Portfolio Management Services (PMS) Distributors Free Demo Test 8

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1 / 10

1. Forward Contracts are _________.

a) Exchange traded contracts

b) Standard maturity date contracts

c) Standardised size contracts

d) Bilateral Contracts

2 / 10

2. If one entered into a fixed vs floating rate swap, then the interest payment depends _________.

a) On a benchmark rate if one is a fixed rate payer

b) On the risk free rate of the country if one is a floating rate payer

c) On benchmark rate if one is a floating rate payer

d) On the risk free rate of the country if one is a fixed rate payer

3 / 10

3. What is a key requirement for portfolio managers regarding the Investor Charter?

a) notify clients and display it on their website

b) submit it only to SEBI

c) share it only upon client request

d) keep it confidential for internal compliance

4 / 10

4. In determining the Price of a derivative, which of the following is not used ________.

a) Price of underlying asset

b) Expiration period of the derivative contract

c) Value at Risk of the underlying Asset

d) Price Volatility of underlying assets

5 / 10

5. Under SEBI Portfolio Managers Regulations, a portfolio manager must obtain prior approval from SEBI in case of:

a) Change in control

b) Alteration in client agreements

c) Appointment of new employees

d) Launch of a new scheme

6 / 10

6. When is the renewal of a portfolio management contract considered a fresh placement?

a) When SEBI issues a directive

b) If the portfolio manager changes the investment strategy

c) Only when the client requests modifications

d) Upon maturity of the initial period

7 / 10

7. How does hedging with derivatives differ from traditional risk management?

a) Eliminates all market uncertainties

b) Increases overall investment risk

c) Always more effective than traditional strategies

d) Transfers risk to another party instead of avoiding or absorbing it

8 / 10

8. Why can’t portfolio managers invest client funds in another portfolio manager’s scheme?

a) Avoids double fees and accountability issues

b) Restricts flexible investment strategies

c) Reduces returns

d) Minimizes the diversification benefits

9 / 10

9. Who manages a REIT’s investment portfolio?

a) Investment Manager

b) Valuer

c) Trustee

d) Sponsor

10 / 10

10. What impact does an increase in a bond’s credit rating have on its market price and yield?

a) Market price and yield remain unchanged

b) Credit rating improvements have no impact on bond pricing

c) Yield decreases, Market Price increases

d) Yield increases, Market price decreases

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Portfolio Management Services (PMS) Distributors Free Demo Test 8

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