NISM VA Chapter 6 Sample Questions, MCQs and PDF
1.What is the role of a mutual fund distributor?
a) Analyzing market factors
b) Assessing investor needs and goals
c) Managing a mutual fund portfolio
d) Constructing a portfolio of securities
2.Who is responsible for constructing a portfolio of securities in line with a mutual fund scheme’s objectives?
a) Mutual fund distributor
b) Investor
c) Fund manager
d) Market participants
3.What inputs and data points does a fund manager analyze when constructing a portfolio?
a) Investor needs and goals
b) Market liquidity and mood
c) Company-specific information
d) Investor limitations and resources
4. Which category of distributors can be referred to as the “non-individual” channel?
a) Individual mutual fund distributors
b) Bank branches
c) National distributors through their branches or sub-agents
d) Post offices
5. Which institutions in India relied on a force of individual agents for distributing financial products?
a) Life Insurance Corporation of India Ltd (LIC)
b) Unit Trust of India (UTI)
c) Both LIC and UTI
d) None of the above
6. True or False: Individual agents in India are now less involved in the distribution of mutual funds.
7. Which entities may use the classification between retail clients and wealthy clients in mutual fund distribution?
a) Stock brokers
b) NBFCs
c) Both stock brokers and NBFCs
d) None of the above
8. True or False: National distributors in the mutual fund industry operate only within a specific region.
9. Which entities operate entirely through the digital mode in mutual fund distribution?
a) Distributors and investors
b) E-commerce platforms and online distributors
c) Stock exchanges
d) Physical OPOAs
10. What is the role of online channel partners in mutual fund distribution?
a) They offer transaction support through physical paperwork.
b) They facilitate buying and selling of units through stock exchanges.
c) They operate their own websites for transacting in mutual funds.
d) They handle physical forms and deposits at OPOAs.
11. How has SEBI facilitated buying and selling of open-ended mutual fund units?
a) Through physical application forms
b) Through online channel partners
c) Through stock exchanges
d) Through traditional distributors
12. What is the significance of Common Account Number (CAN) in MFU?
a) It consolidates all mutual fund holdings of an investor.
b) It facilitates online access and transactions for investors.
c) It is allotted to KYC compliant investors.
d) All of the above.
13. Who can be appointed as a distributor by an Asset Management Company?
a) Individuals only
b) Banks only
c) Non-banking finance companies only
d) All of the above
14. True or False: Individuals above the age of 50 years or with 10 years of experience in the securities market can qualify for the NISM certification through Continuing Professional Education (CPE).
15. What is the purpose of the Know Your Distributor (KYD) requirements introduced by AMFI?
a) To verify the correctness of registration documents
b) To streamline the distribution process of mutual fund products
c) To have verification of the ARN holders
d) All of the above
16. True or False: Distributors are required to ensure that all employees involved in selling or marketing mutual funds have an EUIN.
Answer: True
17. What is the purpose of the clause related to not rebating commission back to investors in the Empanelment Form?
a) To discourage unethical practices that may harm investors’ interests
b) To incentivize distributors to attract more clients through commission rebates
c) To ensure transparency in the commission payment process
d) To promote fair competition among distributors
18. What power does the AMC hold regarding empanelment termination, according to the Empanelment Form?
a) The AMC can terminate the empanelment only after a certain notice period
b) The AMC cannot terminate the empanelment once it is granted
c) The AMC can terminate the empanelment at any time without prior notice
d) The AMC can terminate the empanelment only if the distributor violates specific terms
19. How is trail commission calculated for a mutual fund distributor?
a) Based on the number of units sold by the distributor
b) Based on the net assets attributable to the units sold by the distributor
c) Based on the distributor’s performance in selling mutual funds
d) Based on the market valuation of the mutual fund schemes
20.When is trail commission typically paid to the distributor?
a) Daily
b) Weekly
c) Monthly
d) Annually
21.What factor determines the trail commission amount for a mutual fund distributor?
a) Number of clients served by the distributor
b) Performance of the distributor’s investment portfolio
c) Net Asset Value (NAV) of the mutual fund scheme
d) Market valuation gains in the mutual fund industry
Answers
- b) Assessing investor needs and goals
- c) Fund manager
- b) Market liquidity and mood
- c) National distributors through their branches or sub-agents
- c) Both LIC and UTI
- False
- Answer: c) Both stock brokers and NBFCs
- False
- b) E-commerce platforms and online distributors
- c) They operate their own websites for transacting in mutual funds.
- c) Through stock exchanges
- d) All of the above.
- d) All of the above.
- True
- d) All of the above
- True
- a) To discourage unethical practices that may harm investors’ interests
- c) The AMC can terminate the empanelment at any time without prior notice
- b) Based on the net assets attributable to the units sold by the distributor
- c) Monthly
- c) NAV of the mutual fund scheme
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