For unite of Equity Linked Savings Scheme (ELSS), the lockin period is __ threo years rom the te of orginal nvesiment, even incase of subseq usr purchases by SIP tives year tom he dle of orginal ivestment for each individual unt fox purchase mada by SIP “There sno leek in pari tax sxemeion claimed ¥ connect ANSWER a Explanation: ‘tore vesting in ELS though SI hen each ivestment woulé be locked: rom te eae of te respec invesiment. Te leckin forte ene amourt woud nat get ever on {ompimiono3 years tam ne tea tr SP salmon In the usual course of events, Goll ETFS Equity ETFs Chosen fe (Open-snd fund CORRECT ANSE a Explanation: fund manager will have to provide the maximum liquid assets for, ‘etrs ang closed tints ae tstd on he stock exchanges and vest can sun Unts ek. Tey ned not Sve rdemptonrequnst othe AMCS, 40 te tnd manager mee not ‘naam tq ands or Close ana tines ane ETFs “cper-ane uns have to kp a minenustpulted pr cert of ter orpus in gud 2H, Tis Mae Leen done te ensue tat teres enough Hauiy avaiable win the open ences ‘ie meet redemption reece os The {used by the fund manager te communicate thelr views on tre economy and the markets te the investors Sy informaion Memorandum (KIM) Sttoment of Addtional information (SA) Scheme lniormation Docume (SIO) Fund Factsheet 4 commecraNSER a Explanation: ‘ve fur facaheets ae an oficial sure of information ofthe fund's objective, perfomance, portland basic investment requires sues by the fd house each month Toe {Betaetisses ed yt tuna manager conan ti vn on economy ance harks re vests ana Ge ost ich ereaeh aa arg Meno Whatis the daadvantage of company fixed deposits wien compared to bank fixed deposits? Lowe! rete ofnierest, Lower sty Highly woe Diet quate commer answe 4 Explanation: Company fed capes ae conser to ky when compared to bank Raed deposits du othe credit ik. compar & private enty and may default payment of intra! an ‘rcipl amount & banc hh more ster tan’ eve company ane 30 Reinga daposts are mere serio vest 2, Th operational aticency and management of the company 5intematonal piss of old nly and 2 ny 2and3 nis and 9 Ait 2and3 J CORRECT ANSWER = Explanation Prat of gee mining companies i inked to saver acters 1g. nen gold meta pice ineenses gol rung comgaies wit age reserves of gol ean apprecine Inonere are cencees about» compary's management he shave pies may see a deine respecte ofthe pie of gl Identity the INCORRECT statement wth respect to SEB! Complaint Recress System (SCORES) "SCORES anaes tha marke roads ands compares 1 eco» compli om ves, redress such complants and report rearessal 'SCORES's aWo0-Dasod contaizaa grovance ross 6 ‘SCORES is compltaly oni, so an nvesir canot lodge a physical compliant an investor lodges a physical compiait thon Such compiants aro scannad and hen uploaded in SCORES for processing ¥ CORRECT ANSWER “ Expianaion ‘A invest, he ena amir with SCORES or dots not hae setae to SCORES, ca oe Manuponied ty SCORES toe procecengIdentify te fal statement th ape to a New Fund Ofer (NFO) {VAClosed ended mata! und NFO mil havea NFO opering date, a NFO losing date and a scheme Reopening date 1/ASpemended muti une MPO wit have aNrO opening dats, ANFO losing date and a scheme Re-pening Ste Owytenace Onto Bat and 2 fas None oft above ¥ conmecranswes a Explanation: ‘A clesc-nded mutual fund wi net havea Re-speing ete. They Mer iq tough Ms sting ona toe exenaNge, veer who whieh te Investor tsa dee OUGN a steck frchange broker In vnieh ofthe following ease can s mutual fund charge the 3 er new intons For bays p30 chs east) 1% Fe oS Nw own he seneT® OR 1% os average AWM (YOR To Dt) fe Scam, wher ever higher Wher the new ntlows fom beyord top 25 cies is atleast 30% ofthe gress new nfows "When the new infiows tom Beyond tp 29 cies sat east 10% ofthe gress new infows ‘Whar the new ions om bayord tp 15 cis at last 20% af th gress new infos ¥ conmecranswes, a Explanation: naan ete regulates, tne folowing ecpenses