Chapter 12 · NISM Series V-A

Mutual Fund Scheme Selection

Exam-ready Q&A with detailed explanations. Correct answers highlighted in green.

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Topics covered: Benchmarking for Fund of FundsBenchmarks for Debt SchemesBenchmarks for Fund of FundsBenchmarks for Fund of Funds (FoFs)Benchmarks for Gilt FundsBenchmarks for Gilt fundsBenchmarks for Gold ETFBenchmarks for Gold ETFsBenchmarks for Hybrid FundsBenchmarks for International FundsBenchmarks for Liquid SchemesBenchmarks for Other SchemesBenchmarks for Other Schemes (Gold ETF)Benchmarks for Other Schemes (Hybrid Funds)Benchmarks for Other Schemes (International Funds)Benchmarks for Other Schemes (Real Estate Funds)Benchmarks for Other Schemes - Gold ETFBenchmarks for Other Schemes - Hybrid FundsBenchmarks for Other Schemes - International FundsBenchmarks for Other Schemes - Real Estate FundsBenchmarks for Real Estate FundsBenchmarks for Specific Scheme TypesBenchmarks for Specific Scheme Types (Gilt Funds)Benchmarks for specific scheme typesChoice of Investment Universe

Chapter 12 — All 300 Questions

Q1HardSEBI Guidelines on Benchmarks - Applicability of Two-tiered Structure

Which of the following scenarios is NOT covered by the two-tiered benchmark structure as per SEBI's October 2021 circular?

AA Large Cap Equity Fund
BAn Ultra Short Duration Debt Fund
CA Multi Asset Allocation Fund
An Index Fund replicating the NIFTY 50
💡 The two-tiered structure applies to Income/Debt Oriented Schemes (e.g., Ultra Short Duration Debt Fund) and Growth/Equity Oriented Schemes (e.g., Large Cap Equity Fund). Hybrid and Solution Oriented Schemes (e.g., Multi Asset Allocation Fund) have a single benchmark (Broad Market or bespoke). Index Funds and ETFs have a single benchmark as they replicate an underlying index. Therefore, an Index Fund replicating the NIFTY 50 would have a single benchmark, not a two-tiered structure. (Source: Chapter 12, Mutual Fund Scheme Selection, Table 'Type of Scheme Type of Benchmark' under Principles concerning Benchmarks)
Q2MediumQuantitative measures of performance

When is a fund manager considered to have 'outperformed' based on quantitative measures?

AWhen the scheme's absolute returns are positive.
When the scheme earned a higher return than its chosen benchmark.
CWhen the scheme's expense ratio is lower than its peer group.
DWhen the scheme's Assets Under Management (AUM) have grown significantly.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Refer to 'Quantitative Measures of Fund Manager Performance' section).
Q3MediumBenchmarks for Other Schemes - Real Estate Funds

What is a characteristic of real estate indices used as benchmarks for Real Estate Funds?

AThey have longer histories and wider acceptance than equity indices.
BThey are developed by AMCs and are highly standardized across the industry.
They have shorter histories and are yet to earn the wider acceptance that equity indices enjoy.
DThey are primarily used for international real estate investments, not domestic ones.
💡 Real estate indices, while developed by a few real estate services companies, have shorter histories and are yet to earn the wider acceptance that the equity indices enjoy.
Q4EasyBenchmarks for Debt Schemes

Which of the following would be a suitable benchmark for a Liquid mutual fund scheme?

ANifty 50
CRISIL Liquid Fund Index
C10-year Government of India Security
DS&P BSE Sensex
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q5MediumBenchmarks for Other Schemes - International Funds

An International Fund that proposes to invest largely in the US market would most likely use which index as its benchmark?

AShanghai Composite Index
S&P 500
CNifty 50
DFTSE 100
💡 S&P 500 may be appropriate for a scheme that would invest largely in the US market.
Q6HardStandard Benchmarks for Disclosure

Which standard benchmark is specified for an Equity Savings Fund for disclosure purposes?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DA blended equity and debt index
💡 As per the table of standard benchmarks, an Equity Savings Fund is required to disclose against the 10 years dated GoI security.
Q7HardSEBI Guidelines on Benchmarks - Debt Scheme Implementation Date

According to SEBI circulars, when were the first-tier benchmarks for open-ended debt schemes, based on the Potential Risk Class, implemented by AMCs?

AJanuary 1, 2022
BOctober 27, 2021
April 1, 2022
DDecember 1, 2021
💡 The first-tier benchmarks for open ended debt schemes as per the Potential Risk Class and the same will be implemented by the AMCs with effect from April 1, 2022. (Source: Chapter 12, Mutual Fund Scheme Selection, Footnote 105)
Q8MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021) - FoFs

If a Fund of Funds (FoF) scheme invests in a single underlying fund, what benchmark will be used for the FoF scheme?

AA Broad Market Index
The benchmark of the underlying scheme
CA bespoke index created for the FoF
DA blended index of equity and debt
💡 If a FoF scheme is investing in a single fund, then benchmark of the underlying scheme will be used for corresponding FoF. (Page 274)
Q9MediumBenchmarks for Hybrid Funds

A hybrid scheme with an asset allocation of approximately 65 percent in equity and the balance in debt would most appropriately use which type of benchmark?

AA pure equity index like Nifty 50
BA pure debt index like 10 years dated GoI security
A synthetic index calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex
DA Gold Price index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex. (Refer to 'Hybrid Funds' section).
Q10HardStandard benchmarks

According to the standard benchmarks table, what is the benchmark for 'All Debt Schemes which are not covered in point 2' (i.e., not up to 1 year duration/arbitrage)?

A1 year T-Bill
BNIFTY Composite Debt Index
10 years dated GoI security
DCRISIL Composite Bond Index
💡 The 'Standard benchmarks' table specifies 'All Debt Schemes which are not covered in point 2' should use '10 years dated GoI security.'
Q11MediumBenchmarks for Debt Schemes

A debt scheme that invests exclusively in Government securities (Gilt funds) would most appropriately use which type of benchmark?

AA diverse mix of debt securities index.
BA short-term money market index.
An index based on Government Securities.
DAn equity index.
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Choice of Investment Universe section)
Q12MediumBenchmarks for Other Schemes - Hybrid Funds

A hybrid mutual fund scheme maintains an asset allocation of approximately 65% in equity and 35% in debt. Which of the following would be a suitable benchmark for such a scheme?

ANifty 50
B10 years dated GoI security
A synthetic index calculated as 65% of S&P BSE Sensex and 35% of I-Bex
DCRISIL Liquid Fund Index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex. (Page 272)
Q13MediumBenchmarks for Hybrid Funds

How is the benchmark for a Hybrid mutual fund typically constructed?

AIt is always the S&P BSE Sensex.
It is a blend of an equity index and a debt index, reflecting the scheme's asset allocation.
CIt uses the 10 years dated GoI security as its sole benchmark.
DIt mirrors the gold price index.
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. (Page 272)
Q14MediumBenchmarks for Other Schemes

A hybrid mutual fund scheme with an asset allocation of approximately 70% in equity and 30% in debt should ideally use which type of benchmark?

AA pure equity index like S&P BSE Sensex.
BA pure debt index like 10 years dated GoI security.
A blended index reflecting its asset allocation, such as 70% S&P BSE Sensex and 30% I-Bex.
DA Gold price index.
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting its asset allocation.
Q15EasyStandard Benchmarks

Prior to the SEBI circular dated October 27, 2021, which of the following was a standard benchmark disclosure requirement for an Equity scheme?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, schemes needed to disclose return in INR and by way of CAGR for 'Equity scheme: Sensex or Nifty' as per the standard benchmarks table. (Page 273)
Q16EasyRelative Return Comparison

When a mutual fund scheme's performance is evaluated by comparing its returns against its benchmark or peer group, what is this type of comparison called?

AAbsolute return comparison
Relative return comparison
CAlpha generation comparison
DStandard deviation comparison
💡 Having understood the concept of benchmarks, one can also do relative comparison viz. how did a scheme perform vis-à-vis its benchmark or peer group. Such comparisons are called relative return comparisons. (Chapter 12, Quantitative Measures of Fund Manager Performance)
Q17MediumStandard Benchmarks for Hybrid Funds

According to the standardization guidelines, what is the prescribed benchmark for a Conservative Hybrid Fund for disclosure purposes?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DGold price
💡 For standardization, a Conservative Hybrid Fund needs to disclose returns using a 10 years dated GoI security as a benchmark. (Source: NISM Series V-A Study Material, Chapter 12, 'Standard benchmarks' table)
Q18HardTwo-tiered Benchmarking Structure (Exceptions)

Under the SEBI-mandated two-tiered benchmarking structure, which of the following scheme categories typically uses a *single* benchmark, rather than a two-tiered structure?

AGrowth / Equity Oriented Schemes
BIncome / Debt Oriented Schemes
Hybrid and Solution Oriented Schemes
DLarge Cap Fund Category
💡 For Hybrid and Solution Oriented Schemes, there would be a single benchmark, i.e., Broad Market Benchmark wherever available or bespoke to be created, which would then be applicable across the industry. Other listed categories like Growth/Equity and Income/Debt oriented schemes have a two-tiered structure.
Q19EasyPrinciples Concerning Benchmarks

According to SEBI circular dated October 27, 2021, all benchmarks followed for mutual fund schemes must necessarily be what type of indices?

APrice Return Indices (PRIs)
BNet Asset Value (NAV) Indices
CGross Return Indices (GRIs)
Total Return Indices (TRIs)
💡 The SEBI circular dated October 27, 2021, specifies that all the benchmarks followed will necessarily be Total Return Indices.
Q20EasyBenchmarks for Debt Schemes

What type of index is most appropriate as a benchmark for Gilt Funds?

AIndices based on Corporate Bonds
Indices based on Government Securities
CBlended indices of equity and debt
DReal Estate indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q21EasyBenchmarks for Other Schemes - International Funds

For an International Fund that proposes to invest largely in the US market, which of the following would be an appropriate benchmark?

AShanghai Composite Index
S&P 500
CNifty 50
DFTSE 100
💡 The benchmark would depend on where the scheme proposes to invest. S&P 500 may be appropriate for a scheme that would invest largely in the US market. (Page 272)
Q22EasyEffective dates of regulations

The two-tiered benchmarking structure for mutual fund schemes came into force with effect from which date?

AApril 1, 2021
BJuly 1, 2021
January 1, 2022
DApril 1, 2022
💡 The SEBI circular dated October 27, 2021, regarding the two-tiered benchmarking structure, came into force with effect from January 1, 2022. (Refer to footnote 104 in the 'Principles concerning Benchmarks of Mutual Fund Schemes' section).
Q23MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (FoFs)

In the case where a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what is the prescribed benchmark?

AA bespoke index created for the FoF
BThe benchmark of the primary underlying scheme
A Broad Market Index
DA blended index of the underlying schemes' benchmarks
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as its benchmark.
Q24MediumStandard Benchmarks

For an arbitrage mutual fund, which standard benchmark is mandated to be disclosed as per SEBI's standardization efforts?

ANIFTY 50 Arbitrage Index
B10 years dated GoI security
1 year T-Bill
DCRISIL Short Term Debt Index
💡 As per the table for standard benchmarks, 'All Debt Schemes having duration / maturity up to 1 year and arbitrage Funds' should disclose '1 year T-Bill' as a benchmark.
Q25EasyBenchmarks for Debt Schemes

For Gilt funds that invest only in Government securities, what type of index is considered appropriate as a benchmark?

AIndices based on a diverse mix of debt securities.
BIndices based on corporate bonds.
Indices based on Government Securities.
DEquity market indices.
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q26EasyStandard Benchmarks

What is the primary reason for SEBI's proposal to standardize benchmark disclosures for mutual fund schemes?

ATo increase fund managers' compensation.
BTo restrict the investment universe for fund managers.
To bring uniformity to the process of benchmarking and facilitate scheme performance comparison.
DTo encourage investors to only invest in passive funds.
💡 The proposal was made to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices. These disclosures form part of the Statement of Additional Information and all advertisements of Mutual Funds.
Q27EasyStandard Benchmarks for Disclosure

Which standard benchmark (apart from the scheme's specific benchmark) is required to be disclosed for an Equity scheme as per the standardization guidelines?

A10 years dated GoI security
B1 year T-Bill
Sensex or Nifty
DCRISIL Composite Bond Fund Index
💡 For the sake of standardization, Equity schemes need to disclose return in INR and by way of CAGR for Sensex or Nifty, apart from the scheme's specific benchmark. (Source: Chapter 12, Mutual Fund Scheme Selection, Table 11.2 Standard Benchmarks)
Q28EasyQuantitative Measures of Fund Manager Performance

When a scheme earns a higher return than its benchmark, what does this indicate concerning the fund manager's performance?

AUnderperformance
Outperformance
CNeutral performance
DRelative underperformance
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.7 Quantitative Measures of Fund Manager Performance)
Q29MediumStandard Benchmark Disclosure Requirements

Where are the disclosures for standard benchmarks (return in INR and CAGR) required to be included?

AOnly in the scheme's Key Information Document (KIM)
BOnly in annual reports to SEBI
In the Statement of Additional Information and all advertisements of Mutual Funds
DOnly on the AMC's official website
💡 These disclosures shall form part of the Statement of Additional Information and all advertisements of Mutual Funds.
Q30MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

The SEBI circular dated October 27, 2021, which established the two-tiered structure for benchmarks and mandated Total Return Indices, came into force with effect from which date?

AOctober 27, 2021
January 1, 2022
CApril 1, 2022
DDecember 1, 2021
💡 The SEBI circular dated October 27, 2021, 'shall come into force with effect from January 1, 2022'. (Footnote 104)
Q31MediumBenchmarks for Other Schemes

An international mutual fund scheme aims to invest primarily in the US market. Which benchmark would be most appropriate for this scheme?

AShanghai Composite Index
S&P 500
CNIFTY 50
DFTSE 100
💡 For International Funds, the benchmark would depend on where the scheme proposes to invest. S&P 500 may be appropriate for a scheme that would invest largely in the US market.
Q32MediumPrinciples concerning Benchmarks - Fund of Funds Schemes

For a Fund of Funds (FoFs) scheme that invests in *multiple* underlying schemes, what benchmark should be applied as per the SEBI circular dated October 27, 2021?

AThe benchmark of any one of the underlying schemes.
BA bespoke index created for the FoF.
A Broad Market Index.
DA blended index representing all underlying schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied.
Q33HardPrinciples concerning Benchmarks of Mutual Fund Schemes

The SEBI circular dated October 27, 2021, regarding the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from which date?

AApril 1, 2022
BOctober 27, 2021
January 1, 2022
DJuly 1, 2022
💡 The SEBI circular dated October 27, 2021, states that it 'shall come into force with effect from January 1, 2022'. (Note: Implementation for open-ended debt schemes as per Potential Risk Class was by April 1, 2022, but the circular's general effective date is Jan 1, 2022).
Q34MediumBenchmarks for Gilt Funds

Why are indices based on Government Securities most appropriate for Gilt funds?

ABecause they invest in a wide range of Government and Non-Government securities.
Because they invest only in Government securities.
CBecause they primarily invest in corporate bonds.
DBecause they have a very short maturity profile.
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.5 Benchmarks for Debt Schemes - Choice of Investment Universe)
Q35EasyBenchmarks for Specific Scheme Types

Which of the following would be an appropriate benchmark for a Liquid mutual fund scheme?

AS&P BSE Sensex
NSE's Liquid or CRISIL Liquid Fund Index
C10 years dated GoI security
DNifty 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q36EasyStandard Benchmarks for Disclosure

What is the standard benchmark required for disclosure for a 'Retirement Fund'?

A1 year T-Bill
B10 years dated GoI security
Sensex / Nifty
DCRISIL Liquid Fund Index
💡 As per the Table of Standard Benchmarks, Retirement Funds are required to disclose returns against Sensex / Nifty.
Q37EasyBenchmarks for Other Schemes

For a Gold Exchange Traded Fund (ETF), what is the appropriate benchmark?

