NISM SERIES V A

MUTUAL FUND DISTRIBUTORS CERTIFICATION

DEMO TEST

Question 1 Minors are not legally eligible to contract, so for investing in Mutual
Funds they _________.
(a) have to become 18 years before investing
(b) can invest thro' their guardians
(c) can invest only in long term capital gain funds
(d) can invest in specific 'Minors Only' Mutual Funds

Question 2 Day to day management of the MF schemes is handled by the Trustees -

True or False ?
(a) FALSE
(b) TRUE

Correct Answer 1 can invest thro' their guardians

Answer Minors i.e. persons below the age of 18 are not legally eligible to contract,
Explanation they need to invest through their Parents/Lawful guardians.

Correct Answer 2 FALSE

Answer Day to day management of the schemes is handled by an AMC.

Explanation The AMC is appointed by the sponsor or the Trustees.
 NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST

Question 3 Who receives and delivers securities on behalf of the Mutual Fund ?
(a) Authorised Stock Brokers
(b) The AMC to which the fund belongs
(c) Custodian
(d) Merchant Bankers

Question 2 An investor gives a cheque of Rs 2 lacs for investing in a ELSS scheme at

2.30 pm at a Mutual Fund office. The NAV of which day will be
applicable to him ?
(a) NAV of the same day
(b) NAV of the next business day
(c) NAV of the day on which funds will be available
(d) None of the above

Correct Answer 3 Custodian

Answer The custodian has custody of the assets of the fund. The custodian accepts
Explanation and gives delivery of securities for the purchase and sale transactions of the
various schemes of the fund.
Thus, the custodian settles all the transactions on behalf of the mutual fund
schemes.

Correct Answer 4 NAV of the day on which funds will be available

Answer For all Equity and Debt funds (except Liquid funds) - For investment of
Explanation below Rs 2 lacs - NAV of the same day if received before 3 pm ( cut-off
time)
For investments of amount of Rs 2 lacs and above, irrespective of the time of
receipt of application, NAV of the business day on which the funds are
available for utilisation before the cut-off time of that day is applicable.
 NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST

Question 5 Investors in the _____________ should allot a higher proportion to Income

Funds.
(a) Accumulation Phase
(b) Distribution Phase
(c) Inter generational transfer phase
(d) Sudden Wealth category

Question 6 Long term debt funds would be sensible in declining interest rate
scenarios - True or False ?
(a) TRUE
(b) FALSE

Correct Answer 5 Distribution Phase

Answer Reaping / Distribution the stage when the investor needs regular money.
Explanation Hence, investors in this stage need to have higher allocation to income
generating assets.
It is the parallel of retirement phase in the Life Cycle.

Correct Answer 6 TRUE

Answer As yields in the market goes down, debt securities gain in value.
Explanation Therefore, long term debt funds would be sensible in declining interest rate
scenarios.
 NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST

Question 7 In case a Mutual Fund scheme is winded up and some of the illiquid
securities are sold after a period of two years, the funds so received are to
be _________.
(a) kept by the Mutual Fund under the head 'Other Profits'
(b) transferred to the Investor Education Fund
(c) paid to the old investors
(d) transferred to AMFI and to be used for Mutual Fund promotional activities

Question 8 An investor holds 5000 units of a scheme and this scheme announces a 1 :
5 bonus. How many more units will be allotted to the investor ?
(a) 25000
(b) 10000
(c) 5000
(d) 1000

Correct Answer 7 transferred to the Investor Education Fund

Answer If the amounts received on sale of illiquid securities are substantial, and
Explanation recovered within 2 years, then the amount is to be paid to the old investors
In other cases, the amount is to be transferred to the Investor Education Fund
maintained by each mutual fund.

Correct Answer 8 1000

Answer Bonus Ratio 1 : 5

Explanation Which means for every 5 units, 1 bonus unit will be alloted.
So for 5000 units : 1000 more units will be allotted
 NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST

Question 9 An investor who has a long term view and is looking for capital
appreciation and also has high risk tolerance should opt for investments
in ___________.
(a) Gold
(b) Equities
(c) Fixed Deposits
(d) High interest bearing junk bonds

Question 10 Debt-oriented, close-ended / interval, schemes /plans need to disclose their

portfolio in their website every month, by the _____ working day of the
succeeding month.
(a) 3rd
(b) 10th
(c) 12th
(d) 15th

Correct Answer 9 Equities

Correct Answer 81 3rd

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 NISM SERIES V A
MUTUAL FUND DISTRIBUTORS CERTIFICATION
DEMO TEST