NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Concept and Role of a Mutual Fund
Which statement about an open-ended mutual fund scheme is correct?
An open-ended scheme offers units for sale and repurchase on a continuous basis at prices linked to NAV, and has no fixed maturity. Exchange-listing-only trading and fixed maturity are features of closed-ended schemes.
- AUnits are available for sale and repurchase on an ongoing basis at NAV-related pricesCorrect
- BUnits can be bought or sold only during the New Fund Offer period
- CUnits must be listed and traded only on stock exchanges
- DThe scheme has a fixed maturity date after which it winds up
Explanation
Open-ended schemes allow investors to buy and redeem units on an ongoing basis at prices linked to NAV, and they have no fixed maturity. The other options describe closed-ended features or are incorrect.
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