NISM Series V-A | Mock Test 3 | 20+ High-Yield Solved MCQs
A close-ended mutual fund has a fixed:
A) NAV
B) Fund size
C) Rate of return
D) Number of distributors Answer: B) Fund size
The maximum load that a fund can charge is determined by the:
A) AMC
B) SEBI
C) AMFI
D) Distribution agents Answer: B) SEBI
The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 is:
A) Rs.2000
B) Rs.2015
C) Rs.1985
D) Rs.2030 Answer: D) Rs.2030 (Calculation: 2000 + 1.5%)
A gilt fund is a special type of fund that invests:
A) In very high quality equity only
B) In instruments issued by companies with a sound track record
C) In short-term securities
D) In government securities only Answer: D) In government securities only
Of the following fund types, the highest risk is associated with:
A) Balanced Funds
B) Gilt Funds
C) Equity Growth Funds
D) Debt Funds Answer: C) Equity Growth Funds
The NAV of a mutual fund:
A) Is always constant
B) Keeps going up at a steady rate
C) Fluctuates with market price movements
D) Cannot go down at all Answer: C) Fluctuates with market price movements
An open-ended mutual fund is one that has:
A) An option to invest in any kind of security
B) Units available for sale and repurchase at all times
C) An upper limit on its NAV
D) A fixed fund size Answer: B) Units available for sale and repurchase at all times
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 age
nt Answer: C) On a stock exchange where the fund is listed
The "load" charged to an investor in a mutual fund is:
A) Entry fee
B) Cost of the paper certificates
C) The fee the agent charges
D) The expenses incurred by fund managers for marketing Answer: D) The expenses incurred by fund managers for marketing
A mutual fund is owned by:
A) The Govt. of India
B) SEBI
C) All its investors
D) AMFI Answer: C) All its investors
Units from an open-ended mutual fund are bought:
A) On a stock exchange
B) From the fund itself
C) From AMFI
D) From a stock broker Answer: B) From the fund itself
A mutual fund is NOT:
A) Owned jointly by all investors
B) A company that manages investment portfolios of high networth individuals
C) A pool of funds used to purchase securities
D) A collective investment vehicle Answer: B) A company that manages investment portfolios of high networth individuals
"Load" cannot be recovered:
A) At the time of entry
B) As a fixed amount each year
C) At the time of exit
D) From the fund's distribution agent Answer: B) As a fixed amount each year
The most important advantage of a money market mutual fund is:
A) Quick capital appreciation
B) High regular income
C) Safety of principal
D) No loads Answer: C) Safety of principal
Some close-ended funds are quoted at a discount to their NAV because:
A) Of high expense ratios
B) Investors do not expect current NAV to be sustained
C) Repurchase price is lower than NAV
D) Inherent risk Answer: B) Investors do not expect current NAV to be sustained
The NAV of each scheme should be updated on AMFI's website:
A) Every quarter
B) Every month
C) Every hour
D) Every day Answer: D) Every day
Debt funds target:
A) Low risk and stable income
B) Protection of principal
C) High growth with risk
D) Long term capital appreciation Answer: A) Low risk and stable income
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 Answer: D) Equity of private companies
Which of the following risks do not affect a debt fund:
A) Default by issuer
B) Price fluctuations of debt securities
C) Share price movements
D) Interest volatility Answer: C) Share price movements
Assured return or guaranteed monthly income plans are essentially:
A) Hybrid funds
B) Growth Funds
C) Debt/Income funds
D) Sector funds Answer: C) Debt/Income funds
A Fixed Term Plan Series is:
A) An open-ended fund
B) A close-ended fund
C) A fixed term bank deposit
D) A fixed term corporate bond Answer: B) A close-ended fund
NAVs of equity funds are not affected by:
A) Stock market movements
B) Industry/Sector events
C) Company happenings
D) Real estate prices Answer: D) Real estate prices
The greatest potential for growth in capital is offered by:
A) Debt funds
B) Gilt funds
C) Growth funds
D) Balanced funds Answer: C) Growth funds
A Systematic Withdrawal Plan allows investors to get back principal plus income:
A) True
B) False Answer: A) True
Which of the following is untrue of an automatic reinvestment plan?
