NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
Mr. Sanjay Iyer invests through a mutual fund scheme that pools money from many investors and invests in securities. In the classification of Indian capital market participants, a mutual fund is best described as which of the following?
A mutual fund is an institutional investor. It pools money from many investors and invests it in securities. It is not a stock exchange, which provides a trading platform, nor a depository holding securities electronically, nor a credit rating agency.
- AAn institutional investorCorrect
- BA stock exchange
- CA depository
- DA credit rating agency
Explanation
Mutual funds pool investors' money and invest it in securities, making them institutional investors in the capital market. They do not provide trading platforms, hold securities in electronic form as depositories, or assign credit ratings.
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