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MF Question Paper - 5

The document discusses various aspects of mutual fund management, including KYC requirements, expense charges by Asset Management Companies (AMCs), and investor rights regarding redemptions from segregated portfolios. It also covers compliance with SEBI regulations, the role of distributors, and the significance of benchmarks in mutual fund performance. Additionally, it addresses the implications of investment management fees and the importance of proper asset allocation for investors.

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Santanu Sarkar
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16 views9 pages

MF Question Paper - 5

The document discusses various aspects of mutual fund management, including KYC requirements, expense charges by Asset Management Companies (AMCs), and investor rights regarding redemptions from segregated portfolios. It also covers compliance with SEBI regulations, the role of distributors, and the significance of benchmarks in mutual fund performance. Additionally, it addresses the implications of investment management fees and the importance of proper asset allocation for investors.

Uploaded by

Santanu Sarkar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
tainvesor has to change his default account helshe hast doit wth The KYC Rogstazen agen) el Eiter RAC ANF! ‘Temata und (AMC) dey CORRECTANSWER Explanation Muual tunes provide nests te ty t agit mute Bank secur te eat rctng Be redempen, Aen an ay ter pays Hey te find An ne ‘resco ves senate oe ecu eagnae ste ceu Seaum mews Os pete Meese Mae EO OY Be Investors an ehangete eu ba secur tan me by srucing he MC Yd. © ich ofthese expenses can be charged oa mutual fund scheme by the AMC? Rent for rpstered fice pe mutual urd Salas offnd managoment aan ‘Gone amination expenses of he AMC Y CORRECTANSWER Explanation: ‘nadotion ote vesint te airy, AME may age ne ut Un shane th eng EDEN whch nce es fusca ne nd smi, ‘2 Identiy the TRUE siaterent-A te mandatory forthe AUC to diclone the valuation policy B. The ANG fe nt accountable for policies and procedures for ‘detecting and preventing incorrect valuation, CnyAis tu One sue Bot Aand are tus None of te etove CORRECTANSWER ‘torre lh aus pole and proceauasaorordiy the Scare othe AMC sabe made in Steen ot Adelina orton, onthe watts fhe AMG ensure ‘trspurency etvauabon noms toe ase by asetmanopemencomosey ‘7 aponazy oft ane ares of auton ard coectNAY snl b ota Att Management Company. epic of leat ote Spproved vals ols sna paceren + an asset Management Company (AMC) can recover investment management and advisory fees on management ofthe unclaimed amounts, onion ne aual expenses need noting the ands ‘2 maxmum ate of 0 80 porcont por annum {por helo apeabe onthe shame for whch he redemption was mae Nolnvesment management and avsery tos canbe charged an uncamod amcuns x [Sta macmum te of0 50 percent per orrum Explanaten AMCs expecta to make 3 conuous eo trend he nesters trough eters 6 cm her untamed amounts. AMG ean recover invest manageent nado fees on management ese wee ancuns, st moun ato 09 Becent per aun. ‘he sponsor ofa mutual fund can be compared tothe Chlet Executive ofa company - State Tus or False? “hve \/ CORRECTANSWER Explanation Which estrbutor will be covered under the due cigence process ofthe Asset Management Company as mandated by SEBI? ‘dsr whe has presoncon more an 1 loesbons A dsteatr wie has rcoted commission of ver Rs 5 hs fom one adel ed \¥ CORRECTANSWER Explanation ‘Seb: ns mancatad ACE to putin pce 3 gence process to mguse tates who quay ay ne othe oowingentan: AU sas one R100 tre cross. nds nse nonenstana tty incline och nas AN) Te commision rcaved of oer RS. 1 Cre pa. ee88neusty jt presence (Moreton 20 caters} “Te conmision rcaved ot ver Rs. 0 Lakhs fom singe muti fine ‘Can an investor redeem any amount from a Segregated Portolio. Yes, than what are the rectrctions? ‘There sno resticon on redemptions fiom a Sagregsted Porolo (Onis 25 % of he vai of current investments canbe redeemed fom & Searegsted Portola (ni 50 % othe vale of current investments canbe redeemed fom a Segregated Porton ‘An vest cannel redeem any amount fom a Sgregated Portfolio tam the ANC Z ‘Aniivestor canct redeem any aroust rom a