NISM V-A Chapter 7-9 Final Set 2

NISM VA chapter 7-9 final set 2

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1. In which of the following options does an investor receive the distribution in hand?

Income Distribution cum capital withdrawal option only

Income distribution cum capital withdrawal reinvestment plan only

Income Distribution cum capital withdrawal option and Income distribution cum capital withdrawal reinvestment plan both

Growth

Question 1 of 64

2. Mr. Suresh invests Rs 30000 in an equity fund. The face value of this scheme is Rs 10 and the NAV is Rs 12. The exit load is 2%. How many units will be allotted to Mr. Suresh ?

3000

2142.8571

2500

2411.1574

Question 2 of 64

3. Sale of units of equity oriented mutual fund (delivery based) will attract Securities Transaction Tax at ______ %.

0.01

0.001

0.017

0.125

Question 3 of 64

4. Which information has to be included in the mutual fund application form when a Non-Resident Indian (NRI) subscribes for the units?

Passport details

Countries of residence in the past one year

Details of investments made in the last one year

Current overseas address

Question 4 of 64

5. In order to ensure fairness to investors, _______ has prescribed cut - off timing to determine the applicable NAV.

AMFI

SEBI

RBI

Stock Exchange

Question 5 of 64

6. Identify the category of mutual fund scheme in which the Net Asset Value (NAV) has to be declared for up to 4 decimal points?

Mid - Cap Funds

Blue Chip Funds

Hybrid Funds

Liquid Funds

Question 6 of 64

7. Ms. Priya redeems 2000 units at an NAV of Rs 13. If the exit load is 1 percent, what is the redemption value of the investment?

Rs. 25500

Rs. 26250

Rs. 26000

Rs. 25740

Question 7 of 64

8. Mr. Amit want to invest in a mutual fund scheme. He has to give the request for purchase specifying the _____ .

Units he wants

Amount he wants to invest

Lots he wants

Question 8 of 64

9. Identify the document which authorizes a company to invest in a specific mutual fund?

Resolution passed in the shareholders meeting

Specific Board resolution

As per the Companies Act, a company can invest in any mutual fund scheme aslong it is beneficial to the interest of the shareholders, without any special authorisation

As per the Companies Act, a company cannot invest in mutual funds

Question 9 of 64

10. Identify the TRUE statement/s - A. Time stamping is relevant only for Financial transactions and not for Non - Financial transactions.

Only A is true

Only B is true

Both A and B are true

None of the above

Question 10 of 64

11. In which of these options will the unit balance incerase in the mutual fund investors foilo without any transaction being done by the investor?

Redemption

Dividend Re-investment option

Dividend Payout option

Growth option

Question 11 of 64

12. How can an investor remit money in an Indian mutual fund from abroad?

Through Society for Worldwide Interbank Financial Telecommunication (SWIFT)

Through Immediate Payment Service (IMPS)

Through Real time gross settlement (RTGS)

Through National electronic funds transfer (NEFT)

Question 12 of 64

13. Which of these investors is allowed to do a nomination?

Only SIP investors

Only Equity Mutual Fund investors

Only Institutional Investors

Only Individual Investors

Question 13 of 64

14. In which of these funds is Securities Transaction Tax (STT) not charged?

Fixed Maturity Plans (FMPs)

Equity index ETFs

ELSS - Equity Linked Savings Scheme

Blue chip equity funds

Question 14 of 64

15. The mechanism used to ensure that the cutoff timing is strictly followed is called ___________

Stamp time

Time verification

Time stamping

Auditing

Question 15 of 64

16. Can an investor transact directly through the websites of some mutual fund companies?

Yes, they can buy / sell units on the MFs website

No, this is not allowed in India

Question 16 of 64

17. An investor gives a local cheque of Rs 3 crore for investment in Gilt scheme at 11.30 am. What would be the applicable NAV for this investment?

