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

A client aged 28 with a stable job wants to build a retirement corpus over 30 years and can tolerate high volatility. Which category of mutual fund scheme would a distributor ordinarily consider most suitable for the core of this goal?

A diversified equity fund is the most suitable core holding, because a 30-year horizon and high risk tolerance allow the investor to ride out volatility and capture long-term growth. Overnight, liquid and money market funds are short-term debt products designed for capital safety and liquidity.

  1. AOvernight fund
  2. BLiquid fund
  3. CDiversified equity fundCorrect
  4. DMoney market fund

Explanation

A long horizon and high risk tolerance suit equity-oriented schemes, which have the best potential for inflation-beating growth over long periods. Overnight, liquid and money market funds are low-risk, short-duration debt products meant for parking surplus money, and would likely give lower long-term returns.

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