayed on the AMC website?

a) Quarterly

b) Annually

c) Bi-annually

d) Monthly

e) As per the discretion of the fund manager

Q 11. What action is required from the nominee/legal heir of a deceased mutual fund distributor to initiate the transfer of assets?

a) Intimate AMFI about the demise of the distributor with a true copy of the death certificate.

b) Submit a nomination certificate to the respective AMCs.

c) Request a legal heir certificate from the local authorities.

d) Inform the investors about the demise of the distributor.

e) None of the above

Q 12. What relationships have mutual funds built with PSU banks for mutual fund distribution?

a) Relationships based on mergers and acquisitions

b) Relationships based on employee training programs

c) Relationships based on branch expansion initiatives

d) Relationships based on distribution partnerships

e) Relationships based on technology collaborations

Q 13. What is the purpose of charging marketing and selling expenses in a mutual fund scheme?

a) To cover the costs of fund development

b) To compensate agents for their services

c) To pay for the audit fees

d) To cover the costs of trustee services

e) To finance the insurance premium paid by the fund

Q 14. What is the difference between short-term capital gains and long-term capital gains?

a) Short-term capital gains occur within 1 year of investment, while long-term capital gains occur after 3 years.

b) Short-term capital gains occur within 3 years of investment, while long-term capital gains occur after 1 year.

c) Short-term capital gains occur within 1 year for equity-oriented funds and 3 years for non-equity-oriented funds, while long-term capital gains occur after those periods.

d) Short-term capital gains occur within 3 years for equity-oriented funds and 1 year for non-equity-oriented funds, while long-term capital gains occur after those periods.

e) None of the above

Q 15. How are dividend and redemption proceeds paid out if units are held in physical form?

a) Through electronic transfer only

b) Through cheque or electronic transfer

c) Through cash only

d) Through demand draft only

e) Through wire transfer only

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