Segregated Portflifam the ANC Explanation: Segrgste prtole” mean a portouo, comprising of 5 onay mara instrument aected by acre even nat hasbeen segregate ina mutual tna sche Ne ecemption or subseripten ie sbowss inte segrgate porta. oweve, morro ace et 6 unthoesn sepregsies port oo, AIG shal eae sting of ns of sgregteg porto on he recognize soc exchange Identity the category of mutual fund acheme in which the Net Asest Value (NAV) hae tobe declared for upto 4 dacimal points? ‘Mica Funds | ‘Blue Cup Funds ybed Funds qua Funas ‘Y CORRECTANSWER Explanation: Na iss tele upto mal laces nthe caso ces Tunes Baud Tne ans ter cet Tunes. (Ay fr equty and nlanced unde eo be clei upto atest 2 cis pace In case one ofthe Joint holders is, than the uns wl be transfered to fe HUF of ceased ler Do trarstoredta tmnoe's coninue to be eld by surviving int heer ‘edomed automstcay CORRECT ANSWER Explanation: ‘nce muti! fu fet rete a jt held acount thee can ene change he thle Ajeintheaercanot be celta of sew ane ace, xcepin he vet Seth. Intra event t cet ton nodes hana name ie celeted ne ne srg on lees can condoue wane este ent th ase statements A, vestments in mutal funds can be made ona reparable basis by NRIs B. The mutual fund wil automaticaly pay in Dollars tien the NR redeem his investments wich ware made ona epatable bess ‘ni Ais fase ‘ony Bs ae Bom Aa 8 ota Ship sta Explanation: ot None vesters, payments made he ANC Rupes case te nvstent has ben ade on pata Dass andthe ves wishes o wane eoney abc, ‘be Cons sce an conerng tw rupees mo an fern caren wo bebe Secu oF mre ‘recess cavemen aceon reptile bats canbe eres t ap NRE or FENR coun equ ye nest. 2% yn ofthe folowing ie tae fora month income detibution cum capita withdrawal plan (DCW of mutual fund scheme? "he ital und guaantes deciarng ie OCW however the ancunt may der ‘The maa und guarantees declaring the IDGW aroun! ‘The mata ond cant guaran declan the [DCW amount or Hequency None che stove CORRECT ANSWER Expunation ‘he ncome stn cum cape! witha (nie) py ut apo seams atactve or vasors wanting a regula incre. shoud Monet be Leptin mand a wren ‘maa tone sare win 3 mony paycet opion sen seSursten r= fancbono ebuaDe spas eer sumpus to ceaute cmgene cat seca ‘Tarfrs, he vers ott suH fear ne shee even nen re IONE scene opton nar requetty used by media and research analysts to check the performance of various schemes of mutual fund. Fund Fac Sheat penal Recounts oe ANIC Key sematon Memorandum (KN) Investment Management Agreement ‘CORRECT ANSWER Expansion: ‘ot ot me most pape docurart om the muti tnd i th movi Fund Fatnaet is coeuent is etensvaty ud by esas, fd aatutrs, tnd rating gene, ‘otsre says mela se est Scessnomaton sourtu va senemes one Moa fie The investment ange in detinstruments is between _of tt 120 percent and 93 percant ‘Tsperon and 9 pecan SOpperont and 5 parcant 25 percent and 50 prea Y CORRECTANSWER, Explanation conarintve ion Funes an apanange nord scheme investing resonant in cet armen. sets na Conservative Hybrid Fund, nian at insens tb been 6 paren nd 8 pact stat mene n gy a ey nme ‘All transactions of purchase and sale of secures by kay personnal ofthe AMC, who are drecty involved in investment operations a ompllance ocr ofthe member at est on ‘Weak bats Monn tas HaleYeary bass Yeany bass be cisclosed tothe x Hat Yeaty bess Explanation 1s pr ne AE Cage of thes wansotons ot purchase sd ao acre y hay Etzel we ancy noe in investment optztons a ‘Shmtance tea ote menses oh hve an ans sbsegceney ponte bw Bara) ones ouns hung conte mars te Yana 2" Management of vestments by mutual funds fs governed by Assoctaton of Mutual Funds nda (AME!) Resave Banat naa (8) Secuites aed Exchange Board of nd (SEB) Bom RB and SEB! x ftom Rand SEI Explanation: ‘a sppcane gens xm dr tou SEB nl Fans Reganes 18 Te epeaon ef mun ea gore 2 Tusa on Be ‘crane nny mana nin hangs mtn nr, hr mil Ro encom RBS pont gn enn me mn me AI ot agultrybedy. eminent cf and main Mh olson and thi tandods nal as operation of 4 mt nd indy, 16 The neat Account Statement under SiP/STP shal be sued within 10 working days ofthe inal nvestmendtanster. State whether Tue or False? x Explanation Ident which ofthe fol statement ilar alee in cntest of benchmarks A. An independent agency should calculate the benchmarkin a transparent manner 