Practice Set 5 Welcome to WORLDONOMICS! Practice Set of Securities MarketsTotal Number of Questions: 40Time: 40 MinutesAll the best...Kind RegardsCMA Madhuri Kashyap & CMA Sandeep Kumar - Founder - International Navodaya Chamber of Commerce Name Email 1. A mutual fund pools money from investors to: Invest in stock markets only Diversify their investments across asset classes Lend to businesses directly Manage foreign exchange transactions None 2. Units of mutual funds are first issued to investors during: Systematic Investment Plans Open-end transactions New Fund Offer Dividend declaration None 3. The primary regulator of mutual funds in India is: Reserve Bank of India AMFI SEBI IRDAI None 4. NAV represents: Fund manager’s profit Current market value of the fund’s portfolio Administrative charges Fund’s expense ratio None 5. Which of these is a type of equity mutual fund? Debt Fund Multi-Cap Fund Fixed Income Fund REITs None 6. Systematic Investment Plan (SIP) allows: One-time investment only Pre-determined periodic investments Fixed deposit features Investment without KYC compliance None 7. Closed-end funds are: Always open for transactions Listed and traded on stock exchanges Designed only for high net-worth individuals Borrow money for investing None 8. Who is responsible for managing mutual fund portfolios? Trustees Distributors Fund Managers SEBI None 9. AMFI is responsible for: Regulating mutual funds Issuing scheme-related documents Promoting best practices in the mutual fund industry Auditing mutual fund accounts None 10. What does KYC ensure in mutual fund transactions? Portfolio performance tracking Identity verification of investors Scheme registration approval Dividend distribution None 11. Which of these is a feature of open-ended mutual funds? Fixed maturity period Limited investor participation Continuous buying and redemption Investment in physical assets only None 12. Investors in equity mutual funds primarily seek: Regular income Growth and capital appreciation Fixed returns Tax exemptions None 13. SEBI regulations mandate mutual funds to: Pool funds without trustee oversight Provide scheme information disclosures Issue units only in physical form Borrow funds for investment purposes None 14. Mutual fund units are held: In AMC accounts By individual fund managers By custodian banks in trust As direct ownership by investors None 15. FATCA compliance in mutual funds ensures reporting to: Indian Tax Authorities SEBI Reserve Bank of IndiaU.S U.S. Internal Revenue Service None 16. Mutual funds classify their schemes broadly into: Equity, Debt, Hybrid, Solution-Oriented, Others Public and Private Funds Liquid and Illiquid Funds General and Specific Funds None 17. Index funds typically invest in: Real estate securities Replicating or tracking market indices High-risk assets International markets only None 18. Which entity audits mutual fund scheme accounts? Trustees Distributors SEBI-approved auditors Fund managers None 19. Investors in mutual funds are termed as: Bondholders Unit holders Shareholders Depositors None 20. NAV is calculated: Weekly Daily Monthly Annually None 21. A dividend payout option: Reinvests dividends into the fund Pays dividends directly to investors Converts dividends into fixed deposits Stops NAV calculation None 22. Diversification in mutual funds aims to: Increase fund management fees Reduce portfolio risk Invest only in equities Focus solely on technology stocks None 23. In passive fund management, fund managers: Select stocks based on their analysis Track specific indices Frequently buy and sell assets Focus on high-yield debt instruments None 24. ELSS funds offer: Tax benefits under Section 80C Guaranteed returns Quarterly dividends High liquidity without lock-in None 25. Which document provides key mutual fund details? Scheme Information Document (SID) Investor’s Charter Annual General Report Handbook None 26. Expense Ratio in a mutual fund refers to: The percentage of annual expenses to fund size The investor's profit percentage The rate of dividends paid The cost of managing individual investments None 27. In a systematic withdrawal plan (SWP), investors: Invest regularly in mutual funds Withdraw fixed amounts periodically Redeem their units only after maturity Pay penalties for early withdrawal None 28. Hybrid funds invest in: Only equity securities Only debt securities A mix of equity and debt securities Real estate and commodities None 29. Which of the following is true about liquid funds? They have a lock-in period of 3 years They invest in short-term debt instruments They are high-risk investment options They are only available to institutional investors None 30. The term "load" in mutual funds refers to: The NAV of the fund The interest rate offered Fees charged during buying or selling of units Fund manager's salary None 31. Mutual funds are primarily regulated to ensure: Tax benefits to investors Investor protection and transparency Guaranteed returns for unit holders High profitability for AMCs None 32. Which mutual fund transaction allows an investor to switch between schemes? Systematic Investment Plan (SIP) Switching Dividend Payout Option Redemption None 33. What is the minimum lock-in period for ELSS funds to avail tax benefits? 1 year 2 year 3 year 5 year None 34. Gilt funds primarily invest in: Corporate bonds International equities Government securities Real estate assets None 35. An investor's risk profile determines: The charges they pay to AMCs The suitability of mutual fund schemes for them The dividend payout frequency The redemption charges None 36. The term "asset allocation" in mutual funds means: Allocating a fund's corpus among various distributors Allocating assets across different investment categories Deciding management fees Allocating units among investors None 37. ETFs (Exchange Traded Funds) differ from mutual funds because: They are managed by individual investors They are traded on stock exchanges They guarantee fixed returns They do not follow any index None 38. The fund of funds (FOF) scheme invests in: Stocks and bonds Multiple other mutual funds Real estate and commodities Derivatives and options only None 39. In a growth option of mutual funds, the investor receives: Periodic dividend payouts Accumulated returns added to the NAV Regular withdrawals Fixed returns every quarter None 40. Mutual funds are preferred over direct stock investments because they: Are not regulated Do not charge any fees Offer professional management and diversification Always guarantee returns None Time's upTime is Up!
