NISM 5A

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NISM 5A Investment Knowledge Quiz

Test your knowledge of investment principles and practices with our NISM 5A quiz! This quiz is designed to assess your understanding of mutual funds, risk management, and regulatory frameworks.

Key Features:

Multiple choice questions
Immediate feedback on your answers
Ideal for both beginners and experienced investors

50 Questions12 MinutesCreated by InvestingGuru421

The nomination made in a folio applies to all the investments held under the folio.

True

False

The nominee can be an individual, including minors and NRIs, central and state governments and local authorities.

True

False

Redemption requests for units held in demat mode have to be submitted to the depository or through the stock exchange platform.

True

False

Investors can register up to ten bank accounts with a mutual fund for individual investors and 5 for non-individuals.

True

False

The investor also has the option to convert the demat units into physical form. This process is called re-materialisation.

True

False

Variance measures the fluctuation in periodic returns of a scheme, as compared to its own average return.

True

False

Standard Deviation is equal to the square root of variance.

True

False

Non -systematic risk is measured by its Beta.

True

False

Government securities do not have a credit risk.

True

False

Better the credit rating of an issuer, higer is the spread

True

False

To ensure fair treatment to all investors in case of a credit event and to deal with the liquidity risk, in December 2018, SEBI permitted creation of segregated portfolio of debt and money market instruments by mutual funds schemes

True

False

Creation of segregated portfolio was made optional and at the discretion of the AMC.

True

False

Segregated portfolio shall be effective from the day of credit event.

True

False

AMC will charge investment and advisory fees on the segregated portfolio

True

False

NAV of both segregated and main portfolio shall be disclosed from the day of the credit event.

True

False

Choice of benchmark is simplest for an index fund.

True

False

The benchmark for a scheme is decided by the AMC in consultation with the trustees.

True

False

AMCs can change the benchmark in consultation with the trustees

True

False

Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s MIBOR or CRISIL Liquid Fund Index is suitable.

True

False

Gold price would be the benchmark Gold ETF

True

False

Which amongst the following is a measure of risk-adjusted returns of mutual fund scheme?

Standard deviation

Beta

Variance

Sharpe ratio

The fund factsheets are an official source of information of the fund’s objective, performance, portfolio and basic investment requirements issued by the fund house each month.

True

False

Tracking error is a measure of the consistency of the out-performance of the fund manager relative to the benchmark.

True

False

Alpha - The difference between a scheme’s actual return and its optimal return is its Alpha—a measure of the fund manager’s performance.

True

False

Higher the Treynor Ratio, better the scheme is considered to be

True

False

Capital gains are classified into two categories: short term capital gains and long-term capital gains.

True

False

Equity mutual funds were exempt from long term capital gains tax earlier,now taxable

True

False

Dividend income from mutual funds used to be tax-free in the hands of the investor

True

False

STT is applicable on purchase of units of an equity scheme.

True

False

GST on all the fees other than investment and advisory fees shall be charged to the scheme within the maximum limit of TER.

True

False

The commission payable to the distributors of mutual funds may be subject to GST

True

False

Redemption from which of the following mutual fund schemes would attract Securities Transaction Tax (STT) for an investor?

Multi-cap mutual fund

Government Securities Fund

Liquid Fund

Overnight Fund

In the non-equity-oriented funds, the rate of long-term capital gains tax is 20 percent with indexation

True

False

AMC prepares the Scheme Information Document for the NFO.

True

False

The Registrars and Transfer Agents (RTAs) maintain investor records.

True

False

The auditor appointed to audit the mutual fund scheme accounts needs to be different from the auditor of the AMC.

True

False

Scheme auditor is appointed by the Trustees, the AMC auditor is appointed by the AMC.

True

False

The appointment of RTA is done by the AMC.

True

False

It is not compulsory to appoint an RTA. The AMC can choose to handle this activity in-house

True

False

The objectives of AMFI are: To define and maintain high professional and ethical standards in all areas of operation of the mutual fund industry.

True

False

A major role of AMFI involves the registration of mutual fund distributors, by allotting them AMFI Registration Number (ARM), which is mandatory for becoming a mutual fund distributor.

True

False

Reserve Bank of India (RBI) that regulates the banking system

True

False

Pension Fund Regulatory and Development Authority of India (PFRDA) that regulates the pension market.

True

False

SEBI issued the mutual fund regulations in 1997 in the form of SEBI (Mutual Funds) Regulations, 1997.

True

False

The Mutual Fund will buy and sell securities on delivery basis.

True

False

In standard warning, both the visual and the voice-over reiteration containing 18 words running for at least 8 seconds may be considered as clear and understandable.

True

False

Advertisement issued by mutual funds shall be in terms of Sixth Schedule of SEBI (Mutual Fund) Regulations, 1996

True

False

Performance advertisement of mutual fund schemes shall be provided in terms of CAGR for the past 1 year, 3 years, 5 years and since inception.

True

False

AMCs shall ensure that a true and fair view of the performance of the fund manager is communicated by providing additional disclosures if required.

True

False

What minimum percentage of the mutual fund scheme corpus must be invested in equity and related instruments in the case of Equity Linked Savings Schemes (ELSS)?

65 percent

70 percent

80 percent

100 percent

NISM 5A

NISM 5A Investment Knowledge Quiz

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