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3. Multi-cap mutual fund (This is the correct answer)

Explanation : In the given options, only Multi cap fund is an equity fund and rest all are debt funds. STT is
Great! you have successfully completed your exam
applicable only on redemption/switch of units of Equity oriented mutual funds whether sold on stock

Your Result Mock Test 05 exchange or otherwise. STT is not applicable on purchase of units of an equity scheme. It is also not

Result Pass applicable to transactions in debt securities or debt mutual fund schemes.

No of Questions 49
4. Government Securities Fund
Question Attempted 49

Total Marks 49
Report this Question?
Your Marks 16

Percentage Obtained 33%

GOTO ALL MOCK TEST LIST

Q (3): _______ is considered as an Institutional Investor.

~ DETAILED RESULT ~
1. Non-Resident Indians (Your answer is incorrect)

Q (1): Which of these statements are TRUE with respect to time stamping on mutual fund 2. Trusts (This is the correct answer)

documents? A) Time stamping is relevant for non-financial mutual fund transactions B) The daily Explanation : Charitable Trusts / Private Trusts are considered as institutional investors. Non-Resident
time stamping of application does not start with serial 1 C) Breakdown of time stamping process or Indians (NRIs)/Persons of Indian Origin (PIO) / HNIs are individual investors.
breaking of seal is mandated to be duly recorded and reported to the Trustees
3. Persons of Indian Origin (PIO)
1. A and B are True (Your answer is incorrect)
4. High Networth Individuals

2. B and C are True (This is the correct answer)

Report this Question?
Explanation : 1) Applications for non-financial transactions like change of address are stamped. However,
here stamping of time is not relevant; the data stamping is pertinent. 2) Applications are sequentially
numbered from the first number of the machine to the last number of the machine, before a new numbering
cycle is started for the machine. The daily time stamping of application does not start with serial 1. 3) The
Q (4):Mutual fund units issued against purchase transactions would be subject to levy of stamp duty
points of acceptance have time stamping machines with tamper-proof seal. Opening the machine for repairs
at ______ of the amount invested.
or maintenance is permitted only by vendors or nominated persons of the mutual fund. Such opening of the
machine has to be properly documented and reported to the Trustees.
1. 0.50% (Your answer is incorrect)

3. A and C are true

2. 0.005% (This is the correct answer)

4. A, B and C are true
Explanation : The stamp duty will be levied at the rate of 0.005% on the value of units purchased. For the
Report this Question? transfer of mutual fund units between Demat accounts, a stamp duty of 0.015% will be applied.

3. 0.01%

Q (2): Redemption from which of the following mutual fund schemes would attract Securities 4. 0.40%
Transaction Tax (STT) for an investor?

Report this Question?

1. Liquid Fund (Your answer is incorrect)

2. Overnight Fund

Q (5): In case of a floater Fund, what is the Required Minimum Investment in floating rate investment
of total assets invested ?

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1. 65% (Your answer is correct) Q (8): When the Capital Base of an investor rises, his or her risk appetite will tend to ____ .

Explanation : Floater Fund in an open-ended debt scheme predominantly investing in floating rate
1. decrease (Your answer is incorrect)
instruments (including fixed rate instruments converted to floating rate exposures using swaps/derivatives).
Minimum investment in floating rate instruments (including fixed rate instruments converted to floating rate
2. increase (This is the correct answer)
exposures using swaps/derivatives) shall be 65 percent of total assets.
Explanation : Higher the capital base, better the ability to financially take the downsides that come with
2. 45% risk. For eg - A person with a capital of Rs 1 crore can take more risks than a person with Rs 10000.

3. 55% 3. remain same

4. 75% 4. change randomly

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Q (6): Which of these is a key advantage of Exchange Traded Funds (ETFs) ? Q (9): Suresh see's that his friends are investing in a finance scheme which is promising very high
returns (a ponzi scheme). He also blindly invests in the same scheme. Which bias is Suresh
1. ETFs generally give higher returns than normal funds (Your answer is incorrect) exhibiting?

2. ETFs offer tax benefits 1. Herd mentality (Your answer is correct)

Explanation : In behavioral finance, Herd Mentality bias refers to investors’ tendency to follow and copy
3. Investors can control the money they have invested as to where the ETF can invest
what other investors are doing. They are largely influenced by emotion and instinct, rather than by their own
independent analysis. This often works against investors interests in the financial markets.
4. Investors can buy or sell ETFs on a stock exchange at prices which are close to current valuations