maybe erarged ote sehen | Brokwrage ang wana ort ncn a incurs othe purpose eciton trae up 80.12 parent ot tace aus inca ofan mit wantacons an 0.08 parent ase 1. e raw tous rom beyond tp 20 cites are at ss ) 30 prcant fers new tows a the scheme ce 2) 15 arcent of he average asses uncer management yet ste ot tna ashame, wnenaver 2 migher, tunes esr crarge the acriona expense oF up io U30 percantor the aly et asets fre scheme, ‘[Link]-end fund wall have a Fed Ddend pay-out rato Fed Uri Capital Fred Ne Asset Value (NAY) Fite Aesot Unser lsragement (ALM) X_ wnove auswen CORRES ANSWER: Fixed Unit Capital Explanation: 4 Close-ancea schemes tavean NFO Ofen Ostend NFO Close Date. But. they do nothave 3 Schemw Re-opening Ost, because the asm des otsellor re purchase uns. wnat ver Sslepurenoe of unts tates place between the vestry onthe Steck sxerange ‘mee past NFO sle an purchase at uns happens ot om counter payin the tec exchanged oor from the ssneme-the unit capo te scheme remain tbl oe ce (me numoer or nts isune by serene muti by Hs te value. 1) the ena ome Senemets Unt Cap!) (man open-sna seneme, ne ongoing ot investers imply tat te alt cptal it an open-enaee fun would Keep hanging of 3 regula Bs) "Yaltion ga acjusted against the profs while calelatng distibutable surplus, ‘The Markto-market gains forma partof the datributable reserves in case-of mutual fund Inceme Distribution Cum Capital Withdrawal pl Only Aiscorect, Only 8 is corect Both And B scorect Both A and Bare inconeet a e X rons ausien CORRECT ANSWER: COniy Ais correct Explanation: a ‘S261 guidlines stipulate iden canbe pad out of asinbtabe reser Iarktosaret gins ae on pager they are rt reais, They willbe elze when those investments are sa, So Bes conn be Include Im ittuable reserves are grored, But valuation lesen nett be acute against ihe prot ‘Tis conserve appreach to caleuatng csrbutaie eserves ensures that vised is ple out ot real na retzes profits, er Erovicng fr posse tosses,‘The return froma mutual fund scheme is 8 3% and the Standarel Deviation is 0.6. The rek-tree ate of return ie 5% Caleulate the Sharpe ratio. 35 55 4 er ¥ comRECT ASME a Explanation: “oe toms fr tarps Rat e.(Returm Eomec: Rik ree Retin) Stance Ceviston (s-5)108 3108 (R51) tendon Devanon Opening of ime stamping machine needs to be documented and reported tothe Asset Management Company (AMC) «State iver Tu o: False? “Tn Fake X wos answer CORRECT ANSWER: Felee Explanation a ‘The pols of cceptance for mutual find wansactions have ine stamping machines with tamper roo sea. (feng me machine for repars ormantenane Is permite ely oy vndors or nominated persons of tema une. Such opening of he machine has tobe prope dcumentes Sha reported ote Trustees. Viile the 81D, SAl and KIM need! to be updated periodically, the interim changes are updated by the AM through the issuance Fact Sheet Directors Report Austors Repert ‘dendim ¥ commectausweR a Explanation ‘te he S10, $A! and Ket need to be upésted periaicty the Interim changes are updated trough the Isuance et sfGendum. The adcendum Is considered to be 3 par of ihe {ehame rested Socuments ona must szcompany Incase ofan Index Fund, the minimum investmentin securities ofa particular index (which is being replicated! tracked) shal be 30% of he total assots 15% ore total assets 90% of he total assote 95% of he total assots CORRECT ANSWER = Exlanston Index Funds are opennced seneme repestinptashing + specte index. The minimum vestnas In secures of 2 parkcular née (which Bing repost! aches) 2 perce oat snot investmert styles means buying stocks which are priced lower inthe markets than the assessment based on fundamental analysis. Growth len vale yea ¥ comREcr ANSWER a“ Explanation: atu vestments an paroseh of plohing Up toe, whish are pce lower tan ernie sue, ase on fundamental arava, ‘ne beter tat me mart nas net agprectes seme aspect me vaue m a company’s share ang Panes Ms cheap When we mane recognize ne nine