NISM - Series V A - Model Question Bank with Answer Key

NISM - Series V A - Model Question Bank with Answer Key

1. Units’ of_____________ must be listed on the stock exchange.
a. Sector funds
b. Arbitrage funds
c. Close ended funds
d. Liquid funds

2. Open-ended schemes generally offer exit option to investors through a stock exchange.
a. True
b. False

3. Sector funds invest in a diverse range of sectors.
a. True
b. False

4. High yield bond schemes invest in junk bonds.
a. True
b. False

5. Investment objective is closely linked to ________.
a. Scheme
b. Option
c. Plan
d. SIP

6. The assets of the mutual fund are held by ______.
a. AMC
b. Trustees
c. Custodian
d. Registrar

7. Minimum networth requirement for a new AMC is _______.
a. Rs 50 crore
b. Rs 5 crore
c. Rs 4 crore
d. Rs 10 crore

8. AMC directors are appointed with the permission of Trustees.
a. True
b. False

9. Most investor service centres are offices of _______.
a. Trustees
b. Registrar
c. Custodian
d. Fund Accountant

10. Fund accounting activity of a scheme is to be compulsorily outsourced.
a. True
b. False

11. SEBI regulates __________.
a. Mutual Funds
b. Depositories
c. Registrar & Transfer Agents
d. All of the above

12. Investment objective defines the broad investment charter.
a. True
b. False

13. Statement of Account is to be sent to investors within ___ days of NFO closure.
a. 3
b. 5
c. 7
d. 15

14. Within ___ days of dividend declaration, warrants will have to be sent to investors.
a. 7
b. 10
c. 15
d. 30

15. Unit holders can hold their units in demat form.
a. True
b. False

16. NFOs other than ELSS can be open for a maximum of _____.
a. 7 days
b. 10 days
c. 15 days
d. 30 days

17. Legally, SAI is part of the SID.
a. True
b. False

18. Offer documents of mutual fund schemes are approved by SEBI.
a. True
b. False

19. Application form is attached to ______.
a. SID
b. SAI
c. KIM
d. None of the above

20. KIM has to be updated every 6 months.
a. True

b. False

21. Institutional distributors build reach through ______.
a. Employees
b. Agents
c. Sub-brokers
d. Any of the above

22. The maximum initial commission that a scheme can pay to distributors is ____.
a. Nil
b. 0.05%
c. 1%
d. 2%

23. The distributor can charge a fee from the investor.
a. True
b. False

24. Stock exchange brokers are permitted to distribute mutual funds without the requirement of passing the certifying test.
a. True
b. False

25. Trail commissions are linked to valuation of portfolio in the market.
a. True
b. False

26. Net assets of a scheme are nothing but its investment portfolio.
a. True
b. False

27. The difference between NAV and re-purchase price is _______.
a. Entry Load
b. Exit Load
c. Expense
d. Dividend Stripping

28. NAV of income funds is to be calculated upto ___ decimals.
a. 4
b. 3
c. 2
d. 1

29. Securities Transaction Tax is applicable to Equity Schemes.
a. True
b. False

30. Wealth tax is payable at the applicable rates on equity mutual fund units.
a. True
b. False

31. For a debt scheme with corpus of Rs. 250 cr, what is the maximum amount that can be charged by the AMC as recurring expense, if all moneys have come from the Top 15 cities?
a. Rs. 5.625 cr
b. Rs. 5 cr
c. Rs. 4.625 cr

d. Rs. 5.25 cr

32. As per SEBI regulations, foreign nationals are permitted to invest in Indian mutual funds, subject to KYC.
a. True
b. False

33. PAN Card is not required for mutual fund investments below Rs 50,000 per mutual fund per financial year, where payment is in cash.
a. True
b. False

34. Investments in mutual fund can be made using _____.
a. Cheque / DD
b. Remittance
c. ASBA
d. Any of the above

35. Cut-off timing guidelines are not applicable for _____.
a. NFOs
b. International Funds
c. Both of the above
d. None of the above

36. STP is a combination of SIP and SWP.
a. True
b. False

37. Investors’ KYC details are stored in the server of _____.
a. AMC
b. AMFI
c. SEBI

d. KRA

38. Fundamental analysis is evaluation of the strength of the company’s price-volume charts.
a. True
b. False

39. In a top-down approach, sector allocation precedes stock selection.
a. True
b. False

40. Which of the following is a truly international asset class?
a. Real Estate
b. Equity
c. Debt
d. Gold

41. Loads and taxes may account for the difference between scheme returns and investor returns.
a. True
b. False

42. The most appropriate measure of returns for a scheme in 
existence for several years is ______.
a. Simple Return
b. Dividend Return
c. Annualised Return
d. CAGR


43. Risk can be measured by ______.
a. Variance
b. Standard Deviation
c. Beta
d. Any of the above

44. Equity markets are more predictable in the long term than the short.
a. True
b. False

45. Arbitrage funds are meant to give better equity risk exposure.
a. True
b. False

46. The comparable for a liquid scheme is _______.
a. Equity scheme
b. Balanced Scheme
c. Gilt Fund
d. Savings Bank account

47. Which of the following aspects of portfolio would an investor in a debt scheme give most importance?
a. Sector selection
b. Stock selection
c. Weighted Average Maturity
d. Number of securities in portfolio

48. Mutual fund ranking and rating amount to the same.
a. True

b. False

49. More than 50% of the wealth of Indians is held in physical assets.
a. True
b. False

50. Gold Futures are superior to ETF Gold as a vehicle for life-long investment in gold.
a. True
b. False

51. As regards wealth tax, ETF Gold is superior to physical gold.
a. True
b. False

52. The National Pension System is regulated by ______.
a. SEBI
b. IRDA
c. PFRDA
d. AMFI

53. An investor under the National Pension System can choose which of the following asset classes?
a. Equities
b. Corporate debt
c. Government Securities

d. All of the above

54. Today’s costs can be translated into future requirement of funds using the formula:
a. A = P X (1 + i)n
b. A = P / (1 + i)n
c. P = A n X (1 + i)
d. P = A n X (1 + i)

55. Providing funds for a daughter’s marriage is an example of _______.
a. Goal-oriented Financial Plan
b. Comprehensive Financial Plan
c. Financial goal
d. None of the above

56. According to the Certified Financial Planner – Board of Standards (USA), the first stage in financial planning is _____________.
a. Analyse and Evaluate Client’s Financial Status
b. Establish and Define the Client-Planner Relationship
c. Gather Client Data, Define Client Goals
d. Develop and Present Financial Planning Recommendations and / or Options

57. Investor can get into long term investment commitments in ________.
a. Distribution Phase
b. Transition Phase
c. Inter-generational Phase
d. Accumulation Phase

58. Distribution phase of Wealth Cycle is a parallel of Retirement phase of Life Cycle.
a. True

b. False

59. Risk appetite of investors is assessed through _______.
a. Risk Appetizers
b. Asset Allocators
c. Risk Profilers
d. Financial Plan

60. The objective of asset allocation is risk management.
a. True
b. False

61. The asset allocation that is worked out for an investor based on risk profiling is called _______.
a. Tactical Asset Allocation
b. Fixed Asset Allocation
c. Flexible Asset Allocation
d. Strategic Asset Allocation

62. Model portfolios are a waste of time for financial planners.
a. True
b. False

63. How much equity would you suggest for a young well settled unmarried individual
a. 100%
b. 80%
c. 60%
d. 40%