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    Finance Interview Questions

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    Soumava Ghosh
    The document discusses mutual funds, including what they are, the differences between dividend and growth plans, tax benefits, benefits of investing, charges, and comparisons to savings account returns. It provides information on equity, debt, and hybrid fund tax treatment and an expense deduction available under section 80C. Professional management, diversification, liquidity, and affordability are highlighted as benefits of mutual fund investing.

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    Finance Interview Questions

    Uploaded by

    Soumava Ghosh
    4 views2 pages
    The document discusses mutual funds, including what they are, the differences between dividend and growth plans, tax benefits, benefits of investing, charges, and comparisons to savings account returns. It provides information on equity, debt, and hybrid fund tax treatment and an expense deduction available under section 80C. Professional management, diversification, liquidity, and affordability are highlighted as benefits of mutual fund investing.

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    The document discusses mutual funds, including what they are, the differences between dividend and growth plans, tax benefits, benefits of investing, charges, and comparisons to savings account returns. It provides information on equity, debt, and hybrid fund tax treatment and an expense deduction available under section 80C. Professional management, diversification, liquidity, and affordability are highlighted as benefits of mutual fund investing.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    4 views2 pages

    Finance Interview Questions

    Uploaded by

    Soumava Ghosh
    The document discusses mutual funds, including what they are, the differences between dividend and growth plans, tax benefits, benefits of investing, charges, and comparisons to savings account returns. It provides information on equity, debt, and hybrid fund tax treatment and an expense deduction available under section 80C. Professional management, diversification, liquidity, and affordability are highlighted as benefits of mutual fund investing.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    AMC

    1. What is Mutual Fund?

    A mutual fund is a type of investment vehicle that pools money from multiple investors to
    invest in a diversified portfolio of stocks, bonds, or other securities. These funds are
    managed by professional fund managers who make investment decisions on behalf of the
    investors.

    2. Difference in performance of a Dividend or Growth Plan?

    dividend plans prioritize regular income distribution, attracting investors seeking immediate
    cash flow, while growth plans reinvest profits to pursue long-term capital appreciation.

    3. What are the tax benefits in mutual funds?

    Fund type Short-term capital gains Long-term capital gains

    Gains above Rs. 1 lakh in a financial


    Equity funds 15% + cess & surcharge year are taxed at 10% + cess &
    surcharge

    Debt funds As per the applicable tax slab As per the applicable tax slab

    Gains above Rs. 1 lakh in a financial


    Hybrid equity-oriented funds 15% + cess & surcharge year are taxed at 10% + cess &
    surcharge

    Hybrid debt-oriented funds As per the applicable tax slab As per the applicable tax slab

    u/s 80c of income tax Act 1961, you can claim deduction upto 1.5lacs in a year. For ELSS
    scheme.

    4. What are the benefit of investing in mutual fund?

    Investing in mutual funds offers numerous benefits, including diversification, as funds spread
    investments across various assets, reducing individual risk; professional management by experienced
    fund managers who make informed decisions on behalf of investors; liquidity, enabling easy buying
    and selling of shares at the fund's NAV; affordability due to low minimum investment requirements
    and shared management costs; a wide range of investment options catering to different risk profiles.

    5. What are the charges in mutual funds?

    Expense Ratio: This is the most common charge and represents the annual fee charged by
    the fund company to cover operating expenses, management fees, administrative costs, and
    other expenses associated with managing the fund. The expense ratio is expressed as a
    percentage of the fund's average assets under management (AUM) and is deducted from the
    fund's returns.
    Sales Loads: Sales loads are fees charged either when purchasing (front-end load) or
    redeeming (back-end load) mutual fund shares. Front-end loads are typically a percentage of
    the amount invested, while back-end loads may decline over time or be eliminated
    altogether after a certain holding period.
    Transaction Fees: Some mutual funds charge transaction fees, also known as trading fees,
    when investors buy or sell shares of the fund. These fees are typically charged to cover the
    costs associated with executing trades within the fund's portfolio.

    6. What is an investment fund?


    An investment fund is a pooled investment vehicle that collects money from multiple investors and invests it in a
    diversified portfolio of securities such as stocks, bonds, commodities, or real estate. There are various types of

    investment funds, including mutual funds, exchange-traded funds (ETFs), hedge funds, and private equity funds,
    These funds are professionally managed by fund managers or investment teams who make investment decisions on
    behalf of the investors based on the fund's objectives and strategy. Investment funds provide investors with access
    to a diversified portfolio of assets, allowing them to benefit from economies of scale, professional management,
    and risk diversification.

    7. How do the rates of return offered in funds compare with savings accounts?

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