AS&P BSE Sensex
BNIFTY Gold Index
Gold price
D10 years dated GoI security
💡 As per the NISM V-A syllabus, 'Gold price would be the benchmark for such funds.' (Source: PDF content 'Gold ETF: Gold price would be the benchmark for such funds.')
Q38MediumStandard Benchmarks for Disclosure - Hybrid Funds

Which standard benchmark (apart from the scheme's specific benchmark) is required to be disclosed for a Conservative Hybrid Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DNIFTY Midcap 100
💡 For Conservative Hybrid Funds, the standard benchmark required for disclosure is 10 years dated GoI security. (Source: Chapter 12, Mutual Fund Scheme Selection, Table 11.2 Standard Benchmarks)
Q39EasyStandard Benchmarks for Short Duration Debt Funds

Which standard benchmark is prescribed for all Debt Schemes having duration / maturity up to 1 year and arbitrage Funds for disclosure purposes?

A10 years dated GoI security
BSensex
CNifty
1 year T-Bill
💡 For standardization, all Debt Schemes having duration / maturity up to 1 year and arbitrage Funds must use the 1 year T-Bill as a benchmark for disclosure. (Source: NISM Series V-A Study Material, Chapter 12, 'Standard benchmarks' table)
Q40MediumStandard benchmarks

What is the primary purpose behind SEBI's proposal for standard benchmarks for various mutual fund schemes?

ATo increase the competition among fund managers
BTo allow AMCs more flexibility in choosing benchmarks
To bring standardization and ease comparison of scheme performance
DTo reduce the regulatory burden on mutual funds
💡 The proposal was 'in order to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices.'
Q41EasyQuantitative Measures of Fund Manager Performance

If a comparison of relative returns indicates that a mutual fund scheme earned a higher return than its benchmark, what does this primarily signify?

AUnderperformance by the fund manager.
Outperformance by the fund manager.
CThe scheme's absolute return.
DA change in the scheme's investment objective.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Quantitative Measures of Fund Manager Performance section)
Q42EasyStandard Benchmarks

As per SEBI's standardization guidelines for disclosures, which of the following is a mandatory standard benchmark for an equity mutual fund scheme?

A1-year T-Bill
B10-year dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, equity schemes need to disclose returns using Sensex or Nifty as a benchmark, apart from their scheme-specific benchmark. (NISM V-A, Chapter 12, Table 11.2, Page 273)
Q43EasyPrinciples concerning Benchmarks

As per the SEBI circular dated October 27, 2021, all benchmarks followed by mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
BGross Return Indices
Total Return Indices
DNet Return Indices
💡 The SEBI circular dated October 27, 2021, states that 'All the benchmarks followed will necessarily be Total Return Indices.'
Q44EasyStandard Benchmarks

According to SEBI guidelines, which benchmark is mandated for an Equity scheme's CAGR disclosure, apart from its scheme-specific benchmark?

A1-year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Composite Bond Fund Index
💡 For the sake of standardization, equity schemes need to disclose returns in INR and by way of CAGR for Sensex or Nifty, apart from their scheme-specific benchmarks.
Q45EasyBenchmarks for Other Schemes

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
BA blended index of equity and debt
Gold price
D10 years dated GoI security
💡 The text explicitly states: 'Gold price would be the benchmark for such funds.'
Q46MediumStandard Benchmarks

As per SEBI's standardization norms for benchmark disclosure, which benchmark is mandated for a Balanced Hybrid Fund or an Aggressive Hybrid Fund?

A10 years dated GoI security
B1 year T-Bill
Sensex / Nifty
DCRISIL Liquid Fund Index
💡 For Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation schemes, the mandated benchmark for disclosure is Sensex / Nifty.
Q47EasyBenchmarks for Other Schemes - Gold ETF

What is the appropriate benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
Gold price
CNifty Commodity Index
D10 years dated GoI security
💡 For Gold ETFs, the gold price would be the benchmark.
Q48EasyBenchmarks for Other Schemes

What is the most appropriate benchmark for a Gold Exchange Traded Fund (ETF)?

ANIFTY Commodities Index
BS&P BSE Metal Index
Gold price
DCRISIL Gold Fund Index
💡 For Gold ETF, 'Gold price would be the benchmark for such funds.'
Q49EasyBenchmarks for Debt Schemes

What type of benchmark is most appropriate for a Gilt mutual fund scheme?

AAn index based on corporate bonds.
An index based on Government Securities.
CA blended index of equity and debt.
DA short-term money market index.
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q50MediumBenchmarks for International Funds

An international fund seeking to invest primarily in the US market would most likely use which of the following as its benchmark?

AShanghai Composite Index
S&P 500
CNifty 50
DFTSE 100
💡 The benchmark would depend on where the scheme proposes to invest. S&P 500 may be appropriate for a scheme that would invest largely in the US market. (Page 273)
Q51HardBenchmarks for Other Schemes (Hybrid Funds)

A hybrid mutual fund scheme maintains an asset allocation of approximately 65 percent in equity and the balance in debt. How would a suitable synthetic benchmark for this scheme typically be calculated?

A65 percent of a debt index and 35 percent of an equity index.
B100 percent of an equity index, ignoring the debt component.
65 percent of an equity index and 35 percent of a debt index.
DA simple average of a single equity and a single debt index.
💡 The text provides an example: 'For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.' This shows the benchmark weights align with the asset allocation. (Page 272)
Q52HardPrinciples concerning Benchmarks (Equity Schemes)

For a Growth / Equity Oriented Scheme under SEBI's two-tiered benchmark structure, what is the characteristic of the second-tier benchmark?

AIt is a Broad Market Index reflecting the overall equity market.
It is a bespoke index tailored to the investment style/strategy of the Fund Manager.
CIt is always the Nifty 50 or Sensex.
DIt reflects the performance of global equity markets.
💡 For Growth / Equity Oriented Schemes, the Tier-2 benchmark is described as 'Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index'. The first tier reflects the broad category (e.g., S&P BSE100 Index).
Q53EasyBenchmarks for Gilt Funds

For Gilt funds, which invest only in Government securities, what type of index is most appropriate as a benchmark?

AIndices based on Non-Government Securities
Indices based on Government Securities
CEquity indices like NIFTY 50
DBlended equity and debt indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Chapter 12, Benchmarks for Debt Schemes - Choice of Investment Universe)
Q54HardTwo-tiered Benchmarking Structure

Under the two-tiered benchmarking structure introduced by SEBI, what is the characteristic of the Tier-2 benchmark for Growth/Equity Oriented Schemes?

AIt is a broad market index reflecting the scheme category.
It is a bespoke index demonstrating the fund manager's investment style/strategy.
CIt is always the Nifty 50 Index.
DIt is a blend of equity and debt indices.
💡 For Growth/Equity Oriented Schemes, Tier-1 is a Broad Market Index per Index provider for each category, while Tier-2 is 'Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index'. (Principles concerning Benchmarks of Mutual Fund Schemes table)
Q55MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

Under the SEBI circular dated October 27, 2021, which of the following scheme categories generally has a single benchmark because its characteristics are already tapered according to its focus?

AGrowth / Equity Oriented Schemes
BIncome / Debt Oriented Schemes
Thematic/Sectoral Schemes
DHybrid and Solution Oriented Schemes
💡 The circular states: 'Thematic/ Sectoral schemes: There would be a single benchmark as characteristics of the schemes are already tapered according to the theme/sector.' (Page 274)
Q56MediumBenchmarks for Other Schemes

A mutual fund scheme aims to invest largely in the US market. Which of the following benchmarks would be most appropriate for this international fund?

AShanghai Composite Index
BS&P BSE Sensex
S&P 500
DNifty 50 Index
💡 For International Funds, the benchmark depends on where the scheme proposes to invest. 'S&P 500 may be appropriate for a scheme that would invest largely in the US market.' (Page 272)
Q57EasyQuantitative Measures of Fund Manager Performance

When a mutual fund scheme's performance is compared against its benchmark, what type of comparison is being made?

AAbsolute return comparison
BPeer group comparison
Relative return comparison
DRisk-adjusted return comparison
💡 Comparisons of how a scheme performed vis-à-vis its benchmark are called relative return comparisons. (NISM V-A, Chapter 12, Page 274)
Q58HardPrinciples concerning Benchmarks of Mutual Fund Schemes

SEBI's circular on guiding principles for uniformity in benchmarks, which introduced a two-tiered structure for certain scheme categories, came into force on which date?

AOctober 27, 2021
January 1, 2022
CApril 1, 2022
DDecember 31, 2021
💡 SEBI circular dated October 27, 2021, 'This shall come into force with effect from January 1, 2022'.
Q59MediumStandard benchmarks for hybrid schemes

As per the standardized benchmarks, which index is designated for a Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation scheme?

A10 years dated GoI security
B1 year T-Bill
Sensex / Nifty
DCRISIL Composite Bond Index
💡 For Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation schemes, the standardized benchmark is Sensex / Nifty. (Refer to 'Table 11.2: Standard benchmarks' section).
Q60EasyBenchmarks for Other Schemes - Gold ETF

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

ANIFTY Commodity Index
BS&P BSE Metal Index
Gold price
DCRISIL Gold Index
💡 For Gold ETFs, the gold price itself would be the benchmark.
Q61MediumStandard Benchmarks

Which standard benchmark is prescribed for a Conservative Hybrid Fund for CAGR disclosure?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DCRISIL Conservative Hybrid Index
💡 As per the standardization guidelines, a Conservative Hybrid Fund must disclose CAGR against the 10 years dated GoI security.
Q62MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

The SEBI circular dated October 27, 2021, introducing the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from:

AOctober 27, 2021
BDecember 1, 2021
January 1, 2022
DApril 1, 2022
💡 The circular states, 'This shall come into force with effect from January 1, 2022.' (Source: PDF content, footnote 104)
Q63MediumPrinciples concerning Benchmarks

As per SEBI circular dated October 27, 2021, which type of benchmark is mandatory for all benchmarks followed by mutual fund schemes under the new two-tiered structure?

APrice Return Indices
BAbsolute Return Indices
Total Return Indices
DSectoral Return Indices
💡 The SEBI circular dated October 27, 2021, specifies that all benchmarks followed will necessarily be Total Return Indices.
Q64EasyQuantitative Measures of Fund Manager Performance

What does it indicate if a mutual fund scheme earned a higher return than its chosen benchmark over a specific period?

AThe fund manager under-performed.
BThe scheme was poorly managed.
The fund manager out-performed.
DThe benchmark was unsuitable for the scheme.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Page 275)
Q65EasyPrinciples concerning Benchmarks of Mutual Fund Schemes

As per SEBI circular dated October 27, 2021, all benchmarks followed for mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CDividend Yield Indices
DVolatility Indices
💡 Vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed will necessarily be Total Return Indices.
Q66MediumTwo-tiered benchmarking structure components

In the two-tiered benchmarking structure, what is the primary purpose of the 'Tier-1' benchmark?

ATo reflect the specific investment style or strategy of the fund manager.
BTo provide a bespoke index for niche investment opportunities.
To be reflective of the broad category of the scheme.
DTo compare the fund's performance against a global index.
💡 The first-tier benchmark will be reflective of the category of the scheme. The second-tier benchmark is demonstrative of the investment style/strategy of the Fund Manager. (Refer to 'Principles concerning Benchmarks of Mutual Fund Schemes' section).
Q67MediumHybrid Funds Benchmarks

A hybrid scheme with an asset allocation of approximately 65 percent in equity and the balance in debt would typically use a synthetic index calculated as:

A65% of NIFTY 50 and 35% of CRISIL Liquid Fund Index
65% of S&P BSE Sensex and 35% of I-Bex
C100% of S&P BSE 100
D50% of S&P BSE Sensex and 50% of 10 years dated GoI security
💡 The content states, 'For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.' (Source: PDF content 'For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.')
Q68MediumPrinciples concerning Benchmarks

According to SEBI circular dated October 27, 2021, which of the following is a key requirement for all benchmarks followed under the new two-tiered structure for mutual fund schemes?

AThey must be Gross Return Indices.
BThey must be Price Return Indices.
They must necessarily be Total Return Indices.
DThey can be either Price Return or Total Return Indices at the AMC's discretion.
💡 Vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed will necessarily be Total Return Indices. (Page 274)
Q69EasyBenchmarks for Hybrid Funds

For a hybrid fund with an asset allocation of approximately 65 percent in equity and the balance in debt, how is its benchmark typically constructed?

ABy using a pure equity index like S&P BSE Sensex.
BBy using a pure debt index like I-Bex.
By creating a synthetic index with 65 percent of an equity index and 35 percent of a debt index.
DBy using the 10 years dated GoI security.
💡 A hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex. (Hybrid Funds section)
Q70MediumBenchmarks for Other Schemes - International Funds

A mutual fund scheme aims to invest largely in the US market. Which of the following would be an appropriate benchmark for this scheme?

AShanghai Composite Index
S&P 500
CNifty 50
D10-year GoI Security
💡 For International Funds, the benchmark depends on where the scheme proposes to invest. S&P 500 may be appropriate for a scheme that would invest largely in the US market.
Q71EasyBenchmarks for Debt Schemes

Which of the following is a suitable benchmark for a Liquid scheme that invests in securities with up to 91 days' maturity?

ANIFTY 50 Index
CRISIL Liquid Fund Index
C10-year G-sec Index
DS&P BSE Sensex
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.5 Benchmarks for Debt Schemes)
Q72MediumPrinciples concerning Benchmarks

In SEBI's two-tiered structure for benchmarking mutual fund schemes, what does the first-tier benchmark primarily reflect?

AThe specific investment style/strategy of the Fund Manager.
The broader category of the scheme.
CThe performance of the underlying assets in a FoF.
DThe specific sector or theme of the scheme.
💡 As per the SEBI circular, 'The first-tier benchmark will be reflective of the category of the scheme'.
Q73MediumBenchmarks for Fund of Funds (FoFs)

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what type of benchmark should it use as per SEBI guidelines?

AThe benchmark of the largest underlying scheme by AUM.
BA bespoke index created to reflect the FoF's unique strategy.
A Broad Market Index.
DAn average of the benchmarks of all underlying schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as its benchmark.
Q74HardStandard Benchmarks

Which of the following scheme types, as per SEBI's standardization, is mandated to disclose the 10 years dated GoI security as a benchmark, apart from its scheme-specific benchmark?

ABalanced Hybrid Fund
BRetirement Fund
Equity Savings Fund
DAggressive Hybrid Fund
💡 As per the 'Table 11.2: Blended indices for hybrid funds' and 'Standard benchmarks' section: Balanced Hybrid Fund, Retirement Fund, and Aggressive Hybrid Fund are benchmarked against Sensex / Nifty. Only 'Equity Savings' is listed with '10 years dated GoI security' as the standard benchmark.
Q75MediumPrinciples concerning Benchmarks

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what type of benchmark will be applied as per SEBI's guidelines?

AThe benchmark of the highest performing underlying scheme.
BA bespoke benchmark created specifically for the FoF.
A Broad Market Index.
DA blended index reflecting the average of all underlying schemes' benchmarks.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied.
Q76MediumBenchmarks for Hybrid Funds

A hybrid mutual fund scheme with an asset allocation of 65% in equity and 35% in debt would typically use a benchmark structured as:

A100% S&P BSE Sensex
B100% I-Bex
A synthetic index of 65% S&P BSE Sensex and 35% I-Bex
DA 1-year T-Bill
💡 Hybrid funds invest in a mix of debt and equity. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.
Q77EasyStandard Benchmarks

Which standard benchmark is applicable for an Arbitrage Fund for CAGR disclosure?

ASensex or Nifty
B10 years dated GoI security
1 year T-Bill
DCRISIL Arbitrage Index
💡 As per standardization guidelines, all Debt Schemes having duration/maturity up to 1 year and Arbitrage Funds must disclose CAGR against the 1 year T-Bill.
Q78HardPrinciples concerning Benchmarks

As per SEBI circulars, the first tier benchmarks for open-ended debt schemes based on the Potential Risk Class were implemented by AMCs with effect from which date?

