These twelve are in the style of the NISM Series V-B paper and weighted the way it is — heaviest on Investor Services. Attempt each before reading the answer.
1. Where investor money goes
The money invested by investors goes into ______.
Answer: a separate bank account of the specific scheme. Not the AMC's account, not the RTA's, not a common fund account. Each scheme has its own.
2. Third-party cheques
In which cases is a third-party cheque accepted for a mutual fund investment?
Answer: all of the following — a parent or grandparent paying for a minor up to Rs 50,000 per purchase or SIP instalment; an employer paying for an employee through payroll deduction; a custodian paying on behalf of an FPI. Outside those exceptions, third-party payments are refused.
3. The SAI
The Statement of Additional Information contains ______.
Answer: statutory information about the mutual fund offering the scheme — the sponsor, AMC, trustees, service providers. Scheme-specific details are in the SID.
4. Close-ended schemes
Close-end schemes do not have a ______.
Answer: scheme re-open date. They have an NFO open date and close date; once the NFO closes they neither sell nor repurchase units on an ongoing basis.
5. Mark-to-market
Securities in a scheme's portfolio are marked to market on a ______ basis.
Answer: daily. It is why NAVs change every day — and it is asked in both the Performance and the Regulatory chapters.
6. Trail commission
A distributor is paid trail commission for ______.
Answer: as long as the investor's money stays in the fund. Unlike insurance commission, there is no time cap; trail is calculated on the daily net assets attributable to the units sold.
7. KYD biometrics
The KYD biometric process consists of ______.
Answer: the impression of the index finger of the right hand, taken at a CAMS point of service when documents are submitted.
8. Fundamental attributes
Trustees and the AMC cannot change a scheme's fundamental attributes unless ______.
Answer: a transparent process is followed — disclosure to investors and an exit window for dissenting investors at NAV without exit load. Not a ministry, not the exchanges, not the fund managers.
9. Who the AMC is
Who handles advertising and sales promotion and deals with regulators and service providers?
Answer: the AMC. The sponsor sets it up, the trustees supervise it, but the AMC runs operations.
10. The new cadre
Which of these can a new cadre distributor NOT sell — an FMP, a micro-cap fund, an index scheme, a diversified equity scheme?
Answer: the micro-cap fund. The new cadre's diversified equity schemes must be large-cap oriented and well diversified; small-, mid- and micro-cap, thematic and sector funds are excluded.
11. Equity horizon
Investment in equities is recommended only for an investor with a ______ horizon.
Answer: long-term. Equities are volatile even within a day; the workbook's guidance is a horizon of at least three to five years.
12. Long-term capital gains on equity funds
What is the long-term capital gains tax on equity scheme units for an individual?
Answer: 12.5% on gains above Rs 1.25 lakh in a financial year, with units held for more than 12 months counting as long-term. Older banks still quote the pre-2024 figure of 10% above Rs 1 lakh; the March 2026 workbook uses the current one.
Scoring yourself
Fewer than eight right and there is two weeks of useful work ahead. The pattern in V-B is that almost nothing needs calculation, but a great deal turns on a single fact you either know or do not — which is why answering questions beats re-reading the workbook.
And because there is no negative marking, the habit to build now is answering everything.
Practise the full bank free — 360+ V-B questions filed by chapter, each with an explanation and a memory hook — then sit a timed 50-question mock.