NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection
A retired investor needs regular monthly income and wants low volatility with capital preservation as the priority, with only a small allocation to equity. Which category of scheme is most suitable on these criteria?
A conservative hybrid fund is most suitable because it holds mostly debt with a small equity share. This gives income and lower volatility, matching a retiree's priority of capital preservation. Sectoral, thematic and small cap funds are concentrated, high-risk equity products unsuitable for this need.
- ASectoral equity fund
- BConservative hybrid fundCorrect
- CSmall cap fund
- DThematic equity fund
Explanation
A conservative hybrid fund invests mostly in debt (75-90%) with a small equity portion (10-25%), which matches the need for income, low volatility and capital preservation. Sectoral, thematic and small cap funds are high-risk equity funds that suit growth seekers, not a retiree prioritising safety.
Did you get it right without looking?
One question tells you little. A timed set on Mutual Fund Scheme Selection shows your real accuracy, how long you take and where you lose marks.
More Mutual Fund Scheme Selection questions
- Two equity funds have the same category and 5-year return. Fund A has a standard deviation of 18% and Fund B has 12%. Considering only this …
- A distributor is recommending an equity scheme to a client who wants to track the market at the lowest possible cost, with no attempt to bea…
- While comparing two large-cap equity funds, a distributor notes that Fund A has a five-year return of 12% with a standard deviation of 18%, …
- Two direct-plan equity schemes have the same gross portfolio return of 12.0% a year before expenses. Scheme X has a total expense ratio of 0…
- An investor in the 30% tax bracket wants equity exposure but also wants to use a scheme that qualifies for equity taxation without holding d…
- An investor needs money in about 2 years for a down payment and has low risk tolerance. A distributor wants to avoid the main risk that woul…