NISM V-A Chapter 4-6 Final 2

NISM V-A Chapter 4-6 Final Set 2

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1. SEBI has to approve the Scheme Related Documents in ______ .

7 days

15 days

1 month

SEBI does not approve the Scheme Related Documents. It only gives its observations

Question 1 of 60

2. Key Information Memorandum (KIM) and Scheme Information Document (SID) are two broad types of scheme documents - State whether True or False?

TRUE

FALSE

Question 2 of 60

3. Which distributor will be covered under the due diligence process of the Asset Management Company as mandated by SEBI?

A distributor who has presence in more than 10 locations

A distributor who has AUM of over Rs. 100 crores from non-institutional investors

A distributor who has received commission of over Rs 25 lakhs from one mutual fund

All of the above

Question 3 of 60

4. While the SID, SAI and KIM need to be updated periodically, the interim changes are updated by the AMC through the issuance _______ .

Fact Sheet

Director's Report

Auditor's Report

Addendum

Question 4 of 60

5. Identify the true statement as per AMFI’s Code of Conduct for Intermediaries of Mutual Funds

Intermediaries should rebate some of the commission received by them to the investors

Intermediaries should abstain from making negative statements about any Asset Management Company or Scheme

Intermediaries should split applications so that they can earn higher transaction charges

Question 5 of 60

6. Identify from the following what is not considered as a scheme fundamental attribute?

Type of scheme

Investment objective

Investment pattern

Name of fund manager

Question 6 of 60

7. Distributors can 'opt-out' of charging transaction charges _____ .

at AMC level

at investor level

at scheme level

at distributor level

Question 7 of 60

8. What are the guidelines issued by AMFI for intermediaries known as?

SEBI Brokers and Intermediaries guidelines

Know Your Distributor guidelines

AMFI Guidelines & Norms for Intermediaries (AGNI)

Question 8 of 60

9. The Key Information Memorandum (KIM) is an abridged version of which of these documents?

The yearly statement of the portfolio of the fund

The half yearly statement of the financial statement of the fund

The annual accounts of the fund

Scheme related documents SID and SAI

Question 9 of 60

10. On what basis will the payment be made to an investor who claims his erstwhile unclaimed redemption amount within three years?

The amount paid will based on the prevailing NAV after adding the income earned on the unclaimed profits

The amount paid will based on the NAV at the time of original redemption plus income earned on the unclaimed amount

The amount paid will based on the NAV at the time of original redemption plus income earned on the unclaimed amount and deducting any penalty on the same

The amount paid will based on the average of the NAV at the time original redemption and todays NAV after accounting for income earned and penalty if any

Question 10 of 60

11. When can mutual funds charge an additional expense of 0.30% of daily net assets of the scheme?

If the new inflows from beyond top 30 cities are at least (a) 30 percent of gross new inflows in the scheme or (b) 15 percent of the average assets under management (year to date) of the scheme, whichever is higher

If the new inflows from beyond top 30 cities are at least (a) 20 percent of gross new inflows in the scheme or (b) 5 percent of the average assets under management (year to date) of the scheme, whichever is higher

If the new inflows from beyond top 15 cities are at least (a) 25 percent of gross new inflows in the scheme or (b) 15 percent of the average assets under management (year to date) of the scheme, whichever is higher

If the new inflows from beyond top 15 cities are at least (a) 10 percent of gross new inflows in the scheme or (b) 5 percent of the average assets under management (year to date) of the scheme, whichever is higher

Question 11 of 60

12. Which of the following is INCORRECT with respect to advertisements of Mutual Funds by AMCs.

The advertisements can use celebrities for endorsements

The advertisements can show past performance of the scheme

The advertisements can show the return numbers

All of the above are incorrect

Question 12 of 60

13. Identify the information which is NOT included in the Statement of Additional Information (SAI)

Rights of Unit-holders

Transmission procedure

SIP returns of the schemes

Investment Valuation Norms

Question 13 of 60

14. Identify the FALSE statement : 1. As per AMFI guidelines, the intermediary has a no right of appeal to AMFI 2. It is not the sole responsibility of the mutual fund distributors for spreading investor awareness

Only 1 is false

Only 2 is false

Both 1 and 2 are false

Question 14 of 60

15. Amongst the distribution channel mentioned below, which one is likely to sell funds of only a single mutual fund house?

