Portfolio Management Services (PMS) Distributors Free Demo Test 1

Explanation:

The Coupon yield is the coupon payment as a percentage of the face value.

Coupon yield = Coupon Payment / Face Value

14/100 = 0.14 x 100 = 14%

(Coupon yield is different from Current yield. Current yield = (Annual coupon rate / Current market price of the bond) x 100%

Explanation:

The SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations prohibit a person to, directly or indirectly buy, sell or deal in securities in a fraudulent manner.

Explanation:

Open-ended funds allow the investors to enter or exit at any time, after the NFO. The scheme does not have a maturity. Investors can buy additional units in the scheme any time after the scheme opens for on-going transactions.

Prospective investors can also buy units. At any time, the existing investors can redeem their investments, that is, they can sell the units back to the scheme to get their money back. Close-ended funds have a fixed maturity. Interval funds combine features of both open-ended and close-ended schemes. They are largely close-ended but become open-ended at pre-specified intervals

Explanation:

The trades executed on the exchange are settled through a clearing corporation, which acts as a counterparty and guarantees the settlement of the trades to both buyers and sellers. The clearing corporation provides full novation of contracts between buyers and sellers, which means it acts as buyer to every seller and seller to every buyer. As a result, the operational risk of the transaction is substantially reduced to a trading investor.

Explanation:

Financial Intelligence Unit – India (FIU-IND) is the central, national agency responsible for receiving, processing, analysing and disseminating information relating to suspect financial transactions to enforcement agencies and foreign FIUs.

The portfolio manager is required to report any suspicious transaction within 7 working days to FIU.

Explanation:

A callable bond gives the issuer right to redeem all or part of the outstanding bonds before the specified maturity date. Callable bonds are advantageous to the issuer of the security. In other words, callable bonds present investors with a higher level of reinvestment risk than noncallable bonds. The issuer will call the bond before its maturity only when the interest rates for similar bonds fall in market. The investor will receive the face value of the bond before the maturity.

Explanation:

The agreement between the portfolio manager and the client includes the investment approach. An investment approach is a broad outlay of the type of securities and permissible instruments to be invested in by the portfolio manager for the customer, taking into account factors specific to clients and securities.

Explanation:

A cyclical industry is a type of industry that is sensitive to the business cycle, such that revenues generally are higher in periods of economic prosperity and expansion and are lower in periods of economic downturn and contraction.

Cyclical industries are attractive investments during the early stages of an economic recovery. During the phase of recovery, consumer durable sectors such as producers of cars, personal computers, refrigerators, tractors etc. become attractive investments

Explanation:

Explanation: