NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Concept and Role of a Mutual Fund
Which statement about open-ended mutual fund schemes is correct?
Open-ended schemes allow investors to buy and redeem units on an ongoing basis at prices linked to NAV, so unit capital keeps changing. Fixed maturity and fixed unit capital are characteristics of closed-ended schemes instead.
- AUnits can be bought and sold only on a stock exchange during a fixed period
- BUnits are available for sale and repurchase on an ongoing basis at prices linked to NAVCorrect
- CThe scheme has a fixed maturity date after which it must be wound up
- DThe number of units is fixed at the time of the NFO
Explanation
Open-ended schemes continuously offer units for subscription and redemption at NAV-related prices, so the unit capital varies. Fixed maturity and a fixed unit count are features of closed-ended schemes.
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