Question Set 1D

Welcome to the Mutual Fund Distributor Demo Examination :
Get ready to test your knowledge of the NISM-Series-V-A: Mutual Fund Distributors Certification Examination.

1. For close-ended schemes, how do investors buy or sell units after the NFO?

Directly from the AMC.

Through a stock exchange.

Through the Scheme Re-opening process.

Through any broker.

2. How soon must the units be allotted or refunds made after the NFO closes?

10 business days.

3 business days.

5 business days.

7 business days.

3. What is the price at which investors buy units during an NFO called?

Ongoing Price.

Net Asset Value.

NFO Price.

Issue Price.

4. What type of plan has a lower Total Expense Ratio (TER)?

Regular Plan.

Direct Plan.

Dividend Reinvestment Plan.

Income Distribution Plan.

5. Which option is unavailable to investors who invest through a distributor?

Growth Option.

Direct Plan.

Income Distribution Plan.

Dividend Option.

6. What happens to the NAV when a dividend is paid out?

NAV increases.

NAV decreases.

NAV remains the same.

NAV is unaffected.

7. What does “ex-dividend NAV” refer to?

NAV before dividend payout.

NAV after dividend payout.

NAV before the NFO.

NAV after reinvestment.

8. In a growth option, how does the NAV change over time?

It decreases after dividends.

It remains stable.

It captures the portfolio gains.

It is unaffected by dividends.

9. Which of the following does NOT result in a change in the number of units held by the investor?

Dividend Pay-out Option.

Dividend Reinvestment Option.

Growth Option.

Switch-out Option.

10. What is taxed in a Dividend Pay-out option?

The capital gains only.

The dividend received.

The reinvested dividend.

The entire NAV.

11. Which plan allows investors to receive additional units on account of dividends?

Growth Plan.

Income Distribution cum Capital Withdrawal (Reinvestment) Plan.

Regular Plan.

Direct Plan.

12. What happens in the Reinvestment of Income Distribution option?

Dividend is paid to the investor.

NAV increases.

Additional units are allotted.

NAV remains the same.

13. Which plan provides the highest post-tax returns under normal market conditions?

Dividend Reinvestment Plan.

Growth Plan.

Regular Plan.

Direct Plan.

14. What is the cut-off timing related to in mutual fund transactions?

Time to file tax returns.

Time to buy/sell units.

Time to apply for an NFO.

Time to switch between schemes.

15. Which investor service is critical for maintaining trust in mutual funds?

High returns.

Standardization.

Flexibility.

Non-financial transactions.

16. What happens if an investor opts for a direct plan?

They receive lower returns.

They pay no distributor fees.

They must use a broker.

They get more units.

17. What does the AMC use to make investors aware of the NFO?

Social media.

Newspaper articles.

Advertising and public relations campaigns.

Direct calls to investors.

18. In an NFO, which document must be filed with SEBI?

Statement of Account.

Scheme Information Document (SID).

Fund Performance Report.

Investment Summary.

19. What does KYC stand for in mutual fund investing?

Know Your Commission.

Know Your Capital.

Know Your Customer.

Know Your Category.

20. When can investors re-purchase units in an open-ended scheme?

After the NFO Close Date.

On the Scheme Re-opening Date.

On the Scheme Closing Date.

Anytime after the NFO.

21. How are dividends reinvested in a Reinvestment Plan?

At the current NAV.

At the ex-dividend NAV.

At the original investment price.

At a special discount.

22. Which mutual fund plan option does not provide any dividend payouts?

Growth Option.

Dividend Pay-out Option.

Dividend Reinvestment Option.

Regular Plan.

23. What is a key feature of systematic transactions in mutual funds?

One-time investment.

Regular investment intervals.

Direct access to fund managers.

Full control over NAV.

24. When does the AMC launch events for intermediaries?

After the NFO closes.

Before filing documents with SEBI.

Before the NFO is launched.

After SEBI’s approval of the SID.