The closing NAV of the day preceding the date of application

The closing NAV of the next working day

The closing NAV of the application day

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

Question 17 of 64

18. Which of the below investors will require the approval of board before investing in mutual funds ?

Non Resident investors

Institutional investors

High Networth investors

Retail investors

Question 18 of 64

19. The NFO price of a mutual fund scheme was Rs. 10 and its current Net Asset Value (NAV) is Rs. 8. What would happen if the transactions were to happen at NFO price

The new investors as well as the existing investors in this scheme would stand to lose

The new investors as well as the existing investors in this scheme would stand to gain

The new investors stand to gain at the cost of existing investors

The new investors stand to lose at the cost of existing investors

Question 19 of 64

20. State whether the statement is True or False - Investment in Income Distribution cum Capital Withdrawal re investment option grows faster than Growth option as the investor gets additional units.

Its true for all categories of mutual fund schemes

Its false for all categories of mutual fund schemes

Its true only for equity funds

It depends on whether the fund is open-end or close-end

Question 20 of 64

21. How will the AMC /R&T agent process an application for subscribing to mutual fund units if the ARN is wrongly mentioned in it?

It will be processed as a direct plan application

It will be rejected as incomplete application

It will be considered as an incomplete application and sent back for completion

It will be treated as a regular plan subject to the error being corrected in the required time frame

Question 21 of 64

22. When has the investor in mutual funds provide information under the Foreign Account Tax Compliance Act (FATCA) ?

When the investment is made through a foreign bank account

When the investor's folio was a NRI account before change

When the investor's place of birth is other than India

When the investor is a resident of USA or UK only

Question 22 of 64

23. Which of the following do not impact the calculation of Net Asset Value (NAV)?

Change in value of investments held by the scheme

Daily accrual of expenses

Daily accrual of income

Change in the number of investors in the fund

Question 23 of 64

24. Mr. Ashu holds his mutual fund units in demat form. If he wants to change his nominee or his bank account, he has to contact the ______ and complete the required procedure.

Stock Exchange

Depository Participan

R&T agent of the mutual fund

AMC / Mutual fund

Question 24 of 64

25. What is the Net Asset Value (NAV) after dividend payment called?

ex-Dividend NAV

ex-Load NAV

cum-Dividend NAV

Net - NAV

Question 25 of 64

26. Which of these statements is true with respect to a Switch transaction?

Switch transaction is allowed only after one year from date of purchase

Switch transaction is similar to a purchase transaction

Switch transaction is similar to a sale transaction

Switch transaction is a redemption from one mutual fund scheme and simultaneous purchase in to another scheme

Question 26 of 64

27. Which of these statement is TRUE with respect to Cut-off timings?

Cut-off timings are prescribed by SEBI from time to time

Cut-off timings are agreed upon between the AMC and the Collection centers

Cut-off timings are different from AMC to AMC

Cut-off timings are different for different RTAs

Question 27 of 64

28. Mr. X has invested Rs. 2,00,000 in a 370 day FMP and on maturity he received Rs. 2,15,832. What is the capital gain in this transaction?

Rs. 7916

Rs. 13750

Rs. 15832

Insufficient Data

Question 28 of 64

29. Mr. A is an existing investor in a mutual fund scheme and he is now investing Rs. 5000 in the direct plan of the scheme. What will be his net investment in the scheme after considering the transaction charges?

Rs. 4950

Rs. 4900

Rs. 4875

Rs. 5000

Question 29 of 64

30. A board resolution for investing in a mutual fund scheme is compulsorily required by __________

Non Resident Indians - NRIs

Hindu Undivided Family - HUF

Institutional Investors

Minors

Question 30 of 64

31. What is the maximum permissible limit of investment a single investor can have in a scheme?

5% of the corpus

10% of the corpus

20% of the corpus

25% of the corpus

Question 31 of 64

32. Where should the change in status of an individual from a Resident to a NonResident Indian updated for mutual fund investments?

It should be updated with the Registrar and Transfer Agent

It should be updated with the KYC Registration Agency

It should be updated with the directly with the Mutual Fund

It can be updated with any of the three options provided

Question 32 of 64

33. Investments have to be made only through authorized signatories for investments by __________

Institutional investors

Hindu Undivided Family - HUF

Non Resident Indians (NRI)

High net worth individuals (HNI)

Question 33 of 64

34. An investor is interested in buying some units of a Close ended fund after the NFO is over. How can he buy the same?

He can buy the units on the stock exchange from market makers appointed by the mutual fund.

He can buy the units on the stock exchange from other investors who were allotted the units and are interested in selling.

He can buy the units from the mutual fund itself when they open the sale at periodic intervals as announced by the fund.