(This is the correct answer) 2. Loss Aversion

Explanation : Exchange Traded Funds (ETFs) are passive funds whose portfolio replicates an index or
benchmark such as an equity market index or a commodity index. The units of the ETF are traded at real 3. Confidence bias
time prices that are linked to the changes in the underlying index.
4. Anchoring
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Q (7): There are various risk profiling tools available on the internet. A financial planner can use any
of these as risk profiling is just a process - State True or False ? Q (10): According to guidelines given by SEBI, every mutual fund scheme should have a minimum of
____ investors.
1. True (Your answer is incorrect)
1. 10 (Your answer is incorrect)

2. False (This is the correct answer)

2. 20 (This is the correct answer)
Explanation : Risk profiling is an approach to understand the risk appetite of investors - an essential pre-
requisite to advise investors on their investments. There are various factors which have influence on risk Explanation : Every mutual fund scheme/plan should have a minimum of 20 investors and no single

appetite. Internet risk profiling tools are useful pointers, but it is important to understand the robustness of investor shall account for more than 25 percent of the corpus of the Scheme/Plan(s).

such tools before using them in the practical world. Some of the tools featured in websites have their
3. 25
limitations. So these tools cannot be always used.

4. 50
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Q (11): Identify the FALSE statement(s) - A - Authorised signatories have to sign the request for
transactions of institutional investors in mutual funds B - Even if the Memorandum of Association
and Articles of Association does not permit invest in mutual funds, the company can invest in mutual
Q (14): What is the investment of a constant amount at regular intervals in a mutual fund scheme
fund on the basis of a Board Resolution
called ?
1. Statement A is False (Your answer is incorrect)
1. Systematic Withdrawal Plan (Your answer is incorrect)

2. Statement B is False (This is the correct answer)

2. Systematic Transfer Plan
Explanation : 1. A company cannot invest in mutual funds if its incorporation documents ( (Memorandum of
Association and Articles of Association) do not provide for investments of this type. 2. The mutual fund can
3. Value Investing
allow transactions only if the transaction form/slip carries the signature of any (one or more, as required) of
the authorised signatories. 4. Systematic Investment Plan (This is the correct answer)

Explanation : It is considered a good practice to invest regularly, particularly into volatile markets such as
3. Both statements A and b are false
equity markets. Systematic Investment Plan - SIP is an approach where the investor invests constant

Report this Question? amounts at regular intervals.

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Q (12): How often does a mutual fund disclose the information on Total Expense Ratio charged to a
mutual fund scheme and where is this published?
Q (15): The party in whose favour the Units are pledged is called a _______ .

1. Daily - on the mutual fund website (Your answer is correct)

1. Pledger (Your answer is incorrect)
Explanation : SEBI has mandated that the Asset Management Companies (AMCs) should prominently
disclose on a daily basis, the Total expense ratio (scheme-wise, date-wise) of all schemes under a separate
2. Pledgee (This is the correct answer)
head – “Total Expense Ratio of Mutual Fund Schemes” on their website.
Explanation : The unit holder is the Pledger The party in whose favour the Units are pledged is called the
Pledgee.
2. Weekly - on the mutual fund website

3. Pledge
3. Once a month in the fund Factsheet

4. Pledion
4. Once a year when it makes the mandatory disclosures to SEBI and AMFI

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Q (16): With respect to model portfolio for Senior Citizens, it will not have any exposure to equity -
Q (13): In whose beneficial interest is a mutual fund managed?
State True or false ?
1. Trustees (Your answer is incorrect)
1. True (Your answer is incorrect)

2. Unit holders (This is the correct answer)

2. False (This is the correct answer)
Explanation : An investor (unit holder) in a mutual fund scheme is the beneficial owner of the units one has
Explanation : As per model portfolio for couple in their seventies, with no immediate family support : - 15
bought. The mutual fund is managed for the beneficial interest of the unitholders.
percent diversified equity index scheme; 10 percent gold ETF, 30 percent diversified debt fund, 30 percent
3. Sponsors MIP, 15 percent liquid schemes. This shows some exposure can be taken in equities.

4. AMC Report this Question?

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Q (20): NAV of income funds is to be calculated upto ___ decimals.

Q (17): The distributors are mainly compensated through ______ by the mutual funds.
1. 1 (Your answer is incorrect)

1. commissions (Your answer is correct)

2. 2
Explanation : Agents receive commissions on the amount mobilized by them. Two kinds of commission are
earned by distributors on their mobilization - Upfront Commission and Trail commission.
3. 3

2. salaries
4. 4 (This is the correct answer)

Explanation : NAV is to be calculated upto 4 decimal places in the case of income funds, liquid funds and
3. portfolio profits
other debt funds. NAV for equity and balanced funds is to be calculated upto at least 2 decimal places.
4. annual fees
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Q (21): If a Segregated portfolio is created, it shall be effective from _________ .

