NISM Series VA Mock Test 1 for Mutual Fund Distributors Examination
NISM Series VA Mock Test 1 for Mutual Fund Distributors Examination: The NISM Series VA Exam seeks to create a common minimum knowledge benchmark for all persons involved in selling and distributing mutual funds. Following is NISM V-A Mock Test with Answers and explanation. In this test there are 30 Multiple Choice Questions (MCQs). There is No Negative marking.
NISM Series VA Mock Test 1 for Mutual Fund Distributors Examination
Q 1. Mutual Fund agents/distributors in India required to pass an examination to qualify to sell Mutual Fund Units. The examination is conducted by
[a] Mutual Fund AMC
[b] AMFI
[c] SEBI
[d] NISM
Show Answer
Correct Answer: [d] NISM
Q 2. When interest rates rise, bond price
[a] falls
[b] also rise
[c] dose not affect
[d] either rises or falls
Show Answer
Correct Answer: [a] falls
Notes: When interest rates rise the existing bond price decreases.
Q 3. Risk adjusted returns are measured by…..
[a] Standard Deviation
[b] Sharpe Ratio
[c] Treynor Ratio
[d] B & C both
Show Answer
Correct Answer: [d] b & c both
Q 4. What is the full form of SEBI?
[a] Share Equity Benchmark Index
[b] Securities and Exchange Board of India
[c] Share Equity Balanced Index
[d] None of the above
Show Answer
Correct Answer: [b] Securities and Exchange Board of India
Q 5. A close-ended mutual fund has a fixed:
[a] NAV
[b] Dividend
[c] Fund Size
[d] CAGR
Show Answer
Correct Answer: [c] Fund Size
Notes:
Q 6. Trail commission means paying
[a] No commission
[b] Full entire commission upfront
[c] The entire commission is paid after two years
[d] Part of commission up front and balance in phases
Show Answer
Correct Answer: [d] Part of commission up front and balance in phases
Q 7. Equity investment through SIP can be suggested for investor looking for
[a] Long term growth
[b] Short term growth
[c] Portfolio re-balancing
[d] Tax benefits
Show Answer
Correct Answer: [a] Long term growth
Read Also:- NISM Mutual Fund Distributor Mock Test on Scheme Related Information
Q 8. Systematic Risk is/are
[a] The risks that impact the entire economy
[b] The risk of IT system failure
[c] The company specific risks
[d] None of the above
Show Answer
Correct Answer: [a] The risks that impact the entire economy
Q 9. Financial Planning Involves
[a] Helping client to select the best stock
[b] Advising client to invest only in secured investments
[c] Assessing the clients financial objective/ requirement
[d] None of the above
Show Answer
Correct Answer: [c] Assessing the clients financial objective/ requirement
Q 10. When price of a equity share goes up, the value of it’s future contract will
[a] increase
[b] decrease
[c] remain same
[d] None of the above
Show Answer
Correct Answer: [a] increase
Q 11. Which of the following is physical asset?
[a] Real Estate
[b] Gold Future
[c] Gold Fund
[d] All of the above
Show Answer
Correct Answer: [a] Real Estate
Q 12. Agents are compensated by mutual funds through
[a] salary
[b] commission
[c] mutual fund units
[d] None of the above
Show Answer
Correct Answer: [b] commission
Q 13. Which of the following line(s) is/are part of any marketing communication by Mutual Fund companies?
[a] Mutual Funds are risk free.
[b] Mutual Funds are suitable for your financial objective.
[c] Mutual fund investments are subject to market risks. Please read the scheme related documents carefully before investing.
[d] All of the above
Show Answer
Correct Answer: [c] Mutual fund investments are subject to market risks. Please read the scheme related documents carefully before investing.
Q 14. Bank owned mutual fund are regulated by –
[a] RBI
[b] Bank
[c] SEBI
[d] AMFI
Show Answer
Correct Answer: [c] SEBI
Q 15. Which of the following is not a reason for investor to prefer Mutual Fund over Bank Fixed Deposit (FD)?