AJanuary 1, 2022
BMarch 1, 2022
April 1, 2022
DOctober 27, 2021
💡 The first tier benchmarks for open-ended debt schemes as per the Potential Risk Class were to be implemented by AMCs with effect from April 1, 2022. (NISM V-A, Chapter 12, Page 274, footnote 105)
Q79EasySEBI Two-Tier Benchmarking Structure

According to SEBI's two-tiered benchmarking guidelines, what must all benchmarks necessarily be?

APrice Return Indices (PRI)
Total Return Indices (TRI)
CBroad Market Indices only
DFund-specific bespoke indices
💡 The SEBI circular dated October 27, 2021, explicitly states that 'All the benchmarks followed will necessarily be Total Return Indices.'
Q80MediumStandard Benchmarks

Which of the following is the standardized benchmark for a Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation Fund, as per SEBI guidelines?

A1 year T-Bill
B10 years dated GoI security
Sensex / Nifty
DCRISIL Short Term Debt Index
💡 For Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation schemes, the standardized benchmark is Sensex / Nifty.
Q81EasyBenchmarks for Debt Schemes

Which of the following is an appropriate benchmark for a liquid mutual fund scheme?

AS&P BSE Sensex
B10-year G-sec Index
NSE's Liquid or CRISIL Liquid Fund Index
DNIFTY 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index suitable. (NISM V-A, Chapter 12, Page 272)
Q82HardPrinciples Concerning Benchmarks (Implementation Specifics)

The first-tier benchmarks for open-ended debt schemes, as per the Potential Risk Class, were to be implemented by AMCs with effect from which date?

AJanuary 1, 2022
BOctober 27, 2021
April 1, 2022
DDecember 31, 2021
💡 The first tier benchmarks for open ended debt schemes as per the Potential Risk Class and the same will be implemented by the AMCs with effect from April 1, 2022. (Source: SEBI circular dated Dec 2021).
Q83HardSEBI Two-Tier Benchmarking Structure

What does the second-tier benchmark primarily aim to demonstrate within SEBI's two-tiered structure for mutual fund schemes?

AThe overall market performance for the fund category.
The investment style/strategy of the Fund Manager within the category.
CThe scheme's performance against inflation.
DThe performance of the scheme's peer group.
💡 As per SEBI circular dated October 27, 2021, the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q84HardPrinciples concerning Benchmarks of Mutual Fund Schemes (FoFs)

According to the SEBI circular dated October 27, 2021, what is the correct approach to benchmarking for Fund of Funds (FoFs) schemes based on their investment strategy?

AAll FoFs must use a bespoke index.
If a FoF invests in a single fund, it uses the underlying fund's benchmark; if it invests in multiple schemes, it uses a Broad Market Index.
CFoFs investing in multiple schemes use the benchmark of the largest fund, while single-fund FoFs use a Broad Market Index.
DFoFs are exempt from benchmarking requirements due to their diversified nature.
💡 The circular states: 'If a FoF scheme is investing in a single fund, then benchmark of the underlying scheme will be used for corresponding FoF. However, in case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.' (Page 274)
Q85MediumBenchmarks for Hybrid Funds

How is the benchmark for a hybrid mutual fund typically constructed?

AIt uses only an equity index
BIt uses only a debt index
It is a blend of an equity and a debt index
DIt uses the gold price as a benchmark
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, with proportions reflecting the fund's asset allocation. (Source: NISM Series V-A Study Material, Chapter 12, 'Hybrid Funds' section)
Q86HardPrinciples concerning Benchmarks

As per SEBI's two-tiered benchmarking structure guidelines (Oct 2021), which of the following scheme types is explicitly stated to have a *single benchmark* rather than a two-tiered structure?

AIncome / Debt Oriented Schemes
BGrowth / Equity Oriented Schemes
Thematic/Sectoral Schemes
DFund of Funds (FoFs) investing in a single fund
💡 Thematic/Sectoral schemes would have a single benchmark as their characteristics are already tapered according to the theme/sector. Income/Debt and Growth/Equity oriented schemes have a two-tiered structure. (NISM V-A, Chapter 12, Page 274)
Q87EasyTotal Return Indices Mandate

As per SEBI's principles concerning benchmarks of mutual fund schemes, what type of indices must all benchmarks necessarily be?

APrice Return Indices (PRIs)
Total Return Indices (TRIs)
CBroad Market Indices (BMIs)
DCustomized Indices (CIs)
💡 Vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed will necessarily be Total Return Indices. (Chapter 12, Principles concerning Benchmarks of Mutual Fund Schemes)
Q88EasyBenchmarks for Debt Schemes

A Gilt Fund invests exclusively in Government securities. Which type of index would be most appropriate as its benchmark?

AA broad market equity index like Nifty 50
BAn index based on corporate bonds
An index based on Government Securities
DA blended index of equity and debt
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Page 272)
Q89HardStandard Benchmarks

For Debt Schemes which are not covered in the 'duration/maturity up to 1 year' category, which benchmark is mandated for disclosure as per SEBI's standardization norms?

A1 year T-Bill
10 years dated GoI security
CNifty 50
DCRISIL Composite Bond Fund Index
💡 For All Debt Schemes which are not covered in point 2 (up to 1 year duration and arbitrage funds), the mandated benchmark is a 10 years dated GoI security.
Q90HardPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021) - Effective Date

The SEBI circular dated October 27, 2021, introducing guiding principles for uniformity in benchmarks of mutual fund schemes, came into force with effect from which date?

AOctober 27, 2021
BDecember 31, 2021
January 1, 2022
DApril 1, 2022
💡 The SEBI circular dated October 27, 2021, states: 'This shall come into force with effect from January 1, 2022'. (Page 274, footnote 104)
Q91MediumQuantitative Measures of Fund Manager Performance

If a scheme earned a higher return than its benchmark, what would this typically indicate concerning the fund manager's performance?

AThe fund manager under-performed.
The fund manager out-performed.
CThe fund manager's performance was neutral.
DThe benchmark was incorrectly chosen.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q92MediumPrinciples Concerning Benchmarks

The SEBI circular dated October 27, 2021, introducing the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from which date?

AOctober 27, 2021
January 1, 2022
CApril 1, 2022
DDecember 31, 2021
💡 The SEBI circular on guiding principles for bringing uniformity in benchmarks of mutual fund schemes, dated October 27, 2021, states that it shall come into force with effect from January 1, 2022.
Q93EasyBenchmarks for Debt Schemes

For Gilt Funds, which invest exclusively in Government securities, what type of index is most appropriate as a benchmark?

AIndices based on Corporate Bonds
Indices based on Government Securities
CBlended equity and debt indices
DMoney market indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q94MediumSEBI Guidelines on Benchmarks - Tier-2 Purpose

What is the specific role of the 'Tier-2' benchmark in the two-tiered structure introduced by SEBI's October 2021 circular?

AIt reflects the broad market category of the scheme.
It demonstrates the investment style/strategy of the Fund Manager within the category.
CIt serves as a single, overarching benchmark for all scheme types.
DIt is used only for international funds to compare against global peers.
💡 The two-tiered structure states that the first-tier benchmark will be reflective of the category of the scheme, and the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.6 Principles concerning Benchmarks of Mutual Fund Schemes)
Q95HardPrinciples concerning Benchmarks of Mutual Fund Schemes

SEBI's circular dated October 27, 2021, on guiding principles for uniformity in benchmarks of mutual fund schemes, came into force with effect from which date?

AApril 1, 2021
January 1, 2022
COctober 27, 2021
DMarch 31, 2022
💡 The SEBI circular dated October 27, 2021, concerning guiding principles for uniformity in benchmarks, came into force with effect from January 1, 2022.
Q96MediumBenchmarks for International Funds

For an International Fund that seeks to invest across a number of countries, what type of benchmark would be most appropriate?

AA single country-specific index like S&P 500
BA global debt index
A synthetic index blended from relevant country indices
DThe Indian Nifty 50
💡 A scheme that seeks to invest across a number of countries, can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest.
Q97MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021)

According to the SEBI circular dated October 27, 2021, all benchmarks followed by mutual fund schemes must necessarily be which type of indices?

APrice Return Indices (PRIs)
Total Return Indices (TRIs)
CCustom-built indices only
DSector-specific indices
💡 All the benchmarks followed will necessarily be Total Return Indices. (Page 273)
Q98HardPrinciples concerning Benchmarks of Mutual Fund Schemes (Two-tiered structure)

As per the SEBI circular on uniformity in benchmarks, what is the primary distinction between the Tier-1 and Tier-2 benchmarks?

ATier-1 reflects the fund manager's style, while Tier-2 reflects the scheme's category.
Tier-1 reflects the scheme's category, while Tier-2 demonstrates the fund manager's investment style/strategy.
CTier-1 is for domestic investments, while Tier-2 is for international investments.
DTier-1 is a price return index, while Tier-2 is a total return index.
💡 The first-tier benchmark will be reflective of the category of the scheme, and the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q99HardBenchmarks for International Funds

A mutual fund scheme aims to invest across a number of different countries globally. Which type of benchmark would be most appropriate for such an International Fund?

AA single country's broad market index like S&P 500
BThe NIFTY 50 index
A synthetic index that is a blend of indices relevant to the countries where it proposes to invest
DThe average return of all global funds
💡 A scheme that seeks to invest across a number of countries can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest. (Source: NISM Series V-A Study Material, Chapter 12, 'International Funds' section)
Q100EasyBenchmarks for Gold ETFs

Which of the following is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
BNIFTY 50
Gold price
D10 years dated GoI security
💡 For Gold ETFs, the Gold price would be the benchmark. (Chapter 12, Benchmarks for Other Schemes - Gold ETF)
Q101EasyBenchmarks for Other Schemes

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
Price of physical gold
CNIFTY 50
D10-year G-sec Index
💡 For Gold ETFs, the gold price itself serves as the benchmark. (NISM V-A, Chapter 12, Page 272)
Q102MediumTwo-tiered Benchmarking Structure

What is the primary characteristic of the 'Tier-1' benchmark in the two-tiered structure for mutual fund schemes?

AIt reflects the fund manager's specific investment style or strategy.
BIt is a bespoke index created uniquely for the scheme.
It is reflective of the category of the scheme.
DIt is an average of the benchmarks of the peer group schemes.
💡 The first-tier benchmark will be reflective of the category of the scheme, while the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q103EasyStandard Benchmarks for Disclosure

Which of the following is the standard benchmark required for disclosure for an Equity Scheme, apart from its scheme-specific benchmark?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, Equity schemes need to disclose returns in INR and by way of CAGR for Sensex or Nifty, apart from their scheme-specific benchmarks.
Q104HardSEBI Two-Tier Benchmarking Structure

What is the primary objective of SEBI's two-tiered benchmarking structure for mutual fund schemes, introduced via a circular dated October 27, 2021?

ATo reduce the number of benchmarks used by AMCs.
BTo simplify the calculation of absolute returns for investors.
To standardize and bring uniformity, with the first tier reflecting the category and the second tier demonstrating investment style.
DTo ensure all schemes only use a single broad market index for comparison.
💡 SEBI circular dated October 27, 2021, states that the two-tiered structure for benchmarking aims to standardize and bring uniformity. The first-tier benchmark will be reflective of the category of the scheme, and the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q105EasyBenchmarks for Debt Schemes

Which of the following is a suitable benchmark for a Liquid scheme?

NSE's Liquid Fund Index
BS&P BSE Sensex
CNifty 50
D10 years dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q106MediumBenchmarks for Other Schemes - Hybrid Funds

A Hybrid fund with an asset allocation of approximately 65% in equity and 35% in debt would typically use a benchmark that is:

ASolely an equity index like S&P BSE Sensex.
BSolely a debt index like I-Bex.
A blend of 65% S&P BSE Sensex and 35% I-Bex.
DThe gold price index.
💡 Hybrid funds invest in a mix of debt and equity. A hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.
Q107EasyBenchmarks for Debt Schemes

Which of the following is typically used as a benchmark for Liquid mutual fund schemes?

AS&P BSE Sensex
BNIFTY 50
CRISIL Liquid Fund Index
D10 years dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as CRISIL Liquid Fund Index suitable. (Source: PDF content 'Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.')
Q108EasyBenchmarks for Other Schemes (Gold ETF)

What is the standard benchmark for a Gold ETF?

ANifty 50
B10 years dated GoI security
Gold price
DCRISIL Composite Bond Fund Index
💡 For Gold ETFs, the Gold price itself would be the benchmark.
Q109HardReal Estate Funds Benchmarks

Why are real estate indices generally considered to have less wider acceptance compared to equity indices as benchmarks for mutual funds?

AReal estate funds are not allowed to use benchmarks.
BReal estate indices are only available for international properties.
CReal estate services companies have not developed any indices.
These indices have shorter histories and are yet to earn wider acceptance.
💡 The content states, 'A few real estate services companies have developed real estate indices. These have shorter histories, and are yet to earn the wider acceptance that the equity indices enjoy.' (Source: PDF content 'Real Estate Funds: A few real estate services companies have developed real estate indices. These have shorter histories, and are yet to earn the wider acceptance that the equity indices enjoy.')
Q110MediumPrinciples concerning Benchmarks

If a Fund of Funds (FoF) scheme invests in *multiple* underlying schemes, what benchmark should be applied as per SEBI guidelines?

AThe benchmark of the highest performing underlying scheme.
BThe benchmark of the lowest performing underlying scheme.
A Broad Market Index.
DA bespoke index created by the FoF manager.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as the benchmark. (NISM V-A, Chapter 12, Page 274)
Q111EasyTwo-tiered benchmarking structure components

In the two-tiered benchmarking structure, what is the 'Tier-2' benchmark designed to be demonstrative of?

AThe overall market capitalization of the scheme's universe.
The investment style/strategy of the Fund Manager within the category.
CThe average performance of all schemes in the same category.
DThe regulatory compliance standards of the scheme.
💡 The second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category. (Refer to 'Principles concerning Benchmarks of Mutual Fund Schemes' section).
Q112MediumBenchmarks for Other Schemes - Hybrid Funds

A hybrid mutual fund scheme has an asset allocation of approximately 70% in equity and 30% in debt. Which type of benchmark would be most suitable for this scheme?

AA pure equity index like NIFTY 50
BA pure debt index like I-Bex
A synthetic index blended from an equity and a debt index
DA real estate index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting its asset allocation.
Q113MediumQuantitative Measures of Fund Manager Performance

How is the outperformance or underperformance of a mutual fund manager typically assessed?

ABy comparing the scheme's absolute returns over a short period.
By comparing the scheme's returns against its benchmark or peer group (relative return comparison).
CBy analyzing the fund's expense ratio.
DBy observing the number of investors in the scheme.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. In the reverse case, the initial premise would be that the fund manager under-performed. (Page 274)
Q114EasyBenchmarks for Debt Schemes

Which of the following is typically used as a benchmark for Liquid mutual fund schemes?

AS&P BSE Sensex
B10 years dated GoI security
NSE's Liquid or CRISIL Liquid Fund Index
DNifty 50 Index
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index suitable.
Q115EasyBenchmarks for Other Schemes

What is considered a suitable benchmark for a Gold ETF?

AS&P BSE Sensex
Gold price
C10 years dated GoI security
DNifty 50
💡 Gold price would be the benchmark for such funds. (Gold ETF section)
Q116MediumBenchmarks for Hybrid Funds

For a hybrid mutual fund scheme with an asset allocation of approximately 65 percent in equity and the balance in debt, how is its benchmark typically constructed?

AIt uses only an equity index like S&P BSE Sensex.
BIt uses only a debt index like I-Bex.
It is a blend of an equity and a debt index, weighted according to the asset allocation.
DIt uses a broad market index that does not differentiate between equity and debt.
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, for instance, a synthetic index calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.
Q117MediumStandard Benchmarks (Disclosure Requirements)

Disclosures of scheme returns against standard benchmarks (e.g., Sensex/Nifty, 1-year T-Bill) must form part of which mutual fund documents?

