NISM Mock Test 6 -Base on Current CPE Exam

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Created on March 08, 2024 By

Rajendra

NISM Mock Test 6

In this post, we present a set of 25 questions that are designed to test your knowledge and understanding of the latest Jun month 2023- CPE -NISM Exam. Use this set as a valuable resource to gauge your understanding and enhance your exam readiness. Good luck!

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1. What is the most important reason why benchmarks are required in case of mutual funds?

A. A mutual fund is a relative return product, and hence a benchmark is required for performance comparison

B. A benchmark can accurately predict the future returns that a mutual fund scheme would generate

C. It helps benchmark the fund manager’s compensation

D. Benchmark has no real use

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2. Which of the following mutual fund schemes would have real time NAV?

A. Open-ended funds, if the units are available for transactions through stock exchange platform

B. Close-ended funds, if the units are listed on a stock exchange

C. Interval funds, irrespective of whether the units are listed on stock exchanges

D. ETFs

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3. A distributor is allowed to charge transaction charge of up to 2% on all purchase transaction. State whether True or False.

A. True

B. False

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4. Index funds would have lower turnover in comparison to an actively managed fund

A. True

B. False

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5. In which of the following mutual fund schemes, the investor has to pay entry load?

A. ETF

B. Closed Ended Fund

C. Open Ended Fund

D. Entry load is not allowed in case of any mutual fund schemes as per SEBI regulations

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6. Treynor ratio is a measure of _________

A. Historical returns generated by the mutual fund scheme

B. Volatility of investment returns

C. Risk adjusted returns

D. Credit risk in a debt fund

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7. Which of the following documents provide the asset allocation for the mutual fund schemes?

A. Annual report of the AMC

B. State of Additional Information (SAI)

C. Scheme Information Document (SID)

D. SEBI circular on categorization and rationalization of open-ended mutual fund schemes

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8. In which of the following fund categories ONLY one scheme is allowed post the SEBI circular on categorization and rationalization of open-ended mutual fund schemes?

A. ETFs

B. Sector Fund

C. Value Fund

D. Fund-of-Funds

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9. Which companies would fall in the category of large cap as per the SEBI circular on categorization and rationalization of open-ended mutual fund schemes?

A. 1st to 100th company in terms of full market capitalization

B. 1st to 500th company in terms of full market capitalization

C. Each AMC is free to define the same

D. As per the definition of the stock exchange

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10. In which of the following mutual funds the unit capital cannot change during the life of the fund?

A. ETF

B. Closed Ended Fund

C. Interval Fund

D. Open Ended Fund

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11. Mutual fund being a tax-exempt entity, it does not have to pay the Securities Transaction Tax (STT) on the transactions done on the stock exchanges. State whether True or False.

A. True

B. False

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12. Tax Deduction at Source (TDS) would be applicable on capital gains from mutual funds for which of the following investor category?

A. Resident Indian Investors

B. Minor investing through guardian

C. Non Resident Investor -NRIs

D. Domestic Companies registered in India

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13. How many focused equity funds can an AMC launch?

A. One

B. Maximum five focused schemes can be launched by a single AMC

C. SEBI puts no restriction

D. Two

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14. Which of the following is a non-diversifiable risk?

A. Credit Risk

B. Business Risk

C. Inflation

D. Company specific risk

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15. Which document would NOT indicate anything about the asset allocation pattern of a hybrid fund?

A. Fact sheet

B. Scheme Information Document (SID)

C. Key Information Memorandum (KIM)

D. Statement of Additional Information (SAI)

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16. The Total Expense Ratio (TER) charged to the fund has no impact on the Net Asset Value (NAV) of the scheme

A. True

B. False

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17. In case of death of the ARN holder, the nominee is eligible to earn trail commission on old business only after the nominee clears NISM Series V-A examination.

A. True

B. False

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18. What is the maximum limit allowed under Instant Access Facility?

A. Rs. 50,000 or 90% of the value – whichever is lower

B. Any amount, so long as the investor has completed KYC

C. Rs. 50,000 for individual investors and Rs. 5,00,000 for non-individual investors

D. Rs. 50,000 in case of resident individual investors, and US $ 500 in case of NonResident Indian (NRI) investors, subject to balance in the account

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19. In which of the following funds, the long term capital gains tax would be payable after adjustment for indexation?

A. Contra Fund

B. Multi Cap Fund

C. Conservative Hybrid fund

D. Aggressive Hybrid Fund

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20. Which of the following statements is true in case of income tax on the dividend income earned by a resident Indian investor?

A. Entire dividend income from equity oriented mutual fund schemes is taxable in the hands of the investor

B. Dividend income from equity oriented mutual fund schemes is exempt from income tax in the hands of the investor, up to Rs. 10 lakhs in a year

C. Dividend income from equity oriented mutual fund schemes is taxable at 40% in the hands of the investor

D. Mutual funds do not pay dividends, hence the question of tax does not arise

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21. A segregated portfolio can be created under one of the following situations. Identify the situation:

A. Rise in interest rates in the economy

B. When RBI reduces the policy rates

C. Credit event in one of the papers held by a debt fund

D. When a debt fund decides to declare dividend for the unitholders

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22. Recently SEBI introduced a provision in case of debt funds to protect to investor against potentially very high losses caused by illiquidity in case of a credit event. Which provision are we referring to?

A. Benchmarking the scheme’s performance with Total Return Index (TRI)

B. Creation of segregated portfolios

C. Introduction of instant access facility in certain schemes

D. Allowing only trail commission to the mutual fund distributors

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23. What does a portfolio’s beta measure?

A. Credit Risk

B. Rolling Returns

C. Returns in comparison to a benchmark

D. Volatility of investment returns in comparison to a benchmark

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24. Which of the following is a measure of the risk in an equity index fund?

A. Portfolio’s beta

B. Sharpe Ration

C. Tracking error

D. Credit Rating

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25. Dividend from mutual fund schemes is taxable in the hands of the investor. State whether True or False.

A. True

B. False

Your score is

The average score is 65%

Free NISM Mock Test - This Series Prepare by Mutual Fund Distributor