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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection

A 28-year-old salaried investor with a stable income wants to build a retirement corpus over 30 years and can tolerate high volatility. Which category of mutual fund scheme is most suitable as the core holding for this goal?

A diversified equity fund such as a flexi cap fund is most suitable, because a 30-year horizon and high risk tolerance allow the investor to ride out volatility and seek inflation-beating growth, unlike overnight, liquid or ultra short funds.

  1. AOvernight fund
  2. BLiquid fund
  3. CDiversified equity fund such as a flexi cap fundCorrect
  4. DUltra short duration fund

Explanation

A 30-year horizon and high risk tolerance match growth-oriented equity exposure, which has historically beaten inflation over long periods. Overnight, liquid and ultra short funds are meant for short-term parking and offer low long-term growth.

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