valu, mente Bree woul shoot. Which is the Source Scheme in a Systematic Transfer Pian ? Its the scneme wih the tower NAV tis he sotem fem which ures are wansfered Ni the soneme to which finds are Wanstered "tis the scneme wi the higher NAV ¥ comet ausner 4 Explanation: Ina Syatemate Tense Plan (STP) th amount ha whhérawn or scheme (este the 2utce Scheme) is reinvested in some cer scheme (eal he target sche) othe ame ‘mation et ag An instr nas iat Re 5000019 $B! Oat Fund sn has 8 STPo tanner Re 800 evry munth inte SB Mid a Fund Mae S81 Debt Fund i the Source find aad SBI Mt Sp Bundle the igettuneDiving an ndvduasrortlic allocation betueen Core polio and Satelite portfolio is dependent onthe ris profilo the invester ~ Slate whether Tr Tue False “CORRECT ANSWER é Explanation: eay an nvestors porta shoule be vies ite Core ans sate portals. The core parol vil be Invested secareng te ong-em needs tthe ester and he satelite Poroiowil be inveted totanesavantage af expect shoriarn murat movers. However he dusion btveen cove and stale portoles wil epend vee each investr's pote. Conservative investrs may Eke 6 very small arepeton of hel overal pode to be manages escent ane’ vest comonaso wth sing hiar Het may Raven avn igh suponurete teen invests How can the empaneiment of mutual fund dstrioutor be terminated? “The empanelment gets automaticaly temneted on be completion cf the tem of empanelent Asset Management Conpany can teimnai ie emeaneimant at any ime \When a te cients cf the dstibuer ant Direct Pans Allo above “f cORRECT ANSWER a Explanation: While enpaneting with an ANG, te ut fund stor ppiant sons a declaration which gles power to he AM to emirate the apanelment san tne entity the TRUE statement. A) While calculating scheme returns for an investor, if there i an enty load, then the Inia value ofthe Net Asset Value (NAV) is taken as NAV minus Entry Load 8} While calculating scheme returns for an investor, if there an exitfoad, ten the later value of te Net Asset Value (NAV) is taken as NAV minus Ext Loed On Ais tuo Ony Bis tue Bom A and are tue 2 onc auswen CORRECTANSWER: Onyy 8s tue Explanation: a i there isan Enty loa on smut! fund scheme then while cleulating the seheme returns, thei! vlue of the net asset vale (NAV) is aken 92 HAY PLUS en led 8 the puree abs tmbeanes Gus ey tad Wey a et oon a stam hen wie ceuaig fe shane rts, ar ae fe Nat ae Valu NAV) ten a8 NAY manu eat od 98 sale vate (re-entry esa nas row been Sante by 85) Identity the CORRECT statements wth respect t Conservative hybrid funds 1A Conservative hybris fund cannot Invest n debt teccrives for wich the gcaulay Duration fe more than 1 year BA Conservative hybrid fund eannot invest mare than 25% of tal otal sets in equity instruments A Conservative hybrid fund cannot invest in debt securites which have lower than AAA rating Ony Aand 8 are comect ‘ony Be conoct Ony Agnd Gare cone AIA Band C are corect X wnoxc answer CORRECT ANSWER: Only Bis coreet Explanation: a Conservative Myre Fune isan open-ended nybi shame investing pragomnanty in ab instruments investment in debt instruments shal be between 78 percent and 60 freer of ‘ean asets wile ivestment in egy soc ecu struments Salle between 19 percent and 25 percent tot 530 “The word “corareative” ine nme of Conserve hybrid funds catagory ony refers i he equi slain. Therelore,« Conereaive hybrid und cannot invest more than 28% of ‘etal seem eau insvumems221; The dividends Is declared on units which are under a lien will be paid to : ‘the unit holder only ‘he lien holder oniy the unit holder or lien holder as per the agreement the unit holder or lien holder as per the terms of issue of mutual fund units X_ WRONG ANSWER CORRECT ANSWER: the unit holder or lien holder as per the agreement Explanation: ‘The dividend pay-outs declared on units under lien may be pald tothe unitholder or the lender (lien holder} depending upon the agreement. 