A) Allows reinvestment of all income
B) Allows for accumulation of units
C) Major benefit is compounding
D) Benefit is lost due to heavy load on reinvestment Answer: D) Benefit is lost due to heavy load on reinvestment
Constraints imposed by most funds on check writing are:
A) Min balance requirements
B) Min amount for checks
C) Limit on number of checks
D) Both A & B above Answer: D) Both A & B above
The performance of a fund is largely measured by the success of:
A) Marketing
B) Operations
C) Portfolio management
D) None of the above Answer: C) Portfolio management
Mutual Funds generally invest in:
A) Unlisted
B) Market-traded
C) Thinly traded
D) Privately placed Answer: B) Market-traded
Which of the following is not an equity instrument:
A) Preference shares
B) Equity warrants
C) Ordinary debentures
D) Convertible debentures Answer: C) Ordinary debentures
The drawback of an ordinary share is:
A) Possibility of capital appreciation
B) Ownership privilege
C) Guaranteed dividend
D) No guaranteed income or security Answer: D) No guaranteed income or security
An owner of preference shares is given which right:
A) Voting rights
B) Fixed dividend income from post-tax profits
C) Unlimited dividend income
D) No guaranteed rights Answer: B) Fixed dividend income from post-tax profits
Market capitalisation is calculated by multiplying outstanding shares by:
A) Rs.10
B) Face value
C) Current market value
D) Dividend yield Answer: C) Current market value
Price/Earnings (P/E) Ratio is calculated using:
A) Market price and dividend
B) Market price and EPS
C) Market cap and dividend
D) Market price and face value Answer: B) Market price and EPS
A company whose earnings relate to the state of economy is known as:
A) Economy stocks
B) Cyclical Stocks
C) Value Stocks
D) Growth stocks Answer: B) Cyclical Stocks
A Growth stock refers to shares projected to grow at normal market rates:
A) True
B) False Answer: B) False
Which is generally true for a growth stock?
A) Steady appreciation and steady dividends
B) High appreciation and high dividends
C) High appreciation but low dividends
D) Steady appreciation but high dividends Answer: C) High appreciation but low dividends
Shares of companies with large market capitalisation:
A) Greater growth potential
B) Are more liquid
C) Are not available
D) None of the above Answer: B) Are more liquid
Dividend yield for a stock is:
A) Dividend per share
B) Dividend per face value
C) Dividend per share to current market price
D) None of the above Answer: C) Dividend per share to current market price
Value stocks:
A) High current dividend yield
B) Yield high growth
C) Are currently under valued
D) None of the above Answer: C) Are currently under valued
Better performance than the return on index is given by:
A) Passive manager
B) Active manager
C) All managers
D) Non-fund manager Answer: B) Active manager
Change in key personnel especially the fund manager necessitates a revision of the offer document:
A) True
B) False Answer: A) True
If fresh litigation proceedings are referred by SEBI against sponsors, the offer document needs revision:
A) True
B) False Answer: A) True
The offer document need not be revised if controlling interest in AMC changes:
A) True
B) False Answer: B) False
An AMC cannot explain adverse variations in expense estimates in:
A) Financial newspapers
B) Business channels
C) The offer document
D) AMFI newsletter Answer: D) AMFI newsletter
Information on estimated expenses is found in brochures, not the offer document:
A) True
B) False Answer: B) False
When comparing a fund's performance, which cannot be compared:
A) Two debt funds with 5yr maturities
B) A broad equity fund with an IT Sector Fund
C) A bond fund with a bond
D) A govt security fund with a govt security Answer: B) A broad equity fund with an IT Sector Fund
An AMC must explain adverse variation between expense estimates and actuals in:
A) Financial newspapers
B) Business channels
C) Offer document
D) AMFI Newsletter Answer: C) Offer document
(Repeated) Estimated expenses are not found in the offer document:
A) True
B) False Answer: B) False
Offer documents contain financial information for:
A) All funds in market
B) All schemes launched by the fund in the last 3 fiscal years
C) None of the schemes
D) Only companies proposed Answer: B) All schemes launched by the fund in the last 3 fiscal years
Responsibilities of sponsor, AMC, trustees, and custodian are listed in:
A) Offer document only
B) KIM
C) Both offer document and KIM
D) None Answer: C) Both offer document and KIM
Information about trusteeship fees is in the offer document but not the KIM:
A) True
B) False Answer: A) True
Information found in both SID and KIM includes:
A) Sponsor activities
B) Trust deed provisions summary
C) Board of trustees names/addresses
D) All of the above Answer: D) All of the above
The investment objectives of a selected fund:
A) Are irrelevant
B) Should be same as investor's own objectives
C) Change with market movements
D) Change with key personnel Answer: B) Should be same as investor's own objectives
Investment policies listed in offer documents do not include:
A) Principal security types
B) Asset allocation pattern
C) Policy of diversification
D) Specific securities for future investment Answer: D) Specific securities for future investment
If a scheme name implies sector focus, it should invest at least ____ in that sector:
A) 100%
B) 80%
C) 65%
D) 40% Answer: C) 65% (Note: Modern SEBI rules may specify 80%, but traditionally 65% was the mark in older modules).
Guarantor's net worth for assured return schemes is in:
A) Offer document
B) KIM
C) Both A and B
D) None Answer: A) Offer document
The names and background of key personnel of the AMC:
A) Need not be disclosed
B) Are of no relevance
C) Are disclosed in the offer document
D) Declared in newspapers only Answer: C) Are disclosed in the offer document
Min amount to be raised and max target amount:
A) Not known before conclusion
B) Decided based on response
C) Defined per SEBI Regulations before offer
D) Not disclosed Answer: C) Defined per SEBI Regulations before offer
Refund circumstances are specified only on the application:
A) True
B) False Answer: B) False
Offer related info listed in both SID and KIM includes:
A) Opening/Closing dates
B) Procedure for transfer
C) Both above
D) Neither above Answer: C) Both above
Disclosures of associate transactions must cover the last:
A) One fiscal year
B) 2 fiscal years
C) 3 fiscal years
D) 5 fiscal years Answer: C) 3 fiscal years
Winding up circumstances are described in the offer document at launch:
A) True
B) False Answer: A) True
Which does not form a part of investment procedure in a SID:
A) Various plans
B) Min investment
C) Who can invest
D) Details of competing funds Answer: D) Details of competing funds
A scheme's policy on dividends:
A) Decided by manager daily
B) Can be changed to suit AMC
C) Need not be consistent
D) Should be disclosed at initial launch Answer: D) Should be disclosed at initial launch
SEBI restricts MF investments in AMC group companies in the interest of:
A) Not true
B) Investor protection
C) Only some funds
D) Not favorable to investors Answer: B) Investor protection
Disclosure must be made if AMC invests more than ____ of net assets in group companies:
A) 50%
B) 40%
C) 25%
D) 10% Answer: C) 25%
Mutual funds are allowed to borrow:
A) Freely
B) For investment
C) Only to meet redemption demands
D) Not allowed Answer: C) Only to meet redemption demands
Part of borrowing policy that need not be disclosed:
A) Purpose
B) Regulatory limits
C) Potential risk
D) Names of lenders Answer: D) Names of lenders
Valuation norms for non-traded securities should be disclosed:
A) End of FY
B) Every quarter
C) In the SID at launch
D) Not disclosed Answer: C) In the SID at launch
Procedure for redemption need not:
A) Be described in SID
B) Include price determination
C) Include center names
D) Indicate price as at end of current fiscal year Answer: D) Indicate price as at end of current fiscal year
Fund need not describe accounting policies in SID:
A) True
B) False Answer: B) False
Accounting policies should be in accordance with:
A) GAAP
B) SEBI regulations
C) ICAI Guidelines
D) American GAAP Answer: B) SEBI regulations
Tax treatment section does not:
A) Form section in SID
B) Describe applicable elements
C) Form section in KIM
D) Offer tax advice Answer: D) Offer tax advice
Documents for inspection do not include:
A) MoA of AMC
B) Consent of auditors
C) Investment management reports
D) Reports on actual investment logic Answer: D) Reports on actual investment logic
Investors' rights under a scheme are:
A) Uniform for all
B) Not defined
C) Listed in the offer document
D) With stock exchanges Answer: C) Listed in the offer document
SID should describe how NAV is computed:
A) True
B) False Answer: A) True
Offer document contains grievance history for past:
A) 1 FY
B) 2 FY
C) 3 FY
D) 6 months Answer: C) 3 FY
Pending cases on sponsors/AMC should be disclosed in SID:
A) True
B) False Answer: A) True
Who among these are not eligible to invest in MF:
A) Indian Companies
B) Banks
C) NBFCs
D) Foreign Citizens Answer: D) Foreign Citizens
NRIs are eligible to invest in Mutual Funds:
A) True
B) False Answer: A) True
Most important link between Mutual Fund and Investors is:
A) Government
B) SEBI
C) Fund distributors
D) AMFI Answer: C) Fund distributors
Are Overseas Corporate Bodies allowed to invest in MFs:
A) No
B) Yes
C) If MoF approves
D) If AMFI approves Answer: A) No (OCBs are generally prohibited from secondary market/MF investments)
Who among these are not Institutional Investors:
A) Banks
B) Resident Individuals
C) Provident Funds
D) NBFCs Answer: B) Resident Individuals
It is compulsory to use fund agents/intermediaries for investing:
A) True
B) False Answer: B) False
Which category generally needs advice for investing:
A) NBFCs
B) Insurance Companies
C) FIIs
D) Individuals Answer: D) Individuals
Eligible investors can broadly be individual or institutional:
A) True
B) False Answer: A) True
Commission rates/loads for big vs small investors are:
A) Same
B) Different
C) Not charged
D) None Answer: B) Different
Document distributors refer to for finding eligible investor categories:
A) SEBI Manual
B) AMFI booklet
C) Offer document
D) RBI Guidelines Answer: C) Offer document
As per AMFI, how many agents approximately sell MFs in India:
A) 50,000
B) 100,000
C) 75,000
D) 150,000 Answer: C) 75,000 (Note: Historical data; current numbers are much higher).
Which Mutual Fund historically had majority of agents:
A) LIC
B) UTI
C) SBI
D) None Answer: B) UTI Mutual Fund
Distributors are not allowed to sell other financial products:
A) True
B) False Answer: B) False
Are distributors required to pass an exam:
A) Yes, conducted by AMFI
B) Yes, conducted by SEBI
C) No
D) Post Grad course Answer: A) Yes, conducted by AMFI (Now NISM).
How many major distributor companies are in India:
A) ~9
B) ~11
C) ~10
D) ~25 Answer: C) ~10
The offer document is not a legal document:
A) True
B) False Answer: B) False
A copy of all changes in the SID has to be filed with SEBI:
A) True
B) False Answer: A) True
Legal responsibility for accuracy of SID lies with:
A) SEBI
B) The AMC
C) AMFI
D) Company Law Board Answer: B) The AMC
SEBI does not certify accuracy or adequacy of the SID:
A) True
B) False Answer: A) True
Which need not be covered in a KIM:
A) Risk Factors
B) Dates
C) Disclaimer
D) Detailed functions of Sponsor/AMC/Trustee Answer: D) Detailed functions of Sponsor/AMC/Trustee (These are in SID/SAI).
Front page of an offer document need not cover:
A) Dates
B) Disclaimer
C) Legal compliance
D) Price of units Answer: D) Price of units
A "glossary" of Defined Terms must be included in the offer document: * A) True * B) False Answer: A) True
Dhaval Visariya
AMFI Registered Distributor (ARN-327925) | Software Developer & Finance Enthusiast
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Disclaimer: I am an AMFI Registered Mutual Fund Distributor. Views expressed here are for educational purposes. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
📧 Contact: info.apollofinancialservices@gmail.com
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