25. What is required to initiate financial transactions in mutual funds?

Statement of Account.

KYC compliance.

Trustee approval.

Board of Directors’ approval.

26. During an NFO, units are sold at which value?

Rs. 100.

Rs. 1.

Rs. 10.

Rs. 50.

27. How is the number of units bought in an NFO calculated?

Investment amount divided by Rs. 10.

Investment amount multiplied by Rs. 10.

Investment amount plus Rs. 10.

Investment amount minus Rs. 10.

28. Allotment of units is completed within how many business days after the closure of the NFO?

3 business days.

5 business days.

7 business days.

10 business days.

29. For investors with a demat account, units are credited within how many working days after allotment?

1 working day.

2 working days.

3 working days.

5 working days.

30. If an application is rejected, the refund is made within how many business days?

2 business days.

3 business days.

5 business days.

7 business days.

31. If the refund is delayed beyond 5 business days, what interest rate is paid to the investor?

5% per annum.

10% per annum.

12% per annum.

15% per annum.

32. Which type of investors requires RBI approval for allotment of units?

Resident Indian Investors.

NRIs.

FPIs (Foreign Portfolio Investors).

HUFs.

33. Investors in non-depository mode receive their account statement within how many business days after NFO closure?

2 business days.

3 business days.

5 business days.

7 business days.

34. The price at which units are sold in an ongoing offer of an open-end scheme is called the?

Face Value.

Sale Price.

Offer Price.

Redemption Price.

35. What happens to NAV in a 1:3 bonus issue?

NAV increases.

NAV remains unchanged.

NAV decreases proportionately.

NAV decreases by 50%.

36. The full allotment of units in an NFO depends on what condition?

Investor’s KYC.

Minimum subscription amount for the scheme.

Investor’s PAN.

Number of applicants.

37. When can a rights issue be meaningful for mutual fund investors?

When it offers dividend.

When it’s offered at a higher price.

It’s generally less meaningful for mutual funds.

When bonuses are issued.

38. In a bonus issue, what does the investor pay for the additional units?

Face value of the units.

NAV of the units.

Nothing.

Discounted price.

39. Which statement is issued monthly if a transaction occurs?

Bonus Statement.

Monthly Statement of Account.

Rights Issue Statement.

Annual Account Statement.

40. What is provided in a consolidated account statement (CAS)?

NAV only.

Transaction summary across all mutual funds.

Redemption status.

Tax statement.

41. If an email ID is registered with the AMC, how is the CAS sent?

Only via post.

Both post and email.

Only via email.

Courier.

42. Which category of people can invest in mutual funds as individual investors?

Companies.

Trustees.

Resident Indian adult individuals.

Foreign Portfolio Investors.

43. Who can invest on behalf of a minor in mutual funds?

Any adult relative.

Legal guardian or parent.

Financial advisor.

Only the minor.

44. NRIs can invest in mutual funds in which ways?

Only on a non-repatriable basis.

On both repatriable and non-repatriable basis.

Only through depository receipts.

Only in equity mutual funds.

45. Who are eligible as non-individual investors?

Partnership firms only.

Companies, banks, and registered societies.

Foreign nationals.

Only religious organizations.

46. What document is required for a minor’s investment?

Guardian’s PAN.

Birth certificate of the minor.

Proof of citizenship.

Guardian’s Aadhar.

47. If the mode of holding in a mutual fund folio is joint, can it be changed later?

Yes, at any time.

No, unless a holder dies.

Yes, if both holders agree.

No, never.

48. What additional details are required for foreign investors due to FATCA?

Only passport number.

Tax residency and associated tax ID number.

Bank account details.

Investment amount.

49. Units of mutual funds held in a demat form are:

Not transferable.

Partially transferable.

Fully transferable.

Transferable only to relatives.

50. Which of the following modes can be used for payment in a mutual fund purchase?

Gold coins.

Cash.

Demand draft or cheque.

Cryptocurrency.

51. Which statement is 1 regarding dividend payments in mutual funds?

Dividends are always paid monthly.