222. stamp duty is required to be paid for which of these mutual fund transactions? ‘A. New purchases B. Systematic Investment Plan (SIP) ©. Dividend reinvestment D. Systematic Transfer Plan (STP) ABandD Only Bando ABCandD ¥ CORRECT ANSWER Explanation: ‘Stamp duty will be applicable to all transactions pertaining to scheme inflows: Purchase “Adeitional Purchase “Divigena reinvestment + Systematic Investment Plan (SIP) + systematic Transfer Plan (STP) “Dividend Transfer Pian (OTF) 129. Which ofthese statements are TRUE with respect to time stamping on mutual fund documents? {) Time stamping is relevant for non-financial mutual fund taneactione £5) The dally tme stamping of application does not start with serial 1 (C)Breakéown of time stamping procest or breaking of seal le mandated tobe duly recorded and reported tothe Trustees ‘Aand B are tue Bond Gare true ‘Aand C ae te ‘Band C are bue connect answen Explanation 1) Appleatons for non-nanctal uanszeions ke change of 2ceress are stamped. However, resting of tne sno relevant: the ate stamping sparen. 2) Applications are sequently numbered tom the fst number f the machine tote ast umber ofthe machine, beore 3 new numbenng els ste fer he machine. The ‘anytime sampling oF apeaton goes net sat win se 5) The pnts ofaceeatance have ma stamping machines wih samperpoot se Opaning te machine for repairs of maintenance ie parmite ony by vendors cr nominates [esonk ofthe msl fae. Such oping o re machine Nas tobe propery documented sr Tepories othe Tues, ‘erty the tus statement with respect to measuring returns for Mutual Funds schemes. 4. Simple Return can be calculated using the formula: Sale Price - Cost Price Sale rice 2. Compounded Annual Growth Rats 'CAGR' technique has been prescribed by SEBI when dvidend fs paid and compounding is to be considered ‘3. CAGR Is the recognized standard for calculating returns for Investment horizon of greater than or equal tot esr ‘and 2 2ond3 Sandi {anda 1 coRmECT ANSE Explanation: 1. Simple Retr ea be calelteg with te ftlowing formula: Sale Price -Cost Price / Cost Price [Link] a avicend is paid ane compounaing st Be consieres-the CAGR tehnque (ote Femvestment methee 38 Some cal prescnaeeby SEBI1s used 5: The tum ealeuited using CAGR Mth holding pecs over one yer retums ae ess than one yar, han Simple Returns clelated‘Me. Suresh invests Rs 2.0000 in a mutual fund with afacevalue of Rs 10 and NAV of Rs. 80. How many units wil be allotted to him? $000 uns 20000 units Wil Be loner han 4000 uns eto entry load Wil be lower han 20000 ans de io enty lac CORRECT ANSWER a Explanation: Units ae slot 25 per eurent NAV (urenythere sno erty toae) What isthe Total Expense Ratio for an Index fund or an ETE? Tal Expense Rat shall not exceed 1.00 percent ofthe daily net assets, ‘Total Exponse Rate shall ot exceed 200 par cent ofthe day nt assots Tal Expense Ratio shall not oxcoed 15 per cont ofthe daly not assets, Tal Expense Rat shall not exceed 0 50 percent ofthe day net asses ¥ con@ecr ANSWER a Explanation: Incase ofa Index tnd sere or Exchange ade fund (TF) te ttl expense ato the scheme ncucng the nvestnent a iy nt asets sso fee shall not exceed 1.00 percent of te fa 30, In which document is @ commentary on the current state of economy and markets is also generally provided? ‘Staloment of Addtional information (SAI) Key Information Memorandum (KIM) Fund Fact Snest ‘Scheme information Document (SID) % won answer ‘CORRECT ANSWER: Fund Fact Sheet Explanation: [Apart trom provcing Information abovt the schemes in the tune tact sheet, AMCs may also provide peroato [Updates cn mariets and tie eccnomy. he factsheet Is also used by the fund manager to communicate thelr views onthe economy and the markets tothe investors. Identity the duty ofa SPONSOR of a mutual fund - ‘Guards the interest of the mutual fund unit elders Contributes tothe capital ofthe Asset Management Company Looks after the dey to day administration ofthe mutual fund Regulaty report to SEB! on