Quiz On Association Of Mutual Funds In India!
Quiz on association of mutual funds in India! It is not possible for everyone to invest in every portfolio as some might be out of reach and this is where mutual funds come in. Investors are able to pool their finances together and invest in a collection of securities. Most mutual firms in the associations are also investors in the mutual funds market in India and they aim to ensure that the trade is regulated.
- 1.
A close-ended mutual fund has a fixed:
- A.
NAV
- B.
Fund size
- C.
Rate of return
- D.
. number of distributors
Correct Answer
B. Fund sizeExplanation
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.Rate this question:
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- 2.
An investor in a close-ended mutual fund can get his/her money back by selling his/her units.
- A.
Back to the fund
- B.
To a special trust at NAV
- C.
On a stock exchange where the fund is listed
- D.
To the agent through which he/she subscribed to the units of the fund
Correct Answer
C. On a stock exchange where the fund is listedExplanation
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.Rate this question:
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- 3.
The "load" charged to an investor in a mutual fund is
- A.
Entry fee
- B.
Cost of the paper on which the unit certificates are printed
- C.
The fee the agent charges to the investor
- D.
The expenses incurred by fund managers for marketing a mutual fund scheme
Correct Answer
D. The expenses incurred by fund managers for marketing a mutual fund schemeExplanation
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.Rate this question:
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- 4.
"Load" cannot be recovered.
- A.
At the time of the investor's entry into the fund
- B.
As a fixed amount each year
- C.
At the time the investor exits the fund
- D.
From the fund's distribution agent
Correct Answer
D. From the fund's distribution agentExplanation
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.Rate this question:
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- 5.
The NAV of each scheme should be updated on AMFI's website.
- A.
Every quarter
- B.
Every month
- C.
Every hour
- D.
Every day
Correct Answer
D. Every dayExplanation
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.Rate this question:
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- 6.
Debt funds target
- A.
Low risk and stable income
- B.
Protection of principal
- C.
High growth with risk
- D.
Long term capital appreciation
Correct Answer
B. Protection of principalExplanation
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.Rate this question:
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- 7.
In which of the following do debt funds not invest.
- A.
Government debt instruments
- B.
Corporate paper
- C.
Financial institutions' bonds
- D.
Equity of private companies
Correct Answer
D. Equity of private companiesExplanation
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.Rate this question:
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- 8.
Assured return or guaranteed monthly income plans are essential.
- A.
Hybrid funds
- B.
Growth Funds
- C.
Debt/Income funds
- D.
Sector funds
Correct Answer
C. Debt/Income fundsExplanation
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.Rate this question:
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- 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.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
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.Rate this question:
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- 10.
The offer document need not be revised if the management or the controlling interest in the AMC change.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
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.Rate this question:
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- 11.
An AMC cannot explain adverse variations between expense estimates for the scheme on offer and actual expenses for past schemes in
- A.
Financial newspapers
- B.
Business channels on TV
- C.
The offer document
- D.
AMFI newsletter
Correct Answer
C. The offer documentExplanation
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.Rate this question:
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- 12.
The offer document and key information memorandum contain financial information for
- A.
All schemes of all mutual funds in the capital market
- B.
All schemes launched by the particular fund during the last 3 fiscal years
- C.
None of the schemes
- D.
Companies in which investment is proposed
Correct Answer
B. All schemes launched by the particular fund during the last 3 fiscal yearsExplanation
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.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Apr 28, 2016Quiz Created by
Amarluck
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