AOnly Scheme Information Document (SID)
BOnly Key Information Document (KID)
Statement of Additional Information (SAI) and all advertisements of Mutual Funds
DOnly the Offer Document
💡 These disclosures shall form part of the Statement of Additional Information and all advertisements of Mutual Funds.
Q118MediumStandard Benchmarks for Conservative Hybrid Funds

As per SEBI's standardization for disclosure, what is the mandated benchmark for a Conservative Hybrid Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DNIFTY Financial Services Index
💡 For Conservative Hybrid Fund, the standard benchmark for disclosure is 10 years dated GoI security. (Chapter 12, Standard benchmarks table)
Q119HardPrinciples concerning Benchmarks of Mutual Fund Schemes - Hybrid and Solution Oriented Schemes

Under SEBI's two-tiered benchmarking structure, what is specified for Hybrid and Solution Oriented Schemes?

AThey must use a Tier-1 broad market index and a Tier-2 bespoke index.
They are exempt from the two-tiered structure and use a single benchmark.
CThey must use a blended index with fixed equity and debt components.
DThey must use the 10 years dated GoI security as their sole benchmark.
💡 For 'Hybrid and Solution Oriented Schemes', the guideline states: 'There would be a single benchmark, i.e., Broad Market Benchmark wherever available or bespoke to be created for schemes, which would then be applicable across industry.' This implies they do not follow the two-tiered structure.
Q120EasyQuantitative Measures of Fund Manager Performance

When a mutual fund scheme earns a higher return than its benchmark, this is indicative of:

AUnderperformance by the fund manager
Outperformance by the fund manager
CAbsolute return comparison
DPeer group comparison
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q121EasyStandard Benchmarks

As per SEBI's standardization for disclosing returns, what is the mandated benchmark for an Equity scheme, apart from its scheme-specific benchmark?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, Equity schemes need to disclose return in INR and by way of CAGR for Sensex or Nifty, apart from the scheme benchmarks.
Q122EasyBenchmarks for Gold ETFs

What is the appropriate benchmark for a Gold Exchange Traded Fund (ETF)?

ANifty 50
BS&P BSE Sensex
Gold price
D10 years dated GoI security
💡 For Gold ETFs, the Gold price would be the benchmark.
Q123EasyTwo-tiered benchmarking structure

Under the two-tiered benchmarking structure introduced by SEBI, all benchmarks followed must necessarily be what type of indices?

APrice Return Indices (PRI)
Total Return Indices (TRI)
CGross Return Indices (GRI)
DNet Asset Value (NAV) based indices
💡 Vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed under the two-tiered structure will necessarily be Total Return Indices. (Refer to 'Principles concerning Benchmarks of Mutual Fund Schemes' section).
Q124HardPrinciples concerning Benchmarks of Mutual Fund Schemes

For Income / Debt Oriented Schemes under the SEBI two-tiered benchmarking structure, which statement accurately describes the Tier-1 and Tier-2 benchmarks?

ATier-1 is a bespoke index like AAA Bond Index, and Tier-2 is a broad market index like NIFTY Ultra Short Duration Debt Index.
Tier-1 is a broad market index like NIFTY Ultra Short Duration Debt Index, and Tier-2 is a bespoke index like AAA Bond Index.
CBoth Tier-1 and Tier-2 are broad market indices reflecting the overall debt market.
DTier-1 is based on 10 years dated GoI security, and Tier-2 is based on 1 year T-Bill.
💡 For Income / Debt Oriented Schemes, Tier-1 is 'One Broad Market Index per Index provider for each category such as NIFTY Ultra Short Duration Debt Index or CRISIL Ultra Short Term Debt Index for Ultra Short Duration Fund Category.' Tier-2 is 'Bespoke according to Investment Style/Strategy of the Index like AAA Bond Index.' (Source: PDF content 'Table: Type of Scheme, Type of Benchmark -> Income / Debt Oriented Schemes')
Q125MediumQuantitative Measures of Fund Manager Performance

When a mutual fund scheme earns a higher return than its chosen benchmark, what does this generally indicate?

AThe fund manager under-performed.
BThe benchmark was inappropriate.
Outperformance by the fund manager.
DThe scheme carries higher risk.
💡 'If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.' (Source: PDF content 'Quantitative Measures of Fund Manager Performance -> If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.')
Q126EasyStandard benchmarks

The disclosures regarding standardized benchmarks for mutual funds shall form part of which of the following documents?

AKey Information Memorandum (KIM)
BScheme Information Document (SID)
Statement of Additional Information (SAI) and all advertisements
DAnnual Report only
💡 These disclosures shall form part of the Statement of Additional Information and all advertisements of Mutual Funds. (Source: PDF content 'These disclosures shall form part of the Statement of Additional Information and all advertisements of Mutual Funds.')
Q127EasyStandard benchmarks (Pre-Oct 2021)

As per the pre-October 2021 standardization norms, what was the standard benchmark for all Debt Schemes having duration/maturity up to 1 year and Arbitrage Funds?

ASensex / Nifty
B10 years dated GoI security
1 year T-Bill
DGold price
💡 For all Debt Schemes having duration/maturity up to 1 year and arbitrage Funds, the standard benchmark was 1 year T-Bill. (Page 273)
Q128HardBenchmarks for International Funds

A mutual fund launches an international fund that proposes to invest across a number of countries, including a significant allocation to the US market and some to emerging Asian markets. Which of the following would be the most appropriate benchmark for this scheme?

AS&P 500 only, as it's a major market.
BShanghai Composite Index, due to emerging market exposure.
A synthetic index that is a blend of indices relevant to the countries where it proposes to invest.
DA global bond index, assuming it's a debt-focused international fund.
💡 For International Funds, the benchmark depends on where the scheme proposes to invest. A scheme that seeks to invest across a number of countries can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest. (Refer to 'International Funds' section).
Q129EasySEBI Guidelines on Benchmarks

As per SEBI circular dated October 27, 2021, all benchmarks followed by mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CDividend Yield Indices
DVolatility Indices
💡 Vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed will necessarily be Total Return Indices. (Source: NISM Series V-A Study Material, Chapter 12, 'Principles concerning Benchmarks of Mutual Fund Schemes' section)
Q130EasyStandard Benchmarks

Prior to the SEBI October 2021 circular, what was the standard benchmark disclosed for an Equity scheme?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 As per the 'Standard benchmarks' section, for an 'Equity scheme', the benchmark was 'Sensex or Nifty'.
Q131MediumPrinciples concerning Benchmarks of Mutual Fund Schemes - FoFs

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark principle applies?

ABenchmark of the largest underlying scheme
BA bespoke index created by the AMC
Broad Market Index
DAverage of the benchmarks of all underlying schemes
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied.
Q132MediumSEBI Two-tiered Benchmarking Structure

Under SEBI's two-tiered benchmarking structure, what is the primary characteristic of the 'Tier-1' benchmark for Growth / Equity Oriented Schemes?

AIt is bespoke, according to the investment style/strategy of the Fund Manager.
It is a broad market index reflective of the scheme category.
CIt is always the Nifty 50 Index.
DIt is a blended index of equity and debt.
💡 The first-tier benchmark will be reflective of the category of the scheme, such as 'One Broad Market Index per Index provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category'. (Page 274)
Q133EasyStandard Benchmarks

Where are the disclosures regarding standardized benchmarks typically required to be included by Mutual Funds?

AOnly in the Scheme Information Document (SID)
BOnly in annual reports
In the Statement of Additional Information and all advertisements of Mutual Funds
DOnly on the AMC's website
💡 These disclosures shall form part of the Statement of Additional Information and all advertisements of Mutual Funds.
Q134EasyStandard Benchmarks

What is the mandatory standard benchmark for all Debt Schemes having a duration/maturity up to 1 year and for Arbitrage Funds, as per SEBI's disclosure requirements?

A10 years dated GoI security
BS&P BSE Sensex
1 year T-Bill
DNIFTY 50
💡 For all Debt Schemes having duration/maturity up to 1 year and Arbitrage Funds, the 1 year T-Bill is the prescribed standard benchmark for disclosure. (NISM V-A, Chapter 12, Table 11.2, Page 273)
Q135MediumStandard Benchmarks

According to the standard benchmarks disclosed prior to the SEBI October 2021 circular, which benchmark was applicable to 'All Debt Schemes having duration / maturity up to 1 year and arbitrage Funds'?

ASensex or Nifty
B10 years dated GoI security
1 year T-Bill
DNIFTY Ultra Short Duration Debt Index
💡 As per the 'Standard benchmarks' table, 'All Debt Schemes having duration / maturity up to 1 year and arbitrage Funds' used '1 year T-Bill' as their benchmark.
Q136MediumBenchmarks for Other Schemes - International Funds

An international fund aiming to invest primarily in the US market would likely use which of the following as its benchmark?

AShanghai Composite Index
S&P 500
CMSCI Emerging Markets Index
DNifty 50
💡 The text states, 'S&P 500 may be appropriate for a scheme that would invest largely in the US market.'
Q137EasyBenchmarks for Debt Schemes

Which type of benchmark is most appropriate for Gilt Funds?

ACorporate Bond Indices
Government Securities indices
CMoney Market Indices
DEquity indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q138HardPrinciples concerning Benchmarks

The first-tier benchmarks for open-ended debt schemes, as per the Potential Risk Class, were implemented by AMCs with effect from which date?

AJanuary 1, 2022
BOctober 27, 2021
April 1, 2022
DDecember 2, 2021
💡 Footnote 105 states: 'The first tier benchmarks for open ended debt schemes as per the Potential Risk Class and the same will be implemented by the AMCs with effect from April 1, 2022.'
Q139HardPrinciples concerning Benchmarks of Mutual Fund Schemes

With effect from which date were the first-tier benchmarks for open-ended debt schemes, based on the Potential Risk Class, implemented by AMCs?

AJanuary 1, 2022
April 1, 2022
COctober 27, 2021
DMarch 31, 2022
💡 The first tier benchmarks for open ended debt schemes as per the Potential Risk Class were implemented by the AMCs with effect from April 1, 2022.
Q140MediumPrinciples concerning Benchmarks of Mutual Fund Schemes - FoFs

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what type of benchmark will be applied as per SEBI guidelines?

AThe benchmark of the largest underlying fund.
BA bespoke benchmark created specifically for the FoF.
A Broad Market Index.
DThe benchmark of the smallest underlying fund.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as per SEBI guidelines.
Q141MediumBenchmarks for Debt Schemes

Which two key aspects primarily drive the choice of benchmark in debt schemes, as mentioned in the NISM study material?

AFund manager's experience and AMC's size
Scheme type and choice of investment universe
CScheme size and number of investors
DMarketing strategy and historical returns
💡 The text states: 'The following aspects such as scheme type; choice of investment universe drive the choice of benchmark in debt schemes.' (Page 272)
Q142EasyBenchmarks for Debt Schemes

A Gilt Fund invests exclusively in Government securities. Which type of index would be most appropriate as its benchmark?

AIndices based on corporate bonds
Indices based on Government Securities
CShort-term money market indices
DBlended equity and debt indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q143EasyBenchmarks for Debt Schemes

Which of the following is an appropriate benchmark for a Liquid Mutual Fund scheme?

A10 years dated GoI security
BS&P BSE Sensex
NSE's Liquid or CRISIL Liquid Fund Index
DNifty 50 Index
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index suitable. (Page 272)
Q144HardPrinciples concerning Benchmarks - Implementation Dates

What were the effective dates specified for the SEBI circular dated October 27, 2021, regarding the new benchmarking principles for mutual fund schemes?

AAll provisions effective January 1, 2022.
General provisions effective January 1, 2022, and for open-ended debt schemes as per Potential Risk Class, effective April 1, 2022.
CAll provisions effective April 1, 2022.
DGeneral provisions effective October 27, 2021, and debt schemes effective January 1, 2022.
💡 The circular states it 'shall come into force with effect from January 1, 2022'. Additionally, 'The first tier benchmarks for open ended debt schemes as per the Potential Risk Class and the same will be implemented by the AMCs with effect from April 1, 2022.'
Q145MediumBenchmarks for Gilt Funds

Which type of benchmark is most appropriate for Gilt mutual fund schemes?

AEquity market indices
Indices based on Government Securities
CCorporate bond indices
DReal estate indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Source: NISM Series V-A Study Material, Chapter 12, 'Choice of Investment Universe' section)
Q146MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, which benchmark should be applied according to SEBI guidelines?

AThe benchmark of the single largest underlying fund.
BA bespoke benchmark created specifically for the FoF.
A Broad Market Index.
DA blend of benchmarks of all underlying schemes.
💡 The content specifies, 'However, in case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.' (Source: PDF content 'Fund of Funds Schemes (FoFs) -> However, in case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.')
Q147HardPrinciples concerning Benchmarks of Mutual Fund Schemes

The SEBI circular dated October 27, 2021, introducing the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from which date?

AApril 1, 2022
BOctober 27, 2021
January 1, 2022
DDecember 31, 2021
💡 Footnote 104 on page 274 states: 'This shall come into force with effect from January 1, 2022.'
Q148EasyChoice of Investment Universe

Which benchmark is most appropriate for a Gilt mutual fund scheme?

AIndices based on corporate bonds
Indices based on Government Securities
CEquity market indices
DMoney market indices
💡 Gilt funds invest only in Government securities, therefore, indices based on Government Securities are appropriate. (Source: PDF content 'Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.')
Q149HardPrinciples concerning Benchmarks of Mutual Fund Schemes

The SEBI circular dated October 27, 2021, introducing the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from which date?

AApril 1, 2022
BOctober 27, 2021
January 1, 2022
DJuly 1, 2021
💡 The SEBI circular dated October 27, 2021, regarding guiding principles for bringing uniformity in benchmarks of mutual fund schemes, came into force with effect from January 1, 2022. (Note: The first-tier benchmarks for open ended debt schemes as per PRC were implemented by AMCs with effect from April 1, 2022, but the overall circular's effective date is Jan 1, 2022).
Q150EasyBenchmarks for Debt Schemes

Which type of index is most appropriate as a benchmark for a Gilt fund?

AEquity-based index
BMoney market index
Government Securities based index
DCorporate bond index
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q151MediumBenchmarks for Fund of Funds (FoFs)

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark is typically applied as per SEBI guidelines?

AThe benchmark of the single largest underlying scheme.
BA bespoke benchmark created by the AMC for the FoF.
A Broad Market Index.
DThe average of the benchmarks of all underlying schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as per SEBI guidelines concerning Benchmarks of Mutual Fund Schemes.
Q152HardStandard benchmarks

Which of the following statements correctly identifies the standardized benchmark for a Conservative Hybrid Fund versus an Aggressive Hybrid Fund for disclosure purposes?

ABoth use Sensex or Nifty.
BBoth use 10 years dated GoI security.
Conservative Hybrid Fund uses 10 years dated GoI security, while Aggressive Hybrid Fund uses Sensex or Nifty.
DConservative Hybrid Fund uses Sensex or Nifty, while Aggressive Hybrid Fund uses 10 years dated GoI security.
💡 As per the standardized benchmarks table: 'Conservative Hybrid Fund' uses '10 years dated GoI security'. 'Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation' use 'Sensex / Nifty'. (Source: PDF content 'Table 11.2: Blended indices for hybrid funds -> Scheme Type: Conservative Hybrid Fund -> Benchmark: 10 years dated GoI security' and 'Scheme Type: Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage /Multi Asset Allocation -> Benchmark: Sensex / Nifty')
Q153MediumBenchmarks for Fund of Funds (FoFs)

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark would be applied?

AThe benchmark of the largest underlying fund by AUM.
BA bespoke index created specifically for the FoF.
CThe average of the benchmarks of all underlying funds.
A Broad Market Index.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied. (Chapter 12, Principles concerning Benchmarks of Mutual Fund Schemes - Fund of Funds Schemes)
Q154HardBenchmarks for Real Estate Funds

Which statement accurately reflects the current status and acceptance of benchmarks for Real Estate Funds?

