Question 1

UTI Act was enacted in the year ______.&#10;A)1975&#10;B)1955&#10;C)1963&#10;D)1995

Accepted Answer

The UTI Act, referring to the Unit Trust of India, was enacted in the year 1963 to establish the Unit Trust of India, India's first mutual fund.

Question 2

Expense ratio for a funds should be as ______ as possible.&#10;A)High&#10;B)Low&#10;C)Average&#10;D)NIl

Accepted Answer

A lower expense ratio is generally preferred for funds because it means that less of the fund's assets are being used for administrative and other operating expenses, leaving more of the assets to be invested in the market for potential growth.

Question 3

Jensen's Alpha focuses on _____________&#10;A)Systematic Risk&#10;B)Unsystematic Risk&#10;C)Political Risk&#10;D)Legal Risk

Accepted Answer

Unsystematic Risk&#10;

Question 4

A benchmark once chosen cannot be altered without _________ approval.&#10;A)Custodian&#10;B)AMFI&#10;C)Trustees&#10;D)RBI

Accepted Answer

Trustees' approval is required to alter a benchmark once it has been chosen, as they oversee the fund's operations and ensure that it adheres to its stated objectives and regulatory requirements.

Question 5

Tracking Error of _______ fund has to be minimized.&#10;A)Index Fund&#10;B)Debt Fund&#10;C)Guilt Fund&#10;D)Equity Fund

Accepted Answer

Tracking error needs to be minimized in an Index Fund because it measures how closely the fund follows the benchmark index it aims to replicate. Lower tracking error indicates better performance in mirroring the index.

Question 6

The ________ can issue offer documents on behalf of the trustees.&#10;A)AMC&#10;B)Custodian&#10;C)Agents&#10;D)AMD

Accepted Answer

The Asset Management Company (AMC) is responsible for issuing offer documents on behalf of the trustees, as it manages the funds and investments of the mutual fund.

Question 7

Expenses incurred that are above the regulatory limit are borne by sponsor & _____&#10;A)AMC&#10;B)Custodian&#10;C)Agents&#10;D)AMD

Accepted Answer

Expenses incurred above the regulatory limit are typically borne by the Asset Management Company (AMC), as they are responsible for managing the fund's operations and ensuring compliance with regulatory standards.

Question 8

A fund with _____ Sharpe ratio than the market is outperforming the market.&#10;A)Lower&#10;B)Higher&#10;C)Average&#10;D)Nil

Accepted Answer

A higher Sharpe ratio indicates that the investment has a higher return relative to its risk compared to the market, thus outperforming it.

Question 9

________ funds tends to have lower expense than other type of mutual funds.&#10;A)Equity funds&#10;B)Debt Funds&#10;C)Balance Funds&#10;D)Index funds

Accepted Answer

Index funds tend to have lower expenses than other types of mutual funds because they are passively managed. Instead of actively picking stocks, they simply track a market index, which requires less research and effort from fund managers.

Question 10

Rupee cost averaging means investing fixed amount _________.&#10;A)Periodically&#10;B)Lump sum&#10;C)Yearly&#10;D)Half Yearly

Accepted Answer

Rupee cost averaging involves investing a fixed amount of money at regular intervals, regardless of the market's condition, which allows investors to buy more shares when prices are low and fewer shares when prices are high. This strategy is not limited to any specific period like yearly or half-yearly but is applied periodically, which can include monthly, quarterly, etc.

Question 11

ETF stands for ____________.&#10;A)Exchange Traded Funds&#10;B)Even Traded Funds&#10;C)Exchange Transactions Funds&#10;D)Extra Traded Funds

Accepted Answer

The answer of ETF stands for ____________.&#10;A)Exchange Traded Funds&#10;B)Even Traded...

Question 12

NFO stands for_____________&#10;A)New Funds Offer&#10;B)Net Frauds in Office&#10;C)New Funds in Office&#10;D)Net Frauds Offer

Accepted Answer

The answer of NFO stands for_____________&#10;A)New Funds Offer&#10;B)Net Frauds in...

Question 13

If Holding Period return are 25% & period is 2 years then Annualized returns ____.&#10;A)25%&#10;B)12.5%&#10;C)50%&#10;D)37.5%

Accepted Answer

The answer of If Holding Period return are 25% &...

Question 14

If Holding Period return are 20% & period is 2 years then Annualized returns ____.&#10;A)20%&#10;B)10%&#10;C)40%&#10;D)15%

Accepted Answer

The answer of If Holding Period return are 20% &...

Question 15

Financial year for all mutual fund schemes ends on &#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)31st December&#10;B)31st March&#10;C)30th September&#10;D)30th June

Accepted Answer

The answer of Financial year for all mutual fund schemes...

Question 16

Risk is less in &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.&#10;A)Equity fund&#10;B)growth fund&#10;C)index fund&#10;D)debt fund

Accepted Answer

The answer of Risk is less in &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.&#10;A)Equity fund&#10;B)growth fund&#10;C)index...

Question 17

Equity funds are exempt from long term capital gain tax when investments are held for at least &#8230;&#8230;&#8230;&#8230; months from the date of acquisition.&#10;A)6&#10;B)3&#10;C)9&#10;D)12

Accepted Answer

The answer of Equity funds are exempt from long term...

Question 18

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; funds invest in companies of different sectors across the market.&#10;A)Sectoral&#10;B)Diversified&#10;C)Thematic&#10;D)Index based

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;&#8230; funds invest in companies of different...

Question 19

&#8230;&#8230;&#8230;&#8230; funds are an extension of sector funds.&#10;A)Value&#10;B)Diversified&#10;C)Thematic&#10;D)Index based

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230; funds are an extension of sector...

Question 20

&#8230;&#8230;&#8230;&#8230; funds use algorithmic, in which computer software takes buy/ sell decisions on the basis of formula&#10;A)Value&#10;B)Quant&#10;C)Thematic&#10;D)Arbitrage

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230; funds use algorithmic, in which computer...

Question 21

Open-ended funds have to update offer document at least once in&#8230;&#8230;&#8230;&#8230; years&#10;A)3&#10;B)2&#10;C)4&#10;D)5

Accepted Answer

The answer of Open-ended funds have to update offer document...

Question 22

CAS stands for &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)Combined Account Statement&#10;B)Consolidated Account Statement&#10;C)Combined Account System&#10;D)Consolidated Account System

Accepted Answer

The answer of CAS stands for &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)Combined Account Statement&#10;B)Consolidated Account...

Question 23

Consolidated Account Statements is sent &#8230;&#8230;&#8230;&#8230;&#8230;.. to investors in whose folios no transaction has taken place.&#10;A)every 2 months&#10;B)every 3 months&#10;C)every 4 months&#10;D)every 6 months

Accepted Answer

The answer of Consolidated Account Statements is sent &#8230;&#8230;&#8230;&#8230;&#8230;.. to...

Question 24

R-squared value range from 0 to &#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)0.5&#10;B)0.75&#10;C)1&#10;D)0.25

Accepted Answer

The answer of R-squared value range from 0 to &#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)0.5&#10;B)0.75&#10;C)1&#10;D)0.25...

Question 25

A &#8230;&#8230;&#8230;&#8230;&#8230; risk refers to the possibility of a stock issuer to go bankrupt or facing heavy losses.&#10;A)Business&#10;B)Credit&#10;C)Capital&#10;D)Scheme

Accepted Answer

The answer of A &#8230;&#8230;&#8230;&#8230;&#8230; risk refers to the possibility...

Deck 6: Mutual Fund Terminology and Concepts