1.
A close-ended mutual fund has a fixed:
Correct Answer
B. Fund size
Explanation
A close-ended mutual fund has a fixed fund size, meaning that the number of shares or units issued by the fund is fixed and does not change. This differs from an open-ended mutual fund where the fund size can fluctuate based on investor demand. In a close-ended fund, the fund manager does not create or redeem shares based on investor inflows or outflows. The fixed fund size allows the fund manager to have a more predictable pool of assets to invest and manage.
2.
An investor in a close-ended mutual fund can get his/her money back by selling his/her units.
Correct Answer
C. On a stock exchange where the fund is listed
Explanation
When an investor wants to get their money back from a close-ended mutual fund, they can do so by selling their units on a stock exchange where the fund is listed. This means that the investor can sell their units to other interested buyers in the stock market, allowing them to convert their investment into cash. Selling on a stock exchange provides liquidity and allows investors to exit their investment in the mutual fund.
3.
The "load" charged to an investor in a mutual fund is
Correct Answer
D. The expenses incurred by fund managers for marketing a mutual fund scheme
Explanation
The "load" charged to an investor in a mutual fund refers to the expenses incurred by fund managers for marketing a mutual fund scheme. This includes costs such as advertising, distribution, and promotional activities aimed at attracting investors to the fund. The load is essentially a fee that is deducted from the investor's investment and is used to cover these marketing expenses. It is important for investors to be aware of the load charged by a mutual fund as it can impact their overall returns.
4.
"Load" cannot be recovered.
Correct Answer
D. From the fund's distribution agent
Explanation
The given statement implies that the "Load" cannot be recovered from the fund's distribution agent. This means that once the load, which is a fee or commission charged by the fund, is paid to the distribution agent, it cannot be refunded or recovered from them.
5.
The NAV of each scheme should be updated on AMFI's website.
Correct Answer
D. Every day
Explanation
The correct answer is "every day" because the Net Asset Value (NAV) of each scheme should be updated on AMFI's website on a daily basis. This is important to provide investors with accurate and up-to-date information about the value of their investments. By updating the NAV daily, investors can make informed decisions about buying or selling units of the scheme.
6.
Debt funds target
Correct Answer
B. Protection of principal
Explanation
Debt funds aim to safeguard the initial investment amount, known as the principal, from any potential losses. This means that the primary objective of debt funds is to prioritize the protection of the principal amount rather than focusing on high growth or long-term capital appreciation. Debt funds typically invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments, which offer a relatively lower risk profile and stable income. By prioritizing the protection of principal, debt funds provide investors with a low-risk investment option that aims to preserve the initial investment amount while generating stable income.
7.
In which of the following do debt funds not invest.
Correct Answer
D. Equity of private companies
Explanation
Debt funds primarily invest in debt instruments such as government debt instruments, corporate paper, and financial institutions' bonds. These instruments provide a fixed income to the investor. However, debt funds do not invest in equity of private companies, as equity represents ownership in a company and is associated with higher risk and potential for capital appreciation. Debt funds aim to provide stable returns and focus on fixed income securities rather than equity investments.
8.
Assured return or guaranteed monthly income plans are essential.
Correct Answer
C. Debt/Income funds
Explanation
Debt/Income funds are essential in assured return or guaranteed monthly income plans because these funds primarily invest in fixed income securities such as government bonds, corporate bonds, and other debt instruments. These investments provide a steady income stream through regular interest payments. As a result, investors can rely on these funds to generate a consistent monthly income, making them suitable for individuals looking for a stable and predictable return on their investments.
9.
If fresh litigation cases or adjudication proceedings are referred by SEBI against the fund sponsors or a company associated with the sponsors, then the offer document needs to be revised.
Correct Answer
A. True
Explanation
If SEBI (Securities and Exchange Board of India) refers fresh litigation cases or adjudication proceedings against the fund sponsors or a company associated with the sponsors, it means that there are ongoing legal issues or disputes involving these parties. In such cases, it is necessary to revise the offer document, which is a legal document that provides information about the investment opportunity being offered. This revision is important to ensure that the document accurately reflects the current legal situation and any potential risks or liabilities associated with the investment. Therefore, the statement is true.
10.
The offer document need not be revised if the management or the controlling interest in the AMC change.
Correct Answer
B. False
Explanation
The offer document needs to be revised if there is a change in the management or the controlling interest in the AMC. This is because any change in the management or controlling interest can potentially affect the terms and conditions of the offer, and therefore, the offer document needs to be updated to reflect these changes accurately.
11.
An AMC cannot explain adverse variations between expense estimates for the scheme on offer and actual expenses for past schemes in
Correct Answer
C. The offer document
Explanation
The correct answer is the offer document. The offer document is a legal document that provides detailed information about the scheme being offered, including its objectives, investment strategy, and expenses. It is designed to inform potential investors about the scheme and help them make an informed decision. Therefore, it is not the appropriate platform for explaining adverse variations between expense estimates for the scheme and actual expenses for past schemes.
12.
The offer document and key information memorandum contain financial information for
Correct Answer
B. All schemes launched by the particular fund during the last 3 fiscal years
Explanation
The offer document and key information memorandum contain financial information for all schemes launched by the particular fund during the last 3 fiscal years. This means that the document provides details about the performance, returns, and other financial data specifically for the schemes that have been introduced by the fund in the past three years. It does not include information about schemes from other mutual funds or companies in which investment is proposed.