AThey widely use established global real estate indices with long histories.
BReal estate indices are highly accepted and have earned wider market recognition than equity indices.
A few real estate services companies have developed indices, but they have shorter histories and less wider acceptance compared to equity indices.
DSEBI has mandated a specific broad market index for all real estate funds due to their unique nature.
💡 A few real estate services companies have developed real estate indices. These have shorter histories, and are yet to earn the wider acceptance that the equity indices enjoy. (Chapter 12, Benchmarks for Other Schemes - Real Estate Funds)
Q155HardPrinciples concerning Benchmarks - Two-tiered structure

Under the two-tiered benchmarking structure for Income / Debt Oriented Schemes, which statement accurately distinguishes between Tier-1 and Tier-2 benchmarks?

ATier-1 is a bespoke index for investment style, while Tier-2 is a broad market index.
Tier-1 is a broad market index reflective of the category, while Tier-2 is bespoke according to the investment style/strategy.
CBoth Tier-1 and Tier-2 are single broad market benchmarks, but for different categories.
DTier-1 applies to Liquid schemes, and Tier-2 applies to Gilt funds.
💡 For Income / Debt Oriented Schemes, Tier-1 is 'One Broad Market Index per Index provider for each category', and Tier-2 is 'Bespoke according to Investment Style/Strategy of the Index'.
Q156EasyBenchmarks for Gold ETF

What is the most appropriate benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
BNIFTY Next 50
Gold price
D10-year Government Security Index
💡 For Gold ETFs, the gold price would be the benchmark. (Source: NISM Series V-A Study Material, Chapter 12, 'Gold ETF' section)
Q157EasyPrinciples concerning Benchmarks of Mutual Fund Schemes

According to the SEBI circular dated October 27, 2021, all benchmarks followed for mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CGross Return Indices
DNet Asset Value Indices
💡 The SEBI circular dated October 27, 2021, states, 'All the benchmarks followed will necessarily be Total Return Indices.' (Source: PDF content 'All the benchmarks followed will necessarily be Total Return Indices.')
Q158MediumStandard Benchmarks

Which benchmark is mandated for an Equity Savings Fund as per SEBI's standardization for disclosure?

ASensex / Nifty
10 years dated GoI security
C1 year T-Bill
DGold price
💡 For Equity Savings funds, the mandated benchmark for disclosure is a 10 years dated GoI security.
Q159MediumBenchmarks for Other Schemes

An international mutual fund scheme specifically targets investments largely in the US market. Which of the following would be an appropriate benchmark for this scheme?

AShanghai Composite Index
BNIFTY 50
S&P 500
DNikkei 225
💡 For a scheme that would invest largely in the US market, the S&P 500 would be an appropriate benchmark. (NISM V-A, Chapter 12, Page 273)
Q160EasyStandard benchmarks (Pre-Oct 2021)

Prior to the October 2021 SEBI circular, what was the standard benchmark disclosed for an Equity scheme, apart from its specific scheme benchmark?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, schemes needed to disclose return in INR and by way of CAGR for the following benchmarks apart from the scheme benchmarks: Equity scheme -> Sensex or Nifty. (Page 273)
Q161EasyPrinciples concerning Benchmarks of Mutual Fund Schemes

As per the SEBI circular dated October 27, 2021, concerning benchmarks for mutual fund schemes, what type of indices must all benchmarks necessarily be?

APrice Return Indices
Total Return Indices
CCustom-built indices only
DAbsolute Return Indices
💡 The SEBI circular dated October 27, 2021, states that 'All the benchmarks followed will necessarily be Total Return Indices.' (Page 273)
Q162HardPrinciples concerning Benchmarks

When did the SEBI circular dated October 27, 2021, regarding guiding principles for bringing uniformity in benchmarks of mutual fund schemes, come into force?

AApril 1, 2022
BOctober 27, 2021
January 1, 2022
DMarch 31, 2022
💡 The SEBI circular dated October 27, 2021, 'Guiding principles for bringing uniformity in benchmarks of mutual fund schemes' came into force with effect from January 1, 2022 (as per Note 104).
Q163HardPrinciples concerning Benchmarks of Mutual Fund Schemes

In the two-tiered benchmark structure for Growth/Equity Oriented Schemes, what does the second-tier benchmark primarily demonstrate?

AThe broad market performance for the category.
BThe scheme's overall asset allocation.
The fund manager's investment style/strategy within the category.
DThe scheme's expense ratio compared to its peers.
💡 As per the SEBI circular, the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q164EasyQuantitative Measures of Fund Manager Performance

If a mutual fund scheme earned a higher return than its chosen benchmark, what would this typically indicate?

AUnderperformance by the fund manager
Outperformance by the fund manager
CThe benchmark was inappropriate
DThe scheme is too risky
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q165EasyBenchmarks for Other Schemes - Gold ETF

What is the appropriate benchmark for a Gold Exchange Traded Fund (ETF)?

ANifty Metal Index
BS&P BSE Commodities Index
Gold price
DS&P 500
💡 The content explicitly states, 'Gold price would be the benchmark for such funds.'
Q166MediumBenchmarks for Other Schemes - Real Estate Funds

What is a common challenge associated with using real estate indices as benchmarks for Real Estate Funds?

AThey are too volatile compared to the fund's portfolio.
They have shorter histories and lack wider acceptance compared to equity indices.
CThey are typically not available in India.
DThey only measure commercial real estate, not residential.
💡 Real estate indices have shorter histories and are yet to earn the wider acceptance that the equity indices enjoy, making them a challenging benchmark for Real Estate Funds.
Q167MediumEffective Date of SEBI Circular

The SEBI circular dated October 27, 2021, establishing guiding principles for uniformity in benchmarks, came into force with effect from which date?

AApril 1, 2021
BOctober 27, 2021
January 1, 2022
DApril 1, 2022
💡 The SEBI circular dated October 27, 2021, 'Guiding principles for bringing uniformity in benchmarks of mutual fund schemes' came into force with effect from January 1, 2022. (Source: NISM Series V-A Study Material, Chapter 12, Footnote 104)
Q168HardPrinciples concerning Benchmarks (FoFs)

A Fund of Funds (FoF) scheme decides to invest in multiple underlying schemes. According to SEBI's benchmarking principles, what benchmark will be applied to this FoF scheme?

AThe benchmark of the single best-performing underlying scheme.
A Broad Market Index.
CA bespoke benchmark created specifically for the FoF.
DThe weighted average of the benchmarks of all underlying schemes.
💡 For Fund of Funds Schemes (FoFs), 'in case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.'
Q169EasyBenchmarks for Debt Schemes

Which of the following is an appropriate benchmark for a Liquid mutual fund scheme?

AS&P BSE Sensex
B10 years dated GoI security
NSE's Liquid Index
DNifty 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q170EasyBenchmarks for Other Schemes

What is the prescribed benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
B10 years dated GoI security
Gold price
DNifty 50
💡 Gold price would be the benchmark for such funds. (Page 272)
Q171HardPrinciples concerning Benchmarks of Mutual Fund Schemes

According to the SEBI circular dated October 27, 2021, which came into force on January 1, 2022, what is a key characteristic of all benchmarks followed by mutual fund schemes?

AThey must be Price Return Indices.
They must be Total Return Indices.
CThey must be customized by each AMC.
DThey must be approved by AMFI only.
💡 Vide SEBI circular dated October 27, 2021, it has been notified that there will be a two-tiered structure for benchmarking of certain category of schemes. All the benchmarks followed will necessarily be Total Return Indices.
Q172EasyPrinciples concerning Benchmarks

As per SEBI's guiding principles for uniformity in benchmarks, all benchmarks followed under the two-tiered structure must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CAbsolute Return Indices
DNet Asset Value (NAV) Indices
💡 The SEBI circular explicitly states, 'All the benchmarks followed will necessarily be Total Return Indices.'
Q173HardBenchmarks for Other Schemes (Real Estate Funds)

What is a notable characteristic of real estate indices when used as benchmarks for Real Estate Funds, as mentioned in the NISM study material?

AThey have a long history and wide acceptance comparable to equity indices.
BThey are primarily used for international real estate investments.
They have shorter histories and are yet to earn wider acceptance.
DThey are mandated as the primary benchmark for all multi-asset funds.
💡 The text states about Real Estate Funds: 'A few real estate services companies have developed real estate indices. These have shorter histories, and are yet to earn the wider acceptance that the equity indices enjoy.'
Q174HardPrinciples concerning Benchmarks of Mutual Fund Schemes - Growth / Equity Oriented Schemes

For Growth / Equity Oriented Schemes under the two-tiered benchmarking structure, which of the following best describes the Tier-2 benchmark?

AA broad market index like S&P BSE100
A bespoke index according to investment style/strategy
CA blended index of equity and debt
DA 10 years dated GoI security
💡 For Growth / Equity Oriented Schemes, Tier-2 benchmark is 'Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index'.
Q175MediumPrinciples concerning Benchmarks

For Income / Debt Oriented Schemes, what is the nature of the Tier-2 benchmark as per SEBI's two-tiered structure?

AA broad market index for the entire debt category.
BA 10 years dated GoI security.
Bespoke, according to the investment style/strategy of the Index, like AAA Bond Index.
DThe 1 year T-Bill.
💡 For Income / Debt Oriented Schemes, Tier-2 is described as 'Bespoke according to Investment Style/Strategy of the Index like AAA Bond Index.'
Q176MediumPrinciples concerning Benchmarks

According to the SEBI circular on uniformity in benchmarks (Oct 2021), what is the structure for benchmarking Growth/Equity Oriented Schemes?

AA single benchmark, which is a broad market index.
BA single benchmark, bespoke according to the investment style.
A two-tiered structure, with Tier-1 as a Broad Market Index and Tier-2 bespoke for investment style.
DNo specific benchmark is mandated for equity schemes.
💡 For Growth/Equity Oriented Schemes, the SEBI circular mandates a two-tiered structure: Tier-1 is a Broad Market Index per Index provider for the category, and Tier-2 is bespoke according to the investment style/strategy of the index. (NISM V-A, Chapter 12, Page 274)
Q177MediumStandard Benchmarks

As per the standard benchmark disclosures prior to the SEBI circular dated October 27, 2021, which benchmark was appropriate for a Conservative Hybrid Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DCRISIL Liquid Fund Index
💡 The table 'Standard benchmarks' on page 273 specifies 'Conservative Hybrid Fund: 10 years dated GoI security.'
Q178MediumBenchmarks for International Funds

For an international fund that seeks to invest largely in the US market, which of the following would be an appropriate benchmark?

AShanghai Composite Index
S&P 500
CNifty 50
DCRISIL Liquid Fund Index
💡 S&P 500 may be appropriate for a scheme that would invest largely in the US market. (International Funds section)
Q179EasyBenchmarks for Debt Schemes

Which of the following is an appropriate benchmark for a Liquid mutual fund scheme?

AS&P BSE Sensex
BNIFTY 50
CRISIL Liquid Fund Index
D10 years dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index suitable.
Q180EasyStandard Benchmarks (Pre-Oct 2021)

Which of the following is the standard benchmark required for disclosure for an Equity Savings mutual fund scheme, as per pre-October 2021 guidelines?

ASensex or Nifty
B1 year T-Bill
10 years dated GoI security
DGold price
💡 As per the 'Standard benchmarks' table, the benchmark for an Equity Savings scheme is '10 years dated GoI security'.
Q181MediumTwo-tiered Benchmark Structure

As per the SEBI circular on uniformity in benchmarks, what is the primary purpose of the two-tiered structure for benchmarking certain scheme categories?

ATo reduce the number of benchmarks
To reflect both the scheme category and the fund manager's investment style
CTo only reflect the broad market
DTo simplify international fund benchmarking
💡 The two-tiered structure for benchmarking is designed so that the first-tier benchmark is reflective of the category of the scheme, and the second-tier benchmark is demonstrative of the investment style/strategy of the Fund Manager within the category. (Source: NISM Series V-A Study Material, Chapter 12, 'Principles concerning Benchmarks of Mutual Fund Schemes' section)
Q182EasyStandard benchmarks

What is the standard benchmark specified for disclosure for an open-ended Equity scheme?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Composite Bond Fund Index
💡 For the sake of standardization, Equity schemes need to disclose returns in INR and by way of CAGR for Sensex or Nifty, apart from their scheme-specific benchmarks. (Source: PDF content 'Table 11.2: Blended indices for hybrid funds -> Scheme Type: Equity scheme -> Benchmark: Sensex or Nifty')
Q183MediumStandard Benchmarks

As per the standard benchmarks disclosed in the Statement of Additional Information (SAI) prior to the two-tiered structure, what benchmark was specified for an Equity Savings Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DNifty 50
💡 The table of standard benchmarks specifies '10 years dated GoI security' for an Equity Savings Fund.
Q184EasyBenchmarks for Other Schemes - Gold ETF

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
B10-year Government of India Security
Gold price
DNifty 50
💡 For Gold ETFs, the gold price would be the benchmark.
Q185EasyStandard Benchmarks for Equity Schemes

As per standardization guidelines, which of the following is a mandatory benchmark for an equity mutual fund scheme to disclose its returns in INR and by way of CAGR?

A10 years dated GoI security
B1 year T-Bill
Sensex or Nifty
DCRISIL Liquid Fund Index
💡 For the sake of standardization, Equity schemes need to disclose returns using Sensex or Nifty as a benchmark, apart from their scheme-specific benchmark. (Source: NISM Series V-A Study Material, Chapter 12, 'Standard benchmarks' table)
Q186EasyStandard Benchmarks

As per SEBI's standardization guidelines, which benchmark is to be disclosed for an Equity scheme, apart from its scheme-specific benchmark?

Sensex or Nifty
B1 year T-Bill
C10 years dated GoI security
DCRISIL Composite Bond Fund Index
💡 For the sake of standardization, schemes need to disclose return in INR and by way of CAGR for the following benchmarks apart from the scheme benchmarks: Equity scheme - Sensex or Nifty.
Q187MediumBenchmarks for Other Schemes

A mutual fund scheme that proposes to invest largely in the US market would most appropriately use which index as its benchmark?

AShanghai Composite Index
S&P 500
CNIFTY 50
DCRISIL Liquid Fund Index
💡 The text states: 'S&P 500 may be appropriate for a scheme that would invest largely in the US market.'
Q188EasyBenchmarks for Liquid Schemes

Which of the following is an appropriate benchmark for a Liquid mutual fund scheme?

ANIFTY 50
CRISIL Liquid Fund Index
C10-year G-Sec Index
DS&P BSE Sensex
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Source: NISM Series V-A Study Material, Chapter 12, 'Scheme Type' section)
Q189HardPrinciples concerning Benchmarks of Mutual Fund Schemes (Single vs. Two-tiered)

Which of the following scheme categories, as per the SEBI circular dated October 27, 2021, typically have a single benchmark rather than a two-tiered structure? I. Hybrid and Solution Oriented Schemes II. Thematic/Sectoral Schemes III. Index Funds and ETFs IV. Growth / Equity Oriented Schemes

I, II, and III only
BI, II, and IV only
CII, III, and IV only
DAll of the above
💡 The SEBI circular states that there would be a single benchmark for Hybrid and Solution Oriented Schemes, Thematic/Sectoral Schemes, and Index Funds and ETFs. Growth / Equity Oriented Schemes have a two-tiered structure.
Q190EasyBenchmarks for Liquid Schemes

What is a suitable benchmark for a liquid mutual fund scheme that invests in securities of up to 91 days’ maturity?

ANIFTY 50
CRISIL Liquid Fund Index
C10 years dated GoI security
DS&P BSE Sensex
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Chapter 12, Benchmarks for Debt Schemes)
Q191MediumBenchmarks for Fund of Funds

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark should be applied?

AThe benchmark of the largest underlying scheme.
BA bespoke benchmark created by the AMC for the FoF.
A Broad Market Index.
DThe average of the benchmarks of all underlying schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied. If it invests in a single fund, the benchmark of the underlying fund is used. (Refer to 'Fund of Funds Schemes (FoFs)' section).
Q192HardStandard Benchmarks for Disclosure

As per the standard benchmarks for disclosure, which of the following schemes is benchmarked against the '10 years dated GoI security'?

