NISM VA Mutual Fund Mock Test 6 (50 Exam level Questions)

1. An investor observes that during a period of high inflation and rising policy rates, his bond portfolio has declined in value despite holding high-quality securities. He is confused as there is no default risk involved. What is the most appropriate explanation?

2. True or False: Nominal return of an investment can be misleading if inflation is significantly high during the same period.

3. An investor wants to protect purchasing power over long-term while accepting short-term volatility. Which asset class combination is most suitable?

4. A conservative investor shifts funds from equity to debt after market correction fearing further decline. What behavioral bias is reflected?

5. An investor with limited capital wants exposure to diversified portfolio including equity, debt, and money market instruments managed by professionals. Which feature of mutual funds directly addresses this need?

6. True or False: Mutual funds eliminate all types of investment risk through diversification.

7. An investor compares direct stock investing vs mutual funds and prefers mutual funds due to smaller ticket size and risk spreading. Which concept is he relying on?

8. In a mutual fund structure, who holds the property of the mutual fund in fiduciary capacity for investors?

9. True or False: AMC can act independently without oversight from trustees.

10. If a sponsor wants to exit mutual fund business, what is mandatory?

11. A mutual fund scheme advertisement highlights high past returns but does not disclose risk factors prominently. Which regulatory principle is violated?

12. An investor complains about delay in redemption proceeds beyond prescribed timeline. What is the likely regulatory consequence for AMC?

13. An investor reads a document that summarizes scheme details in simple language including risk, objective, and plans. Which document is this?

14. True or False: Investment objective of a scheme can be changed without investor approval.

15. An open-ended equity scheme introduces exit load of 1% if redeemed within 1 year. What is the main purpose?

16. A distributor recommends schemes purely based on commission rather than suitability. What principle is violated?

17. True or False: ARN is mandatory for mutual fund distributors.

18. An investor buys units at NAV ₹25 with entry load removed regime. Total investment ₹10,000. Units allotted = ?

19. A scheme has assets ₹120 crore, liabilities ₹20 crore, units 5 crore. NAV = ?

20. True or False: Expense ratio is deducted from scheme assets before calculating NAV.

21. An investor sells equity mutual fund units after 15 months with gains of ₹1.5 lakh. What tax implication applies?

22. True or False: Dividend from mutual funds is tax-free in hands of investors.

23. An investor updates bank details in mutual fund records to avoid fraud risk. Which service is being utilized?

24. True or False: KYC compliance is required before investing in mutual funds.

25. An investor uses SWP to withdraw ₹10,000 monthly from a fund. What is the impact?

26. A fund has high standard deviation but similar average return compared to peers. What does this indicate?

27. True or False: Beta greater than 1 indicates higher sensitivity to market movements.

28. A fund consistently beats benchmark over 5 years. What metric reflects this?

29. A fund has higher Sharpe ratio than peers. This implies:

30. A 30-year-old salaried investor plans retirement after 25 years. He chooses a fund solely based on last 1-year return ignoring volatility, consistency, and portfolio quality. After 3 years, he faces significant losses. What was the key mistake?

31. True or False: Past performance alone is sufficient to select a mutual fund.

32. An investor wants stable income with low risk and high liquidity. Which fund category suits best?

33. An investor prefers funds with lower portfolio turnover ratio. What is the likely benefit?

34. An investor diversifies across equity, debt, and gold to reduce risk. What principle is applied?

35. True or False: Mutual funds provide professional fund management services.

36. A distributor discloses commission and risk profile clearly before recommending scheme. Which principle is followed?

37. NAV rises from ₹10 to ₹12. Return % = ?

38. In case of Debt fund, LTCG applies after:

39. True or False: Nomination helps smooth transmission of units after investor death.

40. Systematic risk includes:

41. Benchmark helps in:

42. An investor evaluates funds based on Sharpe ratio, consistency, and portfolio quality. This approach is:

43. True or False: Exit load is charged at time of purchase.

44. ARN stands for:

45. If expense ratio increases, investor return:

46. Switching means:

47. True or False: Higher return always means lower risk.

48. Alpha positive indicates:

49. An investor compares two funds—one with consistent moderate returns and another with highly volatile but occasionally high returns. Being risk-averse, what should be the ideal choice?

50. A mutual fund primarily pools money to: