NISM FINAL TEST
NISM Final Test on Mutual Funds
Test your knowledge of mutual funds and become more informed about this essential investment vehicle. This quiz covers various aspects of mutual funds, including transactions, nominations, and systematic investments. Perfect for individuals aiming to deepen their understanding of financial products!
- 30 multiple choice questions
- Score each question accurately
- Understand critical investment concepts
Transmission is the process to transfer mutual fund units in case of the demise of the unit holder
True
False
Mutual Fund units may be offered as collateral for various types of loans
True
False
Once lien is marked, the units can be redeemed by the investor/ borrower without a no objection certificate (NOC) issued by the lender.
True
False
The rights in the units will rest in the Nominee(s) only upon death of all unit holders.
True
False
Nomination is available for individual investors only.
True
False
The PoA registration and cancellation will be reflected on the account statement as a non-financial transaction.
True
False
Investor can register the power of attorney (PoA) either at the time of opening a fresh mutual fund folio or in his existing mutual fund folio.
True
False
Investors need to compulsorily provide their PAN information in their mutual fund folios to be able to redeem their investments.
True
False
The normal practice is for the AMC to do a test transaction of Re. 1/- to validate the bank details.
True
False
As per SEBI regulations, dividend (IDCW) and redemptions are payable only to the investor’s bank accounts registered with RT
True
False
The R&T agent links the information given in the application to the folio allotted to the investor.
True
False
RTA has a significant role in Commission payment to distributors.
True
False
RTA determine if a transaction sourced from T-30 or B-30 locations based on pin codes
True
False
STP is used either as a variation of SIP or to periodically book profits.
True
False
SWP is usually used by retired persons to get a regular income.
True
False
Unit holders cannot redeem or purchase units at the Applicable NAV on the respective SWP/ STP dates.
True
False
AMCs may or may not charge loads to switch transactions
True
False
Switch transactions always have two legs-Redemption and purchase
True
False
Switch transaction is subject to long term / short term capital gains in the hands of the investor based on holding period and type of scheme.
True
False
The systematic transactions are executed at the applicable NAV
True
False
A switch saves both time and effort for an investor.
True
False
Investors cannot also get a consolidated statement of account for all family members having common email ID.
True
False
Consolidation of account statements are done on the basis of PAN.
True
False
The unitholder may request for a physical account statement by writing/calling the AMC/ISC/RTA.
True
False
Mutual funds also provide SoAs to unit holders within 5 working days, without any charges
True
False
In case of systematic transactions, mutual funds dispatch the SoAs to the unit holders once every quarter
True
False
Statement of Accounts (SoA) is a proof of investment for the investor
True
False
Exit load has the effect of reducing the redemption price for the investor.
True
False
Investors cannot redeem all or part of the units in a folio
True
False
Mutual fund investors are required to indicate in the application form, their preference for receiving redemption proceeds.
True
False
Redemption cheques drawn are payable to the first holder in a folio
True
False
In case of closed-end funds, redemption of units happens only on the maturity date of the scheme.
True
False
Mutual fund investors can nominate someone to receive the investment proceeds in the event of their death
True
False
A Power of Attorney holder can make a nomination.
True
False
PoA holders are also authorised to change the nomination details in an investor’s folio.
True
False
The grantor cannot continue to operate the account even after giving a PoA.
True
False
Minors can enter into valid contracts
True
False
SEBI has also mandated an In Person Verification (IPV) of the client to be conducted by the intermediary with whom the KYC is being done.
True
False
SEBI has allowed Aadhaar based KYC to be used for MF investments, for the convenience of investors.
True
False
The financial transactions of minors are conducted by their guardian on their behalf.
True
False
All joint holders’ signatures are captured in the R&T system irrespective of the mode of operation.
True
False
All valid transactions should carry the signature of the investor.
True
False
An NRI can invest in mutual funds only from an NRE bank account.
True
False
Indian PAN is not necessary for investments by an NRI
True
False
OCBs are currently prohibited from investing in Indian mutual funds.
True
False
Unless specifically mentioned as non-resident, all individual investors are assumed to be resident.
True
False
In India, the Central Board of Direct Taxes (CBDT) is the nodal agency for all tax related compliance's and exchange of information between governments.
True
False
The RTA shall provide all relevant information in the necessary format to CBDT
True
False
The Foreign Account Tax Compliance Act (FATCA) is a US law that aims to combat tax evasion by US persons opening accounts offshore.
True
False
The STT amount must be shown separately in the Statement of Account issued to the investor.
True
False
For non-resident Indians (NRIs), TDS shall be at 10 percent of the dividend amount.
True
False
AMC's maintain detailed records of all transactions of the customers, they help in determining the applicability of TDS.
True
False
Earlier, dividends were tax free in the hands of the investor
True
False
The day of the transaction matters because markets and mutual funds do not work every day.
True
False
The time stamping guidelines defined by SEBI
True
False
All financial transactions are processed in the R&T system as per the applicable NAV according to the recorded time stamp on the document.
True
False
Transactions can be processed only the next day based on NAV of previous day.
True
False
The fund begins to declare its NAV from the next day of allotment.
True
False
In case of ELSS, the allotment must be done within 20 days.
True
False
The NFO for mutual funds (except ELSS) are open for a period not more than 15 days.
True
False
Real Estate Mutual Funds are only issued as open ended funds.
True
False
A Gold ETF buys physical gold which is preserved safely by the custodian
True
False
Currently, there are 5 Real Estate Mutual Funds in India.
True
False
FMP'S may have tenors ranging from 100 days to as much as 7 years
True
False
Gilt funds have a high degree of interest rate risk, depending on the maturity of the bonds
True
False
Gilt funds invest in government securities across maturities
True
False
Liquid funds have very short-term maturity, the risk of NAV fluctuation is high.
True
False
The application form is accompanied by the SAI.
True
False
Every Addendum has to be approved by SEBI
True
False
The Scheme related Documents are available free of cost at any of the Investor Service Centres (ISCs) or AMC offices.
True
False
Risk-o-meter that reflects the current risk of the scheme at a given point in time
True
False
Any change in the Risk-o-meter of a scheme should be communicated to its respective unit holders.
True
False
Close-ended funds run for a specific period
True
False
A mutual fund is created when investors pool their money
True
False
Mutual funds offer a range of products to investors
True
False
Investment Advisors (IA) earn commission or remuneration from the AMC.
True
False
Broker is responsible for calculation of AUM, NAV and determining applicable TER, commissions etc
True
False
Banks provide collection and payment services to mutual funds.
True
False
R&T agents are paid a fee for their services.
True
False
Custodians should be independent of the sponsor
True
False
AMCs should have a net worth of at least Rs. 55 crore at all times
True
False
The AMC is set up by the sponsor, and registered with AMFI.
True
False
The capital of the AMC is contributed by the sponsor and brokers.
True
False
AMCs specialise in investment management
True
False
The sponsor promotes the mutual fund and sets up the AMC
True
False
RTAs ensure timely communication of latest NAVs to the unit holders.
True
False
The PIN code Master and T-30/ Foreign City Master will be reviewed by AMFI for any changes or corrections in coordination with the RTAs once every year
True
False
T-30 and B-30 locations - Re-tagging needs to be done at T+15 business days
True
False
PIN code file for top 200 cities provided by AMFI
True
False
The application form is designed to capture all investor information for the first time
True
False
The transaction slip is designed to capture single transaction type requests
True
False
Most AMCs provide transaction slip as a counterfoil to the account statement sent to the investor.
True
False
For Liquid funds, RTA has to ensure that clear funds are available at the time of allotment of units
CTS is a project of the Reserve Bank of India (RBI), commenced in 2010, for faster clearing of cheques
True
False
NACH have same day presentation and settlement, including returns processing.
True
False
National Automated Clearing House (NACH) is a centralised clearing system launched by the National Payments Corporation of India (NPCI).
True
False
SEBI to investigate into cases of market manipulation and fraudulent and unfair trade practices.
True
False
SEBI makes routine inspections of the intermediaries functioning in the securities markets to ensure compliance with prescribed standards
True
False
SEBI is the apex regulator of the securities market and also responsible for its orderly growth and protection of the investors’ interests.
True
False
Exchange Traded Funds offer a low cost investment avenue to its investors.
True
False
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