Mutual Fund,Venture Capital,Life Insurance Policies and AIFS MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Mutual Fund,Venture Capital,Life Insurance Policies and AIFS, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Mutual Fund,Venture Capital,Life Insurance Policies and AIFS MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Mutual Fund,Venture Capital,Life Insurance Policies and AIFS mcq questions that explore various aspects of Mutual Fund,Venture Capital,Life Insurance Policies and AIFS problems. Each MCQ is crafted to challenge your understanding of Mutual Fund,Venture Capital,Life Insurance Policies and AIFS principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Mutual Fund,Venture Capital,Life Insurance Policies and AIFS MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

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So, are you ready to put your Mutual Fund,Venture Capital,Life Insurance Policies and AIFS knowledge to the test? Let's get started with our carefully curated MCQs!

Mutual Fund,Venture Capital,Life Insurance Policies and AIFS MCQs | Page 17 of 18

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Q161.
What is the requirement for the relationship between the fund sponsor, trustees, custodian, and Asset Management Company in a mutual fund?

a.

They should have a close relationship

b.

They should have an arm's length relationship

c.

They should be direct business partners

d.

They should be family members

Discuss
Answer: (b).They should have an arm's length relationship Explanation:An arm's length relationship is required between the fund sponsor, trustees, custodian, and Asset Management Company in a mutual fund.
Q162.
What are some advantages of mutual funds?

a.

Professional Management, Diversification, and Transparency

b.

Affordable Administration, Low costs, and Good Return

c.

Sector Funds, Index Funds, and ELSS

d.

Large-cap Funds, Mid/Small Cap Funds, and Balanced Funds

Discuss
Answer: (a).Professional Management, Diversification, and Transparency Explanation:Advantages of mutual funds include professional management, diversification, convenient administration, low costs, liquidity, transparency, and good return.
Q163.
What risk factor is associated with mutual funds and securities investments?

a.

Only liquidity risk

b.

Only market risks

c.

Only interest rate risks

d.

Both market risks and investment risks

Discuss
Answer: (d).Both market risks and investment risks Explanation:All mutual funds and securities investments are subject to market risks, and there can be no assurance that the scheme's objective will be achieved. The Net Asset Value (NAV) of the scheme may go up or down depending upon the factors and forces affecting securities markets.
Q164.
What types of ratios are used for evaluating the performance of mutual funds?

a.

Only Sharpe's Ratio

b.

Sharpe's Ratio, Jensen's Alpha Ratio, and Treynor Ratio

c.

Only Fama's Net Selectivity Ratio

d.

Only Jensen's Alpha Ratio

Discuss
Answer: (b).Sharpe's Ratio, Jensen's Alpha Ratio, and Treynor Ratio Explanation:There are many types of ratios for evaluating the performance of mutual funds, including Sharpe's Ratio, Jensen's Alpha Ratio, and Treynor Ratio.
Q165.
What is the definition of AIF (Alternative Investment Fund)?

a.

AIF is any financial institution registered with the Reserve Bank of India

b.

AIF is any fund established in India for the purpose of securities trading

c.

AIF is any company listed on a recognized stock exchange in India

d.

AIF is any privately pooled investment vehicle that collects funds from investors for investing according to a defined investment policy

Discuss
Answer: (d).AIF is any privately pooled investment vehicle that collects funds from investors for investing according to a defined investment policy Explanation:AIF means any fund established in India, in the form of a trust, company, limited liability partnership, or a body corporate, which is a privately pooled investment vehicle that collects funds from investors for investing it in accordance with a defined investment policy for the benefit of its investors.
Q166.
What are some types or nature of AIFs?

a.

Only Debt Funds

b.

Debt Funds, Hedge Funds, and Infrastructure Funds

c.

Hedge Funds, Venture Capital Funds, and Small and Medium Enterprises (SME) Funds

d.

Debt Funds, Infrastructure Funds, and Social Venture Funds

Discuss
Answer: (b).Debt Funds, Hedge Funds, and Infrastructure Funds Explanation:There are many types or nature of AIFs, including Debt Funds, Hedge Funds, Infrastructure Funds, Private Equity Funds, Small and Medium Enterprises (SME) Funds, Social Venture Funds, and Venture Capital Funds (VCFs).
Q167.
How can an AIF raise funds?

a.

Through an initial public offering (IPO)

b.

Through private placement by issuing a prospectus

c.

Through private placement by issuing an information memorandum or placement memorandum

d.

Through a rights issue

Discuss
Answer: (c).Through private placement by issuing an information memorandum or placement memorandum Explanation:An AIF can raise funds through private placement by issuing an information memorandum or placement memorandum.
Q168.
What is the definition of a venture capital fund?

a.

A fund that invests only in publicly listed companies

b.

A fund that invests in various sectors without any specific focus

c.

A fund that has a dedicated pool of capital and invests in venture undertakings in accordance with the regulations

d.

A fund that primarily invests in government securities

Discuss
Answer: (c).A fund that has a dedicated pool of capital and invests in venture undertakings in accordance with the regulations Explanation:As per the regulation, a venture capital fund is defined as a fund that has a dedicated pool of capital, raised in a manner specified in the regulation, and invests in venture undertakings in accordance with the regulations.
Q169.
What is the definition of a venture capital undertaking?

a.

Any company listed on a recognized stock exchange in India

b.

Any domestic company engaged in the production of articles

c.

Any foreign company providing services in India

d.

Any domestic company not listed on a recognized stock exchange in India, engaged in specific business activities

Discuss
Answer: (d).Any domestic company not listed on a recognized stock exchange in India, engaged in specific business activities Explanation:A venture capital undertaking means a domestic company whose shares are not listed on a recognized stock exchange in India and which is engaged in business for providing services, production, or manufacture of articles, excluding activities or sectors specified in the negative list by SEBI with the approval of the Central Government.
Q170.
What is the characteristic of Term Insurance plans?

a.

They provide living benefits

b.

They cover the entire lifetime of the insured

c.

They spread the cost of insurance cover over a longer period

d.

They provide coverage only if the insured dies within a specified period

Discuss
Answer: (d).They provide coverage only if the insured dies within a specified period Explanation:Insurance plans providing only death cover are called Term Insurance, and no payment is made under term insurance if the insured does not die within the specified period.
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