NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Concept and Role of a Mutual Fund
Which of the following is a feature of an open-ended mutual fund scheme?
An open-ended scheme allows investors to buy and redeem units on an ongoing basis at NAV-related prices. It has no fixed maturity, unlike a closed-ended scheme, which is offered during the NFO and exits through maturity or exchange listing.
- AUnits are listed and can be bought only from the stock exchange
- BUnits can be bought and redeemed at NAV-related prices on an ongoing basisCorrect
- CUnits can be redeemed only on the maturity date fixed at launch
- DUnits can be issued only during the New Fund Offer period
Explanation
Open-ended schemes remain available for subscription and redemption on an ongoing basis at prices linked to NAV, and have no fixed maturity. Closed-ended schemes have fixed maturity and are restricted to the NFO period, with exchange listing as the exit route.
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