1. NISM Model Test Paper
NISM-Series-V-A: Mutual Fund Distributors Certification Examination
• Maximum Marks: 50
• Test Duration: 60 minutes
• Pass Marks: 25
NISM is mandated to implement certification examinations for professionals employed in various segments of.
[ 1 Marks ]
(a) Mutual Fund Market
(b) The Indian securities markets.
Q1
(c) Financial Markets
(d) Association of Mutual Funds in India (AMFI)
(e) I am not attempting the question
The examination seeks to create a common minimum knowledge benchmark for all persons involved in selling and
distributing mutual funds including:
A)• Individual Mutual Fund Distributors
B)• Employees of organizations engaged in sales and distribution of Mutual Funds
C)• Employees of Asset Management Companies specially persons engaged in sales and distribution of Mutual
Funds [ 1 Marks ]
Only A
Q2
Only B
Only C
All of the above
(e) I am not attempting the question
SEBI (Mutual Fund) Regulations, 1996 as amended till date define “mutual fund” as [ 1 Marks ]
(a) a trust established in the form of a fund to raise moneys through the sale of units to the public or a section of
the public under one or more schemes for investing in securities including money market instruments or gold or gold
related instruments or real estate assets.
(b) a fund established in the form of a trust to collect moneys through the purchase of units to the public or a
section of the public under one or more schemes for investing in securities including money market instruments or
gold or gold related instruments or real estate assets.
Q3
(c) a fund established in the form of a trust to raise moneys through the sale of units to the public or a section of
the public under one or more schemes for investing in securities including money market instruments or gold or gold
related instruments or real estate assets.
(d) a trust established in the form of a fund to raise moneys through the purchase of units to the public
undertakings or a section of the public undertakings under one or more schemes for investing in securities including
money market instruments or gold or gold related instruments or real estate assets.
(e) I am not attempting the question
Although the AMC manages the schemes, custody of the assets of the scheme (securities, gold, gold-related
Q4 instruments & real estate assets) is with a Custodian, who is appointed by the Trustees. [ 1 Marks ]

2. (a) TRUE
(b) FALSE
(c) I am not attempting the question
Interval funds combine features of both open-ended and close ended schemes. [ 1 Marks ]
(a) TRUE
Q5
(b) FALSE
(c) I am not attempting the question
The amount required to buy 100 units of a scheme having an entry load of 1.5% and NAV of Rs.20 is [ 1 Marks ]
(a) Rs.2000
(b) Rs.2015
Q6
(c) Rs.1975
(d) Rs.2030
(e) I am not attempting the question
Mr.SRK wants to invest in only treasury bills and government securities. He will invest in: [ 1 Marks ]
(a) Actively Managed Funds
(b) Diversified Funds
Q7
(c) Sector Funds
(d) Gilt Funds
(e) I am not attempting the question
_____________ linked to a host fund [ 1 Marks ]
(a)Foreign Investment Fund
(b) International funds
Q8
(c)Feeder Funds
(d) Normal Funds
(e) I am not attempting the question
___________ are the main people behind the mutual fund operation [ 1 Marks ]
(a) RTA
(b) AUM
Q9
(c) Custodian
(d) Sponsors
(e) I am not attempting the question
In order to perform the trusteeship role, either individuals may be appointed as trustees or a Trustee company may be
Q10 appointed. When individuals are appointed trustees, they are jointly referred to as Board of Trustees. A trustee
company functions through its COO [ 1 Marks ]

3. (a) TRUE
(b) FALSE
(c) I am not attempting the question
_________have a key role in selling suitable types of units to their clients i.e. the investors in the schemes [ 1 Marks ]
(a) Sponsors
(b) RTA
Q11
(c) Distributors
(d) Collecting Bankers
(e) I am not attempting the question
All RTAs need to register with ____ [ 1 Marks ]
(a) NISM
(b) NSE
Q12
(c) AMFI
(d) SEBI
(e) I am not attempting the question
Mr. Yogesh expected to retain the Units for at least 3 years. He is a investor in : [ 1 Marks ]
(a) DYS
(b) ELSS
Q13
(c) GF
(d) EI
(e) I am not attempting the question
A "glossary" of Defined Terms must be included in the offer document [ 1 Marks ]
(a) TRUE
(b) FALSE
Q14
(c) I am not attempting the question
Rama invested in debt securities where his interest rate depends on market line and Shayma invested in a variant of
debt schemes. In which type of Debt Fund they both actually invested: [ 1 Marks ]
(a) Rama in Gilt Funds & Shyama in Diversified Debt funds
Q15
(b) Both have invested in Diversified Debt Fund
(c) Rama in Floating Rate Funds & Shyama in Diversified Debt Funds
(d) Rama in Floating Rate Funds & Shyama in Money Market Schemes

