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JAIIB IE&IFS Unit 41 — Mutual Funds: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 1 of the November 2026 cycle (1 November 2026)

This page is a free slice of our JAIIB IE&IFS question bank for Unit 41 — Mutual Funds (Module D — Financial Products and Services). The Mock Centre holds 114 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

IE&IFS · Module D114 MCQs in the Mock Centre5 free belowPaper on 1 November 2026

Key facts examiners test from this unit

  1. Structure: TRUST — sponsor (establishes) → trustees (supervise AMC; 2/3 independent) → AMC (manages; 1/2 independent) → custodian (holds securities); SEBI registration mandatory; unit holders share pro-rata.
  2. History: UTI 1963 (RBI control; US-64 first scheme) → IDBI control 1978 → SBI MF June 1987 (first non-UTI, public phase) → Kothari Pioneer July 1993 (first private) → Regulations 1993 → 1996 comprehensive → Feb 2003 UTI bifurcated; AMFI incorporated 22-8-1995 (SRO).
  3. Five SEBI categories: equity, debt, hybrid, solution-oriented, other; caps: large = top 100, mid = 101–250, small = 251+.

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
Mutual fund investors are known as:
Why (b): Mutual fund investors are called UNIT HOLDERS — they hold units of the scheme, not deposits, shares or bonds.
Question 2 of 5
The industry started in 1963 with:
Why (b): The Indian mutual fund industry began in 1963 with the UNIT TRUST OF INDIA (UTI), created by an Act of Parliament — Phase I of the story.
Question 3 of 5
Investing small amounts at regular intervals:
Why (b): Investing SMALL amounts at REGULAR intervals is the Systematic Investment Plan (SIP) — the drip-invest strategy that builds wealth through discipline.
Question 4 of 5
An open-ended fund differs from a close-ended fund because it:
Why (b): Perpetual two-way windows define open-ended schemes; close-ended schemes lock the corpus for the term with exchange listing (or periodic repurchase) as the exit.
Question 5 of 5
In a GROWTH option, scheme earnings are:
Why (b): Growth compounds inside the fund; payout (IDCW) options distribute — the choice maps to income needs and tax positions.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
SponsorTrusteeEstablishes vs supervises
AMCCustodianManages vs holds
Practise all 114 questions on Unit 41. The free demo opens a slice of every subject with the same explanations; the IE&IFS Online-only pass unlocks all 3,032 IE&IFS questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.