NISM V-A Chapter 7-9 Final Set 1

NISM VA chapter 7-9 final set 1

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1. As per SEBI regulations, a mutual fund scheme should have at least ________investors.

Question 1 of 63

2. Mutual fund units issued against purchase transactions would be subject tolevy of stamp duty at ______ of the amount invested.

0.50%

0.05%

0.005%

0.01%

Question 2 of 63

3. What action has to be taken before deleting a default bank account from theregistered bank account in a mutual fund folio?

A new folio will have to be opened with the same joint holding as the new defaultaccount

Another account has to be designated as the default bank account

All the nominees of the mutual fund scheme have to sign on the change formirrespective of the mode of holding

Defalut bank account can not be deleted from folio

Question 3 of 63

4. Which of these statement(s) is/are FALSE?

If an investor holds his investments in a debt fund for more than three years, thecapital gain will be considered as a long term capital gain

As the purchase and re-purchase is done with the mutual fund, the investor doesnot have to pay any capital gain tax

Both 'a' and 'b' are false

All of the above are false

Question 4 of 63

5. Long term capital gains is NOT taxed in which of these funds? A. BalancedAdvantage Funds B. Balanced Funds C. Diversified Equity Funds

Both A and B

Only C

Only A

Capital gains from all types of mutual funds are taxed subject to certain conditions

Question 5 of 63

6. The loss booked from a debt investment of 15 months can be set off against________ .

Long term capital loss

Short term capital loss

Short term capital gain or long term capital gain

It cannot be set-off

Question 6 of 63

7. In which of these options can an investor expect a cash flow in his bankaccount?

Bonus

Dividend Payout

Dividend Reinvestment

Growth

Question 7 of 63

8. The opening of time stamping machine needs to be documented and reportedto __

Sponsors

Trustees

SEBI

Asset Management Company

Question 8 of 63

9. Once a New Fund Offer closes, an open ended mutual fund is open for purchases _________ .

by existing investors only

by existing investors on the stock exchange platform only

by both existing and new investors on the stock exchange platform only

by both existing and new investors

Question 9 of 63

10. Dividends which are paid by mutual funds can be paid out of ________ .

Profits of the Asset Management Company

Mark to Market profits

All realised and unrealised gains

Distributable surplus only

Question 10 of 63

11. The NAV applicable for purchase in a gilt fund of Rs. 50 Lakhs if the cheque isreceived after 2 pm will be _____ .

Same day NAV if received before cut off time.

Closing NAV of day immediately preceding the date of application

Closing NAV of the next business day

NAV of the business day on which the funds are available for utilisation

Question 11 of 63

12. A mutual fund application form with multiple holders has to be signed by______ .

Any of the holders

All the holders

Only the first holder

Only the first two holders

Question 12 of 63

13. When an investment is done by a minor, what is rule regarding Know YourCustomer (KYC) requirement?

No KYC is required

It depends whether the investment is in equity funds or debt funds

KYC will be required only if the transaction is thorough a stock exchange

KYC of the guardian is required

Question 13 of 63

14. What is the investment of a constant amount at regular intervals in a mutualfund scheme called ?

Systematic Withdrawal Plan

Systematic Transfer Plan

Value Investing

Systematic Investment Plan

Question 14 of 63

15. Stamp duty is required to be paid for which of these mutual fund transactions?A. New purchases B. Systematic Investment Plan (SIP) C. Dividendreinvestment D. Systematic Transfer Plan (STP)

A,B and D

Only A

B and D

A,B,C and D

Question 15 of 63

16. Which of these documents is NOT required to be submitted by institutionalinvestors while investing in mutual funds?

Profit and Loss Statement

PAN card copy

List of authorised signatories

Memorandum of Association and Articles of Association

Question 16 of 63

17. ______ is / are Non Financial transaction(s) in a mutual fund. A) Switch B)Pledge of units C) Nomination D) Transmission

A, B and C

B, C and D

A, C and D

C and D

Question 17 of 63

18. A mutual fund has to report which of the following information of an investorwho comes under the Foreign Account Tax Compliance Act (FATCA)?

The entire investment value of all the folios of the investor

The identity of the account holders

The identity of the beneficial holders

All of the above

Question 18 of 63

19. The loss booked from a equity investment of 18 months can be set off against________ .

Long term capital loss only

Long term capital gain only

Short term capital gain only

Short term capital gain or long term capital gain

Question 19 of 63

20. Which of these investors is/are exempted from providing PAN details forinvestments in Mutual Funds?

Systematic investment plans, where annual investment does not exceed Rs 50000

Investors residing in the state of Sikkim

Transactions undertaken on behalf of Central/State government

All of the above

Question 20 of 63

21. What is the maximum number of joint holders allowed per mutual fundapplication?

Question 21 of 63

22. The dividends is declared on units which are under a lien will be paid to_______ .

the unit holder only

the lien holder only

the unit holder or lien holder as per the agreement

the unit holder or lien holder as per the terms of issue of mutual fund units

Question 22 of 63

23. A change of details such as unit holder's address and bank account for theunits of mutual fund held in a demat account would be facilitated by the__________ .

