Deck 7: Mutual Fund Investment: Understanding Risks, Returns, and Regulations

Question 1

A …………… risk in a mutual fund refers to a situation when the issuer of a stock is unable to make timely payment of interest and principal to the investors.

A)Business
B)Credit
C)Capital
D)Scheme

Answer 1

Credit

Question 2

…………….. risk refers to the investor losing the money invested in mutual funds.

A)Business
B)Credit
C)Capital
D)Scheme

Answer 2

Credit

Question 3

…………….. risk refers to a risk that affects the entire country or a particular region or a certain industry.

A)Market
B)Credit
C)Capital
D)Scheme

Answer 3

Market

Question 4

……………… risk refers to a risk when there is political changes or change in investment policy of the government.

A)Market
B)Credit
C)Political
D)Scheme

Question 5

……………………. Ratio determines how the return of the scheme has compensated and investor for the risk he has taken.

A)Treynor
B)Sharpe
C)Sortino
D)Information

Question 6

The risk of losing money invested in mutual funds is called …………

A)Capital risk
B)scheme risk
C)credit risk
D)market risk

Question 7

……………….. ratio is a measure of the risk-adjusted return of a financial security or asset or portfolio.

A)Treynor
B)Sharpe
C)Sortino
D)Information

Question 8

Returns from non-equity funds are treated as long term capital gains if investments are held for more than ……………….

A)4 years
B)2 years
C)3 years
D)5 years

Question 9

NAV is declared everyday by deducting ……………. expenses

A)Recurring
B)Transaction
C)Exit load
D)Entry load

Question 10

……………….. ratio is the percentage of total assets that are spent to run a mutual fund

A)Treynor
B)Sharpe
C)Expense
D)Information

Question 11

…………. provides in detail scheme wise information about income and expenditure of mutual fund.

A)Balance Sheet
B)Revenue Statement
C)Cash Flow Statement
D)Fund Flow Statement

Question 12

The returns earned from mutual funds are taxed under the head ……………..

A)Income from House Property
B)Salary Income
C)Income from Capital gains
D)Income from other sources

Question 13

When a security is not traded on any recognized stock exchange for a period of …. days prior to the valuation date, the scrip must be treated as a "non-traded "security.

A)30 days
B)40 days
C)45 days
D)60 days

Question 14

………….. ratio is the percentage of total assets that are spent to run a mutual fund.

A)expense
B)income
C)Profit
D)Turnover

Question 15

Equity related schemes are ………….. risky when compared to debt debt schemes.

A)less
B)equally
C)more
D)Cannot say

Question 16

The accounting year for mutual funds ends on ……… of each year.

A)31st December
B)31st March
C)30th September
D)1st April

Question 17

……………….. of a mutual fund is the price at which units are bought or sold by investor.

A)CP
B)SP
C)NAV
D)NPV

Question 18

In ………………………. Investors buy shares of Companies who have announced bonus issues, and subsequently sell the original holding at a loss once the stock becomes ex-bonus.

A)Dividend stripping
B)Bonus stripping
C)Capital stripping
D)Asset stripping

Question 19

……………. is a measure of the volatility of a particular fund in comparison to the market as a whole

A)Beta
B)R-squared
C)Standard deviation
D)Alpha

Question 20

……………….. measures the dispersion in return.

A)Beta
B)R-squared
C)Standard deviation
D)Alpha

Question 21

CAGR stands for …………………

A)Calculated Annual Growth Rate
B)Compounded Annual Growth Rate
C)Changed Annual Growth Rate
D)Changed Annual Grown Rate

Question 22

………………… are simply the annual gains that an investment has earned over a specific period of time.

A)Annualized Return
B)Absolute Return
C)Holding period return
D)None of the above

Question 23

The performance of a scheme is reflected in its ……………..

A)Net asset value
B)Face Value
C)NPV
D)AMC

Question 24

…………………. is a myth about Mutual Fund Investment in India.

A)Small amount is needed to invest in Mutual Funds
B)Higher NAV is better
C)Demat account is compulsory to invest in Mutual funds
D)Big amount is needed to invest in Mutual Funds

Question 25

Abridged version of OD is called …………..

A)OD
B)NFO
C)KIM
D)CD

Question 26

--------------------- is a supplementary document that contains additional information of the fund.

A)SID
B)SAI
C)KIM
D)OD

Question 27

……………. approve the contents of the Offer document

A)AMC
B)Trustee
C)Custodian
D)Sponsor