NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
Which feature best distinguishes a Fixed Maturity Plan (FMP) from an open-ended debt scheme?
A Fixed Maturity Plan is a closed-ended debt scheme with a fixed tenure, normally sold only during the new fund offer and redeemed at maturity. Returns are not guaranteed, and it does not offer daily redemption like open-ended debt funds.
- AIt has a fixed tenure and units are typically bought only during the NFO and redeemed at maturityCorrect
- BIt guarantees a fixed return to investors
- CIt invests only in equity shares
- DIt allows investors to redeem units any day at NAV
Explanation
An FMP is a closed-ended debt scheme with a defined maturity, usually open for subscription only in the NFO, and units are listed or redeemed at maturity. It does not guarantee returns, and daily redemption is a feature of open-ended schemes.
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