Mutual Fund MCQ | Introduction to mutual fund

 Mutual Funds MCQ

Introduction to mutual fund

Mutual Fund MCQ


Multiple choice questions and answers

1. Mutual Fund was first introduced in the year:

a) 1822

b) 1868

b) 1964

d) 1992


2. Which country introduces mutual funds for the first time?

a) UK

b) USA

c) USSR

d) Belgium


3. Who introduces mutual funds in India?

a) RBI

b) UTI

c) SEBI

d) MOF


4. Mutual funds introduced in India in the Year:

a) 1822

b) 1868

b) 1964

d) 1992

Hint: In India, first mutual fund was started in 1964 by Unit Trust of India (UTI).


5. UTI was established in the year:

a) 1822

b) 1868

c) 1963

d) 1992

Hint: UTI was established in the year 1963 under a special act of parliament. Its main aim is to promote mutual funds in India. It was formatted by Reserve Bank of India (RBI).


6. UTI was established by which bank?

a) RBI

b) SBI

c) PNB

d) UCO Bank


7. First mutual fund scheme introduced by UTI was:

a) UTI Index Fund

b) UTI Offshore Fund

c) US-64

d) UTI Midcap Fund


8. First mutual fund established by SBI in the year:

a) 1822

b) 1963

c) 1987

d) 1992


9. In which year private sectors started mutual funds schemes in India?

a) 1964

b) 1988

c) 1993

d) 2016


10. Which one of the following is an advantage of mutual fund?

a) Diversification

b) Reduction of risk

c) Liquidity

d) All of the above


11. In which year commercial banks are permitted to start Mutual fund schemes?

a) 1964

b) 1968

c) 1987

d) 2016


12. LIC mutual fund was set up in the year:

a) 1964

b) 1988

c) 1989

d) 2016


13. The promoter of a mutual fund scheme is called:

a) AMC

b) Sponsor

c) Trustee

d) Custodian


14. Mutual funds in India are formed as:

a) Firm

b) Company

c) Trusts

d) Co-operative society


15. Trustee of mutual funds is appointed by:

a) AMC

b) Sponsor

c) Trustee

d) Custodian


16. The minimum number of members in a board of trustee in:

a) 3 (Three)

b) 4 (four)

c) 5 (Five)

d) 6 (Six)


17. Which one of the following is not qualified for appointment as a trustee?

a) Officers and employees of an AMC

b) Independent trustee of other mutual fund

c) Any person who has been convicted of any economic offence or violation of any securities laws

d) All of the above


18. At least ______ of the trustees of a mutual fund scheme shall be independent.

a) 50%

b) 2/3

c) 90%

d) 75%


19. Which one of the following is not a constituent of a mutual fund?

a) The sponsoring Company known as sponsor

b) The Trustees

c) The Asset Management Company (AMC)

d) RBI


20. Sponsor must contribute at least _____ of the net worth of AMC.

a) 40%

b) 50%

c) 66.67%

d) 90%


21. Which of the following is true about AMC?

a) The sponsor or the trustee shall appoint an AMC.

b) Mutual funds are managed by AMC.

c) AMCs are established as a separate body corporate.

d) All of the above


22. A mutual fund custodian can be either:

a) Bank

b) Trust

c) Both of the above

d) None of the above


23. The main functions of a mutual fund custodian are:

a) Maintain accounts of securities of a client.

b) Collects interest and dividends or rights in respect of securities

c) Helps in transfer of securities in the name of the trust.

d) All of the above


24. A mutual fund custodian is appointed by:

a) The sponsoring Company known as sponsor

b) The Trustees

c) The Asset Management Company (AMC)

d) RBI


25. The person who holds the property of a mutual fund in trust for the benefit of mutual funds unit holder is known as:

a) The sponsoring Company known as sponsor

b) The Trustees

c) The Asset Management Company (AMC)

d) Custodian


26. The regulatory body of mutual funds in India is:

a) RBI

b) SEBI 

c) IRDA

d) Government