the working ofthe fund CORRECT ANSWER Explanation: ‘The appileation o SEB! for registration of a mutual fund Is made by the sponsor. Theretier, the spensor invests Inthe capital the ANC. is nota fair selling practice by @ mutual fund distributor. Tafoiming the investor ofthe various investment options Carefuly understanding the cents fancial needs Encouraging the churing of investments Giving personalised ater sales service CORRECT ANSWER Explanation: ‘churning means frequent Buying an eling, Encouraging ove transacting and churning of Mutual Fund investments te earn higher commissions by MF agents isa bad practice, ‘The loss booked from a equity investment of 18 months can be set off agains ‘Long term capital loss only ‘Long term capital gain only Short term capital gain only ‘Short term capita gain or long term capital gain CORRECT ANSWER Explanation: ‘Acapltal gan or loss trom an equity investment of more than than 12 months Is considered 38 Long term. ‘Long term capital loss can only beset off against longterm captat gain.234 Investments have to be made only through authorized signatories for investments by, Institutional investors Hindu Undivided Family (HUF) Non Resident Indians (NRL) High not wor invduals (HN) X wmons answer CORRECT ANSWER: Institutional investors Explanation ‘ince nstttona investors are not natural persons authorised ineviduats invest on beh othe nse. /Aumorastion forme investing insiuton to invest ryplsiy nthe form ot Baar Ressiuton Identity the TRUE statement with respect to Tracking Error [A Tracking errr is calculated as the standard cevistion ofthe excess returns generated by the func While comparing diferent index funds, one should invest in afund with high tracking error Only Ais tue Ony Bis tue BoinA and B are tue X yons answer CORRECT ANSWER: Only Ais true Explanation ‘Tracing eror sa measure of the consisteney ofthe out performance of the fund manager relative tothe benchmark. The tracing eror hast be ow fora consistent out- Pertorming uns °° Sonu reads about the risk factors given inthe offer document and invests in an equity mutual fund scheme. After a few days the stock market ea NNAV of the equity fund goes down. What ean Mr Sonu do in such a situation? He-can appeal to SEB! and get a remedy He can gota remedy from the AMC He is not key to get any remedy rom the AMC Hos kal to gota remedy from the trustees of the AMC CORRECT ANSWER = Elanaton ‘The omer acumen ofa mutual fund leary sates that Mutua fund investment are subject to market mks vente rund nvests i equy market where pies Muctunte aot the NAV othe unas Ikely to witness huge MuctuBBONS. So the AMC ner SEBI nor none ls can oer a ema ‘he huctntons ae sparta esuty martes 2% identity the TRUE statement - A) The AMC Is notable for any losses suffered by the foreign portfolio Investors due to adverse currency movements B) The AMC has to compensate to frelgn portolo Investors for any losses suffered due to adverse currency movements onya ony Both Aand B ¥ connect answer a Explanation: ‘The ANC goes not manage currency risk or Foreign Porto investors ana the sole responsiity cf the Foreign Portolo investors to manage or reduce curency nskon thelr ‘The Sponsorfund/trusees AMC ae notable or any los o Foreign investors arising tom sch changes in exchange ates, 295 Which document has the statutory information about the mutual fund or AMC, that ie offering the scheme, Scheme Information Document (S10) ‘Statement of Additonal Information (SAI) Red Herring Prospectus Fund Fact Sheet 2% wnons answer CORRECT ANSWER: Statement of Additional Information (SAI) Explanation: Statement of Adalonal information (SA), Pas statutory information about the mutual fund or ANG, tats oterng the scheme. Therefore single ALIS relevant forall the Sehemes oer oy 2 mutt fun, (Scheme Information Document (0) has details ofthe particular scheme) ox ‘The form for registering a change inthe default bank account has to