BLDEA’S

COMMERCE, BHS ARTS & TGP SCIENCE COLLGE JAMAKHANDI

Financial Education and Investment Awareness

Unit -3

Answer the following questions .Each question carries one mark

1. Which of these is not a limitation of mutual fund?

a. Lack of portfolio control c. Liquidity
b. Choice overload d. Lack of cost control

2. ___ _____ is the person or entity that sets up a mutual fund

a. Sponser b. AMC [Link] D .RTA

3. _______ holds the property of the fund for the benefit of unit holders
a. Sponser c. Trustee
b. AMC d. Custodian

4. _________ manages the funds by making investments in various types of securities

a. Asset management company (AMC) c. Sponser
[Link] d. Subscriber

5. __________ holds the securities of the various schemes of the fund in its custody
a. RTA c. AMA
b. Custodian [Link]

6. ________ are the investors who commit to investing in a financial instrument

a. Subscribers c. Sponsers
b. Registrar and Transfer Agents (RTA) d. unit holders

7. __________ acts as a mediators or agent between investors and mutual fund houses
a. Subscribers c. Sponsers
b. Registrar and Transfer Agents (RTA) d. unit holders

8. What is full form of AMFI?

a. Avid Mutual Fund Investor c. Aditya Birla Mutual fund Inc
b. Association of Mutual Funds of India d. None of These

9. The Unit Trust of India (UTI) was established in the year ______
a. 1961 b. 1962 c. 1963 d. 1964

10. What does NAV stands for in the context of Mutual Fund?
a. Net Annual Value b. Net Actual Value c. Net Asset Value d. Net Absolute Value
11. What does AUM stands for in context of Mutual Fund?
a. Actual Unit Money c. Absolute Unit Money
b. Assets Under Management d. Asset Use Method

12. What does SIP stands for in context of mutual funds?

a. Simple Interest Payment c. Systematic Investment Plan
b. Sample Indicative Profits d. None of these

13. ________ schemes are open for subscription and repurchase on a continuous basis
a. Open ended schemes c. Interval schemes
b. Close ended schemes d. None of These

14. Close ended schemes have ________ maturity period

a. No c. Variable
b. Fixed d. None of these

15. _________ schemes allow purchase and redemption during specified transaction periods
(intervals)
a. Open ended schemes c. Interval schemes
b. Close ended schemes d. None of these

16. Growth funds are typically designed to provide __________

a. Regular Income C. Capital Apprecition
b. Regular Dividend d. All of these

17. Income Funds are designed to provide ________

a. Regular Income c. Capital Apprecition
b. High Profit d. All of these

18. Multi asset schemes are also called as _______

a. Hybrid schemes c, Equity schemes
b. Debt Schemes d. None of these

19. Debt schemes invest in _______ securities

a. High income securities c. Low income securities
b. Fixed income securities d. None of these

20. ________ schemes are those that invest in short term money market instruments
a. Debt scheme c. Liquid schemes
b. equity Growth schemes d. None of these

20. ELSS in the context of mutual fund stands for ________

a. Easy Liquidity Saving scheme c. Entity Linked Saving Scheme
b. Equity Linked Saving Scheme d. None of these
21. Equity Linked saving scheme (ELSS) focuses on ________
a. Tax Saving c. Profit Earning
b. Liquidity d. All of these

22. In the context of mutual funds, what does ETF stands for?
a. Electronic Traded Fund c. Exchange Traded funds
b. Easy Transfer funds d. None of these

23. These funds invest in the units of other mutual fund schemes
a. Fund of Funds c. Sector Funds
b. Debt Funds d. None of these

24. These are listed on the Stock Exchanges

a. Units of close ended schemes c. Exchange Traded Funds (ETF)
b. REITs d. All of these

25. Which of these are levels of Risk that a risk-o-meter captures?

a. Low risk c. Moderately High Risk
b. Very High Risk d. All of these

Explaination: There are 6 levels of risks in risk-o-meter : [Link] risk, 2. Low to moderate risk,
3. Moderate risk, 4. Moderately High risk, 5. High risk, 6. Very high risk

26. What does SIP stands for in context of mutual funds?

a. Simple Interest Payment c. Systematic Investment Plan
b. Sample Indicative Profits d. None of these

27. Which of these is the lowest that an SIP investment can be made for?
a. Rs. 10000 c. Rs. 5000
b. Rs. 1000 d. Rs. 500

28. A credible benchmark should be in sync with ________

a. Investment Objectives c. Asset Allocation pattern
b. Investment Strategy d. All of these

29._________ is the difference between the Return earned and the Risk free rate of return
a. Risk Tolerance c. Risk Allocation
b. Risk Premium d. None of these

[Link] premium divided by the ‘Standard Deviation’ is the formula for ________
a. Treynor’s Ratio c. Sharpe Ratio
b. Jenson’s Alpha d. None of these
31. Risk premium divided by the ‘Beta’ is the formula for __________
a. Treynor’s Ratio c. Sharpe Ratio
b. Jenson’s Alpha d. None of these

32. The difference between a scheme’s actual return and its optimal return is _______
a. Risk Premium c. Alpha
b. Beta d. None of these

33. _________ the Treynor Ratio, better the scheme considered to be

a. Higher c. Lower
b. Not correlated d. None of these

34. What is the full form of CAPM?

a. Cost Associated in Portfolio Management c. Capital Asset Pricing Model
b. Capital Allocation Policy Matter d. None of these

35. The diversified stock index has a Beta of _______

a. zero c. Two
b. One d. None of these

36. The difference between an Index fund return and the market return is ________
a. Tracking error b. Minor error
b. Risk error d. none of these

37. In practice of financial planning by advisors, the process consists of how many steps?
a. Four c. Six
b. Five d. Seven

38. Which of these are the basic ways to acquire money?

a. Affiliation c. Earn by sweat of your brow
b. Your money makes money to you d. All of these

39. Usually around what age does the Early Accumulation stage (of life cycle) starts?
a. 12-19 years c. 30-40 years
b. 20-30 years d. 40-55 years

40. On a popular basis , financial life can be classified into how many stages?
a. Ten c. Six
b. Eight d. Four

41. In which year SEBI(Securities Exchange Board of India) was established?

a. 1947 c. 1979
b. 1992 d. 2001
42. Who is the current chairperson of SEBI?
a. Mr. Shaktikant Das c. Ms. Madhabi Puri Buch
b. Ms. Nirmala Sitaraman d. Mr. Debasish Panda