Q (18): The minimum investment in G-Secs (as a percentage of total assets) in case of a Gilt Fund is
1. the day of credit event (Your answer is correct)
______ .
Explanation : To ensure fair treatment to all investors in case of a credit event and to deal with the liquidity
1. 90% (Your answer is incorrect) risk, in December 2018, SEBI permitted creation of segregated portfolio of debt and money market
instruments by mutual funds schemes. “Segregated portfolio” means a portfolio, comprising of debt or money
2. 95% market instrument affected by a credit event, that has been segregated in a mutual fund scheme. Segregated
portfolio shall be effective from the day of credit event.
3. 80% (This is the correct answer)

Explanation : An Gilt fund is open-ended debt scheme investing in government securities across maturity. 2. seven days prior to the credit event
The minimum investment in G-secs is defined to be 80 percent of total assets (across maturity).
3. one year from the date of the credit event
4. 75%
4. the day that security was bought in the portfolio
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Q (19): ________ ensures that the information contained in the scheme related documents (SID and
SAI) are fully complied with. Q (22): The loss booked from a debt investment of 15 months can be set off against ________ .

1. Long term capital loss (Your answer is incorrect)

1. The Trustees (Your answer is correct)

Explanation : The trustees shall ensure that all transactions entered into by the AMC are in compliance
2. Short term capital loss
with the regulations and the scheme’s objectives and intent.

3. Short term capital gain or long term capital gain (This is the correct answer)
2. The Sponsor
Explanation : A capital gain or loss from an investment of less than 3 years in a debt instrument is
3. The Fund Manager considered as Short term. Short term capital loss is to be set off against short term capital gain or long term
capital gain. Long term capital loss can only be set off against long term capital gain.
4. The AMC
4. It cannot be set-off
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1. (A) True (Your answer is incorrect)

Q (23): By mistake the ARN number is wrongly mentioned in the application form. How will such an
application be processed? 2. (B) False (This is the correct answer)

1. The application will be rejected (Your answer is incorrect) Report this Question?

2. It will be returned for rectification

3. As an Direct Plan application Q (26): For a open-ended fund,the repurchase price should not be lower than

4. As a Regular Plan, provided the error being corrected within a time frame (This is the correct answer) 1. NAV (Your answer is incorrect)

Explanation : If the wrong ARN code is mentioned in the application form, then the application will be
processed as a Regular Plan. However, the AMC will contact the investor/distributor for the right ARN code 2. 95% of NAV

within 30 calendar days of the receipt of the application form. If the error is not rectified within these 30 days,
3. 93% of NAV (This is the correct answer)
the application will be reprocessed as a direct application without charging any exit load.

Report this Question? 4. 97% of NAV

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Q (24): In which of the following cases can Goods and Service Tax (GST) be charged to the mutual
fund scheme over and above the Total Expense Ratio of the scheme?
Q (27): For which of the following funds would you consider average maturity as an important factor

1. GST applicable on any fees must be within the Total Expense Ratio (Your answer is incorrect) in selecting the right one for the investor ?

1. A debt fund (Your answer is correct)

2. GST applicable on distributor commission only can be charged to the scheme over and above the Total
Expense Ratio
2. A Balanced fund

3. Money market fund

3. GST applicable on AMC fees as well as distributor commission can be charged to the scheme over and
above the Total Expense Ratio
4. Both 1& 2 above

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4. GST applicable on AMC fees only can be charged to the scheme over and above the Total Expense

Ratio
(This is the correct answer)
Explanation : AMC(s) can charge GST, as per applicable Taxation Laws, to the schemes within the limits
Q (28): Fundamental aspects of a scheme do not include which of the following
prescribed under SEBI (Mutual Fund) Regulations. - GST on fees paid on investment management and
advisory fees shall be charged to the scheme in addition to the overall limits specified as per the Total 1. Address of the Custodian (Your answer is correct)
Expense Ratio (TER) provisions. - The commission payable to the distributors of mutual funds may be
subject to GST, as applicable in case of the ARN holder. Such tax cannot be charged to the scheme. 2. Term

Report this Question? 3. Investment objective

4. nature of the scheme

Q (25): Each AMC is required to display the disclaimer in a particular format and font as decided by Report this Question?

its marketing team.

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Q (29): High yield bond schemes invest in junk bonds.

Q (33): If XYZ AMC has changed the fundamental attributes of an existing scheme. It has to update
1. (A) True (Your answer is correct)
the SID of the scheme _________________ .

2. (B) False
1. Upcoming SID update (Your answer is incorrect)

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2. Immediately printed on a separate piece of paper (addendum) and distributed along with the SID, until the
SID is updated.