be signed. by the frst hole ony by all the dors of he foo ‘according a the mode of holding tthe foto by all the noders ofthe benk account 2% wnonc answer CORRECT ANSWER: ‘according to the mode of holding ofthe folio Explanation: ‘The form fr registering the change in detaul bank account hast be slgned according tothe mode of holding o he ote,or Fisk aloes because of diference in price movement ofthe derivative vis-a-vis that of the securly being hedged. Toe Risk Sate Re Marke Liguity Rsk Credit Risk 2X wrons answer CORRECT ANSWER: ‘Basis Risk Explanation: a ‘sie Ren anes ue tos eterence inthe prise mavamant athe denvatve ie deta ofthe seu ‘To measure the fund managers’ performance, the dtference between scheme’s actual return and ie imal return Is calculated and thle Is known ‘Agha Baa ‘Sharp Traynor 1 CORRECTANSWER a Explanation: ‘ne cference netngen 3 seneme's2ctualfetu ana opal retum ms Alpna—a measure ofthe tnd manager’ perormance. lpn, tertore, measures the performance othe Investment ir comparconto 3 sutble mart ndsx Pest alphas ndcn ef oviperfomance by the fund Manager; neat pha might iste under priarmance Which ofthese isan advantage of Mutual Funds? Pottoto Customaation Chace Overoad entre Over Costs Economies cf scale ¥ connect aNswen a Explanation {erg mvestor corpus os muuatng ast vanous ar ecanors of eh Fortney ot rie ivan ahr ooo pce es send ees nero Lmtons emus Fund Cchalce Overioad- hare are ule mati fund schemes oes by sever mua fend houses and mule Sptons ita ove senemen whch makes tefl forinestrs te ehcowe Between ter Identity the TRUE statemente Roling tury af the average annualizod returns calcula fr atrrat hleing poiod Holding period returns (HPR) do not prowde an accurate ture of returns of fnd i is initial Values foo high oc lw fom tan 2 None a the ebove % wwsons answer CORRECT ANSWER: Holding period returns (HPR) do not provide an accurate picture of returns of fund if ts inal value Is too high or low. Explanation: a Heltng period rita is elelted or fe prog such 8 ene month ‘To cmanate tis ipact rong reunsar siete, Rong retums i the average armunize return calculated for mumps consecutive helng pends In a ealusten pie a, Jani invests Rs 200,000 in an equlty fund. The face value ofthis scheme lee 10 and the NAV is Re 40. The exit oad ie 1%. How many units wil be alloted tee. Jani? 4050 5000 747466 20000 ¥ covececr anes 4 Explanation: Ext is NOT applicable on purchase of unt. ts apptcable oly onsale units Amount invested sR 206,000 200000 140a ‘Can an investor change hie mutual fund distributor? ‘Yes, ba permission fem AM| and SEBIis needed fr the same Yes, ht henwasior has fo v9 ation request othe fund hove Yes, but an upton feos have be paidta the exstingdstibuo' io cover up hs los af income No, a change of distroutr snot permed by SEBI ¥ comnecranswe a Explanation Investors can choose to charge ther dstrbutr orator direct investing. This neds tobe dene trough a wren request by te investor othe AMC. In suen eases, Aus wi neste comply, wamout sista gon any kine of No Onjecton Cermeate om me exsurg estiuto. 24 According to the AMFYs code of conduct for mutual fund intermediates, ia second violation against the intermediary is proved, the ‘Suspendod for year ‘Suspended or3 yous win ple Canceled connec ANSWER a Explanation: nme evento raaen ote Code of Conduct an ntrmasany. the olowingeaquence of eepe ena By AME: * ite tothe interme nd ask fe an wepanstion wen 3 wade +n cana exploration isnot recived witin 3 wiak, ore net saetacory, AME wil insu a waning later indiesting that any subsequent vsaon wi eu in canclton of ANP Fegisraton *irmete is aproves second vlton by the etemesiany, he restrain wit be cance ang ination Sent at MCS. [235 (dently the CORRECT etatement wit respect toa Fund Factehoet ’AFund Factsheet has to bo publsnod only athe timo of @ New Fund Offer NFO) As pot SEB regulations, a Furd Factshot has to be publshed on a mony basis bythe AMCs A