II - Mutual Fund Distributors Certification Examination

JavaScript isn't enabled in your browser, so this file can't be opened. Enable and reload.

Mock Test - II

Every scheme requires a fund manager, and the same fund manager cannot manage multiple schemes. *

1 point

True

False

Which statement is correct? *

1 point

a) The custodian has custody of the assets of the fund.

b) The custodian tracks corporate actions such as dividends, bonus and rights in companies where the fund has invested.

'a'

'b'

Both 'a' and 'b'

Which one is the function of RTA *

1 point

Processing of purchase and redemption transactions of the investor

Dealing with the financial transactions of receiving funds for purchases and making payments for redemptions

Updating the information in the individual records of the investor, called folios, keeping the investor updated about the status of their investment account and information related to the investment.

All of the above

Which of the following statement is wrong? *

1 point

Auditors are responsible for the audit of accounts

The scheme auditor is appointed by the Trustees, .

The auditor appointed to audit the scheme accounts and the auditor of the AMC can be same.

The AMC auditor is appointed by the AMC

Asset Management Companies (AMCs) in India are members of ______________ *

1 point

AMFI

SEBI

ICAI

MSEI

Investment in the listed securities of the group companies of the sponsor will be limited to 20 percent of the net assets. *

1 point

True

False

MF schemes may invest in other schemes of the same Mutual Fund or other Mutual Funds. *

1 point

True

False

Which of the following statements is true? *

1 point

The Mutual Fund will buy and sell securities on delivery basis.

The Mutual Fund shall not advance any loans.

The Mutual Fund under all its schemes shall not own more than 10 percent of a company’s paid up capital bearing voting rights

All of the above

Investment in unrated debt securities of a single issuer will be limited to _____ percent of its net assets and the total investments in such securities shall not exceed ____ percent. *

1 point

10% and 25%

10% and 15%

5% and 20%

10% and 20%

Mutual Funds/AMCs shall ensure that the total exposure of debt schemes of mutual funds in a particular sector shall not exceed ____ percent of the net assets of the scheme. *

1 point

10%

15%

20%

25%

Atleast _____ percent of the ELSS’ funds should be invested in equity and equity-linked securities. *

1 point

60%

75%

80%

85%

ELSS Scheme shall not invest more than ____ percent of its net assets in the equity shares and equity related instruments of a company. *

1 point

10%

20%

40%

80%

A maximum of ___ percent of the net assets of an ELSS scheme will be invested in unlisted equity shares and equity related instruments. *

1 point

7.50%

10%

12.50%

None of the above

In the event of any issue with the AMC or scheme, the investor can directly write to SEBI with the details. *

1 point

True

False

If an investor feels that the trustees have not fulfilled their obligations, then he can file a suit against the trustees for breach of trust. *

1 point

True

False

A unit-holder can seek legal protection on the grounds of not being aware of detail;s *

1 point

True

False

PAN No. and KYC documentation are not compulsory for mutual fund investments. *

1 point

True

False

Mutual Fund Schemes shall be organized, operated and managed in the interest of ______ *

1 point

Sponsors

Directors of Members

Investors

Brokers and other market intermediaries

All of thew above

Any one can become a Mutual Fund distributor *

1 point

True

False

Required

A distributor can be empanelled with more than one mutual fund. *

1 point

True

False

The role of KYC registration agencies is to *

1 point

A unified KYC for the securities market

To do away with multiple KYC formalities with various intermediaries

Both of the above

In-Person Verification (IPV) is not compulsory for Mutual Fund investors. *

1 point

True

False

The assets of the mutual fund are held by ______. *

1 point

AMC

Trustees

Custodian

Registrar

Minimum networth requirement for a new AMC is _______. *

1 point

50 Crore

5 Crore

4 Crore

10 Crore

AMC directors are appointed with the permission of Trustees. *

1 point

True

False

Most investor service centres are offices of _______. *

1 point

Trustees

Registrar

Custodian

Fund Accountant

Fund accounting activity of a scheme is to be compulsorily outsourced. *

1 point

True

False

Mutual Funds have an independent regulatory authority in India. *

1 point

True

False

Anyone who is aggrieved by a ruling of SEBI, can file an appeal with the Securities Appellate Tribunal *

1 point

True

False

Association of Mutual Funds in India (AMFI) is a self regulatory organisation (SRO) *

1 point

True

False

The objectives of AMFI include *

1 point

Defining and maintaining a high professional and ethical standard in all areas of operation of mutual fund industry.

Interact with the Securities and Exchange Board of India (SEBI) and to represent to SEBI on all matters concerning the mutual fund industry.