AEquity scheme
BBalanced Hybrid Fund
Equity Savings
DRetirement Fund
💡 According to Table 11.2, for Equity Savings schemes, the standard benchmark for disclosure is the 10 years dated GoI security. (Page 273)
Q193EasyStandard Benchmarks for Debt Schemes

As per SEBI's standardization guidelines for disclosure, what is the mandated benchmark for all debt schemes which are not covered under the 'up to 1 year duration' category?

A1 year T-Bill
10 years dated GoI security
CCRISIL Composite Bond Index
DNIFTY 50
💡 For standardization, schemes need to disclose returns for 'All Debt Schemes which are not covered in point 2 (up to 1 year duration)' using the '10 years dated GoI security' as a benchmark. (Chapter 12, Standard benchmarks table)
Q194MediumBenchmarks for International Funds

An International Fund that primarily seeks to invest in the US market would most appropriately use which of the following as its benchmark?

AShanghai Composite Index
BNifty 50
S&P 500
DMSCI Emerging Markets Index
💡 For International Funds, the benchmark would depend on where the scheme proposes to invest. S&P 500 may be appropriate for a scheme that would invest largely in the US market.
Q195EasyStandard Benchmarks (Pre-Oct 2021)

What is the standard benchmark for disclosure for a Retirement Fund, as per pre-October 2021 guidelines?

A1 year T-Bill
Sensex / Nifty
C10 years dated GoI security
DGold price
💡 From the 'Standard benchmarks' table, the benchmark for a Retirement Fund / Children's Fund is 'Sensex / Nifty'.
Q196MediumBenchmarks for Other Schemes - International Funds

For an International Fund that seeks to invest across a number of countries, how can its benchmark be structured?

AIt must use a single global index like MSCI World Index.
It can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest.
CIt must use the S&P 500 as a default benchmark.
DIt is exempt from having a benchmark due to global diversification.
💡 A scheme that seeks to invest across a number of countries can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest.
Q197MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

According to SEBI's circular dated October 27, 2021, which introduced a two-tiered structure for benchmarking, what type of indices must all benchmarks for mutual fund schemes necessarily be?

APrice Return Indices
Total Return Indices
CCapital Gains Indices
DNet Asset Value Indices
💡 The SEBI circular dated October 27, 2021, notified that all the benchmarks followed will necessarily be Total Return Indices. (Principles concerning Benchmarks of Mutual Fund Schemes section)
Q198MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (Two-tiered structure)

According to the SEBI circular dated October 27, 2021, what is typically the nature of the Tier-1 benchmark for Growth / Equity Oriented Schemes?

AA bespoke index according to investment style
A broad market index per index provider for each category
CA single benchmark replicating the underlying index
DA 10 years dated GoI security
💡 For Growth / Equity Oriented Schemes, Tier-1 is 'One Broad Market Index per Index Provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category.'
Q199MediumBenchmarks for International Funds

For an international fund that seeks to invest across a number of different countries, what kind of benchmark would be most appropriate?

AA single broad global equity index like MSCI World Index.
BThe S&P 500, as it represents a major global market.
A synthetic index that is a blend of the indices relevant to the countries where it proposes to invest.
DThe Shanghai Composite Index, representing a major emerging market.
💡 A scheme that seeks to invest across a number of countries, can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest. (Chapter 12, Benchmarks for Other Schemes - International Funds)
Q200EasyStandard Benchmarks

What is the standard benchmark for a 'Conservative Hybrid Fund' for disclosure purposes in INR and CAGR?

ASensex or Nifty
B1 year T-Bill
10 years dated GoI security
DNIFTY Income / Debt Ultra Short Duration Debt Index
💡 As per the standard benchmarks table for disclosure, a Conservative Hybrid Fund uses a 10 years dated GoI security as its benchmark.
Q201EasyPrinciples concerning Benchmarks of Mutual Fund Schemes

What type of indices must all benchmarks followed by mutual fund schemes necessarily be, as per SEBI guidelines?

APrice Return Indices
Total Return Indices
CCapital Return Indices
DDividend Return Indices
💡 The text states, 'All the benchmarks followed will necessarily be Total Return Indices.'
Q202MediumBenchmarks for Hybrid Funds

A hybrid scheme with an asset allocation of approximately 65 percent in equity and the balance in debt would typically use which type of benchmark?

AAn equity-only index like S&P BSE Sensex
BA debt-only index like I-Bex
A synthetic index calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex
DThe 10 years dated GoI security index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting its asset allocation.
Q203MediumPrinciples concerning Benchmarks

The SEBI circular dated October 27, 2021, introduced a two-tiered structure for benchmarking primarily to:

AIncrease the number of benchmarks for each scheme.
Standardize and bring uniformity in mutual fund scheme benchmarks.
CAllow fund managers more flexibility in choosing benchmarks.
DReduce disclosure requirements for mutual funds.
💡 The circular was issued 'To standardize and bring-in uniformity in the benchmarks of mutual fund schemes'.
Q204MediumBenchmarks for Other Schemes - Hybrid Funds

How is a benchmark typically constructed for a Hybrid mutual fund scheme?

AIt is always a pure equity index.
BIt is always a pure debt index.
It is a blend of an equity and a debt index.
DIt is a bespoke index based on real estate values.
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index.
Q205HardSEBI Guidelines on Benchmarks Effective Date

According to SEBI circular dated October 27, 2021, the two-tiered structure for benchmarking of certain categories of mutual fund schemes came into force with effect from which date?

AOctober 27, 2021
BDecember 1, 2021
January 1, 2022
DApril 1, 2022
💡 SEBI circular dated October 27, 2021, notified a two-tiered structure for benchmarking, which came into force with effect from January 1, 2022. (Chapter 12, Principles concerning Benchmarks of Mutual Fund Schemes footnote 104)
Q206MediumStandard benchmarks for debt schemes

For standardization, all Debt Schemes which are not covered under schemes having duration/maturity up to 1 year and arbitrage Funds, must disclose returns against which benchmark?

ASensex or Nifty
B1 year T-Bill
10 years dated GoI security
DCRISIL Liquid Fund Index
💡 As per the standard benchmarks table, 'All Debt Schemes which are not covered in point 2 (up to 1 year and arbitrage Funds)' must disclose against the '10 years dated GoI security'. (Refer to 'Table 11.2: Standard benchmarks' section).
Q207EasyQuantitative Measures of Fund Manager Performance

In the context of quantitative measures of fund manager performance, what does it signify if a scheme earned a higher return than its benchmark?

AUnderperformance by the fund manager
Outperformance by the fund manager
CNeutral performance by the fund manager
DInconclusive performance
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Page 274)
Q208MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

Under SEBI's two-tiered benchmarking structure for Growth/Equity Oriented Schemes, what is the primary purpose of the 'Tier-2' benchmark?

ATo reflect the broad market performance of the scheme's category.
To demonstrate the investment style/strategy of the Fund Manager within the category.
CTo provide an alternative to the scheme's primary benchmark.
DTo comply with international benchmarking standards.
💡 The first-tier benchmark will be reflective of the category of the scheme, and the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.
Q209MediumBenchmarks for Hybrid Funds

A hybrid mutual fund scheme maintains an asset allocation of approximately 65 percent in equity and 35 percent in debt. Which of the following would be the most appropriate benchmark for this scheme?

AS&P BSE Sensex only
BI-Bex only
A synthetic index calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex
DCRISIL Hybrid Fund Index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex.
Q210MediumStandard benchmarks

Which standard benchmark is prescribed for Equity Savings mutual fund schemes?

ASensex / Nifty
10 years dated GoI security
CA blended index of equity and debt
DNIFTY Equity Savings Index
💡 The 'Standard benchmarks' table specifies 'Equity Savings' schemes use '10 years dated GoI security.'
Q211EasyFund Manager Performance

In mutual fund performance analysis, what does it indicate if a scheme earned a higher return than its benchmark?

AThe scheme underperformed
BThe scheme performed in line with the market
The fund manager outperformed
DThe benchmark was too easy
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (Source: NISM Series V-A Study Material, Chapter 12, 'Quantitative Measures of Fund Manager Performance' section)
Q212HardStandard Benchmarks

As per the standardization guidelines for disclosure, which benchmark is specified for an 'Equity Savings' scheme?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DNIFTY Income / Debt Ultra Short Duration Debt Index
💡 The standard benchmarks table specifies '10 years dated GoI security' for Equity Savings schemes for disclosure purposes.
Q213EasyPrinciples concerning Benchmarks

As per the SEBI circular dated October 27, 2021, all benchmarks followed by mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CCapital Appreciation Indices
DDividend Yield Indices
💡 The SEBI circular dated October 27, 2021, explicitly states that all the benchmarks followed will necessarily be Total Return Indices. (NISM V-A, Chapter 12, Page 274)
Q214MediumStandard Benchmarks for Disclosure

For disclosure purposes, what is the standard benchmark specified for a Balanced Hybrid Fund?

A10 years dated GoI security
Sensex / Nifty
C1 year T-Bill
DCRISIL Liquid Fund Index
💡 For Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation, the standard benchmark for disclosure is Sensex / Nifty. (Page 273, Table 11.2)
Q215EasyBenchmarks for Debt Schemes

What is the typical benchmark for a Liquid mutual fund scheme, which invests in securities of up to 91 days’ maturity?

NSE Liquid or CRISIL Liquid Fund Index
BS&P BSE Sensex
C10 years dated GoI security
DNifty 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Scheme Type section)
Q216EasyBenchmarks for Other Schemes

What components typically form the benchmark for a Hybrid Mutual Fund?

AOnly equity indices
BOnly debt indices
A blend of an equity and debt index
DReal estate indices
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. (Page 272)
Q217HardStandard Benchmarks for Disclosure (Specific Categories)

For 'Equity Savings' schemes, what is the mandated standard benchmark for disclosure, apart from their scheme-specific benchmark?

ASensex
BNifty
C1 year T-Bill
10 years dated GoI security
💡 As per the Table of Standard Benchmarks, Equity Savings schemes are required to disclose returns against the 10 years dated GoI security.
Q218EasyBenchmarks for Debt Schemes

Which of the following indices would be most appropriate as a benchmark for a Gilt fund?

AA diversified equity index
BA blended index of equity and debt
An index based solely on Government Securities
DA corporate bond index
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Page 272)
Q219EasyBenchmarks for Other Schemes

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
Gold price
C10 years dated GoI security
DCRISIL Liquid Fund Index
💡 For Gold ETFs, the Gold price would be the benchmark for such funds. (Page 272)
Q220MediumSEBI Two-tiered Benchmarking Structure

What is the purpose of the 'Tier-2' benchmark in SEBI's two-tiered structure for Income / Debt Oriented Schemes?

ATo reflect the broad market performance of the debt category.
To demonstrate the investment style/strategy of the Fund Manager within the category.
CTo provide a common benchmark across all debt schemes regardless of their strategy.
DTo compare the scheme against a global debt index.
💡 The second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category, e.g., 'Bespoke according to Investment Style/Strategy of the Index like AAA Bond Index'. (Page 274)
Q221EasyQuantitative Measures of Fund Manager Performance

When comparing a scheme's performance against its benchmark or peer group, what kind of comparison is being made?

AAbsolute return comparison
BNet Asset Value (NAV) comparison
CExpense ratio comparison
Relative return comparison
💡 Such comparisons, focusing on how a scheme performed vis-à-vis its benchmark or peer group, are called relative return comparisons.
Q222EasyBenchmarks for Other Schemes - Gold ETF

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Commodities Index
BNIFTY Metal Index
Gold price
DCRISIL Gold Index
💡 For Gold ETFs, the gold price would be the benchmark for such funds. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.6 Benchmarks for Other Schemes)
Q223MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark principle applies as per SEBI's guidelines?

AThe benchmark of the largest underlying fund will be used.
A Broad Market Index will be applied.
CA bespoke benchmark will be created by the AMC.
DThe average of the benchmarks of all underlying funds will be used.
💡 In case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.
Q224EasyBenchmarks for Specific Scheme Types (Gilt Funds)

What is the appropriate benchmark for a Gilt fund?

ANSE Liquid Index
Indices based on Government Securities
CS&P BSE Sensex
DCRISIL Composite Bond Index
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q225HardEffective Date of Regulations

When did SEBI's two-tiered benchmarking structure for open-ended debt schemes, based on their Potential Risk Class (PRC), become effective?

AJanuary 1, 2022
BOctober 27, 2021
April 1, 2022
DDecember 1, 2021
💡 The first tier benchmarks for open ended debt schemes as per the Potential Risk Class and the same will be implemented by the AMCs with effect from April 1, 2022. (Page 274, footnote 105)
Q226MediumBenchmarks for Hybrid Funds

A hybrid mutual fund scheme maintains an asset allocation of approximately 65% in equity and 35% in debt. Which of the following would be an appropriate benchmark for this scheme?

AS&P BSE Sensex
BI-Bex
A synthetic index calculated as 65% S&P BSE Sensex and 35% I-Bex
DNIFTY 50
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex. (Chapter 12, Benchmarks for Other Schemes - Hybrid Funds)
Q227HardPrinciples concerning Benchmarks

The SEBI circular dated October 27, 2021, regarding guiding principles for bringing uniformity in benchmarks of mutual fund schemes, came into force with effect from which date?

AOctober 27, 2021
BNovember 1, 2021
January 1, 2022
DApril 1, 2022
💡 The SEBI circular dated October 27, 2021, states that it 'shall come into force with effect from January 1, 2022'. (NISM V-A, Chapter 12, Page 274, footnote 104)
Q228MediumQuantitative Measures of Fund Manager Performance

In the context of mutual fund performance evaluation, what does it signify if a scheme earned a higher return than its benchmark?

AThe fund manager under-performed.
The fund manager demonstrated outperformance.
CThe scheme's absolute return was negative.
DThe scheme's risk-adjusted return was low.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager. (NISM V-A, Chapter 12, Page 274)
Q229MediumStandard Benchmarks (Purpose)

What is the primary objective of disclosing standard benchmarks in mutual fund advertisements and Statement of Additional Information (SAI)?

To provide a common reference for comparing scheme performance.
BTo show the fund manager's absolute return.
CTo guarantee a minimum return to investors.
DTo determine the scheme's expense ratio.
💡 Disclosures of standard benchmarks were proposed 'in order to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices.' (Standard benchmarks section)
Q230MediumBenchmarks for Hybrid Funds

A hybrid scheme with an asset allocation of approximately 70 percent in equity and 30 percent in debt could use a synthetic index calculated as:

A70% of I-Bex and 30% of S&P BSE Sensex
70% of S&P BSE Sensex and 30% of I-Bex
C100% S&P BSE Sensex
D100% I-Bex
💡 A hybrid fund's benchmark is a blend of an equity and debt index. For instance, a hybrid scheme with asset allocation of about 65 percent in equity and balance in debt can use a synthetic index that is calculated as 65 percent of S&P BSE Sensex and 35 percent of I-Bex. Applying this principle, 70% equity would mean 70% of the equity index (S&P BSE Sensex) and 30% of the debt index (I-Bex). (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.6 Benchmarks for Other Schemes - Hybrid Funds)
Q231MediumBenchmarks for Hybrid Funds

A hybrid scheme with an asset allocation of approximately 65 percent in equity and the balance in debt would typically use which type of benchmark?

AA pure equity index like S&P BSE Sensex
BA pure debt index like I-Bex
A synthetic index that is a blend of an equity and a debt index
DGold price index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting its asset allocation. For instance, 65 percent of S&P BSE Sensex and 35 percent of I-Bex.
Q232EasyStandard Benchmarks for Disclosure

For disclosure purposes, which benchmark is mandated for all Equity schemes, apart from their scheme-specific benchmark?