Distribution Company

Independent financial advisor

Institutional sales team of the Asset Management Company

Bank

Question 15 of 60

16. An Asset Management Company (AMC) can recover investment management and advisory fees on management of the unclaimed amounts, ________ .

only on the actual expenses incurred in holding the funds

at a maximum rate of 0.50 percent per annum

as per the fee applicable on the scheme from which the redemption was made

No investment management and advisory fees can be charged on unclaimed amounts

Question 16 of 60

17. An Addendum has to be issued for changes in _______ .

Fund Fact Sheet

Half yearly results of the mutual fund

Scheme Information Document (SID)

Statement of Additional Information (SAI)

Question 17 of 60

18. How can the fundamental attributes of a mutual fund scheme be changed?

The fundamental attributes cannot be changed

The fundamental attributes can be changed but this should be communicated to all the unit holders who should be provided an option to exit the scheme

The fundamental attributes can be changed with the permission of SEBI and AMFI

The fundamental attributes can be changed but only with the consent of 100 percent of unit holders

Question 18 of 60

19. Which of these information is not contained in the Scheme Information Document (SID)?

Names of securities in the scheme's portfolio

Investment objective of the scheme

Risk factors of the scheme

Portfolio features

Question 19 of 60

20. Not more than 25% of the Net Assets will be invested in the Derivatives Market' - This statement best describes the ________ of the mutual fund scheme.

Investment Objective

Investment Interest

Investment Strategy

Investment Policy

Question 20 of 60

21. Which of these statements is true with respect to Key Information Memorandum (KIM)?

KIM is a document that provides key information of the past performance of the scheme

KIM is the annual newsletter of the mutual fund

KIM provided NAV history of all mutual fund schemes

KIM is a document which must accompany all mutual fund application forms

Question 21 of 60

22. Identify the TRUE statement - A. It is mandatory for the AMC to disclose the valuation policy B. The AMC is not accountable for policies and procedures for detecting and preventing incorrect valuation

Only A is true

Only B is true

Both A and B are true

None of the above

Question 22 of 60

23. AMFI Code of Ethics states that ________ cannot become a distributor of mutual fund.

Banks

HNIs

Employees of AMC

Empanelled distributors

Question 23 of 60

24. The expenses of _______ cannot be charged to a mutual fund scheme.

Custodian fees

Software development

Registrar Services for transfer of units sold

GST - Goods and Service tax

Question 24 of 60

25. ________ ensures that the information contained in the scheme related documents (SID and SAI) are fully complied with.

The Trustees

The Sponsor

The Fund Manager

The AMC

Question 25 of 60

26. Identify the action which needs to be taken as per the AMFI Code of Ethics for Mutual Funds when a mutual fund enters into a transaction for purchase or sale of securities with any of its associates?

AMC should make certain that the transactions happens at a price that is better than the closing market price

AMC should take the approval of the trustees before undertaking the transactions

AMC should justify the fairness of the transaction to the Board of Trustees

AMC should inform the mutual fund unitholders of the intent to undertake the transaction before it is done

Question 26 of 60

27. The additional Total Expense Ratio (TER) charged has to be credited back to the Mutual Fund if the inflows from beyond the top 30 cities are redeemed within a period of 1 year from the date of investment. State whether True or False?

TRUE

FALSE

Question 27 of 60

28. ________ is not a mutual fund distribution channel.

Branches of Public sector banks

Branches of Reserve Bank of India

Branches of Private sector banks

Branches of Foreign banks

Question 28 of 60

29. Identify the true statement(s) - A) An Addendum must accompany the KIM B) Addendum is considered to be a part of the Scheme Related Documents

Only A is true

Only B is true

Both A and B are true

None of them are true

Question 29 of 60

30. ______ forms the basis of appointment of a distributor by an AMC.

