NISM MUTUAL FUND FOUNDATION 9
NISM MUTUAL FUND FOUNDATION
Mock Test with Answer key - Click Here >>
Q 1. Who is the Compliance Officer in the AMC?
a) Fund managers
b) Trustees
c) Analysts
e) Sales team
Q 2. How does upfronting of trail 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
e) None of the above
Q 3. Which accounting principle requires that expenses and income 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
e) The realization principle
Q 4. 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) Sound track record and reputation for fairness and integrity
e) Approval from the Reserve Bank of India
Q 5. 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
e) Lower transaction costs
Q 6. 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
e) At least one newspaper with nationwide circulation in English
Q 7. 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
e) None of the above
Q 8. What advantage 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
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
e) No, conflicting information is allowed
Q 10. 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
e) To verify the bank account number
Q 11. When are applications for non-financial transactions stamped with the date instead of the time?
a) When submitted by the investor's representative
b) When received after the cut-off time
c) When requesting a change of address
e) None of the above
Q 12. 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
e) NAV
Q 13. What information is required if an investor's citizenship/nationality/place of birth/tax residency are places other than India?
a) Bank account details
b) Educational qualifications
c) Countries of tax residency and respective taxpayer reference ID
e) Social security number
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
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 periods of un-invested assets
b) Reduced return on investments
c) Missed investment opportunities
d) All of the above