Sample Questions

NISM-Series-5A: Mutual Fund Distributor Mock Tests — 5 random MCQs with answers & explanations

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These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 What is the role of an RTA (Registrar and Transfer Agent)?

  • A. Managing stock investments
  • B. Safekeeping physical share certificates
  • C. Regulating AMCs
  • D. Investor record keeping, unit allotment, and processing transactions Correct Answer
Explanation:
RTA handles investor administration including folio maintenance, unit purchases, redemptions, and dividend processing.

Marks: 1

Q2 What term is used to describe the Net Asset Value (NAV) of a mutual fund scheme after a dividend has been declared and paid out? (NISM workbook)

  • A. Gross NAV
  • B. Cum-Dividend NAV
  • C. Ex-Dividend NAV Correct Answer
  • D. Net Distributable NAV
Explanation:
The NAV post-dividend declaration and payout drops by the dividend amount and is termed Ex-Dividend NAV.

Marks: 1

Q3 Which facility allows an investor to get regular payouts from their mutual fund, similar to receiving dividends?

  • A. Systematic Transfer Plan (STP)
  • B. Systematic Withdrawal Plan (SWP) Correct Answer
  • C. Growth Plan
  • D. Systematic Investment Plan (SIP)
Explanation:
An SWP lets you withdraw a fixed amount regularly, which can act like a monthly income regardless of dividend declarations.

Marks: 1

Q4 Unsystematic risk can be reduced through diversification. State whether True or False. (NISM workbook)

  • A. True Correct Answer
  • B. False
Explanation:
Unsystematic risk is company/sector specific and can be diversified away by adding non-correlated assets.

Marks: 1

Q5 In an open-ended mutual fund scheme, when are new units created and allotted to an investor?

  • A. At the end of every financial year
  • B. Only during the New Fund Offer (NFO) period
  • C. Only when another unitholder redeems units
  • D. On a continuous basis whenever fresh purchases are made Correct Answer
Explanation:
Open-ended schemes continuously issue and redeem units on any business day at prevailing NAV-based prices.

Marks: 1

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