4. (e) I am not attempting the question
BSE Sensex would buy only the shares that are part of the composition of the __________ [ 1 Marks ]
(a) Listed Securities
(b) SEBI Listed Securities
Q16
(c) NIFTY
(d) BSE
(e) I am not attempting the question
Sensex stands for [ 1 Marks ]
(a) Securities Index
(b) Sensitive Index
Q17
(c) SEBI Securities
(d) Sector Index
(e) I am not attempting the question
In India, mutual fund AUM is ____ of bank deposits. [ 1 Marks ]
(a) 51.2%
(b) 10%
Q18
(c) 15%
(d) 42%
(e) I am not attempting the question
ETFs are [ 1 Marks ]
(a) Exchange Tradable Funds
(b) Exchange & Traded Funds
Q19
(c) Exchange Traded Funds
(d) Exchange Trading Funds
(e) I am not attempting the question
At least ____ of the trustees / directors on the Board of the trustee company, would need to be independent trustees [
1 Marks ]
(a) 1/3
(b) 2/3
Q20
(c) 4
(d) 1
(e) I am not attempting the question

5. The appointment of an AMC can be terminated by a _______ of the trustees, or by ____ of the Unit-holders.
[ 1 Marks ]
(a) 75%,Majority
(b) Majority, Majority
Q21
(c) 75%,75%
(d) Majority,75%
(e) I am not attempting the question
Payment instruments against applications handed over to branches of the AMC or the RTA need to be banked with
the collecting bankers, so that the moneys are available for investment by the scheme. [ 1 Marks ]
(a) TRUE
Q22
(b) FALSE
(c) I am not attempting the question
Investors in a mutual fund scheme can recover the value of the moneys invested, from the mutual fund itself
[ 1 Marks ]
(a) TRUE
Q23
(b) FALSE
(c) I am not attempting the question
Assets under management (AUM) is looked at as a measure of success against the competition and consists of
growth/decline due to both capital appreciation/losses and new money inflow/outflow.[ 1 Marks ]
(a) TRUE
Q24
(b) FALSE
(c) I am not attempting the question
World’s Largest AUM is [ 1 Marks ]
(a) SBI Capitals
(b)Black Rock
Q25
(c) Allianz
(d) State Street Global
(e) I am not attempting the question
The options offered under a scheme allow investors to structure their investments in line with their liquidity
preference and tax position. [ 1 Marks ]
(a) TRUE
Q26
(b) FALSE
(c) I am not attempting the question
UTI was set up by the _____________ [ 1 Marks ]
Q27
(a) SEBI

6. (b) Mutual Fund Association
(c) RBI
(d) Parliament
(e) I am not attempting the question
In February 2003, the UTI Act was repealed and UTI was stripped of its Special legal status as a trust formed by an
Act of Parliament. The primary objective behind this was to: [ 1 Marks ]
(a) Re-Organise UTI
(b) Bring all mutal fund players on the same level
Q28
(c) To specify undertakings
(d) None of the above
(e) I am not attempting the question
The Alliance of PNB is with [ 1 Marks ]
(a) Sun F&C Mutual Fund
(b) Birla Sun Life
Q29
(c) Fidelity
(d) Principal Mutual Fund
(e) I am not attempting the question
Which is an Institutional Sponsor [ 1 Marks ]
(a) PNB MF
(b) SBI MF
Q30
(c) LIC MF
(d) HSBC MF
(e) I am not attempting the question
_______ arranges for the requisite offices and infrastructure, engages employees, provides for the requisite
software, handles advertising and sales promotion, and interacts with regulators and various service providers.
[ 1 Marks ]
(a) RTAs
Q31 (b) Sponsors
(c) Custodian
(d) AMC
(e) I am not attempting the question
The SEBI regulations provide that if the sponsor or its associates control 51% or more of the shares of a custodian,
or if 50% or more of the directors of a custodian represent the interest of the sponsor or its associates, then that
custodian cannot appointed for the mutual fund operation of the sponsor or its associate or subsidiary company.
Q32
[ 1 Marks ]
(a) TRUE

