McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Financial Markets (B F M) .
| 51. |
Open ended funds can be purchased and sold …………………. |
| A. | Anytime during the day |
| B. | Only at the beginning of the day |
| C. | Only at the end of the day |
| D. | Starting of the day |
| Answer» C. Only at the end of the day | |
| 52. |
……………………. is a facility where investor will invest a fixed amount in a mutual fund scheme at regular intervals. |
| A. | SIP |
| B. | SWP |
| C. | STP |
| D. | SRT |
| Answer» A. SIP | |
| 53. |
…………….. allows an investor to withdraw a fixed amount of money periodically. |
| A. | SIP |
| B. | SWP |
| C. | STP |
| D. | SRT |
| Answer» B. SWP | |
| 54. |
In …………….. STP investor transfers the profit from one fund and invests in the other. |
| A. | Flexi |
| B. | Capital Appreciation |
| C. | Fixed |
| D. | Net |
| Answer» B. Capital Appreciation | |
| 55. |
……………. is a facility provided by banks to investors in new fund offers (NFOs) of mutual funds. |
| A. | ASBA |
| B. | CASBA |
| C. | MASBA |
| D. | NASA |
| Answer» A. ASBA | |
| 56. |
A ……………… ended scheme shall be wound upon the expiry of duration fixed in the scheme on the redemption of units. |
| A. | Open |
| B. | close |
| C. | Old |
| D. | New |
| Answer» B. close | |
| 57. |
A mutual fund has a beginning balance of 100 million earns interest of 10 million, receives dividends of 15 million, and has expenses of 5 million. If 10 million shares are outstanding, what is the NAV? |
| A. | 10.50 |
| B. | 11.00 |
| C. | 12.00 |
| D. | 12.50 |
| Answer» C. 12.00 | |
| 58. |
You invested 1,000 in a mutual fund with a 4% load when NAV was 20 per share. If you sell your shares at a NAV of 20 per share, what is the return of your investment? |
| A. | 14.8% |
| B. | 15.2% |
| C. | 12.5% |
| D. | 10.8% |
| Answer» B. 15.2% | |
| 59. |
If a mutual fund NAV Is 50 and its expense ratio is 2% what are the total expenses per share? |
| A. | 2 |
| B. | 10 |
| C. | 1 |
| D. | 5 |
| Answer» C. 1 | |
| 60. |
How much money would you need to purchase 400 shares of a mutual fund with a NAV of $55 per share and a 3% load? |
| A. | $22,000 |
| B. | $21,450 |
| C. | $23,200 |
| D. | $22,660 |
| Answer» D. $22,660 | |
| 61. |
Investors in high tax brackets will normally achieve higher performance by selecting a mutual fund that generates |
| A. | long-term dividends |
| B. | long-term capital gains |
| C. | long-term stock dividends |
| D. | short-term capital gains |
| Answer» B. long-term capital gains | |
| 62. |
What would be the tax consequence of owning a mutual fund that made distributions of 600 resulting from short-term capital gains and $800 resulting from long-term capital gain rate? |
| A. | 420 |
| B. | 140 |
| C. | 300 |
| D. | 260 |
| Answer» D. 260 | |
| 63. |
If a scheme has 45Cr units issued and has an FV of Rs. 10 and NAV is at 11.33, unit capital(Rs.Cr) would be equal to |
| A. | 500.85 |
| B. | 50.85 |
| C. | 950.85 |
| D. | 450 |
| Answer» B. 50.85 | |
| 64. |
A scheme has average weekly net assets of Rs. 324 Cr and has annual expenses of Rs 3.24Cr, it's expenses ratio is |
| A. | 1% |
| B. | 10% |
| C. | Can't say |
| D. | Insufficient information |
| Answer» A. 1% | |
| 65. |
For a scheme to be defined as an equal fund, it must have a minimum |
| A. | 65% in Indian equities |
| B. | 65% in equities |
| C. | 51% Indian equities |
| D. | 35% in Indian equities |
| Answer» B. 65% in equities | |
| 66. |
Which of the following characteristics is not true of close-ended funds? |
| A. | They can be load or no-load funds. |
| B. | They do not repurchase shares from investors. |
| C. | They are bought and sold on stock exchanges. |
| D. | They may sell above or below NAV. |
| Answer» A. They can be load or no-load funds. | |
| 67. |
Regarding load and no-load mutual funds, |
| A. | Load funds usually outperform no-load funds |
| B. | no-load funds perform at least as well as load funds even fees are ignored. |
| C. | Two types of fund perform about the same considering the fees |
| D. | Load funds may be bought directly, whereas no-load funds must be purchased through a broker. |
| Answer» B. no-load funds perform at least as well as load funds even fees are ignored. | |
