NISM Series V A Mutual Fund Distributors Exam Series -9
NISM Series V A Mutual Fund Distributors Exam Series -9
Q 1. What eligibility criteria should the sponsor meet to be considered a fit and proper person for mutual fund operations?
a) Compliance with SEBI regulations only
b) Association with a foreign financial institution
c) Soundtrack record and reputation for fairness and integrity
d) Investment in capital markets for at least 10 years
e) Approval from the Reserve Bank of India
Q 2. Who does the Compliance Officer report to in the AMC?
a) Fund managers
b) Trustees
c) Analysts
d) Dealers
e) Sales team
Q 3. What potential consequences could arise if activities such as insider trading and deliberate speculation are left unchecked?
a) Increased investor confidence
b) Growth of financial resources
c) Drying up of financial resources and loss of investor trust
d) Decreased market transparency
e) Lower transaction costs
Q 4. What is the minimum circulation requirement for the newspapers publishing the advertisement regarding a change in control of the AMC?
a) Nationwide circulation
b) Circulation in the state where the head office is located
c) Circulation in major financial centers only
d) At least two newspapers with nationwide circulation, one in English and one in Hindi
e) At least one newspaper with nationwide circulation in English
Q 5. How does the upfronting of the trial commission affect the Total Expense Ratio (TER) differential between regular and direct plans?
a) It reduces the TER differential
b) It increases the TER differential
c) It has no impact on the TER differential
d) It eliminates the TER differential
e) None of the above
Q 6. What is the purpose of the biometric process in the KYD process?
a) To verify the distributor's educational qualifications
b) To verify the distributor's identity using fingerprint impressions
c) To assess the distributor's risk tolerance
d) To determine the distributor's investment preferences
e) None of the above
Q 7. What accounting principles require expenses and income to be recognized when they relate to a period, regardless of when they are paid or received?
a) The liquidity principle
b) The delay principle
c) The accrual principle
d) The investment principle
e) The realization principle
Q 8. What advantages does the growth option in mutual fund schemes offer in terms of tax treatment?
a) Immediate tax exemption on capital gains
b) Lower tax rates on capital gains
c) Tax deferral on capital gains until redemption
d) Tax credits for reinvested capital gains
e) Tax deductions on initial investment
Q 9. Can conflicting information in the application form for additional investment lead to rejection?
a) Yes, always
b) No, it will be accepted regardless
c) Only if the investment amount is incorrect
d) Yes, at the discretion of the AMC
e) No, conflicting information is allowed
Q 10. In a rights issue for mutual fund units, what determines the number of units an investor receives?
a) Face value
b) Right price
c) Sale price
d) Bonus issue
e) NAV
Q 11. What information is required if an investor's citizenship/nationality/place of birth/tax residency is in place other than India?
a) Bank account details
b) Educational qualifications
c) Country of tax residency and respective taxpayer reference ID
d) Employment history
e) Social Security number
Q 12. What is the purpose of mentioning the application number or folio number on the reverse of the payment instrument?
a) To identify the bank branch
b) To verify the signature
c) To ensure timely processing of the payment
d) To identify the mutual fund scheme
e) To verify the bank account number
Q 13. When are applications for non-financial transactions stamped with the date instead of time?
a) When submitted by the investor's representative
b) When received after the cut-off time
c) When requesting a change of address
d) When purchasing units
e) None of the above
Q 14. Why is it important for time-stamping machines to have a tamper-proof seal?
a) To prevent unauthorized access and tampering
b) To enhance the visual appeal of the machine
c) To reduce maintenance costs
d) To increase the machine's efficiency
e) None of the above
Q 15. What could be a consequence of settlement problems in the financial markets for a mutual fund scheme?
a) Temporary period of un-invested assets
b) Reduced return on investments
c) Missed investment opportunities
d) Potential losses
e) All of the above