8 {he process of choosing a benchmark for anne Fund ery complex Onivas fase Ons tase Bom Aang worase Nona ottha above \{ CORRECT ANSWER Explanation (eof tetera splat or nce ind he ivestant jet arn winder hath sebame woud ack. Thatindax woud nen bette beshmar for he scheme ‘Bysomerams ncaa ya nxn pny eoipen anne eg peineregny Men bectmans a corey ook ent ee ag 21% identity the TRUE statements A Tne stamping I relevant only for Financial wansactions and not for Non Financial ansactons 8, Time stamping relevant {orboth Financial ana Non Financial wraneactone (Ons bus Onis te None ofthe above \/ CORRECTANSWER Explantton ‘stamping fer ranch rane etons pretend reponse. ry cia tine te MAY at wich ramacn wt the le, {Ties or onan tantacons he te change of adr, imatrssenowegeman wt tc On et saing I Inport fr sch wen ranl [Atop pertorming scheme within a catagory —_. TS the Dost enoo fan vest est Na aN ay or may nt bo to lop prtermor no ra oar to come usualy romans tho top patormer tr along pone ote. usualy be te worst porormor the not yous come \/ CORRECTANSWER Explanation {As epenance nas sown tme a gan, he top performers rng on pod may not ncessary remain 38.2 1p pero fore or path ter op peermes.n SUCN 3.35, [Spy bayngiissrenene dan pocd sur tne econ pst nay neroese apposeh ‘Tne muti fue averesements see dsciener "Past promane mayor mey ht be susan in tee. 122% Ugually most investors mighthave invested across varous asst categores. However te problem with such asset allocation eta . ‘such azeetalocaon vara rte Sich asset alecaton is dene withet daring any bjctve or witout ay process Such asset alocaton incroasos he porto sk Such asset alocaion leads payment of atonal axes \L CORRECTANSWER Explanation: ‘Te bie meaning fase aloeson to seeta an investors mony across set atgois eset achieve seme objective nasty. most investor potoes woul have he ‘movey alate Neos anous asst categories However many surh Coes te be ay be ae waht ay preess or abshale bhi ‘Aout Aocaton sa proceso locating money acess vaso ste catagories inte Wl stated eject. Te undeined wore ar vey inpenae Ps. ia prcess, mc ‘Sheys nvtves seve supacene bene ope trove netoe ghred ev apes sesame te wot sne brn ate enoaton a we Scie Sone scr. Wleseve appran coe ‘ele mat go hough tow see ot process nto sheve he oct 224A person who wants to retain aud n his investments wil invest in. ELSE Schomes Fxod Deposts PFS Lig Funds \ CORRECTANSWER Explanation: | person ite wants quay shuld vesting ods a8 hey ean be reseed very fat uty inka sving schemas (ELES)Rave eck pari ofthe years ‘aad Depons and Pui Provcet Fut PP cant be eal eeasne btoe matty. 222 vino issues a due aligencecerticate stating compliance with al legal formalities at he time of making a new offer of mutual fund units? Bone of Trustees Ane Correiance oncer Custeaen| Y CORRECTANSWER Explanation: ‘Th cove age of Scheme infomation Document {80 nas he folowing Standadcause-"The parc of he Scheme nav been pepsin accordance wth he Secures ond {Behange bon of aa tan Fue) ‘Regultons ot 25 ames oe, oe ha wh SEB along with 3 De Dilgence Caress rm the AMG (ASS Management COMM. 1295 nose benatcal interests a mutual fund maneged? “steee ‘Sponsors ave 11 CORRECTANSWER Explanation: sn vaio unthoe) i ati ine shame the Banal omer the unt oe has Rouph. The mut ind i mansge for ne nail tres he noes Distributors can optout of charging transaction charges "AMC level ‘tive ve it chome vel ‘x detotor level Explanation: Dsrbutors have te opton of opt cut of caring ronson ctargys. But keh otng Ut sale Spplesb Enya OStutr ee. Ths ans he teTBuor cant ‘hoon to cnrpe wane nage rom nw nei an tom seat ‘Banks and NBFC's can lend mongy against ___of mutual und unis Nomination Rodomption Piege ‘Alane above CORRECT ANSWER ‘Banks, NBFCs and terranes cen endimoney aint pledge of Units by the Unite ‘Tse eteces ough a Pee smexecte byte unttoe (legen, The otha. 3 prowson or oeciying te party in whose aur te uns ae page (edge, ‘Tha Kay Information Memorandum (KIM isan abridged version of which ofthese documents? “The yearly statement oft porto of te ina ‘Tho ha yea slalom oho nancia Salemont of he turd ‘The annual accounts ofthe fund ‘Schame tle documents ID and SAL CORRECT ANSWER Explanation: i aesenuay sunny ot th Shame nfomaton Desumant- S10 and Staten ot Agatonl