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Advanced Wealth Management Course (IIBF) - Paper 5

Ch 1: Concept and Role of Mutual Fund

Q1.

(I) Mutual funds are ‘get rich quick investments’. (II) Mutual fund is a universal solution to all investment needs.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q2.

A mutual fund product with ____________ allows the investor to maintain a target mix of debt and equity in one’s portfolio.

Systematic Investment Plan (SIP)

Systematic Transfer Plan (STP)

Systematic Withdrawal Plan (SWP)

Flexi Withdrawal Plan (FWP)

Q3.

Which plan enables withdrawal of different amounts of money for different months?

Systematic Withdrawal Plan (SWP)

Systematic Investment Plan (SIP)

Flexi Withdrawal Plan (FWP)

Systematic Transfer Plan (STP)

Q4.

(I) Systematic Withdrawal Plan (SWP) is a mirror image of SIP. (II) Mutual funds are assured return investments.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q5.

(I) Mutual funds are risk free investments. (II) A mutual fund product with Systematic Investment Plan (SIP) refers to the practice of investing a constant amount every month.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q6.

The systematic risk that can be effectively diversified by investing in adequate number of securities.

True

False

Q7.

Which is the wrong advantage that mutual funds offer to the investors over direct investing?

Risk reduction through diversification

Lower transaction and other costs

Regulatory protection

Convenience

None of the above

Q8.

Mutual fund unit holders are the funds shareholders, while bank depositors are the banks’ creditors.

True

False

Q9.

The term ‘mutual’ is used in the sense that all its returns, plus its expenses, are shared by the fund’s unit holders.

True

False

Q10.

(I) Mutual funds are subject to strict regulation and oversight by SEBI. (II) SEBI requires the open-ended fund to stand ready to redeem the units on a daily basis at its NAV based price.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

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