Mutual Fund Distributors Free Demo Test 5

Explanation:

The risk sequence is (highest risk to low risk) Flexible Allocation – Fixed Allocation – Monthly Income Plans – Capital Protection funds.

Explanation:

Balanced Fund provide investors simultaneous exposure to both equity and debt in one portfolio. A balanced scheme would have an investment objective like: “To achieve growth by investing in equity and equity-related investments, balanced with income generation by investing in debt and money market instruments”.

Explanation:

The maximum number of joint holders allowed per mutual fund application is three.

Explanation:

The dividend pay-outs declared on units under lien may be paid to the unitholder or the lender (lien holder) depending upon the agreement.

Explanation:

The large investment corpus of a mutual fund leads to various other economies of scale. For instance, costs related to investment research and office space get spread across investors. Further, the higher transaction volume makes it possible to negotiate better terms with brokers, bankers and other service providers.

– Limitations of Mutual Fund

– Lack of Portfolio Customization

– A unitholder cannot influence what securities or investments the scheme would invest into.
Choice Overload

– There are multiple mutual fund schemes offered by several mutual fund houses and multiple
options within those schemes which makes it difficult for investors to choose between them. No Control Over Costs

– An individual investor has no control over the costs in a scheme.

Explanation:

The investor’s risk appetite is a function of three things—the need to take risks, the ability to take risks, and the willingness to take risks. Thus, an understanding of the risk profile and the investment risks associated with various mutual fund schemes would be essential for deciding the asset allocation in an investor’s portfolio.

Explanation:

IN THE MONEY – A call option with a strike price that is lower than the market price of the underlying asset, or a put option with a strike price that is higher than the market price of the underlying asset. In the money means that your stock option is worth money and you can turn around and sell or exercise it. For example, consider a stock that is trading at Rs 100. For such a stock, call options with strike prices below Rs 100 would be In the money calls ( ie Rs 80, Rs 90 calls) while put options with strike prices above Rs 100 (Rs 110 , Rs 120 calls etc.)would be In the money puts. For easy understanding, those calls or puts which are profitable are In the Money.

Explanation:

Statement of Additional Information (SAI), which has statutory information about the mutual fund or AMC, that is offering the scheme like the Constituents of the mutual fund, Rights of Unit-holders, Investment Valuation Norms, Rights of Unit-holders etc. It does not contain information on scheme returns etc. This information is available in the Mutual Fund Fact Sheet.

Explanation:

Investment objective defines the broad investment charter. Investment policy describes in greater detail, the kind of portfolio that will be maintained. The investment policy includes the scheme’s asset allocation and investment style.

Explanation:

All details such as an address, bank account details, and nomination for the units held in DEMAT FORM is according to the information available in the depository’s records. Any changes to the said information have to be made by contacting his depository participant.