Skip to content

NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information

Which of the following best describes a Fixed Maturity Plan (FMP) in India?

A Fixed Maturity Plan is a close-ended debt scheme that invests in securities maturing on or before the scheme's maturity date. This lets investors hold to maturity and reduces interest rate risk. It is not open-ended and has no equity lock-in feature.

  1. AAn open-ended debt scheme that allows daily redemptions at NAV
  2. BA close-ended debt scheme that invests in instruments maturing on or before the scheme's maturity dateCorrect
  3. CAn equity scheme with a mandatory lock-in of three years
  4. DA hybrid scheme that always holds 50% equity and 50% debt

Explanation

FMPs are close-ended debt schemes whose portfolio is built from securities maturing in line with the scheme tenure, so that investors can hold to maturity and reduce interest rate risk. Open-ended daily redemption and a 3-year lock-in describe other products (liquid or open funds, ELSS).

Did you get it right without looking?

One question tells you little. A timed set on Scheme Related Information shows your real accuracy, how long you take and where you lose marks.

Practise Scheme Related InformationFree diagnostic mock

More Scheme Related Information questions