[a] Tax Benefit
[b] Deposit Insurance
[c] Investment Convenience
[d] Capital Gains
Show Answer
Correct Answer: [b] Deposit Insurance
Notes: Professional management, diversification, investment convenience, transparency, liquidity, tax benefits are the benefits of mutual fund investments.
Q 16. Who appoints AMC?
[a] Custodian
[b] The trustees
[c] R&T
[d] Distributors
Show Answer
Correct Answer: [b] The trustees
Q 17. Value stocks are those stocks which
[a] are currently under valued.
[b] have high growth momentum.
[c] pay high dividend.
[d] None of the above
Show Answer
Correct Answer: [a] are currently under valued.
Read Also:- Practice Questions for NISM Series VA Exam on Risk, Return and Performance of Funds
Q 18. In order to be eligible to sell mutual funds, which of the following is compulsory?
[a] NISM Certification
[b] Know Your Distributor Requirements
[c] Obtaining AMFI Registration Number
[d] All of the above
Show Answer
Correct Answer: [d] All of the above
Q 19. What is the current rate of Entry load in Equity mutual fund scheme?
[a] No Entry load
[b] 1%
[c] 1.5%
[d] 2%
Show Answer
Correct Answer: [a] No Entry load
Q 20. Following is/are the advantage of Mutual Fund for investors.
[a] Professional Management
[b] Economies of Scale
[c] Liquidity
[d] All of the above
Show Answer
Correct Answer: [d] All of the above
Notes: Professional management, diversification, investment convenience, transparency, liquidity, tax benefits are the benefits of mutual fund investments.
Q 21. Which one is wrong?
[a] SIP – Systematic Income Plan
[b] SWP – Systematic Withdrawal Plan
[c] STP – Systematic Transfer Plan
[d] None of the above
Show Answer
Correct Answer: [a] SIP – Systematic Income Plan
Q 22. SCORES stands for
[a] Small Cap Residue
[b] Small Company of Real Estate
[c] SEBI Complaint Redress System
[d] None of the above
Show Answer
Correct Answer: [c] SEBI Complaint Redress System
Q 23. In case of Mutual Fund, SEBI does not approve or disapprove the Scheme Related Documents. However it gives its observation. State whether True or False.
[a] True
[b] False
Show Answer
Correct Answer: [a] True
Q 24. Index funds are –
[a] Active fund
[b] Passive fund
[c] Both a & b
[d] None of the above
Show Answer
Correct Answer: [b] Passive fund
Q 25. Arbitrage fund are equity fund. State whether True or False.
[a] True
[b] False
Show Answer
Correct Answer: [a] True
Q 26. Sponsor of a mutual fund can be compared to –
[a] Director of company
[b] Employee of company
[c] CEO of company
[d] Promoter of company
Show Answer
Correct Answer: [d] Promoter of company
Q 27. Prior approval of SEBI needs to be taken before a person is appointed as trustee. State whether True or False.
[a] True
[b] False
Show Answer
Correct Answer: [a] True
Q 28. Incase of a mutual fund investment application by a Minor, whose KYC needs to be completed?
[a] Guardian
[b] Minor
[c] Any family member of the minor
[d] No KYC is needed
Show Answer
Correct Answer: [c] Mutual fund investments are subject to market risks. Please read the scheme related documents carefully before investing.
Q 29. Model portfolio should be recommended based on commission income possibility for distributor. State whether True or False.
[a] True
[b] False
Show Answer
Correct Answer: [b] False
Q 30. What is the name of asset allocation strategy, if it is fixed @ 50%?
[a] Tactic allocation
[b] Strategic allocation
[c] Both a & b
[d] None of the above
Show Answer
Correct Answer: [b] Strategic allocation
Read Also:- NISM Series VA Mock Test – Mutual Fund Distributors Mock Test
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