He cannot buy units of a close ended fund.

Question 34 of 64

35. Identify the true statement with respect to investments in mutual funds through Stock Exchanges?

Stock exchanges have now become another important channel for mutual fund companies to sell their units to investors

One can buy mutual fund units on stock exchange but cannot sell them on stock exchange

The mutual fund units purchased through a stock exchange have a mandatory lock-in period of 30 days

None of the above are true

Question 35 of 64

36. In case of _______ , the Net Asset Value has to be declared for upto 4 decimal points

Mid Cap and Small Cap Funds

Liquid Funds

Aggressive Hybrid Funds

ELSS Funds

Question 36 of 64

37. 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 fund on the basis of a Board Resolution

Statement A is false

Statement B is false

Both statements A and b are false

Statement B is false

Question 37 of 64

38. The form for registering a change in the default bank account has to be signed ______________

by the first holder only

by all the holders of the folio

according to the mode of holding of the folio

by all the holders of the bank account

Question 38 of 64

39. Ms. Apeksha invests Rs 2 crore in a Gilt scheme at 2 pm with a local cheque. What would be the applicable NAV for allotment of units?

Closing NAV of date of application

Closing NAV of next business day

Closing NAV of day immediately preceding the date of application

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

Question 39 of 64

40. Which of the following is true for a monthly income distribution cum capital withdrawal plan (IDCW) of a mutual fund scheme?

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

The mutual fund guarantees declaring the IDCW amount

The mutual fund cannot guarantee declaring the IDCW amount or frequency

None of the above.

Question 40 of 64

41. Identify the false statement/s. A. Investments in mutual funds can be made on a repatriable basis by NRIs B. The mutual fund will automatically pay in Dollars when the NRI redeems his investments which were made on a repatriable basis

Only A is false

Only B is false

Both A and B are false

Question 41 of 64

42. For Non-resident investors, payment is made by the AMC in Rupees. In case the investment has been made on a repatriable basis, and the investor wishes to transfer the money abroad, the costs associated with converting the rupees into any foreign currency would be to the account of the investor. Proceeds of investments made on a repatriable basis can be credited to an NRE or FCNR account, as required by the investor.

When the performance of the mutual fund declines as compared to previous year

When the inflows from beyond the top 30 cities are redeemed within a period of 1 year from the date of investment.

When the TER of the mutual fund exceeds the limit specified under the regulations

All of the above

Question 42 of 64

43. Identify the false statement/s with respect to a New Fund Offer (NFO). 1. A Closed-ended mutual fund NFO will have a NFO opening date, a NFO closing date and a scheme Re-opening date 2. A Open-ended mutual fund NFO will have a NFO opening date, a NFO closing date and a scheme Re-opening date

Only 1 is false

Only 2 is false

Both 1 and 2 are false

None of the above

Question 43 of 64

44. Opening of time stamping machine needs to be documented and reported to the Asset Management Company (AMC) - State whether True or False?

TRUE

FALSE

Question 44 of 64

45. If a investor has to change his default account, he/she has to do it with ____ .

The KYC Registration agency

AMFI

Either KRA or AMFI

The mutual fund (AMC) directly

Question 45 of 64

46. Which of these investors CANNOT do CASH investments in mutual funds up to a limit of Rs. 50,000?

Investments made by a PIO (Person of Indian Origin)

Investments made by Sole Proprietorship firm

Investments made by minors

Investments made by resident Indian investors without PAN

Question 46 of 64

47. Redemption proceeds has to be paid to the mutual fund unit holders within the time specified by __________ from time to time.

AMFI

SEBI

Registrar of Companies

Ministry of Finance

Question 47 of 64

48. Ms Shweta purchases through a distributor 5000 units of a mutual fund scheme at a NAV of Rs 30. The current NAV of the scheme is Rs 28. What will be the trail commission for today if the trail commission rate is 1% per annum

