Mutual Fund Management Set 4

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 4

Q1 | The difference between an international and a global fund is
  • global funds invest in both U.S. firms and those of other countries wherever International funds focus on firms outside the United States.
  • International funds invest in U.S. firms and those of other countries while global funds invest only in foreign firms.
  • international funds in Treasury securities but no U.S. firms while global funds invest in both.
  • there is no difference except in name.
Answer: global funds invest in both U.S. firms and those of other countries wherever International funds focus on firms outside the United States.
Q2 | Which of the following is not true of global and international bond funds?
  • They may be subject to interest rate risk.
  • They may be subject to exchange rate risk.
  • Their expenses may be higher than those of domestic bond funds.
  • They are especially attractive to investors in a high tax bracket.
Answer: They are especially attractive to investors in a high tax bracket.
Q3 | High yield (junk-bond funds focus on relatively risky bonds issued by firms that are subject to
  • default risk
  • interest rate risk
  • exchange risk
  • management risk
Answer: default risk
Q4 | International bond funds
  • focus on bonds interest by non-U.S. firms or governments.
  • may hold bonds that offer a higher yield then the U.S. bound.
  • are subject to exchange rate risk.
  • All of the above correct.
Answer: All of the above correct.
Q5 | _______ mutual funds invest in both foreign bonds and U.S. bonds.
  • International bonds
  • Index
  • Treasury bond
  • Global bond
Answer: Global bond
Q6 | Technology funds focus on technology-based firms. Which of the following statements regarding thosefirms is not true?
  • Many of those firms are relatively young.
  • They have a low degree of risk.
  • They have the potential for a high return.
  • They do not have a consistent record of strong performance.
Answer: They have a low degree of risk.
Q7 | Existing shares of closed-ended mutual fund companies are purchased
  • from the investments company directly.
  • from the investment company through a broker.
  • from other investors in the stock market.
  • from a bank.
Answer: from other investors in the stock market.
Q8 | In calculation the net assets value (NAV) which of the following is true?
  • Dividends are subtracted and expenses added
  • Interest is subtracted and expenses are added.
  • dividends are added and expenses are subtracted
  • Interest and other expenses are not included
Answer: dividends are added and expenses are subtracted
Q9 | To calculate the NAV, the market value of the portfolio liabilities is the dividend by the ______ to arriveat a per-share basis.
  • original number of shares
  • share currently issued by the fund
  • maximum shear to be issued
  • average number of shares incomparable funds.
Answer: share currently issued by the fund
Q10 | An open-ended mutual fund may do all of the following except
  • sell shares directly to investors.
  • charge a fee to buy but not sell shares.
  • repurchase shares from investors who want to sell their shares.
  • have its shares traded on a New York Stock Exchange.
Answer: have its shares traded on a New York Stock Exchange.
Q11 | The amount by which a close-ended fund's share price in the secondary market is above the fund's NAVis called the
  • market value
  • premium
  • discount
  • par value
Answer: premium
Q12 | ______ is a tax that is imposed by the government on companies based on dividend paid to a company'sinvestors.
  • dividend distribution tax
  • return on investment tax
  • goods and services tax
  • corporate tax
Answer: dividend distribution tax
Q13 | All dividends in Equity & Equity Oriented Funds will be taxed at _____ from 2018.
  • 5%
  • 10%
  • exempt up to 10%
  • not taxable at all
Answer: 10%
Q14 | Sponsor must hold at least _______% of the AMCs networth.
  • 30%
  • 40%
  • 50%
  • 60%
Answer: 40%
Q15 | AMCs net worth has to be at least __________
  • 5 Crore
  • 7 Crore
  • 10 Crore
  • 12 Crore
Answer: 10 Crore
Q16 | At least _____ % of the AMC directors Should be independent .
  • 30
  • 40
  • 50
  • 60
Answer: 50
Q17 | The AMC and the Trustees enter into an _____ Agreement.
  • Investment Management
  • Memorandum of Association
  • Legal
  • None of the above
Answer: Investment Management
Q18 | If ______ of unit holders approve , The service of the AMC can be terminated.
  • 50%
  • 75%
  • 60%
  • 40%
Answer: 75%
Q19 | Scheme take over do not result in merger of ______.
  • Trusts
  • AMC
  • AMFI
  • All of the above
Answer: AMC
Q20 | Any grievance against the AMC can be addressed to _______
  • AMFI
  • DCA
  • Trustees
  • AMF
Answer: DCA
Q21 | The UTI is governed by _________.
  • UTI Act
  • Company Act
  • Partnership Act
  • HUF Act
Answer: UTI Act
Q22 | Listed mutual funds have to abide by __________ of the stock exchanges.
  • Listing Regulations
  • Legal
  • Internal
  • None of the above
Answer: Listing Regulations
Q23 | The offer document of an open ended fund is valid for ______ years.
  • 1
  • 2
  • 3
  • 2.5
Answer: 2
Q24 | If equity markets move up, P/E tatio will move ________.
  • Up
  • Down
  • No change
  • None of the above
Answer: Up
Q25 | If equity markets move down, dividend yield will move ________.
  • Up
  • Down
  • Sable
  • None of the above
Answer: Up
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