Undertake nationwide investor awareness programe so as to promote proper understanding of the concept and working of mutual funds.

All of the above

AMFI code of ethics (ACE) sets explicit standards for AMCs and ________ *

1 point

Distributors

Trustees

Auditors

None of the above

AMCs has to put in place a due diligence process to regulate distributors who qualify the following criteria: *

1 point

Commission received of over Rs. 50 Lakhs from a single mutual fund

Multiple point presence (More than 20 locations)

AUM raised over Rs. 100 crore across industry in the non-institutional category but including high networth individuals (HNIs)

All of the above

Compliance and risk management functions of the distributor shall include review of defined management processes for: *

1 point

Review of transactions, exceptions identification, escalation and resolution process by internal audit.

Internal / external audit processes, their comments / observations as it relates to MF distribution business.

Recruitment, training, certification and performance review of all personnel engaged in this business.

All of the above

The Mutual Funds can buy and sell securities on delivery basis and also trade on a daily basis . *

1 point

True

False

Mutual funds cannot invest in the unlisted or privately placed securities of any associate or group company of the sponsor. *

1 point

True

False

Mutual funds can invest in listed securities of the group companies of the sponsor but will be limited to ____ percent of the net assets. *

1 point

25%

20%

10%

The Mutual Fund under all its schemes shall not own more than ____ percent of a company’s paid up capital bearing voting rights *

1 point

25%

20%

10%

The Scheme shall not invest more than ___ percent of its NAV in investment grade debt instruments issued by a single issuer. *

1 point

20%

15%

10%

Parking of funds in Short-term deposits with all scheduled commercial banks shall be limited to ___ percent of the net assets of a Mutual fund scheme. *

1 point

10%

15%

None of the above

The investor/s can appoint up to 5 nominees, who will be entitled to the Units in the event of the demise of the investor/s. *

1 point

True

False

The investor cannot pledge the units in order to offer as security to a financier. *

1 point

True

False

Unit-holders do not have any right to the beneficial ownership of the assets of the scheme. *

1 point

True

False

Which of the following is true? *

1 point

Investors can choose to hold the Units in dematerialised form.

Unit-holders have the right to inspect key documents such as the Trust Deed, Investment Management Agreement, Custodial Services Agreement, RTA agreement and Memorandum & Articles of Association of the AMC.

The mutual fund has to publish a complete statement of the scheme portfolio and the half-yearly unaudited financial results, within 1 month from the close of each half year.

All the above statements are true,

Scheme-wise Annual Report or an abridged summary has to be mailed or emailed to all unit-holders within _____ months of the close of the financial year. *

1 point

One

Two

Three

Four

Consolidated Account Statement (CAS) is issued to investors _______ *

1 point

Quarterly

Half yearly

Yearly

The appointment of the AMC for a mutual fund can be terminated by a majority of the trustees or by ____ percent of the unit-holders (in practice, Unit-holding) of the Scheme. *

1 point

51%

60%

75%

Under the law, investors can sue the trust. *

1 point

True

False

A unit-holder can seek legal protection on the grounds of not being aware, *

1 point

True

False

Investors who reclaim money invested in MF after 3 years, will get payment based on the prevailing NAV. *

1 point

True

False

Mutual Fund Schemes shall be organized, operated, managed and their portfolios of securities selected, in the interest of ....... *

1 point

Brokers and other market intermediaries.

Associates of the Members.

All classes of unit holders.

All of the above

Members shall disclose to unit holders investment pattern, portfolio details, ratios of expenses to net assets and total income and portfolio turnover wherever applicable in respect of schemes on _____ basis. *

1 point

Annual

Half yearly

Quarterly

Members shall maintain records of all activities and transactions for at least ____ years, *

1 point

Two

Three

Five

Six

A “Significant Unit holder” means any entity holding _____ percent or more of the total corpus of any scheme managed by the member and includes all entities directly or indirectly controlled by such a unit holder. *

1 point

10%

15%

25%

Intermediaries are allowed to rebate commission back to investors. *

1 point

True

False

Intermediaries including the sales personnel of intermediaries engaged in sales / marketing shall obtain.... *

1 point

NISM certification.

AMFI Registration Number (ARN).

All of the above

SEBI regulates __________ *

1 point

Mutual Funds

Depositories

Registrar & Transfer Agents

All of the above

Investment objective defines the broad investment charter. *

1 point

True

False

Statement of Account is to be sent to investors within ___ days of NFO closure. *

1 point

Within ___ days of dividend declaration, warrants will have to be sent to investors. *

1 point

Unit holders can hold their units in demat form. *

1 point

True

False

The draft Offer Document for the NFO needs to be approved by the _____ and the ________. *

1 point

Trustees and Board of Directors of AMC

Board of Directors of AMC and Chief Investment Officer

Board of Directors of AMC and Chief Marketing Officer

Trustees and Chief Investment Officer

Close-ended Schemes have an NFO do not have a Scheme Re-opening Date. *

1 point

True

False

NFOs other than ELSS and RGESS can remain open for a maximum of ____ days. *

1 point

15 days

10 days

7 days

5 days

Allotment of units or refund of moneys, should be done within _____ business days of closure of the scheme. *

1 point

5 business days

3 business days

7 business days

10 business days

Open-ended schemes have to re-open for sale and re-purchase within 5 business days of the allotment. *

1 point

2 business days

3 business days

5 business days

7 business days

All information that an investor needs to know about a New Fund Offer (NFO) is available in the ______ *

1 point

Offer document

Prospectus

Scheme Information document (SID)

None of the above

Which of the following is not part of the Offer document? *

1 point

The type of scheme

Investment objective(s) and Investment Pattern of the scheme

Terms of the issue

Proposed portfolio of the scheme

Statement of Additional Information (SAI) is common for all the schemes offered by a mutual fund. *

1 point

True

False

SEBI has to approves the Offer Documents. *

1 point

True

False

Scheme Information Document (SID) and Statement of Additional Information (SAI) are part of Mutual Fund Offer Document. *

1 point

True

False

If a scheme is launched in May 2019, then the first update of the SID is due by _____ . *

1 point

June 2020

September 2020

March 2021

June 2021

If a scheme is launched in December 2019, then the first update of the SID is due by ______. *

1 point

June 2020

September 2020

March 2021

June 2021

In case of any changes in SID, then *

1 point

It will be printed on a separate piece of paper (addendum) and distributed along with the SID, until the SID is updated.

The change is to be mentioned in the website of the mutual fund.

The change is to be advertised in an English newspaper having nation-wide circulation, and in a newspaper of the language of the region where the head office of the mutual fund is located.

All of the above

SAI - Statement of Additional Information include *

1 point

Information about Sponsors, AMC, Trustee directors, service providers etc.

Condensed financial information (for schemes launched in last 3 financial years)

Rights of Unit-holders

All of the above.

Investors can access the SAI of all the mutual funds through AMFI website. *

1 point

True

False

Regular update of SAI is done every _____. *

1 point

6 months

End of financial year

End of 3 months of every financial year

End of 6 months of every financial year

KIM - Key Information Memorandum is essentially a summary of the SID and SAI. *

1 point

True

False

As per SEBI regulations, every application form is to be accompanied by the KIM. *

1 point

True

False

KIM is to be updated at least once every _______ *

1 point

Year

6 months

3 months

NFOs other than ELSS can be open for a maximum of _____. *

1 point

7 days

10 days

15 days

30 days

Legally, SAI is part of the SID. *

1 point

True

False

Offer documents of mutual fund schemes are approved by SEBI. *

1 point

True

False

Application form is attached to ______. *

1 point

SID

SAI

KIM

None of the above

KIM has to be updated every 6 months. *

1 point

True

False

Open-ended schemes are required to be listed in a stock exchange *

1 point

True

False

ETFs are bought and sold in the stock exchange. *

1 point

True

False

SEBI permission is required to appoint individuals, bank, non-banking finance company or distribution company as a distributor. *

1 point

True

False

The trail commission is calculated on net assets. *

1 point

True

False

an investor has bought 1000 units at Rs. 10 each. Later the NAV of the scheme goes up to Rs.15. Trail commission is payable on ......... *

1 point

Rs.10,000/-

Rs. 15,000/-

None of the above

Commission–upfront and trail – is payable to the distributor for their own investments also. *

1 point

True

False

MF distribution companies and banks can appoint sub-brokers. *

1 point

True

False

AMC it is bound by the acts of the distributor and also the distributor’s agents or sub-brokers. *

1 point

True

False

Sharing part of the commission earned with the investors, is permitted. *

1 point

True

False

SEBI Advertising Code permits celebrities to form part of the advertisement. *

1 point

True

False

Institutional distributors build reach through ______. *

1 point

Employees

Agents

Sub-brokers

Any of the above

The maximum initial commission that a scheme can pay to distributors is ____. *

1 point

Nill

0.05%

The distributor can charge a fee from the investor. *

1 point

True

False

Stock exchange brokers are permitted to distribute mutual funds without the requirement of passing the certifying test. *

1 point

True

False

Trail commissions are linked to valuation of portfolio in the market. *

1 point

True

False

Submit

Clear form

Forms

This form was created inside of sharemarkettutor.in.