Mutual Fund / AMC itself

Stock Exchange

Depository participant

R&T Agent

Question 23 of 63

24. Mr. Rohit wants to initiate a Systematic Investment Plan (SIP) in a mutual fund scheme. Which of the following statement is correct?

A SIP can be done only in an existing folio

A SIP can be used to initiate a fresh purchase of mutual funds

A SIP cannot be done in an New Fund Offer (NFO)

A SIP can be done in a Close-end fund

Question 24 of 63

25. Mr. Sharma sells a security and books short-term capital gain. This gain will betaxed after adjusting for ________ , if any.

long-term capital loss only

short-term capital loss only

both long-term and short-term capital loss

Question 25 of 63

26. While giving the mutual fund units for re-purchase, the distributor shouldconsider the impact of Capital Gains Tax and ______ on the investor'sportfolio.

Beta

Entry Load

Exit Load

Sharpe Ratio

Question 26 of 63

27. Identify the plan which could be used in lieu of income distribution cum capitalwithdrawal pay-outs?

Systematic Withdrawal Plan

Systematic Transfer Plan

Systematic Investment Plan

None of the above

Question 27 of 63

28. Mr. Sunil redeems 5000 units at an NAV of Rs 30. If the exit load is 1 percent,what is the redemption value of the investment?

Rs. 148500

Rs. 147650

Rs. 150000

Rs. 151500

Question 28 of 63

29. A mutual fund investment made by a NRI on a repatriable basis can be redeemed in a foreign currency from AMC. - State true orfalse?

TRUE

FALSE

Question 29 of 63

30. The first step in the sequence of creating a mutual fund product is ______ .

Trustee and AMC approval for the new mutual fund product and drafting of the SID

SEBI approval of SID

Filing of SID with SEBI

Launching the New Fund Offer (NFO)

Question 30 of 63

31. Which document is NOT required for the KYC process by a mutual fundinvestor ?

Proof of Income

Proof of Address

Proof of Identity

PAN Card

Question 31 of 63

32. Mr. X invests in a liquid fund at 4 pm and the funds are not available forinvestments the same day. What will be the applicable NAV in this case forallotment of units ?

Closing NAV of the day preceding the day funds are available

Closing NAV of the day the funds are available

Closing NAV of the day immediately preceding the date of application

Closing NAV of the day of the date of application

Question 32 of 63

33. What exception is made for investments by Systematic Invest Plans, if theannual investment is below Rs 50000 ?

KYC is not required to be done

Photo identity is not required

PAN Card is not required

None of the above

Question 33 of 63

34. Which of these are considered as Institutional group of investors?

Foreign investors

Non-Resident Indians (NRIs)

Companies

Hindu Undivided Families (HUFs)

Question 34 of 63

35. The returns published in a mutual fund advertisement would be withoutfactoring the entry or exit load - State True or False?

TRUE

FALSE

Question 35 of 63

36. Identify the TRUE statement/s : 1. Once the minor becomes major, financialtransactions are disallowed in their account 2. The Indian inheritance laws areNOT applicable to mutual fund unit holders 3. A Power of Attorney (POA) cannot make or change nominations in a mutual fund

Only 1 and 2 are true

Only 2 and 3 are true

Only 1 and 3 are true

All 1,2 and 3 are true

Question 36 of 63

37. When a NRI applies for mutual fund units, he also has to provide ________along with other information while filling the application form.

Current overseas address

Passport details

Investments made in the last one year

Countries of residence in the last one year

Question 37 of 63

38. The current market value of the stocks of a Mutual Fund scheme portfolio is Rs 12 cr and the current liabilities are 7 cr. The unit capital is Rs 10 cr and theface value per unit is Rs 10. What is the current NAV of this scheme?

Rs. 5

Rs. 10

Rs.12

Rs. 19

Question 38 of 63

39. The NAV which is applicable for processing a mutual fund transaction depends on _________.

The type of scheme

The day of transaction

The time of transaction

All of the above

Question 39 of 63

40. __________ Indicates how much money can be generated per unit of mutual fund in case the scheme is liquidated.

Market price

Exit load

Asset Under Management

Net Asset Value

Question 40 of 63

41. The facility of Application Supported by Blocked Amount (ASBA) can be used for ________________

application for additional purchase of MF units

applications by SIP

application for New Fund Offers (NFO)

Fresh purchase by a new investor of an existing scheme

Question 41 of 63

42. Mr. Shah gives a local cheque at 2.30 pm of Rs 30 lacs for investment in an Equity Scheme. Which will be the applicabel NAV for allotment of units to Mr. Shah?