| 68. |
On average, actively managed mutual funds have an expenses ratio of about |
| A. | 1.5% |
| B. | 2.5% |
| C. | 3% |
| D. | 5%. |
| Answer» A. 1.5% | |
| 69. |
The component of the expense ratio that includes a fee charged by some mutual funds to pay brokers is |
| A. | A management fee |
| B. | A 12b-1 fee |
| C. | An administrative expense. |
| D. | A referral fee. |
| Answer» B. A 12b-1 fee | |
| 70. |
which of the following is a stock mutual fund? |
| A. | Ginnie Mae fund |
| B. | Growth fund |
| C. | Municipal securities fund |
| D. | Treasury securities find |
| Answer» B. Growth fund | |
| 71. |
Which of the following stock mutual fund focus on medium-sized companies that are more established than small-cap firms, but may have less growth potential? |
| A. | Equity income funds |
| B. | Sector funds |
| C. | Mid-size capitalisation funds |
| D. | Balance growth and income funds |
| Answer» C. Mid-size capitalisation funds | |
| 72. |
Which of the following is not a reason why Index funds typically incur lower expenses than other mutual funds? |
| A. | Index funds are not actively managed |
| B. | There are no expenses for research |
| C. | The portfolio is reversed infrequently, so the transaction cost is low. |
| D. | The security and Exchange Commission set a limit on index fund expenses |
| Answer» D. The security and Exchange Commission set a limit on index fund expenses | |
| 73. |
______ funds are mutual funds that attempt to mirror the movements of the existing board market indicators. |
| A. | Internet |
| B. | Stock |
| C. | Index |
| D. | International |
| Answer» C. Index | |
| 74. |
Index funds incur _______ expenses and are ______ managed compared to other funds. |
| A. | fewer; not actively |
| B. | fewer; actively |
| C. | more; not actively |
| D. | more; actively |
| Answer» A. fewer; not actively | |
| 75. |
Index funds offer tax advantages because they ______ In much trading and, therefore, _______ capital gains. |
| A. | engage; generate |
| B. | do not engage; generate |
| C. | engage; do not generate |
| D. | do not engage; do not generate |
| Answer» D. do not engage; do not generate | |
| 76. |
The difference between an international and a global fund is |
| A. | global funds invest in both U.S. firms and those of other countries wherever International funds focus on firms outside the United States. |
| B. | International funds invest in U.S. firms and those of other countries while global funds invest only in foreign firms. |
| C. | international funds in Treasury securities but no U.S. firms while global funds invest in both. |
| D. | there is no difference except in name. |
| Answer» A. global funds invest in both U.S. firms and those of other countries wherever International funds focus on firms outside the United States. | |
| 77. |
Which of the following is not true of global and international bond funds? |
| A. | They may be subject to interest rate risk. |
| B. | They may be subject to exchange rate risk. |
| C. | Their expenses may be higher than those of domestic bond funds. |
| D. | They are especially attractive to investors in a high tax bracket. |
| Answer» D. They are especially attractive to investors in a high tax bracket. | |
| 78. |
High yield (junk-bond funds focus on relatively risky bonds issued by firms that are subject to |
| A. | default risk |
| B. | interest rate risk |
| C. | exchange risk |
| D. | management risk |
| Answer» A. default risk | |
| 79. |
International bond funds |
| A. | focus on bonds interest by non-U.S. firms or governments. |
| B. | may hold bonds that offer a higher yield then the U.S. bound. |
| C. | are subject to exchange rate risk. |
| D. | All of the above correct. |
| Answer» D. All of the above correct. | |
| 80. |
_______ mutual funds invest in both foreign bonds and U.S. bonds. |
| A. | International bonds |
| B. | Index |
| C. | Treasury bond |
| D. | Global bond |
| Answer» D. Global bond | |
| 81. |
Technology funds focus on technology-based firms. Which of the following statements regarding those firms is not true? |
| A. | Many of those firms are relatively young. |
| B. | They have a low degree of risk. |
| C. | They have the potential for a high return. |