A1 year T-Bill
B10 years dated GoI security
Sensex or Nifty
DCRISIL Composite Bond Index
💡 As per the standard benchmarks for disclosure, an Equity scheme must disclose returns against Sensex or Nifty in INR and by way of CAGR.
Q233HardSEBI Guidelines on Benchmarks - Effective Date

The SEBI circular dated October 27, 2021, which introduced the two-tiered structure for benchmarking of mutual fund schemes, came into force with effect from which date?

AOctober 27, 2021
January 1, 2022
CApril 1, 2022
DMarch 31, 2022
💡 The SEBI circular dated October 27, 2021, regarding guiding principles for bringing uniformity in benchmarks of mutual fund schemes, 'shall come into force with effect from January 1, 2022'. (Source: Chapter 12, Mutual Fund Scheme Selection, Footnote 104)
Q234EasyBenchmarks for Debt Schemes

According to NISM guidelines, what is a suitable benchmark for a Liquid mutual fund scheme?

AS&P BSE Sensex
CRISIL Liquid Fund Index
CNifty 50
D10 years dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q235HardPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021)

What is the purpose of the Tier-2 benchmark for Income/Debt Oriented Schemes as per the SEBI circular dated October 27, 2021?

ATo reflect the broad market performance of the debt segment.
To demonstrate the investment style/strategy of the Fund Manager within the category.
CTo provide a standardized comparison across all debt schemes.
DTo track a specific government securities index.
💡 For Income/Debt Oriented Schemes, Tier-2 is 'Bespoke according to Investment Style/Strategy of the Index like AAA Bond Index.' This demonstrates the investment style/strategy of the Fund Manager. (Page 273)
Q236MediumPrinciples concerning Benchmarks - Two-tiered structure

As per the SEBI circular dated October 27, 2021, what constitutes the Tier-1 benchmark for Growth / Equity Oriented Schemes?

AA bespoke index according to the investment style/strategy of the index.
One Broad Market Index per Index provider for each category (e.g., S&P BSE100 for Large Cap).
CA single benchmark reflecting the scheme's theme or sector.
DThe benchmark of the underlying fund in case of a single fund investment.
💡 For 'Growth / Equity Oriented Schemes', the Tier-1 benchmark is defined as 'One Broad Market Index per Index provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category'.
Q237HardPrinciples concerning Benchmarks of Mutual Fund Schemes

What is a mandatory characteristic of all benchmarks followed under SEBI's two-tiered benchmarking structure?

AThey must be Price Return Indices (PRIs).
BThey must be Custom Indices developed by AMCs.
They must be Total Return Indices (TRIs).
DThey must only include Government Securities.
💡 As per the SEBI circular, all the benchmarks followed will necessarily be Total Return Indices (TRIs).
Q238MediumBenchmarks for Fund of Funds

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what type of benchmark is typically applied?

AThe benchmark of the single largest underlying fund
BA bespoke index created by the AMC
A Broad Market Index
DA blend of the benchmarks of all underlying funds
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as its benchmark. (Source: NISM Series V-A Study Material, Chapter 12, 'Fund of Funds Schemes (FoFs)' section)
Q239EasyBenchmarks for specific scheme types

Which of the following is an appropriate benchmark for a Liquid scheme, which typically invests in securities of up to 91 days’ maturity?

AS&P BSE Sensex
CRISIL Liquid Fund Index
CNifty 50 Index
D10 years dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Refer to 'Scheme Type' section for Liquid schemes).
Q240MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

According to SEBI's two-tiered structure for benchmarks, what does the Tier-1 benchmark reflect for an equity-oriented scheme?

AThe specific investment style/strategy of the fund manager.
The overall broad market category of the scheme.
CThe scheme's performance against its closest peer group.
DThe absolute returns generated by the scheme.
💡 The first-tier benchmark will be reflective of the category of the scheme, such as a Broad Market Index like S&P BSE100 or NSE 100 for a Large Cap Fund Category.
Q241MediumBenchmarks for Fund of Funds

If a Fund of Funds (FoF) scheme invests in a *single* underlying fund, what benchmark would generally be used for the FoF, as per SEBI guidelines?

AA broad market index.
The benchmark of the underlying scheme.
CA bespoke index created specifically for the FoF.
DThe Nifty 50 Index.
💡 If a FoF scheme is investing in a single fund, then benchmark of the underlying scheme will be used for corresponding FoF. (Fund of Funds Schemes (FoFs) section under Principles concerning Benchmarks)
Q242EasyBenchmarks for Debt Schemes

Which of the following benchmarks is typically suitable for a liquid mutual fund scheme?

AS&P BSE Sensex
CRISIL Liquid Fund Index
C10 years dated GoI security
DNifty 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity, making a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index suitable.
Q243MediumStandard Benchmarks

As per SEBI's standardization guidelines for disclosures, which of the following is the mandated standard benchmark for a Conservative Hybrid Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DCRISIL Liquid Fund Index
💡 The standard benchmark for a Conservative Hybrid Fund, as per SEBI's disclosure requirements, is the 10 years dated GoI security. (NISM V-A, Chapter 12, Table 11.2, Page 273)
Q244EasyStandard benchmarks for disclosure

As per SEBI guidelines for standardization, which benchmark is to be disclosed for an Equity scheme, apart from its scheme-specific benchmark?

A1 year T-Bill
BCRISIL Composite Bond Index
Sensex or Nifty
D10 years dated GoI security
💡 For the sake of standardization, Equity schemes need to disclose return in INR and by way of CAGR for Sensex or Nifty, apart from the scheme's specific benchmark. (Refer to 'Table 11.2: Standard benchmarks' section).
Q245MediumBenchmarks for Other Schemes

How is the benchmark for a hybrid mutual fund typically constructed?

AIt is always a pure equity index like Sensex.
BIt is always a pure debt index like a Gilt index.
It is a blend of an equity index and a debt index, weighted by asset allocation.
DIt is a real estate index.
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting its asset allocation. (NISM V-A, Chapter 12, Page 272)
Q246MediumPrinciples concerning Benchmarks of Mutual Fund Schemes - FoFs

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what type of benchmark would typically be applied?

AThe benchmark of the largest underlying fund.
BA bespoke benchmark created by the AMC.
A Broad Market Index.
DA blend of benchmarks of all underlying funds.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as its benchmark.
Q247EasyPrinciples concerning Benchmarks of Mutual Fund Schemes

As per SEBI's guiding principles for uniformity in benchmarks, all benchmarks followed by mutual fund schemes must necessarily be what type of indices?

APrice Return Indices
Total Return Indices
CVolatility Indices
DSectoral Indices
💡 All the benchmarks followed will necessarily be Total Return Indices.
Q248EasySingle Benchmark Categories

Which of the following scheme categories, as per SEBI's guidelines, typically uses a single benchmark because its characteristics are already specific to a particular area?

AGrowth / Equity Oriented Schemes
BIncome / Debt Oriented Schemes
Thematic/Sectoral Schemes
DHybrid and Solution Oriented Schemes (when broad market benchmark is available)
💡 For Thematic/Sectoral schemes, there would be a single benchmark as characteristics of the schemes are already tapered according to the theme/sector. (Page 274)
Q249MediumStandard benchmarks

For standardization purposes, what is the mandated benchmark for all debt schemes having a duration/maturity up to 1 year and arbitrage funds?

ACRISIL Liquid Fund Index
B10 years dated GoI security
1 year T-Bill
DNIFTY Ultra Short Duration Debt Index
💡 The 'Standard benchmarks' table lists 'All Debt Schemes having duration / maturity up to 1 year and arbitrage Funds' with '1 year T-Bill' as the benchmark.
Q250EasyQuantitative Measures of Fund Manager Performance

When does a mutual fund scheme indicate outperformance by the fund manager?

AWhen its absolute return is positive.
When its return is higher than the benchmark.
CWhen its return is lower than the peer group average.
DWhen it maintains a consistent Net Asset Value (NAV).
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q251EasyQuantitative Measures of Fund Manager Performance

If a scheme earned a higher return than its benchmark, this would be indicative of:

AAbsolute return
BRelative underperformance
Relative outperformance
DNet Asset Value (NAV) depreciation
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager, or relative outperformance.
Q252EasyQuantitative Measures of Fund Manager Performance

When a mutual fund scheme's return is compared against its benchmark, and the scheme earns a higher return than the benchmark, this is indicative of:

AUnderperformance by the fund manager.
Outperformance by the fund manager.
CAbsolute return calculation.
DPeer group comparison.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q253MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021) - FoFs

What is the benchmark for a Fund of Funds (FoF) scheme that invests in multiple underlying schemes?

AThe average benchmark of all underlying schemes.
BThe benchmark of the largest underlying scheme.
A Broad Market Index.
DA custom-created blended index.
💡 In case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied. (Page 274)
Q254HardStandard Benchmarks

Prior to the SEBI October 2021 circular, which of the following mutual fund categories shared the same standard benchmark of '10 years dated GoI security'?

AEquity scheme and Retirement Fund
All Debt Schemes which are not covered in point 2 and Conservative Hybrid Fund
CBalanced Hybrid Fund and Aggressive Hybrid Fund
DLiquid schemes and Arbitrage Funds
💡 As per the 'Standard benchmarks' table, 'All Debt Schemes which are not covered in point 2' and 'Conservative Hybrid Fund' both had '10 years dated GoI security' as their standard benchmark.
Q255EasyBenchmarks for Debt Schemes

Which of the following would be a suitable benchmark for a Liquid Mutual Fund scheme?

ANIFTY 50 Index
CRISIL Liquid Fund Index
CS&P BSE Sensex
D10-year dated GoI security
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.
Q256EasyBenchmarks for Debt Schemes

What is a suitable benchmark for a Liquid mutual fund scheme?

AS&P BSE Sensex
NSE's Liquid or CRISIL Liquid Fund Index
C10 years dated GoI security
DGold price
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Page 272)
Q257MediumBenchmarks for Other Schemes - Hybrid Funds

A hybrid mutual fund scheme with an asset allocation of 60% equity and 40% debt would most appropriately use which type of benchmark?

AA pure equity index
BA pure debt index
A blended index comprising 60% equity index and 40% debt index
DA 10 years dated GoI security index
💡 Hybrid funds invest in a mix of debt and equity. Therefore, the benchmark for a hybrid fund is a blend of an equity and debt index, reflecting their asset allocation.
Q258EasyBenchmarks for Other Schemes

What is the standard benchmark for a Gold ETF?

AS&P BSE Sensex
BNifty 50
Gold price
D10 years dated GoI security
💡 For Gold ETFs, the gold price itself would be the benchmark. (Page 272)
Q259MediumBenchmarks for Other Schemes

Which statement accurately describes the current status of benchmarks for Real Estate Funds?

AThey primarily use well-established equity indices for benchmarking.
Real estate indices have shorter histories and are yet to earn wider acceptance.
CSEBI mandates a single standard benchmark for all real estate funds.
DThere are no suitable benchmarks available for real estate funds.
💡 For Real Estate Funds, 'A few real estate services companies have developed real estate indices. These have shorter histories, and are yet to earn the wider acceptance that the equity indices enjoy.'
Q260HardBenchmarks for Fund of Funds

Under the SEBI circular dated October 27, 2021, for Fund of Funds (FoF) schemes investing in *multiple* underlying schemes, what benchmark is prescribed?

AThe average benchmark of all underlying schemes.
BA bespoke index reflecting the FoF's strategy.
A Broad Market Index.
DThe benchmark of the largest underlying scheme.
💡 In case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied. (Fund of Funds Schemes (FoFs) section under Principles concerning Benchmarks)
Q261MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021)

For a Growth/Equity Oriented Scheme, what primarily defines the Tier-1 benchmark as per the SEBI circular dated October 27, 2021?

AIt is bespoke according to the investment style/strategy of the Fund Manager.
It is a Broad Market Index, reflective of the category.
CIt is always Nifty 50, regardless of the scheme's category.
DIt is an index representing a specific sector or theme.
💡 For Growth/Equity Oriented Schemes, Tier-1 is 'One Broad Market Index per Index provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category.' This is reflective of the category. (Page 273)
Q262MediumBenchmarks for Other Schemes (International Funds)

The benchmark for an International Fund is primarily determined by:

AThe fund manager's investment style
The scheme's proposed investment geography
CThe fund's asset under management (AUM)
DThe average return of global equity markets
💡 The benchmark for an International Fund would depend on where the scheme proposes to invest. Thus, a scheme seeking to invest in China might have the Shanghai Composite Index as the benchmark, while S&P 500 may be appropriate for a scheme that would invest largely in the US market.
Q263HardTwo-tiered Benchmarks for Equity Schemes

For Growth / Equity Oriented Schemes under the two-tiered benchmark structure, which statement accurately describes the distinction between Tier-1 and Tier-2 benchmarks?

ATier-1 is a bespoke index reflecting the fund manager's style, while Tier-2 is a broad market index.
Tier-1 is a broad market index (e.g., S&P BSE100), while Tier-2 is bespoke according to the investment style (e.g., Nifty 50 Index).
CBoth Tier-1 and Tier-2 are broad market indices, but for different market caps.
DTier-1 is for international equity and Tier-2 is for domestic equity.
💡 For Growth / Equity Oriented Schemes, Tier-1 is one Broad Market Index per Index provider for each category (e.g., S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category). Tier-2 is bespoke according to the Investment Style/Strategy of the Index (e.g., Nifty 50 Index). (Source: NISM Series V-A Study Material, Chapter 12, 'Type of Scheme Type of Benchmark' table)
Q264MediumStandard benchmarks

What was the primary objective behind SEBI's proposal for standardized benchmarks for disclosure (e.g., Sensex/Nifty for equity schemes)?

ATo reduce the number of benchmarks in the market.
BTo mandate all schemes to invest in these specific indices.
To bring standardization to benchmarking and facilitate comparison with easily available indices.
DTo ensure all schemes perform at par with broad market indices.
💡 The proposal was made 'in order to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices.' (Source: PDF content 'This was proposed in order to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices.')
Q265MediumStandard Benchmarks

According to SEBI's standardization, what is the common benchmark for all Debt Schemes having a duration/maturity up to 1 year and for Arbitrage Funds?

A10 years dated GoI security
BSensex or Nifty
1 year T-Bill
DCRISIL Composite Bond Fund Index
💡 As per the table for standard benchmarks, 'All Debt Schemes having duration / maturity up to 1 year and arbitrage Funds' use '1 year T-Bill' as their standardized benchmark.
Q266EasyStandard Benchmarks

What was one of the key objectives behind SEBI's proposal for standardized benchmarks for mutual fund schemes?

ATo increase the total returns of schemes
BTo reduce the expense ratio of funds
To bring standardization to performance comparison
DTo mandate specific investment strategies for fund managers
💡 The proposal was made 'in order to bring standardization to the process of benchmarking as well as comparing the scheme performance with easily available indices.'
Q267EasyBenchmarks for Debt Schemes

For a Gilt Fund, which type of index is most appropriate as a benchmark?

AIndices based on Corporate Bonds
Indices based on Government Securities
CIndices based on Money Market Instruments
DBlended equity-debt indices
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate.
Q268HardSEBI Two-tiered Benchmarking Structure and Exceptions

Which of the following scheme categories is NOT subject to the two-tiered benchmarking structure as per SEBI's October 2021 circular?

AIncome / Debt Oriented Schemes
BGrowth / Equity Oriented Schemes
Index Funds and Exchange Traded Funds (ETFs)
DFund of Funds (FoFs) investing in a single underlying fund
💡 The two-tiered structure applies to Income/Debt and Growth/Equity schemes. However, for Index Funds and ETFs, there would be a single benchmark as these schemes replicate an underlying index. (Page 274)
Q269MediumStandard Benchmarks

As per the standard benchmarks disclosed in the Statement of Additional Information (SAI) prior to the two-tiered structure, what benchmark was specified for a Conservative Hybrid Fund?

ASensex / Nifty
B1 year T-Bill
10 years dated GoI security
DGold price
💡 As per the table of standard benchmarks, the benchmark for a Conservative Hybrid Fund was specified as '10 years dated GoI security'.
Q270EasyBenchmarks for Other Schemes (Gold ETF)

What is the primary benchmark for a Gold Exchange Traded Fund (ETF)?

