NISM VA Chapter 7 Net Asset Value, Total Expense Ratio And pricing Of Units-Mock Questions for Mutual Fund Distributor Exam Free MCQs
1.Who approves the policies and procedures for valuing each type of securities/assets held by mutual fund schemes?
a) SEBI
b) The Board of the Asset Management Company
c) The investors in the mutual fund scheme
d) The valuation agencies appointed by SEBI
2. When can exceptional events occur where market quotations are no longer reliable for a particular security?
a) When the market is highly volatile
b) When there is a significant change in the overall economy
c) When there is a change in regulations affecting the security
d) When the security faces unique circumstances or events
3. True or False: The fair valuation principles require consistent valuation of assets held by mutual funds, even in exceptional events.
4.What should prevail in case of a conflict between the Principles of Fair Valuation and Valuation Guidelines?
a) SEBI regulations
b) The decision of the Board of Trustees
c) The Principles of Fair Valuation
d) The Valuation Guidelines
5. True or False: The fair valuation principles aim to maximize profits for investors.
6.How is the gold held by a gold exchange traded fund scheme valued?
a) Based on the daily gold prices in the local market
b) Based on the AM fixing price of the London Bullion Market Association (LBMA)
c) Based on the spot price of gold in New York Stock Exchange
d) Based on the average price of gold across multiple global exchanges
7. What is the fineness requirement for gold held by a gold exchange traded fund scheme?
a) 990.0 parts per thousand
b) 995.0 parts per thousand
c) 999.9 parts per thousand
d) 999.0 parts per thousand
8.What is the fineness requirement for silver held by a silver exchange traded fund scheme?
a) 990.0 parts per thousand
b) 995.0 parts per thousand
c) 999.9 parts per thousand
d) 999.0 parts per thousand
9.True or False: Higher interest, dividend, and capital gains earned by a mutual fund scheme result in a higher Net Asset Value (NAV).
10. True or False: Higher appreciation in the investment portfolio leads to a higher Net Asset Value (NAV) of a mutual fund scheme.
11. What effect do higher expenses have on the Net Asset Value (NAV) of a mutual fund scheme?
a) They have no impact on the NAV.
b) They decrease the NAV.
c) They increase the NAV.
d) They lead to unpredictable changes in the NAV.
12.What is the purpose of adopting a conservative approach to calculating distributable reserves?
a) To maximize dividend payments to investors
b) To ensure dividend is paid from real and realized profits
c) To minimize the amount of dividend paid to investors
d) To avoid losses in the investment portfolio
13. Who decides the quantum of dividend and the record date for dividend payments?
a) Asset Management Company (AMC)
b) Mutual fund investors
c) Trustees of the scheme
d) Regulatory authorities
14.What is the distinctive feature of open-ended schemes?
a) The ongoing facility to acquire new units
b) The restriction on acquiring new units
c) The absence of entry and exit loads
d) The fixed Sale Price and re-purchase Price
15. What was the difference between the Sale Price and NAV in the past?
a) Exit load
b) Entry load
c) Repurchase Price
d) Market price
16. If the NAV of a scheme is Rs 11.00 per unit and it charges an entry load of 1 percent, what would be the Sale Price?
a) Rs 11.00
b) Rs 11.10
c) Rs 11.11
d) Rs 11.01
17. What is the minimum decimal places required for NAV calculation for equity and balanced funds?
a) Up to 1 decimal place
b) Up to 2 decimal places
c) Up to 3 decimal places
d) Up to 4 decimal places
Answers
- b) The Board of the Asset Management Company
- d) When the security faces unique circumstances or events
- True
- c) The Principles of Fair Valuation
- False
- b
- b
- d
- True
- True
- b
- b
- c
- a
- b
- a) Rs 11.00
- d
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