SEBI approval

Agreement between the investor and the distributor

Power of attorney from the AMC

An agreement between the AMC and the Distributor

Question 30 of 60

31. Which document has the statutory information about the mutual fund or AMC, that is offering the scheme.

Scheme Information Document (SID)

Statement of Additional Information (SAI)

Red Herring Prospectus

Fund Fact Sheet

Question 31 of 60

32. In case a fund manager is managing more than six funds, then ______ in all performance related advertisements.

the total number of schemes managed by him hs to be disclosed

performance data need not be given

performance data of top 2 and bottom 2 schemes has to be disclosed

performance data of top 3 and bottom 3 schemes has to be disclosed

Question 32 of 60

33. In which of the following cases is the transaction charge to be paid to the mutual fund distributor, deducted from the gross investment of the investor ?

When the investor purchases mutual fund units worth Rs 5000 through a mutual fund distributor

When the investor purchases mutual fund units worth Rs 10000 through a mutual fund distributor

When the investor purchases mutual fund units worth Rs 5000 through the website of the mutual fund

When the investor purchases mutual fund units worth Rs 10000 through the website of the mutual fund

Question 33 of 60

34. When is the Statement of Additional Information (SAI) updated ?

Every month

Before 10th of January and 10th of July every six months

Every three months

Before the end of 3 months of every financial year

Question 34 of 60

35. Can the fundamental attributes of scheme be changed? If yes - how?

Yes- but with the consent of 100% of the unit holders

Yes - with the permission of SEBI and AMFI

Yes - but this should be communicated to unit holders who should be provided an option to exit the scheme

No - the fundamental attributes cannot be changed as it is based on these attributes that investors have invested their money

Question 35 of 60

36. The AMFI Code of Ethics (ACE) sets out ________ .

The standards of good practices to be followed by the AMCs in their operations and in their dealings with investors, intermediaries and the public.

The standards of good practices to be followed by the AMCs in their operations and their dealings with mass media

The standards of good practices to be followed by mutual fund distributors in their dealings with AMFI, AMCs and investors

The standards of good practices to be followed by fund managers in their dealings with AMFI and investors.

Question 36 of 60

37. How often does a mutual fund disclose the information on Total Expense Ratio charged to a mutual fund scheme and where is this published?

Daily - on the mutual fund website

Weekly - on the mutual fund website

Once a month in the fund Factsheet

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

Question 37 of 60

38. If there is a breach of the Code of Conduct by an intermediary and a second violation by the intermediary is proved then the registration of the intermediary is _______ .

Not renewed

Cancelled

Suspended

Withheld

Question 38 of 60

39. If a Segregated portfolio is created, it shall be effective from _________

the day of credit event

seven days prior to the credit event

one year from the date of the credit event

the day that security was bought in the portfolio

Question 39 of 60

40. As per SEBI rules, commissions cannot be paid to ______ .

Brokers of the stock exchange

Banks

Sponsor distributors

Investors

Question 40 of 60

41. Identify the true statement with respect to Total Expense Ratio?

The AMC is not allowed to change the Total Expense Ratio of a scheme during its entire life time

The AMC can change the Total Expense Ratio and it need not be communicated to the unit holders as its an internal matter

The AMC can change the Total Expense Ratio and it has to be communicated to all the unit holders

There is no term as - Total Expense Ratio for a mutual fund scheme

Question 41 of 60

42. If one wants to know the General Risk Factors, then which document should he read?

Fund Fact Sheet

Key information memorandum (KIM)

Scheme Information Document (SID

Question 42 of 60

43. The empanelment of a mutual fund distributor by an Asset Management Company can be terminated __________

In case all the investors of the distributors shift to direct plans

When the term of empanelment is over

Any time by the AMC

All of the above

Question 43 of 60

44. Identify the true statement with respect to 'Unclaimed Dividend' in mutual fund schemes

If the plan is a regular plan, then it is the distributors responsibility that the investor claims the dues