7. (b) FALSE
(c) I am not attempting the question
Managers of balanced funds can, however, shift this ratio one way or the other to take advantage of high interest
rates or stock market growth. [ 1 Marks ]
(a) TRUE
Q33
(b) FALSE
(c) I am not attempting the question
Income Securities focus on paying dividends as their top priority while de-emphasizing the growth in value of their
portfolios. [ 1 Marks ]
(a) TRUE
Q34
(b) FALSE
(c) I am not attempting the question
Mutual Fund industry is part of a well-regulated investment environment where the interests of the investors are
protected by the regulator. All funds are registered with AMFI and complete transparency is forced. [ 1 Marks ]
(a) TRUE
Q35
(b) FALSE
(c) I am not attempting the question
Closed-end Funds may also offer "buy-back of units" to the unit holders. In this case, the corpus of the Fund and its
outstanding units do get changed. [ 1 Marks ]
(a) TRUE
Q36
(b) FALSE
(c) I am not attempting the question
Deferred load is charged to the scheme over a period of time. [ 1 Marks ]
(a) TRUE
Q37
(b) FALSE
(c) I am not attempting the question
Profits arising out of sale of units by an investor within 12 months of purchase are categorized as short-term capital
gains, which are taxable. [ 1 Marks ]
(a) TRUE
Q38
(b) FALSE
(c) I am not attempting the question
Market capitalization of Mid-Cap companies is less than that of big, blue chip companies (less than Rs. 2500 crores
but more than Rs. 500 crores) and Small-Cap companies have market capitalization of less than Rs. 500 crores.
[ 1 Marks ]
Q39 (a) TRUE
(b) FALSE
(c) I am not attempting the question

8. MAGNUM BALANCED FUND is SBIs Hybrid Fund Scheme [ 1 Marks ]
(a) TRUE
Q40
(b) FALSE
(c) I am not attempting the question
Balanced funds generally have low volatility and are popular with investors seeking current income with growth
potential [ 1 Marks ]
(a) TRUE
Q41
(b) FALSE
(c) I am not attempting the question
Franklin India Prima Fund is a closed-ended Equity Fund [ 1 Marks ]
(a) TRUE
Q42
(b) FALSE
(c) I am not attempting the question
Asset Allocation Funds depends upon the skill of a fund manager in anticipating market trends. [ 1 Marks ]
(a) TRUE
Q43
(b) FALSE
(c) I am not attempting the question
Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the
total number of its outstanding shares in the market. [ 1 Marks ]
(a) TRUE
Q44
(b) FALSE
(c) I am not attempting the question
Investor has to pay investment management fees and fund distribution costs as a percentage of the value of his
investments (as long as he holds the units), irrespective of the performance of the fund. [ 1 Marks ]
(a) TRUE
Q45
(b) FALSE
(c) I am not attempting the question
As per the mandate, a minimum of 90% of investments by ELSS should be in equities at all times. [ 1 Marks ]
(a) TRUE
Q46
(b) FALSE
(c) I am not attempting the question
SBI TAX ADVANTAGE FUND - SERIES I ,is an ELSS Scheme [ 1 Marks ]
(a) TRUE
Q47
(b) FALSE
(c) I am not attempting the question

9. The biggest advantage offered by ETF is that they offer diversification, flexibility of holding a single share (tradable at
index linked prices) at the same time. [ 1 Marks ]
(a) TRUE
Q48
(b) FALSE
(c) I am not attempting the question
IPOs are related with Open –ended Schemes [ 1 Marks ]
(a) TRUE
Q49
(b) FALSE
(c) I am not attempting the question
The NAV of an open-end fund is calculated every day [ 1 Marks ]
(a) TRUE
Q50
(b) FALSE
(c) I am not attempting the question
QUESTIONS
THESE QUESTIONS COMPRISE OF 1st & 2nd CHAPTERS OF
NISM-Series-V- A: Mutual Fund Distributors Certification Examination
ISM-Series-
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