JAIIB · Indian Economy & Indian Financial System · Module D — Financial Products and Services
JAIIB IE&IFS Unit 41 — Mutual Funds: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 2 November 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
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).
Five SEBI categories: equity, debt, hybrid, solution-oriented, other; caps: large = top 100, mid = 101–250, small = 251+.
Law update, November 2026. The SEBI (Mutual Funds) Regulations, 2026 replaced the 1996 Regulations from 1 April 2026. SEBI's February 2026 circular on scheme categorisation lets a fund house offer both a value fund and a contra fund, provided their portfolios overlap by no more than 50%. SEBI banned upfront commissions from October 2018; distributors now earn trail commission only, built into the regular plan's expense ratio.
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 interval scheme combines features of:
Why (b): An interval scheme is close-ended most of the time but opens for purchases and redemptions during set transaction periods, combining features of open- and close-ended schemes.
Question 5 of 5
Under the IDCW option, part of each payout may come from:
Why (b): IDCW stands for Income Distribution cum Capital Withdrawal: a payout can include the investor's own capital (through the equalisation reserve), so it is not pure income; the growth option reinvests instead.
0 of 5 answered.
Traps in this unit
Confusable A
Confusable B
The difference
Sponsor
Trustee
Establishes vs supervises
AMC
Custodian
Manages 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 3,000+ IE&IFS questions, the full and module mocks, Smart Revision and the Readiness Score for 18 months (₹1,299). Not sure where you stand? Sit the free 120-question mock first (all four papers, questions drawn from pages like this one, real exam screen).
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 November 2026; verify from official sources before relying on them in practice.
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