Mutual Fund Management Set 3

Bachelor of Financial Markets (B.F.M)

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This set of Mutual Fund Management Multiple Choice Questions & Answers (MCQs) focuses on Mutual Fund Management Set 3

Q1 | Open ended funds can be purchased and sold ………………….
  • Anytime during the day
  • Only at the beginning of the day
  • Only at the end of the day
  • Starting of the day
Answer: Only at the end of the day
Q2 | ……………………. is a facility where investor will invest a fixed amount in a mutual fund scheme atregular intervals.
  • SIP
  • SWP
  • STP
  • SRT
Answer: SIP
Q3 | …………….. allows an investor to withdraw a fixed amount of money periodically.
  • SIP
  • SWP
  • STP
  • SRT
Answer: SWP
Q4 | In …………….. STP investor transfers the profit from one fund and invests in the other.
  • Flexi
  • Capital Appreciation
  • Fixed
  • Net
Answer: Capital Appreciation
Q5 | ……………. is a facility provided by banks to investors in new fund offers (NFOs) of mutual funds.
  • ASBA
  • CASBA
  • MASBA
  • NASA
Answer: ASBA
Q6 | A ……………… ended scheme shall be wound upon the expiry of duration fixed in the scheme on theredemption of units.
  • Open
  • close
  • Old
  • New
Answer: close
Q7 | A mutual fund has a beginning balance of 100 million earns interest of 10 million, receives dividends of15 million, and has expenses of 5 million. If 10 million shares are outstanding, what is the NAV?
  • 10.5
  • 11
  • 12
  • 12.5
Answer: 12
Q8 | You invested 1,000 in a mutual fund with a 4% load when NAV was 20 per share. If you sell your sharesat a NAV of 20 per share, what is the return of your investment?
  • 14.80%
  • 15.20%
  • 12.50%
  • 10.80%
Answer: 15.20%
Q9 | If a mutual fund NAV Is 50 and its expense ratio is 2% what are the total expenses per share?
  • 2
  • 10
  • 1
  • 5
Answer: 1
Q10 | How much money would you need to purchase 400 shares of a mutual fund with a NAV of$55 per share and a 3% load?
  • $22,000
  • $21,450
  • $23,200
  • $22,660
Answer: $22,660
Q11 | Investors in high tax brackets will normally achieve higher performance by selecting a mutualfund that generates
  • long-term dividends
  • long-term capital gains
  • long-term stock dividends
  • short-term capital gains
Answer: long-term capital gains
Q12 | What would be the tax consequence of owning a mutual fund that made distributions of 600resulting from short-term capital gains and $800 resulting from long-term capital gain rate?
  • 420
  • 140
  • 300
  • 260
Answer: 260
Q13 | If a scheme has 45Cr units issued and has an FV of Rs. 10 and NAV is at 11.33, unitcapital(Rs.Cr) would be equal to
  • 500.85
  • 50.85
  • 950.85
  • 450
Answer: 50.85
Q14 | A scheme has average weekly net assets of Rs. 324 Cr and has annual expenses of Rs 3.24Cr, it'sexpenses ratio is
  • 1%
  • 10%
  • Can't say
  • Insufficient information
Answer: 1%
Q15 | For a scheme to be defined as an equal fund, it must have a minimum
  • 65% in Indian equities
  • 65% in equities
  • 51% Indian equities
  • 35% in Indian equities
Answer: 65% in equities
Q16 | Which of the following characteristics is not true of close-ended funds?
  • They can be load or no-load funds.
  • They do not repurchase shares from investors.
  • They are bought and sold on stock exchanges.
  • They may sell above or below NAV.
Answer: They can be load or no-load funds.
Q17 | Regarding load and no-load mutual funds,
  • Load funds usually outperform no-load funds
  • no-load funds perform at least as well as load funds even fees are ignored.
  • Two types of fund perform about the same considering the fees
  • Load funds may be bought directly, whereas no-load funds must be purchased through a broker.
Answer: no-load funds perform at least as well as load funds even fees are ignored.
Q18 | On average, actively managed mutual funds have an expenses ratio of about
  • 1.50%
  • 2.50%
  • 3%
  • 5%.
Answer: 1.50%
Q19 | The component of the expense ratio that includes a fee charged by some mutual funds to pay brokers is
  • A management fee
  • A 12b-1 fee
  • An administrative expense.
  • A referral fee.
Answer: A 12b-1 fee
Q20 | which of the following is a stock mutual fund?
  • Ginnie Mae fund
  • Growth fund
  • Municipal securities fund
  • Treasury securities find
Answer: Growth fund
Q21 | Which of the following stock mutual fund focus on medium-sized companies that are more establishedthan small-cap firms, but may have less growth potential?
  • Equity income funds
  • Sector funds
  • Mid-size capitalisation funds
  • Balance growth and income funds
Answer: Mid-size capitalisation funds
Q22 | Which of the following is not a reason why Index funds typically incur lower expenses than othermutual funds?
  • Index funds are not actively managed
  • There are no expenses for research
  • The portfolio is reversed infrequently, so the transaction cost is low.
  • The security and Exchange Commission set a limit on index fund expenses
Answer: The security and Exchange Commission set a limit on index fund expenses
Q23 | ______ funds are mutual funds that attempt to mirror the movements of the existing board marketindicators.
  • Internet
  • Stock
  • Index
  • International
Answer: Index
Q24 | Index funds incur _______ expenses and are ______ managed compared to other funds.
  • fewer; not actively
  • fewer; actively
  • more; not actively
  • more; actively
Answer: fewer; not actively
Q25 | Index funds offer tax advantages because they ______ In much trading and, therefore, _______ capitalgains.
  • engage; generate
  • do not engage; generate
  • engage; do not generate
  • do not engage; do not generate
Answer: do not engage; do not generate
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