NISM MF Mock Test 10 (Series VA, Advanced Level – 50 Questions)

1. An investor shifts his allocation from equity to long-duration debt funds expecting interest rates to fall over the next year. What is the primary reasoning behind this strategy?

2. An investor earns 12% return on an investment while inflation during the same period is 10%. What is the approximate real return?

3. An investor diversifies across multiple asset classes but still faces losses during a global financial crisis. What does this indicate?

4. An investor refuses to sell a losing investment hoping it will recover, despite negative fundamentals. Which behavioral bias is reflected?

5. A retail investor with limited funds wants to invest in a diversified portfolio managed by professionals. Which mutual fund feature supports this need?

6. An investor believes mutual funds eliminate all risks through diversification. Evaluate this statement.

7. An investor prefers mutual funds over direct stock investing due to lack of expertise. Which benefit is he primarily relying on?

8. Which entity in a mutual fund ensures that the AMC operates within regulatory guidelines and protects investor interests?

9. Before launching a new scheme, which entity must ensure that all regulatory requirements are fulfilled?

10. The entity responsible for setting up a mutual fund is known as:

11. A mutual fund advertisement highlights high returns prominently but does not equally emphasize associated risks. Which principle is violated?

12. An AMC delays redemption beyond prescribed timelines. What is the likely consequence?

13. Providing all material information including risks and objectives to investors is ensured by which principle?

14. Which document provides a summary of scheme details in a simplified format?

15. An AMC plans to change the fundamental attributes of a scheme. What must be ensured before implementation?

16. An investor redeems units within the exit load period. What is the impact?

17. A distributor recommends a high-risk fund to a low-risk investor. What issue does this represent?

18. An investor checks ARN before investing through a distributor. What does ARN confirm?

19. An investor invests ₹1,00,000 at NAV ₹50. How many units will he receive?

20. A scheme has assets ₹400 crore, liabilities ₹40 crore, and 18 crore units. What is NAV?

21. True or False: Expense ratio impacts returns by reducing NAV on a continuous basis.

22. An investor sells equity mutual fund units after 15 months with gains of ₹1.8 lakh. What tax implication applies?

23. Dividend received from mutual funds is treated as:

24. An investor forgets to update bank details and faces delay in redemption. Which service would have helped avoid this issue?

25. An investor opts for SWP to generate regular income. How does SWP work?

26. An investor completes KYC once and later invests in multiple mutual fund schemes across different AMCs without repeating the process. What does this indicate about the KYC system?

27. Two funds deliver similar average returns over 5 years, but Fund A shows significantly higher fluctuations in returns compared to Fund B. What should an investor infer?

28. A mutual fund has a beta of 1.5. If the market falls by 8%, what approximate decline can be expected in the fund?

29. An investor observes that a fund consistently generates returns above its benchmark over long periods. Which measure best reflects this capability?

30. A fund shows lower absolute returns than peers but has significantly lower volatility and a higher Sharpe ratio. What conclusion is most appropriate?

31. A fund performs very well during bull markets but sharply underperforms during market downturns. What characteristic does this indicate?

32. An investor finds that a fund’s returns closely match its benchmark with very little deviation over time. Which type of fund is this most likely to be?

33. An investor wants to compare two funds with different levels of risk. Which metric should be used to make a fair comparison?

34. An investor selects a mutual fund based only on its recent 1-year high returns without analyzing long-term performance or risk factors. What is the key issue with this approach?

35. An investor prefers funds with low portfolio turnover ratio. What advantage does this provide?

36. A long-term investor with high risk tolerance is choosing between large-cap and small-cap funds. Which is more suitable and why?

37. An investor invests only in fixed deposits and later realizes that his wealth has not grown in real terms due to rising inflation. What risk is he facing?

38. Mutual funds allow investors with small capital to invest in diversified portfolios. Which concept enables this benefit?

39. A distributor clearly explains product risks, charges, and suitability before recommending a scheme. Which principle is followed?

40. An investor observes NAV rising from ₹25 to ₹30 over a year. What is the approximate return?

41. An investor sells debt mutual fund units after holding them for 2 years. How will the gains be treated?

42. An investor registers a nominee in his mutual fund folio. What is the primary advantage?

43. An investor wants to understand the type of risk that cannot be eliminated through diversification. Which risk is this?

44. An investor compares fund performance against a benchmark index to evaluate effectiveness. What is this process called?

45. Exit load is charged by mutual funds primarily to:

46. ARN provided to distributors ensures:

47. If the expense ratio of a mutual fund increases while gross returns remain constant, what happens to investor returns?

48. True or False: Investments offering higher expected returns generally involve higher risk.

49. A fund consistently shows positive alpha over several years. What does this indicate?

50. An investor compares two funds—one offering stable returns and another offering highly volatile but occasionally high returns. Being risk-averse, which should he choose?