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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investment Landscape

Which of the following is a characteristic of an investment in gold held in physical form, compared with a Gold ETF?

Physical gold carries storage, security, purity and making-charge concerns, which a Gold ETF largely avoids. It does not pay interest, is not traded on an exchange in physical form, and no regulator guarantees against loss on it.

  1. AIt provides regular interest income
  2. BIt carries storage, security and purity concerns and making chargesCorrect
  3. CIt is always traded on a stock exchange at a transparent price
  4. DIt is guaranteed by SEBI against loss

Explanation

Physical gold involves storage and safety costs, purity concerns and making charges on jewellery. It pays no interest, is not exchange traded in physical form, and SEBI does not guarantee returns of any investment.

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