Q (30): If a fund calculates NAV daily, it will include all the transaction concluded up to
3. Do not require

1. last week (Your answer is incorrect)

4. Immediately after the lapse of the time period given to existing investors to exit the scheme (This is the

correct answer)
2. last two days
Explanation : In case of change in the fundamental attributes, the SID has to be updated immediately after
the lapse of the time period given to existing investors to exit the scheme.
3. previous day

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4. today (This is the correct answer)

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Q (34): In Capital Market Line every investment is:

1. Finitely divisible (Your answer is incorrect)

Q (31): If an investor given the request in an equity fund for purchase at 2.30pm which days NAV will
be applicable
2. Infinitely divisible (This is the correct answer)

1. Same Days Nav (Your answer is correct) Explanation : In Capital Market Line every investment is infinitely divisible. The capital market line (CML)
represents portfolios that optimally combine risk and return. The capital asset pricing model (CAPM), depicts

2. Next Days Nav the trade-off between risk and return for efficient portfolios.

3. Previous Days Nav 3. Both (A) & (B)

4. Next working Days Nav 4. None of the above

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Q (32): If gold market is down gold future investment will, Q (35): In joint holding mode when fist holder dies

1. Go up (Your answer is incorrect) 1. Units transfer to nominee (Your answer is incorrect)

2. Go down (This is the correct answer) 2. Units are legally transfer to legal hier

3. Units are automatically get redeemed

3. React as per margin

4. Units are holds or carry by surviving holder (This is the correct answer)
4. Remains Same

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Q (40): Investors who buy ETF can hold on to their position indefinitely.

Q (36): In the offer document, funds are required to make disclosures summarizing associate
1. (A) True (Your answer is correct)
transactions and their impact on the performance of the scheme for the last

2. (B) False
1. one fiscal year (Your answer is incorrect)

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2. 2 fiscal years

3. 3 fiscal years (This is the correct answer)

Q (41): KYC application form are accepted at_______________

4. 5 fiscal years

Report this Question? 1. Point of Service (Your answer is correct)

2. Point of Acceptance

3. RTA
Q (37): Individual AMCs create their own SID and SAI documents.

4. NSDL
1. (A) True (Your answer is correct)

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2. (B) False

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Q (42): Loads and taxes may account for the difference between scheme returns and investor
returns.

Q (38): Interest earned in a bank deposit is taxable each year.

1. (A) True (Your answer is correct)

1. (A) True (Your answer is correct)

2. (B) False

2. (B) False
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Q (43): Micro SIP is not available for

Q (39): Investments in mutual fund can be made using _______.

1. Minor (Your answer is incorrect)

1. Cheque / DD (Your answer is incorrect)

2. Individual

2. Remittance
3. (C) NRI

3. ASBA
4. (D) HUF (This is the correct answer)

4. Any of the above (This is the correct answer)

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Q (44): Mutual Fund agents/distributors are not allowed to sell Financial Products other than Mutual

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1. (A) True (Your answer is incorrect)

Q (48): Offer documents of mutual fund schemes are approved by SEBI.

2. (B) False (This is the correct answer)

1. (A) True (Your answer is correct)

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Explanation : These are prepared by the Asset Management Company (AMC) about a particular scheme,
and submitted to the Securities and Exchange Board of India (SEBI) for approval.

Q (45): Mutual funds are regulated in the country by the IRDA. 2. (B) False

1. (A) True (Your answer is incorrect)

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2. (B) False (This is the correct answer)

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Q (49): PPF are contributed upto:

1. Rs. 70,000/- (Your answer is incorrect)

Q (46): NAV of Mutual Fund 2. Rs. 50,000/-

1. Mutual fund do not received income in interest (Your answer is incorrect) 3. Rs.1,20,000/-

2. Interest income is added to the NAV (This is the correct answer) 4. Rs. 500 to Rs. 1.5 Lakh (This is the correct answer)

Explanation : Public Provident Fund (PPF) is a retirement savings scheme offered by the Government of
3. Interest income is subtratced to the NAV India with the aim of providing a secure post-retirement life to everyone. The minimum deposit you must
make in the account per financial year is Rs.500 and it can go up to Rs.1.5 lakh. In addition to providing
4. None of these
retirement savings, you can also claim income tax benefits on the amount you invest in the account.

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Q (47): NFOs other than ELSS can be open for a maximum of___________ Days

1. (A) 7 (Your answer is incorrect) BACK TO RESULT

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2. (B) 10 Privacy | Terms | About us | Contact us

3. (C) 15 (This is the correct answer)

Explanation : Explanation: Under the SEBI guidelines, NFOs other than ELSS can remain open for a
maximum of 15 days. Allotment of units or refund of moneys should be done within 5 business days of
closure of the scheme. Further, open-ended schemes have to re-open for sale / re-purchase within 5
business days of the allotment. In case of ELSS, the allotment must be done within 30 days

4. (D) 30

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