NISM MUTUAL FUND FOUNDATION 7
NISM MUTUAL FUND FOUNDATION
Mock Test with Answer key - Click Here >>
Q 1. Who signs the check for mutual fund purchases?
a) The banker
b) The mutual fund manager
c) The account holder
e) None of the above
Q 2. What are the risks associated with equity investments?
a) Fixed returns and low volatility
b) High volatility and absence of defined returns
c) Predictable earnings and stable prices
e) Guaranteed returns and market stability
Q 3. What must distributors understand about the risks discussed in Section 10.1 of the book?
a) The risks are negligible for most investors
b) The risks are unimportant when considering investment objectives
c) The impact of risks on investors and their investment objectives
e) None of the above
Q 4. What factors determine the benchmark selection for mutual fund schemes?
a) Scheme's historical performance
b) Scheme's NAV (Net Asset Value)
c) Scheme's investment objectives, asset allocation pattern and investment strategy
e) Scheme's fund manager's preference
Q 5. What does the NAV of Gold ETFs closely track?
a) Share prices of gold companies
b) Price of gold metal
c) Performance of gold sector funds
e) Market indices
Q 6. How do equity shareholders potentially benefit from company profits?
a) By receiving fixed interest payments
b) By receiving capital appreciation only
c) By receiving dividends
e) By receiving royalties
Q 7. What is the term used to describe investment returns adjusted for inflation?
a) Nominal rate of return
b) Real rate of return
c) Effective rate of return
e) Inflation-adjusted rate of return
Q 8. How do mutual funds benefit investors?
a) By guaranteeing high returns
b) By eliminating all investment risks
c) By providing diversification and professional management
e) None of the above
Q 9. What are the key characteristics of an equity-linked savings Scheme (ELSS)?
a) It has a lock-in period of 1 year
b) It primarily invests in debt securities
c) It provides tax benefits with a statutory lock-in period of 3 years
e) None of the above
Q 10. What does the custodian track in the companies where the fund has invested?
a) Investment returns
b) Market trends
c) Corporate actions such as dividends, bonuses, and rights
e) Regulatory changes
Q 11. Who appoints the directors of the Asset Management Company (AMC)?
a) Trustees
b) Custodian
c) Unit-holders
d) Sponsor
Q 12. What is the timeline for an intermediary to provide an explanation after receiving a complaint?
a) 1 weeks
b) 2 weeks
c) 3 weeks
e) 5 weeks
Q 13. What is mentioned on the cover page of the SID?
a) Table of Contents
b) Introduction
c) Investment Objectives and Policies
e) Performance track record of the scheme
Q 14. How does the payment of AUM-linked commission differ from transaction-based commission?
a) AUM-linked commission is payable upfront, while transaction-based commission is payable periodically.
b) AUM-linked commission is payable periodically, while transaction-based commission is payable upfront.
c) Both are payable upfront.
e) None of the above
Q 15. What is the purpose of allowing transaction charges for mutual fund subscriptions?
a) To discourage investments in urban areas
b) To increase regulatory oversight
c) To incentive distributors
e) None of the above