NISM Series V A Mutual Fund Distributors Exam Series - 20
NISM Series VA Mutual Fund Distributors Exam Series - 20
Q 1. Which principle aims to address conflicts of interest in the valuation process?
a) Principle No. 1
b) Principle No. 2
c) Principle No. 3
d) Principle No. 4
e) Principle No. 5
Q 2. What is the tax rate applicable to short-term capital gains for equity-oriented funds?
a) 10%
b) 15%
c) 20% with indexation benefits
d) Marginal tax rate, as applicable to the investor
e) None of the above
Q 3. How can an SIP be renewed?
a) By submitting a renewal form with updated bank details
b) By providing details of the scheme, plan, SIP amount, SIP date, and period
c) By increasing the SIP amount
d) By setting an upper limit for the SIP amount
e) By canceling the existing SIP and enrolling in a new one
Q 4. What can be provided as an alternative to a canceled cheque if the name is not pre-printed on it?
a) Bank statement
b) Passport
c) PAN card
d) Voter ID
e) Utility bill
Q 5. What is the main difference between Direct and Regular Plans offered by mutual funds?
a) Direct Plans have higher expense ratios
b) Regular Plans have higher expense ratios
c) Direct Plans including distribution expenses and commissions
d) Regular Plans do not include distribution expenses and commissions
e) Direct Plans pay commissions to distributors
Q 6. What is the significance of designating a default account in UPI?
a) It enables automatic fund transfers
b) This ensures funds are deposited into the correct account
c) It links multiple bank accounts to a single VPA
d) It facilitates international transactions
e) None of the above
Q 7. Which of the following documents can serve as proof of address for KYC compliance?
a) Passport only
b) Bank account statement only
c) Utility bill only
d) All of the above
e) None of the above
Q 8. How does a lower Loan to Value (LTV) ratio affect the risk of default?
a) Increases the risk of default
b) Decreases the risk of default
c) Does not affect the risk of default
d) Increases potential recovery in case of default
e) Decrease the potential recovery in case of default
Q 9. What is the modified duration used for debt analysis?
a) Assessing credit risk
b) Predicting market liquidity
c) Estimating price volatility in response to interest rate changes
d) Evaluating issuer reputation
e) None of the above
Q 10. What risks cannot be reduced through the diversification of mutual funds?
a) Credit risk
b) Market risk
c) Interest rate risk
d) Inflation risk
e) Liquidity risk
Q 11. Which of the following helps investors assess the consistency of a fund’s performance over different market scenarios?
a) Cumulative returns
b) Comparison of benchmark returns
c) Discreet annual returns
d) Asset allocation strategy
e) None of the above
Q 12. What should investors be cautious of if a 'hybrid fund' takes aggressive positions in equity or debt?
a) Low returns
b) High liquidity
c) Higher risk than expected
d) Tax implications
e) Diversification benefits
Q 13. What does strategic asset allocation consider when determining the target allocation across asset categories?
a) Market opportunities
b) Recent market events
c) Financial goals, time horizon, and risk profile
d) Investor emotions and biases
e) Investment performance history
Q 14. Which factor contributes to higher price fluctuations in bonds with longer maturities?
a) Inflation risk
b) Market risk
c) Credit risk
d) Interest rate risk
e) Liquidity risk
Q 15. What are illiquid investments in financial markets?
a) Investments that are easily tradable in the market
b) Investments with high liquidity and readily available buyers
c) Investments for which investors cannot easily find buyers or realize their value in the market
d) Investments with guaranteed returns
e) None of the above
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