AS&P BSE Sensex
B10 years dated GoI security
Gold price
DNifty 50
💡 For Gold ETFs, the gold price itself would be the benchmark.
Q271MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (FoFs)

If a Fund of Funds (FoF) scheme invests in a single underlying fund, what benchmark should be used for the FoF?

AA broad market index
The benchmark of the underlying scheme
CA blended index of equity and debt
DA bespoke index created for the FoF
💡 If a FoF scheme is investing in a single fund, then the benchmark of the underlying scheme will be used for the corresponding FoF.
Q272HardTwo-tiered Benchmarking Structure

Under the SEBI circular dated October 27, 2021, for which type of scheme would a *single benchmark* (either broad market or bespoke) be applicable across the industry, rather than a two-tiered structure?

AGrowth/Equity Oriented Schemes
BIncome/Debt Oriented Schemes
Hybrid and Solution Oriented Schemes
DFund of Funds investing in multiple schemes
💡 For 'Hybrid and Solution Oriented Schemes', the SEBI circular states: 'There would be a single benchmark, i.e., Broad Market Benchmark wherever available or bespoke to be created for schemes, which would then be applicable across industry.' (Principles concerning Benchmarks of Mutual Fund Schemes table)
Q273EasySEBI Guidelines on Benchmarks (Oct 2021)

As per SEBI circular dated October 27, 2021, what type of indices must all benchmarks followed by mutual fund schemes necessarily be?

APrice Return Indices (PRI)
Total Return Indices (TRI)
CMarket Capitalization Weighted Indices
DEqual Weighted Indices
💡 To standardize and bring-in uniformity in the benchmarks of mutual fund schemes, vide SEBI circular dated October 27, 2021, it has been notified that all the benchmarks followed will necessarily be Total Return Indices. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.6 Principles concerning Benchmarks of Mutual Fund Schemes)
Q274HardPrinciples concerning Benchmarks of Mutual Fund Schemes (SEBI Circular Oct 2021)

As per the SEBI circular dated October 27, 2021, what significant structural change was introduced for benchmarking of certain categories of mutual fund schemes?

AAll schemes must now use a single, broad market index.
A two-tiered structure for benchmarking was introduced.
CFund managers are no longer required to disclose benchmarks.
DOnly absolute returns, not relative returns, are to be disclosed.
💡 To standardize and bring-in uniformity in the benchmarks of mutual fund schemes, vide SEBI circular dated October 27, 2021, it has been notified that there will be a two-tiered structure for benchmarking of certain category of schemes. (Page 273)
Q275EasyBenchmarks for Gilt funds

For Gilt funds, which invest only in Government securities, what type of indices are considered appropriate benchmarks?

AIndices based on corporate bonds
Indices based on Government Securities
CBlended equity and debt indices
DShort-term money market benchmarks
💡 Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. (Refer to 'Choice of Investment Universe' section for Gilt funds).
Q276MediumStandard Benchmarks for Disclosure

Which standard benchmark is required for disclosure for all Debt Schemes having a duration/maturity up to 1 year and Arbitrage Funds?

ASensex / Nifty
B10 years dated GoI security
1 year T-Bill
DCRISIL Composite Bond Index
💡 As per the standard benchmarks for disclosure, all Debt Schemes having duration / maturity up to 1 year and Arbitrage Funds must use the 1 year T-Bill.
Q277EasyBenchmarks for Debt Schemes

Which of the following is an appropriate benchmark for a Liquid Mutual Fund scheme?

AS&P BSE Sensex
CRISIL Liquid Fund Index
C10 years dated GoI security
DNifty 50
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable. (Page 272)
Q278MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

According to the SEBI two-tiered benchmarking structure for Growth / Equity Oriented Schemes, what is the role of the Tier-2 benchmark?

ATo reflect the broad market performance of the category.
BTo replicate an underlying index for passive funds.
To demonstrate the investment style/strategy of the Fund Manager within the category.
DTo serve as the single benchmark for thematic schemes.
💡 For Growth / Equity Oriented Schemes, the Tier-1 benchmark is a Broad Market Index, while the Tier-2 benchmark is 'Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index'. (Source: PDF content 'Table: Type of Scheme, Type of Benchmark -> Growth / Equity Oriented Schemes -> Tier-2: Bespoke according to Investment Style/Strategy of the Index e.g.: Nifty 50 Index')
Q279HardPrinciples concerning Benchmarks of Mutual Fund Schemes

As per SEBI circular dated October 27, 2021, when did the principles concerning the two-tiered benchmarking structure for mutual fund schemes come into force?

AJanuary 1, 2021
BApril 1, 2022
COctober 27, 2021
January 1, 2022
💡 Footnote 104 states, 'This shall come into force with effect from January 1, 2022'.
Q280MediumSEBI Two-Tier Benchmarking Implementation Date

When did SEBI's circular on the guiding principles for uniformity in benchmarks of mutual fund schemes (the two-tiered structure) come into force?

AOctober 27, 2021
January 1, 2022
CApril 1, 2022
DDecember 27, 2021
💡 The SEBI circular dated October 27, 2021, states that 'This shall come into force with effect from January 1, 2022.'
Q281MediumTier-1 Benchmarks for Equity Schemes

For Growth/Equity Oriented Schemes under the two-tiered benchmark structure, what is the primary role of the Tier-1 benchmark?

ATo reflect the investment style/strategy of the Fund Manager.
BTo demonstrate the specific sector or theme of the scheme.
To be reflective of the category of the scheme.
DTo compare against global equity markets.
💡 The first-tier benchmark will be reflective of the category of the scheme. For Growth/Equity Oriented Schemes, Tier-1 is one Broad Market Index per Index provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category. (Chapter 12, Principles concerning Benchmarks of Mutual Fund Schemes - Type of Scheme: Growth / Equity Oriented Schemes)
Q282HardEffective dates of regulations and debt schemes

The first-tier benchmarks for open-ended debt schemes, as per their Potential Risk Class, were to be implemented by AMCs with effect from which date?

AOctober 27, 2021
BJanuary 1, 2022
April 1, 2022
DJuly 1, 2022
💡 The first tier benchmarks for open-ended debt schemes as per the Potential Risk Class were to be implemented by the AMCs with effect from April 1, 2022. (Refer to footnote 105 in the 'Principles concerning Benchmarks of Mutual Fund Schemes' section).
Q283EasyPrinciples concerning Benchmarks

According to the SEBI circular on benchmark uniformity, how many benchmarks should a Thematic/Sectoral scheme follow?

ATwo-tiered benchmark (Tier-1 and Tier-2)
A single benchmark
CA blended benchmark of equity and debt
DNo specific benchmark is required
💡 For Thematic/Sectoral schemes, the guideline states: 'There would be a single benchmark as characteristics of the schemes are already tapered according to the theme/sector.'
Q284MediumBenchmarks for International Funds

For an International Fund that seeks to invest across a number of countries, how would its benchmark typically be structured?

AIt would solely use the S&P 500 as a global standard.
BIt would use a single index from the country with the highest allocation.
It can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest.
DIt would not have a benchmark due to the diverse investment universe.
💡 A scheme that seeks to invest across a number of countries can structure a synthetic index that would be a blend of the indices relevant to the countries where it proposes to invest. (Source: Chapter 12, Mutual Fund Scheme Selection, Section 11.6 Benchmarks for Other Schemes - International Funds)
Q285MediumStandard Benchmarks for Retirement Funds

As per SEBI's standardization for disclosure, what is the mandated benchmark for Retirement Funds?

A10 years dated GoI security
B1 year T-Bill
Sensex / Nifty
DCRISIL Composite Bond Index
💡 For Retirement Fund / Children's Fund, the standard benchmark for disclosure is Sensex / Nifty. (Chapter 12, Standard benchmarks table)
Q286MediumPrinciples concerning Benchmarks (Implementation Date)

SEBI's circular on guiding principles for bringing uniformity in benchmarks of mutual fund schemes, which introduced the two-tiered structure, came into force with effect from which date?

AApril 1, 2021
BOctober 27, 2021
January 1, 2022
DApril 1, 2022
💡 The SEBI circular dated October 27, 2021, states: 'This shall come into force with effect from January 1, 2022'.
Q287MediumSEBI Guidelines on Benchmarks - Two-tiered Structure

As per the SEBI circular dated October 27, 2021, which of the following scheme types would have a single benchmark, rather than a two-tiered structure?

AIncome / Debt Oriented Schemes
BGrowth / Equity Oriented Schemes
Thematic/Sectoral schemes
DAll of the above will have a two-tiered structure.
💡 For Thematic/Sectoral schemes, there would be a single benchmark as characteristics of the schemes are already tapered according to the theme/sector. Income/Debt Oriented and Growth/Equity Oriented schemes fall under the two-tiered structure. (Source: Chapter 12, Mutual Fund Scheme Selection, Table 'Type of Scheme Type of Benchmark' under Principles concerning Benchmarks)
Q288MediumBenchmarking for Fund of Funds

If a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark is prescribed by SEBI?

AThe benchmark of the single largest underlying fund.
BA bespoke benchmark created by the FoF manager.
A Broad Market Index.
DThe average of the benchmarks of all underlying schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied. (Page 275)
Q289MediumPrinciples concerning Benchmarks

For Growth / Equity Oriented Schemes, the Tier-1 benchmark under SEBI's two-tiered structure is designed to be:

ABespoke, according to the investment style/strategy of the Index.
One Broad Market Index per Index provider for each category.
CA blended index of equity and debt.
DThe Nifty 50 Index.
💡 For Growth / Equity Oriented Schemes, Tier-1 is described as 'One Broad Market Index per Index provider for each category e.g.: S&P BSE100 Index or NSE 100 Index for Large Cap Fund Category.'
Q290MediumPrinciples concerning Benchmarks

What is the primary objective behind SEBI introducing a two-tiered structure for benchmarking mutual fund schemes?

ATo increase the complexity of scheme comparison for investors.
BTo allow fund managers more flexibility in choosing any benchmark.
To standardize and bring uniformity in the benchmarks of mutual fund schemes.
DTo reduce the number of benchmarks used across the industry.
💡 SEBI circular dated October 27, 2021, states that the two-tiered structure was introduced 'To standardize and bring-in uniformity in the benchmarks of mutual fund schemes.'
Q291MediumBenchmarks for International Funds

For an International Fund that proposes to invest largely in the US market, which of the following would be an appropriate benchmark?

AShanghai Composite Index
BNifty 50
S&P 500
DMSCI Emerging Markets Index
💡 The benchmark for International Funds depends on where the scheme proposes to invest. S&P 500 would be appropriate for a scheme that would invest largely in the US market.
Q292HardTier-2 Benchmarks for Debt Schemes

Which of the following statements accurately describes the nature and purpose of a Tier-2 benchmark for Income / Debt Oriented Schemes?

AIt is a broad market index like NIFTY Ultra Short Duration Debt Index, reflecting the overall debt category.
BIt is a benchmark that replicates a specific government security for standardization purposes.
It is a bespoke benchmark according to the investment style/strategy of the Fund Manager, such as an AAA Bond Index.
DIt is primarily used for comparing the scheme's performance against global debt markets.
💡 For Income / Debt Oriented Schemes, the Tier-2 benchmark is bespoke according to the Investment Style/Strategy of the Fund Manager, like an AAA Bond Index. (Chapter 12, Principles concerning Benchmarks of Mutual Fund Schemes - Type of Scheme: Income / Debt Oriented Schemes)
Q293EasyQuantitative Measures of Fund Manager Performance

What is indicated if a mutual fund scheme earned a higher return than its benchmark?

AThe scheme under-performed its peer group.
The fund manager out-performed.
CThe scheme's expense ratio was too high.
DThe scheme's risk profile was too low.
💡 If a comparison of relative returns indicates that a scheme earned a higher return than the benchmark, then that would be indicative of outperformance by the fund manager.
Q294MediumPrinciples concerning Benchmarks of Mutual Fund Schemes

For Growth / Equity Oriented Schemes, what is the primary distinction between the Tier-1 and Tier-2 benchmarks as per the SEBI circular dated October 27, 2021?

ATier-1 reflects investment style, while Tier-2 reflects the category.
Tier-1 is a Broad Market Index for the category, while Tier-2 is bespoke according to investment style/strategy.
CTier-1 is mandatory, while Tier-2 is optional.
DTier-1 is for large-cap funds, Tier-2 is for mid-cap funds.
💡 The SEBI circular states that 'The first-tier benchmark will be reflective of the category of the scheme, and the second-tier benchmark will be demonstrative of the investment style/strategy of the Fund Manager within the category.' For Growth/Equity, Tier-1 is 'One Broad Market Index per Index provider for each category' and Tier-2 is 'Bespoke according to Investment Style/Strategy.' (Page 273)
Q295MediumBenchmarks for Fund of Funds (FoFs)

What benchmark would be applied to a Fund of Funds (FoF) scheme that invests in multiple underlying schemes, as per SEBI guidelines?

AThe benchmark of the scheme with the highest allocation.
A Broad Market Index.
CA bespoke index created by the FoF manager.
DNo specific benchmark is required for FoFs investing in multiple schemes.
💡 In case a FoF scheme invests in multiple schemes, then a Broad Market Index will be applied as the benchmark. If it invests in a single fund, then the benchmark of the underlying scheme will be used. (Source: Chapter 12, Mutual Fund Scheme Selection, Table 'Type of Scheme Type of Benchmark' under Principles concerning Benchmarks - Fund of Funds Schemes (FoFs))
Q296MediumPrinciples concerning Benchmarks of Mutual Fund Schemes (FoFs)

According to the SEBI circular dated October 27, 2021, if a Fund of Funds (FoF) scheme invests in multiple underlying schemes, what benchmark approach should be applied?

AThe benchmark of the single largest underlying scheme.
BA custom-built synthetic index.
A Broad Market Index.
DNo benchmark is required for FoFs investing in multiple schemes.
💡 The SEBI circular states: 'In case a FoF scheme invests in multiple schemes, then Broad Market Index will be applied.' (Page 274)
Q297HardStandard Benchmarks for Complex Hybrid Funds

As per the standardization guidelines for disclosure, what is the prescribed benchmark for schemes categorized as Balanced Hybrid Fund / Aggressive Hybrid Fund / Dynamic Asset Allocation or Balanced Advantage / Multi Asset Allocation funds?

A10 years dated GoI security
B1 year T-Bill
Sensex / Nifty
DA bespoke blended index
💡 For standardization, schemes like Balanced Hybrid Fund, Aggressive Hybrid Fund, Dynamic Asset Allocation or Balanced Advantage, and Multi Asset Allocation are required to disclose returns using Sensex / Nifty as a benchmark. (Source: NISM Series V-A Study Material, Chapter 12, 'Standard benchmarks' table)
Q298EasyQuantitative Measures of Fund Manager Performance

When a mutual fund scheme's performance is compared against its benchmark, this comparison is known as:

AAbsolute return comparison
Relative return comparison
CExpense ratio comparison
DRisk-free return comparison
💡 Comparisons of how a scheme performed vis-à-vis its benchmark or peer group are called relative return comparisons.
Q299MediumDisclosure requirements

The disclosures of standardized benchmarks, including returns in INR and CAGR, must form part of which mutual fund documents?

AOnly the Key Information Memorandum (KIM)
BOnly the Scheme Information Document (SID)
The Statement of Additional Information (SAI) and all advertisements of Mutual Funds
DOnly the annual report to unitholders
💡 These disclosures (of standardized benchmarks) shall form part of the Statement of Additional Information and all advertisements of Mutual Funds. (Refer to 'Standard benchmarks' section).
Q300EasyBenchmarks for Debt Schemes

A liquid mutual fund scheme invests in securities with a maturity period of up to 91 days. Which of the following would be a suitable benchmark for such a scheme?

ANIFTY 50 Index
CRISIL Liquid Fund Index
C10-year G-Sec Index
DS&P BSE Sensex
💡 Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s Liquid or CRISIL Liquid Fund Index is suitable.

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