NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Mutual Funds
Which statement about a close-ended mutual fund scheme in India is correct?
A close-ended scheme must provide liquidity either by listing its units on a stock exchange or by offering periodic repurchase. It has a fixed maturity and is not redeemable daily at NAV, and market prices can sit above or below NAV.
- AUnits must be listed on a stock exchange or the scheme must offer periodic repurchase facility to investorsCorrect
- BUnits can be redeemed at NAV on any business day directly with the fund
- CThe scheme has no fixed maturity period
- DUnits are always priced at a premium to NAV on the exchange
Explanation
Under SEBI rules, close-ended schemes must provide liquidity through listing on a stock exchange or periodic repurchase. They have a fixed tenure and units may trade at a discount or premium to NAV, so the other options are wrong.
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