NISM Series V A Mutual Fund Distributors Exam Series - 19

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Q 1. What is the purpose of computerized connectivity mandated for KRAs?

a) To calculate Net Asset Value (NAV)

b) To maintain bank accounts for mutual fund schemes

c) To facilitate transactions by allowing investors to buy mutual fund units

d) Sharing data for efficient processing of KYC

e) To audit the accounts of mutual fund schemes

Q 2. How should mutual fund advertisements convey performance figures for schemes with short investment horizons, according to SEBI's Advertising Code?

a) Advertisements should exclude performance figures for such schemes.

b) Advertisements should include complex performance figures to impress investors.

c) Advertisements can use annualized yields if they accurately represent the scheme's performance.

d) Advertisements should inflate performance figures to attract investors.

e) Advertisements should exclude warnings about market risks for such schemes.

Q 3. Which planet is known as the Red Planet?

a) Venus

b) Mars

c) Jupiter

d) Saturn

e) Neptune

Q 4. Where can an investor find information on the various ways in which they can transact with the mutual fund, including transacting directly, through channel distributors, and via electronic mode?

a) Risk Factors

b) Investment limits

c) Plans and options available under the scheme

d) Mode of transaction

e) Liquidity and Redemption in a scheme

Q 5. What distinguishes Execution Only Platforms (EOP) from other platforms in mutual fund distribution?

a) EOPs provide advisory services along with transaction support

b) EOPs execute trades without any investor involvement

c) EOPs facilitate paper-based transactions only

d) EOPs operate in physical office locations

e) EOPs rely on sub-agents for distribution

Q 6. Which entities are included in the category of non-individual distributors of mutual funds?

a) Only partnership firms

b) Only banks and stockbrokers

c) Only regional distributors

d) Partnerships, regional distributors, national distributors, NBFCs, banks, and stockbrokers

e) Only NBFCs and banks

Q 7. Which of the following expenses may be incurred by a gold exchange-traded fund scheme?

a) Listing fees

b) Brokerage and transaction costs

c) Insurance premium paid by the fund

d) Storage and handling expenses of gold

e) Rating fees

Q 8. What is the STT rate applicable for the sale of units of an equity-oriented mutual fund for delivery-based transactions?

a) 0.001%

b) 0.01%

c) 0.025%

d) 0.05%

e) 0.1%

Q 9. How can an investor terminate the Transfer of Income Distribution cum capital withdrawal plan (DTP)?

a) By sending a written request to the mutual fund

b) By converting units into cash

c) By increasing the dividend amount

d) By decreasing the target scheme's NAV

e) By withdrawing all units from the source scheme

Q 10. What authorization is required from the client for intermediaries to access their data through the UIDAI system?

a) Authorization from the government

b) Authorization from the intermediary

c) Authorization from UIDAI

d) Authorization from the client

e) None of the above

Q 11. What is the key difference between a Direct Plan and a Regular Plan in mutual fund investments?

a) Direct Plan requires routing investments through a distributor, while Regular Plan does not.

b) The Direct Plan offers lower expenses as it does not involve distributor commissions, while the Regular Plan does.

c) The Direct Plan provides higher returns compared to the Regular Plan.

d) The Direct Plan requires a higher minimum investment amount compared to the Regular Plan.

e) Direct Plan is only available to certain types of investors, while Regular Plan is open to all.

Q 12. What is the role of the nominee in the transmission process?

a) To hold the units in trust for the legal heirs

b) Transfer units to the fund manager

c) To receive the proceeds from the redemption

d) To switch between different mutual fund schemes

e) To nominate another individual as the beneficiary

Q 13. What language options are available for NUUP-based mobile banking?

a) 5 regional languages

b) 10 regional languages

c) 11 regional languages

d) 15 regional languages

e) None of the above

Q 14. How does a downgrade in the credit rating of a fixed-income security system typically affect its price?

a) Increase the price

b) Decrease the price

c) Has no impact on the price

d) Increases the yield

e) Decreases the yield

Q 15. What is the standard/general risk factor associated with mutual fund investments?

a) Credit risk

b) Interest rate risk

c) Currency risk

d) Liquidity risk

e) Default risk

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