NAV of the business day on which the funds are available for utilisation

Closing NAV of the next business day

Closing NAV of day immediately preceding the date of application

Same day NAV if received before cut off time

Question 42 of 63

43. Identify the mutual fund folios which cannot make a nomination?

Folio held by a Trust

Folio held by a company

Folio held by a minor

All of the above cannot make a nomination

Question 43 of 63

44. Within how many working days should the AMC send the Statement of Account of the initial transaction for a Systematic Transfer Plan (STP)

10 working days

15 working days

20 working days

30 working days

Question 44 of 63

45. The facility to invest in cash up to Rs. 50,000 is NOT available to ___________.

Investments made by Sole Proprietorship firm

Investments made by minors

Investments made by a NRI / PIO (Person of Indian Origin)

Investments made by resident Indian investors without PAN

Question 45 of 63

46. Identify the FALSE statement : 1. The investor does not have to bear a tax on the capital gains as the re-purchase of units is done by the mutual fund 2. Capital gains will be considered as Long term capital gain in case of debt funds only if the holding period is more than 3 years

Both 1 and 2 is false

Only 1 is false

Only 2 is false

Question 46 of 63

47. The facility of Application Supported by Blocked Amount (ASBA) can be used for _______________.

application for additional purchase of MF units

applications by SIP

application for New Fund Offers (NFO)

Fresh purchase by a new investor of an existing scheme

Question 47 of 63

48. A company wishes to invest a specific scheme of a Mutual Fund. Which document authorises it to do so?

The Memorandum of Association

The Articles of Association

Share holders resolution

Specific Board resolution

Question 48 of 63

49. Mr. Shah gives a local cheque at 2.30 pm of Rs 30 lacs for investment in an Equity Scheme. Which will be the applicable NAV for allotment of units to Mr. Shah?

NAV of the business day on which the funds are available for utilisation

Closing NAV of the next business day

Closing NAV of day immediately preceding the date of application

Same day NAV if received before cut off time

Question 49 of 63

50. In which of the following options does an investor receive the dividend declared by the mutual fund scheme in his/her bank account?

Income Distribution cum capital withdrawal option only

Income distribution cum capital withdrawal reinvestment plan only

Both of the above

None of the above

Question 50 of 63

51. Mr. Surendra has chosen to invest in a mutual fund scheme with monthly income distribution cum capital withdrawal plan(IDCW). However, he must remember that _______________

The mutual fund guarantees declaring the IDCW amount

The mutual fund cannot guarantee declaring the IDCW amount or frequency

The mutual fund guarantees declaring the IDCW, however the amount may differ

Question 51 of 63

52. Identify the transactions on which Securities Transaction Tax (STT) is applicable

Purchase transactions of debt mutual funds

Purchase transactions of equity mutual funds

Redemption transactions of debt mutual funds

Redemption transactions of equity mutual funds

Question 52 of 63

53. Which is the Target Scheme in a Systematic Transfer Plan ?

It is the scheme with the lower NAV

It is the scheme with the higher NAV

It is the scheme from which funds are transferred

It is the scheme to which funds are transferred

Question 53 of 63

54. Long term capital gains will be taxed after adjusting for _________ , if any.

long-term capital loss only

short-term capital loss only

both long-term and short-term capital los

None of the above

Question 54 of 63

55. An existing investor in mutual funds invests Rs. 25,000 in ABC scheme's direct plan. Calculate the amount that will be the net investment made in the scheme after accounting for transaction charges?

Rs. 24,500

Rs. 25,000

Rs. 24,750

Rs. 24,800

Question 55 of 63

56. Securities transaction Tax (STT) is applicable on redemption of both Equity mutual funds and Debt mutual funds - State whether True or False?

True

FALSE

Question 56 of 63

57. While giving mutual fund units for re-purchase, the distributor should consider the impact of ______ and _______ on the investor's portfolio.

Exit Load ; Capital Gains Tax

Exit Load ; Entry Load

Entry Load ; Capital Gains Tax

Entry Load : Beta

Question 57 of 63

58. No investor can have a holding of more than 20 percent of a scheme - State True or False?

True

FALSE

Question 58 of 63

59. A folio which is held by a _________ CANNOT have a nominee.

Minor

Trust

Registered Company

All of the above

Question 59 of 63

60. Identify the TRUE statement/s : 1. The Indian inheritance laws are NOT applicable to mutual fund unit holders 2. A Power of Attorney (POA) cannot make or change nominations in a mutual fund

Only 1 is true

Only 2 is true

Both 1 and 2 are true

Both 1 and 2 are false

Question 60 of 63

61. Which of these statement/s is/are INCORRECT? A. The impact of exit load can be ignored by the distributor at the time of re-purchase of a mutual fund units B. When the investor wants to redeem mutual fund units, the distributor must suggest redemption from the scheme with the maximum exit load

Only statement A is incorrect

Only statement B is incorrect

Both statements A and B are incorrect

Both of the statements are correct

Question 61 of 63

62. Identify the FALSE statement : 1. When an investor sells his mutual fund units, the re-purchase is done by the mutual fund. Therefore the investor does not have to bear a tax on the capital gains 2. When an investor invests in a debt mutual fund for more than three years, the capital gains will be considered as Long term capital gain

Only 1 is false

Only 2 is false

Both 1 and 2 are false

Question 62 of 63

63. Identify the TRUE statement with respect to Systematic Investment Plan (SIP)?

A SIP cannot be done in an New Fund Offer (NFO)

A SIP can be done only in an existing folio

A SIP can be done in a Close-end fund

A SIP can be used to initiate a fresh purchase of mutual funds

Question 63 of 63