Investors can choose to receive dividends via cheque or direct credit.

Only NRIs can receive dividends.

Dividends are paid directly to the broker.

52. Who is identified across mutual funds for CAS purposes?

Email address.

Permanent Account Number (PAN).

Mobile number.

Bank account number.

53. Who can invest through the ASBA mode?

Minors.

NRIs.

Institutional investors only.

Any investor.

54. What happens if nomination details are not provided in a mutual fund application?

The application is rejected.

The mutual fund cannot proceed without a nomination.

The investor can provide a signed declaration opting out of nomination.

The mutual fund will assume the nominee is the investor’s family.

55. What is required to operate a mutual fund folio under a Power of Attorney (PoA)?

Attested copy of the PoA.

Only the PAN of the PoA holder.

Proof of residence.

56. What is required for the initial purchase of mutual fund units?

Only the investor’s name.

A completed application form with documentation and payment.

Only the payment.

An email confirmation.

57. Where can investors obtain mutual fund application forms?

Only from banks.

From AMCs, distributors, and Investor Service Centres (ISCs).

Only online.

From local post offices.

58. What is required for an existing investor to make additional purchases in the same mutual fund?

A new application form.

A transaction slip with the folio number.

Only a phone call.

No additional documentation.

59. What happens if the name of the holder in the folio does not match the application for additional investment?

The application is always approved.

The application may be rejected by the AMC.

The AMC automatically updates the name.

The application is put on hold.

60. What is the process called when an investor redeems units from one scheme and invests in another?

Switch.

Transfer.

Convert.

Withdraw.

61. What happens if the investment holding in a folio falls below the minimum limit after a repurchase?

The units are frozen.

The folio may be closed and all units repurchased.

The minimum limit is waived.

The AMC contacts the investor for confirmation.

62. Which of the following is not a mode of payment for mutual fund purchases?

Cash.

Internet banking.

SWIFT transfer.

Physical gold.

63. What is the function of the Two-Factor Authentication (2FA) mandated by SEBI?

mandated by SEBI?

Speeding up transactions.

Reducing the number of documents required.

Enhancing security for subscription and redemption transactions.

64. What facility allows the digital transfer of funds between bank accounts and is commonly used for mutual fund payments?

ECS.

NACH.

NEFT.

ATM.

65. Which digital payment medium provides the fastest interbank electronic fund transfer service?

NEFT.

IMPS.

RTGS.

SWIFT.

66. In what scenario is Real Time Gross Settlement (RTGS) typically used?

For instant, high-value transfers.

For international transfers.

For small daily transactions.

For purchasing stocks.

67. What document is required to redeem mutual fund units held in dematerialized form?

Cheque.

Redemption form.

Proof of address.

Tax return.

68. How are mutual fund units debited for dematerialized units?

Through the AMC directly.

Through the Depository Participant (DP).

By submitting a cheque.

By calling the mutual fund office.

69. What does NACH stand for?

National Automated Clearing House.

National Account Clearing Hub.

National Asset Clearing House.

National Audit Clearing Hub.

70. What is the advantage of NACH over ECS?

Slower settlement.

Higher transaction fees.

Faster presentation and settlement of transactions.

No digital transactions allowed.

71. What are the two types of NACH services?

NACH Credit and NACH Debit.

NACH Simple and NACH Complex.

NACH Digital and NACH Physical.

NACH Electronic and NACH Paper.

72. What is the primary benefit of Internet Banking for mutual fund transactions?

Lower fees.

24/7 accessibility.

No need for a folio number.

Faster repurchase.

73. What does SWIFT stand for?

Secure Wireless Internet Financial Transfers.

Society for Worldwide Interbank Financial Telecommunications.

Smart Web Instant Fund Transfer.

Speedy Wire International Fund Transfer.

74. What does FIFO stand for in mutual fund redemptions?

First-In-First-Out.

Funds-In-First-Order.

Financial Investment Fund Operation.