Information 2, nem eee documents cons 80 an 3A contains te key pons of net cecum tha are aan fre nvettr to know to ke Gelaon on he SUR fhe investment tor ta 48 |Win ofthe below etatemente le «important advantage of a Exchange Txded Fund (ETF)? "Apotson can esey tack he cent valuabon of an ETF and buyisel the us on a sock exchange a thse pcs Efe general ve higher aun than oer tal Funds [An vestorin an ETF can have a conolon wher his monay canbe invested ‘sloth above \/ CORRECTANSWER Eqpanaten: Psat pase ts wots porto repeats anne or bench such an equ ara nde ors commoay ne. ‘Te unt oh EF ave raed ato ome es ate nto te changes nthe UNEEng a ‘he markt pete Wank NAY very ose) deny the factor which mus be consisted to determine the asset location fran investor? Financed goa othe vester ang hs tharos stuston [AUMot tie scheme Scheme expenses Past peremmance ofthe scheme \/ CORRECTANSWER Explanatn: ‘Asst ocston a shocston signed othe nancial gel fh inhul consier te rn requred em the pore active te gel, pen the tine xs val fr the cesta be ree and neo prof of tena Itathird party payments tobe made for subscribing to a mutual fund scheme, then which of he fllowing ilar essonily required? “The minum nvestnon hast be Re 50000 ‘The tr party has to peeve PAN dts an also comply wi the KYC nome “The tht party shoul so have a foo wih the mutual fund ‘ofthe above \/ CORRECTANSWER Exolanation: Compare whe YC norms and proving te AN deta ae man byte tie ary mating te payment respective ofthe aout net. ‘Tretia pary nee not hve 3 oo wth te mut a, ‘han an investmentis done by a minor, whats ule regarding Know Your Customer (KYC) requirement? NOKYC is requted pans wether to vestments in equy funds o ae ands YC wl be requted ont tansacton is rough astock exchange YC ofthe guardian equros “1 CORRECT ANSWER Explanation: ‘inerrant maar ir as nan ya con ogh etn wr hs comply th na KY nc PAN grat a rtm na vein at Risk profile at an investors influenced by ‘ony Rand ‘IA Band 1A) the nee tae sks B) the wilingness fo take sks ) the ably fo take isk Miabewe Explaation: ‘re tnesors x appt 3 function cf ve ingh—te nes tat rk, habitats aks and te wilngnns net ‘hus, an understanding tens pote ad theinvestmen ss asec wh aus mut nd Scames Wo besser or Geng Me asst atecaton man veers [As per SEBI Code of Conduct, mutual fund schemes portfolios shouldbe managedin the intrest of Sponsors Brokers Y CORRECTANSWER Boianaton’ pe 81 Cote of Concut Pues and asset manuel companies sal crt ot snes ane invest im aeoreance wit te investment abject tts he shee [i SEtisens Sac etsimanoccion sony netneeer eae ‘ninvester purchases trough 9 estrbutr 6000 unis of ¢ mut! fund scheme at a NAV of Rs 25. The current NAV ofthe scheme IR 43, What wil be the Wa ‘Commission or today ithe tral commission rasta c per annum. Re 2150 Rs 53.1854 Re gan Re 5.004 Revsouae Explanation ‘al commision amas cleans one cuent AY. ‘al emission forte cay = Cure vate Xtal eommision at p.a388 21000 9/988 4072 nt ae statement) 8 The bes stay sling a mil ind shes that baad on pt performance) When nvr want redeem (On ststement Bs false ‘Bath statements and ae fae Y CORRECTANSWER Explanation: Etgenence as howe ea gn, toppererare rng ane prod mayne nessa ran atop petra forever ornare a tp petonmes ad ce vers. ‘tet scoce simpy ouymg eS heme at goo ems eecn post ay neve a Sppeh nen a nvstor wants ree on a sehen he estrbuter mus suggest semen Roe Seheme wh mim 8 na corperate Bond fund, the minimum ivestmentin highest rated corporate bonds is__percent of he total asets So 6 70 0 « Fy Explanation iponte tora ure Ap open-nde set scree prcominaty investing in AR a tov ted corporate Bones he minum monster crprate nes sha Be 89 Free ‘Feta eiyn aus Sn oars suescorpure son) ‘tan investor wants to get updated monthly performance and portolo data on mutual funds, which of the fllowing documents should he read? “Schane vormaton Document (0) Ensen Sheet ey intonation Memoranc (KM) Y CORRECTANSWER Explanation: "Teton She ays val gg uproot on te muti ne Schems an sey pUBIMRCOn 3 MoM BS by en ROUHS staat sot sary reguama ’an investor in India has invested in US Dollar based funds. He/She will benefit when, "The US Dalar becomes Weaker ‘The US Dollar becomes stonger ‘The US Dalar reams steady

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