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Advanced Wealth Management Course (IIBF) - Paper 5

Ch 3: Organisational Structure of Mutal Funds

Q1.

Who maintains record of the unitholders account?

Custodian

Banks

Registrar and transfer agent

Brokers

Q2.

Most of the communication between the unitholders and mutual fund takes place through brokers.

True

False

Q3.

(I) The appointment of an asset management company can be terminated by eighty per cent of the unitholders of the scheme. (II) The registrar and transfer agent forms the most vital interface between the unitholders and mutual fund.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q4.

As per the regulations, for a person to qualify as a sponsor, he must contribute at least __________ of the net worth of the AMC and posses a sound financial record over five years period prior to registration.

30%

50%

75%

40%

Q5.

Which Act prohibits the limiting or extinguishing the obligations and liabilities of the trustees?

The Indian Trusts Act, 1883

The Investment Company Act, 1940

The Investment Company Act, 1933

The Indian Trusts Act, 1882

Q6.

Which Act requires federal registration of all public offerings of securities, including mutual fund shares?

The Securities Act of 1933

The Investment Company Act of 1940

The Securities Exchange Act of 1934

The Investment Advisers Act of 1940

Q7.

Which Act requires federal registration of all investment advisers to mutual funds?

The Securities Exchange Act of 1934

The Securities Act of 1933

The Investment Advisers Act of 1940

The Investment Company Act of 1940

Q8.

A Unit Trust is authorized and regulated by _____________.

SEBI (Mutual Funds)

Financial Services Authority (FSA)

Banks

None of the above

Q9.

(I) Investment Trusts are open ended. (II) Unit Trusts are closed ended.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q10.

(I) Unitholders of unit trusts enjoy unlimited rights. (II) Assets of the unit trusts are held by the trustees on behalf of the beneficiaries – the unitholders.

Both the statements are correct

Only statement (I) is correct

Only statement (II) is correct

Both the statements are wrong

Q11.

Which Act regulates broker-dealers, including mutual fund principal underwriters and others who sell mutual fund shares, and requires them to register with the SEC?

The Investment Advisers Act of 1940

The Investment Company Act of 1940

The Securities Act of 1933

The Securities Exchange Act of 1934

Q12.

A mutual fund in UK is typically externally managed.

True

False

Q13.

Which Act provides that the investment adviser has a specific fiduciary duty with respect to compensation paid by the fund?

Section 36(b) of the 1940

Section 36(a) of the 1940

Section 35(b) of the 1940

Section 35(a) of the 1940

Q14.

Who is responsible for selecting portfolio investments in accordance with the objectives and policies set forth in the fund’s prospectus?

Transfer Agent

Investment adviser

Custodian

Principal Underwriters

Q15.

The Principal underwriters are regulated as broker-dealers and are subject to National Association of Securities Dealers’ Rules regarding mutual fund sales practices.

True

False

Q16.

The trustees shall furnish to SEBI on a ___________ basis.

Yearly

Half yearly

Quarterly

Monthly

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