First Investment, Full Out.

75. Which payment method may take longer due to passing through multiple banks?

SWIFT transfer.

RTGS.

NACH.

IMPS.

76. Where should an investor submit a redemption request for non-demat units?

Depository Participant.

AMC’s Investor Service Centre.

Bank branch.

Stock exchange.

77. What type of transaction is NACH Debit used for?

Receiving dividends.

Making bulk payments like salaries.

Automating regular debits for bill payments.

International transactions.

78. Which system did NACH replace for repetitive transactions?

ECS.

RTGS.

NEFT.

SWIFT.

79. What risk is associated with digital payment mediums?

Transaction delays.

Higher fees.

Data theft.

Unrecorded payments.

80. What should be provided along with a bank transfer as proof of payment?

Photo ID.

Unique transaction reference number.

PAN card.

Receipt from the distributor.

81. What is the typical outcome if a folio falls below the required minimum after a repurchase?

The investor must deposit more money.

All remaining units are repurchased, and the folio is closed.

The folio is kept open with a zero balance.

The investor is fined.

82. In an open-ended mutual fund, how is the redemption price determined?

Based on the fund’s historical performance.

By a fixed rate.

By the applicable NAV minus the exit load.

By the stock market index.

83. Which payment method offers instantaneous transfers?

NEFT.

SWIFT.

RTGS.

IMPS.

84. What is required to make additional mutual fund purchases under an existing folio?

Application form.

Transaction slip.

New bank account details.

A notarized statement.

85. Which of the following services allows bulk transactions like dividend distribution?

IMPS.

NEFT.

NACH Credit.

SWIFT.

86. What is the primary function of M-Banking?

Sending SMS messages.

Making phone calls.

Investment and transaction purposes.

Tracking fitness activities.

87. What does UPI stand for?

Unified Payment Interface.

Universal Payment Integration.

Ultimate Payment Innovation.

Unified Private Investment.

88. What is required to use a UPI app for transactions?

An email address.

A registered mobile banking facility.

A credit card.

A mutual fund account.

89. What is VPA in the context of UPI?

Virtual Payment Authentication.

Verified Payment Address.

Virtual Payment Address.

Virtual PIN Authentication.

90. How can funds be transferred in the new version of UPI?

Using a credit card.

Using the Aadhaar number.

By swiping a card at a merchant.

Through a physical bank check.

91. What is ASBA used for?

To block amounts for credit card purchases.

For making UPI transactions.

For authorizing blocked amounts in New Fund Offers (NFO).

For making mutual fund redemptions.

92. What is the key benefit of ASBA?

Instant fund transfer.

Interest continues to be earned until allotment.

Free internet banking services.

No need to register for mobile banking.

93. What does AEPS stand for?

Automated Electronic Payment Service.

Aadhaar Enabled Payment Service.

Advanced Encryption Payment System.

Alternative E-Banking Payment System.

94. What is required to use AEPS for transactions?

A smartphone.

An Aadhaar-linked bank account.

A virtual debit card.

A mutual fund account.

95. How does AEPS authenticate transactions?

Through a PIN code.

Using facial recognition.

Using a fingerprint.

By voice recognition.

96. What is the main advantage of NUUP over other banking platforms?

It works without the internet and smartphone.

It supports international transfers.

It allows real-time stock trading.

It provides unlimited free transactions.

97. What language options does NUUP support?

Only English.

5 regional languages.

11 regional languages.

20 regional languages.

98. What is a significant limitation of using E-Wallets for mutual fund purchases?

Cannot transfer funds to a bank account.

Requires high internet bandwidth.

Only available for repatriable accounts.

Requires a PAN card for all transactions.

99. What is the annual limit for mutual fund investments using E-Wallets?

Rs. 10,000.

Rs. 25,000.

Rs. 50,000.

Rs. 1,00,000.

100. What type of cards can be used for mutual fund purchases?

Credit cards.

Debit cards.

Prepaid cards.

None of the above.

Question 1 of 100