Rs. 13.8356

Rs. 7.2256

Rs. 3.8356

Rs. 26.7463

Question 48 of 64

49. The minimum number of investors that a mutual fund scheme should have :

10 investos

20 investors

50 investors

100 investors

Question 49 of 64

50. Which is the Source Scheme in a Systematic Transfer Plan ?

It is the scheme with the lower NAV

It is the scheme from which funds are transferred

It is the scheme to which funds are transferred

It is the scheme with the higher NAV

Question 50 of 64

51. Once the mutual fund units are pledged, the unit holder/s _______

Cannot sell the units

Can sell the units bit after a period of 3 months

Cannot sell the units but can switch the units to another scheme

Cannot do additional purchase in the same account

Question 51 of 64

52. In case one of the joint holders dies, than the units will ________ .

be transferred to the HUF of deceased holder

be transferred to nominee/s

continue to be held by surviving joint holders

be transferred to nominee/s

Question 52 of 64

53. __________ is NOT accepted as a photo identity documentation for Micro SIP.

Debit card with a photo

Permanent Retirement Account Number (PRAN) card issued to National Pension System (NPS)

Employee ID cards issued by companies registered with the Registrar of Companies

Credit card.

Question 53 of 64

54. What happens in the process of Indexation?

In indexation, the impact of capital gains tax is reduced in case of both short term and long term capital gains.

In indexation, the mutual fund's performance is benchmarked against a suitable index

In indexation, the cost of acquisition is adjusted upwards to reflect the impact of inflation.

None of the above

Question 54 of 64

55. On whom is the compliance rerquirement under Foreign Account Tax Compliance Act (FATCA) applicable?

Only on those mutual funds who have foreign institutions as their sponsors

Only on those mutual funds who are registered with a foreign agency

All financial institutions including mutual funds

Only Indian mutual funds

Question 55 of 64

56. Identify the true statement(s) - A) A systematic transaction cannot be cancelled B) Assuming a mutual fund scheme is profitable then the investors can keep encashing some profits through a Systematic Withdrawal Plan

Only A is true

Only B is true

Both A and B are true

Question 56 of 64

57. An investor purchases through a distributor 5000 units of a mutual fund scheme at a NAV of Rs 25. The current NAV of the scheme is Rs 43. What will be the trail commission for today if the trail commission rate is 1% per annum.

Rs. 2150

Rs. 33.1854

Rs. 3.4246

Rs. 5.8904

Question 57 of 64

58. Rising Sun Mutual Fund holds shares of AAA Ltd. in its portfolio. When the NAV of the scheme is calculated on 10th April, then each share of AAA Ltd. will be valued at ______ .

Average traded price of AAA Ltd. on 10th April across all stock exchanges

Opening price of AAA Ltd. on 10th April at BSE / NSE

Closing price of AAA Ltd. on 10th April at BSE / NSE

Average traded price of AAA Ltd. on 10th April at BSE / NSE

Question 58 of 64

59. According to guidelines given by SEBI, every mutual fund scheme should have a minimum of __________ investors.

Question 59 of 64

60. Identify the TRUE statements with respect to Transmission of mutual fund units - A) Before the transfer is effected, the mutual fund will insist for an indemnity against future problems for the mutual fund arising out of the transfer B) Before the transfer is effected, the mutual fund will not insist on the death certificate of the deceased unit holder C) Before the transfer is effected, the mutual fund will insist on the KYC documentation from the nominee

A and B are true

B and C are true

A and C are true

All A, B and C are true

Question 60 of 64

61. Mr. Mohit has filled up a application form for subscribing to a mutual fund scheme. However the address mentioned in the application form is different from the address provided at the time of KYC compliance. Which address will be included in the mutual funds records once the KYC compliance is validated?

The address provided for KYC compliance

The address provided in the application form

Mr. Mohit can indicate which address is correct

The address provided in the application form will be used for all communications

Question 61 of 64

62. Which of these statements are TRUE with respect to time stamping on mutual fund documents? A) Time stamping is relevant for non-financial mutual fund transactions B) The daily time stamping of application does not start with serial 1 C) Breakdown of time stamping process or breaking of seal is mandated to be duly recorded and reported to the Trustees

A and B are true

B and C are true

A and C are true

A, B and C are true

Question 62 of 64

63. Investors who have not transacted during the previous ______ are known as dormant investors.

15 months

12 months

9 months

6 months

Question 63 of 64

64. Long term capital loss from an investment can be set off against _____ .

short term capital gains only

short term capital gain or long term capital gain

long term capital gains only

long term capital loss cannot be set off

Question 64 of 64