Fund Factsheets cubishod by AMCs on a volintary bass ‘Allmutua fund cstiouors have to mana read the Fund Factsheot before recommending a chomp to thor investors 2 wons answer CORRECT ANSWER: [A und Factsheet Is published by AMCs on a voluntary basis Explanation: a “The una ‘acsneets ate an oma source of nfrmaten ot be fund's objetive, performance, porte ar pale nvesment requfemerts sued bythe fund nouse e3eh wenn. The ‘icishat size use byte fund manage to communtst thelviews on the ocanemy ana he aha tothe investors and Car cbservars ues ai feeaten analysts ating agen Sndmedia, ‘Ris net maneary for fund houoen to puble fastheee. But mont Rnd hevoee J vo 48 away t reach cute the eietng and naw iver. 26 The adeitiona Total Expenee Ratio (TER) charged has tobe credited bsck to the Mutual Fund ifthe inflows from beyons! the top 30 cities are redeomed wethin period oft year ror the date of investment. Sate whethar True or False? Tre Fake 2 ymons suswee CoRRECT ANSWER: Tue Explanation: e Hemever, the addioral TR on aczountofiews trom beyone the top 20 ites 50 charge shal F1 yeartrem me ate ofiosiment ona TER he new ieows ate rom bere tp 39 ces (subject to some contons) recited back tothe Scher n case the sa ines ae redeemed tin 3 paredom one. Identity the TRUE statement with respect to Trustees of mutual funds. The Trustees can legally change the Asset Management Company (AMC) ‘The Asset Management Company (ANIC) apponts the Trustees The Trustees appoint the Sponsors ofthe Asset Management Company (AMC) ‘The Trustees have to approve the appoiniment ofthe distibutors of ts mutual fund schemes 2X WRONG ANsweR CORRECT ANSWER: ‘The Trustees can legally change the Asset Management Company (AMC) Explanation: ‘Day to day management o he schemes isnandled by an Asset Management Company (AMC). The AME Is appointed by the sponsor or he Trustees “The appointment ofan AMC ean be terminated by a majonty ofthe trustees, or by 76 percent of the Uni-noiers. Ig NOTa function of AMFI, Ropresening the mutual fund industry tothe Government, RBI otc Undertaking studios and resoarch of the mutual und industry Undertaking investor awareness programs Conducting cerifcation exams for mutual fund distributors %_ wnonc answen ‘CORRECT ANSWER: Conducting certifcation exams for mutual fund distributors Explanation: Function of Assovistion of Mutual Funds in India /AMI) includes alo the above except - Conducting a certteaton examination for Mutual Fund cistibutors, National institute of Secures Market (NSH) Conduets the certfieation examination for Mutual Fun etrinutors. dentiy the plan which could be used in i of income datibution cum capital withdrawal pay-outs? ‘Systematic Withdrawal Pian Systematic Tanster Plan ‘Sjtematc Invesiment Pan None ofthe sbove ¥conRECT ANSWER a Explanation: ‘The Income cistbution cum eat wihawal aver pay-out option for investors wanting regular nome ‘Systematic Water Plan(SWP i fit which allows an investor to withdraw 2 xed amount at pre-determined neva, ‘Therefore an come dstrbuton cum capa wiharol (end) pay-out options sia to SW. The eiference sat he dvendspald onl when the fund has 2 Surplus amount ana nS the mounts eompusany a (The dividend pay-out plan is renamed as pay-out f income distibution cum capital withdrawal, dividend reinvestment plan is renamed as reinvestment of Income distribution cum capital witdrawal option followed by renaming of dividend transfer plan to transfer of income distribution cum eapital withdrawal plan), The decision to Opt-out trom transaction charges can be taken by distributors at exch individual lent level depending on his relationship with the client. State whether True or alee? Tne Falee X mone ansnen CORRECT ANSWER: alee Explanation: a Distros have te open of opting out of charging rantacton charges. But uch opting oUt eal be applicable only at tbutor Ive. This mans thatthe eater cannot Shoose to eharge wanstctonehsge am one vest ad na tom ane