NISM Series V A Mutual Fund Distributors Exam Series - 17

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Q 1. What are some reasons why investors prefer transacting through the Internet for mutual fund investments?

a) Convenience and avoidance of paperwork

b) Preferences for physical office visits

c) Dependence on the distributor

d) Complexity of digital transactions

e) Higher costs associated with digital transactions

Q 2. What types of investments are excluded from commission payments to distributors?

a) Investments from loyal investors

b) Investments from high-net-worth individuals

c) Investments from existing clients

d) Investments from the distributors themselves

e) None of the above

Q 3. What should the asset management company consider when valuing debt and money market securities, according to Principle No. 10?

a) Historical performance

b) Market demand

c) Price of trades of the same security or similar security reported on all available public platforms

d) Investment objectives

e) Economic indicators

Q 4. What is the purpose of indexation in taxation on long-term capital gains?

a) To increase the tax liability

b) To decrease the tax liability

c) To exempt the gains from tax

d) To adjust for changes in market value

e) None of the above

Q 5. How can an investor book profits using triggers?

a) By setting a stop-loss trigger

b) By specifying a particular NAV level for redemption

c) By transferring money into an equity scheme when the market goes down

d) By choosing to redeem just the appreciation on activation of the trigger

e) By switching to another scheme for the activation of the trigger

Q 6. What additional documents need to be provided if the payout bank account is different from the account used for purchasing units?

a) Original passport

b) Original driving license

c) Original canceled cheque of the pay-out account, self-attested copy of bank passbook or bank statement, or a letter on bank letterhead

d) Birth certificate

e) Self-attested PAN card copy

Q 7. What is the benefit of the Application Supported by Blocked Amount (ASBA) facility?

a) It allows instant fund transfers

b) It earns interest from the investor until the allotment is made

c) It requires manual authorization for each transaction

d) It links multiple bank accounts to a single application

e) None of the above

Q 8. What is the requirement for SEBI registered intermediaries/mutual fund distributors who want to undertake Aadhaar authentication services through KUAs?

a) They must undergo a background check

b) They must agree with KUA and get registered as sub-KUAs with UIDAI

c) They must obtain approval from SEBI

d) They must pay a fee to UIDAI

e) None of the above

Q 9. Which document serves as proof of identity for all mutual fund applicants?

a) Passport

b) Aadhaar Card

c) Voter ID Card

d) Permanent Account Number (PAN) Card

e) None of the above

Q 10. How do fixed-income securities typically react to changes in interest rates?

a) Prices rise when interest rates rise

b) Prices fall when interest rates rise

c) Prices rise when interest rates drop

d) Prices remain unaffected by changes in interest rates

e) Prices fluctuate randomly regardless of interest rate changes

Q 11. What happens to the Net Asset Value (NAV) of the segregated portfolio after the credit event?

a) It remains the same as before the credit event

b) It increases significantly due to the credit event

c) It decreases significantly due to the credit event

d) It is not disclosed to investors

e) None of the above

Q 12. When can a segregated portfolio be created in a mutual fund scheme according to SEBI regulations?

a) In case of a market-wide liquidity crisis

b) In case of default of interest or principal amount by the issuer of unrated debt instruments

c) If there is a downgrade in the credit rating of any security in the scheme's portfolio

d) During operational issues such as force majeure

e) None of the above

Q 13. Which index is not suitable for a credit risk fund?

a) CRISIL Credit Risk Index

b) CRISIL Medium Term Corporate Bond Index

c) CRISIL Money Market Index

d) CRISIL Short-Term Corporate Bond Index

e) S&P BSE India Sovereign Bond Index

Q 14. What risks may be associated with debt funds focusing on total returns?

a) Capital preservation risk

b) Market risk

c) Inflation risk

d) Liquidity risk

e) Interest rate risk

Q 15. What complicates the assessment of gold and silver purity for many investors?

a) High liquidity

b) Low transaction costs

c) Varying degree of purity

d) Long-term storage capability

e) Availability of purity certificates

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