| D. | They do not have a consistent record of strong performance. |
| Answer» B. They have a low degree of risk. | |
| 82. |
Existing shares of closed-ended mutual fund companies are purchased |
| A. | from the investments company directly. |
| B. | from the investment company through a broker. |
| C. | from other investors in the stock market. |
| D. | from a bank. |
| Answer» C. from other investors in the stock market. | |
| 83. |
In calculation the net assets value (NAV) which of the following is true? |
| A. | Dividends are subtracted and expenses added |
| B. | Interest is subtracted and expenses are added. |
| C. | dividends are added and expenses are subtracted |
| D. | Interest and other expenses are not included |
| Answer» C. dividends are added and expenses are subtracted | |
| 84. |
To calculate the NAV, the market value of the portfolio liabilities is the dividend by the ______ to arrive at a per-share basis. |
| A. | original number of shares |
| B. | share currently issued by the fund |
| C. | maximum shear to be issued |
| D. | average number of shares incomparable funds. |
| Answer» B. share currently issued by the fund | |
| 85. |
An open-ended mutual fund may do all of the following except |
| A. | sell shares directly to investors. |
| B. | charge a fee to buy but not sell shares. |
| C. | repurchase shares from investors who want to sell their shares. |
| D. | have its shares traded on a New York Stock Exchange. |
| Answer» D. have its shares traded on a New York Stock Exchange. | |
| 86. |
The amount by which a close-ended fund's share price in the secondary market is above the fund's NAV is called the |
| A. | market value |
| B. | premium |
| C. | discount |
| D. | par value |
| Answer» B. premium | |
| 87. |
______ is a tax that is imposed by the government on companies based on dividend paid to a company's investors. |
| A. | dividend distribution tax |
| B. | return on investment tax |
| C. | goods and services tax |
| D. | corporate tax |
| Answer» A. dividend distribution tax | |
| 88. |
All dividends in Equity & Equity Oriented Funds will be taxed at _____ from 2018. |
| A. | 5% |
| B. | 10% |
| C. | exempt up to 10% |
| D. | not taxable at all |
| Answer» B. 10% | |
| 89. |
Sponsor must hold at least _______% of the AMCs networth. |
| A. | 30 % |
| B. | 40 % |
| C. | 50 % |
| D. | 60 % |
| Answer» B. 40 % | |
| 90. |
AMCs net worth has to be at least __________ |
| A. | 5 Crore |
| B. | 7 Crore |
| C. | 10 Crore |
| D. | 12 Crore |
| Answer» C. 10 Crore | |
| 91. |
At least _____ % of the AMC directors Should be independent . |
| A. | 30 |
| B. | 40 |
| C. | 50 |
| D. | 60 |
| Answer» C. 50 | |
| 92. |
The AMC and the Trustees enter into an _____ Agreement. |
| A. | Investment Management |
| B. | Memorandum of Association |
| C. | Legal |
| D. | None of the above |
| Answer» A. Investment Management | |
| 93. |
If ______ of unit holders approve , The service of the AMC can be terminated. |
| A. | 50% |
| B. | 75% |
| C. | 60% |
| D. | 40% |
| Answer» B. 75% | |
| 94. |
Scheme take over do not result in merger of ______. |
| A. | Trusts |
| B. | AMC |
| C. | AMFI |
| D. | All of the above |
| Answer» B. AMC | |
| 95. |
Any grievance against the AMC can be addressed to _______ |
| A. | AMFI |
| B. | DCA |
| C. | Trustees |
| D. | AMF |
| Answer» B. DCA | |
| 96. |
The UTI is governed by _________. |
| A. | UTI Act |
| B. | Company Act |
| C. | Partnership Act |
| D. | HUF Act |
| Answer» A. UTI Act | |
| 97. |
Listed mutual funds have to abide by __________ of the stock exchanges. |
| A. | Listing Regulations |
| B. | Legal |
| C. | Internal |
| D. | None of the above |
| Answer» A. Listing Regulations | |
| 98. |
The offer document of an open ended fund is valid for ______ years. |
| A. | 1 |
| B. | 2 |
| C. | 3 |
| D. | 2.5 |
| Answer» B. 2 | |
| 99. |
If equity markets move up, P/E tatio will move ________. |
| A. | Up |
| B. | Down |
| C. | No change |
| D. | None of the above |
| Answer» A. Up | |
| 100. |
If equity markets move down, dividend yield will move ________. |
| A. | Up |
| B. | Down |
| C. | Sable |
| D. | None of the above |
| Answer» A. Up | |
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