It is the sole responsibility of the investor that he/she claims the dues

The Asset Management Company (AMC) is expected to make a continuous effort to remind the investors through letters to claim their dues

All of the above are true

Question 44 of 60

45. Identify the false statement with respect to mutual fund scheme related documents

KIM and SID are two broad types of scheme documents

SID has details of the particular scheme

SAI has statutory information about the mutual fund

KIM is essentially a summary of the SID and SAI

Question 45 of 60

46. Which expenses can be charged by the AMC to a mutual fund scheme?

Expenses which are incurred to manage the fund

Expenses which are incurred to launch the fund

Expenses which are incurred by the AMC

Expenses which are incurred by the investors in buying the fund

Question 46 of 60

47. Mutual funds must publish their unaudited accounts once every six months ________

on the AMFI website

on the AMC website

on the SEBI website

in atleast two English newspaper

Question 47 of 60

48. As per AMFI’s code of ethics, an Asset Management Company has to disclose which of the following scheme related information to the unit holders? A. Investment Pattern B. Annual portfolio turnover C. Annual securities transactions

Only B

A and B

B and C

A, B and C

Question 48 of 60

49. If an investor wants to get updated monthly performance and portfolio data on mutual funds, which of the following documents should he read?

Scheme Information Document (SID)

Fund Fact Sheet

Key Information Memorandum (KIM)

Statement of Additional Information (SAI)

Question 49 of 60

50. A mutual fund distributor cannot charge a transaction fee on which of these transactions?

Systematic Transfer Plan

A new investor making a purchase in a mutual fund scheme

An existing investor making a purchase in a mutual fund scheme

Systematic Investment Plan (SIP)

Question 50 of 60

51. Where are the 'Standard Risk Factors' of a Mutual Fund scheme disclosed?

Fund Fact Sheet

Addendum

Statement of Additional Information (SAI)

Scheme Information Document (SID

Question 51 of 60

52. Which document will an investor look at if he has to know the fundamental attributes of a mutual fund scheme?

Key Information Memorandum (KIM)

Addendum

Scheme Information Document (SID)

Statement of Additional Information (SAI)

Question 52 of 60

53. 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?

GST applicable on any fees must be within the Total Expense Ratio

GST applicable on distributor commission only can be charged to the scheme over and above the Total Expense Ratio

GST applicable on AMC fees as well as distributor commission can be charged to the scheme over and above the Total Expense Ratio

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

Question 53 of 60

54. A mutual fund scheme mentions that it will use derivatives only to the extent of 30% of its net assets. This is the scheme's Investment Objective. State whether True of False?

TRUE

FALSE

Question 54 of 60

55. SEBI Complaint Redress System (SCORES) is a web-based centralized grievance redress system of SEBI and the activities starting from a lodging of a complaint till its closure by SEBI is online and works in an automated environment. However there is a scope for lodging a complaint in physical form also. State whether True or False?

TRUE

FALSE

Question 55 of 60

56. The heads of expenses that can be charged to a mutual fund scheme by the AMC is specified by SEBI - State whether True or False?

TRUE

FALSE

Question 56 of 60

57. Inwhich of the following transactions a 'Transaction charge' can be deducted?

Online purchases

Systematic transfer plan (STP) transaction

Purchases of Rs 10000 or more

Purchases made on stock exchanges

Question 57 of 60

58. Which of the below is /are FUNDAMENTAL ATTRIBUTES of a scheme ?

The type of scheme

Investment objective(s)of the scheme

Terms of the issue

All of the above

Question 58 of 60

59. The Scheme Information Document (SID) does not give information on the names of all the securities in the mutual fund scheme portfolio - State whether True or False?

True

FALSE

Question 59 of 60

60. The __________ is used by the fund manager to communicate their views on the economy and the markets to the investors

Key Information Memorandum (KIM)

Statement of Additional Information (SAI)

Scheme Information Document (SID)

Fund Fact Sheet

Question 60 of 60