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Practice Questions for AMFI Test

1. A close-ended mutual fund has a fixed :

a. NAV

b. fund size

c. rate of return

d. number of distributors

2. The maximum load that a fund can charge is

determined by the :

a. AMC

b. SEBI

c. AMFI

d. distribution agents based on demand for the

fund

3. The amount required to buy 100 units of a scheme

having an entry load of 1.5% and NAV of Rs.20 is :

a. Rs.2000

b. Rs.2015

c. Rs.1985

d. Rs.2030

4. A gilt fund is a special type of fund that invests :

a. in very high quality equity only

b. in instruments issued by companies with a

sound track record

c. in short-term securities

d. in government securities only

5. Of the following fund types, the highest risk is

associated with

a. Balanced Funds

b. Gilt Funds

c. Equity Growth Funds

d. Debt Funds

6. The NAV of a mutual fund :

a. is always constant

b. keeps going up at a steady rate

c. fluctuates with market price movements

d. cannot go down at all

7. An open-ended mutual fund is one that has :

a. an option to invest in any kind of security

b. units available for sale and repurchase at all

times

c. an upper limit on its NAV

d. a fixed fund size

8. An investor in a close-ended mutual fund can get

his/her money back by selling his/her units:

a. back to the fund

b. to a special trust at NAV

c. on a stock exchange where the fund is listed

d. to the agent through which he/she

subscribed to the units of the fund

9. The "load" charged to an investor in a mutual fund

a. entry fee

b. cost of the paper on which the unit

certificates are printed

c. the fee the agent charges to the investor

d. the expenses incurred by fund managers for

marketing a mutual fund scheme

10. A mutual fund is owned by

a. the Govt. of India

b. SEBI

c. all its investors

d. AMFI

11. Units from an open-ended mutual fund are bought

a. on a stock exchange

b. from the fund itself

c. from AMFI

d. from a stock broker

12. A mutual fund is not

a. owned jointly by all investors

b. a company that manages investment

portfolios of high networth individuals

c. a pool of funds used to purchase securities

on behalf of investors

d. a collective investment vehicle

13. "Load" cannot be recovered

a. at the time of the investor's entry into the

fund

b. as a fixed amount each year

c. at the time the investor exits the fund

d. from the fund's distribution agent

14. The most important advantage of a money market

mutual fund is

a. quick capital appreciation

b. high regular income

c. safety of principal

d. no loads

15. Some close-ended funds are quoted at a discount

to their NAV because

a. of high expense ratios

b. investors do not expect the current NAV to

be sustained in future

c. the repurchase price fixed by the fund in

lower than the NAV

d. of the inherent risk involved in investing in

such type of funds

16. The NAV of each scheme should be updated on

AMFI's website

a. every quarter

b. every month

c. every hour

d. every day

17. Debt funds target

a. low risk and stable income

b. protection of principal

c. high growth with risk

d. long term capital appreciation

18. In which of the following do debt funds not invest

a. Government debt instruments

b. Corporate paper

c. Financial institutions' bonds

d. Equity of private companies

19. Which of the following risks do not affect a debt

fund

a. Default by issuer on payment of interest or

principal

b. Price fluctuations of the debt securities

c. Share price movements

d. Interest volatility

20. Assured return or guaranteed monthly income

plans are essentially

a. Hybrid funds

b. Growth Funds

c. Debt/Income funds

d. Sector funds

21. A Fixed Term Plan Series is

a. an open-ended fund

b. a close-ended fund

c. a fixed term bank deposit

d. a fixed term corporate bond

22. NAVs of equity funds are not affected by

a. Stock market movements

b. Events affecting the industry/sector in which

the fund has invested Happenings in the

companies in which the fund has invested

c. real estate prices

23. The greatest potential for growth in capital is

offered by

a. debt funds

b. gilt funds

c. growth funds

d. balanced funds

24. A Systematic Withdrawal Plan, allows investors

to get back the principal amounts invested in addition

to the income on investment

a. True

b. False

25. Which of the following is untrue of an automatic

reinvestment plan?

a. The plan allows for automatic reinvestment

of all income and capital gains

b. Automatic reinvestment allows for

accumulation of additional units of the fund

c. The major benefit of automatic reinvestment

is compounding

d. The benefit of automatic reinvestment is

often lost on account of the heavy load

charge on the reinvestment

26. Constraints imposed by most funds on check

writing are:

a. Account balance should not fall below the

minimum capital required

b. Checks issued must be for at least the

minimum amount specified

c. Number of checks per month must not

exceed a specified number

d. Both a & b above

27. The performance of a fund is largely measured by

the success of

a. the marketing function

b. the operations function

c. the portfolio market function

d. none of the above

28. Generally invest in

a. unlisted

b. market-traded

c. thinly traded

d. privately placed

29. Which of the following is not an equity

instrument

a. preference shares

b. equity warrants

c. ordinary debentures

d. convertible debentures

30. The drawback of an ordinary share is

A. possibility of capital appreciation

B. ownership privilege of the company

C. guaranteed dividend income

D. no guaranteed income or security

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Practice Questions for AMFI Test 1. A close-ended mutual fund has a fixed : a. NAV b. fund size c. rate of return d. number of distributors 2. The maximum load that a fund can charge is determined by the : a. AMC b. SEBI c. AMFI d. distribution agents based on demand for the fund 3. The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 is : a. Rs.2000 b. Rs.2015 c. Rs.1985 d. Rs.2030 4. A gilt fund is a special type of fund that invests : a. in very high quality equity only b. in instruments issued by companies with a sound track record c. in short-term securities d. in government securities only 5. Of the following fund types, the highest risk is associated with a. Balanced Funds b. Gilt Funds c. Equity Growth Funds d. Debt Funds 6. The NAV of a mutual fund : a. is always constant b. keeps going up at a steady rate c. fluctuates with market price movements d. cannot go down at all 7. An open-ended mutual fund is one that has : a. an option to invest in any kind of security b. units available for sale and repurchase at all times c. an upper limit on its NAV d. a fixed fund size 8. An investor in a close-ended mutual fund can get his/her money back by selling his/her units: a. back to the fund b. to a special trust at NAV c. on a stock exchange where the fund is listed d. to the agent through which he/she subscribed to the units of the fund 9. The "load" charged to an investor in a mutu ...
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