NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection
An investor has a surplus of Rs 5 lakh that will be needed in about 20 days for paying an advance on a flat. Capital safety and liquidity are the priorities. Which scheme choice is most appropriate?
A liquid fund is most appropriate, because it invests in very short maturity instruments up to 91 days, has low volatility and offers quick redemption. Equity or long duration debt funds could show losses over a 20-day horizon.
- ASectoral equity fund
- BLiquid fundCorrect
- CLong duration debt fund
- DSmall cap fund
Explanation
Liquid funds invest in money market and debt instruments with residual maturity up to 91 days, giving low interest rate and credit risk and quick redemption. Long duration debt and equity funds can show capital losses over a 20-day period.
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
- A retired investor needs regular income and has low risk tolerance, but wants returns above a savings account for funds not needed for 2-3 y…
- A distributor is advising a first-time investor with a low risk appetite and a five-year horizon who wants a single scheme combining equity …
- Two equity funds have the same category and similar portfolios. Fund A has a Total Expense Ratio of 0.60% for its Direct plan and Fund B has…
- A 28-year-old salaried investor with a stable income wants to build a retirement corpus over 30 years and can tolerate high volatility. Whic…
- While selecting a debt mutual fund for an investor who wants low interest-rate risk and may need the money in about 3 months, which feature …
- A fund has a beta of 1.2 relative to its benchmark. The risk-free rate is 6%, and the benchmark return is 12%. The fund returned 14%. Using …