NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which of the following best describes a feature of an open-ended mutual fund scheme in India?
An open-ended mutual fund scheme lets investors buy and redeem units on an ongoing basis at prices linked to NAV. It has no fixed maturity, unlike a closed-ended scheme, which has a set tenure and offers an exit mainly through exchange listing.
- AUnits are available for subscription and redemption on an ongoing basis at NAV-related pricesCorrect
- BUnits can be bought or sold only during a fixed new fund offer period
- CUnits have a fixed maturity and are redeemed only on that date
- DUnits can be traded only on a stock exchange and never with the fund house
Explanation
An open-ended scheme has no fixed maturity and allows investors to subscribe and redeem on an ongoing basis at prices linked to NAV. Closed-ended schemes have a fixed tenure and are redeemed at maturity, with exchange listing as the exit route.
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